Cablegate: Daily Summary of Japanese Press 11/10/08

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UNCLAS SECTION 01 OF 10 TOKYO 003109

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
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.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 11/10/08

INDEX:

(1) About 10 years needed for U.S. military realignment in Okinawa:
U.S. PACOM commander (Asahi)

(2) Guam relocation in 2015 or later (Yomiuri)

(3) New ASDF Chief of Staff Hokazono apologizes for damaging public
trust (Nikkei)

(4) DPJ to pursue Tamogami essay blunder as "problem of civilian
control" in summoning him to Diet for testimony (Yomiuri)

(5) Tamogami essay scandal: Additional ASDF members found to have
sent essays, bringing total to 94 (Nikkei)

(6) Refueling bill likely to pass Diet in a week (Nikkei)

(7) Japanese, Chinese chief delegates to six-party talks agree on
need to codify nuclear-verification accord (Yomiuri)

(8) Prime minister jumps on bandwagon of Obama popularity (Tokyo
Shimbun)

(9) DPJ head Ozawa sends letter to U.S. President-elect Obama
(Asahi)

(10) DPJ President Ozawa criticizes Prime Minister Aso as
good-for-nothing (Asahi)

(11) DPJ Secretary General Hatoyama calls for Prime Minister Aso's
resignation (Asahi)

(12) Financial crisis a boost to trading companies: Survive with
M&As targeting overseas companies (Tokyo Shimbun)

(13) Bidding for imported rice fails with traders avoiding impact of
tainted rice incident (Mainichi)

(14) Vice Agricultural Minister Ide expects next U.S. administration
to take even tougher line in beef negotiations, Japan to base
response of scientific knowledge (Nihon Nogyo Shimbun)

ARTICLES:

(1) About 10 years needed for U.S. military realignment in Okinawa:
U.S. PACOM commander

ASAHI (Page 2) (Full)
November 8, 2008

Toshiya Umehara

WASHINGTON-Japan and the United States agreed in 2006 to build an
alternative facility for the U.S. Marine Corps' Futenma Air Station
in Okinawa by 2014 and relocate U.S. Marines from Okinawa to Guam in
that process. However, U.S. Pacific Command (PACOM) Commander
Keating recently indicated that it would be difficult to do so by
that year. "Depending on circumstances, it would be difficult to do
so even by 2015, and it would take another 10 years or so to
implement the realignment plan," Keating said in a meeting held in
New York on Nov. 5. The issue of relocating Futenma airfield has

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been at a deadlock. As it stands, some officials have noted that it
would be difficult to carry out the U.S. military realignment as
scheduled. However, this is the first time that a U.S. government
official has formally admitted to a possible delay in the
realignment schedule.

(2) Guam relocation in 2015 or later

YOMIURI (Page 1) (Full)
Eve., November 8, 2008

WASHINGTON-Japan and the United States have agreed to move 8,000
U.S. Marines from Okinawa to Guam by 2014 in the process of
realigning U.S. forces in Japan. However, this Guam relocation would
not take place until after 2015, and its cost is also highly likely
to swell. According to sources, the United States is now certain to
cut its defense budget for fiscal 2010 (from October 2009) due to
the current financial crisis in the United States. As it stands, the
U.S. government deems it difficult to secure the budget to an extent
that is needed for the Guam relocation to be completed as scheduled,
the sources said.

The U.S. government has informally transmitted such an outlook to
the Japanese government.

The relocation of U.S. Marines from Okinawa to Guam is estimated to
cost a total of 10.27 billion dollars. The Marines' Guam relocation
is planned to be completed in 2014 along with the relocation of the
U.S. Marine Corps' Futenma Air Station to a coastal area of Camp
Schwab in Okinawa Prefecture. In May, however, the U.S. Government
Accountability Office (GAO) of the U.S. Congress noted that the Guam
relocation plan was "too optimistic." There was also a view pointing
out the necessity of infrastructure construction in Guam.

If the planned relocation of Marines from Okinawa to Guam is delayed
due to circumstances in the United States, it will likely affect
Futenma relocation that has been falling behind schedule due to
Japan's own circumstances.

In addition, Japan is to pay 6.09 billion dollars-approximately 60
PERCENT of the total cost-in its burden sharing of the Guam
relocation. In this regard, the United States is even likely to ask
Japan for an additional burden in its share of the relocation cost.

(3) New ASDF Chief of Staff Hokazono apologizes for damaging public
trust

NIKKEI (Page 2) (Abridged slightly)
November 8, 2008

Kenichiro Hokazono, who has become new Air Self-Defense Force chief
of staff, held his first press conference on the afternoon of July
7. In the session, touching on the assertion of his predecessor,
Toshio Tamogami, who has been removed from the post due to his essay
running counter to the government's view, Hokazono said: "Reflecting
earnestly the fact that the inappropriate act has damaged public
trust, I offer my deepest apology."

Hokazono also said about Tamogami's essay, "I read it and I felt it
was inappropriate." Touching on the fact that Tamogami's essay also
refers to the right to collective self-defense, the new ASDF chief
criticized it, saying: "It contains some problems in connection with

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the Constitution, and it is inappropriate from a viewpoint of
civilian control."

Hokazono added that his view on history was the same as the
government's view. He also explained that although he has
contributed a paper on integrated operations to the ASDF journal, he
has not released any essays outside the SDF.

Ahead of the press conference, Defense Minister Yasukazu Hamada
issued a letter of appointment to Hokazono. Hamada encouraged
Hokazono, saying, "The environment is severe, but I expect that you
will fulfill your duties." In taking on the post, Hokazono declared
that he would abide by the Constitution and laws and would not
become involved in political activities. Hokazono's post, Defense
Intelligence Headquarters chief, has been filled by ASDF Deputy
Chief of Staff Koji Shimohira.

(4) DPJ to pursue Tamogami essay blunder as "problem of civilian
control" in summoning him to Diet for testimony

YOMIURI (Page 4) (Slightly abridged)
November 8, 2008

Toshio Tamogami, who was dismissed over his essay contradictory to
the government's view about Japan's wartime aggression in Asia, will
appear as an unsworn witness before the House of Councillors Foreign
Affairs and Defense Committee on Nov. 11. The focus of deliberations
there is expected to be on whether the Air Self-Defense Force (ASDF)
was systematically involved in an essay contest in which Tamogami's
essay won a prize, as well as on future options for civilian
control.

Total of 94 ASDF officers submitted essays

In his first press conference as ASDF chief of staff, Kenichiro
Hokasono, the successor to Tamogami, said: "I deeply apologize for
this problem that undermined public confidence (in the ASDF)." He
then revealed that a total of 94 ASDF members had submitted essays
to the contest organized by the Tokyo-based condominium developer
APA Group.

It has been revealed that the Air Staff Office's Education Division
had faxed a paper outlining how to enter the competition to SDF
troops across the nation. A member of the Air Staff Office said: "We
thought writing an essay would help their training." But it is
unusual for the office to let its members know about an essay
contest organized by a private firm. Tamogami reportedly became
acquainted with APA Group President Toshio Motoya when he commanded
an ASDF unit at Komatsu base in Ishikawa Prefecture. Focusing on
this fact, the Democratic Party of Japan intends to question whether
the ASDF had systematically encouraged applications for the essay
contest, with one member saying: "It is conceivable that Tamogami,
reflecting his personal relationship with Motoya, urged members to
submit essays."

Allowance of retirement criticized

Tamogami verbally conveyed the application of his essay to Kimito
Nakae, director general of the Defense Ministry's Secretariat, but
failed to submit a report in violation of a ministry rule.

Defense Minister Hamada yesterday indicated that the ministry will

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consider strengthening the system to check when Self-Defense Forces
members plan to express opinions in public. The opposition bloc,
however, has criticized this case as a problem of civilian control
over ranking SDF officers. The opposition has also lashed out at the
Defense Ministry for having chosen the option of mandatory
retirement for Tamogami, which will allow him to receive about 60
million yen in retirement pay, instead of dismissing him. The
defense minister hopes to ward off the criticism by letting Tamogami
return the retirement benefit voluntarily. But many observers expect
that Tamogami is unlikely to do so.

In 1978, Chairman of the Joint Chiefs of Staff Hiroomi Kurisu was
dismissed from his post for a controversial remark and agreed to
retire early. Kurisu said: "Even if Japan were to encounter a
surprise raid, it might not be able to respond to the attack legally
in some cases. In such cases, Japan would take extralegal action."

A senior Defense Ministry official, however, commented: "Mr. Kurisu
spoke of the operation of the SDF, so the problem of civilian
control was pointed out. In the case of Mr. Tamogami, though, it is
difficult to fire him, because he just expressed his view about
Japan's war role. Since he did not voluntarily offer to retire, we
had to opt for retirement."

Unanimous decision for Tamogami's essay

Five judges examined the essays submitted to the contest while
covering the names of writers. An APA group member said: "Mr.
Tamogami's work was unanimously chosen to win first prize," but one
judge remarked: "I felt Mr. Tamogami's essay was radical in content,
so I gave it a zero."

(5) Tamogami essay scandal: Additional ASDF members found to have
sent essays, bringing total to 94

NIKKEI (Page 2) (Abridged slightly)
November 8, 2008

It was learned yesterday that an additional 16 Air Self-Defense
Force (ASDF) members had submitted essays to the contest to which
former ASDF Chief of Staff Toshio Tamogami also sent an essay on
history that was at variance with the government's view. This brings
the total to 94 ASDF personnel. Those who are newly found to have
sent essays are based at rescue teams or other units across Japan.
They reportedly followed a set of required procedures, such as
reporting their actions to their superiors.

Kenichiro Hokazono, who became new ASDF Chief of Staff on Nov. 7,
revealed the information in a press conference. He indicated that
the Air Support Command and other units were conducting surveys when
an announcement was made on Nov. 6. The contest collected a total of
235 essays, of which 40 PERCENT came from SDF members.

Hokazono also indicated that the ASDF Personnel and Training
Department director has said that he had informed ASDF troops across
Japan of the essay contest run by the condominium and hotel
developer APA Group at his own decision, denying Tamogami's
involvement. Tamogami in a press conference on Nov. 3 indicated that
he had introduced the contest to his subordinates, adding that he
did not coerce them to send essays.

The ASDF Personnel and Training Department faxed messages on how to

TOKYO 00003109 005 OF 010

enter the essay contest to units nationwide on May 20. The ASDF has
not been able to confirm a case in which its chief of staff had
introduced an essay contest in the past, Hokazono said. General
affairs officials assisting the ASDF chief of staff had been aware
of Tamogami's essay before it came to light.

Tamogami wrote in his essay: "It is certainly a false accusation
that our country was an aggressor nation." He was dismissed from the
post on Oct. 31 and was allowed to retire from the SDF on Nov. 3. He
is scheduled to appear before the Upper House Foreign Affairs and
Defense Committee as an unsworn witness on Nov. 11.

(6) Refueling bill likely to pass Diet in a week

NIKKEI (Page 2) (Abridged)
November 9, 2008

Early in the week, the Diet will enter the final phase of
deliberations between the ruling and opposition camps on a
government-introduced bill extending the Maritime Self-Defense
Force's refueling mission in the Indian Ocean. The leading
opposition Democratic Party of Japan (Minshuto), which holds a
majority of the seats in the House of Councillors, will pursue the
issue of former Air Self-Defense Force Chief of Staff Toshio
Tamogami's controversial essay that ran counter to the government's
view. However, the DPJ will not delay taking a vote on the bill. The
bill is therefore expected to clear the Diet within a week.

The House of Councillors Foreign Affairs and Defense Committee will
summon Tamogami on the morning of Nov. 11 as an unsworn witness,
with relevant cabinet ministers attending. The DPJ will pursue the
government's responsibility for the appointment of Tamogami to the
post of ASDF chief of staff and the propriety of his taking ordinary
retirement.

Meanwhile, the DPJ, after the summons of Tamogami, will respond to
set a date for taking a vote on the bill. The DPJ is wary of
criticism that could come from the public in case the party delays
deliberations. In addition, the DPJ is also concerned that the
Tamogami issue may be put to an end after the refueling bill
deliberations. The DPJ will therefore handle these two matters
separately. "The refueling bill is now highly likely to pass the
Diet by Nov. 14," Masashi Waki, vice chair of the ruling Liberal
Democratic Party's Diet Affairs Committee in the House of
Councillors, said in an executive meeting of the committee on Nov.
7.

(7) Japanese, Chinese chief delegates to six-party talks agree on
need to codify nuclear-verification accord

YOMIURI (Page 2) (Full)
November 8, 2008

Foreign Ministry Asian and Oceanian Affairs Bureau Director General
Akitaka Saiki and Chinese Vice Minister Wu Dawei, both of whom
represent their respective countries' missions to the six-party
talks on the North Korean nuclear issue, held a meeting at the
Chinese Foreign Ministry in Beijing on Nov. 7. They agreed on the
need to codify the contents of an agreement on nuclear verification
procedures in written form.

Saiki explained that Japan will not join the program of economic and

TOKYO 00003109 006 OF 010

energy aid under the six-party-talk framework in exchange for North
Korea's denuclearization unless progress is made on the issue of
North Korea's past abductions of Japanese nationals. Wu said: "The
aid program is an important issue in the process of the six-party
talks."

After the meeting, Saiki told reporters: "There are difficult points
in putting an accord into writing. It is important for the countries
to cooperate with each other." Asked about the timing for the next
six-party session, Saiki replied: "The Chinese side said that no
specific timetable has been set yet."

(8) Prime minister jumps on bandwagon of Obama popularity

TOKYO SHIMBUN (Page 2) (Abridged slightly)
November 8, 2008

By Akihiro Ikushima

Prime Minister Taro Aso is showing eagerness to meet with U.S.
President-elect Barack Obama at an early date. Building a
relationship of trust between the two leaders will be essential for
strengthening the Japan-U.S. alliance. Besides such an ostensible
reason, the prime minister apparently wants to use the occasion to
boost his cabinet's support ratings, which have been dropping.

Prime Minister Aso received a telephone call from President-elect
Obama shortly after seven o'clock on the morning of July 7 at the
Prime Minister's Office (Kantei). Aso congratulated Obama in
English, saying: "Congratulations! I have become the prime minister
of Japan on my fourth attempt but you have won the presidency on
your first bid."

The telephone conversation ended in less than ten minutes. The prime
minister requested close cooperation, citing such issues as the
financial crisis, the war on terror, and the North Korean issue. The
prime minister also directly expressed his eagerness to meet Obama,
saying, "I earnestly want to meet with you."

Aides to the prime minister have been looking for ways for the prime
minister to meet with President-elect Obama by using such occasions
as the emergency summit (financial summit) to be held in Washington
on Nov. 15 and the Asia-Pacific Economic Cooperation (APEC) forum to
be held in Peru starting on Nov. 22.

Some government officials think that from a commonsense viewpoint,
the prime minister should meet with Obama after he is sworn in on
January 20. But the prime minister has judged that in order to
address pressing issues, such as the financial crisis, the two
leaders should meet with each other at an early date.

A Kantei source also expressed hope that the meeting will help buoy
up the Aso administration, saying: "A handshake with Mr. Obama would
result in immeasurable advertising effects." The move is also aimed
to counter the major opposition Democratic Party of Japan, which is
trying to enliven the mood of a change of government by taking
advantage of the victory of Obama, who advocates change.

However, President-elect Obama will be extremely busy making
preparations for taking over the helm of government. Chief Cabinet
Secretary Takeo Kawamura in a press briefing still showed confidence
in realizing an Aso-Obama meeting, saying: "The reaction on that

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side was not dismissive, and I have an impression that (an Aso-Obama
meeting) depends on coordination." Whether a concrete timetable can
be worked out remains unclear.

(9) DPJ head Ozawa sends letter to U.S. President-elect Obama

ASAHI (Page 4) (Full)
November 8, 2008

Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama
revealed in a press conference on Nov. 7 that DPJ President Ichiro
Ozawa had sent on Nov. 6 a letter to U.S. President-elect Barack
Obama. According to Hatoyama, Ozawa expressed in the letter his
determination to take over the reins of government, saying: "Japan's
DPJ want to realize political change in a general election, which
will hopefully be held soon. I believe that we can bring about
change in Japan, as well."

In the letter Ozawa offered his congratulations for Obama's victory
in the presidential election, saying:

"I respect that you have attained your aim after overcoming various
difficulties. I would like to work with you for peace and stability
in the Asia-Pacific region. I am looking forward to seeing you
soon."

(10) DPJ President Ozawa criticizes Prime Minister Aso as
good-for-nothing

ASAHI (Page 4) (Full)
November 8, 2008

During a meeting on Nov. 7 in Sapporo City, Democratic Party of
Japan (DPJ) President Ichiro Ozawa stated:

"Mr. Aso is a good-for-nothing. The fact is that he will not be able
to surmount the difficulties he will encounter during the current
Diet session. There is a strong possibility that he will have to
dissolve the House of Representatives before the next regular
session for a snap election, no matter how he tries to avoid it."

Ozawa then pointed out:

"Even if a second supplementary (budget) is compiled this month
after much debate, it would not be submitted to the Diet until next
month. Because some kind of special account budget would have to be
used (to secure resources), it will be necessary to come up with
budget-related bills. Anybody with even a little knowledge would
realize that it will be difficult to compile a state budget (for
fiscal 2009) no matter how earnestly one tries. The government,
which has tried to avoid an election, repeatedly saying that the
priority is on the economy, will find itself in an impossible
situation."

He then said:

"The economic situation is deteriorating. The view that a
government, which obtains the public support in an election, should
implement a drastic policy will spread among the public. The prime
minister will have to dissolve the Lower House and call a general
election no matter he tries to pass the buck."

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(11) DPJ Secretary General Hatoyama calls for Prime Minister Aso's
resignation

ASAHI (Page 4) (Full)
November 8, 2008

Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama, in
a press conference on Nov. 7, stated: "I often see too much
fuzziness in Prime Minister Taro Aso's remarks. He does not at all
understand the significance of his remarks. The public is perplexed
at them." He then said: "I would like him to step down from his post
as quickly as possible."

Hatoyama criticized Aso's remarks one after the other. Regarding
Aso's remarks on a consumption tax hike, Hatoyama said:

"Even though he had said the consumption tax would be raised in
three years, the said a tax hike should be implemented after
economic recovery. Who said that the economy would recover in three
years? His remarks are inconsistent."

Referring to Aso's remarks on a fixed cash benefit payments plan,
Hatoyama said:

"He initially said that cash incentive would be provided to all
households across the nation. But immediately after he made the
remark, the view is being floated that income limitation should be
set. The prime minister's remarks are all over the place."

Hatoyama also commented on a second additional budget for fiscal
2008: "Since the prime minister announced an economic stimulus
package in a high-handed manner, he should submit it to the ongoing
extraordinary Diet session."

(12) Financial crisis a boost to trading companies: Survive with
M&As targeting overseas companies

TOKYO SHIMBUN (Top Play) (Full)
November 9, 2008

The total value of Japanese companies' M&As involving foreign
companies in the January-October period reached a record high of
approximately 6.67 trillion yen, 3.7 times larger than the amount of
the same period in the preceding year, according to a survey
conducted by Recof, an M&A consulting company, as of November 8.

All-time high of 6.6 trillion yen marked in January-October period

While European and U.S. investment funds, which have been the
leading players in corporate acquisitions, are now cutting back on
their operations due to the financial crisis, Japanese companies are
stepping up their moves to purchase foreign companies, receiving a
boost from the global stock plunges and the strong yen.

Domestic manufacturers are suffering from the decline in foreign
markets. However, leading trading houses, which are profiting from
the sharp rise in resources prices, see the present situation as a
good opportunity, as Marubeni Corporation President Teruo Asada
noted. Financial institutions and food manufacturers, which have
been lagging behind their competitors in Europe and the U.S., will
likely strengthen their corporate acquisition strategies.

TOKYO 00003109 009 OF 010

According to Recof, the record of M&As involving foreign companies
in annual terms was registered in 2006 with about 8.61 trillion yen.
However, the figure achieved as of the end of October this year has
already topped the figures from the comparable period in 2006.

The largest M&A this year was the investment of about 900 billion
yen into Morgan Stanley, a leading U.S. securities firm, by
Mitsubishi-UFJ Financial Group, followed by Takeda Pharmaceutical
Company's investment of approximately 890 billion yen into
Millennium Pharmaceuticals, a U.S. biotechnology-based drug
manufacturer.

Foreign companies are finding it difficult to procure funds. On the
other hand, Sumitomo Corp. can reportedly use funds totaling
approximately 1 trillion yen drawing from its current bank deposits
and bank loans. Vice President Noriaki Shimazaki made a bullish
remark, "We still have more room for investment."

In the face of the financial crisis, the major aim of corporate
acquisition has shifted from money games for investment's sake to
surviving the harsh business environment. Mitsui Bussan Vice
President Junichi Matsumoto said, "The role of Japanese trading
companies, which have real work, will increase."

Anticipating contraction of the domestic market, food manufacturers
have successively bought foreign companies. Suntory has set up a
section exclusively dealing with M&As. As the first M&A, the company
has decided to purchase a leading New Zealand soft drink company for
about 75 billion yen. Daiwa Institute of Research senior analyst
Masami Hamaguchi expects that moves by Japanese companies, centered
on food and pharmaceutical manufacturers, which have relatively
ample funds available, to buy foreign companies will continue for
some time.

(13) Bidding for imported rice fails with traders avoiding impact of
tainted rice incident

MAINICHI (Page 2) (Full)
November 8, 2008

The Ministry of Agriculture, Forestry and Fisheries (MAFF) on
November 7 said that no contracts were concluded in public bidding
for imported rice, which took place for the first time in about two
month. Tenderers were invited for three brands. However, the three
brands received either no bids or only one bid from traders. Since
MAFF included among contract conditions a ban on the sale of tainted
rice even for emergency use, importers apparently shied away from
signing a contract.

Japan is obligated to import approximately 770,000 tons of minimum
access rice under the World Trade Organization (WTO) agreement.
Bidding is held to sell such rice. The government had suspended
bidding since early September following the revelation of the
illegal sale of tainted rice.

Tenderers were invited for open bidding for three brands of rice
totaling 51,000 tons. Two brands, including Thai rice, received one
bid respectively. U.S. rice received no bids. Since the bidding
requires participation by more than two companies, it ended in
failure. There will be another round of bidding.

Before the tainted rice incident was discovered, importers were

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allowed to sell tainted rice discovered in quarantine for industrial
use. Commenting on the failure of the bidding, one official at the
MAFF grain trade division said, "Traders were presumably unable to
make preparations, such as concluding insurance contracts in
readiness for an event that necessitates them to dispose of
purchased rice, in time."

(14) Vice Agricultural Minister Ide expects next U.S. administration
to take even tougher line in beef negotiations, Japan to base
response of scientific knowledge

NIHON NOGYO SHIMBUN (Page 3) (Full)
November 7, 2008

Ministry of Agriculture, Forestry, and Fisheries (MAFF) Vice
Minister Michio Ide on Nov. 6 expressed his views to the press corps
on the issue of import conditions for U.S. beef, now that Senator
Obama has been elected president. "Until now, the U.S. has been
hard-lined, and that won't change," he said. He then added, "Our
major premise is food safety and the securing of consumer
confidence. He will handle the issue not based on political
decisions but based on scientific knowledge."

On trade policy, such as the World Trade Organization (WTO)
negotiations, Ide pointed out: "From the statements made in the
election campaign by candidate Obama, we cannot see a clear
direction." He said it was first necessary to pay attention to the
cabinet lineup, including who becomes U.S. Trade Representative
(USTR).

SCHIEFFER

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