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UNCLAS SECTION 01 OF 09 TOKYO 003362 
 
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 07/24/07 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Defense and security: 
4) Defense Ministry plans to develop stealth technology, eyeing 
fifth generation Japan-built fighter aircraft 
5) Defense Ministry's aim in planning to develop own stealth fighter 
may be to extract compromises from US 
6) Construction at Iwakuni to allow for transfer of carrier-based 
fighters from Atsugi will not start until 2010: US Navy commander in 
Japan 
 
Election prelude: 
7) Growing chorus of LDP voices saying no need for Abe to step down 
as prime minister regardless of election outcome 
8) Close coalition between LDP, New Komeito at the top but 
disharmony between the two parties at the election campaign level 
9) Prior voting in the Upper House election running 1.5 times higher 
than last time, with 4 million absentee voters in 10 days 
 
Earthquake damage: 
10) Tally for Chuetsu Earthquake damage now estimated to run 1.5 
trillion yen 
11) Earthquake revealed structural defects at the Kashiwazaki-Koriya 
nuclear plant 
 
12) Police arrest gangsters involved in human trafficking of 
Japanese women 
 
13) Foreign Ministry to set up maritime diplomacy policy 
headquarters 
 
14) Government plans tax revisions that would allow economy-of-scale 
farming 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Kashiwazaki nuclear power plant: 2,000 tons of water seep under 
reactor 
 
Mainichi: 
Nippon Express, Yamato Transport, and Seino Transportation to hold 
shares mutually to counter postal privatization 
 
Yomiuri: 
Irrecoverable credits from pension-fund-financed resort facilities 
amount to 1 trillion yen: Sun-Peer Komatsu built at cost of 5.4 
billion yen and sold for 800 million yen; 
 
Nikkei: 
Government plans to revise tax system for consolidation of farmland 
 
Sankei: 
Upper House election campaign going astray: Who will benefit from 
this? 
 
 
TOKYO 00003362  002 OF 009 
 
 
Tokyo Shimbun: 
Damage from Niigata earthquake estimated at 1.5 trillion yen: 
Suspension of nuclear power plant incur loss of 700 billion yen 
 
Akahata: 
Determined to secure five seats in proportional representation and 
election of Tamura in electoral district; JCP Chair Shii stumps in 
Shinjuku, Tokyo 
 
2) EDITORIALS 
 
Asahi: 
(1) Education and Upper House election: Nail down true essence of 
Abe-style reform 
(2) Hostages in Afghanistan: We hope kidnapped Koreans will be 
released 
 
Mainichi: 
(1) Both LDP and DPJ avoiding constitutional revision issue 
(2) Lawsuit over excessive interest: Lenders to bear heavier 
liability 
 
Yomiuri: 
(1) Foreign policy and security: Discussion of peace and security 
flat 
(2) General election in Turkey: Secularism hits a wall 
 
Nikkei: 
(1) IAEA is not rescue organization to secure safety at nuclear 
power plant 
(2) Lessons of auto-parts-maker Riken 
 
Sankei: 
(1) Final stage of Upper House election campaign: Concern about lack 
of policy discussion 
(2) IAEA inspection of nuclear power plant: Beneficial, but don't 
hope for too much 
 
Tokyo Shimbun: 
(1) Politics and money: Cabinet ministers should clear the air 
(2) IT society: Japanese technology lacking international 
competitiveness 
 
Akahata: 
(1) Small and medium-sized businesses: Realize stable management by 
ending poverty 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 23 
 
NIKKEI (Page 2) (Full) 
July 24, 2007 
 
07:00 
Left Haneda Airport on ANA Flight 3711. 
 
08:22 
Arrived at Kumamoto Airport. Met with Education Minister Ibuki 
aboard the plane. 
 
09:22 
 
TOKYO 00003362  003 OF 009 
 
 
Met with Kumamoto Gov. Shiotani at Misato Town Hall. Inspected the 
area devastated by heavy rains. 
 
10:11 
Gave words of encouragement to disaster victims at facility for the 
elderly. 
 
11:02 
Arrived at the LDP Kumamoto Hall in Kumamoto City. 
 
11:26 
Delivered street speech at Karashima Park. 
 
13:53 
Gave street speech at the south exit of JR Saga Station. 
 
16:13 
Delivered stump speech at Shimase Park in Sasebo City. 
 
18:06 
Stump speech in Nagasaki City. 
 
19:12 
Arrived at Nagasaki Airport and met with Finance Minister Omi. 
 
19:55 
Left Nagasaki Airport on ANA Flight 3742. 
 
21:21 
Arrived at Haneda Airport. 
 
21:57 
Attended election strategy meeting at LDP headquarters. 
 
23:08 
Returned to his official residence. 
 
4) Defense Ministry to develop prototype stealth fighter to test 
technologies 
 
YOMIURI (Page 1) (Full) 
July 24, 2007 
 
The Defense Ministry decided yesterday to include in its fiscal 2008 
budgetary request funds to develop a manned prototype 
fifth-generation fighter jet equipped with stealth capabilities and 
other advanced technologies. With the production of F-2 support 
fighters, jointly developed by Japan and the United States, 
scheduled to end in FY2011, the ministry apparently plans to 
maintain the foundations for future technological development. 
 
The ministry, by showing interest in developing jet fighters 
domestically, hopes to gain an edge in negotiations with the United 
States next summer when it selects Japan's next-generation mainstay 
combat aircraft (FX). 
 
According to the ministry, the envisioned prototype would be 
equipped with stealth technology and other advanced electronics that 
would make the plane difficult to detect by radar. As the prototype 
would not be installed with radars and weaponry, it is expected to 
be smaller than real fighter jets. The prototype is likely to be 
developed over about a 10-year period at an estimated cost of 
 
TOKYO 00003362  004 OF 009 
 
 
several tens of billions of yen. 
 
The ministry has in principle purchased fighters from the United 
States in terms of costs and performance. The F-22 Raptor is 
considered to be one of the leading candidates for the ministry's 
next fighter jet request to the United States, though US law 
currently prohibits export of the stealth fighter and the US 
government therefore cannot provide information on the Raptor to the 
ministry. 
 
The cost and capabilities of any domestically produced fighter would 
have to be thoroughly studied if full scale development is to take 
place. For this reason, the ministry has decided to develop a manned 
prototype first to prove technologies. 
 
5) US concessions eyed behind plan to develop prototype stealth 
fighter 
 
YOMIURI (Page 1) (Abridged slightly) 
July 24, 2007 
 
Commentary 
 
Japan has not developed a domestic fighter since the F-1 support 
fighter jet in the 1970s. The idea of developing a domestically 
produced fighter was originally floated while the government was 
selecting an FSX plane to succeed the F-1, but Japan-US trade 
friction led the government to bend to US wishes on the issue. As a 
result, the two governments decided to jointly develop the F-2 
support fighter jet. F-15 fighter jets, which form the core of the 
country's fighter force, are being manufactured in the country under 
a license agreement by which the government pays patents fees to and 
receives technical guidance from the United States for production. 
 
Against this backdrop, some ministry officials have called for the 
development of domestic fighter jets as domestic technological 
development would otherwise come to a standstill when production of 
F-2 fighter jets ceases. Japan has expertise in advanced 
electronics, stealth materials and aviation control equipment, but a 
senior ministry official said because Japan does not have experience 
in assembling fighter aircraft from scratch, its fighter jets would 
not be effective as US warplanes. 
 
Some ministry officials argue that since domestic fighters have not 
been considered as a candidate for the next FX fighter jet, the US 
government would not be swayed by the ministry's negotiation 
strategy of parlaying its interest in developing domestic fighter 
jets to win concessions from the US government, including discounts 
and a review of its domestic law. 
 
It also is unclear whether the production of a prototype would 
eventually lead to the development of domestic warplanes. 
 
Developing fighter jets is hugely expensive, as evidenced by the 
more than 320 billion yen allocated for the development of the F-2 
support fighter jet, a budget that far exceeded earlier estimates. 
 
It is also unclear if the aircraft can have sufficient 
capabilities. 
 
As the US government could be reluctant to see warplanes 
manufactured in Japan, some observers argue the ministry should 
 
TOKYO 00003362  005 OF 009 
 
 
produce only a prototype for the time being. 
 
6) Kelly reveals plan to begin construction work at Iwakuni in 2010 
for relocating carrier-borne aircraft from Atsugi 
 
TOKYO SHIMBUN (Page 3) (Full) 
July 24, 2007 
 
Rear Adm. James Kelly, commander of US naval forces in Japan, 
revealed in his meeting with reporters yesterday a plan to produce 
an official plan by the end of fiscal 2008 on the planned relocation 
of carrier-borne aircraft from the US Navy's Atsugi base in Kanagawa 
Prefecture to the Iwakuni base in Yamaguchi Prefecture to start 
building necessary facilities at the Iwakuni base in 2010. 
 
Commander Kelly is in charge of the relocation plan. In May 2006, 
Japan and the United States produced a final report on the 
realignment of US forces in Japan specifying that the relocation 
must be completed by 2014. No specific timetable for the relocation 
was revealed, however. 
 
As challenges for the relocation, Kelly cited: (1) establishing 
airspace for training near the Iwakuni base, and (2) securing space 
for facilities, aircraft hangars, and housing on the Iwakuni base 
where 95% is already in use. The commander said: "We would like to 
produce rough plans by the end of this year to push ahead with the 
relocation speedily after obtaining concurrence of USFJ and the 
Japanese government." 
 
7) "Even if LDP loses Upper House race, prime minister will not step 
down," many LDP members say 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 24, 2007 
 
While the observation is growing that the ruling coalition will 
likely lose its majority in the House of Councillors, yesterday some 
in the ruling Liberal Democratic Party (LDP) raised the view that 
Prime Minister Shinzo Abe should stay in office even if the ruling 
camp is defeated in the July 29 Upper House election. 
 
Former Prime Minister Junichiro Koizumi delivered a speech in the 
city of Kagoshima, in which he emphasized, saying: 
 
"I want Mr. Abe to stick it out. He would be criticized if he quits 
his job when he is at the bottom. I want him to fulfill his duty, 
thinking of it as test of his character." 
 
Yoshimi Watanabe, state minister in charge of administrative reform, 
also stated: 
 
"The prime minister will not step down from his post because of the 
outcomes of the Upper House election. The view that he should resign 
is an old notion that existed during the period of the medium-size 
electoral system." 
 
Watanabe also indicated the possibility of Abe dissolving the House 
of Representatives in the fall or later, noting, "Should he fail to 
manage his government in the end, voters would choose the party they 
feel should hold the reigns of government." 
 
8) 2007 Upper House race: LDP-New Komeito cooperation deepens, while 
 
TOKYO 00003362  006 OF 009 
 
 
there is discord at election sites 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
July 24, 2007 
 
The ruling Liberal Democratic Party (LDP) and its coalition partner 
New Komeito set up "districts for election cooperation" for the 
first time, aiming at stepping up their election cooperation. 
However, the more they strengthen their solidarity, the more discord 
deepens between the two parties. 
 
Since the LDP and New Komeito formed a coalition government in 1999, 
the two parties have joined hands in three House of Representatives 
elections and two House of Councillors races. 
 
In the past elections, the New Komeito recommended LDP candidates 
running in electoral districts where it did not field its own 
candidates, while the LDP backed the New Komeito in the 
proportional-representation segment. 
 
In the upcoming Upper House election, the New Komeito has 
recommended LDP candidates running in constituencies other than five 
prefectural districts where the party has fielded its own 
candidates, and the prefectures of Ibaraki and Miyazaki. 
 
Meantime, the LDP Gunma and Kumamoto chapters have gone beyond 
simply exhorting supporters to vote for New Komeito in proportional 
representation and have actually recommended specific New Komeito 
candidates. The LDP Oita and Kagoshima chapters have supported the 
New Komeito's proportional representation candidates. 
 
It is extremely unusual for the LDP to recommend or support 
candidates of other parties in the proportional representation 
section of the election. 
 
The secretaries general of the two parties agreed to designate the 
Aichi, Saitama, and Chiba prefectural districts (each with three 
seats) as election cooperation districts. The LDP supports the New 
Komeito in the Aichi and Saitama districts, in which both parties 
fielded their own candidates, while the New Komeito backs the LDP in 
the Chiba district, in which the LDP filed two candidates, aiming to 
win two seats by the two parties. 
 
The reason for the LDP and New Komeito stepping up cooperation is 
that the ruling coalition is facing an uphill battle due to the 
plunge in support for the cabinet of Prime Minister Shinzo Abe. 
 
However, there is discord among candidates. 
 
9) Interim tally: 4 million voters -- 1.5 times previous Upper House 
election -- already cast ballots in 10 days 
 
YOMIURI (Page 2) (Full) 
July 24, 2007 
 
The Ministry of Internal Affairs and Communications yesterday 
released its interim tally of the number of voters who have already 
cast their ballots for the July 29 House of Councillors election. A 
total of 3,999,300 voters cast ballots in the 10 days from July 13 
through 22 across the nation. Compared with the figures of the 2004 
Upper House race, the total is up 54%. If this pace continues, it is 
certain that the final number of voters who vote early will exceed 
 
TOKYO 00003362  007 OF 009 
 
 
the 7.17 votes cast in the previous election. 
 
Looking at each prefecture, in Tokyo 366,826 voters -- the largest 
number nationwide --cast their votes, followed by 275,398 in Osaka, 
and 269,768 in Kanagawa Prefecture. 
 
Compared with the numbers of the interim tally in the previous 
election, the number of early voters was up 4.06-fold -- the highest 
-- in Gunma Prefecture, followed by 2.2-fold in Toyama, and 
2.16-fold in Okinawa. However, the number of voters decreased in 
Kochi and Miyazaki Prefectures due probably to the recent typhoon. 
 
Early voting will be conducted until July 28, the eve of the Upper 
House election, from 8:30 a.m. through 8:00 p.m. at early polling 
stations in municipalities across the nation. 
 
10) Niigata earthquake caused 1.5 trillion yen damage, of which 700 
billion yen related to suspension of nuclear power plant 
 
TOKYO SHIMBUN (Top play) (Excerpts) 
July 24, 2007 
 
The Niigata prefectural government yesterday said that the recent 
earthquake that hit Niigata Prefecture has caused damage to the 
prefecture estimated at some 1.5 trillion yen, nearly half of which 
is linked to the temporary suspension until next March of Tokyo 
Electric Power Company's (TEPCO) Kashiwazaki-Kariwa nuclear power 
plant. 
 
The prefectural government explained that "TEPCO's estimated damage 
has been included to show how much impact a disaster that occurred 
in an area housing a nuclear power plan would have on the 
prefecture." In addition, some 100-200 billion yen is estimated as 
damage caused by harmful rumors about nuclear power plant troubles, 
demonstrating how serious it is once a disaster hit a nuclear power 
plant. 
 
A man who was seriously injured in an accident that occurred in a 
factory soon after the earthquake died yesterday, increasing the 
number of deaths to 11. 
 
The prefectural government has estimated damage to commerce and 
industry, such as tourism, at 300 billion yen, buildings and plants, 
including housing, at 200 billion yen, infrastructure, such as roads 
and railways, at 70 billion yen, agriculture, fisheries, and 
forestry, such as the fisheries industry, at 40 billion yen, and 
lifelines, such as water and gas, at 10 billion yen. 
 
11) Chuetsu earthquake: Building accommodating no. 6 nuclear reactor 
at Kashiwazaki nuclear plant found to have structural defects; Water 
leakage not anticipated 
 
YOMIURI (Page 1) (Excerpt) 
July 24, 2007 
 
Water stored in a pool for spent fuel from no. 6 nuclear reactor at 
Tokyo Electric Power Co.'s (TEPCO) Kashiwazaki-Kariwa nuclear power 
plant spilled out in the Chuetsu Earthquake in Niigata Prefecture, 
causing part of the water containing radioactive substance to leak 
out into a non-control area and to be released into the sea. The 
Nuclear and Industrial Safety Agency (NISA) yesterday came up with 
the estimation that there were some structural defects on the 4th 
 
TOKYO 00003362  008 OF 009 
 
 
floor of a building accommodating the nuclear reactor, where the 
pool in question was installed. NISA Director General Yasuhisa 
Komoda inspected the nuclear plant the same day and pointed out that 
there were many things that need improvement, including the fire 
safety system and the communication system in the event of leakage 
of radioactive substance." He indicated an outlook that it would 
take a fairly long time before the nuclear power plant can resume 
operation, noting, "It is not yet the time to consider resuming 
operation." 
 
12) Gang member and others arrested on charges of human trafficking 
involving Japanese women in Tochigi Prefecture 
 
ASAHI (Page 35) (Full) 
July 24, 2007 
 
The Tochigi Prefectural Police yesterday said that on July 21, they 
arrested four people, including a gangster, on charges of human 
trafficking for selling a Japanese woman from one adult 
entertainment shop to another, and that they sent them to the 
Utsunomiya District Public Prosecutors Office's Tochigi Branch on 
the same charges yesterday. 
 
It is the first time since the establishment of the Human 
Trafficking Law in July 2005 that the police detected a human 
trafficking case in which the victim has been a Japanese woman. 
 
The people who have been set to the prosecutors are Wataru Kurihara 
(26), a member of a gang affiliated with the Sumiyoshi-kai crime 
syndicate and a manager of an adult entertainment shop, who lives in 
Nishigo in Moka City, Tochigi Prefecture; Minoru Kimura (24) of no 
fixed address, a former chief of an adult entertainment shop; Lee 
Min Yong (38) of South Korean nationality, a manager of an adult 
entertainment shop, who lives in Oyama in Oyama City in the 
prefecture; and Yuzuru Saito (29) of no fixed address, a member of a 
gang affiliated with the Sumiyoshi-kai crime syndicate and a manager 
of an adult entertainment shop. 
 
According to the police investigation, Kurihara and Kimira are 
suspected of having sold a woman (who was then 21) working at a 
sex-related business run by Kurihara to suspects Lee and Saito at a 
price of over one million yen. Lee is suspected of having bought the 
women in order to have her work at a sex shop he ran. 
 
13) Policy headquarters established in Foreign Ministry apparently 
to check Land Ministry 
 
NIKKEI (Page 2) (Full) 
July 24, 2007 
 
With the Basic Law of the Sea aimed at reducing red tape in 
policy-making taking effect on July 20, the Ministry of Foreign 
Affairs (MOFA) established a Foreign Policy Headquarters on the Sea, 
which is headed by Vice Foreign Minister Shotaro Yachi. The 
secretariat chief of the headquarters is the director-general of the 
 
SIPDIS 
Economic Affairs Bureau. This new office consists of some 20 bureau 
director-general-level members. 
 
A Comprehensive Policy Headquarters on the Sea composed of officials 
from government ministries, including MOFA, the Defense Ministry, 
and the Ministry of Land, Infrastructure and Transport (MLIT), was 
also set in motion. The chief of this office is the prime minister, 
 
TOKYO 00003362  009 OF 009 
 
 
with the posts of deputy chiefs assumed by the chief cabinet 
secretary and the minister of land and infrastructure and transport. 
 
SIPDIS 
The foreign minister joins the office as a member, a status lower 
than the deputy chief. 
 
MOFA says it intends to engage in policy-making in view of 
international law and treaties, but some believe that MOFA 
established its new headquarters to check the MLIT. 
 
14) Government plans to revise tax system for consolidation of 
farmland 
 
NIHON KEIZAI (Top Play) (Excerpts) 
July 24, 2007 
 
The government has started looking into the possibility of revising 
preferential tax measures concerning inheriting and transferring 
farmland with the aim of promoting the effective use of farmland. 
Under the plan, those who inherit farms and do not plan to continue 
farming will be exempt from taxes if they lease the land to large 
operators. The aim is to promote large-scale farming. The government 
will apply no preferential tax measures on unused farmland in order 
to encourage effective use of farmland, which is lower than foreign 
countries, through the tax system. It will strengthen the 
international competitiveness of Japan's agriculture by enhancing 
its productivity. 
 
The Ministry of Agriculture, Forestry and Fisheries (MAFF) will 
incorporate revisions of the preferential tax system for farmland in 
its tax reform requests for fiscal 2008 for detailed discussions by 
the government's Council on Economic and Fiscal Policy and the Tax 
Research Commission reporting to the prime minister. 
 
Under the current preferential measures for the inheritance tax, 
inheritors of farmland are given a moratorium and exemption from 
taxes if they continue operations for 20 years. Under the envisaged 
preferential tax system, inheritors would be eligible for 
preferential measures even if they do not maintain operations, 
provided that they lease their farmland to large operators. The 
definition of large operators eligible for this scheme is collective 
operators with more than 20 hectares of farmland and individual 
farmers with more than 4 hectares of farmland. 
 
The government envisages that this measure would boost the leasing 
of farmland by part-time farmers who have difficulty finding heirs 
to take over their households, accelerating the consolidation of 
farmland under large-scale farmers. 
 
SCHIEFFER