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Cablegate: Japanese Morning Press Highlights 12/04/09

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WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
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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 12/04/09

INDEX:

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

Futenma flip-flop:
4) Coalition takes priority over Japan-U.S. alliance in decision to
delay Futenma solution (Sankei)
5) SDP hints it might leave coalition; Prime Minister directs
ministers to consult with U.S. (Sankei)
6) Maehara welcomes suggestion for Futenma facility relocation to
Kansai International Airport (Sankei)
7) PNP presents united front with SDP (Yomiuri)
8) Okinawa Governor placed in awkward position (Yomiuri)
9) Concern in defense and foreign ministries about effect on
Japan-U.S. relationship (Mainichi)
10) Hatoyama orders defense minister to find new Futenma relocation
site (Yomiuri)
11) Government to earmark U.S. military relocation costs in FY2010
budget (Nikkei)
12) Okada cancels meeting with Okinawan residents (Yomiuri)
13) Defense Minister mulls meeting with Osaka Governor (Nikkei)
14) LDP and New Komeito call for Futenma decision this year
(Nikkei)

Economy:
15) Open skies agreement spurs reorganization of industry (Nikkei)

16) Government to help companies secure rights to rare metals
(Nikkei)

Defense & security:
17) Participants in preparatory meeting on Nuclear Security Summit
agree to tighten controls on nuclear materials (Nikkei)

Foreign relations:
18) Foreign Ministry establishes new unit on child custody
(Mainichi)

Articles:

1) TOP HEADLINES

Asahi: Nikkei: Tokyo Shimbun:
Tax panel set to abolish income tax deductions both at national and
local levels: Increase in burden of 33,000 yen per child

Mainichi:
Prime Minister Hatoyama to postpone decision on Futenma base
relocation until next year, giving consideration to Social
Democratic Party

Yomiuri:
Futenma relocation: Prime Minister orders defense minister to find
new relocation site

Sankei:
Government puts off decision on Futenma base relocation until next
year

Akahata:

TOKYO 00002769 002 OF 010


Document disclosed in U.S. mentions that it had explained Japan that
vessels carrying nuclear weapons are exempt from prior talks

2) EDITORIALS

Asahi:
(1) Government decision on Futenma base relocation put off to next
year: Prime Minister Hatoyama should decide relocation policy on his
own
(2) Suspicions of a nuclear Iran: Settle the issue through
diplomacy

Mainichi:
(1) Government put off decision on Futenma Air Station relocation to
next year
(2) Minor increase in tobacco tax: Has priority been given to
boosting revenue rather than protecting people's health?

Yomiuri:
(1) Futenma relocation: Prime Minister should reconsider issue for
settlement before the end of the year
(2) Guilty verdict in flyer distribution case: Arrest of flyer
distributors should be limited in scope

Nikkei:
(1) Why is the government only rushing to abolish the provisional
gas tax rate?
(2) Environment technology driving industrial restructuring

Sankei:
(1) Political funds donations by Hatoyama family: Are they aware
that they are committing tax evasion? Public prosecutors should
conduct thorough investigation

Tokyo Shimbun:
(1) Freeze on public works: What is needed is a change in concept
(2) Japanese Trade Union Confederation's policy for annual spring
labor offensive

Akahata:
(1) Amended Money Lending Control Law: Watered down amendment
unforgivable

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 3

NIKKEI (Page 2) (Full)
December 4, 2009

10:15 Met State Minister for Government Revitalization Unit Sengoku
and Deputy Chief Cabinet Secretary Matsui at the Prime Minister's
Official Residence.
11:11 Met Foreign Minister Okada and Vice Foreign Minister Yabunaka.
Followed by Cabinet Office Senior Vice Minister Furukawa.
13:30 Met Cabinet Intelligence Director Mitani.
14:06 Met Okada, Defense Minister Kitazawa and Chief Cabinet
Secretary Hirano.
15:07 Met Japan Association of Bioindustries Executive President
Katsuhiro Utada and others, with Lower House member Jojima.
15:42 Met Upper House members Odachi and Kimata.
16:03 Met the Finance Ministry's three executive parliamentary

TOKYO 00002769 003 OF 010


officials, including Foreign Minister Fujii, Vice Minister Tango,
and Budget Bureau Director General Katsu.
17:15 Met National Strategy Minister Kan, Hirano, Matsui, and
Furukawa. Hirano, Matsui and Furukawa stayed behind.
18:02 Met Hungarian President Solyom. Held a joint press
conference.
19:02 Hosted a dinner party for Solyom.
20:17 Saw off Solyom.
20:30 Arrived at his official residential quarters.

4) Coalition takes priority over Japan-U.S. alliance in decision to
delay Futenma solution to 2010

SANKEI (Top play) (Abridged)
December 4, 2009

As of Dec. 3, it had become difficult to settle the issue of the
relocation of the U.S. forces' Futenma Air Station (in Ginowan City,
Okinawa) before the end of the year, which the U.S. side is
demanding. Social Democratic Party (SDP) leader Mizuho Fukushima
(state minister for consumer affairs and declining birthrate) voiced
strong objection to a decision based on the existing relocation plan
under the previous Japan-U.S. agreement on the same day, threatening
to bolt the coalition government. In reaction to this, Prime
Minister Yukio Hatoyama indicated his stance of attaching importance
to the coalition and his intention to respect the SDP's wishes.

A solution to the Futenma relocation issue has been deferred to next
year because Hatoyama gave higher priority to maintaining the
coalition government for the time being than to an early solution to
the Futenma issue, which is undermining the Japan-U.S. alliance
relationship.

If the Prime Minister makes a decision to respect the Japan-U.S.
agreement to relocate the Futenma base to Henoko in Nago City,
Okinawa, the SDP is certain to leave the coalition. Under the
present situation where the Democratic Party of Japan parliamentary
group alone does not control a majority in the House of Councillors,
the SDP's departure will deal a serious blow to the administration.
Furthermore, Hatoyama will be occupied with dealing with economic
stimulus measures and the suspected false reporting of his political
funds before year end. He will not have enough energy to work on the
Futenma issue.

5) SDP hints at leaving coalition; Hatoyama instructs ministers to
explain Japan's circumstances to U.S.

SANKEI (Page 1) (Excerpts)
December 4, 2009

"If the cabinet decides to construct a base in the waters off
Henoko, the Social Democratic Party (SDP) and I will have to make an
important decision," SDF head Mizuho Fukushima said during a meeting
of party executives yesterday. Under the current plan, an
alternative facility to the U.S. Marine Corps' Futenma Air Station
would be constructed in a coastal area of U.S. Camp Schwab in the
Henoko district of Nago City, Okinawa Prefecture.

Fukushima indicated, with the expression "an important decision,"
that the SDP would not hesitate to leave the coalition government.

In response, Prime Minister Yukio Hatoyama told reporters last

TOKYO 00002769 004 OF 010


evening: "The SDP is a ruling coalition partner, so we must
seriously consider its views." He also said: "We must reach a speedy
conclusion so as not to allow any more accidents to occur at the
Futenma base." But he does not necessarily have any specific plan in
mind that would bring about a solution to the Futenma issue by the
end of the year.

Prior to this, Hatoyama met with Foreign Minister Katsuya Okada,
Defense Minister Toshimi Kitazawa, and Chief Cabinet Secretary
Hirofumi Hirano and instructed them to explain the Japanese side's
circumstances to the U.S., saying: "I would like you to talk to the
U.S. in a sincere manner."

6) Transport minister welcomes Osaka governor's positive stance
about accepting Futenma facility

SANKEI (Page 5) (Full)
December 4, 2009

Osaka Governor Toru Hashimoto has indicated that he would consider a
plan to move the U.S. Marine Corps' Futenma Air Station in Ginowan
City, Okinawa Prefecture, to Kansai International Airport. Speaking
before reporters in Tokyo yesterday, Land, Infrastructure, Transport
and Tourism Minister Seiji Maehara (state minister for Okinawa,
northern territories, and disaster prevention) welcomed this
development. He said: "Although I have not heard anything concrete,
I appreciate Mr. Hashimoto's exercising leadership in meetings of
the National Governors' Association and encouraging them to offer a
helping hand (to resolve the Futenma issue)."

7) PNP, SDP strengthen cooperative ties

YOMIURI (Page 1) (Full)
December 4, 2009

The People's New Party (PNP) is keeping step with the Social
Democratic Party (SDP) regarding the issue of relocating the U.S.
Marine Corps' Futenma Air Station.

PNP leader Shizuka Kamei, state minister for financial affairs,
categorically said in a speech yesterday in Tokyo, "If the SDP and
PNP do not agree, the Okinawa base issue will not be resolved. Even
if the United States and the Okinawa governor approve (of the
relocation of the base within Okinawa), we will not give our
approval."

Yesterday Mikio Shimoji and Tomoko Abe, the policy chiefs of the two
parties, called on Defense Minister Toshimi Kitazawa and told him
about their meeting on Dec. 2 with Osaka Gov. Toru Hashimoto, who
had said that the burden on Okinawa should be shared by the whole
nation. Kitazawa expressed his willingness to hold talks with
Hashimoto.

Shimoji had apparently intended to meet alone with Hashimoto
initially, but he later asked Abe to attend the meeting. The purpose
of the SDP and PNP stepping up their cooperation on the Futenma
issue is to secure their political influence. All the more because
the SDP is hinting at the possibility of leaving the coalition
government, PNP members are saying things like, "This is a good
chance for us to make special requests regarding other issues to the
Democratic Party of Japan, which has been acting weak."


TOKYO 00002769 005 OF 010


8) Okinawa governor in hot seat; anti-relocation forces gaining
momentum; Nago mayoral election may be affected

YOMIURI (Page 4) (Full)
December 4, 2009

Now that the government has effectively given up on reaching a
settlement on the issue of relocating the U.S. Marine Corps' Futenma
Air Station before year's end, Okinawa Gov. Hirokazu Nakaima, who
has accepted the existing relocation plan based on a Japan-U.S.
agreement, finds himself in a tighter spot than ever before. In
Okinawa, anti-relocation forces calling for relocation out of the
prefecture or even out of the country are gaining momentum. At the
same time, the government's decision to postpone a conclusion has
given rise to speculation that Futenma will never be returned to
Japan. The decision is also likely to have an impact on next
January's Nago mayoral election, for which the Futenma relocation is
the major campaign issue.

"Moving Futenma outside the prefecture is the best option, but as
the person charged with administration, I think the matter will take
a substantial amount of time," Nakaima said in response to a
question about the relocation issue in a prefectural assembly
question-and-answer session yesterday. "It would make things less
complicated if I say 'outside the prefecture,' but I have not
changed my basic policy." The Liberal Democratic Party Okinawa
chapter, which has supported Nakaima, has also decided to call for
moving Futenma outside the prefecture if the matter is not resolved
before the end of the year. Nakaima expressed his personal struggle
to the press corps: "The situation will push me further to deal with
the matter in line with the prefectural people's desire to move
Futenma outside Okinawa."

In the Nago mayoral race, chances are that there will be a head-on
clash between the incumbent supporting the existing plan and a
newcomer opposing the relocation. "If the incumbent is defeated,
chances of a solution to the Futenma issue will diminish," Nago City
Council Chairman Kenyu Shimabukuro said angrily. On the other hand,
Prefectural assembly deputy chairman Yoshikazu Tamashiro from Nago
welcomed the government's step, saying, "If the government decided
to accept the existing plan, the people in Okinawa would give a
thumbs down. Coming this far, I want the government to take time to
reach a conclusion."

Meanwhile, residents of Ginowan, home to Futenma Air Station, do not
conceal their dismay. Kamiojana community association chairperson
Chieko Oshiro, 55, said: "I know that it will not be easy to move
the base outside the prefecture. Whether within or outside the
prefecture, I just want the danger of the air station moved as soon
as possible." Ginowan Mayor Yoichi Iha said: "Although there is no
need to insist on reaching a settlement on the existing plan before
the end of the year, Futenma Air Station must be closed down at the
earliest possible time."

9) Concern widespread about impact on Japan-U.S. relations

MAINICHI (Page 3) (Full)
December 4, 2009

"It is a matter for the ruling coalition to decide in the end, so
it's meaningless for us to think about it," a senior Foreign
Ministry official said with an air of resignation. "Unless the

TOKYO 00002769 006 OF 010


Futenma issue is settled, the bilateral alliance will not be
deepened as was agreed on in the recent Japan-U.S. summit." Concerns
about a possible impact on Japan-U.S. relations are rising in the
foreign and defense ministries all the more because they have been
making arrangements for a settlement within the year.

A Japan-U.S. ministerial-level working group will meet today at the
Foreign Ministry. The meeting is scheduled to be attended by Foreign
Minister Katsuya Okada, Defense Minister Toshimi Kitazawa, U.S.
Ambassador to Japan John Roos, U.S. Forces Japan Commander Edward
Rice, and others. The Japanese side is expected to inform the U.S.
side of its decision to give up on reaching a conclusion before
year's end. The working group has been set up in line with Okada and
Roos's eagerness "to reach a conclusion expeditiously." As such,
Japan's decision is likely to draw a strong backlash from the U.S.
side.

The Defense Ministry plans to include Futenma relocation-related
funds, such as an environmental impact assessment, in its fiscal
2010 budget plan. "This is intended to demonstrate Japan's sincerity
toward the United States. Once the stage is set for talks, they will
be implemented immediately," a ministry official explained.

Meanwhile, Okinawa's Nago City, the relocation site for Futenma
under the existing relocation plan, will carry out a mayoral
election next January, and the Democratic Party of Japan and the
Social Democratic Party are backing an anti-relocation candidate.
Prime Minister Yukio Hatoyama has hinted at reaching a decision
after the Nago race, but Diet deliberations on the FY2010 budget
will begin shortly after that. A settlement might be further delayed
as a House of Councillors election will take place in the summer.
Some foreign and defense ministry officials are concerned that a
postponement due to domestic circumstances might result in distrust
on the part of the U.S.

10) PM Hatoyama orders DM Kitazawa to find new Futenma relocation
site; decision postponed until next year

YOMIURI (Top play) (Abridged)
December 4, 2009

It was learned on Dec. 3 that with regard to the relocation of the
U.S. forces' Futenma Air Station, Prime Minister Yukio Hatoyama
asked Defense Minister Toshimi Kitazawa to "find a new site,"
ordering him to find a relocation site other than the coastal area
of Camp Schwab (in Henoko, Nago City, Okinawa). The Prime Minister's
instruction is regarded as a de facto order to consider a relocation
site from scratch. It is believed that Hatoyama has decided to
postpone a decision on the Futenma issue until next year because the
search for a new relocation site will take time.

Hatoyama told reporters on the evening of Dec. 3 that, "We are not
discussing the issue on the premise that it has to be decided within
the year," stating openly that the decision will be deferred to next
year.

Earlier, Hatoyama had met with Chief Cabinet Secretary Hirofumi
Hirano, Foreign Minister Katsuya Okada, and Defense Minister Toshimi
Kitazawa at the Prime Minister's Official Residence in the late
afternoon to discuss the meeting of the Japan-U.S. cabinet level
working group of foreign and defense ministers to be held in Tokyo
on Dec. 4. He said at the meeting that, "The coalition is important.

TOKYO 00002769 007 OF 010


I want you to talk to the U.S. in good faith," asking the ministers
to seek the U.S. side's understanding. Hatoyama has been meeting
with Hirano, Okada, and Kitazawa on a daily basis for the past few
days, and his order to look for a new relocation site came out
during these meetings.

11) Gov't to earmark U.S. military relocation costs in FY2010
budget

NIKKEI (Page 2) (Full)
December 4, 2009

In connection with the planned relocation of the U.S. military's
Futenma base in Okinawa Prefecture, the Defense Ministry will
earmark costs relating to the realignment of U.S. forces in Japan in
its budget for next fiscal year, a top-level official of the Defense
Ministry said yesterday. The ministry is going to include the
relocation costs in its budget request although the Futenma
relocation issue is not expected to be settled before the year is
out. "Our bilateral agreement between Japan and the United States
has not collapsed," the official said. "If we don't include the
relocation costs, we will lose the United States' faith," the
official added.

The Defense Ministry has already earmarked a total of approximately
89 billion yen in its budget estimate relating to the U.S. force
realignment, including about 35.3 billion yen for moving U.S.
Marines from Okinawa to Guam and about 28.8 billion yen for
relocating the Futenma base.

12) Planned exchange of views between Okada and Okinawa residents
cancelled

YOMIURI (Page 4) (Full)
December 4, 2009

The Democratic Party of Japan Okinawa chapter had planned to hold a
session on Dec. 5 in Itoman City for the exchange of views between
Foreign Minister Katsuya Okada and residents of Okinawa Prefecture,
but the planned session was suddenly cancelled. Although the DPJ
Okinawa chapter planned to open the session to the public, the
Foreign Minister's side objected. Therefore, arrangements for the
plan hit a snag.

13) Kitazawa mulls meeting Hashimoto

NIKKEI (Page 2) (Full)
December 4, 2009

Defense Minister Toshimi Kitazawa met yesterday in his Defense
Ministry office with Tomoko Abe, chair of the policy board of the
Social Democratic Party, one of the ruling Democratic Party of
Japan's two coalition partners, and Mikio Shimoji, chair of the
People's New Party, the DPJ's other coalition partner. In the
meeting, Shimoji and Abe proposed using Kansai International Airport
as a relocation site for some of U.S. fighter jets' training
missions currently conducted at the Kadena base in Okinawa
Prefecture. In this regard, they requested that Kitazawa meet with
Osaka Gov. Tohru Hashimoto. Kitazawa said he will consider the
request.

14) LDP, Komeito call for gov't to settle Futenma issue within the

TOKYO 00002769 008 OF 010


year

NIKKEI (Page 2) (Full)
December 4, 2009

Liberal Democratic Party President Sadakazu Tanigaki and New Komeito
President Natsuo Yamaguchi met yesterday evening at a Tokyo hotel
and agreed to call for the government to settle the pending issue of
relocating the U.S. military's Futenma base within the year. This
was the first meeting of the two party leaders.

15) ANA, two U.S. carriers to integrate flight routes: Envisaged
open skies agreement spurs reorganization

NIKKEI (Page 9) (Excerpts)
December 4, 2009

All Nippon Airways (ANA) and two leading U.S. air carriers, United
Airlines and Continental Airlines, will basically integrate their
passenger flight businesses in the fall of 2010. They will deepen
their existing business tie-ups, triggered by the envisaged open
skies agreement between Japan and the U.S., so as to be ready for
competition between the two countries becoming increasingly fierce
in the future. The next focus of attention will be on steps taken by
Japan Air Lines, which also holds a major share of flights between
the two countries.

The governments of Japan and the U.S. will likely reach a consensus
to conclude an open skies agreement next week and put it into
practice next year. ANA and its partner carriers intend to apply for
antitrust immunity (ATI) status with the Transport Ministry and the
U.S. Department of Transportation. Approval will likely be granted
in October 2010 at the earliest in both countries. The three
carriers estimate an increase in revenues totaling several tens of
billion yen as a result of increased income and cost reductions.

The three carriers, members of the Star Alliance, will provide
optimum numbers of seats based on demand by adjusting their flight
routes and the number of flights. The three carriers also plan to
improve efficiency by ANA taking over operations for its U.S.
partners at airport counters and administrative duties for their
business in Japan, and vice-versa in the U.S.

Once the open skies agreement is materialized, access to Japan-U.S.
routes will become, in principle, liberalized. How much market entry
will occur is unclear because landing and departure slots available
at Japanese airports are limited. However, there is a strong
possibility that price competition will become more intense.

16) Government to finance private companies' securing rare-metal
rights

NIKKEI (Page 5) (Full)
December 4, 2009

The Ministry of Economy, Trade and Industry (METI) has decided to
set up a new government-financed body to help private companies
obtain rights related to rare metals. According to the plan, the
government will invest in projects for joint production of rare
metals by the private and public sectors to help companies smoothly
obtain mining rights. Government investment will amount to several
hundred million yen per project. The government will also support

TOKYO 00002769 009 OF 010


companies in securing rare metals, over which international
competition is becoming fierce.

METI will incorporate the measure into an additional economic
stimulus package, which the government will formulate on Dec. 4.
Since the weak-dollar trend is continuing on the foreign exchange
market, METI plans to become proactively involved in projects to
develop resources overseas. The measure is a pillar of the program
designed to address the strong yen to be included in the economic
pump-priming package.

Under the plan, METI will enable the Japan Oil, Gas, Metals National
Corporation (JOGMEC), an independent administrative agency, to newly
finance private companies when they produce rare metals in Africa or
South America. JOGMEC is allowed to finance petroleum or natural gas
companies at the stage of production. However, there has been no
system allowing it to assist private companies producing mineral
resources.

Government-guaranteed loans will also be made available to companies
when they need funds at the development or production stage of rare
metals. METI intends to set up a guarantee framework worth several
hundred billion yen so that companies can secure funds flexibly in
the event of a rise in the yen or a fall in resource prices. METI
will submit a bill amending the JOGMEC Establishment Law to the
regular session of the Diet next year.

17) Japan, U.S. agree to strengthen management of nuclear materials
in preparatory meeting for Nuclear Security Summit

NIKKEI (Page 2) (Full)
December 4, 2009

The governments of Japan and the U.S. held a preparatory meeting for
the Nuclear Security Summit (NSS). At the NSS, participants will
discuss how to bring about a nuclear-free world, an initiative
proposed by U.S. President Barack Obama. The meeting, chaired by
Laura Holgate, who is responsible for antiterrorism at the U.S.
National Security Council (NSC), brought together concerned vice
ministers and bureau chiefs from 43 countries, including countries
that possess nuclear weapons and nuclear power plants. They affirmed
the importance of strengthening the management system of nuclear
weapons.

Prime Minister Yukio Hatoyama told reporters at the Prime Minister's
Official Residence last night: "How to ensure the security of the
world is a very important theme in discussions. Japan, as the only
nation to have suffered nuclear bombing, must take the initiative in
an effort to eliminate nuclear weapons."

In his speech in Prague this April, President Obama reiterated the
importance of major powers' nuclear arms reduction and called for
countermeasures to the use of nuclear weapons by terrorists,
focusing on the growing risk of nuclear proliferation.

18) Foreign Ministry sets up new office on child custody

MAINICHI (Page 12) (Excerpts)
Evening, December 3, 2009

Tetsu Kudo


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In response to recent troubles in connection with international
parental child abduction, the Ministry of Foreign Affairs set up an
office in charge of issues related to child custody in order to look
into the possibility of Japan's joining the Hague Convention on the
Civil Aspects of International Child Abduction, which stipulates
rules to solve disputes related to international marriages. Giving
consideration to criticism by the United States and Europe that
problems have occurred because Japan has not yet joined the
Convention, MOFA has launched a consultative body of working-level
officials on issues related to child custody with France, a leader
in discussions on the issue.

Foreign Minister Katsuya Okada stated at a press conference
yesterday: "Various Issues, including how to deal with the existing
issues and the propriety of Japan's participation in the Convention,
will be discussed at the consultative body. We want to look into
Japan's response as quickly as possible."

Meanwhile, in the first talks with France held yesterday in MOFA,
France reportedly presented 35 cases involving parental child
abduction and called on Japan to take specific measures to deal with
the cases. MOFA will soon set up a similar consultative framework
with the United States.

ROOS

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