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Cablegate: Japanese Morning Press Highlights 01/07/10

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UNCLAS SECTION 01 OF 07 TOKYO 000035

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: JAPANESE MORNING PRESS HIGHLIGHTS 01/07/10

INDEX:

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

Futenma relocation issue:
4) Kitazawa says Futenma relocation site to be decided after
conclusion of budget (Asahi)
5) Investigative panel looking into process leading to existing
Futenma relocation plan (Sankei)
6) Foreign Ministry hints Japanese, U.S. foreign ministers to meet
this month (Sankei)

Foreign relations:
7) Summary of Yomiuri interview with Assistant Secretary Campbell
(Yomiuri)

Politics:
8) Vice Prime Minister Kan to replace Fujii as Finance Minister
(Nikkei)
9) Ozawa agrees to undergo prosecutors' questioning about land deal
(Asahi)

Economy:
10) Enterprise Turnaround Initiative Corp. considers financing up to
300 billion yen for JAL reconstruction (Mainichi)
11) American examining increasing size of its offer of financial
assistance to JAL (Sankei)
12) Japanese whaling support ship, Sea Shepherd boat collide
(Sankei)

Media:
13) "Time" to close its Tokyo bureau (Asahi)

Articles:

1) TOP HEADLINES

Asahi:
Deputy Prime Minister Kan picked as successor to Finance Minister
Fujii; State Minister for Government Revitalization Sengoku to serve
concurrently as national strategy minister

Akahata:
Blows to Hatoyama administration - prosecutors' request for
questioning of Ozawa, resignation of Finance Minister Fujii just
ahead of Diet deliberations on budgets

2) EDITORIALS

Asahi:
(1) Hatoyama should make use of replacement of finance minister to
rebuild administration
(2) Government should address JAL problem as part of growth
strategy

Mainichi:
(1) Kan's skills as finance minister to be tested
(2) New growth strategy: It's time to proceed with real reforms

Yomiuri:

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(1) Resignation of Finance Minister Fujii: Rebuild administrative
structure under lead of Hatoyama
(2) Many women should be vaccinated against cervical cancer

Nikkei:
(1) Thoroughgoing economic and fiscal management expected under new
finance minister
(2) Japan should take initiative in controlling marine resources

Sankei:
(1) Prosecutors responsible for clearing up details of land deal
scandal by questioning Ozawa
(2) How will government dispel blow from Fujii's resignation?

Tokyo Shimbun:
(1) Resignation of Fujii: Economic management, reforms must be
carried out thoroughly
(2) Foreign nurses: Measures needed to remove barrier of Japanese
language

Akahata:
(1) Ozawa must respond to public inquiry over illegal political
donations

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, January 6

NIKKEI (Page 2) (Full)
January 7, 2010

09:58 Met National Strategy Minister Naoto Kan and Chief Cabinet
Secretary Hirofumi Hirano at Prime Minister's Official Residence
(Kantei)
10:30 Met Defense Minister Toshimi Kitazawa
11:16 Met former Deputy Foreign Minister Hitoshi Tanaka
12:02 Met Kan; followed by meeting with assistants Katsuya Ogawa,
Satoshi Arai, and Seiji Aizaka
13:58 Met Foreign Minister Katsuya Okada
17:05 Attended New Year's Party hosted by Jiji Press, Naigai Josei
Chosakai, and others at Imperial Hotel
17:35 Met Kan at Kantei; joined by Administrative Reform Minister
Yoshito Sengoku
19:27 Held another meeting with Kan and Sengoku
20:11 Dined at French restaurant Girandole in Park Hyatt Tokyo with
House of Councillors members Naoki Kazama, Minoru Kawasaki, and
others
22:52 Arrived at his official residential quarters

4) Hatoyama, Kitazawa agree to resolve Futenma issue after passing
FY2010 budget

ASAHI (Page 4) (Full)
January 7, 2010

Defense Minister Toshimi Kitazawa held talks yesterday with Prime
Minister Yukio Hatoyama on the issue of relocating the U.S. Marine
Corps' Futenma Air Station (in Ginowan City, Okinawa) at the Prime
Minister's Official Residence (Kantei). According to comments made
by Kitazawa at a meeting in Nagano City, he and Hatoyama agreed on
the idea that the Futenma relocation issue should be resolved soon
after the passage of the state budget for fiscal 2010.

TOKYO 00000035 003 OF 007

Kitazawa said, "(Until the budget is passed) the three ruling
parties will continue to hold discussions and reach a conclusion,"
indicating that the three ruling parties will look into possible
relocation sites until the end of March when they expect to pass the
budget, after which the Japanese government will formulate its own
plan and negotiate with the United States.

5) Study panel examines process that led to current Futenma
relocation plan

SANKEI (Page 5) (Full)
January 7, 2010

Yesterday the government and ruling parties held the second meeting
of the Okinawa base issues study committee chaired by Chief Cabinet
Secretary Hirofumi Hirano, which is tasked with discussing
relocation sites for the U.S. Marine Corps' Futenma Air Station in
Ginowan City, Okinawa Prefecture. Participants examined the process
that led to the conclusion of an agreement between Japan and the
U.S. to relocate the Futenma facility to the coastal area of U.S.
Camp Schwab in Nago City. Social Democratic Party policymaking
advisory board head Tomoko Abe, People's New Party Policy Research
Council Chairman Mikio Shimoji, and others attended the meeting held
at the Prime Minister's Official Residence and were briefed on the
Japan-U.S. agreement by officials from the Defense Ministry and the
Foreign Ministry.

Defense Minister Toshimi Kitazawa met Prime Minister Yukio Hatoyama
and U.S. Ambassador John Roos separately to exchange views on the
Futenma relocation issue.

6) Japanese, U.S. foreign ministerial to take place possibly in
mid-January

SANKEI (Page 5) (Full)
January 7, 2010

Rui Sasaki, Washington

Foreign Minister Katsuya Okada and Secretary of State Hillary
Clinton are likely to hold talks in mid-January. After meeting with
Deputy Secretary of State James Steinberg on Jan. 5, Administrative
Vice Foreign Minister Mitoji Yabunaka, who is currently visiting the
U.S., told reporters that arrangements for Okada's visit to the U.S.
"are now in the final stages."

Yabunaka agreed with Steinberg that the Japan-U.S. alliance is
imperative for the peace and stability of East Asia. He then told
his counterpart that the government has set up a consultation body
to discuss with the Social Democratic Party and the People's New
Party the relocation of the U.S. Marine Corps' Futenma Air Station
in Ginowan City, Okinawa Prefecture. Prime Minister Yukio Hatoyama
has said that the government will come up with a conclusion by May.
Yabunaka later told reporters that the U.S. side "was listening" (to
his explanation). He also met with Under Secretary of Defense
Michele Flournoy on the 4th and briefed her on the Japanese
government's position.

7) Gist of U.S. Assistant Secretary of State Kurt Campbell's
interview on bilateral, other issues


TOKYO 00000035 004 OF 007


YOMIURI (Page 4) (Full)
January 7, 2010

Following is the gist of (Yomiuri Shimbun's exclusive) interview
with U.S. Assistant Secretary of State Kurt Campbell (at the
Department of State on Jan. 5):

Deepening of Japan-U.S. alliance

Japan and the United States are in a position to address issues
beyond the Asia-Pacific region and issues across national boundaries
as they deal with issues such as North Korea and the maintenance of
peace and stability in the Taiwan Strait. Based on what they have
achieved so far, how they will deal with the dramatic changes in the
world will be reflected (in the talks on deepening the alliance).
There are many aspects to the Japan-U.S. relationship. We cannot put
off those aspects. The talks (on deepening the alliance) will begin.
We hope for tangible results.

Omoiyari yosan (sympathy budget; i.e. host nation support)

The new administration in Japan wants to discuss issues relating to
the sympathy budget and the Japan-U.S. Status of Forces Agreement
with the U.S. We will discuss all issues in depth and thoroughly.

Futenma relocation

The U.S. is asking for a prompt decision on the implementation of
the bilateral agreement. I understand that Japan has said that it
needs more time. I am confident that the Prime Minister and his team
will uphold the spirit of "responsibility and trust" for the sake of
the Japan-U.S. relationship. We interpret (the Prime Minister's
words "trust me") to mean that he will strengthen and maintain this
relationship, including the right solution to the Futenma issue. It
is important for this to be handled as a package (with measures to
reduce the burden). Needless to say, we are ready to study and
consider a degree of burden reduction.

Summoning of ambassador

We indeed summoned the ambassador. Secretary Clinton rarely meets an
ambassador. However, she summoned the ambassador to directly convey
U.S. thinking on the Futenma issue.

Marines' relocation to Guam

Unless there is progress in the Futenma process, we have no
intention to proceed further with Guam relocation or the other
projects.

North Korea

(North Korea) brought up the subject of lifting the sanctions at the
U.S.-DPRK talks. The U.S. pointed out very clearly that the next
step should be the resumption of the Six-Party Talks. We are waiting
for North Korea's response. Frankly speaking, we think that the
dialogue is still at a preliminary stage and North Korea's basic
attitude is unclear. I believe that the Six-Party Talks have the
support of all parties, including China, and they can be resumed. I
don't know when that will be, but probably soon. Once the talks
reopen, the discussions will be broad ranging at the beginning. Not
only Yongbyon or the issue of verification, but other political

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issues (such as uranium enrichment) and the abduction issue will
also be discussed.

8) Deputy Prime Minister Kan to replace Fujii as finance minister:
Sengoku to serve concurrently as state minister for national policy

NIKKEI (Top play) (Excerpts)
January 7, 2010

Prime Minister Yukio Hatoyama on Jan. 6 decided to accept Finance
Minister Hirohisa Fujii's resignation and appoint Deputy Prime
Minister and State Minister for National Policy Naoto Kan as his
successor. Fujii had conveyed to the prime minister his intention to
step down from the post due to poor health. State Minister for
Government Revitalization Yoshito Sengoku will serve concurrently as
state minister for national policy. A letter of appointment to
assign him to the position will be issued on the afternoon of the
7th. A situation in which protracted disarray will undermine the
prime minister's power basis has thus been prevented. However,
Fujii's resignation will inevitably affect deliberations on the
fiscal 2010 budget during the regular Diet session to be convened on
the 18th.

Fujii is the first cabinet minister to step down since the Hatoyama
cabinet was launched last September. Kan will continue to be in
charge of economic and fiscal policy. Education, Culture, Sports,
Science and Technology Minister Tatsuo Kawabata will be responsible
for science and technology policy.

On the evening of the 6th, Kan told the press corps, "I am still a
novice. However, I told (the prime minister) that I will do my
utmost." Concerning his serving concurrently as deputy prime
minister and state minister for economic and fiscal policy, he said,
"I thought it would be all right from the perspective of mapping out
a broader path toward Japan's revitalization."

9) Land transaction issue: Ozawa to accept questioning by public
prosecutors

ASAHI (Page 1) (Excerpts)
January 7, 2020

The Tokyo District Public Prosecutors Office special investigation
squad has asked Democratic Party of Japan Secretary General Ichiro
Ozawa through his attorney to accept a voluntary interview on the
issue that approximately 400 million yen in the funds used for the
purchase of land in 2004 by Rikuzan-kai, Ozawa's fund management
organization, were not listed in its political fund report.
Responding to a question by the Asahi Shimbun, a close aide to Ozawa
on the evening of the 6th said that Secretary General Ozawa had
decided to accept voluntary questioning by public prosecutors in
response to a request made by the Tokyo Public Prosecutors Office.

There is now a strong possibility of public prosecutors questioning
him one of these says. How Ozawa will explain the matter is of
intense interest.

According to a related source, the special investigation squad on
the 5th asked his attorney to tell Ozawa to accede to questioning
within a week or so. The attorney did not turn down the request but
stopped short of giving an immediate reply.


TOKYO 00000035 006 OF 007


Ozawa is not subject to criminal accusation. However, the special
investigation squad has determined that since the land transaction
took place at his behest and the money (approximately 400 million
yen) used for the purchase is believed to have come from him, they
should ask him to give an account of the matter.

10) Enterprise Turnaround Initiative Corp. considers financing up to
300 billion yen for JAL reconstruction

MAINICHI (Page 3) (Excerpts)
January 7, 2010

It has been learned that the Enterprise Turnaround Initiative Corp.
(ETIC), which has been asked financial assistance from Japan
Airlines (JAL), is considering financing 200 to 300 billion yen to
JAL. Since public funds will be used for the financial assistance,
the ETIC intends to clarify the responsibility of JAL's executive,
premised on legal liquidation and a large-scale capital reduction.
Before the end of January it will make a formal decision to begin a
full-fledged reconstruction work.

The ETIC has looked into the appointment of a successor (CEO) to JAL
President Nishimatsu, who has tendered his resignation, from outside
the company.

11) American Airlines looking into boosting financial assistance for
JAL

SANKEI (Page 11) (Excerpt)
January 7, 2010

During talks on continuing its alliance with Japan Airlines, which
is in the process of corporate reconstruction, American Airlines
proposed up to 1.1 billion dollars in financial assistance. In this
connection, it was learned on Jan. 6 that the carrier is looking
into increasing its offer. Calls pushing for an alliance with Delta
Air Lines, which has a large share in the Pacific routes between
Japan and the U.S., are gaining ground among government officials.
American Airlines intends to stage a comeback in the battle to
secure a partnership with JAL by submitting a new assistance
proposal as early as this month.

12) Japanese whaling fleet support vessel, Sea Shepherd boat
collide

SANKEI (Page 1) (Excerpts)
January 7, 2010

The Fisheries Agency announced yesterday that the Shonan Maru No. 2,
a Japanese whaling fleet support ship, and the protest boat Ady Gil,
operated by the U.S.'s Sea Shepherd anti-whaling group, collided in
the Antarctic Ocean. The Ady Gil and another Sea Shepherd boat, the
Bob Barker, had been disrupting the Shonan Maru's operations since
early in the morning of Jan. 6, and the collision occurred during
that time, according to the agency. The Shonan Maru was not
seriously damaged and its crew members were not injured in the
incident. Although the bow of the Ady Gil was seriously damaged, its
crew was rescued by the Bob Barker.

According to the agency, the Ady Gil came unusually close to the
Shonan Maru at around 12:30 a.m. on Jan. 6. The anti-whaling boat
started to cut cross the Shonan Maru's bow from right to left and

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then reduced speed. The Shonan Maru failed to avoid the collision.
The Shonan Maru tried to ward off the Ady Gil by spraying water and
using bullhorns. The Sea Shepherd side, however, has claimed that
the Ady Gil was not under way when the Shonan Maru suddenly collided
with it and that the Japanese side did not even rescue its crew.

13) Increasing number of U.S. magazines leaving Japan; Time closing
Tokyo bureau on January 8

ASAHI (Page 10) (Full)
January 7, 2010

Daisuke Igarashi

Due to a decline in advertising revenues, more and more major U.S.
magazines are leaving Japan. Major U.S. general interest magazine
Time is closing its Tokyo bureau on Jan. 8 as part of its
restructuring efforts both inside and outside the U.S.

According to an informed source, the Tokyo bureau was set up in
1945, shortly after the end of World War II. Its office is currently
located in Roppongi Hills. The editorial section of the Tokyo bureau
will be closed and its one regular correspondent and one editor will
be laid off. Time's public affairs officer said, "We will hire
part-time reporters and experts on Japan, so reporting on Japan will
continue as usual." The marketing and advertising sections in Japan
will be retained.

Another major U.S. magazine Newsweek also closed its Tokyo bureau
last spring. Last December, after the economic magazine BusinessWeek
was acquired by the major U.S. financial news company Bloomberg, its
editorial section was merged with Bloomberg.

Commenting on the recent wave of U.S. magazines pulling out of
Japan, Gakushuin Women's College Professor (of media studies)
Yasuharu Ishizawa, a former reporter for The Washington Post, said:
"Three factors are behind this: poor business results of the U.S.
print media, the decline in Japan's news value, and the rise of
China. The decrease in reporters with experience working in Japan
who have a profound understanding of Japan is a loss for Japan."

ROOS

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