Cablegate: Japanese Morning Press Highlights 10/22/08

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P 220102Z OCT 08




E.O. 12958: N/A



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

Defense affairs:
4) Bill extending the MSDF's refueling mission in the Indian Ocean
clears the Lower House (Mainichi)
5) Dispatch of SDF personnel to Sudan on Oct. 24 (Asahi)
6) Government sets parameters for response to pirate attacks on the
open sea (Asahi)

North Korea problem:
7) Australia a candidate to take over part of Japan's share of
energy aid to North Korea for disabling its nuclear facility
8) Government announces considering providing funding for North
Korea's scrapping of its nuclear program (Nikkei)
9) Government studying third phase of North Korea's denuclearization
process which requires outside funding for implementation (Tokyo

10) Government to provide Georgia with 20 billion yen in aid

Trilateral cooperation:
11) Japan, China, and South Korea to discuss system of monitoring
financial institutions (Yomiuri)
12) December agenda for trilateral discussions among Japan, China

Diet affairs:
13) Democratic Party of Japan (DPJ) cooperative with ruling camp on
passing the refueling bill but will fight over the bill to
strengthen the financial system (Yomiuri)
14) DPJ is changing its spots back to old confrontational stance in
the Diet (Asahi)
15) DPJ alarmed at Prime Minister Aso's tactic of delaying
dissolution of the Lower House (Nikkei)

16) Prime Minister Aso's foreign affairs schedule is so full, there
is little time to think about dissolving the Diet (Sankei)



Housing, car loan repayments double in Iceland due to plunging

Disparities widening among schools in Tokyo after free-selection
system adopted

Fukushima hospital receives donations from patients who underwent
treatment outside medical insurance framework

Part of additional funds offered by Tokyo to Shinginko Tokyo to be

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Tsushima in danger: Three times more South Korean visitors than

Tokyo Shimbun:
Shinagawa to provide low-income earners with
guardianship-system-related subsidies

JCP criticizes ruling coalition, DPJ for pushing refueling bill
through Diet


(1) Either use of reserves or issuance of government bonds as fiscal
resources for tax cuts will just leave burden on future
(2) Japan-India summit: Conduct discussion while focusing on world

(1) Emissions trading system: Don't end up with just trial
(2) Create society free of elderly abuse

(1) Japan should create suitable emissions trading system through
(2) Local governments' crooked accounting: Review subsidy system

(1) Dishonest accounting pouring cold water on decentralization
(2) Global financial crisis gradually worsening Japanese economic

(1) Refueling bill clears Lower House: DPJ's security policy
(2) Chinese economic slowdown: Place emphasis on domestic demand

Tokyo Shimbun:
(1) Ruling coalition eyes 2 trillion yen tax cut, with eye on
general election
(2) Aso's visit to China: Two leaders expected to cooperate in
stabilizing financial system

(1) Government must seriously tackle global warming

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, October 21

NIKKEI (Page 2) (Full)
October 22, 2008

Had a telephone conversation with President Bush at the Kantei in
the presence of Chief Cabinet Secretary Kawamura, Deputy Foreign
Minister Kono, North American Affairs Bureau Director-General
Nishimiya, and Vice Minister of Finance for International Affairs

TOKYO 00002938 003 OF 011

Visited the Global Warming Countermeasures Headquarters.
Afterward attended a cabinet meeting.

Met Finance Minister Nakagawa, Vice Finance Minister Sugimoto, and
Budget Bureau Director-General Tango.

Met Vice Foreign Minister Yabunaka.

Attended a Lower House members' meeting held in the Diet building.

Attended a Lower House plenary session.

Met LDP Diet Affairs Committee Chairman Oshima. Afterward attended
an LDP Women's Bureau executive meeting. Afterward attended a photo
shoot session.

Met at the Kantei Shinohara, Foreign Policy Bureau Director-General
Bessho and others in the presence of Deputy Chief Cabinet Secretary
Matsumoto. Afterward met deputy foreign ministers Sasae and Kono and
Ambassador to India Domichi.

Met the Asian Clay Shooting Federation chairman and others.

Met Japan Business Federation Honorary Chairman Okuda, Chairman
Mitarai, Japan Chamber of Commerce and Industry Chairman Okamura,
Tokyo Electric Power Co. President Katsumata, Nippon Steel Corp.
Chairman Mimura and Others in the presence of METI Minister Nikai,
Environment Minister Saito and others.

Met the international peace unit to Sudan.

Attended a ceremony to hand commemorative gifts to Beijing
Paralympics medal winners and a photo shoot, followed a discussion.

Met advisor Yamaguchi.

Met acquaintances at a restaurant in Akasaka.

Dined with his secretary at an ANA Intercontinental Tokyo

Returned to his private residence in Kamiyama.

4) Refueling extension bill clears lower chamber

MAINICHI (Page 1) (Full)

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October 22, 2008

A bill amending the new Antiterrorism Special Measures Law to extend
the Maritime Self-Defense Force's refueling activities in the Indian
Ocean for another year cleared the House of Representatives in its
plenary sitting yesterday with a majority of votes from the ruling
Liberal Democratic Party and its coalition partner, the New Komeito.
The bill has now been sent to the House of Councillors. The leading
opposition Democratic Party of Japan (Minshuto) and other opposition
parties, including the Japanese Communist Party, the Social
Democratic Party, and the People's New Party, voted against the
legislation. The House of Councillors will hear a government
explanation of the bill in its plenary sitting this morning and will
enter into deliberations on it. The bill will likely be voted down
in a plenary session of the opposition-controlled House of
Councillors on Oct. 29, and after that the bill is expected to pass
the House of Representatives in a second vote that will override the
upper chamber's decision.

Meanwhile, the House of Representatives also took a vote in its
plenary sitting yesterday on the DPJ's counterproposal of a
terrorism eradication bill. The DPJ-proposed bill is intended to
send the Self-Defense Forces after a conflict cessation accord is
reached in Afghanistan. However, it was voted down with a majority
of votes from the ruling coalition, the JCP, and the SDP.

The MSDF refueling mission in the Indian Ocean was suspended last
fall for a while because the Diet's deliberations on the legislation
to extend it were protracted against the backdrop of the Diet's
divided situation. This time, however, the bill cleared the House of
Representatives after actual deliberations for only two days. The
government and the ruling parties have now taken a step forward to
continue the refueling activities under the current law that is to
expire Jan. 15 next year.

Meanwhile, the DPJ-which is the largest of all political parties in
the opposition-dominated House of Councillors-is calling for
dissolving the House of Representatives at an early date as a
precondition for fast-tracking a vote on the new antiterror

5) SDF officers to leave for Sudan on Oct. 24

ASAHI (Page 4) (Full)
October 22, 2008

The government decided yesterday to send two Self-Defense Forces
officers to the headquarters of the United Nations Mission in Sudan
for U.N. peacekeeping operations in the southern part of Sudan. The
two SDF officers, who will leave Japan on Oct. 24, will serve as a
logistics staff officer to coordinate military supplies and as an
intelligence staff officer to control databases.

6) Use of weapons on high seas constitutional

ASAHI (Page 4) (Full)
October 22, 2008

The government made a cabinet decision yesterday to adopt a written
statement regarding the use of weapons by Japan Coast Guard
officials against pirates or suspicious vessels of unknown
nationality in international waters. It goes: "In the case of

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vessels bearing no national flag, using weapons to crack down on
crimes under Japan's laws and ordinances is not a problem in the
light of international law. This does not fall under the use of
armed force prohibited in Article 9 of the Constitution." This is a
reply to the prospectus of a Diet interpellation posed by Akihisa
Nagashima, a House of Representatives member of the leading
opposition Democratic Party of Japan (Minshuto).

7) U.S. informally asks Australia to shoulder Japan's share of heavy
oil aid to North Korea

MAINICHI (Page 1) (Abridged slightly)
October 22, 2008

Akiko Horiyama, Seoul

The United States has informally asked the six-party members to let
Australia shoulder Japan's share of 200,000 tons of heavy fuel it
has yet to implement due to the abduction issue, a U.S.-ROK talks
source in Seoul revealed on Oct. 21. The six parties are in an
agreement to extend energy aid to the North in return for the
disablement of its nuclear facilities. The option is said to have
emerged in the U.S. government to use Australia, a major U.S. ally,
as a strategic concept with an eye on the discussion to forge an
East Asian security cooperative regime at the stage of nuclear
abolishment. The matter is likely to escalate into a debate on
expanding the framework of the six-party talks.

Besides Australia, New Zealand and the European Union (EU) have
expressed willingness to join the energy aid in return for the
disablement since the six countries reached the agreement in
February 2007 on first-stage measures.

According to the U.S.-ROK negotiations source, North Korea expects
the EU excluding France to join the aid effort because the North has
diplomatic ties with it. The United States, on the other hand,
supports participation by Australia, which can make strategic
arguments in collaboration with the United States, while keeping in
mind the discussion on a future regional security system. Multiple
countries are expected to take part in providing the aid in the end.
There is a possibility that Australia will play a role beyond being
a mere aid participant.

A South Korean Foreign Affairs and Trade Ministry official explained
on Oct. 21 about a country extending aid in place of Japan: "The
talks are still at an initial stage, and no country has been picked
formally." The source also expressed a cautious view about expanding
the framework of the six-party talks, saying: "The members are
negative about the possibility of turning the framework into talks
among seven to eight countries."

8) Government announces its decision to consider assisting North
Korea's denuclearization

NIKKEI (Page 2) (Full)
October 22, 1008

The government on October 21 conveyed at a joint meeting of the
LDP's foreign affairs-related divisions held at the party
headquarters its decision to start considering providing funds and
technologies needed for North Korea to dismantle its nuclear
programs. Chief Cabinet Secretary Takeo Kawamura also revealed the

TOKYO 00002938 006 OF 011

plan at a news conference held the same day. Some participants in
the joint meeting called for a prudent approach with one saying,
"Japan could send a wrong message that it gives money without
winning concessions from North Korea."

In the meantime, concerning energy aid to North Korea in return for
its dismantling its nuclear weapons (Japan's share is 200,000 tons
of heavy oil), in which Japan will not take part unless there is
progress in abductions cases involving Japanese nationals, the U.S.
has indicated a stance of accepting an offer for such aid from
countries other than the six-party talks member nations. Australia
and New Zealand are among the candidate countries.

9) Government considering providing funds for third phase of North
Korea denuclearization

TOKYO SHIMBUN (Page 3) (Full)
October 22, 2008

The government has begun discussions on providing funds and
technology in connection with nuclear abolition, a major agenda item
in the third phase of the six-party talks on North Korea's
denuclearization. Foreign Minister Hirofumi Nakasone said in a press
conference yesterday: "We have made contributions through the
International Atomic Energy Agency. We will discuss with countries
connected with the six-party talks how we can contribute to the
abolishment of North Korea's nuclear programs."

Japan has rejected energy aid corresponding to 200,000 tons of heavy
oil to North Korea, citing a lack of progress on the abduction
issue. The government has also begun an effort with countries
concerned, including the United States, to have Australia, New
Zealand, and some European countries shoulder Japan's share of
energy aid. With assistance to nuclear abolishment defined as an
alternative to energy aid, the government's response has been
determined in outline.

Specifically, the government is considering bearing the cost of
removing the fuel rods from nuclear facilities at Yongbyon and
extracted plutonium and demolishing the nuclear facilities,
including nuclear reactors.

In energy aid, Australia and New Zealand have informed Japan that
they would provide 10 million dollars (approximately 1 billion yen)
each, which corresponds to over 30,000 tons of heavy fuel in total.

Coordination is also underway with such countries as Britain. If
that is not enough, the United States and South Korea will also
consider making contributions.

10) Government to provide Georgia with 20 billion yen in aid

ASAHI (Page 4) (Full)
October 22, 2008

The government will announce today in a meeting on support for
Georgia, hosted by the European Union and the World Bank, its
assistance measures for that country totaling approximately 200
million dollars (20 billion yen). Most of the assistance will be
provided in yen loans. Japan's aid will be used to revitalize
regional economies and improve roads damaged by the conflict with
Russia in August.

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Japan will provide Georgia with its first yen loan package in 10
years. The loans will likely total 19 billion yen, nearly four times
of the accumulated total of 5.3 billion yen provided to that country
so far.

Projects subject to the yen loans include the road improvement plan,
which is called "East-West Corridor" (length of 370 kilometers)
linking between Azerbaijan, located on the coast of the Caspian Sea,
and the Black Sea. The road reportedly is absolutely necessary to
transport commodities to South Ossetia, which was devastated by the

11) Japan, China, South Korea to set up organization in November to
discuss system of monitoring financial institutions

YOMIURI (Page 1) (Full)
October 22, 2008

In an effort to stabilize money markets in Asia, monetary
authorities of Japan, China, and South Korea will establish a new
body to discuss a system to monitor financial institutions and
information disclosure, according to informed sources yesterday. The
three countries aim to set up an Asian-version Financial
Stabilization Forum (FSF) composed of the countries participating in
meetings of the Group of Seven (G-7) finance ministers and central
bank governors. They will also call on Association of Southeast
Asian Nations (ASEAN) member countries to join the group. The first
meeting is expected to occur in Tokyo in November to discuss
specific measures to contain the adverse effect of the ongoing
global financial crisis on the Asian economy.

China and South Korea responded to Japan's proposal for establishing
a new consultative organ. The new organ calls itself "the workshop
to stabilize the macro economy and the financial system" (the
Asian-version FSF). Representatives from the three countries'
finance ministries, central banks, and financial supervisory offices
will meet on a regular basis. Participants are expected to discuss a
system to monitor financial institutions' internal supervision
systems designed to grasp the level of the soundness of finances,
the state of loans, and investment risk.

The Asian economy has continued to grow rapidly, but the global
financial crisis triggered by the U.S. has driven stock prices down,
resulting in affecting the real economy. Given this, Japan, China,
and South Korea judged it necessary to hammer out Asia's own
measures to stabilize the financial system, separately from the G-7

Japanese mega-banks, as well as life and non-life insurance
companies have also accelerated moves to establish local
subsidiaries mainly in China and Southeast Asian countries and to go
into partnership with local firms. For Japanese financial
institutions that have placed more emphasis on business in Asia,
efforts to stabilize Asia's financial system are becoming more

The Asia-version FSF is expected to issue positive proposals on such
details as the monitoring of financial institutions and the
transparency of information disclosure, as the same way as being
done by the FSF since it was established in 1999.

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12) Japan-China-South Korea summit: Prime minister sounds out
possibility of holding it in December, creating stir

MAINICHI (Page 2) (Full)
October 22, 2008

Mainichi Shimbun on October 21 learned that Prime Minister Taro Aso
had sounded out China and South Korea about the possibility of
holding the envisaged Japan-China-South Korea summit in Fukuoka City
in December. A senior Foreign Ministry official stressed that
holding such a summit before year's end had been a pending issue
since the previous Fukuda administration. However, if it is to be
held in early December, it could clash with the political agenda if
a Lower House election is held on November 30. Some are, therefore,
puzzled, unable to determine the true reason for the prime
minister's eagerness to hold the summit then.

Aso on the evening of the 21st indicated a desire to hold the summit
before year's end, saying, "The trilateral summit must be held
before the end of the year." He made that statement in front of
reporters at the Kantei. The three countries agreed to hold
trilateral talks once a year, apart from international conferences.
Japan is to host the first meeting. Though it was originally
scheduled to be held in Japan on September 21, it was postponed on
very short notice due to the resignation of former Prime Minister
Yasuo Fukuda.

However, there has been strong concern in the Foreign Ministry that
unless the meeting is held before the end of the year, it would
become impossible for Japan to host the first meeting and should
that occur, China and South Korea might seize the initiative. For
this reason, senior Foreign Ministry officials have been pressing
the prime minister since immediately after his inauguration on the
need to host the summit.

In addition, following the emergence of the financial crisis, China
and South Korea have also asked Japan to hold it before the end of
the year. In response, the prime minister has started undertaking
coordination with the possibility of holding it in December. He
appears to have been determined to set the date of the summit for
December, even if this gives rise to speculation about the timing of
Lower House dissolution.

In the event of the summit schedule being fixed for early December,
concern that it may be impossible to hold a Lower House election on
November 30 is bound to mount.

13) DPJ to cooperate with ruling parties up to amendment to new
antiterrorism law; Determined to stage battle over financial
functions strengthening law

YOMIURI (Page 4) (Full)
October 22, 2008

The DPJ on October 21 held a senior staff meeting, joined by
President Ozawa, Secretary General Hatoyama and others, at the party
headquarters. Participants confirmed that the party would not impede
passage of a bill amending the new Antiterrorism Law to extend the
Maritime Self-Defense Force's refueling mission but would then
switch to a confrontational stance in the Diet, if Prime Minister
Aso puts off dissolution of the Lower House. The party is
considering staging a battle over a bill amending the Financial

TOKYO 00002938 009 OF 011

Function Early Strengthening Law, which the government will submit
to the Diet on October 24.

Shizuka Kamei, deputy president of the People's New Party, in the
Diet called on Hatoyama and Deputy President Kan to return to a
confrontational stance over the bill amending the new antiterrorism
law during Upper House deliberations. They replied that though the
party would cooperate on the bill amending the new terrorism law, it
has yet to decide what approach it would take after that. They also
said that the party would remain quiet, but it would thoroughly
oppose it if the government tries to adopt a second supplementary
budget. Diet Affairs Committee Chairman Kenji Yamaoka at a meeting
of legislators on the 21st emphatically said, "When the Lower House
will be dissolved is very unclear. We want to make a response, after
carefully determining the situation."

Concerning a bill amending the Financial Functions Early
Strengthening Law, the DPJ sought to check the ruling camp, noting,
"It is not necessary to cooperate with the ruling parties, if there
is no dissolution of the Lower House." It is also opposing the
easing of requirements for injecting public money into financial
institutions, insisting that it is not possible to inject tax
payers' money without questioning the management responsibility of
troubled financial institutions. Some, however, take the stance that
if the DPJ opposes, it could give an excuse for the government to
put off Lower House dissolution.

14) DPJ hints at showdown over financial bill

ASAHI (Page4) (Abridged)
October 22, 2008

The leading opposition Democratic Party of Japan (Minshuto) is
assuming a strong stand against the government and the ruling
parties over their plan to introduce a new legislative measure
intended to strengthen the functions of financial institutions. The
DPJ was willing to cooperate on expediting the financial bill's
passage through the Diet in order to urge Prime Minister Aso to
dissolve the House of Representatives at an early date. In the Diet,
however, many surmise that the prime minister will likely put off
his decision on Diet dissolution. The DPJ is therefore reacting
negatively. The DPJ will make a decision on its attitude after
finding out the prime minister's intent and the government bill's

The DPJ held a meeting of its executives for Diet affairs in the
House of Representatives yesterday morning, in which they discussed
a reported plan of the government. In its plan, the government
reportedly will not jack up the management of publicly funded
financial institutions. This point came under fire in the DPJ
meeting. "That's out of the question," one of the participants there
said. "The ruling parties are making a big mistake if they think the
bill will go through on the nod," he added.

Meanwhile, there was a meeting of directors from the House of
Representatives Committee on Financial Affairs yesterday afternoon.
In that meeting as well, the DPJ rejected the government's offer to
explain the bill. "That's all right after a cabinet decision (on the
bill)," a committee director of the DPJ said in the meeting.
Furthermore, the DPJ took up the government's planned capital
injections into the Norinchukin Bank, a banking institution mainly
for farmers. In this regard, the DPJ noted that agricultural

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cooperatives stand behind the ruling Liberal Democratic Party. "If
the bill is biased to one single party," the DPJ warned, "we will
revise it in the House of Councillors."

The current relevant law came into effect four years ago. At that
time, the DPJ voted against its enactment, claiming that it does not
sufficiently pursue the responsibilities of management. This time,
the DPJ was ready to cooperate to have the bill clear the Diet as
early as possible with countermeasures incorporated for credit
crunch. However, the DPJ was increasingly concerned that the
government and the ruling coalition might exploit such a cooperative
stance of the DPJ to pass a number of bills. "They could overdo
something they have," a DPJ executive said.

DPJ President Ozawa and other party executives met yesterday at once
and then confirmed that the DPJ would make its judgment after the
government has formally presented its draft bill. One DPJ executive
said, "If there is no definite promise to dissolve the Diet, we will
deliberate on the bill in a thoroughgoing way." So saying, he
implied that the DPJ could change its tactics, depending on what
will happen to its call for an early dissolution of the Diet.

15) DPJ alarmed by possible postponement of Lower House dissolution;
cautious view about supporting bill to strengthen financial

NIKKEI (Page 2) (Full)
October 22, 2008

The Democratic Party of Japan (DPJ), the largest opposition party,
is moving to constrain the ruling coalition in its Diet measures,
worried about the possibility that the dissolution of the House of
Representatives and a snap election is being put off. The DPJ has
been preparing for a general election, with late November in mind.
However, when the election will be held is uncertain because Prime
Minister Taro Aso plans overseas travel. The largest opposition
party has begun to put pressure on the ruling camp in an attempt to
force an early dissolution of the Lower House, hinting of the
possibility of changing its policy of cooperating to enact a bill
amending the law to strengthen the financial system.

DPJ Diet Affairs Committee Chairman Kenji Yamaoka said yesterday in
a meeting of the party's Lower House members: "Dissolution of the
Lower House remains an extremely uncertainty. We would like to
respond while watching the situation." Yamaoka indicated in his
remarks that the DPJ's scenario of Lower House being dissolved
before the end of October for a snap election in late November might
crumble. Yamaoka hinted at taking a cautious stance toward the
handling of the bill amending the law to strengthen the financial
system's functions, saying: "We will consider our response after
seeing the contents of the bill."

Many in the DPJ now assume that Prime Minister Aso is planning on
staying in office, since he has expressed strong desire to attend an
emergency summit meeting to be held in the United States in

DPJ President Ichiro Ozawa met yesterday at party headquarters with
Secretary General Yukio Hatoyama, Upper House Chairman Azuma
Koshiishi and other officials. Yamaoka referred to the possibility
of the postponement of Lower House dissolution. Koshiishi stressed:
"We will not change our policy for this month." The DPJ executives

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confirmed that the party would quickly vote down as planned a bill
to extend the Maritime Self-Defense Force's refueling mission in the
Indian Ocean.

Ozawa intends to accelerate preparations for the forthcoming
election. At DPJ headquarters, he gave words of encouragements to
candidates endorsed by the party. He told them: "We have not choice
but to do our best with Nov. 30 election in mind. Since you have not
enough time, you must deliver at least 50 outdoor speeches a day

16) Prime Minister Aso has tightly packed diplomatic schedule

SANKEI (Page 5) (Full)
October 22, 2008

Although there is a rumor that the House of Representatives will be
dissolved in November for a snap election, Prime Minister Taro Aso
has a tightly packed diplomatic schedule during that timeframe. Aso
yesterday told U.S. President George W. Bush on the phone that he
would attend the emergency summit of the leaders of the Group of
Eight (G-8) possibly in November in the United States to discuss a
response to the global financial crisis. It has been announced that
Aso will visit Beijing on Oct. 23-25 to attend the summit of the
Asia-Europe Meeting (ASEM). It has also been revealed that Aso
sounded out China and South Korea on holding a trilateral summit in
early December in Fukuoka.

The Aso-Bush telephone conversation was held on the morning of Oct.
21. Aso told Bush: "Japan as chair of the G-8 summit needs to
fulfill the necessary leadership." Aso will meet with the top
leaders of China and South Korea on Oct. 24 for the first time since
he took office. The annual summit of the Asia-Pacific Economic
Conference (APEC), which successive prime ministers attended, will
take place in Lima Peru on Nov. 22-23. Aso plans to hold a
trilateral summit of Japan, China and South Korea in his hometown
Fukuoka on Dec. 6-7. In addition, the government is considering
Aso's attendance to the East Asia Summit, which will be held on Dec.


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