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

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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 08/24/09

INDEX:
(1) Political column by Yoichi Kato, editorial writer: Gaps in
political biorhythm and policies of DPJ and Obama administration
(Asahi)
(2) Japan needs comprehensive foreign policy strategy (Yomiuri)
(3) Do not drop out from the solidarity of nations (Yomiuri)
(4) Viewpoint in making selection (Part 3): Discuss national
security issue independently (Mainichi)
(5) Manifestos for 2009 Lower House election: Focus for choosing the
party to take on reins of government; Pressure from left prevents
DPJ from coming up with concrete policy; LDP gives up specifying
right to collective self-defense in its manifesto (Sankei)
(6) Column article: Using ODA to control economic bubble (Sankei)
(7) Tokyo Shimbun pre-election analysis: DPJ likely to win over 300
seats, LDP about 100 (Tokyo Shimbun)
(8) DPJ hastily adding more substance to plan for new administration
(Nikkei)
(9) 2009 Lower House election: Struggle for power as "Hatoyama
government" gets ready to launch; Shadow of Ozawa flickers (last
installment) (Sankei)
(10) Escalating nuclear power generation business: Obtaining uranium
is top (Yomiuri)
(11) Chinese government rejects MADF vessels' visit to Hong Kong,
possibly because of Uyghur issue (Yomiuri)
(12) Rough sailing in selection of FX: ASDF should clarify
operational concept (Yomiuri)
(13) TOP HEADLINES
(14) EDITORIALS
(15) Prime Minister's schedule (Nikkei)

ARTICLES:

(1) Political column by Yoichi Kato, editorial writer: Gaps in
political biorhythm and policies of DPJ and Obama administration

ASAHI (Page 15) (Full)
August 24, 2009

With the arrival of new U.S. Ambassador to Japan John Roos in his
post, the lineup of the Obama administration's Japan policy team has
now been set. Looking over the White House, the Department of State,
and the Department of Defense, the team, made up of well-known
practical persons affiliated with the Democratic Party, is quite
strong.

When I met some of them, I felt their strong enthusiasm for easing
the strains in the relationship between Japan and the United States
that had developed during the closing days of the Bush
administration over the U.S.'s delisting of North Korea as a state
sponsor of terrorism.

In Japan, the possibility of a change of government has moved closer
to reality. Both Tokyo and Washington appear to be ready for "making
a fresh start." However, it seems that it will be difficult for the
two countries to return to the starting point because there remain
two large gaps in the positions of the two countries.

One of the two gaps is a difference in political biorhythm.

The U.S. administration launched an overall review of the U.S.
diplomatic and security strategies immediately after its
inauguration. The Obama administration is trying to recreate the

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East Asia Strategy Report (EASR), which was first set up by the
Clinton administration. The Obama administration plans to complete a
new EASR by early next year.

However, Tokyo is unlikely to act in concert with Washington. Japan
is scheduled to compile a new National Defense Program Outline by
the end of the year. If an administration-led by the Democratic
Party of Japan (DPJ) is inaugurated, there is a rumor that the
compilation of the new National Defense Outline will be delayed for
one year. The U.S. side reportedly was informed by sources familiar
with the DPJ that until the party wins a single-party majority in
the Upper House in next summer, it will be unable to do full-scale
policy making.

In next summer, the United States will enter an inward-looking mode
an eye on the mid-term congressional elections in the fall. The
political situations of the two countries will not get along this
year and next year.

The other gap is in the contents of the alliance policy.

Washington wants Japan not to refer to such core issues as the U.S.
Status of Forces Agreement (SOFA) and an agreement on the
realignment of U.S. Forces Japan that consist the bases of the
bilateral alliance. The U.S. side has warned that the USFJ
realignment agreement is like building blocks in that if you touch
one issue, the whole agreement could collapse. This has not changed
even under the Obama administration.

The U.S. administration is very much concerned because the DPJ,
however, asserts that it will review the USFJ realignment agreement.
Although the DPJ uses a soft expression in its manifesto for the
Aug. 30 House of Representatives election, DPJ President Yukio
Hatoyama stated on the relocation of the U.S. Marine's Air Station
Futenma in a party-heads debate on Aug. 17: "We have no intention to
alter our basic position (of seeking the relocation of Futenma out
of Okinawa)."

Support ratings for the Obama administration have dropped due to its
medical insurance reform problem. The U.S. government expects Japan
to become a partner able to increase policy resources by bring about
diplomatic achievements. It does not want a negotiator that eats up
policy resources by "realigning" the USFJ realignment. Amid the
growing possibility of the DPJ assuming the reins of government,
some U.S. administration officials are perplexed at the possible
birth of a DPJ government and some have given up hope.

(2) Japan needs comprehensive foreign policy strategy

YOMIURI (Page 11) (Full)
August 22, 2009

Akihiko Tanaka, professor at the University of Tokyo

The world is at a crossroads. U.S. power is declining, while China
is making its presence increasingly felt. The war against terror
continues, while the nuclear threat is growing. Which way should
Japan go as the old order is shaken and the balance of power shifts?
How well can the foreign and security policies of the various
political parties respond to fresh challenges? -- Ryuichi Otsuka, a
member of the editorial board.


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(Ryuichi Otsuka spoke with two experts--Akihiko Tanaka and Yukio
Okamoto-and compiled their comments. Prof. Tanaka's comments appear
below; Mr. Okamoto's are found in the following article.)

The world is experiencing a complex crisis. We are still mired in
the financial crisis precipitated by the collapse of Lehman Brothers
last September, while the threat of terrorism since 9/11 is still
with us. The situation in Afghanistan, a hotbed of terrorism, is
also serious. North Korea's nuclear weapons constitute a direct
threat to Japan.

Structurally speaking, the world is heading toward a redistribution
of power. While America will probably continue to play a leading
role, China, India, and other newly emerging economies will play
growing roles. A truly multipolar era is arriving -- a world in
which the U.S., China, India, and West Europe will compete on a
similar scale is approaching.

The challenge for Japan is that on its present scale it will no
longer be able to compete. At the end of the Cold War Japan
possessed economic power that posed a threat to the U.S. There was a
lot of talk about the absurdity of not wielding political power
befitting such economic power. That Japan deserved to hold political
power equivalent to its economic power was advanced as an argument
for its permanent membership in the UN Security Council (UNSC).

In a situation where scale is no longer what counts, how should
Japan make its presence felt and protect the interests of its
citizens? How should it deal with China's out-sized presence? What
should it do not to be squeezed between the U.S. and China? Japan is
facing ever more difficult problems. It is not enough to think of
foreign and security policies in conventional terms, such as abiding
by a pacifist line or prioritizing the Japan-U.S. alliance.

However, neither the Liberal Democratic Party (LDP) nor the
Democratic Party of Japan (DPJ) has been able to put forward a
vision of how Japan can project its presence in a situation where
relatively it is shrinking in scale. For sure, specific foreign
policy issues are important. However, there is no over-arching
foreign policy strategy transcending these issues.

The two parties' collection of policies gives the impression of turf
battles among the various ministries. For the LDP, policies are
divided into foreign affairs and security, resources and energy, and
the environment and global warming. This sounds like the old policy
speeches of the prime ministers. While campaign pledges do
ultimately have to be backed by fiscal funding and, in a sense,
their parceling among different ministries is, in a sense,
inevitable, the parties should give us the whole picture of the
future of Japan that they are working for, a vision that encompasses
all the pledges.

The urgent issues for the people are those related to allaying their
concerns about matters directly affecting their livelihoods, such as
the economic crisis, employment, and pensions. All parties have
presented their solutions. That is well and good, but Japan's power
will continue to decline if it does not formulate a policy for
survival amid the seismic shifts in the international community.

In a book he published when he was foreign minister Prime Minister
Taro Aso wrote, "Japan can do it" and "Japan is an incredible
country." However, absent from this election has been the message

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that Japan can remain a vibrant proactive country in the world
community. The same is true with the DPJ.

I believe Japan has a lot of potential. For example, today there is
unprecedented appreciation of Japanese culture.

It is fine for the DPJ to criticize the construction of a national
media art center dubbed the "anime hall of fame" as a "state-run
manga caf." But the novels of Haruki Murakami, the anime of Hayao
Miyazaki, and Japanese cuisine are not concrete things. So the
argument that there is no need to build infrastructure is valid.
However, if infrastructure is not the answer, what does the DPJ
propose to do to make full use of different forms of Japanese soft
power and enhance Japan's presence?

I would like to see more constructive discussions of how to make
good use of Japan's vitality, as well as a vision for world
leadership that is not just limited to culture.

(3) Do not drop out from the solidarity of nations

YOMIURI (Page 11) (Full)
August 22, 2009

Yukio Okamoto, foreign affairs commentator

Japan should not drop out from the global "mutual-aid society"
conducing the war against terrorism. A typical example is the war in
Afghanistan. The U.S. is not the only target of the international
terrorist organization Al Qaeda. That is why the international
community is united in this fight. In a peaceful expanse of sea
Japan is providing fuel to multinational forces patrolling the
Indian Ocean, and with that, it is barely able to be counted as a
member of the mutual-aid society. It is now facing a decision on
whether to continue this minimal operation or to take a further step
and dispatch ground troops, which involves greater risk, in answer
to the call of the international community. It also needs to stop
addressing this matter with makeshift special-measure laws.

As for relations with the U.S., the Japan-U.S. alliance has been
instrumental in ensuring Japan's security and prosperity. The
overall foreign policy of the Liberal Democratic Party (LDP) has
been correct.

In security policy there are few options. Actually, there are only
three: unarmed neutrality, armed neutrality, and alliance. In theory
collective security is another option, albeit an unlikely one among
East Asian countries with diverse political systems, military
capabilities, and basic values.

Which of the three options should Japan select? Only a small
percentage of people support unarmed neutrality. Armed neutrality,
in the absence of a dramatic reinforcement of the Self-Defense
Forces (SDF), as well as nuclear armament, is not viable vis-`-vis
neighboring countries. That leaves only alliance. A process of
elimination winnows the field of possible allies to only one with
which Japan shares the common values of freedom and democracy - the
United States.

Even the Democratic Party of Japan (DPJ) affirms the Japan-U.S.
alliance is the basis of foreign policy. An alliance brings
intrinsic rights and duties. Article 5 of the security treaty

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establishes the defense of Japan as the United States' duty, while
Article 6 stipulates the provision of military bases is Japan's duty
in return. These two reciprocal obligations are a set. Japan cannot
request the unilateral easing of its obligation. There can be no
pick and choose here.

The DPJ must quickly come up with a security policy rooted in
reality. If it takes over the reins of government, it will have to
deal with U.S. President Barack Obama's visit to Japan in November
and the drafting of the Mid-Term Defense Buildup Program and the
National Defense Program Guidelines (NDPG) in December, which will
determine the direction of defense policy. Any mistakes will be
irreversible.

DPJ President Yukio Hatoyama has also said that he will seek an
"optimum distance" from the U.S., but the U.S. is eager to
strengthen its ties with China. If Japan indicates a desire to
weaken relations with the U.S., it will then approach China without
any qualms. The U.S. and China may proceed to make decisions for
Asia without heeding Japan's wishes.

I am also dissatisfied with the LDP. Japan is the only
industrialized country that has been reducing its defense spending
year after year. I think this is irresponsible in light of North
Korea's development of nuclear arms, and China's modernization of
its nuclear arsenal and building of a blue water navy. The LDP has
given little importance to national defense.

The budget for official development assistance (ODA), which is
essentially a tax paid as a member of the international community,
has been reduced by over 40 percent from its peak. China has
dispatched 2,000 troops for UN peacekeeping operations (PKO) while
Japan has only sent 40. Does it want to be left out of the
mutual-aid society and live in isolation?

On the other hand, it is also important to improve relations with
Asia. Will it be possible to achieve reconciliation with China and
South Korea through a process similar to that between Germany and
France? In this I pin my hopes on the DPJ. The interpretation of
history is at the root of this issue. If the DPJ takes over the
administration, I would like to see a blueprint of its plans for
reconciliation with the Asian countries.

(4) Viewpoint in making selection (Part 3): Discuss national
security issue independently

MAINICHI (Page 1) (Full)
August 21, 2009

By Kenji Bando, chief foreign news editor

"A global economic crisis brings about a serious outcome
geopolitically," says Roger Altman, who served as the assistant
secretary of the U.S. Department of State under the Clinton
administration, in the latest issue of the bimonthly magazine
Foreign Affairs. He is close to the administration of President
Barack Obama.

Altman noted in the article titled, "Recession of globalization":
"Japan, the U.S. and other industrialized countries in Europe have
received the most serious blow, posing doubts over the liberalistic
economic models. China, whose economy returned to a recovery track

TOKYO 00001953 006 OF 019


most quickly, has survived in an age of competition. We are entering
a new age in which there is no leader, emerging from the U.S.-led
unipolar age in the post-cold war."

The Obama administration was inaugurated under the slogan of
"change." The Bush Republican administration lost public support due
to the Iraq war. Given the U.S.-triggered financial crisis getting
more serious, change from a long-term perspective is now being
sought.

On foreign and national security policies, the Obama administration
has begun to place emphasis on favoring diversity, instead of
imposing its values on other countries. This policy switch is
reflected in its priority to the framework of the Group of 20 (G-20)
over that of the Group of Eight (G-8), its willingness to hold talks
with Iran and North Korea, as well as its emphasis on U.S.-China
strategic talks.

Next year marks the 50th anniversary of the revision of the
U.S.-Japan Security Treaty. A response to the Japan-U.S. security
arrangements is a campaign issue for the upcoming Lower House
election in Japan. In dealing with North Korea's development of
nuclear weapons and China's military expansion, cooperation between
Japan and the U.S. is indispensable. Washington has a sense of
vigilance against the Democratic Party of Japan for its stance of
favoring independence and equality.

However, the U.S. has begun to give priority to cooperation in
dealing with global-scale "new threats," such as climate change,
infectious diseases, and energy shortage, in addition to traditional
cooperation in the security area, centered on military power. Joseph
Nye, Harvard University professor knowledgeable of Japanese affairs,
emphasized: "In new areas, Japan is a more equal partner."

The U.S. is hopeful of acquiring Japan's advanced technologies to
realize President Obama's "Green New Deal" designed to foster new
industries in the environment sector. New U.S. Ambassador to Japan
John Roos, who arrived in Japan to take up his new post on Aug. 19,
worked as a lawyer in Silicon Valley, so he is well-versed in new
energy development.

The U.S. probably is aiming to restore its leadership by
regenerating its comprehensive national power, while ignoring slight
differences and picking other countries' brains and power.

As shown by Obama's call for the goal of a world free of nuclear
weapons, the U.S. has gradually changed its view about national
security. Japan remains unable to come up with measures to cope with
problems caused by its graying society. This inability, rather than
the restrictions on its military operations, is the main cause of
Japan's limitations.

We are no longer in an age in which Japan can enjoy security and
prosperity only with dependence on the U.S. and the Japan-U.S.
security arrangements. Discussing security issues in a hasty way
must be avoided, but it is necessary to consider independently
future options for Japan-U.S. cooperation and its security system in
accordance with the changes in the international environment and the
emergence of new threats. The campaign for the upcoming Lower House
election is the starting point of such an effort.

(5) Manifestos for 2009 Lower House election: Focus for choosing the

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party to take on reins of government; Pressure from left prevents
DPJ from coming up with concrete policy; LDP gives up specifying
right to collective self-defense in its manifesto

SANKEI (Page 3) (Abridged)
August 24, 2009

Yoshiki Ozaki, Akajima Shiho

The Korean Peninsula situation has begun showing some signs of
change due to such events as the recent visit to North Korea by
former U.S. President Bill Clinton and North Korea condolence
delegation to South Korea to pay respects to the late former
President Kim Dae Jung. Meeting with South Korean President Lee
Myung Bak on August 23, the North Korean delegation conveyed to him
North Korean leader Kim Jong Il's message on promoting cooperation
between the South and North. But if talks do not move forward as
Pyongyang expects, the North might conduct another nuclear test and
launch ballistic missiles. The abduction issue and the development
of ballistic missiles and nuclear weapons can continue looming over
as "clear and present dangers."

On June 18, a meeting took place between Democratic Party of Japan
(DPJ) executives and representatives of the Association of the
Families of Victims of Kidnapped by North Korea (AFVKN) and the
National Association for the Rescue of Japanese Kidnapped by North
Korea (NARKN) at DPJ headquarters in Tokyo's Nagatacho. At the
meeting, AFVKN Secretary General Teruaki Masumoto, who was visiting
there to urge the DPJ to specify in its manifesto (campaign pledges)
its determination to find a solution to the abduction issue,
complained about the existence of some DPJ lawmakers who think Japan
must not take steps that irritate North Korea. In response, Hatoyama
said before Masumoto and Sakie Yokota, the mother of Megumi Yokota:
"True, there are such people, but they are a minority. They cannot
take on important positions under my responsibility. North Korea
requires pressure."

"This means Mr. Hatoyama will stifle individuals with ties to North
Korea," a mid-level DPJ lawmaker explained. In fact, the DPJ vows in
its manifesto to make utmost efforts to resolve the abduction issue
when it takes over the helm of government. To a person well-versed
in the abduction issue, the fact that Hatoyama acknowledged the
existence of pro-DPRK forces in the DPJ is more surprising (than its
stance on the abduction issue itself).

?

Atsuhiko Isozaki, a lecturer at Keio University who is well-versed
in North Korean affairs, indicated that because the DPJ includes
many former Japan Socialist Party ranks, it has not come up with
concrete policy toward the North.

On Aug. 14, the Nodong Sinmun, the Korean Workers Party organ paper,
expressed the following view while pointing out the DPJ's strong
likelihood to take over the reins of government in the Aug. 30 House
of Representatives election: "North Korea must closely monitor
whether the DPJ heads for a new direction or follow the same
direction as the LDP." In other words, Pyongyang is going to simply
watching a Hatoyama administration's moves.

At a party-head debate held on Aug. 12, Hatoyama expressed a plan to
take necessary legislative measures to inspect cargos on vessels

TOKYO 00001953 008 OF 019


connected with North Korea. The LDP manifesto, too, vows to take
legislative measures. There is a strong possibility that the law
will be enacted during the extraordinary Diet session in the fall.
Nevertheless, if North Korea plays up a "dialogue mood," pro-DPRK
forces in the DPJ might gain momentum.

The question of altering the government's interpretation of the
right to collective self-defense is unavoidable in dealing with the
military threat from North Korea.

At a press conference on Aug. 4, Hatoyama expressed a view
dismissive of changing the government's interpretation of the right
to collective self-defense that Japan possesses the right under
international law but is not allowed to exercise it under its
Constitution. The United States can defense Japan by exercising its
collective defense right. But in compliance with the government's
interpretation of the right, Japan can neither defend U.S. warships
from ballistic missile attacks in the high seas nor intercept
missiles targeting the United States.

If Self-Defense Force (SDF) vessels just look on U.S. warships under
attacks, the Japan-U.S. alliance will collapse, let alone the DPJ's
pledge to build a close and equal relationship with the United
States. Hatoyama simply said, "We would like to begin scrutinizing
our thinking."

The LDP manifesto that reads, "We will take necessary security
steps," leaves some room for making changes to the government's
interpretation. But as seen in Policy Research Council Senior Deputy
Chairman Hiroyuki Sonoda's explanation that some LDP lawmakers had
called for the including of the right to collective self-defense in
its manifesto, while some others raised questions about directly
specifying the matter in the manifesto, the party discussion
experienced complications.

Originally, the LDP had planned to sort out the relationship with
the Constitution, including the question of the right to collective
self-defense, in compliance with Prime Minister Taro Aso's strong
wishes. But that has been pushed back by cautious views in the
party.

At a party-heads debate on Aug. 17, Prime Minister Aso underlined
the need to strengthen the security foundation in connection with
the collective self-defense right apparently in a bid to make a
clear distinction with the DPJ.

But the party has yet to deepen its discussions due party because
its coalition partner, New Komeito, is clearly opposed to the
exercise of the collective defense right, even though it advocates
the steady implementation of a missile defense (MD) system.

(6) Column article: Using ODA to control economic bubble

SANKEI (Page 7) (Excerpts)
August 24, 2009

Hideo Kesen, commentary writer

The Ministry of Foreign Affairs (MOFA) in late July reorganized its
International Cooperation Bureau, which is responsible for official
development assistance (ODA). The structure that divided into
sections yen loans, grants, and technical cooperation was changed

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into a system that could strongly respond to the needs of regions or
specific countries.

MOFA's thinking is that each developing country has different aid
needs, and determining the best aid package by country would make
ODA more efficient.

What is ODA for in terms of its definition? It is for the sake of
Japan's "national interest," in the first place. Needless to say,
the government should aim to provide ODA that will contribute to the
national security and peace of mind. The international community
operates under the principle of give and take. It is also important
to understand that "charity is not good for its recipient."
Furthermore, in terms of the international economy, ODA contributes
to order and stability in the flow of money.

Almost one year has passed since the financial crisis that started
in the U.S.. Many analyses and studies have been made about the
cause of this crisis. Many experts cite the disequilibrium in the
flow of money as the cause. In other words, while you have countries
like the Arab states and Russia exporting oil and China exporting
goods which enjoy substantial balance-of-payment surpluses, there
are countries like the U.S. that have neglected its
balance-of-payments deficits for years. This resulted in surplus
money in the world inundating the U.S., causing a financial bubble.

Although the newly emerging economies are growing rapidly, the gap
between rich and poor is considerable. Since the social security
systems and medical services are inadequate, people who feel
insecure about their future tend to increase their savings. Since
there is little capacity to absorb investment based on real domestic
demand in these countries, they headed for the U.S. through banks
and other institutions. However, such investments resulted in losses
and triggered a worldwide recession. In light of this sad reality,
one lesson learned is that ODA should be used to improve the
international balance of payments in the future.

Aid for the African states with balance-of-payment deficits can be
used to achieve balance-of-payment surpluses through the process of
building domestic infrastructure, poverty reduction and increase in
domestic savings, fostering of industries with growth potential, and
increasing exports.

For the newly emerging economies enjoying surpluses, ODA can be used
to create the environment for investments to expand domestic demand
through assistance for legislation of domestic laws and relaxation
of regulations and fostering domestic industries with technical
cooperation, in order to help reduce the surpluses.

The world is expanding fiscal spending and easing monetary policies
in its attempt to extricate itself from the recession. Excess
liquidity has the potential of causing another bubble. The use of
ODA to correct the disequilibrium in international balance of
payments can be expected to help prevent the next worldwide bubble
to a certain extent.

(7) Tokyo Shimbun pre-election analysis: DPJ likely to win over 300
seats, LDP about 100

TOKYO SHIMBUN (Top play) (Slightly abridged)
August 23, 2009


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The Tokyo Shimbun conducted interviews and an independent telephone
poll on Aug. 22 ahead of the 45th House of Representatives election
to be held on Aug. 30. The results showed that the Democratic Party
of Japan (DPJ), the major opposition party, is likely to garner 300
seats, perhaps as many as 320, substantially more than the number
that would give them a majority, 241. That would represent a quantum
leap above its pre-election strength of 115 seats. In contrast, the
ruling coalition of the Liberal Democratic Party (LDP) and the New
Komeito is certain to fail to secure a majority, with the former
suffering a major setback from its pre-election strength of 300
seats.

In the single-seat constituencies, the DPJ is certain to secure 180
seats and has a good chance of winning an additional 50 seats. The
DPJ has the upper hand not only in urban areas but also in rural
areas. In the proportional representation segment as well, the DPJ
is expected to secure 90 seats, a majority.

Meanwhile, the LDP is expected to win a total of 100 seats -- 50
seats each in the single- and proportional-representation segments.
The LDP is fighting an uphill battle both in urban areas, where it
demonstrated overwhelming strength in the previous 2005 election,
and in the countryside, its traditional base of conservative
support. Then again, it is possible for the LDP to regain lost
ground and win over 150 seats.

As for the New Komeito, which has fielded eight candidates, only one
is certain to win a seat. Chances are high that the party will fail
to maintain its pre-election strength of 31 seats, even including
the rock-solid proportional representation segment.

The Japan Communist Party may win more than its pre-election nine
seats, on the strength of a solid performance in the proportional
representation segment. The Social Democratic Party and the People's
New Party will be hard pressed to keep their respective nine and
four seats.

Your Party is certain to win one seat. The prospects for Kaikaku
Kurabu (Japan Renaissance Party) or the New Party Nippon (NPN) to
secure seats are nil.

The situation could change, as 36.3% and 32.8% of respondents in the
telephone survey said they had not made up their minds regarding the
single-seat segment and the proportional representation segment,
respectively.

DPJ ahead of other parties in 21 Tokyo districts

The DPJ has fielded candidates in 22 constituencies in the 25
single-seat districts in Tokyo. It is leading in 21 constituencies.
There is a possibility that the DPJ, which won only one seat in the
previous election, will achieve an overwhelming victory,
outdistancing the LDP.

In the Tokyo bloc (17 seats) as well, the DPJ is likely to garner
nine proportional-representation seats, a substantial increase from
the six seats it won in the previous election. The LDP, which won
seven in the last election, is expected to win no more than five.
Following (its victory) in the Tokyo assembly election, the DPJ
continues to sail with the wind at its back.

The situation could shift, as nearly 40% of respondents remain

TOKYO 00001953 011 OF 019


undecided regarding the single-seat segment.

The LDP is enjoying a lead in the 1st, 2nd, 3rd, 6th, 7th, 12th,
14th, 15th, 18th, 19th, 21st, 22nd, and the 24th districts.
Meanwhile, the LDP has the upper hand in the 8th, 17th, and the 25th
constituencies.

Thirty-eight percent of respondents said they would vote for the DPJ
in the proportional representation segment, 20.7% for the LDP, and
6.2% for the New Komeito. Over 90% of respondents expressed interest
in the upcoming election.

(8) DPJ hastily adding more substance to plan for new
administration

NIKKEI (Page 2) (Slightly abridged)
August 23, 2009

The Democratic Party of Japan (DPJ) is hurriedly adding more
substance to its plan for a new administration included in its
campaign manifesto (policy platform) for the Aug. 30 House of
Representatives election. The major focus of attention is on the
authority and membership of the new organizations proposed in the
manifesto, such as a national strategy bureau and an administrative
renovation council. These are core organizations to powerfully
promote policymaking under politicians, but many points have not yet
been clarified. Since the DPJ needs to give consideration to the
Social Democratic Party (SDP) and the People's New Party (PNP), with
which the DPJ has pushed ahead with election cooperation, senior DPJ
members are working out the details of the plan in a cautious
manner.

Focus on power and lineup of proposed new organizations

DPJ President Yukio Hatoyama said that he would pick the cabinet
minister regarded as most deeply versed in policies for the top post
of the national strategy bureau tasked with setting budget outlines
and foreign policy. The party also plans to appoint officials
responsible for administrative work from among both bureaucrats and
private citizens. There is also a proposal to assign 30 persons as
members of the strategy body.

If the main opposition party takes over the reins of government, the
party will create the new body in its first cabinet meeting and set
it in motion when its government is inaugurated. But the party
intends to delay legal preparations to grant the new body with
powerful authority until after the start of the next extraordinary
Diet session in the fall.

A cabinet members' council, another proposed new panel, would
discuss key issues prior to the first cabinet meeting. For instance,
the DPJ would instruct the Finance Ministry to compile a budget in
accordance with the budget outlines set by the national strategy
bureau. The cabinet ministers' council would lay down a budgetary
plan, and the plan would be adopted in a cabinet meeting.

Another key element is an administrative reform council tasked with
exposing wasteful spending and securing the fiscal resources to
finance the policy measures to be adopted by the new administration.


Hatoyama plans to bring some local government members into the

TOKYO 00001953 012 OF 019


national strategy bureau. A plan has also been proposed to
powerfully promote decentralization reform under the prime minister
by integrating the functions of the existing Decentralization Reform
Committee and the Decentralization Reform Headquarters.

The DPJ has yet to present details about these new organizations,
such as the form and also the composition and selection criteria for
their members.

If a change of government takes place, the new administration will
have to complete the formation of its cabinet and negotiations on a
coalition government by the middle of September, with a view to the
UN General Assembly in late September and other diplomatic events.
There is concern that hastily created organizations could hinder the
handling of the government. In addition, party members might be
abuzz and the atmosphere of tension in the election campaigning
could slacken.

A senior party member told Hatoyama: "There are members who are
talking about personnel appointments in an elated mood."

Regarding a plan to establish a government independently by the DPJ,
PNP Acting President Shizuka Kamei commented: "The DPJ must discuss
what to do about the authority and contents (of the new
organizations) with the PNP and the SDP. Even if a coalition
government is established, it would come to a standstill (if these
discussions are not conducted).

(9) 2009 Lower House election: Struggle for power as "Hatoyama
government" gets ready to launch; Shadow of Ozawa flickers (last
installment)

SANKEI (Page 3) (Full)
August 20, 2009

The Lower House election was publicly announced on August 18.
Democratic Party of Japan (DPJ) President Yukio Hatoyama kicked off
his campaign in Nanba, Osaka, and then with vigor, quickly visited
five prefectures, including Kyoto and Aichi prefectures. He then
visited Yotsuya, Tokyo, as the final place that day to deliver an
impassioned speech, his face flushed with excitement.

"For your livelihoods and futures, Japan will not last unless a
change of government comes about. Please help the DPJ (do that)."

As the dominance of the DPJ is being reported, the possibility of
the inauguration of "Prime Minister Hatoyama" is becoming
increasingly likely. However, how effective the party's highlighted
pledge for politician-led handling of government? There is a big
gap over security and foreign policies between the DPJ and the
Social Democratic Party and the People's New Party. The term
"change of government" is moving ahead, while the outline of the
government is still vague.

The DPJ has had troubles in compiling its proportional
representation list until the night of August 17. DPJ Acting
President Ichiro Ozawa called former Lower House member Yukichi
Maeda, whose name was on the recommendation list submitted by the
DPJ Aichi prefectural chapter.

"Do not run for an election this time, you will have another
chance."

TOKYO 00001953 013 OF 019

Maeda had to leave the DPJ in October 2008 to take responsibility of
receiving donation from a pyramid selling scheme, and he had
announced that he would not run for the Lower House election. While
he was a DPJ lawmaker, he served as the secretariat of "Isshin-kai,"
Ozawa's political group. He was known as an Ozawa close aide within
and outside the party.

The DPJ had difficulties in coordinating the order of the DPJ's
candidates in the proportional representation constituency, because
election campaign is going in favor of the party and the possibility
became high that a candidate only running for a proportional
representation constituency and listed lower in the list and not
likely to win at normal times might win this time. If they know
they cannot win from the beginning, they can give it up. However,
they now have a possibility of winning, so there were fierce battles
among the candidates listed low.

"Ozawa is the only one who can settle the issue by force" (according
to a DPJ official).

Ozawa was given a free hand in coordinating the list. As a result,
the "shadow of Ozawa" loomed behind the list announced on the
morning of August 18.

In fact, a candidate who is close to Ozawa and decided to be on the
list was rejoiced at the surprising news, saying, "It came as a
surprise to me. I have to start preparing for the election now."
It implies that the list was made at the initiative of Ozawa. An
Upper House member from the Hokuriku-Shinetsu bloc had to explain to
local supporters, because they asked about what has caused the
difference in the list's order.

A candidate from the Minami-Kanto Bloc openly expresses discontent.


"There are many mysteries about the list. Everything might be
'Ozawa Brand.'"

"All DPJ candidates in the prefectural constituencies will win."
"If the 'DPJ government' is inaugurated, I will join the Cabinet."


A DPJ senior official who repeatedly made such remarks during an
election campaign was singled out and criticized at a meeting of the
three top DPJ officials, including President Hatoyama and Secretary
General Katsuya Okada, held at the party headquarters on August 3.
One of the attendees warned that "Is not the election campaign
coming loose?" As the attendee is concerned, DPJ's preparedness for
election is, in fact, gradually slackening.

However, the future of the DPJ is not as stable as to be intoxicated
with the atmosphere of "easy victory." Hatoyama as well as Ozawa
has had a political donation issue, and there are many pitfalls
ahead.

"Mr. Hatoyama often sinks into serious thought, so do not give him
any strange information."

Ozawa made the order to party officials in mid-August. He is likely
to have worried that Hatoyama might distress himself by the issue of
falsified report on political funding.

TOKYO 00001953 014 OF 019

Hatoyama might be able to get the issue out of his mind during the
election campaign, but the falsified report issue will haunt the DPJ
even after the Lower House election. If the DPJ takes control of
the government, the "opposition Liberal Democratic Party" will be
sure to take up the issue in the extraordinary election scheduled to
be convened in fall.

"I would like to take power and restore confidence in politics,"
said Hatoyama in a speech in Hachinohe, Aomori Prefecture on August
19. If he topples by his own "money and politics" issue, the DPJ
will lose public expectation for the "DPJ government" at once.

(10) Escalating nuclear power generation business: Obtaining uranium
is top

YOMIURI (Page 8) (Full)
August 21, 2009

"It is important to expand and strengthen business areas upstream."
President of Toshiba Corporation Norio Sasaki stressed at a
management briefing on August 5.

If one portrays the nuclear power generation business as a river,
construction of a nuclear power plant, which is the center of the
business, would be the middle part of the river. The process of
mining uranium and producing fuel for nuclear power plant would be
the upstream part and the lower part of the river would be the
recycling of spent nuclear fuel. Nuclear power plant builders, who
want to secure the upstream part of the business, are rushing to
secure uranium.

Toshiba Corporation obtained an interest in a uranium mine in
Kazakhstan, which has the second largest uranium reserve in the
world. Toshiba also capitalized on a big Canadian uranium
development company in February. Following the conclusion of the
Japan-Russia Nuclear Energy Agreement in May, Toshiba started
discussion with a Russian national nuclear company on using stored
enriched uranium for business. It is a strategy to enrich uranium,
mined in Kazakhstan, in Russia, which has the highest capability in
the world.

Mitsubishi Heavy Industries will use the group's organizational
strength. It set up a joint venture company with Mitsubishi
Material Corporation, Mitsubishi Corporation, and French Areva to
design, produce, and sell fuel on a consistent basis.

Hitachi has been cautious about independently proceeding upstream,
as (Vice President Hiroaki Nakanishi) said, "(Hitachi) has
established a strong relationship with U.S. company, General
Electric (GE)." However, Hitachi tied up with Cameco Corp, the
world's largest uranium production company, and secured a uranium
ore supply route.

Companies are rushing to move upstream, because it is viewed that a
"business, which has a mixture of uranium procurement and
construction of a nuclear power plant will become mainstream" (Tokyo
Foundation researcher Taisuke Abiru).

It is not easy for emerging countries, which have no know-how about
nuclear power generation, to procure fuel on its own. Whether to be
able to establish a consistent system from (procurement of) fuel to

TOKYO 00001953 015 OF 019


construction of (nuclear power) plant is the key to win in
competition for orders.

It is said that uranium reserves will not dry up for another
century. It is abundant (amount of reserve) at this point compared
with 40 years of oil and 60 years of natural gas. However, if a
rush of nuclear power plant construction continues, the uranium
supply could dry up. A sense of crisis is also intensifying the
competition to secure uranium.

Meanwhile, (companies') approach to the downstream part of the
business is lagging behind, compared to upstream efforts. A nuclear
fuel cycle is indispensable for a long-term stable operation of
nuclear power plant. It is also important from the viewpoint of
nuclear nonproliferation. Only a limited number of countries have
the technology (of recycling nuclear fuel). It has been becoming a
global challenge.

Japanese companies pooled their technologies and built a nuclear
fuel-cycle facility in Rokkasho Village in Aomori Prefecture.
However, due to a series of mishaps, when the facility will start
operation is unknown. Joint efforts by public and private sectors
will be the key for Japanese companies to become global as
comprehensive nuclear-power plant builders.

(11) Chinese government rejects MADF vessels' visit to Hong Kong,
possibly because of Uyghur issue

YOMIURI (Page4) (Slightly abridged)
August 22, 2009

The Chinese government has rejected a Japanese proposal for Maritime
Self-Defense Force (MSDF) vessels to call at Hong Kong in August or
early September, citing scheduling difficulties.

According to the Ministry of Defense and other sources, the MSDF
sounded out the Chinese government about a visit to Hong Kong by its
training ships Kashima and Shimayuki and its destroyer Yugiri
embarking some 710 MSDF officer candidates in all in conformity with
an agreement to promote defense exchanges, reached at the
Japan-China defense ministerial meeting in March this year. In
response, the Chinese side conveyed its rejection to Tokyo via the
Japanese Consulate General in Hong Kong earlier this month. Some
Japanese observers believe China's rejection of the port call is
connected with the recent visit to Japan by World Uyghur Congress
President Rebiya Kadeer, a visit to Japan later this year by former
Taiwanese president Lee Teng-hui, and a visit to Japan by the 14th
Dalai Lama, the spiritual leader of Tibet.

(12) Rough sailing in selection of FX: ASDF should clarify
operational concept

YOMIURI (Page 11) (Full)
August 22, 2009

Hidemichi Katsumata, editorial staff member

The process of selecting the next fighter (FX) for the Air
Self-Defense Force (ASDF) is in a state of confusion, and the budget
requests for the next fiscal year to be published in late August
will not include allocations for the procurement of the FX.


TOKYO 00001953 016 OF 019


The selection process started in earnest three years ago, and the
ASDF has been eying the U.S.-made state-of-the-art F-22 fighter. One
senior ADSF officer confessed that Japan wants the F-22 "very
badly." This is because the F-22 has very high stealth performance
meaning it is very hard to detect with radar, possesses supersonic
cruise capability, and is termed the "most powerful" fighter.
However, the U.S. has prohibited its export precisely due to its
sophisticated military technology. The U.S. defense budget has also
been reviewed in April, resulting in the discontinuation of the
production of the F-22.

One would think that the FX selection process was now back at square
one, but during his visit to the U.S. in May, Defense Minister
Yasukazu Hamada made a request to U.S. Secretary of Defense Robert
Gates regarding the export of the F-22. The U.S. Congress also
passed a bill on studying the possibility of exporting the F-22.
Therefore, the ASDF is not fully resigned to giving up on this
aircraft. ASDF Chief of Staff Kenichiro Hokasono stated at a news
conference on August 7 that the situation "is not completely
hopeless." It is said in the Ministry of Defense (MOD) that "the
ministry, including the minister, is in a state of not being able to
back down." But is this the best option?

One reason for such doubts is that the ASDF has been unclear about
the role of the FX in its future fleet of aircraft.

When the National Defense Program Guidelines were revised five years
ago, the ASDF did away with any distinction between the "main
fighters," which are meant for anti-aircraft operations, and
"support fighters," which are responsible for ground and anti-ship
attack, unifying all 260 fighters under the category of
"multi-purpose fighters."

After the selection of the FX, the ASDF's main fighter F-15 will be
become obsolete in over 10 years, and after that, the F-2s will have
to be updated. Ideally, along with the selection of the FX, the ASDF
needs to clarify its concept of operations on the capabilities and
operational requirements for its future fighters, then explain the
models and number that need to be procured.

Another problem is that little attention is paid to the production
and technical base, which is important for the stable operation of
the fighters.

There are two ways to import fighters from overseas: licensed
domestic production by paying for the patents and designs of foreign
manufacturers and import of finished products. After World War II,
the ASDF has mostly maintained a system of licensed domestic
production for over 50 years, starting with the F-86 fighters.

Two years ago, a U.S. Air Force (USAF) F-15 fighter ruptured in
flight, and it took 3.5 months before the USAF could resume
operation of the F-15. However, Japanese manufacturers, using
technology accumulated through licensed production, were able to
pinpoint the cause on their own, and the ASDF resumed the operation
of the F-15 only 18 days after the accident. Japanese technicians
involved with licensed production say that "fighters are an
amalgamation of advanced technology. It is impossible to maintain
the technology without licensed production."

Even if the procurement of the F-22 or the F-35, which is still in
the development stage, becomes possible, the method is expected to

TOKYO 00001953 017 OF 019


be the import of finished products since these fighters use many top
secret technologies. The aircraft itself will have to be sent back
to the U.S. every time repairs are required, which means the
utilization rate of the fighters will be very low. At the same time,
the domestic production and technical base is very likely to be
lost.

The important thing in FX selection is how to maintain and improve
Japan's technology and development capability when the time comes
for the next fighter after the FX. Russia is said to be deploying
stealth fighters six years from now and China is expected to do the
same in 10 years. By that time, they will be undertaking the
development of even more advanced capabilities.

The UK has been eagerly promoting its Eurofighter as a candidate for
the FX this time. However, it is not stopping at the Eurofighter and
is participating in the joint development of the F-35, adopting an
attitude of constantly pursuing the most advanced technology. Japan
should learn from this. The MOD should set up a mechanism for
integrating continuous research and development with the production
and technical base.

(13) TOP HEADLINES

Asahi:
Ruling coalition heavyweights stay in home constituencies to
campaign

Mainichi:
LDP steps up criticism against DPJ to overcome inferior position in
general election, DPJ guards against letting advantage slip

Yomiuri, Sankei, and Tokyo Shimbun:
North Korean delegation conveys North Korean leader Kim Jong Il's
message to South Korean President Lee calling for resumption of
dialogue to improve South-North ties

Nikkei:
Lawson, Matsumotokiyoshi eye business tie-up to open new outlets
starting next spring

Akahata:
Appearing on NHK program, Chairman Shii calls for shift of weight
from business world to household finances, and foreign policy that
makes use of Article 9 of the Constitution

(14) EDITORIALS

Asahi:
(1) 2009 general election: Multilayered livelihood support system
essential
(2) Disputes and international law: Japan must work for humanitarian
causes

Mainichi:
(1) Six days before 2009 Lower House election: One vote carries
greater significance
(2) Lower House election: Science and technology-oriented country;
Solid research base vital

Yomiuri:
(1) Both LDP's, DPJ's recipes for growth lack punch

TOKYO 00001953 018 OF 019


(2) Decentralization: Shift of power requires specific discussion

Nikkei:
(1) Massive chain-store operators faced with three "reductions"

Sankei:
(1) Political parties must pledge to carry out civil service reform
from viewpoint of structural reforms
(2) Proposed income indemnity system may run counter to plan to
increase farmers

Tokyo Shimbun:
(1) 2009 Lower House election: Improving pension system a top
priority
(2) Nikkei Stock Average that has been hovering around 10,000 level
must be monitored carefully

Akahata:
(1) Large-firm-oriented policy must be corrected to put more weight
on small and medium-sized enterprises

(15) Prime Minister's schedule, August 22

NIKKEI (Page 2) (Full)
August 23, 2009

07:03
Met Cabinet Office Director General Omori at Haneda Airport.

07:31
Departed Haneda on ASDF U-4 multipurpose aircraft.

08:24
Arrived at Kobe Airport. Met with Hyogo Governor Ido.

10:28
Met Sayo Town mayor at town government office.

10:43
Visited shopping mall in front of JR Sayo Station that was affected
by torrential rains.

10:48
Returned to Sayo Town government office.

12:05
Met his secretary at Okura Hotel Kobe in Kobe City.

13:27
Delivered stump speech in front of Daimaru Department Store.

14:26
Visited New Komeito candidate's election office in Amagasaki City.

15:01
Visited LDP candidate's election office in Itami City.

15:37-
Gave stump speeches in Osaka City.

17:00
Visited New Komeito candidate's election office in Sakai City.

TOKYO 00001953 019 OF 019


18:27 Departed Kansai Airport via JAL 186.

19:16
Arrived at Haneda Airport.

20:02
Arrived at his official residence.

Prime Minister's schedule, August 23

NIKKEI (Page 2) (Full)
August 24, 2009

07:05
Appeared on Fuji TV program at Grand Prince Hotel Akasaka.

08:43
Appeared on TV Asahi program.

11:56
Arrived at LDP headquarters.

13:44 -
Delivered stump speeches in various locations in Chiba Prefecture.

19:11-
Stump speeches in Tokyo.

21:43
Arrived at his official residence.

ROOS

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