Cablegate: Japanese Morning Press Highlights 12/05/07

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TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 12/05/07

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Antiterrorism refueling mission:
4) Defense Ministry in assessing impact of withdrawal of MSDF from
Indian Ocean finds 40 PERCENT of Pakistani ships have been removed
from action (Sankei)
5) Antiterrorism bill being deliberated in Upper House but both
camps remain on parallel tracks (Nikkei)
6) Small extension of Diet session being eyed, with intention of
passing antiterrorism bill by end of year (Tokyo Shimbun)
7) Government no longer taking a low profile toward the opposition
camp in Upper House deliberations on the antiterrorism bill (Sankei)

8) Democratic Party of Japan (DPJ) rethinking Diet strategy after
Nukaga summons failed (Asahi)
9) DPJ refuses to add time to the committee debate on the
antiterrorism bill (Nikkei)

Diet business:
10) Meeting of minds between ruling, opposition camps allowing the
amended political funds law to pass the Diet (Mainichi)
11) Report of the educational revival council heavily watered down
(Sankei)
12) Shoichi Nakagawa and other conservative lawmakers form
Hananokai, a study group to continue the policy aims for former
Prime Minister Abe (Sankei)

13) Fukuda orders immediate measures to keep economy sound by
countering double impact of high price of oil and U.S. economy slide
due to sub-prime mess (Nikkei)
14) DPJ has own measures ready to cope with rising oil price
(Nikkei)
15) Prime Minister Fukuda once served on the board of the U.S.-Japan
peace and cultural exchange, run by shady figure linked to defense
scandal (Asahi)
16) DPJ head Ozawa would like to see enshrined Class-A war criminals
removed from Yasukuni Shrine (Nikkei)

China ties:
17) DPJ head Ozawa to travel to China with large entourage in order
to set up direct links there (Asahi)
18) Ruling camp calls Ozawa's China entourage of 48 DPJ lawmakers
"excessive" (Asahi)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri & Sankei:
Japanese students slip further in OECD tests, fall to 10th from the
6th in mathematics

Nikkei:
Government to hike tax on profit-making businesses under a new
public-interest corporation law as part of reform of incorporated
associations and foundations

Tokyo Shimbun:

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The accounting official system scrapped but increase in number of
vice governors in 12 prefectures across the country

Akahata:
Scandal-tainted Defense Ministry not qualified to submit new
aniterror bill

2) EDITORIALS

Asahi:
(1) OECD tests: What is necessary to foster the ability to think?
(2) New refueling legislation: We expect lively debate in Upper
House

Mainichi:
(1) Where has the DPJ's counterproposal to the government-sponsored
antiterror legislation gone?
(2) OECD tests: Weak motivation to study is a problem

Yomiuri:
(1) Results of OECD tests must be reflected in new course of study:

(2) Taxi-fare hike: Service and efficiency must be improved
promptly

Nikkei:
(1) Budget discipline must be maintained in compiling supplementary
budget as well as next year's budget
(2) Need to find out the causes of Japanese students slipping
further in OECD tests

Sankei:
(1) Why is DPJ sending delegation to China now?
(2) Lessons from case of Osaka Gov. Ota forgoing reelection

Tokyo Shimbun:
(1) OECD tests: Japan needs to foster the ability to think
(2) Rugby players who used marijuana: Need to review students'
sports

Akahata:
(1) We call for withdrawal of a plan to cut child-care allowances

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 4

NIKKEI (Page 2) (Full)
December 5, 2007

07:59
Met Deputy Chief Cabinet Secretary Iwaki at the Kantei.

08:50
Attended a cabinet meeting. Foreign Ministry Koumura stayed on.
Afterward handed a letter of appointment to Special Advisor to the
Cabinet Nishimura.

09:22
Arrived at the Kantei.

10:00

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Attended an Upper House Foreign Affairs and Defense Committee
meeting.

12:47
Met Assistant Deputy Chief Cabinet Secretary Saka at the Kantei.

13:00
Attended the Upper House Foreign Affairs and Defense Committee
meeting.

17:15
Met OEDC Secretary General Gurria at the Kantei.

18:27
Met at the Fukudaya Japanese restaurant in Kioicho with US
Ambassador to Japan Schieffer, his predecessor Baker, and former
Finance Minister Shiokawa.

21:37
Returned to his residence in Nozawa.

4) MSDF pullout affects Pakistan's antiterror activities at sea:
Ishiba

SANKEI (Page 2) (Abridged)
December 5, 2007

The House of Councillors Foreign Affairs and Defense Committee
yesterday entered into a substantive debate on a new bill introduced
by the government to resume the Maritime Self-Defense Force's
refueling activities in the Indian Ocean. The MSDF has now withdrawn
from the Indian Ocean due to the Antiterrorism Special Measures
Law's Nov. 1 expiry. In his reply before the committee, Defense
Minister Shigeru Ishiba, touching on the MSDF's pullout and its
impact on multinational forces, stated that Pakistani vessels, which
cannot receive fuel from the MSDF, have to make port calls for fuel.
In this regard, Ishiba revealed that there is now a decrease of
about 40 PERCENT in the number of operational days for Pakistani
ships there.

Prime Minister Fukuda stated: "Many countries are engaged in even
more difficult activities, and they are continuing their activities
in a persevering way although many have lost their lives. It's only
natural that we want to resume (refueling) activities. It's taken
for granted in the international community. I want the bill passed
before the Diet session ends on Dec. 15."

Meanwhile, Chief Cabinet Secretary Nobutaka Machimura, referring to
an aid plan for Afghanistan, said the government is considering
measures to be incorporated in the (FY2007) supplementary budget.

In the committee meeting, the opposition bench pursued a series of
scandals involving the Defense Ministry. Asked about former
Administrative Vice Defense Minister Takemasa Moriya's bribery case,
Fukuda stated, "It's truly regrettable that there were scandals at
the Defense Ministry." He added, "It's extremely serious, and we
will have to change the Defense Ministry fundamentally."

5) Refueling bill enters into debate in upper chamber

NIKKEI (Page 2) (Abridged)
December 5, 2007

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The House of Councillors yesterday entered into substantive debate
on a newly-introduced legislative measure intended to resume the
Maritime Self-Defense Force's refueling mission in the Indian Ocean.
The government and ruling parties regard the bill as the most
important legislation in the current Diet session. However, the
Foreign Affairs and Defense Committee is concerned about a scandal
over the Defense Ministry's procurement. In its discussion, the
ruling and opposition parties were never on the same wavelength.

"Japan will do all it can. I do not want to give up on this stance.
It's one of the ways for Japan to live." With this, Prime Minister
Yasuo Fukuda emphasized the necessity of resuming the MSDF's
refueling activities.

The committee focused its discussion yesterday on international
views after the MSDF's pullout and what Japan can do in its
contributions instead of refueling activities.

Ichiro Ozawa, president of the leading opposition Democratic Party
of Japan (Minshuto), has advocated participating in the
International Security Assistance Force (ISAF) in Afghanistan to
assist with its reconstruction. Ozawa asserts that Japan may
participate in ISAF operations. In this regard, Ozawa maintains that
Japan's ISAF participation in the ISAF, if authorized by the United
Nations, does not conflict with the Constitution even though Japan's
ISAF participation includes using armed force.

In his reply, Fukuda rejected Ozawa's standpoint. "We don't take
that view," Fukuda said. "Using armed force conflicts with the
Constitution of Japan," Fukuda added. Referring to the option of
conducting assistance activities in Afghanistan, Foreign Minister
Masahiko Koumura noted that it would be "very difficult" to do so,
reasoning that Japanese nationals in Afghanistan are being advised
to evacuate that country.

Koumura also touched on the MSDF's withdrawal and its impact on
maritime interdiction operations conducted by the naval forces of
foreign countries. "In the case of Pakistan's activities," Koumura
said, "their efficiency is now 40 PERCENT lower than in the days
they were refueled by Japan." He stressed, "It's easy to imagine how
serious the loss of (Japan's) credibility is."

6) Diet session: Slight re-extension plan surfaces; Ruling camp aims
at settling new refueling legislation before year's end

TOKYO SHIMBUN (Page 1) (Full)
December 5, 2007

A plan to re-extend the extraordinary Diet session, which is to end
on Dec. 15, by 7-10 days surfaced yesterday in the ruling camp. The
aim is to secure Diet approval during the current session for the
new antiterror special measures bill aimed at resuming refueling
operations in the Indian Ocean by the Maritime Self-Defense Force
(MSDF). The leaderships of the Liberal Democratic Party (LDP) and
the New Komeito will make a final decision on the propriety of
extending the Diet session and the scope of any extension after
determining opinions in both parties and the movements of the
Democratic Party of Japan (DPJ or Minshuto).

Substantive deliberations on the bill started yesterday at the Upper
House Foreign Affairs and Defense Committee. Prime Minister Yasuo

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Fukuda has urged the bill be put to a vote in the Upper House before
the Diet session ends on Dec. 15. The ruling camp insisted on
expediting deliberations, using reserved days in addition to
scheduled deliberation days of Tuesdays and Thursdays.

DPJ President Ozawa during a press conference yesterday rejected the
idea of deliberating on the bill using reserved days, saying, "How
dare they say that reserved days should be used for deliberations,
shutting their eyes to their own fault?"

The ruling parties' judgment is that if sufficient deliberation time
is secured, the DPJ will have no choice but to agree to take a vote,
as one senior member explained. As such, a proposal for extending
the Diet session by 7-10 days has been made, because this would
secure deliberation time equal to the amount allocated to the Lower
House (approximately 41 hours), even if deliberations take place
only on scheduled days.

Even if the Upper House votes down the bill, which cleared the Lower
House on Nov. 13, it can still be passed into law if it is adopted
again in the Lower House by a two-thirds majority on Jan. 12 or
later, according to the Constitution. As such, the dominant view in
the ruling parties had been that the Diet session should be extended
by about a month to mid-January in readiness for the DPJ putting off
a roll call.

However, if the Diet session is extended to January, the year-end
compilation of the fiscal 2008 budget would be significantly
affected. If the bill is adopted again in the Lower House without a
vote in the Upper House, it would legitimatize the DPJ submitting a
censure motion against the prime minister, as a senior ruling camp
member said. As such, a call for closing the Diet session before
year's end has gained ground.

7) Government reverses passive attitude in reaction to Upper House's
slow deliberation on new antiterrorism bill

SANKEI (Page 5) (Full)
December 5, 2007

With the Dec. 15 end of the current Diet session just around the
corner, the government and ruling party executives, including Prime
Minister Yasuo Fukuda, are increasingly frustrated with the House of
Councillors that has yet to accelerate its debate on a new
antiterrorism special measure bill.

The Upper House Foreign Affairs and Defense Committee began
substantial deliberations on the bill yesterday. In the session,
Prime Minister Fukuda said in a strong tone: "There are many days
left. I would like you to meet everyday to discuss the
legislation."

The prime minister was visibly frustrated yesterday. There was even
an instance when Chief Cabinet Secretary Nobutaka Machimura snapped
at the major opposition Democratic Party of Japan: "You have not
come up with a bill. You should not say things on a whim." The
government has reversed its passive policy course.

The growing frustration of the government and ruling camp comes from
the committee's policy to meet only on Tuesdays and Thursdays, as
scheduled, to discuss the legislation. There are only four days for
substantial deliberations before the Diet session closes. This makes

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it difficult to meet the opposition camp's demand for 41 hours of
deliberation time in the Upper House on a par with the lower
chamber.

DPJ President Ichiro Ozawa in a press conference yesterday rebutted
the call of the government and ruling bloc for holding sessions on
days other than Tuesdays and Thursdays, saying: "The Diet wasted
away two months because of (former Prime Minister Shinzo Abe's)
abrupt announcement to step down. How could they say such a thing at
this point? (Deliberations) should have started in August."

Given the situation in which the committee is chaired by a DPJ
member, the government and ruling coalition have no effective means
to accelerate the deliberations. Looking angry, a cabinet minister
said: "The committee meets only twice a week to discuss matters for
six hours a day. Is the Upper House a house of lords?"

8) DPJ looking for new ammunition following end to Nukaga dinner
party issue

ASAHI (Page 4) (Excerpts)
December 5, 2007

The question of Diet testimony by Finance Minister Fukushiro Nukaga
over his alleged presence at a dinner party was earnestly discussed
at the Diet for the first time yesterday since it had been called
off. As a result, the matter is likely to be effectively settled
before the major opposition Democratic Party of Japan (DPJ or
Minshuto) was able to pursue Nukaga. The DPJ, however, is busy
looking for new ammunition, believing that it can win public support
by pursuing a variety of allegations about the Ministry of Defense
(MOD). Can the party pull itself together to continue pursing
allegations? Its ability will be tested.

"I wanted to ask Finance Minister Nukaga some questions, but my
request was turned down," DPJ member Kazuya Shinba said
disapprovingly at the outset of the House of Councillors Foreign
Affairs and Defense Committee meeting yesterday. Shinba was visibly
unhappy with Nukaga's absence from the meeting.

The DPJ had asked that Nukaga be present at the session, but in the
committee directors' meeting the day before, the matter did not go
as far as to decide it by the rule of majority, forcing the DPJ to
withdraw its request. As a result, the televised question-and-answer
session ended calmly without any questions about Nukaga's alleged
presence at a dinner party or his ties to the defense industry.

Now that the Diet has given up on the DPJ-led decision on Nukaga's
testimony, the prevalent mood in the largest opposition party is
that it should put an end to the dinner party issue for the time
being, with a former party official saying, "We have gone too far
regarding this issue. We must make a fresh start."

9) Opposition camp refuses deliberations on new antiterrorism bill
on days other than those for regular meeting

NIKKEI (Page 2) (Full)
December 5, 2007

The House of Councillors Foreign Affairs and Defense Committee
decided in its executive meeting yesterday to hold the next
question-and-answer session on the new antiterrorism bill that would

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enable Japan to resume its refueling mission tomorrow, the day for a
regular meeting of the committee. The ruling coalition requested
that deliberations should be held on days other than those for
regular meeting and that a vote on the bill be taken by the
scheduled end of the current Diet session on Dec. 15. But the
Democratic Party of Japan (DPJ) declined this request.

Prime Minister Yasuo Fukuda asked the opposition bloc in his reply
at the committee to take a vote on the bill by the end of the
session, saying: "The period of the session is limited, but there
are more days for deliberations. I want the opposition camp to
swiftly come to a conclusion."

In a press conference, DPJ President Ichiro Ozawa criticized
Fukuda's comment, saying: "Setting aside what they did (including
the LDP presidential election, on which much time was spent), he
suggested using reserve days. How arbitrary his suggestion is."

In the DPJ, though, some members are worried that the party might be
criticized for putting off a vote. Secretary General Yukio Hatoyama
told reporters: "It is fully conceivable that we will agree to a
vote when an environment that can convince the public is created."
He thus indicated that the party would consider agreeing to a vote
by the end of this year if the current session is re-extended.

Asked about a re-extension of the session, the prime minister only
replied: "I cannot comment on the next step."

10) Political Fund Control Law to be revised in current Diet
session; Third organ to set guidelines for disclosure of receipts
for expenditures of less than 10,000 yen

MAINICHI (Page 1) (Full)
December 5, 2007

The ruling and opposition parties agreed yesterday to leave a
decision up to a third organ, a Political Fund Rationalization
Committee (tentative name), as to standards for the disclosure of
receipts for every item costing less than 10,000 yen, which won't be
required to be attached to their fund reports but would be kept by
them. With this, consultations on a revision of the Political Fund
Control Law between the ruling and opposition camps have been
concluded. The two camps will confirm this issue in a meeting today
of the Diet affairs committee chairs. The revision bill is expected
to clear the Diet during the current session.

The revised law is expected to be put into effect on Jan. 1. The
ruling and opposition parties have reached an agreement that
receipts for small expenditures will be disclosed by separating
"payments in which power has been abused" from "payments that
violate public order and morals." The third organ will set specific
guidelines and the Ministry of Internal Affairs and Communications
and prefectural government authorities will decide whether receipts
should be disclosed or not. Since the revised law will include vague
expressions, whether they are disclosed will be put off until the
guidelines are compiled. The third organ will pick five committee
members based on Diet approval, and the committee will be
inaugurated as early as next April. The Japanese Communist Party has
opposed the establishment of the committee, however.

The ruling and opposition camps have also agreed that if auditors
authorized by the third organ declare a false report, they will face

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a fine of 300,000 yen.

11) Education Revitalization Council in hamstrung situation, losing
momentum with inauguration of Fukuda administration: Panel members
angry, saying, "Nothing will be decided"

SANKEI (Page 2) (Excerpts)
December 5, 2007

Discussions by the government's Education Revitalization Council,
which is tasked with formulating a third report this month, are
getting nowhere. Though the debate has gone into the homestretch, no
noteworthy results have been produced. Some members are aggravating
a grievance with one complaining, "The Council is doing nothing."
The move to include moral education in school curriculums has also
fallen under a cloud. Government efforts to revitalize education,
the showcase of the previous Abe administration's policy, appear to
have lost momentum with the inauguration of the Fukuda
administration.

A joint subcommittee meeting was held on Dec. 3 to discuss items to
be included in a draft interim report for the third report. Hearing
a flurry of bureaucratic terms, such as "will consider" and "bear in
mind," Miki Watanabe, a panel member and the president of restaurant
chain "Watami," deplored the meeting, saying, "This would never
work." Another member also revealed, "Though I would not voice my
grievance, I am skeptical about the present state of the panel,
which is unable to decide anything."

The panel was launched in October last year by former Prime Minister
Abe with a fanfare, but its discussions have been sluggish.

For instance, discussions to include moral education replacing
ethics classes have come to an impasse. It had been thought that
grading students regarding moral education with a point system as
are the case of other subjects would not be appropriate. One member
proposed, "We should consider other grading method, such as a
description method." However, this proposal was fizzled out in the
end. Acting Chairman Morio Ikeda during a press briefing after the
meeting noted that if moral education is included in school
curriculums, it would be better not to individually grade students'
performance.

12) Cross-factional study group led by Shoichi Nakagawa begins
activities to follow Abe's policy line of "departure from postwar
regime"; The group likely to be called "HANA no Kai"

SANKEI (Page 5) (Abridged)
December 5, 2007

Former Liberal Democratic Party (LDP) Secretary General Taro Aso,
who ran in the latest LDP presidential election as a rival candidate
against Prime Minister Yasuo Fukuda, and former LDP Policy Research
Council Chairman Shoichi Nakagawa have both recently become
politically active. Yesterday, Nakagawa launched a cross-factional
study group. Aso brought together deputy secretaries general and
others in Tokyo. Nakagawa and Aso have both declared that they would
support the Fukuda administration, but what seems to be behind their
moves is the legacy of former Prime Minister Shinzo Abe. This study
group recalls the former "ANA line," which stands for Abe, Nakagawa,
Aso, but now with former Minister of Economy, Trade and Industry
Takeo Hiranuma's joining the group, the name has become informally

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the HANA no Kai. There is a possibility that this group could find
itself in the middle of a political cyclone.

Nakagawa: "What do you think about calling the group 'HANA no Kai'
by adding H standing for Mr. Hiranuma to ANA?"

Aso: "That's a good idea."

Rxchanging views jokingly, Nakagawa conveyed his plan to launch a
study group to Aso, who was sitting next to him during a Lower House
plenary session on Nov. 20.

Nakagawa and Aso tightened their bonds of friendship under the Abe
administration when the relationship of the three was called the
"ANA line." But neither is installed in any responsible posts in the
Fukuda administration at present. Given the current situation in the
Diet, where the ruling coalition holds a majority of seats in the
Lower House, but the Upper House is under the opposition bloc's
control, it is difficult to be anti-mainstreamers. Given this,
Nakagawa has concluded that in order for them to remain influential,
they needed to establish their own study group.

The study group was launched at the Constitutional Government Hall
in the Diet at noon yesterday with the support of 58 Lower and Upper
House lawmakers. It was attended by 30 lawmakers. Nakagawa, who took
the post of chairman, gave a speech at the meeting. In it, he
stated: "I am keenly aware of my responsibility. I'd like to lead
the group with confidence, pride, and modesty." He indicated he
would take over the Abe administration's policy line of "departure
from the postwar regime." Hiranuma, who assumed the post of supreme
advisor, declared: "There is a trend to think that politicians
should call for reform, but what is now sought is an attitude of
cherishing and protecting Japanese culture and traditions."

The official name of the study group has yet to be decided, but some
see it in the light of the hawkish study group "Seirankai" formed in
1973 by Nakagawa's father, former Agriculture Minister Ichiro
Nakagawa (TN: which included Shintaro Ishihara, now Tokyo governor).
Other factions are likely to increase their pressure on members of
the study group.

Former Secretary General Hidenao Nakagawa of the Machimura faction
noted: "Policies should be studied on the premise of supporting the
Fukuda cabinet. Otherwise, those who study policies for purposes
other than that should leave the faction." Nonetheless, some junior
and mid-level lawmakers of the Machimura faction, including Deputy
Secretary General Kouichi Hagiuda, have joined the study group in

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response to Abe's strong wishes.

Meanwhile, Aso brought together a dozen or so lawmakers, including
deputy secretaries general, at a Japanese restaurant in Tokyo's
Kagurazaka late yesterday. Those lawmakers were under the
sponsorship of Aso, when he served as secretary general. The purpose
of the gathering was to recognize their contributions, but the
current LDP executives may see this scene as a provocative act.
Secretary General Bunmei Ibuki, chief of the Ibuki faction to which

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Shoichi Nakagawa belongs, put a good face on toward a series of the
moves involving the study group, noting, "It's for studying
policies; it's fine if they do so without disrupting the unity of
the party." But apparently he was upset about it.

13) Ruling coaling picking up efforts, with eye on election, to map

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out economy-spurring measures given looming uncertainty

NIKKEI (Page 2) (Excerpts)
December 5, 2007

The government and the ruling coalition are stepping up efforts to
hammer out economy-boosting measures, out of concern about a
downturn in the economy due to the recent steep rise in oil prices
and the US subprime loan problem. Prime Minister Yasuo Fukuda
instructed relevant cabinet ministers yesterday to draw up measures
to deal with rising oil prices. With an eye on the next House of
Representatives election, the Liberal Democratic Party and the New
Komeito are eagerly taking the lead in adopting measures in many
cases.

The government and the ruling camp take a considerably severe view
about the future of the economy. LDP Secretary General Bunmei Ibuki
stressed: "Uncertainty is looming due to the subprime loan problem
and price hikes, including crude oil and commodities."

Speaking before reporters yesterday, the prime minister also
emphasized the need for the government to take prompt action,
saying: "It is necessary to consider how to cope with the situation.
We need to pay close attention to future moves, focusing on whether
oil prices will go up further. We want to reach a conclusion as
early as possible and take measures."

The buzzwords for a series of countermeasures worked out by the
ruling coalition are "small businesses," "livelihood," and
"localities." The ruling parties have in mind the July Upper House
election, in which the ruling parties were crushingly defeated by
the Democratic Party of Japan, which stressed in the campaign its
determination to address pocketbook issues.

The ruling camp plans to finalize a package of measures to deal with
the problem of oil price rises by early next week. Included in the
package will be measures to lower the express tolls for trucking
companies; financial aid for small businesses; and assistance for
needy persons in cold districts. These measures are specified in the
two parties' respective packages. This shows signs of a close
teamwork between relevant government agencies and the ruling
coalition.

14) DPJ also preparing measures to deal with oil-price rise, giving
consideration to small businesses but leaving financial resources
vague

NIKKEI (Page 2) (Full)
December 5, 2007

The Democratic Party of Japan (DPJ) has also begun to take action to
deal with the recent sharp rise in oil prices. Based on the view
that the government has little sense of alarm, the main opposition
party set up a project team tasked with working out emergency
measures, chaired by Teruhiko Mashiko, the minister of economy,
trade and industry in the "next cabinet." In its first meeting, the
team drafted a package that includes measures to lower the express
tolls by 30 PERCENT and to provide low-income earners with
subsidies for purchasing oil. The party will announce the package
today.

The DPJ hopes to have the package ready before a supplementary

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budget for this fiscal year is compiled. Small and medium-sized
enterprises, burdened by high oil prices, are also a strong voting
base for the DPJ.

The problem is how to secure financial resources. The DPJ has left
the amount of money to fund these measures ambiguous, citing that it
is under study. The party intends to ask the government to use
reserve funds or surplus funds in a special account in the budget
for this fiscal year.

Most of the listed measures, therefore, are expected to be just
provisional ones. Regarding subsidies for oil, as well, the party is
looking into distributing "oil vouchers" for a limited time only.

15) Fukuda in 2005 became director of Japan-U.S. Center for Peace
and Cultural Exchange, which was searched by prosecutors

ASAHI (Page 4) (Full)
December 5, 2007

Prime Minister Yasuo Fukuda revealed in yesterday's House of
Councillors Foreign Affairs and Defense Committee session that he
had served from 2005 as a director of the Japan-U.S. Center for
Peace and Cultural Exchange, for which Naoki Akiyama, who is
allegedly serving as a liaison between the Japanese and U.S. defense
industries, is also serving as a permanent director. Fukuda also
said that he had resigned as a director and left the organization in
March this year.

Fukuda was responding to a question from Japanese Communist Party
member Satoshi Inoue.

Fukuda said: "I became a member (of the center), as I was advised by
a lawmaker in 2000. There was a reception during my tenure as chief
cabinet secretary, and I delivered a speech for a couple of minutes
there. In 2005, I was asked by a lawmaker to become a director of
the organization, and I accepted the request."

The prime minister also explained his duties as director: "I don't
know much about the center. Although I became a director, I did not
do anything. I have never attended a directors' meeting."

Inoue, pointing out Fukuda's attendance at the organization's
meeting in the United States, also asked if the expenses were paid
by the center. In response, Fukuda said: "I traveled to the United
States seven years ago. Since I have no recollection of receiving
benefits from this organization, I probably paid (the expenses)
myself."

The organization has been searched by the special investigation
squad of the Tokyo District Public Prosecutors Office. The
organization's former directors also include former Defense Minister
Fumio Kyuma, Finance Minister Fukushiro Nukaga, and Defense Minister
Shigeru Ishiba.

16) Ozawa expresses view in favor of unenshrining war criminals from
Yasukuni Shrine

NIKKEI (Page 2) (Full)
December 5, 2007

Asked about the propriety of visits to Yasukuni Shrine by Japanese

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prime ministers, Democratic Party of Japan (DPJ) President Ichiro
Ozawa said: "In the belief that enshrining the souls of Class-A war
criminals is irrational, I have said that if I assume political
power, I will not make an official visit." In a press conference
yesterday, prior to his departure for China tomorrow, Ozawa
expressed his view in favor of unenshrining war criminals from
Yasukuni Shrine.

17) DPJ President Ozawa to visit China ahead of prime minister's
trip to Beijing

ASAHI (Page 4) (Excerpts)
December 5, 2007

Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
will visit China on Dec. 6-8. With an eye on taking over the reins
of government, Ozawa aims to develop his own channels of
communication to China by deepening exchanges with such leading
Chinese figures as President Hu Jintao, with whom the largest
opposition head is expected to hold a meeting on Dec. 7. Referring
to the Taiwan issue prior to his China trip, Ozawa stressed that he
would not just hold friendly relations with Taiwan. He intends to
make the planned China trip an opportunity to exchange frank views
also with China, before Prime Minister Yasuo Fukuda visits Beijing,
not only with the United States.

Ozawa said yesterday in a press conference:

"China and the United States would look down upon us if we curry
favors with them. I've heard that when Mr. Fukuda met with President
Bush, he told the President that Japan would definitely (resume the
refueling mission) and the President told him to pull himself
together. I find that unacceptable."

He also criticized the Fukuda government's China policy:

"In a real sense, Japan is not dealt with. Regarding the six-party
talks, discussions have been held between the United States and
China. North Korea has said that Japan should be excluded from the
members of the multinational talks."

Ozawa, who has advocated that Japan-U.S.-China relations should be
like an isosceles triangle, stated that he would express clear views
and hold a debate with Chinese leaders.

18) LDP, New Komeito: Number of lawmakers -- 24 Upper House and 21
Lower House members -- to accompany Ozawa to China is excessive

ASAHI (Page 4) (Full)
December 5, 2007

The plan of a total of 24 House of Councillors members accompanying
Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa's
visit to China was taken up yesterday in an Upper House Steering
Committee session. Approval by the committee is required for an
overseas trip by Diet members during when the Diet is in session.
Committee members from the ruling Liberal Democratic Party (LDP) and
its coalition partner New Komeito suspended their decisions, citing
that a trip of many lawmakers would affect Diet management. Although
the planned China trip is expected to be approved in a committee
session today, Committee Chairman Takeo Nishioka, a DPJ member, gave
the lawmakers an earful, saying, "I want them refrain from going

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abroad as much as possible if there is no urgency."

A total of 21 House of Representatives members will also accompany
Ozawa. It is unusual for nearly 50 lawmakers to make an overseas
trip at the same time having the same purpose, when the Diet is in
session. The 24 Upper House members include four members of the
chamber's Foreign Affairs and Defense Committee, which deliberates
the new antiterrorism bill to resume the Maritime Self-Defense
Forces' refueling operation in the Indian Ocean. The DPJ will alter
its committee members. The committee will start deliberations
tomorrow.

LDP Upper House Caucus Secretary General Masaki Yamazaki made
yesterday a critical comment: "That's too much." DPJ Upper House
Secretary General Kenji Hirata, however, rebutted: "This have come

SIPDIS
up because they extended the Diet session."

SCHIEFFER

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