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Cablegate: Japanese Morning Press Highlights 01/06/10

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UNCLAS SECTION 01 OF 07 TOKYO 000019

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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 01/06/10

INDEX:

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

Futenma relocation issue:
4) DM Kitazawa creates task force on Futenma relocation (Yomiuri)
5) Chief Cabinet Secretary Hirofumi Hirano to visit proposed Futenma
relocation sites in Okinawa (Tokyo Shimbun)

Defense & security:
6) Defense Minister to appoint Nishimoto as special advisor
(Mainichi)
7) Ozawa calls for international contribution in return for reducing
U.S. bases (Akahata)

Foreign relations:
8) PRC Ambassador to South Korea Cheng Yonghua to become new envoy
to Japan (Nikkei)

Politics:
9) Finance Minister Fujii to resign post (Asahi)
10) LDP accepts Yamauchi's resignation from party (Asahi)
11) Private advisory council presents proposals on Japan-U.S.
relationship to PM (Nikkei)
12) Masuzoe aims for political realignment; hints at formation of
new party (Sankei)
13) Prosecutors to ask Ozawa to respond to questioning about fund
management body's failure to report land deal (Mainichi)

Economy:
14) New car sales in Japan drop below 5 million (Tokyo Shimbun)

Opinion:
15) Nikkei poll: 70 PERCENT of corporate managers say Japan-Korea
FTA necessary (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Finance Minister Fujii to step down for health reasons

Akahata:
15 years pass since Great Hanshin Earthquake, victims still having
difficulties

2) EDITORIALS

Asahi:
(1) Land deal scandal: We want to hear Ozawa's explanation
(2) China's growing GDP: Efforts needed to become responsible
economic power

Mainichi:
(1) 2010 as year of reconstruction: Build a society friendly toward
all citizens

Yomiuri:
(1) Hatoyama administration facing difficulties - economy, bases,

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and donations

Nikkei:
(1) Establish multi-axial industrial structure, focusing on Asia and
environment

Sankei:
(1) JAL reconstruction: Early settlement by legal liquidation
needed

Tokyo Shimbun:
(1) Emerging from deflation top priority

Akahata:
(1) New growth strategy welcomed by business world is hopeless

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, January 5

NIKKEI (Page 2) (Full)
January 6, 2010

10:02 Held cabinet meeting at the Prime Minister's Official
Residence (Kantei)
10:58 Met Finance Minister Hirohisa Fujii
11:14 Held National Vision Study Group meeting
13:17 Met Fujii; Chief Cabinet Secretary Hirofumi Hirano also
present
14:05 Attended joint New Year party hosted by three economic
organizations at Imperial Hotel
14:55 Met Environment Minister Sakihito Ozawa and Senior Vice
Environment Minister Issei Tajima at the Kantei; joined by Senior
Vice Foreign Minister Tetsuro Fukuyama
15:58 Attended New Year party of Rengo (Japanese Trade Union
Confederation) at Hotel Lungwood in Higashi-Nippori
17:28 Arrived at the Kantei
19:58 Had dinner with Administrative Reform Minister Yoshito
Sengoku, Government Revitalization Unit Secretary General Hideki
Kato, Cabinet Office Senior Vice Minister Motohisa Furukawa, House
of Councillors member Ren Ho, and Liberal Democratic Party House of
Representatives member Taro Kono at Italian restaurant Caf La
Boheme in Shinjuku
20:51 Arrived at his official residential quarters

4) DM Kitazawa in action: Task force on Futenma relocation to be
created, introduces adviser to Prime Minister

YOMIURI (Page 4) (Full)
January 6, 2010

Defense Minister Toshimi Kitazawa is stepping up moves to realign
foreign and security policy, which is regarded as the weak point of
the Hatoyama administration.

At a news conference on Jan. 5, Kitazawa announced the creation of a
task force under his supervision that will work on the issue of the
relocation of the U.S. forces' Futenma Air Station in Okinawa.

The task force will consist of several officials who were not
directly involved with developing the existing relocation plan and
will take charge of coordination with the U.S. Department of Defense

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and Okinawa. Although Social Democratic Party leader State Minister
for Consumer Affairs Mizuho Fukushima has said that the officials
who have been in charge of the Futenma issue up until now from the
North American Affairs Bureau of the Ministry of Foreign Affairs and
the Defense Policy Bureau of the Ministry of Defense should be
replaced, Kitazawa did not go that far.

Kitazawa also introduced foreign affairs commentator Yukio Okamoto
to Prime Minister Yukio Hatoyama in December. Okamoto is an expert
on the United States who served as an adviser to the prime minister
under the Hashimoto and Koizumi cabinets. He visited the U.S. in
December and met with senior U.S. government officials through his
own personal connections. After returning home, he briefed Hatoyama
in detail on the situation in the U.S. at a meeting in late
December.

Hatoyama had, at first, shown an interest in the proposal to
relocate the Futenma base to the U.S. territory of Guam, but ruled
out this possibility after his meeting with Okamoto on Dec. 26. It
is widely believed that Okamoto's advice was behind this change.
Japan Research Institute Chairman Jitsuro Terashima, who takes a
skeptical view of U.S. policies, has so far been seen as an
influential foreign policy adviser to Hatoyama, but it appears that
Okamoto is becoming more important.

Kitazawa also decided to appoint Tetsuya Nishimoto, former chairman
of the Self-Defense Forces Joint Staff Council, as his adviser on
Jan. 5. Since a revision of the National Defense Program Guidelines
is scheduled for the end of the year, he wants to seek the advice of
an expert.

5) Chief Cabinet Secretary Hirofumi Hirano to visit proposed Futenma
relocation sites in Okinawa

TOKYO SHIMBUN (Page 2) (Slightly abridged)
January 6, 2010

Chief Cabinet Secretary Hirofumi Hirano announced at a news
conference on Jan. 5 that he will visit Okinawa on Jan. 8-10 in
connection with the search for a relocation site for the U.S.
forces' Futenma Air Station (in Ginowan City, Okinawa).

In addition to visiting the Futenma base located in an urban
district, Hirano is also thinking of going to the islands of Ie and
Shimoji, which have emerged as possible relocation sites in the
ruling parties. He will also meet Governor Hirokazu Nakaima.

6) Defense minister to appoint Nishimoto as special adviser

MAINICHI (Page 5) (Full)
January 6, 2010

Defense Minister Toshimi Kitazawa decided yesterday to appoint
former Joint Staff Council chairman Tetsuya Nishimoto as his special
adviser. The appointment is likely to be approved at a cabinet
meeting shortly. Nishimoto chaired the Joint Staff Council, the top
brass among uniformed personnel from the Self-Defense Force staff
offices at that time, from July 1993 through March 1996 after
serving as Ground Self-Defense Force chief of staff. He will provide
advice to Kitazawa over the issue of relocating the U.S. Marine
Corps' Futenma Air Station, the revision of the National Defense
Program Outline scheduled for later this year, and other matters.

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The Defense Ministry set up the post of special adviser last year
after a series of scandals involving the ministry.

7) DPJ's Ozawa advocates international contribution in place of
downsizing U.S. military bases in Japan

AKAHATA (Page 2) (Full)
January 6, 2010

Democratic Party of Japan (DPJ) Secretary General Ichiro Ozawa
appeared on a TV Tokyo program aired on the evening of Jan. 4.
Discussing the issue of the U.S. forces' Futenma base in Okinawa,
Ozawa said: "The biggest problem is that the Japanese government,
especially the Ministry of Foreign Affairs, is unable to speak up to
the United States. The U.S. is annoyed by this."

Ozawa added: "If there is no need for so many U.S. military bases
and soldiers in the front line, (Japan) should say so clearly (to
the U.S. side). It should just say that we will defend our country
properly and will make international contributions in the following
ways, so there is no need to worry," stating in effect that if Japan
reinforces its military capability, U.S. military bases can be
downsized.

Ozawa refrained from commenting on the pros and cons of U.S. bases
in Okinawa. He said: "I am not in a position to make comments on
specific policies."

Ozawa has been making deceitful statements. He agreed with U.S.
Secretary of State Hillary Clinton on "reinforcing" the subservient
Japan-U.S. alliance last year while also advocating an "equal
Japan-U.S. relationship."

8) PRC Ambassador to South Korea Cheng Yonghua to become new envoy
to Japan

NIKKEI (Page 3) (Abridged)
January 6, 2010

Ken Sato in Beijing

It was learned on Jan. 5 that the Chinese government has decided to
appoint ambassador to South Korea Cheng Yonghua, 55, to succeed
ambassador to Japan Cui Tiankai, 57, and has been coordinating with
the Japanese government on this. Cui is moving on to become vice
foreign minister. The Japanese government is expected to agree to
the appointment and Cheng is expected to take up his post as soon as
March. Cheng is proficient in Japanese and has extensive connections
in the Japanese political and business world. By appointing a Japan
expert as ambassador, China intends to strengthen its relations with
Japan.

Cheng was one of the first government-funded students to study in
Japan after the normalization of diplomatic relations between Japan
and China in 1972. He is known to have an affable personality. He is
currently the ambassador to South Korea and is knowledgeable on
North Korean issues.

9) Finance Minister Fujii to resign

ASAHI (Top play) (Excerpts)
January 6, 2010

TOKYO 00000019 005 OF 007

Finance Minister Hirohisa Fujii (77) on Jan. 5 decided to step down
for the reason that it would be impossible for him to attend
deliberations in the upcoming regular Diet session due to ill
health. Several sources close to him revealed this. Fujii is
expected to formally announce his decision shortly. Prime Minister
Yukio Hatoyama intends to ask him to stay. However, according to an
aide close to him, he is firmly determined to quit.

Hatoyama yesterday evening told reporters, "I would like him to
continue to do his best." This will be the first resignation (if
realized) of a Hatoyama cabinet member since the administration was
launched in September last year. If he steps down, the regular Diet
session is bound to fall into a state of disarray, which would deal
a major blow to the administration. The regular Diet session is
slated to be convened on the 18th. A plan to have either Deputy
Prime Minister and State Minister for National Policy Naoto Kan or
State Minister for Government Revitalization Yoshito Sengoku double
as finance minister or to promote either Deputy Finance Ministers
Yoshihiko Noda or Naoki Minezaki to the post has been floated.

10) Upper House member Yamauchi's resignation from LDP approved

ASAHI (Page 4) (Full)
January 6, 2010

The Party Ethics Committee of the Liberal Democratic Party (LDP)
accepted House of Councillors member Toshio Yamauchi's request to
leave the party. He intends to join the Japan Renaissance Party. He
was elected in the Kagawa constituency.

11) Experts offer policy proposals on Japan-U.S. relations to
Hatoyama

NIKKEI (Page 2) (Full)
January 6, 2009

Prime Minister Yukio Hatoyama yesterday invited members of his
private study group on national policy to his office and heard their
views on such issues as Japan-U.S. relations and economic policy.
According to one attendee, some members contended that if the
government neglects public opinion calling for relocating U.S.
Marine Corps Air Station Futenma out of Okinawa, the anti-base
movement will spread and Japan-U.S. relations will only grow worse.
Hatoyama responded, saying: "I'm impressed; that view shows
foresight."

12) LDP Masuzoe hints at forming new political party in pursuit of
political realignment

SANKEI (Page 2) (Full)
January 6, 2010

Yoichi Masuzoe of the Liberal Democratic Party (LDP), former health,
labor and welfare minister, said after attending the party's first
meeting of the year at party headquarters yesterday: "I am
determined to take action when action is required amid the
significant changes occurring in the political world. Ultimately, I
would like to attain the major goal of political realignment."

Masuzoe asserted: "Democratic Party of Japan Secretary General
Ichiro Ozawa has followed the LDP's most old-fashioned political

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style. It is necessary (for the LDP) to work together with those who
can handle the affairs of state from a fresh perspective
(irrespective of whether they are ruling or opposition party
members)." He then indicated that he would form a new political
party, remarking: "It does not make sense to resuscitate a political
party that has already become antiquated and has been abandoned by
the people. We must take on the attitude required to form a new
political party."

In response, LDP Secretary General Tadamori Omori commented:
"Political realignment is not a responsible political view. I do not
think that a reorganization of the political world will take
place."

13) Prosecutors to ask Ozawa to respond to questioning about fund
management body's failure to report land deal

MAINICHI (Page 1) (Full)
January 6, 2009

The Tokyo District Public Prosecutors Office has apparently decided
on a policy of asking Democratic Party of Japan (DPJ) Secretary
General Ichiro Ozawa to respond to questioning on a voluntary basis
in connection with the political fund reports of his fund management
body, Rikuzankai. However, there is a possibility that Ozawa's side
will refuse to respond to the request. Prosecutors have already
filed a criminal complaint against Tomohiro Ishikawa, 36, a DPJ
House of Representatives member and former private secretary of
Ozawa, elected in the Hokkaido No. 11 district, and another former
aide of Ozawa, on suspicion of violating the Political Funds Control
Law because Rikuzankai did not accurately report a 2004 land
purchase in its funding report for 2004 and the source of the money
is unclear.

Ishikawa has testified by saying, "(We) made the land purchase at
Mr. Ozawa's instruction. His own money was spent for the land
purchase. (We) told him that we lacked operating funds, and took out
a loan. I don't think he was aware (of the details)." As a result,
prosecutors have apparently determined that it will be necessary to
ask Ozawa for an explanation.

14) Sales of brand-new cars fall below 5 million units

TOKYO SHIMBUN (Page 1) (Excerpts)
January 6, 2010

The Japan Automobile Dealers Association and the Japan Mini Vehicles
Association on Jan. 5 announced that the number of brand-new
domestic vehicles sold in 2009 stood at 4,609,255 units, down 9.3
percent from the previous year, falling below the 5 million- level
for the first time in 31 years. The sales of such cars marked a
year-on-year decline for five consecutive years. The figure is about
a 40 percent drop from 7,777,493 units marked in 1990. A major drop
in the first half of last year as a result of the economic
stagnation since the financial crunch has put a dent in the sales.

Japan's auto market has been shrinking, because young people's
interest in cars has been declining since even before the Lehman
shock. The statistics showed that this situation is still
continuing. However, there are indications that the downtrend
bottomed out in the second half of 2009 due to the eco-car tax break
and subsidies system. The Japan Automobile Manufacturers Association

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estimates the sales of brand-new cars (including compact s) in 2010
at 4,798,400 units, up 4.1 percent from the 2009 level.

15) Poll of Japanese, South Korean top managers: More than 70
percent say Japan-South Korea-China FTA is necessary

NIKKEI (Page 1) (Excerpts)
January 6, 2010

According to a questionnaire of Japanese and South Korean top
business managers, conducted jointly by the Nihon Keizai Shimbun and
South Korea's Maeil Business Newspaper, more than 70 percent of
Japanese and South Korean business leaders surveyed replied that it
is necessary for Japan, South Korea, and China to conclude a free
trade agreement. They are eager to achieve economic expansion
through the elimination of trade barriers such as tariffs.

Japanese business leaders who replied that a Japan-South Korea-China
FTA is "necessary" or "somewhat necessary" jumped to 76 percent, up
15 points from the previous survey carried out in December 2008. The
ratio of their South Korea counterparts who gave the same reply
reached 82 percent, up 3 points compared to the previous survey.
Japanese business leaders have taken an increasingly positive stance
presumably because exports have dropped sharply, following the
financial meltdown in the fall of 2008. However, this poll targeted
leading companies. Small- and medium-sized businesses and farmers
are likely to be opposed the idea.

ROOS

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