VZCZCXRO4374
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2848/01 1760133
ZNR UUUUU ZZH
P 250133Z JUN 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 4824
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4134
RUEHFK/AMCONSUL FUKUOKA 1719
RUEHOK/AMCONSUL OSAKA KOBE 5292
RUEHNAG/AMCONSUL NAGOYA 0845
RUEHKSO/AMCONSUL SAPPORO 2539
RUEHBJ/AMEMBASSY BEIJING 7582
RUEHUL/AMEMBASSY SEOUL 3635
RUCNDT/USMISSION USUN NEW YORK 4743

UNCLAS SECTION 01 OF 08 TOKYO 002848 
 
SIPDIS 
 
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 06/25/07-2 
 
 
Opinion polls: 
15) Kyodo trend poll on Upper House election finds Minshuto now 
ahead of LDP; Cabinet non-support rate up 9 points to 57.7 % 
16)  Yomiuri net-monitor poll: Minshuto with 31 %   outpacing LDP, 
with 26 %  , as party of choice for winning Upper House race 
 
Political agenda: 
17)  Prime Minister Abe on TV says the buck stops with him on 
accepting responsibility for the pension issue 
18)  Abe sees constitutional amendment in three years time 
19)  LDP Secretary General Hidenao Nakagawa does not expect Abe to 
step down if LDP defeated in Upper House election 
20)  Lawmaker Kamei in TV discussion predicts a major political 
realignment after the Upper House election 
 
21) LDP panel plans assistance program to Asia that would help 
countries establish economic legislation 
 
22) As WTO agricultural negotiations stumble, Japan's lawmakers 
representing farmers breathe sigh of relief 
 
23) Survey of 100 top companies finds over half see economy 
expanding next year 
 
OPINION 
 
15) Poll: DPJ tops all parties; Cabinet support rate lowest at 33 % 
 
 
TOKYO (Page 1) (Abridged) 
June 25, 2007 
 
The rate of public support for Prime Minister Shinzo Abe and his 
cabinet was 33.5 %   in a telephone-based nationwide public opinion 
survey conducted by Kyodo News Service on June 23-24 to probe public 
trends toward next month's election for the House of Councillors. 
The Abe cabinet's support rate showed a further drop of 2.3 
percentage points from a telephone-based spot nationwide public 
opinion survey conducted June 1-2, renewing its all-time low since 
the Abe cabinet came into office in September last year. Its 
nonsupport rate rose 9.0 points to 57.7 %  , breaking 50 %   for the 
first time. The results were extremely severe for Abe. 
 
In the survey, respondents were also asked to pick up to two issues 
they view as important. In response to this question, "pensions" 
accounted for 63.4 %  , sticking out of all other answers, such as 
"education" at 23.4 %  . As is evident from these figures, the 
general public is strongly dissatisfied with the government's 
pension record-keeping flaws. "Constitution revision" and "social 
divide" were both at 18.0 %  , with "money and politics" at 16.9 % 
. 
 
Respondents were further asked which political party or which 
political party's candidate they would vote for in the forthcoming 
House of Councillors election. In response, the leading opposition 
Democratic Party of Japan (Minshuto) marked 22.0 %   for electoral 
districts. The figure was higher than those for all other political 
parties. The DPJ also topped all other political parties in 
proportional representation blocs as well, scoring 22.1 %  . The 
ruling Liberal Democratic Party was at 21.4 %   for electoral 
districts and 19.8 %   for proportional representation. 
 
 
TOKYO 00002848  002 OF 008 
 
 
Among other political parties for proportional representation, New 
Komeito stood at 4.9 %  , with the Japanese Communist Party 3.1 %  , 
the Social Democratic Party (Shaminto) at 1.2 %  , and the People's 
New Party (Kokumin Shinto) at 0.6 %  . "Undecided" voters accounted 
for 42.0 %  . 
 
The biggest focus of the upcoming election is on whether the ruling 
coalition will maintain its current majority of the seats in the 
House of Councillors, including those not up for reelection. In the 
survey, respondents were asked if they would like the ruling 
coalition to maintain its majority. To this question, 48.3 % 
answered they would like the LDP-led coalition to lose its majority, 
with 36.5 %   saying they would like it to sustain its majority. 
 
16) Poll: Minshuto most popular at 31 %  , LDP 26 % 
 
YOMIURI (Page 2) (Abridged) 
June 23, 2007 
 
The Yomiuri Shimbun conducted an Internet-based nationwide opinion 
poll covering 1,000 individuals ahead of the July House of 
Councillors election. 
 
The results compiled yesterday found that the major opposition 
Minshuto (Democratic Party of Japan) was most popular among 
respondents with 31 %  , surpassing the Liberal Democratic Party's 
26 %  . In comparison to a survey conducted in 2005 before then 
Prime Minister Junichiro Koizumi dissolved the House of 
Representatives for a snap election over postal reform, the LDP's 
figure dropped 24 points, while Minshuto's increased 11 points. In 
the latest survey, 4 %   of respondents picked the New Komeito as 
their favorite party, 1 %   each for the People's New Party and the 
New Party Nippon, and 32 %   said they do have any favorite parties. 
The survey clearly showed a headwind against the LDP over the 
pension fiasco and other matters. 
 
Asked who gives a better impression -- Prime Minister Shinzo Abe or 
Minshuto President Ichiro Ozawa -- Abe found favor with 35 % 
against Ozawa's 23 %  . 
 
A total of 50 %   of respondents gave positive assessments to the 
government and ruling bloc's response to the pension-record 
mismanagement issue, while 40 %   gave negative assessments. 
 
Those who gave positive assessments to the government and the ruling 
bloc's response were asked what party they would vote for in the 
proportional representation segment in the upcoming election. The 
results showed that 38 %   would vote for the LDP, 27 %   for 
Minshuto, and 24 %   said undecided. In response to the same 
question to those who gave negative assessments, 43 %   picked 
Minshuto, 32 %   said undecided, and 12 %   for the LDP. 
 
17) Prime Minister Abe: I also have responsibility for pension 
fiasco 
 
ASAHI (Page 2) (Full) 
June 25, 2007 
 
Appearing on an NHK talk show yesterday, Prime Minister Shinzo Abe 
stated: "I bear greatest political responsibility" for the pension 
premium payment records fiasco. He showed a positive stance toward 
the idea of introducing a social-security numbering system that 
 
TOKYO 00002848  003 OF 008 
 
 
would cover personal information on pension and medical insurances, 
saying "I think a one numbering system would be convenient. Such a 
system would prevent this kind of "pension problem" from occurring. 
I would like to promote debate." 
 
Abe also stated that he needed to make effort to explain the pension 
issue, saying, "It is necessary to reach a national consensus on 
protection of personal information, which is a very important 
issue." 
 
18) Prime minister cites "constitutional revision three years later" 
as campaign issue for Upper House election 
 
TOKYO SHIMBUN (Page 1) (Full) 
June 25, 2007 
 
Appearing on an NHK news show yesterday, Prime Minister Shinzo Abe, 
asked about points of contention for the upcoming House of 
Councillors election, said: "It is necessary to declare to the 
public that the government will aim at revising the Constitution 
three years later. That is the government's honest stance." 
 
Since assuming office, the prime minister has expressed his 
determination to revise the Constitution during his term in office. 
With the passage of the National Referendum Law in the current Diet 
session, it will become possible to propose constitutional revision 
starting three years from now. Keeping this in mind, he made a 
specific remark about this issue. 
 
While reiterating the need for cooperation with the Democratic Party 
of Japan (Minshuto) and other opposition parties in revising the 
Constitution, the prime minister expressed his desire to conduct 
discussions, focusing on the draft constitution the LDP drew up in 
¶2005. He said, "The LDP draft is a well-executed work, matching the 
new values and global circumstances." 
 
On the sloppy pension record-keeping issue, the prime minister 
clearly said: "The major political responsibility rests with me." 
 
19) LDP secretary general: Prime Minister Abe's resignation unlikely 
even if LDP falls short of a majority in Upper House 
 
ASAHI (Page 2) (Full) 
June 25, 2007 
 
Appearing on a TV Asahi program yesterday, ruling Liberal Democratic 
Party (LDP) Secretary General Hidenao Nakagawa took a view that 
there will be need for Prime Minister Shinzo Abe to step down from 
his post even if the ruling coalition falls short of a majority in 
the July 29 House of Councillors election. He stated: "Since the 
upcoming Upper House election is an internal appraisal of the 
government by voters, Prime Minister Abe's resignation will be 
unlikely." He, however, indicated that he might step down from his 
post if the ruling camp falls short of a majority, saying, "I will 
risk my political life to win the Upper House race." 
 
In the meantime, asked about his responsibility if the ruling camp 
fails to win majority seats in the Upper House race in July on an 
NHK program yesterday, Abe responded: 
 
"If I speak on the assumption that the ruling coalition might fall 
short of a majority, such an assumption may lead to a situation we 
 
TOKYO 00002848  004 OF 008 
 
 
will not win the race. We will win in all elections at any cost." 
 
Asked about the fact that some in the ruling camp say that the prime 
minister's responsibility has grown since he decided to extend by 12 
days the current Diet session, delaying the Upper House election for 
a week, Abe responded: "There is no change in my responsibility 
regardless of whether the Diet session is extended or not. Even if 
the session is not extended, my responsibility will never lesson." 
 
Appearing on the NHK program along with Abe, Minshuto (Democratic 
Party of Japan) President Ichiro Ozawa, refrained from responding to 
a question that how he would take responsibility if his party fails 
short of a majority in the Upper House, only saying, "I will make a 
clear answer sometime before the election." He, however, stated: If 
the ruling coalition fails to win majority Upper House seats, "Some 
in the LDP will talk about what to do and such an argument will be 
raised in our party, as well." He indicated in his remarks that 
effort to collect as many supporters as possible will be activated 
with an eye on future political realignment. 
 
20) Kamei predicts grand coalition after election on Fuji TV's 
program Hodo 2001, June 24 
 
SANKEI (Page 5) (Abridged) 
June 25, 2007 
 
Policy chiefs of ruling and opposition parties exchanged views on 
the Diet extension and campaign issues for the upcoming House of 
Councillors election. 
 
Diet extension 
 
What was the reason to extend the Diet session by 12 days? 
 
LDP policy chief Shoichi Nakagawa: "There still remain bills that 
must be deliberated on for the people and the state." 
 
New Komeito policy chief Tetsuo Saito: "Passing essential bills is 
the ruling bloc's responsibility." 
 
Minshuto (Democratic Party of Japan) policy chief Takeaki Matsumoto: 
"The ruling bloc railroaded 14 bills in the current Diet session, 
exposing its highhanded approach." 
 
Japanese Communist Party policy chief Akira Koike: "The ruling bloc 
has intentionally extended the Diet session in a bid to defuse the 
public outcry over the pension fiasco." 
 
Abolition of fixed-rate tax cut 
 
-- Is Minshuto going to make a greater public burden a campaign 
issue? 
 
Matsumoto: "Both the abolition of the fixed-rate tax cut and the 
transfer of tax revenue sources from the central to local 
governments are important. The government is hiding a heavier 
national burden from the public by just telling them about the 
transfer of tax revenue sources." 
 
Social Democratic Party policy chief Tomoko Abe: "Although the 
nation's economy is said to have recovered, pensioners and salaried 
workers would suffer more with the elimination of the fixed-rate tax 
 
TOKYO 00002848  005 OF 008 
 
 
cut." 
 
Upper House election victory-or-defeat line 
 
-- Some are mentioning the responsibility of Prime Minister Shinzo 
Abe. 
 
Nakagawa: "There is no need to discuss that." 
 
Saito: "Although the New Komeito is said to win 13 seats for 
certain, that would be extremely difficult. For now, the ruling 
parties should make every effort rather than to discuss who should 
take responsibility. 
 
-- Minshuto has increased its target. 
 
Matsumoto: "Is the public going to give a majority to the ruling 
bloc or the opposition bloc? We take the upcoming election as an 
occasion for the public to make that decision." 
 
People's New Party Deputy Representative Shizuka Kamei: "Through the 
election, the Liberal Democratic Party and the New Komeito will be 
forced into a minority, and a policy-based grand coalition will 
occur as a result. The PNP will take the leadership in the 
process." 
 
21) LDP proposes assisting establishment of economic legal systems 
in Asia 
 
NIHON KEIZAI (Page 1) (Excerpt) 
June 24, 2007 
 
The Liberal Democratic Party (LDP) yesterday finalized a package of 
measures to help upgrade legal systems in the Asian region. The LDP 
will set up in the Prime Minister's Official Residence within this 
fiscal year a strategic council that will be placed under the prime 
minister but also joined by private-sector experts. The panel will 
work out cross-sectional assistance measures. It will also study the 
possibility of recommending the establishment of Asian law schools 
to study Asian unified legal systems in existing law graduate 
schools. In addition to the purpose of making Asian countries aware 
of the need for legal preparation, the LDP also aims to help 
Japanese firms make inroads into Asia and assist their activities 
there afterward by spreading Japanese legal systems across the 
region. 
 
A subcommittee on future options for laws and legal work to cope 
with internationalization under the LDP Research Council on Legal 
Systems will compile a strategic vision on support for legal system 
arrangement by the end of this month. The government intends to 
incorporate necessary expenditures in the fiscal 2008 budget bill. 
 
22) Agreement at WTO talks this year difficult: Bilateral talks will 
likely gather momentum; Agriculture policy clique members feeling 
relieved 
 
TOKYO SHIMBUN (Page 9) (Full) 
June 23, 2005 
 
The Group of 4 -- the US, the EU, Brazil and India -- meeting held 
in Germany under the Doha Round (new multilateral trade talks) at 
the WTO ended in rupture. A Group of 6 meeting, including Japan and 
 
TOKYO 00002848  006 OF 008 
 
 
Australia, planned for June 23, was also canceled. It now appears 
difficult for the talks to reach an agreement due to the breakdown. 
Concerned countries are expected to shift their focus to bilateral 
talks. In the meantime, members of the agricultural policy clique in 
the Diet appeared relieved now that difficult issues in the 
agricultural area, the focus of attention, have been shelved for the 
time being. 
 
Sharp standoff 
 
Commenting on the outlook for the WTO talks, Minister of Economy, 
Trade and Industry Akira Amari during a press conference on June 22 
noted, "I must admit that the situation is extremely severe." He 
made this remark because although it is in principle necessary to 
reach an agreement by the end of July in order for the WTO talks to 
reach an agreement before the end of the year, it is difficult to 
consolidate various opinions. 
 
The reason for the breakdown of the G-4 meeting is that Brazil and 
India did not make concessions on cuts in tariffs on mined and 
manufactured products and that the US did not on a cut in 
agricultural subsidies. The objective of the G-4 meeting was to 
coordinate the interests of leading countries as a preliminary step 
for wrapping up the stalemated multilateral talks. However, the 
talks have highlighted differences in the stances of emerging 
economies and industrialized countries. 
 
Amari has indicated his desire to play a role in the WTO talks at a 
trade ministers meeting of the Asia-Pacific Economic Cooperation 
Conference to be held in Australia in early July: "Only contenders 
are in the arena. There is no umpire." However, it is not an easy 
job to coordinate views of various countries within a limited time. 
 
If that is the case, Japan will have to promote bilateral talks, 
such as economic partnership agreement (EPA) talks centered on the 
East Asia region and free trade agreement (FTA) talks, while 
pursuing the WTO talks. If it does so, it would be urged to revise 
its trade strategy, because it has yet to shift its policy to that 
direction from the present approach shown in the economic guidelines 
for fiscal 2007 released on June 19 by the government, 
characterizing talks with the US and the EU as future agenda items. 
 
Sticking point averted 
 
An atmosphere of relief, instead of a shock from the breakdown of 
the G-4 talks, permeated among agricultural sources regarding two 
respects. One is that Japan has avoided being unilaterally forced to 
follow the agreement reached at the G-4, in which it did not take 
part. One senior official of the Ministry of Agriculture, Forestry 
and Fisheries (MAFF) said, "It was good that conditions 
disadvantageous to Japan were not adopted." 
 
The other point is that the WTO talks have lost weight as a campaign 
issue for the Upper House election at the end of July. One senior 
member of the LDP Agriculture and Forestry Division predicted that 
the talks would be protracted, saying, "The crisis has been staved 
off for the time being. It will take two more years for the talks to 
reach an agreement." 
 
The Democratic Party of Japan (DPJ or Minshuto) printed flyers for 
the upcoming Upper House election criticizing the agricultural 
policy of the government and the ruling camp. They are strengthening 
 
TOKYO 00002848  007 OF 008 
 
 
their campaign in single-seat constituencies, where farmers tend to 
determine the fate of the election, as many such constituencies 
consist of farm villages. The ruling camp had been concerned that if 
conditions disadvantageous to Japan, such as cuts in tariffs on 
agricultural products, are adopted, it might lose 
agriculture-related votes. 
 
The G-4 talks have for the time being put off reaching an agreement. 
However, the basic policy of calling on industrialized countries to 
cut tariffs on agricultural products will remain at multilateral 
talks, which will become a key venue for future WTO talks. 
Agricultural organizations intend to closely monitor the future 
situation with one official noting, "The situation is far from 
optimistic." 
 
23) In poll, 55 of 100 firms expect continued economic growth next 
year 
 
ASAHI (Page 1) (Excerpts) 
June 24, 2007 
 
A survey of 100 Japanese firms by the Asahi Shimbun showed that 
executives at Japanese firms are optimistic about the future of the 
Japanese economy, with 55 predicting that the longest economic 
expansion of the postwar era will continue into next year. Although 
those who said that the current economic situation was "standing 
still" slightly increased, many anticipate that the economy will 
grow at a moderate pace in the near future. 
 
The survey is conducted twice a year. The latest one was carried out 
June 1-15 targeting 50 manufacturing and 50 nonmanufacturing firms 
by interviewing their chief executive officers. 
 
Asked about the present state of the economy, 84 companies said that 
the economy is "expanding" or "moderately recovering." This figure 
is 4 points less than in the previous survey. Meanwhile, 16 firms, 
up 4, said that the economy has stalled. Mitsubishi Heavy Industries 
President Kazuo Tsukuda made this analysis: "In some industries, 
capital investment, which has played a role in driving the economy, 
is now at a standstill. Exports to the United States in some sectors 
are also slowing down." 
 
A number of executives were upbeat about the economy. In the 
previous survey conducted last November, only 18 firms said that the 
economy will continue to expand in 2008 and beyond, but this number 
tripled about six months later, probably encouraged by the 
restructuring of excessive investment, debts, and employment. 
 
Regarding the speed of economic expansion, however, Taiheiyo Cement 
Corp. President Samejima commented: "The economy is growing not 
conspicuously but steadily. So the economy will not suddenly lose 
momentum." Tokio Marine & Nichido Fire Insurance Co. Managing 
Director Takaaki Tamai also said, "Although it is a low peak, there 
is no valley." Only two executives predicted that the economy would 
grow at more than 2.5 %  , and most respondents estimated the growth 
rate at 1.5 %   to just over 2 %  . 
 
Asked about a cause for concern, 75 firms cited the future of the US 
economy. This figure is 5 points less than in the previous survey, 
but the survey showed that many executives still harbor a sense of 
alarm about the US economy. 
 
 
TOKYO 00002848  008 OF 008 
 
 
The number of companies that listed a further rise in oil and raw 
material prices significantly increased to 20. A decreasing number 
of firms cited stagnant personal consumption. 
 
SCHIEFFER