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Cablegate: Japanese Morning Press Highlights 08/07/08

DE RUEHKO #2163/01 2200135
P 070135Z AUG 08




E.O. 12958: N/A


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China connection:
1) Prime Minister Fukuda travels to China tomorrow for the opening
ceremony of the Olympics and summit meeting with President Hu
2) Fukuda, Hu likely to take up cooperation in investigating
poisoned dumpling cases, now a domestic issue in China with
discovery of new outbreaks there (Nikkei)

North Korea problem:
3) Japan, DPRK talks restart on 11th after two-month hiatus
4) Restarted Japan-North Korean talks come against a background of
U.S.-DPRK maneuvering on the issue of delisting (Mainichi)

5) Australian woman "Jane", raped by a U.S. soldier, appeals for
steps to prevent future case, says U.S., Japanese governments said
to have concealed her case (Tokyo Shimbun)

Political agenda:
6) Likelihood growing stronger that Fukuda administration, caving in
to New Komeito's wish, will convene the extra Diet session in
September (Mainichi)
7) Ruling parties will seek to speed up Diet agenda as economic and
social welfare issues pile up (Nikkei)
8) Opposition camp willing to return to the Diet but will not
deliberate on the bill extending the anti-terrorism law allowing
Indian Ocean refueling (Tokyo Shimbun)
9) New Komeito becoming more powerful in Diet affairs, setting the
political agenda (Tokyo Shimbun)
10) Mood in ruling parties toward extending refueling mission in
Indian Ocean has seemingly changed overnight, but concern remains
about international reaction (Asahi)
11) Ota, Watanuki meet and agree to be cautious about anti-terror
bill revote (Yomiuri)
12) Maehara says he will not run in the Democratic Party of Japan
presidential race (Yomiuri)

13) Indicators show that the economy is entering a recession
14) LDP Secretary General Aso in tug-of-war with LDP's Hidenao
Nakagawa over course of economic policy line (Sankei)

1) Fukuda to leave for China tomorrow to attend opening ceremony of
Beijing Olympics, to hold talks with President Hu

MAINICHI (Page 2) (Full)
August 7, 2008

Prime Minister Yasuo Fukuda will set out for Beijing, China,
tomorrow to attend the opening ceremony of the Beijing Olympics. It
will be the first time for a Japanese prime minister to attend an
Olympics opening ceremony since Noboru Takeshita attended the
opening ceremony of the Seoul Olympics in 1988. Fukuda is also
scheduled to hold separate talks with President Hu Jintao and
Premier Wen Jiabao.

The upcoming visit to China is the second for Prime Minister Fukuda,
following the one last December. He will have met with Hu four times
and Wen twice in just the one year since assuming office. Fukuda is

TOKYO 00002163 002 OF 010

likely to also visit the Olympic village on the day of the opening
ceremony owing to China's cooperation, though such a visit would
normally be impossible due to stepped-up security against terrorism.
This arrangement shows Beijing's hospitality toward the pro-China

Relations between the Japanese and Chinese governments have also
improved on the working level, as seen from their agreement in June
on joint development of gas fields in the East China Sea. The
planned meetings with Hu and Wen will last only for a short time.
The leaders are expected to confirm their friendship there without
conducting probing discussions. A senior government official said:
"It is significant for both sides to share the joy of the opening of
the Olympics."

2) Fukuda to ask for investigative cooperation on dumpling poisoning
case during Japan-China summit

NIKKEI (Page 1) (Full)
August 7, 2008

The government decided yesterday to ask for China's strong
investigative cooperation regarding the poisoning case triggered by
frozen gyoza meat dumplings made in China. The decision follows
China's announcement that dumplings that had been recalled by their
producer, Tianyang Food, were put on the market and that an unknown
number of Chinese were poisoned by the pesticide methamidophos in
mid-June. Prime Minister Yasuo Fukuda is scheduled to hold separate
meetings with Chinese President Hu Jintao and Premier Wen Jiabao in
Beijing on August 8. The prime minister is expected call for
enhanced cooperation and an early settlement of the poisoning cases
through talks with them.

Chief Cabinet Secretary Nobutaka Machimura in a press conference
yesterday indicated that the prime minister would naturally ask for
investigative cooperation during the upcoming Japan-China summit
talks. In response to the Nikkei's written questions, the Chinese
Foreign Ministry has replied: "Poisoning cases occurred in China in
mid-June. The Public Security Ministry is investigating them
earnestly." According to the Chinese Foreign Ministry, it reported
to the Japanese government on the cases in early July before the G-8
Lake Toya summit.

3) Japan-North Korea talks set for Aug. 11, with focus on abduction

MAINICHI (Page 1) (Slightly abridged)
August 7, 2008

The Foreign Ministry announced yesterday that Japan and North Korea
will hold working-level talks in Shenyang, China, on Aug. 11-12,
aiming to resume talks by the working group on normalizing bilateral
diplomatic relations under the framework of the six-party talks. In
the upcoming talks, the focus of discussion will be on how to
translate into action the promise the North made in the previous
round of talks on June 11-12 in Beijing to reinvestigate the issue
of Japanese nationals abducted by its agents and for Japan to
partially remove its sanctions against Pyongyang.

Akitaka Saiki, director general of the Foreign Ministry Asian and
Oceanian Affairs Bureau, and Song Il Ho, North Korean envoy in
charge of normalization talks with Japan, will be attending the

TOKYO 00002163 003 OF 010


Following the agreement reached in the June talks on such matters as
the start of reinvestigation, Tokyo had been calling on Pyongyang to
resume working-level talks, but the other side had not responded.
Given that the U.S. government has indicated the possibility of
postponing the planned delisting of North Korea as a state sponsor
of terrorism on Aug. 11, Pyongyang is apparently aiming to play up
its positive posture about improving relations with Japan by
agreeing to Japan's call for resuming bilateral talks.

On the abduction issue, Japan has urged the North to commit itself
to an effective reinvestigation, as Chief Cabinet Secretary Nobutaka
Machimura said: "The North should conduct reinvestigation that will
lead to repatriating more abductees," making North Korea wary.
Pyongyang is expected to strongly demand Japan partially lift its
sanctions. The issue of North Korea's handing over Japanese radicals
who had hijacked a plane to North Korea decades ago is also likely
to be on the agenda.

4) N. Korea bargaining with U.S. over delisting

MAINICHI (Page 2) (Abridged)
August 7, 2008

North Korea has now agreed to resume working-level talks with Japan
on Aug. 11-12. What lies behind this is that the United States,
which is expected to delist North Korea as a state sponsor of
terrorism, is now uncertain to do so that day. In late June, the
U.S. government told the U.S. Congress of its delisting decision,
which was expected to go into effect on Aug. 11. Though the leverage
of delisting had weakened since then, it is not becoming effective

"The United States will not delist North Korea unless there is
progress in its talks with North Korea," a senior official of the
Foreign Ministry said. "North Korea may also think it would be
better to talk with Japan to move forward its talks with the United
States," the official added. It was Aug. 5 when Pyongyang answered
that it would agree to hold working-level talks with Japan,
according to the official.

President Bush, in his Aug. 6 press remarks, said the United States
would not automatically delist North Korea, implying that the U.S.
government could postpone its delisting action slated for Aug. 11.
In June, Japan and North Korea held talks. North Korea had expected
the U.S. government to report its delisting decision to the U.S.
Congress in late June. Meanwhile, the United States called on North
Korea to make progress in its relations with Japan. Given this,
Pyongyang likely wanted to play up its cooperation with Tokyo, thus
agreeing to resume working-level talks with Japan.

The Japanese government intends to explore agreements with North
Korea for better relations and wants to resolve the issue of
Japanese nationals abducted to North Korea on the sidelines of talks
over its nuclear issues. However, North Korea is certain to call for
Japan to lift some of its economic sanctions. The Japanese
government could come under fire from public opinion should it fail
to ensure that North Korea reinvestigates the abduction issue and
produces substantive results.

5) Australian woman who was victim of crime by U.S. serviceman calls

TOKYO 00002163 004 OF 010

for recurrence prevention; Japanese, U.S. governments try to cover
up incident

TOKYO SHIMBUN (Page 3) (Full)
August 7, 2008

"Police never asked me till the end, 'Are you all right?' No one
believed me. That day, it was like I was killed."

In April 2002, Jane was in the city of Yokosuka, Kanagawa
Prefecture. She was getting into a car, and then she was raped by a
U.S. serviceman. She ran into a police station even without her
underwear. She was not taken to a hospital. Surrounded by policemen,
she was photographed for an investigation of what happened to her.
It was 13 hours after that when she was released.

Japan still suffers from post-traumatic stress disorder (PTSD). Her
pain was doubled, because the criminal was a U.S. serviceman. About
three months later, the Yokohama District Public Prosecutors Office
decided not to prosecute the U.S. serviceman. The U.S. military also
did not court-martial him.

"The Japanese and U.S. governments try to cover up the crimes
committed by American soldiers. They are lightly charged in many
cases, so the victims have no choice but to just give in."

In 2004, the Tokyo District Court handed down a ruling that ordered
the U.S. serviceman-who was not there-to pay 3 million yen in
compensation. Jane cried aloud. She won the court fight after she
was driven into a tight corner both financially and mentally.

"I thought to myself that I was not all alone," Jane said. "And,"
she added, "we can change it together." Jane has been calling for
recurrence prevention. She is now making every effort to set up a
24-hour center to prevent rapes. She is from Australia.

6) Extraordinary Diet session most likely to be convened in
September: LDP leadership gives consideration to New Komeito's

MAINICHI (Page 5) (Excerpts)
August 7, 2008

The ruling parties remain unable to decide when to convene the next
extraordinary Diet session, because they are at odds over the issue
of whether to extend the New Antiterrorism Special Measures Law.
Even though the secretaries general, Policy Research Council
chairmen and Diet Policy Committee Chairmen of the Liberal
Democratic Party (LDP) and the New Komeito met on August 6 at a
Tokyo hotel and conferred on the matter, they failed to reach a
decision. However, there is a growing possibility of the timetable
of convening the extraordinary Diet session being delayed from late
August, as originally proposed, to September, with consideration
given to the New Komeito. That party is insisting that the session
should be convened in late September, the idea being to put on the
backburner the bill that would extend the anti-terror law.

A formal decision will likely be reached in mid-August or so, after
coordination of views with the government.

The prevailing view in the LDP is that they should enact a bill
amending the New Antiterrorism Special Measures Law, the main focus

TOKYO 00002163 005 OF 010

of attention in the extraordinary Diet session, by taking a revote
in the Lower House (after the bill is rejected in the
opposition-controlled Upper House). However, the New Komeito is
reluctant to do so, since it wants to see the extraordinary Diet
session close early. The party wants the Lower House to be dissolved
around the turn of the year. New Komeito Diet Policy Committee
Chairman Yoshio Urushibara said, "It is questionable to set a date
to convene the extraordinary Diet session, making a revote in the
Lower House a foregone conclusion."

Referring to the extension issue, New Komeito Secretary General
Kazuo Kitagawa at an executive meeting of the ruling parties on the
6th said, "The ruling parties should make efforts so as to obtain
the public's understanding." He took a stance that the ruling camp
should seek cooperation from the opposition parties, instead of
making a revote in the Lower House a precondition.

When he was LDP secretary general, Bunmei Ibuki had insisted that
the extraordinary Diet session should be convened in late August,
creating discord with the New Komeito. However, the new leadership
has shown a stance of giving consideration to the New Komeito with
Ibuki's successor Taro Aso noting, "I do not think that the
extraordinary Diet session should be convened in late August."

7) With eye on next Lower House election, ruling bloc expediting
efforts for economic countermeasures, freeing up road revenues, and
social security panel report

NIKKEI (Page 2) (Excerpts)
August 7, 2008

Both the Liberal Democratic Party and New Komeito have decided to
gear up their policies for the next Lower House election. In their
executive meeting yesterday, the two parties confirmed the policy
course to expedite efforts to come up with economic countermeasures,
concluding steps against rising prices of commodities, including
oil, and specific ways to free up road-related tax revenue for
general purposes. Conclusions to the two parties' outstanding issues
have been postponed. The two parties are now determined to
expeditiously make track records in unity, with an eye on the next
Lower House election that could occur in December or early January.
The plan to implement policies ahead of schedule seems to be
designed to give some latitude to their year-end timetable, as

Yesterday's meeting was held among the secretaries general, policy
research council chairmen and other executives of the two ruling
parties. In the session, LDP Secretary General Taro Aso reminded the
attendants of the need to speedily produce bold economic

The ruling camp is scheduled to draw up an outline of its economic
countermeasures today featuring assistance for maintaining sea
routes to remote islands. The ruling bloc is also set to consider
increasing the funding for such measures that were initially
projected to cost 500 billion yen.

The ruling parties are also planning to resume talks on freeing up
road-related revenues for general spending before the end of the
month and to consider a green tax, as well, with the aim of
submitting related bills to the Diet in November during the next
extraordinary Diet session. The ruling coalition will also call upon

TOKYO 00002163 006 OF 010

the Democratic Party of Japan for revision talks on Consumer Affairs
Agency-related bills with a view to enacting them in the upcoming
Diet session. Further, the two ruling parties will ask the
government's National Commission on Social Security to release its
final report earlier than October as originally planned.

The ruling bloc is expediting its policy discussion from the desire
to play up its achievements to the public ahead of Lower House
dissolution for a snap general election that is likely to occur in
the year-end and New Year period following the latest cabinet
shuffle. The New Komeito, which hopes for the Lower House election
by next January, underlined in yesterday's meeting the need to
materialize policies early in preparation for the political climate
in the fall and beyond.

8) Opposition parties call off Diet boycott, but will not deliberate
the refueling mission bill

TOKYO SHIMBUN (Page 2) (Abridged)
August 7, 2008

Three opposition parties-the Democratic Party of Japan (Minshuto),
the Social Democratic Party, and the People's New Party-held a
meeting of their Diet affairs committee chairmen yesterday in the
Diet and agreed to return to parliamentary deliberations at the next
extraordinary Diet session on legislative measures, except for those
on a bill amending the new Antiterrorism Special Measures Law to
allow the Maritime Self-Defense Force's refueling activities in the
Indian Ocean to continue.

The three opposition parties boycotted Diet deliberations at the
recent ordinary Diet session after the House of Councillors passed a
censure motion against Prime Minister Fukuda. However, they deemed
it better to attend deliberations and pursue the government and the
ruling parties at the extraordinary session over the soaring oil
prices and social security issues.

After the meeting, Kenji Yamaoka, chairman of the DPJ's Diet affairs
committee, met with Tadamori Oshima, chairman of the ruling Liberal
Democratic Party, and proposed holding an out-of-session hearing on
a U.S. nuclear-powered submarine's radiation leakage and food
poisoning caused by frozen Chinese-made 'gyoza' dumplings.

9) New Komeito's influence growing stronger, controlling such issues
as Lower House election, revoting on bills in Lower House; LDP
unable to ignore the party's wishes

TOKYO SHIMBUN (Page 2) (Abridged)
August 7, 2008

The outlook now is likely that the convening of the extraordinary
Diet session will slip to September. The reason is that coalition
partner New Komeito has expressed its strong objection to convening
the session in late August, as the government and some members of
the Liberal Democratic Party (LDP) had wanted. Prior to the next
Lower House election, the influence of the New Komeito, which is
backed by a powerful religious sect, Soka Gakkai, has gradually
grown stronger in the ruling camp.

LDP Secretary General Taro Aso and other senior LDP members on
August 6 met at a local hotel with Komeito Secretary General Kazuo
Kitagawa and other executives, the first for the new coalition

TOKYO 00002163 007 OF 010

leadership. Kitagawa proposed:

"We must make efforts as much as possible to obtain the
understanding of the public toward the bill to amend the new
anti-terrorism special measures law (refueling mission law) and work
on the opposition camp, as well, to obtain their cooperation."

Aso responded by saying, "I totally agree with you."

The reason for the new LDP executive's being filled with willingness
to give consideration to the New Komeito lies in the fact that the
LDP alone is unable to pass the amendment to that law. The
Democratic Party of Japan (DPJ) is opposed to the law, and will
definitely vote down the bill in the Upper House. The only way to
pass the bill is for a two-thirds override vote in the Lower House.

However, to do so requires full attendance by all members of the
Lower House: 320 members must attend the plenary session and vote
for the bill. The LDP (excluding Lower House Speaker Yohei Kono) has
304 seats, and there are five independents who voted for an override
last January. The number is still shy of the two-thirds needed to
pass the bill, so the cooperation of the New Komeito with its 30
seats is absolutely necessary.

The New Komeito has changed its stance and now opposes a revote on
the bill, fearing this would invite a strong reaction from the
public, just prior to a possible Lower House election. The party is
also calling for delaying the convening of the extraordinary Diet
session, creating a gap with former LDP Secretary General Ibuki and
others in the LDP who favor convening the Diet session in August.

For the LDP executive, who had anticipated that the next Lower House
election would be a bitter struggle to accumulate votes, an enmity
toward the New Komeito and its powerful backer has been added.

10) Mood in LDP suddenly changes on continuing the Indian Ocean
refueling mission; The party is now lined up with the New Komeito;
Government worried about the reaction from the international

ASAHI (Page 4) (Excerpts)
August 7, 2008

Calls for taking a cautious approach to continuing the refueling
mission in the Indian Ocean are growing stronger. On the issue of
passing a bill extending refueling activities during the
extraordinary session of the Diet, the New Komeito has mouthed its
objections that such would be a disadvantage in the next Lower House
election. Even in the Liberal Democratic Party (LDP) executive a
similar chord is being struck. On the other hand, LDP Secretary
General Taro Aso has announced that consideration be given to
separate assistance measures, without a simple extension of the law.

The government at this point has not changed its basic policy course
of extending the mission. The reason is the judgment that without
there being some other assistance measures than supplying fuel,
continuing the mission is necessary in order to cooperate with the
international community, starting with the United States. With
Japan-U.S. relations recently being strained over such issues as the
U.S. entering into procedures to remove North Korea from the list of
states sponsoring terrorism, if the refueling operations are ended,

TOKYO 00002163 008 OF 010

the mood between the two countries could get ugly.

11) Ota, Watanuki agree that cautious approach should be taken to a
revote in Lower House on New Antiterrorism Special Measures Law

MAINICHI (Page 5) (Full)
August 7, 2008

New Komeito head Akihiro Ota and People's New Party President
Tamisuke Watanuki on the evening of August 6 met at a Japanese
restaurant in Tokyo. They agreed that a cautious approach should be
taken to a revote in the Lower House on a bill intended to extend
the New Antiterrorism Special Measures Law, a focal point in the
next extraordinary Diet session.

Watanuki during the meeting indicated that it is necessary to
compile a large supplementary budget as part of an economic stimulus
package. He also called for a switch from the structural reform
policy line. The meeting was also joined by Diet Affairs Committee
Chairmen Yoshio Urushibara and Masaaki Itokawa from the two

12) Maehara not to run in DPJ leadership race

YOMIURI (Page 4) (Excerpts)
August 7, 2008

Democratic Party of Japan Vice President Seiji Maehara, holding a
press conference yesterday at the Japan National Press Club,
announced that he would not run in the party presidential election
in September, which is less than one month away. The election will
be officially announced on the 8th and the voting will take place on
the 21st. Maehara's announcement came shortly after Katsuya Okada,
another vice president, expressed reluctance to become a candidate.
Whether anyone will run against President Ozawa remains unclear.

Maehara said: "I want to remain engaged as one of the coordinators.
I firmly believe that a presidential election (involving more than
one candidate) must be held for the evolution of the manifesto
(campaign pledges)."

Ozawa rebutted this in a press conference in Osaka yesterday: "We
have just produced the manifesto (for the Upper House election)
after conducting discussion one year ago. Even if (the next Lower
House election) is held in the fall, how are we going to explain if
our manifesto is different from last year's?"

At present, only Public Relations Committee Chair Yoshihiko Noda and
former Policy Research Committee Chair Yukio Edano are regarded as
likely candidates against Ozawa. Noda said: "We will be able to take
the reins of government once we can present political culture in
which everyone follows (the new leaders) after heated policy
debate." But Noda keeps mum about his candidacy. Edano simply said:
"I want to consult with other fellow DPJ members with my candidacy
in mind."

13) Strong indications of economy in recession: June index drops 1.6
points: Cabinet Office downgrades its economic outlook to

MAINICHI (Top Play) (Excerpts)
August 8, 2008

TOKYO 00002163 009 OF 010

The Cabinet Office on August 6 released the composite index (spot
report) for June. The composite index of coincident economic
indicators, the key gauge of the current state of the nation's
economy, stood at fell to 101.7 against the 2005 base of 100, down
1.6 from the previous month. It downgraded its economic assessment
to "worsening," which tentatively indicates that "there is strong
possibility of the economy having entered a recessionary phase."
This is the first time in two months for the Cabinet Office to
downgrade its economic outlook. Accordingly, the government will
likely remove the word "recovery" from its monthly economic report
for August to be released on the 7th and instead use the downgraded
term "weak note." The data suggest that Japan's longest postwar
expansion, which kicked in in February 2002, ground to a halt and
that there is a strong possibility of the economy already having
entered a recessionary phase.

Some in the Cabinet Office take the view that judging from the
composite index, there is a strong possibility that the economy had
entered a downward phase at the end of the fall last year, as one
senior official said.

The industrial production index has significantly dropped in the
wake of a decline in exports following the slowdown of the global
economy and the steep rise in crude oil and raw material prices.
Many other indexes, such as an employment-related index, have also
dropped. The Cabinet Office up until May had used in its economic
outlook based on the composite index the words "possible turning
point," which indicate that the economy passed the peak several
months ago. However, now that the downward trend of the CI has
become clearer mainly due to a drop in industrial output in June, a
factor that has shored up the economic recovery, the Cabinet Office
downgraded its economic outlook.

14) Battle heating up between Hidenao Nakagawa, Aso over economic

SANKEI (Page 4) (Full)
August 7, 2008

Liberal Democratic Party Secretary General Taro Aso has proposed
delaying the government's goal of putting the primary balance of the
central and local governments in the black by FY 2011. In reaction,
former Secretary General Hidenao Nakagawa, who has advocated
prioritizing economic growth, criticized Aso on his website
yesterday. In part because a number of lawmakers insisting on the
importance of fiscal discipline have joined the second Fukuda
cabinet, including State Minister for Economic and Fiscal Policy
Kaoru Yosano, the battle over economic policy is likely to heat up
in the LDP.

On his website, Nakagawa posted this message: "I can't believe that
a person who is opposed to the prime minister's clear and precise
economic and fiscal policy is in the party leadership." He lashed
out at Aso, though avoiding calling him by name. The message notes
that Aso's argument for postponing the goal "is not within the scope
of policy debate but is a policy switch that would mean the
immediate dissolution of the Diet." Emphasizing that Prime Minister
Yasuo Fukuda has clarified his intention to hold fast to the goal,
the message says: "What the prime minister says is right. I will
carefully watch how the prime minister and party executives form a

TOKYO 00002163 010 OF 010

Meanwhile, Aso said in a speech in Fukui City yesterday: "Persons
who can understand the state of the economy and business activities
have joined the new cabinet, such as Policy Research Council
Chairman Kosuke Hori and Yosano." He then rapped former Internal
Affairs Minister Heizo Takenaka, an advocate of economic growth,
saying: "His views are quite different from mine." Aso stressed the
effectiveness of a positive fiscal policy, remarking: "Although a
primary budget surplus must be achieved sometime in the future, when
to do so is a separate matter. It is proper to expand the economic
pie first and then pay back loans."


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