Cablegate: Daily Summary of Japanese Press 09/24/08

DE RUEHKO #2638/01 2680759
P 240759Z SEP 08




E.O. 12958: N/A



(1) U.S. financial crisis: Japanese banks bailing out U.S. financial
institutions (Nikkei)

(2) Guam relocation costs rise 4.7 billion dollars, totaling over 15
billion dollars: Marine Forces Pacific estimate (Ryukyu Shimpo)

(3) Are U.S. nuclear warships safe? (Asahi)

(4) Deployment of U.S. nuclear-powered carrier (Part 1): Anxiety
about its safety; Citizens seek self-protection measures: families
to store iodine tablets (Tokyo Shimbun)

(5) Special contribution by Yukio Okamoto (Part B): Japan dropping
out of international mutual aid society; Japan not allowed to stand
outside terrorist bloc (Sankei)



(8) Prime Minister Fukuda's schedule, September 23 (Nikkei)


(1) U.S. financial crisis: Japanese banks bailing out U.S. financial

NIKKEI (Page 3) (Full)
September 23, 2008

Major realignment of financial institutions in the U.S. and Europe
has gotten underway, triggered by the U.S.-induced financial crisis.
Amid such a move, Japanese banks are seen investing in those
financial institutions as saviors. Mitsubishi UFJ Financial Group
(MUFJG) will invest in Morgan Stanley, a U.S. securities firm.
Nomura Holdings will purchase the Asia business of Lehman Brothers.
Japanese banks have thus begun targeting the last stronghold of the
U.S. financial industry, taking the advantage of the financial
crisis, which has been gradually deepening since summer last year.

Last week, when Lehman Brothers filed for bankruptcy, Morgan
Stanley's share price plunged. Media organizations reported that the
firm was trying to find several investors or business partners.
MUFJG was chosen from among several bidders. According to MUFJG, the
basic capital reinforcement agreement with MUFJG is the only such
agreement for that firm. Other bidders and potential business
partners appear to have remained cautious.

In the ongoing financial crisis, U.S. and European financial
institutions were first pressed for major recapitalization in the
second half of last year through early this year. At the time, major
investors were mainly government-affiliated funds in Asia and Middle
Eastern funds flush with oil money. However, it is said that those
funds now find it difficult to make additional investments, strapped
with massive latent losses due to lingering sluggish stock prices.
Japanese banks, whose financial standing is relatively solid by
international standards, have suddenly begun drawing attention for
their investment capacity.

Morgan Stanley accepted investment worth 5 billion dollars or

TOKYO 00002638 002 OF 010

approximately 540 billion yen from a Chinese government-affiliated
fund. Now MUFJG will invest nearly double that amount. MUFJG, which
has particularly abundant capital among Japanese banks, is expected
to use its own funds when investing up to 900 billion yen in Morgan
Stanley. The financial standing of other mega-banks is also

Goldman Sachs, another leading U.S. securities house, will likely
draw major attention as Morgan did. Provided that discussion for
reinforcing that company's capital base heightens, what approach
Sumitomo Mitsui Financial Group (SMFG), which has deep relations
with Goldman, will make will come into focus.

One SMFG executive said, "We will value our historical relationship
with Goldman Sachs." The two financial institutions have had a close
relationship since the former Sumitomo Bank invested a total of 500
million dollars in Goldman Sachs in 1986. In 2003, when SMFG was
facing a bad loan fiasco, Goldman bought 150 billion yen in SMFG
preferred shares to help the Japanese institution strengthen its
financial base.

SMFG has decided to provide approximately 100 billion yen in
financial assistance to Barclays of Britain. However, it has turned
down a similar request for financial assistance from Lehman
Brothers, a leading U.S. securities firm like Goldman Sachs,
apparently giving consideration to Goldman.

The purchase of the Asia business of Lehman Brothers and the ongoing
talks to take over its Europe business by Nomura are another case of
a Japanese financial institution investing in a U.S. financial
institution. Nomura came up with a bidding price exceeding the
amount proposed by its competitors, because it has capital
procurement capacity, backed by its fiscal and profit-earning base.

Japanese banks have successively invested in foreign financial
institutions since early this year. The scale of MUFJG's investment
in Morgan Stanley this time is unprecedented, reflecting that
leading Japanese banks, which have suffered a relatively minor blow
in the current financial crisis stemming from the U.S. subprime
mortgage fiasco, are increasing their presence. The situation is
bound to affect the investment behavior of other Japanese financial

(2) Guam relocation costs rise 4.7 billion dollars, totaling over 15
billion dollars: Marine Forces Pacific estimate

RYUKYU SHIMPO (Top play) (Full)
September 24, 2008

Japan and the United States have reached an intergovernmental
agreement to share the burden of costs for relocating U.S. Marines
from Okinawa to Guam in the process of realigning U.S. forces in
Japan. In this connection, it became known on Sept. 22 that the U.S.
Marine Forces Pacific estimates the total cost for the Guam
relocation at 15 billion dollars (approximately 1.575 trillion yen),
an increase of 4.7 billion dollars (493.5 billion yen) over the
agreed amount (about 10.3 billion dollars or about 1.0815 trillion
yen). The estimated costs include high-speed craft acquisition. In
its report dated Sept. 17, the U.S. Government Accountability Office
(GAO) listed the costs as estimated by a Marine Forces Pacific

TOKYO 00002638 003 OF 010

In its analysis, the GAO report says there are uncertain factors
affecting spending on the relocation of Marines from Okinawa to
Guam. As a precondition for that, the report suggests the need to
settle the various changes in the plan to relocate Futenma airfield.
In a way, this suggestion urges the U.S. government to take action,
with Futenma airfield's offshore relocation in mind.

In April 2006, the Japanese and U.S. government agreed that Japan
would take on approximately 6.1 billion dollars (59 PERCENT ) in the
breakdown of relocation costs. The GAO report makes no mention of
shares in the increased portion. However, the U.S. Congress is
expected to frown on further spending. Accordingly, Washington could
call for Tokyo to further increase its burden.

The extra portion covers acquisition and maintenance costs for
high-speed boats intended to carry Marines in Guam. In addition, it
includes costs for building new training facilities in the Northern
Mariana Islands and purchasing furniture for these facilities.

In addition, the GAO report estimates 2 billion dollars for training
ranges for the Marines on Guam and the Northern Mariana Islands.

In connection with costs for the strategic movement of Marines, the
GAO report estimates an additional outlay of 88 million dollars a
year from Guam as compared with their movement from Okinawa.

(3) Are U.S. nuclear warships safe?

ASAHI (Page 3) (Full)
September 23, 2008

Fumiaki Sonoyama
Kuniichi Tanida, senior writer

The USS George Washington, a U.S. aircraft carrier, is slated to
arrive at the U.S. Navy's Yokosuka base in Kanagawa Prefecture on
Sept. 25 for deployment. The George Washington is the first U.S.
nuclear-powered flattop to be homeported in Japan. The U.S. Navy has
underscored the nuclear aircraft carrier's safety. However, there
have been accidents involving U.S. nuclear warships, such as a fire
on the George Washington and radiation leaks from a nuclear-powered
submarine. Due to such eventualities, the local residents of
Yokosuka are growingly concerned about the aircraft carrier's
deployment. The U.S. Navy has disclosed only limited information on
these incidents, a factor that further rocks the safety myth of U.S.
nuclear warships.

The George Washington caught fire in May when she was underway from
the U.S. East Coast to the Pacific Ocean, and she underwent
large-scale repairs.

The U.S. military's first deployment to Japan of a nuclear-powered
aircraft carrier is aimed to buttress up its western Pacific
presence. On Aug. 7, George Washington Carrier Strike Group
Commander Richard Wren met the press at the San Diego base on the
U.S. West Coast. In his press briefing there, the commander
underscored the safety of the carrier for the Japanese public. "Our
nuclear-powered vessels have operated about 5,000 times around the
equator," he said. "And," he went on, "we've never caused a major
accident in over 50 years of use."

In the same month of August, however, the USS Houston, a

TOKYO 00002638 004 OF 010

nuclear-powered submarine of the U.S. Navy, leaked a trace amount of
radiation when she called at the Yokosuka base in Kanagawa
Prefecture, the Sasebo base in Nagasaki Prefecture, and White Beach
in Uruma City, Okinawa Prefecture. This fact added to local concerns
about nuclear warships.

U.S. nuclear-powered warships are equipped with pressurized light
water reactors. A nuclear-powered submarine has a single nuclear
reactor, and the George Washington has a pair of nuclear reactors.
In terms of commercial reactors, the combined thermal output of the
George Washington's two reactors is equivalent to the No. 1 reactor
at the Mihama nuclear power plant (1,031,000 kilowatts). According
to a private institution's estimate, a large number of local
residents could die should they be exposed to highly concentrated
radiation in the fallout from a major accident.

However, the U.S. Navy has little disclosed data about the reactors
of its nuclear-powered warships. That is because the United States
could lose its military supremacy, according to a U.S. naval

In the case of the Houston's radiation leaks as well, the U.S.
government explained that liquids containing radioactive substance
leaked from a valve. However, the U.S. government has never
explained why the leaked water contained radioactive substance, nor
has it accounted at all for what kind of substance leaked and which
valve leaked such radioactive substance.

"Something like potassium-which exists in the human body and in the
natural world-is quite different in meaning from iodine and cesium
that accumulate in the human body, even though at the same amount,"
said Makoto Akashi, director of the Center for Emergency Radiation
Exposure Medical Studies at the National Institute of Radiological
Sciences. "Their effects on human health cannot be military secrets
at all," he added

The Japanese government swallowed the U.S. government's account. The
Foreign Ministry received a report from the U.S. Embassy and
released the U.S. government's explanation three times. However, the
Japanese government only reiterated the U.S. government's
standpoint, saying the leakage of radiation does not affect the
human body or the environment.

Hiromichi Umebayashi, special advisor to Peace Depot, a nonprofit
organization, commented: "This is nothing but negligence. It's equal
to only discharging information."

Meanwhile, U.S. nuclear-powered warships have made nearly 1,400 port
calls in Japan since 1964. They have received exceptional treatment
because the Japanese government has honored memorandums and
statements issued by the U.S. government in 1964 when the first port
call was made.

The U.S. government promised in its documentation that U.S. nuclear
warships will not replace fuel or repair power units, which could
cause danger, while in Japan. Meanwhile, the U.S. Navy has refused
to provide technical data about the design and operation of its
nuclear warships. In addition, the U.S. Navy has also refused to let
Japanese officials board its nuclear warships for the purpose of
obtaining such technical data. This constrains the Japanese
government's plan to deal with radiation leakage.

TOKYO 00002638 005 OF 010

Since the U.S. government rules out the possibility of an accident
occurring on U.S. nuclear-powered warships, the Japanese government
takes the position that it will not go further.

"The important thing in the event of an accident is to disclose
information without delay," said Hiroshi Honma, a professor emeritus
at Hosei University, who is familiar with legal issues involving the
U.S. military. "Even so," Honma went on, "how far to let us know is
at the U.S. side's discretion." He added, "We have no choice but to
rely on their favor, as a matter of fact."

In 2000, the Japanese government added a clause of nuclear vessel
disasters to its disaster prevention plan, which is based on the
Natural Disasters Law, to determine roles and countermeasures for
the central and local governments. However, the government has yet
to decide on anything about what to do at the stage where Japan and
the United States conflict over their respective sovereignties in
clearing up the causes of nuclear warships' accidents and pursuing
responsibilities for such accidents.

The Ministry of Education, Culture, Sports, Science and Technology
(MEXT) has set up monitoring posts measuring aerial and underwater
radiation in the three ports of call to detect radiation leakage
from U.S. nuclear warships. Patrol boats are also assigned there for
monitoring assistance. MEXT continues to analyze seawater and marine
products sampled right near nuclear warships. In addition, MEXT has
also set up the "Nuclear Ship Monitoring Center" near the Yokosuka
base in preparation for the George Washington's deployment. The
center started its operation on Sept. 1.

In the past, the monitoring system detected abnormality twice.
However, the government could not clear up its cause.

In May 1968, a nuclear-powered submarine entered the port of Sasebo.
At the time, radiation was detected near the nuclear submarine. Its
readout was 10-20 times higher than normal levels. In September
2006, nuclear substances, cobalt 58 and 60, were detected from
seawater sampled near a nuclear submarine in Yokosuka. The U.S. Navy
denied its potential links to the nuclear submarine. Eventually,
this case reached a gray settlement.

The local communities of base-hosting municipalities are concerned
about the port calls of nuclear-powered warships. In August, the
municipal assembly of Sasebo City passed a statement maintaining
that the city should not easily allow nuclear warships to enter port
as long as their safety is not established. In May this year, a
group of citizens in Yokosuka City submitted a petition with about
50,000 signatures working on the city government to hold a
referendum on whether to host the George Washington. The city's
municipal assembly voted down the proposal but passed a resolution
calling on the central government to ensure safety and step up
disaster prevention.

"It is Japanese people who will sustain damage in the event of an
accident," Honma said. "To protect their lives and properties," he
added, "the Japanese government should propose standards for
information disclosure and renegotiate an agreement with the U.S.

(4) Deployment of U.S. nuclear-powered carrier (Part 1): Anxiety
about its safety; Citizens seek self-protection measures: families
to store iodine tablets

TOKYO 00002638 006 OF 010

TOKYO SHIMBUN (Page 28) (Full)
September 23, 2008

"Since the city's countermeasures are insufficient, city residents
have no other recourse but to do what they can to protect

The statement was made by Yokosuka City Assembly member Akihiro
Harada in mid-month, when the deployment of the nuclear-powered
carrier U.S.S. George Washington to Yokosuka Naval Base was
imminent. He was rushing to stock up stable iodine tablets for use
at home. Visiting pharmacies, he explained the need for it and asked
their cooperation. Slowly but surely, the number of stores
consenting to stock the material increased.

Stable iodine prophylaxis will prevent radioactive iodine that has
been released by a nuclear reactor accident or the like from being
absorbed by the human body and causing thyroid cancer. Similar to
local communities that house nuclear power plants, the city of
Yokosuka, too, will stockpile approximately 300,000 tablets at
disaster prevention centers. City residents during a disaster will
be required to take them at evacuation centers.

However, in order to heighten the effectiveness of the preventive
measure, time is of the utmost importance when taking the tablets.
City assembly member Harada made this appeal: "Three hours after the
accident occurs, the effectiveness of the tablets is reduced by
half. I am worried about the response being swift enough, such as a
delay in informing people of the accident. The tablets should always
be stored at home and taken there."

The Ministry of Education and Science and Technology, which promotes
safety measures to counter nuclear-power disasters, will increase
the number of monitoring posts set up inside and outside the base to
measure radiation that might be leaked into the air or the water. It
stressed that it will build a new facility to analyze radioactive
materials, as well as put every effort into the surveillance

That being said, the function of the monitoring system comes into
play only after an accident has occurred. The Japanese side, being
unable to check the safety of the nuclear reactor (in the carrier),
has no way to realize preventive measures. The city last year in
March signed a disaster-prevention accord with the U.S. Navy in
Japan that included mutual assistance at the time of a disaster.
Although it was to provide fully for such measures as early
dispensing of stable iodine tablets, it lacked specifics steps to
control damage such as swift reporting of an accident from the U.S.
forces. The reality is that we can only rely on the U.S. forces.

With such a system of safety measures that only relies on the U.S.
military, a feeling of alarm has grown in the labor union federation
of the Miura Peninsula, the mother organization of Yokosuka City
Mayor Ryoichi Kabaya. The union on Sept. 5 pressed Mayor Kabaya to
take such steps as promoting safety measures for base employees,
saying, "This will become material for making our judgment in next
year's city election." The union's Deputy Manager Noriyuki Iijima
complained: "The city until the end has not indicated to us in a
visible way what its safety measures are."

The U.S.S. George Washington will enter the port of Yokosuka on

TOKYO 00002638 007 OF 010

Sept. 25. It is unprecedented for the United States to deploy a
nuclear-powered vessel of this kind in an overseas base. With a
nuclear disaster and the danger of a terrorist incident looming
ahead, we embark on this report filled with anxiety.

(Nuclear-powered carrier problem news gathering team)

(5) Special contribution by Yukio Okamoto (Part B): Japan dropping
out of international mutual aid society; Japan not allowed to stand
outside terrorist bloc

SANKEI (pp. 1-3) (Abridged slightly)
September 19, 2008

Maritime Self-Defense Force supply vessels are providing fuel to
coalition forces' vessels in the waters off Somalia so that they do
not have to return to the Persian Gulf to be refueled. The task is
safe but requires high technologic skills. The MSDF's performance is
praised and appreciated by other countries.

The Emden, which headed to rescue the Takayama, has also received
fuel from the MSDF refueler Omi. On Aug. 25, coalition naval forces
designated the waters off Somalia as a Maritime Security Patrol Area
(MSPA) and strengthened the setup to defend commercial vessels. I
hear that Germany and Denmark are considering sending additional
naval troops for protecting commercial ships.

Ichiro Ozawa is calling for an end to the MSDF's refueling mission
for coalition forces vessels off Somalia as a violation of the
Constitution. The ruling bloc managed to return the MSDF refueler to
the waters off Somalia by using a two-thirds House of
Representatives override vote. The opposition bloc is again calling
for the withdrawal of the MSDF.

Such a demand would probably make terrorists and assailants feel
relieved. Why the refueling mission, which is divorced from the use
of force, constitutes the use of the right to collective
self-defense is a mystery. Before that, can Ozawa tell Japanese
shipping industry people that we are going to block Japan's support
for the coalition naval forces so seek assistance from coalition
naval vessels?

The predicament does not just make Japan feel small in the
international community. It concerns how Japan should operate in the
world. (Ozawa's demand) is tantamount to saying, let Japan enjoy the
fruit of the international mutual aid society although it will drop
out of the society and urging the society to build a world in which
Japanese people can live safely by forcing all the risks on other

When did Japan become such a country?

? Destructive

The international community has been combating terrorism for over 30
years, but it was still not able to prevent the 9/11 terrorist
attacks on the United States. There have been many terrorist attacks
on civilians in Europe and Asia since then. Why? In recent years,
terrorists' organizational and financial power has increased, and
the use of information and telecommunications technology has made
their attacks even more destructive. Their doctrines have become
more radical, as well. The goal of Osama bin Laden and others is to

TOKYO 00002638 008 OF 010

annihilate civilized society. It does not go along with Japan's
preference for a peaceful settlement. Japan is still on Osama bin
Laden's list of targets of attacks.

The defending side must go into terrorist bases. One of them is
Afghanistan, a country producing 93 PERCENT of opium in the world
and serving as a basis of Al Qaeda and the Taliban. Originating from
there, terrorism has spread to Asia. Another breeding ground for
terrorists is Somalia, anarchy in East Africa.

Coalition naval vessels are deployed in the waters off Somalia to
block exchanges between the two areas. The MSDF's refueling mission
is not for supporting the United States but for Japan itself. When
the world is not safe, Japan is not safe.

Japan is not allowed to stand outside the terrorist bloc by itself.

In 1997, 10 Japanese tourists were killed by terrorists at Luxor,
Egypt. The 9/11 World Trade Center attacks claimed 24 Japanese
lives. In some cases, Japanese nationals launched terrorist attacks.
In 1972, three Japanese men, including Kozo Okamoto, killed 24
people at a Tel Aviv airport. There was the 1977 "Dacca Incident" as
well. Terrorism knows no national borders.

? Sense of mission

The Tiananmen Incident occurred in June 1989. Beijing was on the
verge of chaos because of the clash between the students and the
People's Liberation Army. The evacuation of Japanese nationals
seemed imminent, and we informally asked an airline to airlift them
to Japan. But the airline union did not give its nod of approval. So
I, a Foreign Ministry official at the time, informally asked the
United States about the possibility of rescuing Japanese nationals.
A reply came immediately: "We will extend maximum cooperation. Can
you assemble those leaving China at one place?" Fortunately, we did
not have to plan specifics any further. We learned a sense of
mission from the U.S. government's quick response.

Japan, too, has quite a few civil servants with a strong sense of
mission. In 1987, it became dangerous to sail through the Persian
Gulf because of the intensified Iran-Iraq war. Japan received a
request from the United States to join a multinational fleet to
escort civilian vessels.

Although sending SDF vessels was politically difficult, the Japan
Maritime Safety Agency (JMSA) responded to the request. The JMSA
crafted a plan to deploy patrol boats to the Persian Gulf for
assisting Japanese vessels. JMSA officials' determination reached
Transport Minister Ryutaro Hashimto and the minister declared that
he would board the first patrol boat. Prime Minister Yasuhiro
Nakasone also endorsed the plan.

The plan eventually fell through due to Chief Cabinet Secretary
Masaharu Gotoda's strong opposition. But it was a fact that
arrangements were made to deploy patrol boats to waters 12,000
kilometers away from Japan in order to defend Japanese vessels. A
vessel can reach the Persian Gulf by navigating northward after
passing through the Strait of Hormuz, or can reach off Somalia by
sailing westward without going through the strait.

Once an order is issued, SDF personnel can demonstrate their high
morale. Their sense of mission and performance on overseas missions

TOKYO 00002638 009 OF 010

are often praised by locals.

? Defending fellow citizens

Dispatching the SDF only to places that are not dangerous is the
basic principle established through Diet deliberations. If everyone
stays away from anything dangerous, Japan would not be able to stand
as a state. As a result, only those who do not have any means to
defend themselves would go to such a place.

In Afghanistan, there are Japanese nationals working for the Japan
International Cooperation Agency (JICA) or for nongovernmental
organizations (NGOs). Most foreign aid workers in Afghanistan are
protected by their own military or police under the Provincial
Reconstruction Team (PRT) regime. A total of 27 international teams
are conducting activities under this regime. There is no team to
escort Japanese experts.

There are Foreign Ministry officials in Baghdad. There are no SDF
personnel because the place is dangerous, and the Japanese Embassy
is guarded by Iraqi guards. In Baghdad, the Japanese Embassy is the
only embassy that is not guarded by its own troops.

Some 100 Japanese nationals, including aid workers, are living in
Sudan's capital of Khartoum. Making sure that the city is safe
before sending a couple of SDF personnel there requires tremendous
efforts. Even a fact-finding team was sent there. It has been nearly
six months since Japan received a request form the United Nations,
but the SDF has not been sent there.

The same is true with oceans. Even after the SDF's departure,
Japanese commercial ships would have to cruise off Somalia in order
to pass through the Suez Canal. Japanese tankers have been loading
crude oil in Iraq after the Takasuzu incident. Without their
efforts, Japan would run out of crude oil.

What the Diet is trying to secure is not the safety of the general
public but the safety of SDF troops. There is no other country in
the world that is trying to such. Given the situation, in the case
of Japan, "unarmed teams" are assigned to dangerous areas.

Reportedly there is no chance of deploying the SDF to Afghanistan
because Kazuyo Ito was slain. There are two types of countries in
the world: those that say we cannot go to a place where our fellow
citizen was killed and those that say we will go to the defense our
fellow citizens.


Asahi: Tokyo Shimbun

Nomura strikes deal to buy Lehman's European and Middle Easter

Mainichi: Yomiuri: Sankei
Ex-education minister Nakasone likely to be tapped as foreign
minister in Aso's cabinet to be launched today

Aso to be picked prime minister today: To review public health
insurance scheme for elderly people aged 75 or older; Agreement
reached on LDP-New Komeito coalition; Review organ to discuss

TOKYO 00002638 010 OF 010

regional bloc system to be set up

Japanese Communist Party is the only party people can depend on


(1) We want to ask the New Komeito why it has opted for another
LDP-New Komeito coalition
(2) Border-crossing food safety controls necessary

(1) Ota-led New Komeito: We want a clear cut explanation and action

(2) Falling land prices: Development that does not depend on
speculative money needed

(1) Investment in U.S. securities firms: Japanese banks now going on
(2) Melamine-tainted milk: Strict inspection of China-produced food

(1) Can Japanese financial institutions grab opportunities in the
U.S. financial crisis?
(2) The New Komeito should be aware of its weighty responsibility

(1) Power-sharing talks between LDP and New Komeito: Revising public
health insurance scheme for elderly people aged 75 or older is a
(2) Realignment of financial institutions throughout the world: Use
major turmoil in financial market as good opportunity to advance
into international market

Tokyo Shimbun:
(1) Tainted food products in Japan and China: Japanese and Chinese
citizens should jointly pursue responsibility
(2) Pakistan could become a powder keg in Asia

(1) Deployment of nuclear aircraft carrier George Washington at
Yokosuka Naval Base unacceptable

(8) Prime Minister Fukuda's schedule, September 23

NIKKEI (Page 2) (Full)
September 24, 2008

09:34 Attended Autumnal Equinox Festival at Imperial Palace.
11:21 Returned to his private residence in Nozawa, Tokyo.


© Scoop Media

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