Cablegate: Japanese Morning Press Highlights 12/22/09

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

4) Hatoyama says current gasoline tax to be maintained, no income
limit for child allowances (Nikkei)
5) Ozawa says Japan should assert itself in relations with U.S.
6) Foreign Minister tells mayors he will work for adoption of
"Hiroshima-Nagasaki Protocol" at NPT conference (Asahi)
7) Prime minister's former aide to be indicted without arrest on
24th (Nikkei)
8) Hasegawa indicates he will leave LDP (Nikkei)
9) Keidanren chairman Mitarai: Hatoyama administration proceeding by
trial and error (Nikkei)

Defense & security:
10) Yomitan village head demands handover of U.S. serviceman
involved in hit-and-run incident (Mainichi)

Foreign relations:
11) Okada expresses concern about Iran's nuclear development

12) If necessary, BOJ Governor prepared to act swiftly to tackle
deflation (Nikkei)
13) Japan's trade surplus with the U.S. grew for the first time in
27 months (Sankei)
14) Number of foreign visitors to Japan shows first increase in 16
months (Nikkei)
15) Japan and Korea set agenda for restart of EPA negotiations

16) Japanese companies eager to compete in Iraq but concerned about
security (Nikkei)

17) Asahi poll: Older women backing DPJ (Asahi)
18) Sankei-FNN poll: Cabinet support nosedives, "entering dangerous
waters" (Sankei)
19) Sankei-FNN poll: Cabinet approval rating plummets to 51 PERCENT

20) Ministry of Agriculture, Forestry, and Fisheries to earmark
maximum income subsidies for farming households (Nikkei)



Asahi, Mainichi, Yomiuri, Nikkei, Sankei, Tokyo Shimbun:
No income limit for child allowance, gasoline tax rate to be kept in
different form; tobacco tax to be raised by five yen per cigarette

On political parties (Part 1): Which party delivered a message

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reflecting the will of the people regarding Futenma?


(1) 100-day-old Hatoyama administration: Irritation and expectations
for change

(1) Noguchi heads to space station: Russia's ideas offer
opportunities for learning
(2) LDP in wintertime: Train young leaders

(1) Changing fagade not enough for Japan Pension Agency
(2) Astronaut Noguchi's activities expected to usher in new space

(1) Amendments to dispatched workers law run counter to protection
of dispatched workers
(2) Child allowance system without income cap dangerous

(1) Submission of statement by PM Hatoyama insufficient
(2) Noguchi off to space station: Increase Japan's presence in

Tokyo Shimbun:
(1) Japan Pension Agency must put customers first
(2) Develop oilfields in Iraq to help reconstruct the country

(1) Economy deteriorating: Make efforts to create jobs and improve
household finances

3) Prime Minister's schedule, December 21

NIKKEI (Page 2) (Full)
December 22, 2009

09:22 Met Minister for National Strategy Kan and Chief Cabinet
Secretary Hirano, joined by Finance Minister Fujii, Senior Vice
Finance Minister Noda, Administrative Vice Finance Minister Tango,
and Budget Bureau chief Katsu at the Prime Minister's Official
Residence (Kantei). Fujii and Hirano stayed behind.
11:55 Met Fujii again, joined by Kan, Hirano, Noda, Tango, Katsu and
Senior Vice Minister of the Cabinet Office Furukawa.
12:59 Met Kan and Hirano. Kan stayed behind.
13:51 Met Assistant Deputy Chief Cabinet Secretary Fukuda.
14:26 Met Environment Minister Ozawa, joined by Senior Vice Foreign
Minister Fukuyama, Deputy Chief Cabinet Secretary Matsuno, and
Deputy Minister for Foreign Affairs Sasae. Fukuyama, Matsuno, and
Sasae stayed behind.
15:47 Met Yukio Okamoto, commentator on foreign affairs.
17:00 Met Kan, Fujii, Hirano, and Katsu. Fujii and Hirano stayed
behind. Joined by DPJ Secretary General by Ozawa.
17:49 Met New Japan-China Friendship 21st Century Committee members,
including Tokyo Stock Exchange President Taizo Nishimuro.
18:07 Met Kan, Fujii, and Hirano, joined by Furukawa. Kan and Hirano
stayed behind.
20:51 Arrived at his official residential quarters.

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4) Gas tax to be kept in place, premier announces: No income limit
to be set on child-raising allowance

NIKKEI (Top play) (Excerpts)
December 22, 2009

Prime Minister Yukio Hatoyama on the evening of Dec. 21 announced
his decision to introduce a new system, after abolishing the
existing provisional taxes, such as the gas taxes, when compiling
the fiscal 2010 tax, so as to maintain the present level of tax
revenues. The prime minister has thus responded to key requests
filed by the Democratic Party of Japan (DPJ) in general outline. He
also categorically noted that there would be no income limit for a
monthly child-raising allowance. He will reach a decision on whether
to introduce a global warming prevention tax (environmental tax)
within a year. Now that major items in the annual code revision have
been set, the government will adopt a tax code revision outline at a
special cabinet meeting to be held on the afternoon of the 22nd. The
prime minister will also aim at adopting the draft budget at a
cabinet meeting this week.

Points of the prime minister's statement

(Provisional tax rate)
Q Abolish the system itself. However, the tax rate is to be
Q Call for a fresh measure worth 2 trillion yen aimed at turning
around the economy.

(Monthly child-raising allowance)
Q Basically no income limit is to be set
Q Set up a system that will enable those who have declined to accept
the allowance to donate the money to their local governments.

(Global warming prevention (environmental) tax)

Q Reach a decision, after looking into it over a year

(Cigarette tax)
Q The government's tax commission will reach a decision on the 22nd.
The prime minister's own view is that there should be a hike.

(Tax deduction for dependents)
Q Reach a decision at a meeting of the basic policy ministerial
committee on the 22nd.

5) DPJ's Ozawa says Japan should be more assertive in relations with

MAINICHI (Page 5) (Full)
December 22, 2009

During a recording session for a program on a commercial TV station
on Dec. 21, Democratic Party of Japan (DPJ) Secretary General Ichiro
Ozawa discussed the Japan-U.S. relationship in relation to the issue
of the relocation of the U.S. forces' Futenma Air Station (in
Ginowan City, Okinawa). He said: "The biggest problem is that the
Japanese government cannot speak up to the United States. The
Liberal Democratic Party has always been that way and the U.S. is
annoyed." He expounded on his pet theory that Japan's self-assertion
will lead to the improvement of bilateral relations.

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Ozawa pointed out: "If there is no need for a large number of
soldiers on the front lines of U.S. military bases, Japan should say
so (to the U.S.). It should just say we will defend our own country
properly or we will make international contributions." He indicated
that it is important for the two countries to engage in discussions
and fulfill their responsibilities.

6) Hiroshima, Nagasaki mayors ask foreign minister to make efforts
toward adoption of protocol for abolition of nuclear weapons at NPT

ASAHI (Page 4) (Full)
December 22, 2009

Hiroshima Mayor Tadatoshi Akiba, Nagasaki Mayor Tomihisa Tagami, and
the two cities' assembly chairmen met Foreign Minister Katsuya Okada
on Dec. 21 and urged the government to press other countries to
adopt the Hiroshima-Nagasaki Protocol that presents a plan for the
abolition of nuclear weapons by 2020 during the Nuclear
Nonproliferation Treaty (NPT) Review Conference to be held in May
next year.

Nagasaki City Assembly Chairman Takashi Yoshihara cited Okada as
responding, "We would like to consider it carefully and make
efforts." The protocol was released in April 2008 by the conference
of mayors for peace (chaired by Akiba) composed of 134 countries and
areas. This August, the conference adopted a "Nagasaki appeal" aimed
at the adoption of the protocol at the NPT review conference.

7) PM Hatoyama's former secretary to be indicted on Dec. 24 for
falsification of political donation reports

NIKKEI (Page 1) (Full)
December 22, 2009

In connection with the falsification of political donation records
by Prime Minister Yukio Hatoyama's political fund management body,
the Yuai Seikei Konwakai, it was learned from an informed source on
Dec. 21 that the Special Investigation Division of the Tokyo
District Public Prosecutors Office has decided to indict without
arrest his former government-paid first secretary, 59, who used to
serve as an accounting officer. The former secretary has already
been dismissed. Hatoyama and the current accounting officer will not
be prosecuted due to insufficient evidence.

It appears that the Special Investigation Division has already
completed its investigations and has obtained the approval of the
Supreme Public Prosecutors Office and higher level offices on the
timing for filing criminal charges, taking into account the
political schedule.

According to the above source, the former first secretary received
some 400 million yen from Hatoyama and his mother, 87, to fund the
political activities of the Konwakai over five years until 2008. He
falsely recorded these funds as donations from individuals or income
from fundraising parties and is suspected of falsifying political
donation reports.

The secretary received about 250 million yen from Hatoyama's
personal funds from Rokko Shokai (in Minato Ward, Tokyo), a company
that manages the Hatoyama family's assets, and a total of about 900

TOKYO 00002912 005 OF 010

million yen from Hatoyama's mother.

In a report that Hatoyama submitted to the prosecutors, he denied
any involvement in this affair. It is believed that after criminal
charges are filed, Hatoyama will admit that funds from his mother
were legally a gift and will file a revised income tax return.

8) Upper House member Hasegawa intends to leave LDP

NIKKEI (Page 1) (Full)
December 22, 2009

Tamon Hasegawa, a House of Councillors member belonging to the main
opposition Liberal Democratic Party (LDP), decided yesterday to bolt
the LDP. He intends to carry out political activities as an
independent for the time being while distancing himself from the
ruling Democratic Party of Japan (DPJ). He was elected for the first
time in 2007 from the Upper House Ibaraki constituency. Hasegawa has
reacted strongly to the fact that Kishiro Nakamura, a former
construction minister, who won the Lower House Ibaraki No. 7
district seat by defeating an LDP candidate, formed a joint
parliamentary group with the LDP as a member of the Japan
Renaissance Party.

Hasegawa will be the second incumbent Diet member to leave the LDP
since the LDP suffered a crushing defeat in the August Lower House
election, following Upper House member Kotaro Tamura.

9) New government in process of trial and error: JBF Chair Mitarai

NIKKEI (Page 5) (Full)
December 22, 2009

When asked by reporters about the sharp drop in public support rates
for the cabinet of Prime Minister Yukio Hatoyama, Fujio Mitarai,
chairman of the Japan Business Federation (JBF or Nippon Keidanren)
responded by saying, "I think since he has assumed the reins of
government for the first time, he is now in a process of trial and

In connection with the relationship between the manifesto (policy
platform) pledged in the latest House of Representatives election
and Hatoyama's actual policy management, Mitarai said, "In reality,
there are gaps. That has affected the plunge in support rates." He
also pointed out, "If he provides clear explanations to the public
and if the people are convinced, the situation will change."

10) Yomitan mayor asks National Safety Commission chairman for
handover of U.S. serviceman

MAINICHI (Page 29) (Full)
December 22, 2009

Hiromi Nagano

A U.S. Army staff sergeant is suspected of involvement in an
incident in which a 66-year-old man was killed after being run down
in the village of Yomitan, Okinawa Prefecture. In this connection,
Yomitan Mayor Keizo Yasuda and others on Dec. 21 called on National
Public Safety Commission Chairman Hiroshi Nakai at the National
Police Agency and handed him a letter seeking a review of the
Japan-U.S. Status of Forces Agreement and the early handover of the

TOKYO 00002912 006 OF 010


The letter of protest was adopted at a rally protesting the fatal
hit-and-run incident involving the U.S. service member, held on Dec.
13 in the village by the executive committee chaired by Yasuda.

In his meeting with Nakai, Yasuda conveyed to the safety commission
chairman the villagers' angry voices seeking the handover of the
custody of the suspect and his prosecution. In response, Nakai
explained: "We must produce hard evidence that can stand trial
without a confession. We will spend time to collect evidence. We are
not giving special consideration to this case."

Yasuda and others also visited the Prime Minister's Official
Residence (Kantei) and others places to make similar requests.

11) FM Okada voices concern about Iran's development of nuclear arms
at meeting with top Iranian nuclear negotiator

NIKKEI (Page 2) (Full)
December 22, 2009

Foreign Minister Katsuya Okada met Secretary Saeed Jalili of the
Iranian Supreme National Security Council at the Iikura Guesthouse
in Tokyo on Dec. 21. Okada expressed concern on Iran's rejection of
the proposal of the International Atomic Energy Agency (IAEA) to
move its low-enriched uranium out of the country. Regarding
cooperation between Japan and Iran in the future, Okada said: "The
present situation in the international community renders the
promotion of cooperation difficult."

Jalili emphasized that "(Iran) is seriously opposed to nuclear
weapons." Jalili is Iran's top nuclear negotiator. He is on a visit
to Japan at Japan's invitation. Okada and Jalili also exchanged
views on Afghan aid and North Korea's development of nuclear arms.
Okada pointed out that "the international community has serious
concerns about Iran's relations with North Korea." Jalili responded:
"We criticize North Korea's military use of nuclear energy. The
abduction issue should also be resolved internationally."

Jalili will visit the nuclear power station in Kashiwazaki City in
Niigata on Dec. 23 and the Peace Memorial Museum in Hiroshima City
on Dec. 24. In connection with the visit to Hiroshima, Okada said:
"I hope you will go and see the tragedy caused by nuclear weapons."

12) "We are ready to act promptly if necessary," says Bank of Japan

NIKKEI (Page 5) (Excerpts)
December 22, 2009

Appearing on TV Tokyo's news show "World Business Satellite," Bank
of Japan (BOJ) Governor Masaaki Shirakawa on the evening of Dec. 21
said that the BOJ is ready to act promptly and boldly if it becomes
necessary to do so in order to prevent falling prices and a
deflationary spiral. He thus indicated that he is prepared to adopt
additional monetary easing measures if abnormal developments are
observed in the financial market. He also stressed his determination
to tenaciously maintain the current basically zero-interest rate

Regarding the specific details of the next measure to be taken,

TOKYO 00002912 007 OF 010

Shirakawa simply said, "We are always looking into what measures
would be most suitable, while referring to various measures the BOJ
took in the past, policies other countries are adopting, and their

After indicating his policy of undergirding the economy with
monetary measures, Shirakawa said that the fundamental cause of the
deflation is a shortage of demand. He expressed hope for the
government's growth strategy. He underscored that the most important
policy is not only generating short-term demand, but also making
people feel that their income will increase in the future.

He also stressed that groundless pessimism is dangerous, warning
that if an excessively pessimistic view about the future of the
economy becomes rampant, it will undermine growth.

13) Japan posts trade surplus with U.S., increasing for first time
in 2 years and three months

SANKEI (Page 10) (Full)
December 22, 2009

According to trade statistics for November released by the Finance
Ministry, the nation's trade balance, determined by deducting the
amount of imports from the amount of exports, came to 373.9 billion
yen. Japan has posted a trade surplus for 10 consecutive months. In
the same month of the previous year, Japan posted a trade deficit of
227.5 billion yen. Japan's trade surplus with the U.S. increased
after a hiatus of two years and three months or for the first time
since August 2007, reaching 404.5 billion yen, up 10.6 percent.

14) Foreign visitors to Japan in November up for first time in 16

NIKKEI (Page 5) (Full)
December 22, 2009

Foreign visitors to Japan increased 2.1 PERCENT over the same month
a year ago to 565,000 in November, marking the first climb in 16
months since July 2008, according to data released yesterday by the
Japan National Tourism Organization. This rise is attributed to
improving economic conditions in South Korea and Australia.
Meanwhile, Japanese travelers overseas inched up 0.7 PERCENT to
1.273 million in the same month, recording the fourth consecutive
monthly upturn. But the total number of foreign tourists during the
period between January and November in 2009 was 6.1626 million. The
number (of foreign visitors in 2009) will likely fall short of 7
million for the first time in four years.

15) In working-level talks, South Korea presents problems to be
solved for resuming EPA negotiations

NIKKEI (Page 7) (Full)
December 22, 2009

Yamaguchi, Seoul

The governments of Japan and South Korea held the second round of
working-level talks by their deputy-director-level officials at the
Foreign Ministry in Seoul, aimed at resuming governmental
negotiations on concluding a bilateral economic partnership
agreement (EPA). South Korean representatives mainly presented

TOKYO 00002912 008 OF 010

specific problems to solve, such as its trade deficit with Japan and
Japan's entry regulations. Japanese representatives promised to take
measures to deal with such problems at an early date. A negotiator
said: "Both sides were able to deepen mutual trust and
understanding." However, such specific items as the timing for the
next round of negotiations were not decided during the talks.

16) Japanese group now eager to invest in reconstruction of Iraq

NIKKEI (Page 3) (Full)
December 22, 2009

Hirofumi Matsuo, Dubai

Japanese firms are greatly interested in demand for reconstruction
in Iraq. The Japan-Iraq Economic Forum's meeting was held in Baghdad
on Dec. 20 and in Basra on the 21, in which a group consisting of
more than 100 people, including company executives from petroleum,
trading, plant and machinery firms, participated from Japan.

"We want Japanese firms to invest in Iraq and compete with companies
from other countries," Iraqi Prime Minister Nouri al-Maliki said at
the meeting. In response, Nippon Oil Corp. Chairman Fumiaki Watari,
who also serves as vice chairman of the Japan Business Federation,
remarked: "We have the world's highest-level technology, so this
meeting will provide an opportunity for Japan's comeback in the
Iraqi market."

During the Iraq war and the postwar confusion, "Japanese firms
completely lagged behind other countries' companies, because they
avoided risk," said Foreign Policy Institute President Kunihiko
Miyake, who attended the meeting. But momentum is finally building
up for Japanese companies to grope for chances to invest in Iraq.
Marubeni Corp. has agreed to cooperate in increasing production
efficiency at obsolete fertilizer and cement plants. Toyota Tsusho
Corporation received orders from the Iraqi Ministry of Electricity
in October for power-supply equipment, including eight transformer
apparatuses, chalking up its first business results in rebuilding
Iraq. In addition, the Japanese government has decided to offer yen
loans worth more than 3.2 billion dollars for reconstruction

The biggest obstacle to Japanese firms' advancement to Iraq is the
deteriorating security situation. In Baghdad, foreigners move about
in bulletproof car with guards. The forum was held at Baghdad
International Airport for security reasons. Yoshihiko Shimazu,
advisor to Sumitomo Corp., however, said: "When the security
situation is completely recovered, nothing will be left to do." JGC
Corp. President Masahiko Yaegashi commented: "It is now the right
time to consider how Japanese firms should enter the Iraq market."

17) Poll analysis: DPJ enjoys steady support, backed by elderly

ASAHI (Page 1) (Abridged)
December 22, 2009

The popularity of Prime Minister Hatoyama and his cabinet is on the
decline. His ruling Democratic Party of Japan, on the other hand,
stands at 42 PERCENT in terms of public support for political
parties and the opposition Liberal Democratic Party at 18 PERCENT .
The Asahi Shimbun has conducted four public opinion surveys since

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the Hatoyama cabinet came into office. In the latest survey, the DPJ
upheld its public support in the 40 PERCENT range, outdistancing
the LDP that has been in the 10 PERCENT range. In particular,
elderly women have markedly changed their support for political
parties since the Hatoyama cabinet's inauguration and strongly back
the DPJ-led ruling coalition. This remains the foundation of the
DPJ's high popularity.

In an Asahi Shimbun exit poll of voters in the Aug. 30 general
election, the proportion of those who voted for the LDP among its
supporters was only 54 PERCENT , with 30 PERCENT of them casting
their votes for the DPJ.

When the LDP was at the helm, public voting behavior that seemed to
be aimed at punishing the LDP was seen in past elections. This time
around, however, the survey shows no signs of public support for the
LDP rebounding. Even among those who voted for the LDP in this
summer's general election, many have presumably switched to
supporting the DPJ.

18) Poll: Hatoyama cabinet eclipsed as "short-lived"

SANKEI (Page 3) (Abridged)
December 22, 2009

The Hatoyama cabinet's support rate nosedived in the latest public
opinion survey jointly conducted by the Sankei Shimbun and Fuji News
Network (FNN). "The cabinet is about to enter the danger zone," says
Banri Kaieda, deputy chair of the ruling Democratic Party of Japan's
Election Campaign Committee. The cabinet's support rate is now over
40 PERCENT , which can be taken to indicate a further drop in its
public approval rating. Meanwhile, Prime Minister Yukio Hatoyama has
submitted a statement to the Tokyo District Public Prosecutors
Office over his fund-managing body's alleged falsification of
political fund reports. "We may not be able to fight the campaign
battle for next summer's election for the House of Councillors," a
DPJ lawmaker seated in the House of Councillors said, even implying
that the Hatoyama cabinet could be short-lived.

19) Poll: Cabinet support tumbles to 51 PERCENT , nonsupport rate
tops 40 PERCENT for first time

SANKEI (Page 1) (Abridged)
December 22, 2009

The Sankei Shimbun and Fuji News Network (FNN) conducted a joint
public opinion survey on Dec. 19-20, in which the public disapproval
rating for the Hatoyama cabinet topped 40 PERCENT for the first
time, rising 17.5 percentage points from the last survey conducted
Nov. 21-22 to 40.4 PERCENT . The approval rating narrowly topped 50
PERCENT , scoring 40.4 PERCENT . However, it posted a sharp drop of
11.5 points from 62.5 PERCENT in the last survey. The public seems
to be very critical of Prime Minister Yukio Hatoyama's statements
and actions concerning the pending issue of relocating the U.S.
military's Futenma airfield and the process of compiling next fiscal
year's budget.

In the breakdown of public support for political parties, the ruling
Democratic Party of Japan stood at 37.2 PERCENT , down 2.5
percentage points from the last survey. The opposition Liberal
Democratic Party rose 1.9 points to 19.2 PERCENT . The DPJ's two
coalition partners, the Social Democratic Party and the People's New

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Party, were both weak, with the SDP at 1.8 PERCENT and the PNP at
0.7. The New Komeito was at 2.8 PERCENT and the Japanese Communist
Party at 3.3 PERCENT .

20) Government to implement full income indemnity system in line
with DPJ's wishes placing importance on agriculture with eye on
Upper House election

NIKKEI (Page 5) (Excerpts)
December 22, 2009

The government has decided to include in the fiscal 2010 budget the
full amount of expenses (totaling 561.8 billion yen) connected with
an income indemnity system for individual farm households, as
requested by the Ministry of Agriculture, Forestry, and Fisheries
(MAFF). This is because the Democratic Party of Japan called, in its
budgetary and tax system reform priority requests presented earlier,
for securing the funds necessary for the early implementation of the
income indemnity system. Although Japan will shift its agricultural
policy toward covering income directly with public funds, there is
concern that this might block the improvement of production
efficiency resulting from large-scale farming.

There is a possibility that the farmer income subsidy system will
prompt wholesalers and others to call for lowering rice prices and
result in a smaller burden on consumers. At the same time, there is
criticism about giving preferential treatment to farmers alone by
using tax money. MAFF plans to expand the targets for subsidies to
include fruit and other products in fiscal 2011 and beyond.

The income-subsidy system for farmers is composed of two pillars: a
model rice project (344.7 billion yen) and rice paddy changeover
support (217.1 billion yen). The model project is designed to supply
the fixed-amount portion that is obtained based on the difference
between the average production cost for the last several years and
the sales price, and to pay for the additional variable portion in
case rice prices decline substantially. But in order to be subject
to this project, production targets set by the government must be
met. The project therefore will effectively be a farmer rice acreage
reduction selection system.


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