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Cablegate: Japanese Morning Press Highlights 08/18/09

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UNCLAS SECTION 01 OF 12 TOKYO 001897

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: JAPANESE MORNING PRESS HIGHLIGHTS 08/18/09

Index:

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

Opinion polls on the election:
4) Kyodo election trend poll: 32% of voters favor DPJ in
proportional rate, while 16% would choose LDP, but 35% remain
undecided (Tokyo Shimbun)
5) Tokyo Shimbun poll finds DPJ with a commanding lead over the over
the LDP in the single seat districts and proportional races (Tokyo
Shimbun)
6) Asahi poll: Aso Cabinet support rate at 19%, almost unchanged;
DJP remains ahead among voters, but low ratings for campaign
promises of both parties (Asahi)

Election campaign:
7) Announcement today will officially start the campaign leading to
the Lower House election on Aug. 30 (Asahi)
8) Six party leaders debate the issues on national television
(Nikkei)
9) Exchanges between Prime Minister Aso and DPJ President Hatoyama
on foreign and security affairs in the party leaders' debate (Asahi)

10) U.S.-Japan FTA comes up in the party leaders' debate (Sankei)

11) Hatoyama will not appoint private sector persons to cabinet
posts (Tokyo Shimbun)
12) DPJ displaying the party flag but not the national flag at
rallies (Nikkei)
13) There are not spotlight candidates for the LDP in the campaign
(Sankei)
14) One of the "Koizumi children", LDP lawmaker Kuniko Inoguchi,
withdraws from the race in a tearful news conference (Yomiuri)
15) Ruling camp taking advantage of the rise in GDP, attributing it
to successful economic policy (Tokyo Shimbun)

(MHIX090818)

Articles:

1) TOP HEADLINES

Asahi, Nikkei, Sankei, & Akahata:
Official campaigning for House of Representatives election to kick
off today

Mainichi, Yomiuri:
Leaders of six major political parties face off over responsibility
or reform

Tokyo Shimbun:
34% hope for change of government

Akahata:
Let us create Japan for people

2) EDITORIALS

Asahi:
(1) "2009 regime" to be launched

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Mainichi:
(1) Start of official campaigning today: Candidates should speak of
future of Japan; Relations with U.S. also key campaign issue

Yomiuri:
(1) Debate among six party leaders: Reply to voters' questions
honestly
(2) Positive GDP growth: Additional measures needed to put economy
on sustainable recovery track

Nikkei:
(1) Campaigning for historic election to select new government
begins today

Sankei:
(1) Political parties should speak more about future options for
Japan

Tokyo Shimbun:
(1) Official campaigning kicks off today

Akahata:
(1) JCP determined to build new Japan centered on people

3)Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 16

NIKKEI (Page 2) (Full)
August 18, 2009

07:54
Took a walk on the grounds of his official residence.

10:30
Left JR Shinjuku Station on Kaiji 103.

11:30
Arrived at JR Otsuki Station. Afterward delivered a stump speech in
front of the station.

12:22
Visited Shirayuri Winery in Koshu City, Yamanashi Prefecture.

13:31
Attended an LDP Yamanashi Chapter election strategy council meeting
at Apio Kofu Showa town.

13:43
Held an informal meeting with organizational representatives in the
prefecture, including Seihachi Takei, Yamanashi commercial,
industrial, and political federation chairman. Afterward delivered a
speech.

15:10
Met with Yamanashi Chapter Vice Chairman Toshio Fukasawa and others
at JR Kofu Station.

15:29
Left JR Kofu Station on Kaiji 116.


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17:07
Arrived at JR Shinjuku Station.

17:34
Arrived at his official living quarters.

18:08
At the Imperial Hotel organized documents.

21:35
Returned to his official living quarters.

Prime Minister's schedule, August 17

NIKKEI (Page 2) (Full)
August 18, 2009

08:03
Took a walk on the grounds of his official residence.

10:11
Arrived at the Kantei.

11:27
Met with Chief Cabinet Secretary Kawamura.

13:00
Attended debate among the heads of six political parties at the
Japan National Press Club.

15:23
Met at LDP headquarters with Secretary General Hosoda, Election
Strategy Council Chairman Koga, his deputy Suga, Senior Deputy
Secretary-General Ishihara, and Upper House Caucus Chairman Otsuji.
Hosoda, Koga, Suga, and Ishihara remained.

17:03
Gave an interview to newspaper and news agencies.

19:00
Gave an interview to sports newspapers.

19:43 Returned to his official living quarters.

OPINION POLLS ON THE ELECTION

4) Poll: DPJ scores 32%, LDP at 16% in public preference

TOKYO SHIMBUN (Page 2) (Abridged)
August 18, 2009

Ahead of the upcoming general election for the now-dissolved House
of Representatives, Kyodo News conducted a telephone-based public
opinion survey across the nation on Aug-15-16 to probe public
attitudes on the election. In the pre-election poll, respondents
were asked which political party they would vote for. In response to
this question, 32.6% chose the Democratic Party of Japan, down 1.5
points from the last pre-election poll taken Aug. 8-9. The Liberal
Democratic Party was at 16.5%, up 3.2 points. The gap shrank by 4.7
points. However, this does not represent a sea change, since the DPJ
has maintained support in the 30% range since the first pre-election
poll on July 18-19 and the LDP has remained in the 10% range.

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Undecided voters accounted for 35.1%, down 2.9 points from the last
pre-election poll.

Respondents were also asked which political party's candidate they
would vote for in single-seat constituencies. 34.1% opted for the
DPJ's candidate (35.2% in the last pre-election poll), with 18.8%
choosing the LDP's candidate (14.8% in the last pre-election poll).
The LDP rebounded as it did in preference for political party in
proportional representation.

In proportional representation districts the New Komeito Party
followed the DPJ and LDP at 4.9% (3.8% in the last pre-election
poll). Next were the Japanese Communist Party at 3.8% (3.6% in the
last pre-election poll), the Social Democratic Party at 1.1% (1.4%
in the last pre-election poll), the People's New Party at 0.9% (0.7%
in the last pre-election poll), the Your Party at 0.7%, and the New
Party Nippon by 0.2%. No respondents chose the Reform Club.

5) Poll: Election battle to kick off with DPJ leading

TOKYO SHIMBUN (Top play) (Abridged)
August 18, 2009

Ahead of the 45th general election for the House of Representatives,
the Tokyo Shimbun conducted a telephone-based public opinion survey
of 3,600 persons to probe the public's voting behavior. In the poll,
respondents were asked which political party's candidate and
political party they would vote for. In this public preference, the
Democratic Party of Japan was way above the Liberal Democratic Party
both for proportional representation blocs and for single-seat
constituencies. In the desirable framework of government as well,
those opting for a DPJ-led coalition government and those desiring
the DPJ's single-party government added up to 34.6%, while the
combined proportion of those choosing an LDP-led coalition
government and those preferring the LDP's single-party government
was 20.0%. The figures show the public's growing expectations.

The Aso cabinet's support rate was 21.7%, and its nonsupport rate
was 70.1%. Respondents were also asked if they thought Prime
Minister Taro Aso or DPJ President Yukio Hatoyama would be more
appropriate for prime minister. To this question, 45.9% chose
Hatoyama, with 25.2% giving Aso.

6) Poll: DPJ ahead of LDP

ASAHI (Page 1) (Abridged)
August 18, 2009

Ahead of the upcoming general election for the House of
Representatives, the Asahi Shimbun conducted a telephone-based
nationwide public opinion survey, in which respondents were asked
which political party they would vote for in their proportional
representation blocs if they were to vote now. In this public
precedence of political parties for proportional representation, the
Democratic Party of Japan scored 40% (39% in the last survey taken
Aug. 1-2), with the Liberal Democratic Party at 21% (22% in the last
survey). As seen from the figures, the DPJ is still far ahead of the
LDP. Meanwhile, the LDP and the DPJ have set forth their respective
showcase campaign pledges, with the LDP targeting an income increase
of 1 million yen for each household and the DPJ proposing child
allowances. However, negative opinions outnumbered affirmative
opinions about these pledges, with a total of more than 80% feeling

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uneasy about ways and means.

In the public preference of political parties, the DPJ has been
around 40% since this May. However, the LDP has not rebounded. In
the breakdown of public support for political parties as well, the
DPJ keeps a big lead over the LDP prior to their campaign battle for
the election, with the DPJ standing at 32% (26% in the last survey)
and the LDP at 20% (24% in the last survey).

The Aso cabinet's support rate was 19% (18% in the last survey), and
its nonsupport rate was 65% (63% in the last survey).

ELECTION CAMPAIGN

7) Official campaign for Lower House election kicks off today

ASAHI (Top play) (Abridged slightly)
August 18, 2009

The official campaign for the 45th House of Representatives election
scheduled for Aug. 30 will begin today. The Liberal Democratic Party
(LDP), New Komeito, Japanese Communist Party (JCP), and People's New
Party (PNP) yesterday unveiled their candidate lists for the
proportional representation segment. The DPJ revealed the names of
candidates running only in the proportional representation section,
but it has yet to clarify its list. The party will make its list
public this morning. More than 1,300 candidates are expected to run
in the single-seat constituencies (300) and the proportional
representation portion (180 seats). Leaders of six political parties
held a debate yesterday. DPJ President Yukio Hatoyama stated that he
would appoint Diet members as chief cabinet secretary, foreign
minister, and finance minister should he become prime minister.

The LDP yesterday revealed its list of 306 candidates, including
those who running only in the proportional representation segment,
cutting the list of candidates from the 336 it had fielded in the
2005 Lower House election. The LDP ranks seasoned politicians in its
upper ranks, completely different from the previous list in which it
ranked female candidates in its list for the proportional
representation blocs of the ballot.

The LDP ranks candidates running in both electoral districts and the
proportional representation portion number one in its list in five
proportional representation blocs of the 11 blocs. This means that
the party aims to increase opportunities for unsuccessful candidates
in the electoral district races to win proportional representation
seats.

The LDP tried to have Health, Labor, and Welfare Minister Yoichi
Masuzoe run in the proportional representation segment of the Tokyo
bloc, but Masuzoe, currently a House of Representatives member,
refused. As a result, the party ranked a candidate running in both a
single-seat constituency and the proportional representation Tokyo
bloc as number one in the list. As a result, Kuniko Inoguchi, a
former minister in charge of declining birthrate, who had been
ranked number one in the previous election, announced her intention
of not seeking reelection.

Among the LDP candidates, only five candidates - Prime Minister Taro
Aso; LDP Election Strategy Headquarters Acting Head Makoto Koga;
Shinjiro Koizumi, the second son of former Prime Minister Junichiro
Koizumi; Takeshi Hayashida; and Norio Mitsuya - are running only for

TOKYO 00001897 006 OF 012


district seats.

In the New Komeito, candidates running in eight districts, including
party head Akihiro Ota and Secretary General Kazuo Kitagawa, opted
not to run also in the proportional representation segment.

Meanwhile, the DPJ failed to announce yesterday evening its list of
candidates for the proportional representation portion although it
had planned to do so. However, the party unveiled the names of 59
candidates running only in the proportional representation section
early this morning. The 59 candidates include former Finance
Minister Hirohisa Fujii.

Assuming that most of the candidates running in both single-seat
constituencies and the proportional representation segment will win,
the DPJ leadership has increased the number of its candidates
running in the proportional representation section. For this reason,
the party's prefectural chapters asked to field many candidates in
the proportional representation segment, exceeding the ten
candidates in three blocs that were fielded for the previous
election.

The DPJ will rank candidates running in both single-seat and
proportional representation section at the top of its list and it
intends to list candidates running only in the proportional
representation segment in the lower ranks.

8) Leaders of six parties engage in battle of words over ability to
govern

NIKKEI (Top Play) (Excerpts)
August 18, 2009

The leaders of six ruling and opposition parties traded barbs on the
eve of official campaigning for the Aug. 30 House of Representatives
election. During the debate organized by the Japan National Press
Club, Prime Minister Taro Aso (as Liberal Democratic Party
president) stressed that the LDP would raise the consumption tax at
a time when the people really have a sense that the economy has
recovered. Democratic Party of Japan (DPJ) President Yukio Hatoyama
said that he would appoint suitable persons for the posts of chief
cabinet secretary, finance minister and foreign minister from among
lawmakers if his party takes over the reins of government.

Aso emphasized at the outset of the debate: "What I would like to
stress the most to the public is the ability to take
responsibility." Citing the gross domestic product's (GDP) first
positive growth in five quarters in the April-June period, he
boasted: "The positive growth can be attributed to our economic
stimulus measures." Aso added: "We are still only halfway there. Our
top priority task is to buoy up the economy. Pork-barrel policies
with no clear strategy will not be any help in perking up the
economy."

Regarding the issue of whether the consumption tax should be hiked
from the current 5%, Aso remarked: "The current major question is
how to improve the economy to a satisfactory level at which the
people can recognize both it in terms of numerical figures and their
actual experiences. The consumption tax should be raised at such a
stage." He indicated that the party would delay the sweeping tax
reforms initially planned until after the economy turns around.


TOKYO 00001897 007 OF 012


Hatoyama struck back: "Disparities between the rich and the poor
have become wider. Is that what you call a responsible party?" He
then indicated that he would like to move forward with measures
included in the party's manifesto such as introducing a system to
offer a monthly child-raising allowance and waiving all expressway
tolls. He also said that he would give priority to economic growth
in Asia, including China.

Aso and Hatoyama agreed on the need for the ruling and opposition
parties to hold talks on pension and other issues after the Lower
House election.

In reference to his own vision for a new administration, Hatoyama
said he would prepare a key post for Deputy President Ichiro Ozawa
after the election.

Aso and Japanese Communist Party President Kazuo Shii expressed
their concern about the negative effects on domestic farmers of the
proposed Japan-U.S. free trade agreement (FTA) in the DPJ manifesto.
Hatoyama reiterated the possibility of conducting negotiations on
farm products except for the nation's mainstay products, such as
rice and wheat, saying: "It should be possible for us to promote
negotiations while protecting our national interests."

9) Q&A session with party leaders on security issues at National
Press Club debate on August 17

ASAHI (Page 5) (Full)
August 18, 2009

Q: Was Japan's support of the attack on Iraq not a mistake?

Aso: If Hussein were alive and still holding power today, there
might have been an even more serious crisis for international peace.
I think (the war) made some achievements.

Q: Mr Obama was against the war. Does that mean that you and Mr
Obama have different views?

Aso: It is possible to argue ex post facto that the war was right or
wrong. It is not possible to answer your question.

Q: You propose to review the U.S. military bases in Japan and the
Status of Forces Agreement (SOFA). Will this not undermine Japan's
security?

Hatoyama: I do understand that after taking over the administration,
it will be necessary to build a relationship of trust with President
Obama. Without trust, it will be difficult to find a solution even
if we demand an early review of SOFA or the withdrawal of the bases.
I think this is an issue that can be resolved through a
comprehensive review in the process of building trust.

Q: The Democratic Party of Japan (DPJ) is advocating the relocation
of the U.S. forces' Futenma base (in Okinawa Prefecture) outside of
Okinawa. Do you have a concrete plan in mind?

Hatoyama: There are certain aspects that will not become clear until
we take over the government, but we will not change our basic
position. We would like to fully understand the wishes of the people
of Okinawa and arrive at a final conclusion through a comprehensive
review.

TOKYO 00001897 008 OF 012

Q: What is your thinking on anti-piracy measures in waters off
Somalia?

Hatoyama: Sending the ships of the Japan Coast Guard would be most
desirable. If that is not possible, we accept the dispatch of the
Self-Defense Forces (SDF).

Q: Will you terminate the refueling mission in the Indian Ocean by
January?

Hatoyama: That is our basic thinking. We do not intend to simply
extend the mission. We understand that (the SDF) cannot simply be
withdrawn right away because this is a matter of foreign policy.
However, we will be able to prepare other aid measures that will be
much more welcome.

Q: The DPJ is in favor of sending the SDF to waters off Somalia. How
about the Social Democratic Party?

Fukushima: It is necessary to state unequivocally that the SDF will
not be sent overseas.

Q: Is it possible that you will condone this under a coalition
government?

Fukushima: We are not considering it at this point.

Q: Does a secret (nuclear) agreement exist?

Aso: The answer is as what we have stated consistently. It is not
possible that we will suddenly say one day that oh, actually, it
does exist.

Q: Mr Hatoyama, if you take over the reins of government, how do you
plan to disclose the secret agreement?

Hatoyama: We will investigate thoroughly. It is necessary to
continue the investigation not only in Japan's Ministry of Foreign
Affairs, but also in the United States. When the facts become clear,
we will disclose the information to the people based on our
thinking.

Q: When do you expect to announce the result of the investigation?

Hatoyama: For sure, it will be necessary to come up with a
conclusion in six months or one year.

Q: You have indicated a positive view on constructing a national
memorial facility. Do you plan to realize this during the four years
of the DPJ administration?

Hatoyama: We still do not know how far we can proceed with a
concrete plan. However, I believe that a non-religious memorial
facility where anyone can offer prayers without ill feelings is
necessary. We would like to build one as soon as possible.

Q: What do you think, Mr Watanuki?

Watanuki: I am opposed to this idea.

10) Hatoyama takes heavy fire over Japan-U.S. FTA in party-heads

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debate

SANKEI (Page 3) (Excerpts)
August 18, 2009

Mitsuru Sakai

Debates were held yesterday among the heads of six major political
parties. With a change of government likely to occur after the next
general election, questions were hurled most heavily at Democratic
Party of Japan (DPJ) President Yukio Hatoyama.

Agricultural policy

In its manifesto, the DPJ had initially included the conclusion of a
free trade agreement (FTA) with the United States, but meeting with
fierce protests from agricultural organizations and other bodies, it
has now replaced the "conclusion of an FTA" with the "promotion of
talks." At the party-heads debate, other parties intensively
criticized the DPJ which has shifted its major policy in just six
months. Prime Minister Taro Aso said, "Questions remain concerning
the party's seriousness about agriculture." Hatoyama rebutted, "Even
if we want to conclude a pact, it will not necessarily come true 100
percent because the matter also involves (the other side)."

Japanese Communist Party Chairman Kazuo Shii expressed an opposition
to negotiations themselves, saying, "The country's rice production
has dropped 82%, dealing a devastating blow to agriculture. The
matter could deal a fatal blow to the people of Japan in general."
Hatoyama explained that major agricultural products, such as rice,
would be excluded from talks, but the two sides were still wide
apart.

11) DPJ President Hatoyama in party-heads debate says he will not
appoint private-sector persons as key cabinet ministers

TOKYO SHIMBUN (Page 1) (Full)
August 18, 2009

An open debate of leaders of six political parties was held
yesterday at the Japan National Press Club in Tokyo. In it,
Democratic Party of Japan (DPJ) President Yukio Hatoyama said: "I
would like to appoint politicians to the important posts of chief
cabinet secretary, finance minister, and foreign minister," if his
party takes the reins of government in the upcoming House of
Representatives election. He revealed his intention to appoint Diet
members as key cabinet ministers.

Hatoyama is determined that it is necessary to pick lawmakers key
cabinet ministers in a bid to manage the government under the
initiative of politicians.

Regarding economic stimulus measures, Hatoyama said: "I want to
implement measures directly stimulating households earlier than
planned if possible," suggesting his view that he will look into the
possibility of moving up priority policy measures that his party has
pledged to implement next April in its manifesto. He cited a child
allowance program and the abolition of gasoline taxes as examples.

As for the supplementary budget for fiscal 2009, which was adopted
in May, Hatoyama indicated that it would be used as fiscal source
for priority policies. He said: "The extra budget includes portions

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that will necessarily stimulate the economy. So it is necessary to
recompile this part."

Prime Minister Taro Aso (president of the Liberal Democratic Party)
stressed the fact that Japan's GDP returned to positive growth in
the April-June period, saying: "This is because of my policies." He
then expressed his eagerness to continue to take the political helm,
noting: "The public has yet to really experience economic recovery.
The recovery is still underway. I will definitely turn the economy
around."

The open debate was attended by Aso, Hatoyama, New Komeito leader
Akihiro Ota, Japanese Communist Party Chairman Kazuo Shii, Social
Democratic Party Chairperson Mizuho Fukushima, and People's New
Party President Tamisuke Watanuki.

12) Aso criticizes DPJ for cutting up Japanese flags to create party
insignia; Haotyama apologizes

NIKKEI (Page 2) (Full)
August 18, 2009

At the party leaders' debate organized by the Japan National Press
Club on August 17, Prime Minister Taro Aso took up the issue of the
Democratic Party of Japan (DPJ) cutting up two Japanese flags to
create the party's insignia at a meeting held in Kagoshima
Prefecture on August 8. He criticized DPJ President Yukio Hatoyama,
saying, "I can't believe that the national flag, which is the symbol
of the country, was mutilated. This is a sad and unforgivable act."
It is believed that this statement was made with the conservative
voters in mind.

"If there were indeed people who did such a disgraceful thing, I
apologize deeply," responded Hatoyama.

13) LDP on decline; Masuzoe declines to run in Lower House election
as proportional representation candidate

SANKEI (Page 3) (Excerpts)
August 18, 2009

Hiroyuki Kano

The ruling and opposition parties unveiled yesterday their lists of
candidates running in the 11 proportional representation blocs ahead
of the Aug. 30 House of Representatives election. The Liberal
Democratic Party (LDP) informally offered to Health, Labor and
Welfare Minister Yoichi Masuzoe, a House of Councillors member, the
idea of putting him at the top of the party's proportional
representation list for the Tokyo bloc, apparently in a bid to make
him a key LDP candidate. Masuzoe, however, turned down the offer.

The LDP has already failed to field Miyazaki Gov. Hideo
Higashikokubaru for the upcoming race. The party has generated an
impression that it is on the decline.

Masuzoe garnered some 1.58 million proportional representation votes
in the 2001 Upper House election, and 470,000 votes in the 2007
Upper House race - the highest figures among all LDP candidates.
Masuzoe has constantly secured the top rank in a variety of opinion
polls. For this reason, Senior Deputy Secretary-General Nobuteru
Ishihara and others attempted to field Masuzoe for the Tokyo bloc.

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The LDP Tokyo chapter yesterday morning sounded out Masuzoe on his
candidacy for the upcoming race. But Masuzoe, feeling discontent
with the fact that the request did not come from Prime Minister Taro
Aso, reportedly turned down the offer, saying, "I cannot accept the
offer, which is a stopgap measure in anticipation of an uphill
battle. There is absolutely no possibility that I will run in the
race."

If Masuzoe decided to change hats and run in the Lower House, he was
certain to become the frontrunner in the next LDP presidential race.
Masuzoe's rejection has left some bewildered. A certain former
cabinet minister noted: "He might think that it is advisable to
maintain a freehand rather than to become the president of the LDP,
an opposition party, and suffer a lot. He might have the next Tokyo
gubernatorial race in mind."

14) Kuniko Inoguchi gives up her candidacy

YOMIURI (Page 39) (Excerpts)
August 18, 2009

The Liberal Democratic Party (LDP) unveiled yesterday its lists of
candidates running in the proportional representation blocs for the
Aug. 30 House of Representatives election which will be announced
officially today. Many candidates running also in single-seat
constituencies have been placed at the top of the lists of
candidates running in proportional representation blocs to improve
their chance for success. At the same time, former State Minister in
Charge of Gender Equality Kuniko Inoguchi, 57, who was placed at the
top of the list in the Tokyo bloc and who also became a showcase
cabinet minister in the former Koizumi administration, has now been
forced to give up her candidacy.

Inoguchi, holding a press conference at LDP headquarters yesterday,
announced that she would not run in the upcoming Lower House
election. Although she had asked the party leadership for a high
ranking, Inoguchi was told by Secretary General Hiroyuki Hosoda on
the phone that her place would be 24th on the party list, and that
place has not changed. Inoguchi consulted with former Prime Minister
Junichiro Koizumi, her "political mentor." At the press conference,
Inoguchi quoted Koizumi as saying, "(Prime Minister Aso) does not
listen to me, and that cannot be helped. Do your best so that LDP
candidates can win."

A tearful Inoguchi also said that although she will not run in the
race, she will continue supporting LDP candidates.

15) GDP expands; Ruling camp plays up effectiveness of economic
stimulus measures; DPJ concerned about future

TOKYO SHIMBUN (Page 2) (Excerpts)
August 18, 2009

Junpei Kiriyama, economic news department

The nation's gross domestic product (GDP) expanded in the April-June
2009 quarter, the first growth in five quarters, according to data
released by the Cabinet Office yesterday. The ruling LDP-New Komeito
coalition has given itself credit for the GDP's expansion.
Meanwhile, the major opposition Democratic Party of Japan (DPJ) has
criticized the government's economic stimulus measures by saying
that they are not sufficient to boost household finances.

TOKYO 00001897 012 OF 012

Four hours after the data was released, a debate took place among
the heads of six ruling and opposition parties. During the debate,
Prime Minister Taro Aso indicated that bright economic signs have
begun to emerge owing to the government's pump-priming measures. New
Komeito Representative Akihiro Ota, too, talked about a plan to
steadily implementing budgets.

The positive GDP growth is bullish news for the ruling camp which is
expected to face an uphill battle in the upcoming House of
Representatives election. The economic expansion came following the
nation's worst ever negative growth of the previous quarter,
propelled by the Chinese economy. Private think tanks have been
predicting positive growth for months.

To begin with, the ruling coalition has set the Lower House election
for late August in the hope that it go take advantage of a tailwind
resulting from positive economic data as it goes into the election.
In fact, the LDP manifesto reads, "Averting the worst-case scenario,
some of the nation's economic indices have shown positive results."

But some are pointing to a drop in personal consumption which
accounts for 60% of the GDP with respect to the economy in the
coming months.

At the party-head debate, DPJ President Hatoyama played up this weak
point in the Japanese economy, saying that the future is not
necessarily bright.

ZUMWALT

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