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UNCLAS SECTION 01 OF 09 TOKYO 003598 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 08/06/07 
 
 
INDEX: 
(1) Poll on Abe cabinet, political parties 
 
(2) Blue-ribbon panel's report on right to collective self-defense 
to be put on back burner in wake of LDP's crushing defeat in Upper 
House election; Cautious view exists against legislation for 
allowing the use of the right to collective self-defense 
 
(3) Government concerned about effect of LDP's defeat in election on 
Abe diplomacy; China, North Korea already taking tough stance 
 
(4) Reversed positions of ruling and opposition parties as a result 
of Upper House election: LDP's stinging defeat may be the "beginning 
of the end"? 
 
(5) Primary balance: Impossible to move it into the black by FY2011, 
according to Cabinet Office estimate, as increase in tax revenues 
cannot be hoped for 
 
(6) Foreign Ministry to set up ODA regular consultative council, 
aiming to improve efficiency of aid 
 
(7) Government bullish to compile austere budget: Discussions on 
general-account budget requests to start today; Aftereffect of Upper 
House election felt by ruling parties; Calls for revision of reform 
agenda 
 
ARTICLES: 
(1) Poll on Abe cabinet, political parties 
 
MAINICHI (Page 3) (Full) 
August 6, 2007 
 
Questions & Answers 
(T = total; P = previous; M = male; F = female) 
 
Q: Do you support the Abe cabinet? 
 
      T  P  M  F 
Yes    22  (31)  20  24 
No    65  (53)  68  62 
Not interested  12  (14)  12  13 
 
Q: (Only for those who answered "yes" to the above question) Why? 
 
      T  P  M  F 
Because the prime minister is from the Liberal Democratic Party 
      21  (25)  25  18 
Because something can be expected of the prime minister's leadership 
 
      13  (12)  8  17 
Because there's a young, fresh image about the prime minister 
      32  (33)  34  31 
Because something can be expected of the prime minister's policy 
measures 
      30  (25)  30  30 
 
Q: (Only for those who answered "no" to the above question) Why? 
 
      T  P  M  F 
Because the prime minister is from the Liberal Democratic Party 
      7  (7)  8  6 
 
TOKYO 00003598  002 OF 009 
 
 
Because nothing can be expected of the prime minister's leadership 
      57  (46)  56  59 
Because the prime minister is inexperienced, weak 
      16  (18)  14  17 
Because I'm opposed to the prime minister's policies 
      18  (27)  19  17 
 
Q: Which political party do you support? 
 
T  P  M  F 
Liberal Democratic Party (LDP) 17  (22)  18  16 
Democratic Party of Japan (DPJ or Minshuto) 
      33  (24)  35  31 
New Komeito (NK)   6  (6)  4  7 
Japanese Communist Party (JCP) 4  (4)  4  3 
Social Democratic Party (SDP or Shaminto) 
      2  (3)  1  2 
People's New Party (PNP or Kokumin Shinto) 
      1  (1)  1  0 
New Party Nippon (NPN or Shinto Nippon) 
      1  (1)  1  1 
Other political parties 
      1  (3)  1  2 
None      35  (34)  33  37 
 
Q: What do you think about the outcome of the recent election for 
the House of Councillors? 
 
      T  P  M  F 
Very satisfied    12    15  10 
Satisfied     56    59  54 
Dissatisfied    22    19  25 
Very dissatisfied   5    5  6 
 
 
Q: The LDP was swamped in the House of Councillors election with 
only 37 seats. What do you think is the reason for the LDP's 
crushing defeat? 
 
      T  P  M  F 
Pension problem    26    22  29 
Social divide     10    13  6 
Politics and money   29    27  31 
Prime Minister Abe's competence 
      15    18  12 
Cabinet ministers' gaffes  20    19  20 
 
Q: The DPJ won an overwhelming victory in the House of Councillors 
election, garnering 60 seats. What do you think is the reason for 
the DPJ's victory? 
 
      T  P  M  F 
The public wanted to see the DPJ take office 
      10    10  10 
The DPJ was good at campaigning 
      9    8  9 
The DPJ gathered votes critical of the LDP 
      79    80  78 
 
Q: After the House of Councillors election, Prime Minister Abe 
clarified that he will stay on. Do you think he should resign, or do 
you otherwise think there is no need for him to resign? 
 
TOKYO 00003598  003 OF 009 
 
 
 
      T  P  M  F 
Resign     56    62  52 
No need to resign   41    37  44 
 
Q: Having seen the outcome of the House of Councillors election, 
there is an opinion saying Prime Minister Abe should dissolve the 
House of Representatives for a general election at an early date. 
What do you think about this opinion? 
 
      T  P  M  F 
Dissolve the lower house  58    62  56 
No need to do so   39    37  41 
 
Q: Prime Minister Abe has now replaced Agriculture Minister Norihiko 
Akagi over his alleged murky political funds. What do you think 
about Prime Minister Abe's decision? 
 
T  P  M  F 
Support     8    8  8 
It was too late to do so  87    88  86 
There's no need to do so  3    3  3 
 
(Note) Figures shown in percentage, rounded off. "0" indicates that 
the figure was below 0.5 percent. "No answer" omitted. Figures in 
parentheses denote the results of the last survey conducted July 
25-26. 
 
Polling methodology: The survey was conducted Aug. 4-5 over the 
telephone with the aim of calling a total of 1,000 voters across the 
nation on a computer-aided random digit sampling (RDS) basis. 
Answers were obtained from 1,165 persons. 
 
(2) Blue-ribbon panel's report on right to collective self-defense 
to be put on back burner in wake of LDP's crushing defeat in Upper 
House election; Cautious view exists against legislation for 
allowing the use of the right to collective self-defense 
 
MAINICHI (Top play) (Full) 
 
Yoso Furumoto 
 
The "Council to Reconstruct the Legal Base for National Security" 
(chaired by former Ambassador to the United States Shunji Yanai), an 
advisory panel to Prime Minister Shinzo Abe, is to resume on Aug. 10 
discussions, which have been suspended owing to the Upper House 
election. The council is expected to propose reviewing the current 
interpretation of Article 9 of the Constitution so as to allow Japan 
to exercise the right to collective self-defense in a report to be 
out this fall. But with the crushing defeat in the recent Upper 
House election, the Abe administration is rapidly losing its 
cohesiveness and has come under pressure to delay legislative action 
on the right to collective self-defense by shelving the report. Abe 
is being forced to switch away from his policy line of "getting rid 
of the postwar regime." 
 
A senior lawmaker from the New Komeito said: "The council's report 
will be put on hold. For us to allow the exercise of the right to 
collective defense would be the same as asking the Abe 
administration to commit suicide." The party from the beginning has 
been strongly opposed to allowing the use of the right to collective 
self-defense. 
 
TOKYO 00003598  004 OF 009 
 
 
 
The council has had three rounds of discussions between May 18 and 
the Upper House election. Abe has asked the council to study four 
specific cases regarding national security. Of the four, the council 
has almost finished discussions on two cases aimed at strengthening 
the Japan-US alliance: escort US vessels cruising on high seas; and 
intercept ballistic missiles targeting the US. The council has 
agreed that it is necessary to allow Japan to exercise the right to 
collective self-defense. In resumed discussions, the council will 
discuss the remaining two specific cases regarding the expansion of 
the Self-Defense Forces' (SDF) participation in international 
peacekeeping operations: whether to rush to the spot of emergency 
and escort other countries' vessels; and whether to allow the SDF to 
provide logistic support in battle zones. The council is likely to 
endorse also these two cases, with one council member asserting: 
"The contents of the report will not change regardless of the 
outcome of the Upper House election because discussions are 
continuing in line with a foregone conclusion." 
 
A senior Cabinet Secretariat official said that in order for Japan 
to use the right of collective self-defense, "the prime minister's 
declaration for the use of that right is not sufficient; legal steps 
such as amending the SDF Law are required." The SDF Law does not 
provide for any activities for the SDF to engage in for the sake of 
Japan's ally. So, it is necessary to revise that law so as to add 
such items as "mobilization for collective self-defense." One idea 
under study is to establish a collective self-defense law that would 
require Diet approval in order to thoroughly implement civilian 
control. 
 
The New Komeito, however, has stiffened its attitude. A senior 
member argued: "Any hawkish bills are out of the question. Should 
such bills emerge, we would put them into the shredder." Given this, 
it is hopeless to submit relevant bills to the Diet for the time 
being. 
 
Even in the LDP, it has become tough-going for the prime minister to 
unify views, given that even former Defense Agency Director-General 
Shigeru Ishiba, who had until recently led debates favoring the 
exercise of the right to collective self-defense, has began openly 
calling on the prime minister to step down. 
 
(3) Government concerned about effect of LDP's defeat in election on 
Abe diplomacy; China, North Korea already taking tough stance 
 
NIHON KEIZAI (Page 2) (Full) 
August 5, 2007/08/06 
 
The Japanese government has been worried about what impact the 
Liberal Democratic Party's crushing defeat in the July House of 
Councillors election will have on Prime Minister Abe's diplomacy. In 
a cabinet ministerial meeting of the Association of Southeast Asian 
Nations (ASEAN) Regional Forum (ARF) held in Manila just after the 
Upper House election, North Korea sharply criticized Japan. China 
has not eased its tough stance over the issue of gas-field 
development in the East China Sea. The Foreign Ministry is 
increasingly concerned that if the Abe administration's footing 
becomes weaker, Japan might lose its negotiating power and 
capability to send messages. 
 
In the ARF ministerial on Aug. 2, North Korean Foreign Minister Pak 
Ui Chun asserted: "If Japan brings forward Pyongyang's abductions of 
 
TOKYO 00003598  005 OF 009 
 
 
Japanese nationals, North Korea will request that the wartime 
comfort women issue be brought up." In reaction, Foreign Minister 
Aso emphasized: "Abductions are an important issue not only for 
Japan but also for the international community." He asked the chair 
country to incorporate the abduction issue in the chairman's 
statement, but the statement used this common expression: "We 
stressed the importance of humanitarian issues." 
 
Initially, there was a strong possibility that the chairman's 
statement would specify the abduction issue. But in an unofficial 
meeting held prior to the ministerial, as well, no other countries 
but Japan had referred to the abduction issue. 
 
An accompanying source grumbled after the meeting: "Other countries 
might have taken mean advantage of the ruling coalition's failure in 
maintaining its majority in the Upper House election." 
 
In a Japan-China foreign ministerial meeting held in Manila on the 
previous day, Aso "traded verbal jabs," according to the 
accompanying source, with his Chinese counterpart Yang Jiechi over 
the issue of oil field development in the East China Sea. 
 
The governments of Japan and China, when Premier Wen Jiabao came to 
Japan in April, agreed to work out by this fall a specific 
joint-development plan for oil fields in the East China Sea. The 
Japanese side insisted that China should present a specific plan to 
move negotiations forward, but China has made no response. When Aso 
applied pressure by indicating the possibility of developing the gas 
fields independently, Yang only replied: "It is important to create 
a favorable environment for the negotiations." 
 
 
Relations between Japan and China have improved since the Abe 
administration was inaugurated. Given this, the Chinese government 
has mapped out a policy toward Japan on the assumption that the Abe 
administration will stay in power for a long period of time. Some 
Foreign Ministry officials take the view that China's tough stance 
might reflect its speculation that since the current Japanese 
government is losing political ground, it might not be able to 
sustain a tough approach. 
 
The government relies strongly on the United States, but the issue 
of Japan being able to extend the Antiterrorism Special Measures Law 
has come up. Prime Minister Abe will soon attend the summit of the 
Asia-Pacific Economic Cooperation (APEC) forum and visit China. But 
the unstable political situation may have a negative effect on 
Japan's bargaining capability in summit diplomacy, as well. 
 
(4) Reversed positions of ruling and opposition parties as a result 
of Upper House election: LDP's stinging defeat may be the "beginning 
of the end"? 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
August 2, 2007 
 
Takaharu Watanabe 
 
"We saw a number of able politicians defeated in the election. As 
the top leader of the party, I am really sorry for that," Prime 
Minister Shinzo Abe (concurrently president of the governing Liberal 
Democratic Party (LDP)) told an LDP board meeting on Aug. 1 and 
apologized for the ruling bloc's big setback in the recent Upper 
 
TOKYO 00003598  006 OF 009 
 
 
House election. 
 
Many in the LDP are arguing that the prime minister and his aides 
are responsible for this crushing defeat. They insist that because 
the government was too late to deal with a series of 
money-and-politics scandals involving cabinet members and the 
pension problem, the voters "punished" the prime minister. 
 
The LDP won only 37 seats from both the proportional representation 
segment and electoral districts, and particularly in single-seat 
constituencies, where the party had a showdown with the major 
opposition Democratic Party of Japan (DPJ or Minshuto), the LDP was 
overwhelmingly beaten by the DPJ, 23 seats to 6. Is the LDP's defeat 
simply attributable to distrust of Abe? Fundamental reasons seem to 
underlie the LDP's defeat. 
 
The LDP was founded in 1955, and it has been in power since then 
except for the period of 1993 to 1994. But it is undeniable that the 
LDP lacks dynamism as an organization partly because of the 
increased number of second-generation Diet members. 
 
Under the so-called 1955 political setup, the Japan Socialist Party 
(JSP, predecessor of the current Social Democratic Party) played a 
part, but it fragmented, and analysts said the JSP completed its 
historical mission. That was a long time ago. But the LDP even now 
remains in power. One veteran LDP lawmaker explained: "The LDP has 
survived because Junichiro Koizumi took office as president." 
 
In the days of his serving as prime minister, Koizumi discarded the 
previous supporting organizations for the LDP, such as special post 
offices and the construction industry, through structural reform, 
and widened support for him among unaffiliated voters in cities and 
was able to stay in power for more than five years. 
 
But it was impossible for Abe to pick up after Koizumi, who had a 
strong personality and unique political techniques. 
 
The LDP would be certain to be removed from power if it failed to 
rebuild its posture upon fully analyzing the causes of its defeat in 
the Upper House election this time before the next Lower House 
election, which is likely to be a big showdown with the DPJ over the 
reins of government. 
 
On Aug. 1, the LDP leadership established a committee to examine the 
results of the Upper House election in order to examine the causes 
of its defeat. 
 
But in the LDP, heavyweight lawmakers declared their support for Abe 
to stay on one after the other, giving the impression that the party 
members have not taken the defeat seriously. 
 
Behind this is presumably their calculation that with no apparent 
successor to Abe at present, it would be wise not to offend Abe by 
opposing his decision to stay on if they want to secure either a 
cabinet portfolio or a party executive post. 
 
Even mid-level and junior lawmakers, who have until recently led the 
move for revitalizing the party, are unlikely to criticize the party 
executives. 
 
Will the defeat this time become an opportunity for the LDP to make 
a "revolutionary, fresh start," as former party Vice President Taku 
 
TOKYO 00003598  007 OF 009 
 
 
Yamasaki put it? Or will it become the beginning of the end of the 
LDP-led administration? The answer will come out in the next Lower 
House election. 
 
(5) Primary balance: Impossible to move it into the black by FY2011, 
according to Cabinet Office estimate, as increase in tax revenues 
cannot be hoped for 
 
YOMIURI (Page 2) (Full) 
August 4, 2007 
 
The government aims at moving the primary balance into the black by 
fiscal 2011. However, the Cabinet Office's estimate on Aug. 3 found 
that it would be impossible for the government to achieve that goal. 
Since the government and the ruling parties have considered 
achieving that goal as essential for fiscal reconstruction, the 
estimate will likely spread repercussions to future budget 
compilation and discussion on drastic reform of the tax system. 
 
The primary balance is an index indicating whether it is possible to 
finance policy expenses without relying on borrowing. In working out 
the estimate, the Cabinet Office has modified the government's 
reference estimate for the mid-term economic guidelines, by 
incorporating the latest economic trends. 
 
The result will be submitted to a meeting of the Council on Economic 
and Fiscal Policy on August 6 as basic data to be used for the 
compilation of the fiscal 2008 budget. 
 
The estimate made as of January was that under an ideal scenario of 
promoting tough spending cuts with a nominal grow rate of 4 percent, 
the primary balance would mark a 1.6 trillion yen surplus. 
 
However, the estimate this time is that the income and expenditure 
balance would come out even, narrowly enabling the nation to climb 
out of the red. The poor showing is due to the fact that the 
nation's effort to emerge from deflation is slow. As a result, the 
nominal growth rate has taken a downward turn, making an anticipated 
revenue increase impossible. If a growth rate and the level of 
spending cuts fall short of the level envisioned in the ideal 
scenario, deficits in the primary balance would further increase. 
 
In the meantime, the economic growth rate for fiscal 2008 projected 
by the Cabinet Office has also been revealed. The Cabinet Office 
estimated 2.2 percent real growth and about 2.6 percent nominal 
growth. It also estimated the rate of increase in consumer prices to 
be about 0.5 points, the level that will enable the nation to 
completely break with deflation within fiscal 2008. 
 
(6) Foreign Ministry to set up ODA regular consultative council, 
aiming to improve efficiency of aid 
 
YOMIURI (Page 2) (Full) 
Evening, August 4, 2007/08/06 
 
The Foreign Ministry has decided to set up a body tasked with 
discussing future options for the nation's official development 
assistance (ODA) policy on a regular basis, in cooperation with 
Nippon Keidanren (the Japan Business Federation), the Japan 
International Cooperation Agency (JICA), and the Japan Bank for 
International Cooperation (JBIC). The ministry intends to hold its 
first meeting by the end of this year, with the aim of pursuing the 
 
TOKYO 00003598  008 OF 009 
 
 
efficient management of the ODA program. 
 
The panel will discuss the specific measures included in a package 
of proposals on ODA policy released by Nippon Keidanren this May, 
including: (1) shortening the period between planning and 
implementation; (2) expanding projects eligible for the Special 
Terms for Economic Partnership (STEP) designed to make use of 
advanced technologies of Japanese firms; and (3) increasing the 
number of projects. These measures are aimed to increase 
opportunities for Japanese firms to participate in ODA projects and 
make ODA more effective through the best use of private-sector 
know-how. 
 
The Foreign Ministry, JICA, and JBIC are now involved in projects 
related to yen loans, grant aid, and technology transfer, but 
starting in October of next year, the government plans to place 
these services uniformly under the control of JICA. In the new body, 
members will discuss measures to strengthen the nation's ODA 
strategy, focusing on this unification plan. 
 
(7) Government bullish to compile austere budget: Discussions on 
general-account budget requests to start today; Aftereffect of Upper 
House election felt by ruling parties; Calls for revision of reform 
agenda 
 
NIKKEI (Page 2) (Full) 
August 6, 2007 
 
The government and the ruling parties will start discussing 
guidelines for general-account budget requests today. The government 
is ready to stick to an austere budget, continuing its effort to 
recapitalize the nation's fiscal base, including a 3 percent cut in 
public works-related expenses. However, an atmosphere of seeking a 
revision of the existing structural reform line is growing in the 
LDP, following the defeat in the recent Upper House election. The 
situation appears that the aftereffect of the Upper House election 
could cast a pall over the management of the economy. 
 
Kantei remains bullish 
 
The government held meetings of the Council on Economic and Fiscal 
Policy for three days starting on Aug. 6, though one scheduled for 
Aug. 1 was put off. The arrangement it envisages is drafting 
ceilings of budget estimates for the next fiscal year's budget in 
one burst. The plan is to obtain cabinet approval on Aug. 10 and 
close estimated budget requests from all ministries at the end of 
the month. 
 
The Prime Minister's Official Residence (Kantei) is bullish with one 
official noting, "We must not stop the reform drive, letting it be 
affected by the result of the election." The Kantei has been playing 
up the need to carry out structural reforms after the ruling 
parties' defeat in the Upper House election as well, maintaining the 
predetermined process of squeezing 220 billion yen by cutting public 
works and containing a natural increase in social security spending. 
It is concerned that slackening the drive to tighten spending at 
this juncture could affect the progress of making the fiscal 
situation sound, such as through a drastic reform of the tax system, 
which is to start in the fall. 
 
The Kantei is also showing a stance of counterattacking the 
Democratic Party of Japan (DPJ or Minshuto), which during the Upper 
 
TOKYO 00003598  009 OF 009 
 
 
House election campaign criticized the government as having 
abandoned the local regions. Those close to the prime minister are 
criticizing the DPJ's policy with one noting that a political party 
that compiles a pork-barrel budget is not responsible enough to run 
the country. They are openly counterattacking the DPJ. The ruling 
camp has a strong sense of crisis that if it aims exclusively at a 
structural reform policy, such as a substantive cut in public works, 
the parties could be defeated in the next Lower House election, as 
well. The LDP will start discussing budget request caps, holding a 
plenary meeting of the Policy Research Council on Aug. 7. The 
situation is, however, a gap with the government could surface. 
 
One senior LDP official noted: "The Finance Ministry has taken 
advantage of the Koizumi reform line. If the DPJ wins the reins of 
government in the next Lower House election, the Finance Ministry 
will unavoidably be affected." There is a deep-seated resistance in 
the LDP toward a 3 percent cut in public works, which the Finance 
Ministry is insisting on. Disgruntlement with the Finance Ministry 
for allegedly banking on the taking over of government reins by the 
DPJ is smoldering in the LDP. 
 
The LDP won six seats and lost 23 seats in the single-seat 
constituencies, which used to be the LDP's impregnable stronghold. 
How to set budgetary caps is drawing attention in the sense how the 
LDP will make the most of lessons it learned from the defeat. If 
public finance is managed led by the Finance Ministry, criticism is 
bound to arise from within the LDP. There is a strong possibility of 
a backlash against Prime Minister Shinzo Abe for remaining in office 
becoming even stronger. 
 
Voices of regional districts 
 
On the other hand, if urban voters have judged that the ruling 
parties have completely abandoned the structural reform policy, they 
might turn their backs on them. 
 
Whether to continue the spending reform or shifting from it is a 
difficult decision to make, as it could dictate the political 
equation in the future. Abe told the chief cabinet secretary and 
deputy chief cabinet secretaries over dinner on the evening of Aug. 
2, "I want to listen to local voices." 
 
SCHIEFFER