Cablegate: Daily Summary of Japanese Press 09/17/09

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UNCLAS SECTION 01 OF 04 TOKYO 002175

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

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

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 09/17/09

INDEX:

(1) Hatoyama cabinet inaugurated: Vows to end bureaucrat-led
politics in first conference as premier; Budget to be compiled
before year's end; Intends to build relationship of trust with U.S.
(Nikkei)

(2) Seats in the Upper and Lower Houses (Nikkei)

(3) Deputy Prime Minister Kan to serve as first acting prime
minister, Chief Cabinet Secretary Hirano as second (Nikkei)

(4) Editorial: Prime Minister Hatoyama should address expectations
of people who hoped for change of government (Nikkei)

ARTICLES:

(1) Hatoyama cabinet inaugurated: Vows to end bureaucrat-led
politics in first conference as premier; Budget to be compiled
before year's end; Intends to build relationship of trust with U.S.

NIKKEI (Top Play) (Excerpts)
September 17, 2009

The Yukio Hatoyama cabinet was launched on the evening of Sept. 16.
The government is a three-party coalition government consisting of
the Democratic Party of Japan (DPJ), the Social Democratic Party
(SDP), and the People's New Party (PNP). This is the first
inauguration of a non-Liberal Democratic Party (LDP) administration
through an election in 16 years, since the Morihiro Hosokawa
administration in 1993. The Hatoyama cabinet will now endeavor to
realize its policy manifesto for the Lower House election under the
slogan of ending bureaucrat-led politics. At his first press
conference since taking office the prime minister announced, "I will
grapple with the drafting of the fiscal 2010 budget according to a
schedule that will enable its compilation before year's end." The
prime minister at the first cabinet meeting presented a set of basic
polices stipulating a framework for politician-led politics. During
the discussion the prime minister and cabinet members agreed on the
desired nature of their relationship with bureaucrats.

Hatoyama became the nation's 60th prime minister for the 93rd
cabinet in elections to nominate the prime minister at plenary
sessions of the Lower and Upper Houses held on the afternoon of the
16th. After the election, he immediately entered the Kantei and
appointed 17 cabinet members, including Naoto Kan as deputy prime
minister. An installation ceremony for the prime minister and an
attestation ceremony for the cabinet members by the Emperor were
held at the Imperial Palace last evening, formally launching the
three-party coalition government.

In a set of basic policies presented at the first cabinet meeting,
the prime minister ordered the establishment of a national strategy
office to serve as a predecessor of the national strategy bureau
responsible for compiling a budgetary framework. The package also
notes that the government will make the Japan-U.S. alliance a close
and equal one. It also stresses the building of a relationship in
which Japan can actively propose specific action guidelines.

Concerning Japan-U.S. relations, the prime minister said at a press
conference, "We will adopt a stance of expressing our views without
hesitation." However, regarding a summit with President Obama slated

TOKYO 00002175 002 OF 004

for later in the month, Hatoyama said, "The main purpose of the
meeting is to build a relationship of trust. We will take time in
pursuing discussions." He thus hinted at his intention not to raise
specific issues, such as a revision of the Japan-U.S. Status of
Forces Agreement.

(2) Seats in the Upper and Lower Houses

NIKKEI (Page 5) (Excerpts)
September 17, 2009

House of Representatives House of Councillors
311 Democratic Party of Japan (DPJ) 118
118 Liberal Democratic Party (LDP) 85
21 New Komeito 21
9 Japanese Communist Party (JCP) 7
7 Social Democratic Party (SDP) 5
5 Your Party -
3 People's New Party (PNP) -
3 Group to Protect National Interest and People's Daily Lives -
3 Independents 4
0 Vacant 2

(3) Deputy Prime Minister Kan to serve as first acting prime
minister, Chief Cabinet Secretary Hirano as second

NIKKEI (Page 5) (Full)
September 17, 2009

The government decided in its first cabinet meeting last night the
order of priority for cabinet members to serve as acting prime
minister if Prime Minister Yukio Hatoyama becomes unable to fulfill
his duties due to an overseas visit, illness, or accident. Naoto
Kan, deputy prime minister and state minister in charge of national
strategy, was picked as the first acting prime minister, followed by
Chief Cabinet Secretary Hirofumi Hirano, National Public Safety
Commission Chairman Hiroshi Nakai, Finance Minister Hirohisa Fujii,
and Justice Minister Keiko Chiba. After the formal meeting, the
cabinet ministers held an informal meeting during which they decided
to return ten percent of their salaries (for August).

(4) Editorial: Prime Minister Hatoyama should address expectations
of people who hoped for change of government

NIKKEI (Page 2) (Full)
September 17, 2009

With the election of Democratic Party of Japan President Hatoyama as
head of the 93rd cabinet, the coalition government of the DPJ, the
Social Democratic Party and the People's New Party was launched. The
new administration was inaugurated with the DPJ scoring a historic
landslide victory in the Lower House election, capturing 308 seats.
We want Prime Minister Hatoyama to address expectations of people
who hoped for a change of government and steadily produce results.

The DPJ in its policy manifesto pledged to realize politician-led
politics, in which the ruling parties take responsibility. A new
attempt to change relations between politicians and bureaucrats and
the policy-making mechanism of the long-lasted LDP administration
started.

Move to review relations between politicians and bureaucrats

TOKYO 00002175 003 OF 004

Prime Minister Hatoyama appointed his aide Hirofumi Hirano as chief
cabinet secretary, a key post in the cabinet, and Naoto Kan as state
minister responsible for the national strategy bureau, which will
serve as the key policy-making body. Kan, who will double as senior
vice minister, is the number two person in the cabinet.

Hirohisa Fujii, who once served as finance minister, assumed his
former portfolio. Yoshito Sengoku, a policy expert, assumed the post
of state minister for the administrative reform council. Mid-ranking
lawmaker Akira Nagatsuma was appointed minister of the Health, Labor
and Welfare Ministry, which is responsible for the pension issue.
With the exception of those showcase appointments, the cabinet
lineup gives the impression the prime minister has put together a
rock-solid cabinet with consideration for achieving good balance in
the party. The idea of picking for the cabinet people from the
private sector has been put on hold. Establishing the national
strategy bureau, which will be tasked with formulating basic
policies for budgetary compilation, will require an amendment to the
relevant law. The government will cope with this situation by
setting up a national strategy office for the time being. However,
since its authority is unclear, there is fear confusion will arise.
Role-sharing between the chief cabinet secretary, a coordinator
among various government agencies, and State Minister Kan,
responsible for the national strategy bureau, will be a major issue.
It is important for the prime minister, Kan, and Hirano to closely
liaise with one another and coordinate views on various policies.

The Hatoyama administration must tackle such things as rebuilding
the economy, compiling a new growth strategy and reforming the
social security system in response to the low birthrate and aging
society. A point of concern is that the postal privatization policy
might be watered down because of the appointment of PNP President
Shizuka Kamei as state minister for financial affairs and postal
reform. Structural reforms, such as regulatory reforms, are
essential for turning around the economy. It is unforgivable to
allow structural reforms to stall.

The compilation of the fiscal 2010 budget is the first crucial test
for the new administration. The change in administration is a good
opportunity to eliminate constraints. We want the government to
boldly press ahead with efforts to eliminate wasteful spending and
review the inflexible distribution of budgetary funds.

However, new policy measures slated to be implemented in the next
fiscal year alone, including the payment of 50 percent of the child
allowance, will cost 7.1 trillion yen. It is unclear whether such a
sum can be secured through slashing wasteful spending. There is a
risk of rising interest rates if the shortage is to be covered with
the additional issuance of government bonds. We urge the government
to compile a budget in a flexible manner, while paying attention to
economic trends as well. The budget must be compiled before year's
end without fail so as to prevent a delay from affecting the
economy.

The Hatoyama administration abolished the vice ministerial meeting
as a symbol of (the start of) politician-led politics. Whether the
cabinet ministerial committee to be newly set up can serve as a
policy-making forum depends on the cabinet ministers' capability. It
is desirable if the government ends the practice of reshuffling
posts on a regular basis. It is desirable for each cabinet member to
serve as long as possible.

TOKYO 00002175 004 OF 004

In order for the cabinet to unify the policy-decision processes
under its wing, its relations with the party are also important. The
DPJ intends to newly establish a party leaders' council consisting
of Prime Minister Hatoyama, Secretary General Ichiro Ozawa, and
others as a supreme decision-making organ responsible for steering
the Diet. It must not give rise to a two-tier power structure
involving Ozawa.

Prime Minister Hatoyama will soon visit the U.S. to attend the UN
climate change summit, the UNSC summit on nuclear nonproliferation
and nuclear disarmament, and the G-20 Summit in Pittsburgh.

Before he took office as prime minister, Hatoyama announced a policy
of setting a mid-term goal of cutting greenhouse gases to 25 PERCENT
below the 1990 level. This is a switch from the Aso cabinet's
policy of cutting such gases to 8 percent below the 1990 level. This
announcement has impressed upon the international community that
power has changed hands in Japan. Hatoyama's ability to engage China
and India in an international framework for greenhouse gas emission
reductions by using his bold mid-term goal will be put to the
test.

Dispel concern over relations with U.S.

The Hatoyama administration raises concern about relations with the
U.S. Prime Minister Hatoyama plans to hold his first meeting with
President Obama during his upcoming visit to the U.S. The DPJ does
not plan to extend Japan's refueling operation in the Indian Ocean,
which is set to expire next January, but the U.S. government is
asking Japan to reconsider. Concerning U.S. force realignment,
including Futenma Air Station relocation, there are also differences
in views between the U.S., which calls for the implementation of the
agreement made between the two governments, and the new
administration.

The prime minister said in his inaugural speech that building a
relationship of trust with the President is the first step. Actions
to maintain the robust Japan-U.S. alliance are indispensable in
order to achieve that goal.

In order to secure a majority in the Upper house, the DPJ has formed
a coalition with the SDP and the PNP, with which there is a wide gap
in diplomatic and security policies. This has become a disturbing
factor for the new administration. Given the election results, it is
only natural for the DPJ to take leadership in steering the
administration. The SDP and the PNP need to practice self-control
instead of sticking to their own policy stances.

When the DPJ confronts the SDP or the PNP over diplomatic and
security policies, Prime Minister Hatoyama needs to be shrewd enough
to seek cooperation from the opposition Liberal Democratic Party and
New Komeito.

ROOS

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