Cablegate: Tokyo Media Reaction - U.S. Financial Crisis

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2563 2620119
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P 180119Z SEP 08
FM AMEMBASSY TOKYO
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RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
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UNCLAS TOKYO 002563

SIPDIS

STATE FOR I/RF, PA/PR/FPC/W, IIP/G/EA, EAP/PD, R/MR,
EAP/J, EAP/P, PM;
USTR FOR PUBLIC AFFAIRS OFFICE;
TREASURY FOR OASIA/IMI;
SECDEF FOR OASD/PA;
CP BUTLER OKINAWA FOR AREA FIELD OFFICE;
PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO JA
SUBJECT: TOKYO MEDIA REACTION - U.S. FINANCIAL CRISIS

1. LEAD STORIES: Thursday morning's Asahi led with the
informal agreement between the ruling LDP and its
junior partner New Komeito to dissolve the Lower House
in early October for a snap election on October 26.

2. "Public Fund Used This Time around" On the USG
decision to bail out insurance firm American
International Group (AIG), the top-circulation,
moderate Yomiuri editorialized (9/18): "The USG
decision to rescue AIG illustrates ambiguities
concerning the criteria used for the injection of
public funds.... The U.S. financial authorities can be
criticized for a double standard. A sufficient
explanation is needed. A bailout (by the federal
government) cannot be permitted to lead to moral hazard
on the part of financial institutions. However, the
U.S. authorities are also tasked with mobilizing all
policy instruments available in order not to trigger a
financial depression."

3. "Do Not Feel Relieved" The liberal Mainichi argued
in an editorial (9/18): "With AIG's downfall averted,
panic-driven U.S. and European financial institutions
appear to be getting out of difficulty. However, they
must not feel relieved.... Rather than waiting to make
a decision in the eleventh hour, the U.S. authorities,
as well as financial institutions, should make the best
use of the current 'grace period' to make additional
efforts to remove market anxiety."

4. "Fundamentals of Crisis Must Be Addressed" The
conservative Sankei contended (9/18): "It is premature
to be relieved. The financial market is still haunted
by suspicions and anxiety. Fundamental conditions
(concerning market turbulence) remain unchanged.... 'At
your own risk' is one of the basic principles of a free
economy. While that principle is acceptable in peace
time, it is a matter of course to choose an alternate
approach when confronted with a financial system crisis
that endangers the overall economy. The USG should be
aware of the magnitude of the current financial crisis,
as well as its responsibilities in the international
economy."

SCHIEFFER

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