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Cablegate: Japanese Morning Press Highlights 11/20/08

DE RUEHKO #3194/01 3240124
P 190124Z NOV 08




E.O. 12958: N/A


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

Diet agenda:
4) Japan Business Federation chairman blasts Democratic Party of
Japan (DPJ) for blocking passage of the bill to allow refueling
operations in the Indian Ocean (Asahi)
5) Showered with criticism, DPJ returns to deliberations in Upper
House, ending boycott (Yomiuri)
6) Second supplementary budget to be submitted to the regular Diet
session in January (Yomiuri)
7) By delaying submission of the second supplementary budget,
containing stimulus package, Prime Minister Aso placing self in
difficult spot (Tokyo Shimbun)

Political economics:
8) Prime Minister Aso backs freeze on postal stocks, citing the
turmoil in the market (Asahi)
9) Aso trying to get the "post office vote" to return to the ruling
party by freezing sales of stocks that are part of the unpopular
privatization of postal services (Mainichi)
10) Aso to distribute 1 trillion yen from road tax revenues to local
governments to freely use (Asahi)

11) Aso says, "Many doctors lack common sense," but later apologizes

DPJ politics:
12) DPJ adds 11 to its list of sponsored candidates bringing the
total who will run in the next Lower House election to 234
13) DPJ President Ozawa negative about running from another district
than his old one (Mainichi)

Welfare Ministry targeted:
14) Aso administration being tested in response to first crisis, the
Health Ministry stabbings (Tokyo Shimbun)

15) Putin visit to Japan put off (Asahi)



Culprit entered home of ex-vice welfare minister in Tokyo at time of

Mainichi, Yomiuri, Sankei & Tokyo Shimbun
Attacker pretended to be parcel delivery person in Saitama assault
case, as well

Itochu to acquire 20 PERCENT stake in Chinese largest
processed-food company



TOKYO 00003194 002 OF 010

(1) Attacks on ex-vice welfare ministers: Public enemy never
(2) Prime minister should submit second extra budget to current Diet

(1) Attacks on government officials unprecedentedly despicable

(1) Banks post losses due to economic woes, weak stock prices
(2) Afghan situation going deeper into maze as Taliban rampant

(1) APEC as chance for Japan to play up presence
(2) M&A with foreign firms making use of yen appreciation

(1) Attacks on government officials: Impermissible terrorism against
(2) Revision of Nationality Law: More discussion needed to eliminate
illegal acts

Tokyo Shimbun:
(1) Attacks on government officials impermissible despicable crime
(2) Mid-term account settlement: Roll back with future products

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, November 19

NIKKEI (Page 2) (Full)
November 20, 2008

Met Japan Association of Private Universities and Colleges Chairman
Yuichiro Anzai and Association of Private Universities of Japan
Chairman Sunao Onuma at the Kantei.

Attended a local assembly chairmen's convention held at the NHK

Attended a National Governors' Association conference held at the

Attended a national private kindergarten PTA federation convention
held at the Grand Prince Hotel Akasaka.

Attended a Japan-Australia conference held at the Mita Kyoyo
Conference Hall.

Met at the Kantei JICA President Sadako Ogata in the presence of
MOFA International Cooperation Bureau Director-General Kitera.
Afterward met Shiseido Honorary Chairman Yoshiharu Fukuhara and
other Japan-France Club members.


TOKYO 00003194 003 OF 010

Met Administrative Reform Minister Amari, followed by Economic and
Fiscal Policy Minister Yosano. Later met Upper House Caucus Chairman

Met his secretary at the Imperial Hotel.

Prime Minister's schedule, November 20

NIKKEI (Page 2) (Full)
November 20, 2008

Returned to his private residence in Kamiyamacho.

4) Keidanren chairman criticizes DPJ

ASAHI (Page 4) (Full)
November 20, 2008

Opposition parties, including the Democratic Party of Japan, have
yet to take a vote on a bill amending the Refueling Assistance
Special Measures Law, and have pressed the ruling bloc for
presenting a second supplementary budget to the Diet in the current
session. Touching on this fact, Nippon Keidanren (Japan Business
Federation) Chairman Fujio Mitarai said yesterday, "They cannot
avoid being criticized for politicizing the matter."

Mitarai was responding to a question emerged in a press conference
held in Kanazawa City after a meeting between the Keidanren and the
Hokuriku Economic Federation.

About the bill amending the special measures law to extend the
refueling mission in the Indian Ocean, Mitarai said: "The matter
should be considered from a viewpoint of international cooperation;
it is different from domestic issues."

Association of Corporate Executives Chairman Masamitsu Sakurai, too,
criticized on Nov. 18 the DPJ's response, saying: "It is
inappropriate to discuss Lower House dissolution by linking economic
stimulus measures to other important bills."

5) DPJ returns to Upper House deliberations in order to ease
criticism that it is boycotting discussions

YOMIURI (Page 4) (Abridged slightly)
November 20, 2008

The Democratic Party of Japan has returned to House of Councillors
deliberations with its attendance at yesterday's Upper House
Financial Affairs Committee session discussing a bill amending the
Financial Function Strengthening Law. The party's confrontational
policy course of not taking votes on bills amending the New
Antiterrorism Special Measures Law and the financial sector
strengthening law unless a fiscal 2008 second supplementary budget
is submitted to the current session has drawn objections from both
inside and outside the party. The return to Upper House
deliberations reflects the DPJ's intent to put on a cap on criticism
that it has boycotted Diet deliberations and that it has also taken
antiterrorism and financial legislation hostage.

DPJ President Ichiro Ozawa, in a press conference in Yokohama

TOKYO 00003194 004 OF 010

yesterday, reiterated that the government should submit the second
extra budget to the Diet in the current session. He said: "Prime
Minister Aso said he would prioritize the economy over an election.
If he does not present a supplementary budget, he would end up doing
nothing for three, four months." Ozawa also indicated that his party
would clash head on with the government and the ruling parties from
the beginning of the next regular Diet session, saying: "If this
situation persists with next year's regular session approaching, we
will gear up believing the next Lower House election is near."

Later in the day, DPJ Diet Affairs Committee Chairman Kenji Yamaoka
met with his LDP counterpart, Tadamori Oshima, in the Diet building
and asked him if the ruling coalition would respond to the DPJ's
request for the presentation of the second extra budget.

Ozawa's bullish stance comes from the belief that the DPJ's demand
for the supplementary budget would win public support. There is
strong concern in the DPJ, with one saying: "If we are regarded as
boycotting Diet deliberations and taking antiterrorism and financial
legislation hostage, our just argument would become less convincing
to the public."

This can explain why the DPJ is taking the stance of not boycotting
all committee deliberations though it has declared that it would not
take votes on antiterrorism and bank strengthening legislation. The
party, however, boycotted six Upper House committee meetings on Nov.

In yesterday's meeting of directors of the Upper House Foreign
Affairs and Defense Committee that is discussing the bill amending
the new antiterrorism law, the opposition side demanded
deliberations. Chairman Toshimi Kitazawa of the DPJ also proposed a
question-and-answer session on civilian control. Some DPJ lawmakers
think there are not enough materials to keep pushing back a vote.
The party, however, intends to pursue for the time being the nature
of the Defense Ministry and the Self-Defense Forces while taking up
a sexual harassment scandal involving a high-ranking Air
Self-Defense Force officer and other matters. The ruling bloc keeps
the stance of not responding to the DPJ's call for deliberations
unless it takes a vote on the legislation, saying its unilateral
breach on Nov. 18 of an agreement is unforgivable. There are no
prospects for deliberations.

At Upper House Financial Affairs Committee sessions, the DPJ plans
to apply pressure on the ruling camp by taking up the question of
the financially troubled ShinGinko Tokyo and other matters.

6) Second supplementary budget to be submitted to regular Diet

YOMIURI (Page 2) (Full)
November 20, 2008

The government and the ruling camp on November 19 started
undertaking coordination with the possibility of submitting the
second supplementary budget bill incorporating a flat-sum
cash-benefit program to the regular session of the Diet to be
convened next January. It will not be submitted to the current
session that closes on November 30, even if it is extended. The aim
is to avoid the submission of the bill having an impact on the
compilation of the fiscal 2009 budget and an annual tax-code
revision in December. In view of the coordination of views of the

TOKYO 00003194 005 OF 010

flat-sum cash benefit program having encountered complications, the
government and the ruling parties determined that since opposition
parties are expected to rigorously attack the contents of the
supplementary budget bill if it is submitted to the current session,
it would be wise to make a fresh start on the issue.

If the second supplementary budget bill is not submitted to the
current Diet session, the Democratic Party of Japan's stance is that
it will not agree to take votes on bills amending the New
Antiterrorism Special Measures Law for US-led antiterrorism
operations and the Financial Functions Early Strengthening Law in
the Upper House.

The government and the ruling parties intend to enact both bills,
applying a legal measure that failure by the House of Councillors to
take final action within 60 days after receipt of a bill passed by
the House of Representatives may be viewed by the House of
Representatives to constitute a rejection of the said bill by upper

In this connection, LDP Diet Affairs Committee Chairman Tadamori
Omori and his DPJ counterpart Kenji Yamaoka on the 19th held talks.
Yamaoka sought the submission of the bills during the current Diet
session. Oshima said that he would reply on the 25th.

7) Submission of second supplementary budget bill to be delayed:
"Aso for the economy" makes awkward excuse

TOKYO SHIMBUN (Page 2) (Almost full)
November 20, 2008

The Democratic Party of Japan (DPJ) is pressing the government to
submit the fiscal 2008 second supplementary budget bill to the
current Diet Session. The government and the ruling parties are busy
providing explanations on their decision to delay the timing. Prime
Minister Taro Aso's explanations are changing repeatedly.

"It is difficult in terms of timing. Given the need to revise down a
projection for tax revenues, it is impossible to determine an
outlook for tax revenues for fiscal 2008 before December 20." So
saying, Liberal Democratic Party (LDP) Diet Affairs Committee
Chairman Tadamori Omori at a meeting of the ruling parties conveyed
to participants that the submission of the bill to the current Diet
session will likely be delayed.

A downward revision to the projection for tax revenues for fiscal
2008 by about 6 trillion yen is expected to be necessary due to a
decline in tax revenues as a result of the economic recession. For
this reason, Oshima said, "A projection for tax revenues must be
finalized, by revising down the initial estimate. Otherwise it would
be impossible to draft the supplementary budget bill."

However, some government officials are still of the opinion that it
is possible to compile the budget by November 28, if a downward
revision to the projection for tax revenues is removed from the
budget compilation work. The government has considered submitting
the portion of the economic stimulus package, removing a portion of
the downward revision to the tax revenue projection. The
supplementary budget bill will be automatically enacted 30 days
after it clears the Lower House. Even if opposition parties oppose
the bill in the Upper House, it would be possible to enact it early
in the new year, if the current Diet session is extended.

TOKYO 00003194 006 OF 010

However, bills related to a downward revision to the tax revenue
projection requires a second vote in the Lower House, based on the
60-day legislation measure. The passage of those bills is bound to
be delayed until December. In that event, it would be necessary to
extend the Diet session until February next year.

However, it is a usual practice under a Diet Law provision to
convene the regular Diet session within January. As such, even if
the current extraordinary Diet session is extended into the next
year, the 60-day rule cannot be applied, preventing the bills from
securing Diet approval.

The government and the ruling parties are frantic about providing
explanations on their decision to delay the submission of the fiscal
2008 supplementary budget bill to the Diet, because the DPJ has
confronted the prime minister with a proposal for cooperation on
deliberations on the second supplementary budget bill.

Regarding whether to submit the budget bill to the current Diet
session or not, the prime minister during a press conference late
last month said, "I cannot reply before determining whether we can
obtain cooperation from the DPJ." Since Ozawa has revealed a
cooperative stance, the prime minister had no choice but to cite
that the downward revision to the tax revenue projection is the
bottleneck in submitting the bill to the current session. The prime
minister is now becoming suspicious about Ozawa's approach,
according to a government source.

However, since he has insisted that the point of the economic
stimulus package is "speediness," an increasing number of ruling
party members are unhappy about the delay in the submission of the
bill to the Diet with one saying that it is necessary to explain to
the pubic why the government does not submit the bill.

8) "Freeze the sale of postal stocks," says premier following stock

ASAHI (Page 1) (Full)
November 20, 2008

The sale of stocks of Japan Post Group companies is to be started in
fiscal 2010. In this connection, Prime Minister Aso on November 20
told reporters, "It is better to freeze the plan." He made this
comment with an eye on the current stock plunges. There has now
appeared a possibility of talks to revise the bill freezing the sale
of postal stocks, submitted by the Democratic Party of Japan (DPJ),
the Social Democratic Party (SDP) and the People's New Party (PNP)
and approved in the Upper House, jump-starting.

The plan is to sell stocks of Japan Post Holdings, Japan Post Bank
and Japan Post Insurance. The government holds all shares of Japan
Post Holdings. Japan Post Holdings holds all shares of Japan Post
Bank and Japan Post Insurance. The sale of those stocks is the
pillar of the postal privatization promoted by former Prime Minister

The prime minister said, "It is ridiculous to sell postal stocks at
a time when stock prices are plummeting. It is only natural to sell
stocks when their prices are high." The bill freezing the sale of
postal stocks has been sent to the Lower House. Some Liberal
Democratic Party (LDP) members are beginning to support it.

TOKYO 00003194 007 OF 010

The prime minister ruled out any possibility of taking a second look
at the privatization of postal services, saying, "I am not eyeing
nationalization." He then pointed out, "It is necessary to consider
building a system that will make the privatized company profitable."
He thus indicated his intention to review the way Japan Post Group
companies operate with a revision every three years as stipulated
under the postal privatization law in mind.

9) Mood of reconsidering postal privatization in LDP in order to win
"postal votes"

MAINICHI (Page 5) (Slightly abridged)
November 20, 2008

A mood of reviewing the process of postal privatization has suddenly
heightened. Prime Minister Taro Aso yesterday indicated he would
support a possible freeze on the planned sale of state-owned shares
in three companies under Japan Post Holding Company. Moreover, the
Diet affairs committee chiefs of the ruling Liberal Democratic Party
(LDP) and the minor opposition People's New Party (PNP) agreed to
hold deliberations on revising the bill to freeze the sale of
state-owned shares. The LDP's move comes from its expectations for
winning "postal votes" in the next general election of the House of
Representatives, even though the LDP won big in the 2005 Lower House
election with a campaign slogan of privatizing postal services.

Shizuka Kamei, deputy chief of the PNP, was adamant in policy
consultations on Nov. 14 between his party and the main opposition
Democratic Party of Japan (DPJ), saying:

"The LDP may review postal privatization, shifting its policy.
Unless the DPJ is serious (about reviewing postal privatization),
there is a possibility that the (PNP) will leave the parliamentary
group in the House of Councillors. There would be no election

On Nov. 12 at the Prime Minister's Official Residence, PNP President
Tamisuke Watanuki met with Aso to ask for his support for the freeze
of sale of state-owned shares.

Reconsideration of postal privatization is in the PNP's policy
platform. Although a bill freezing the sale of shares was adopted
last December in the Upper House, the ruling coalition-controlled
Lower House left it on the shelf. Aso told Watanuki that he would
tell the LDP's Diet Affairs Committee. Diet Affairs Committee
Chairman Tadamori Oshima was quick to take action.

Many LDP lawmakers believe that postal privatization was one of the
reasons for the party's defeat in last summer's Upper House
election, since voters in rural areas distanced themselves from the

10) Of total of 1.3 trillion yen drawn from highway revenue funds,
Prime minister to allocate 1 trillion yen to local governments as
local grant tax

ASAHI (Page 1) (Excerpt)
November 20, 2008

Prime Minister Aso yesterday indicated that accompanying the turning
of the special highway revenue funds into general funds, he was

TOKYO 00003194 008 OF 010

thinking of having the central government allocate as a local grant
tax 1 trillion yen out of a total of 1.3 trillion yen in funds to
local governments. If the funds are turned into a local grant tax,
there would be no restrictions place on its use, except that the
cash must be used for purposes other than road-building. There is
likely to be a fierce reaction from the road-policy clique in the
Diet whose members intend to limit the local grant tax to use for
public works projects.

11) Aso, says, "Many doctors lack common sense," but later

ASAHI (Page 1) (Full)
November 20, 2008

Prime Minister Aso made the following remark in a meeting of
prefectural governors yesterday when asked what measures he intends
to take to cope with the current problem of shortage of doctors:

"I can't speak from the perspective of someone who manages a
hospital, but I do understand that hospitals in rural areas are
having trouble (getting doctors). Frankly speaking, there are many
doctors who pretty much lack common sense. ... (Doctors) must be
held responsible for the current serious shortage. I recall that our
party once scolded (doctors), 'Who suggested that the number of
doctors should be decreased because there are too many?'"

He indicated the government would make such efforts as reviewing the
clinical training system, which is said to be one of the main causes
for the shortage of doctors.

Asked by reporters later in the day about the real intention of his
remarks, Aso said: I apologize if decent doctors felt displeased."
Aso's relatives run Iizuka Hospital under the wings of the Aso group
in Iizuka City, Fukuoka Prefecture, where he comes from.

In reaction to the controversial remarks by Aso, Toshio Nakagawa, an
executive board member of the Japan Medical Association (JMA),
stated in a press conference: "I cannot believe it. It is
inconceivable that the prime minister made such a remark." The Japan
Medical Federation, a political group of the JMA, is a support group
of the Liberal Democratic Party. Some LDP members voice concern
about the negative effect of the remarks by the prime minister on
the next general election.

12) DPJ announces additional candidates; Ozawa not included

YOMIURI (Page 4) (Excerpts)
November 20, 2008

The Democratic Party of Japan announced yesterday an additional 11
individuals it has officially endorsed for the new Lower House
election, bringing the total to 234.

The party again put off endorsing President Ozawa. Ozawa, who is
representing Iwate Constituency No. 4, had this to say about
switching his constituencies in a press conference in Yokohama
yesterday: "We have determined our candidates for the vast majority
of the constitutions in the country, and there aren't many
constituencies left to which I can switch. I want to determine my
constituency by monitoring the entire situation of the country until
shortly before the election."

TOKYO 00003194 009 OF 010

Ozawa also announced in the press conference that the party would
field Lower House member Tetsundo Iwakuni (proportional
representation South Kanto bloc) for Kanagawa Constituency No. 1
instead of No.8. The party does not plan to field anyone for
Constituency No. 8 by envisioning post-election cooperation with
Kenji Eda, an independent.

The DPJ did not include Iwakuni in its additional list yesterday in
response to a protest from the People's New Party, which has decided
to field a newcomer for Constituency No. 1.

13) DPJ President Ozawa negative about switching to another
electoral district

MAINICHI (Page 5) (Full)
November 20, 2008

The Democratic Party of Japan (DPJ), the largest opposition party,
announced yesterday 11 additional candidates it officially has
endorsed and one unofficial candidate. When asked by reporters about
his view on the timing of the next House of Representatives
election, DPJ President Ichiro Ozawa yesterday stressed in

"If (Prime Minister Aso) fails to keep his promise to the public
(that he would submit a second extra budget to the current session)
before the end of the year, our party will prepare for the election,
thinking that it will be held soon."

Ozawa indicated in his remark that he planned to force an early
Lower House dissolution, depending on Aso's response regarding a
second supplementary budget.

Referring to LDP Diet Affairs Committee Chairman Tadamori Oshima's
remark that it would be difficult to submit a second extra budget to
the ongoing session, Ozawa made a critical comment, saying:

"I don't think the Prime Minister will reach such a half-baked
conclusion. I want (Aso) to make clear his promise to the public --
whether it was just an excuse for pushing back the election."

Ozawa took a negative stance about switching to another electoral
district from the Iwate No. 4 district, noting: "Since we have
fielded candidates for almost all constituencies across the nation,
few electoral districts are left." He then added: "After watching
the situation until immediately before the election, I will make a
decision regarding my own electoral district."

The DPJ has endorsed 234 candidates --109 incumbent lawmakers, 42
former members, and 83 new-face candidates. A total of 26 candidates
are now waiting for the DPJ's official endorsement.

14) Aso cabinet being tested on crisis management

TOKYO SHIMBUN (Page 2) (Abridged)
November 20, 2008

The murder of a former vice health minister and his wife at their
home in Saitama and the stabbing of another retired vice health
minister's wife also at their home in Tokyo have become the first
case to test Prime Minister Aso and his cabinet on crisis management

TOKYO 00003194 010 OF 010

competence to deal with such emergencies. The government yesterday
urged investigative authorities to expedite investigation to solve
the crimes. At the same time, the government has also tightened
security for its officials to prevent a recurrence.

"If we have clearly found this to be an act of terrorism, we will
then take resolute action as a matter of course," Aso told reporters
at his office.

Politicians also denounced the serial stabbings. Hiroyuki Hosoda,
secretary general of the ruling Liberal Democratic Party, commented:
"This is clearly terrorism. We must take resolute action." Ichiro
Ozawa, president of the leading opposition Democratic Party of Japan
(Minshuto), said, "Whatever reason there may be, it's unforgivable
to use violence to kill or injure someone."

The Aso cabinet has been in office for about two months since its
inauguration in late September. During that time, there was no major
disaster or accident. If the incidents this time are serial
terrorist attacks against the backdrop of the national pension
issue, such an emergency is a challenge for a democracy. "The
government's crisis management is being tested," said a high-ranking
official of the government.

Aso met with National Public Safety Commission Chairman Tsutomu Sato
on the evening of Nov. 18 and ordered him to investigate the
incidents in a thoroughgoing way and to tighten security for
officials to prevent a recurrence. Chief Cabinet Secretary Takeo
Kawamura also told investigative authorities to do their best for
the security of health and welfare ministry officials.

15) Russian Premier Putin to put off visit to Japan

ASAHI (Page 4) (Full)
November 20, 2008

It was learned yesterday a visit to Japan by Russian Premier
Vladimir Putin before the end of the year, on which Japan and Russia
had agreed, would be put off. Senior Japanese Foreign Ministry
officials view that Putin is busy readying economic measures at home
due to the global financial crisis that originated in the United
States. The Japanese government intends to try to reschedule the
Putin visit for early next year.

Putin's visit to Japan before the end of the year was decided in a
meeting between then Prime Minister Yasuo Fukuda and President
Dmitry Medvedev in July on the sidelines of the G-8 summit in
Hokkaido. It had been agreed that the final schedule for Putin's
Japan visit would be decided in a meeting between Medvedev and Prime
Minister Taro Aso in Peru when they attend the Asia-Pacific Economic
Cooperation Conference.

The Japanese government predicts that the Russian side will
emphasize the importance of relations with Asian countries,
including Japan, in the APEC meeting. A senior Foreign Ministry
official said: "The Russian government may have judged that ahead of
the premier's visit to Japan, preparations (for the Northern
Territories issue) would be needed."


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