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UNCLAS SECTION 01 OF 12 TOKYO 004638 
 
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 10/03/07 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Anti-terrorism law: 
4) Government and ruling parties agree on outline of the new 
anti-terrorism bill that would allow the MSDF to continue Indian 
Ocean refueling services 
5) New anti-terrorism law will have a 2-year time limit and may stop 
MSDF refueling of supply ships 
6) Democratic Party of Japan (DPJ) refuses ruling camp's request for 
prior consultation on anti-terror bill to iron out differences 
7) Government reply to Diet question on charge of diversion of use 
of MSDF-provided fuel in Indian Ocean: Not in a position to know 
full details 
8) Fierce confrontation expected in the Diet between ruling and 
opposition camps over the extension of MSDF refueling services in 
Indian Ocean 
9) Ruling parties coordinating one-month extension of the Diet 
session in order to have time to pass new anti-terror bill 
10) Government denies that MSDF fuel oil supplied in the Indian 
Ocean was diverted by US warships for use in Iraq war. 
 
North Korea problem: 
11) US, Japan reach understanding on latest 6-party agreement 
setting timetable for limited North Korean nuclear disablement 
12) Joint statement by six-party talks says delisting DPRK as state 
sponsor of terrorism "depends on how that country will behave from 
now on" 
13) Chief cabinet secretary denies that tentative 6-party agreement 
on North Korea contains stated timeframe for removing DPRK from 
terror-sponsor list 
14) Government has hopes and fears about ongoing South-North Korea 
summit talks, but Japan will continue its sanctions 
 
15) Fukuda administration swiftly responded to Okinawa textbooks 
issue when caught by surprise monster rally in that prefecture 
 
16) Support group of DPJ senior member Watanabe falsified political 
funds records to claim large expenses for non-existent office 
 
Business trends: 
17) First triangular merger in Japan includes US' Citigroup 
18) Japanese business circles alarmed by triangular merger, but METI 
is cool about it 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Nikkei: 
Citigroup to wholly own Nikko Cordial in first case of triangular 
merger: Nikko to be delisted as early as next January 
 
Mainichi: 
KDDI, DoCoMo to lower mobile phone call charges by about 30 PERCENT 
possibly next month 
 
Yomiuri: 
New antiterror legislation to mention UNSC resolution: Government, 
 
TOKYO 00004638  002 OF 012 
 
 
ruling camp agree on outline; two-year term limit most likely 
 
Sankei: 
Medical care for the elderly: Radical reform plan to be compiled in 
a year; LDP, New Komeito to review medical copayments by those in 
65-74 age bracket 
 
Tokyo Shimbun: 
New refueling legislation: Ruling parties agree in principle; 
Coordination underway for extending Diet session by a month 
 
Akahata: 
Government to review school textbook screening concerning mass 
suicides: Hearts of people in Okinawa move government 
 
2) EDITORIALS 
 
Asahi: 
(1) Inter-Korean talks: Secure commitment to disable nuclear 
facilities from North Korea 
(2) Medical services for the elderly: Freezing increase in 
copayments a stopgap measure with eye on general election 
 
Mainichi: 
(1) Passages on mass-suicides: Just reinstating reference to 
coercion by the military will not settle issue 
(2) Privatized postal services launched: Do not forget user 
convenience 
 
Yomiuri: 
(1) Mass-suicides in wartime Okinawa: Political intervention in 
school textbook screening puzzling 
(2) Death of 17-year-old sumo wrestler: Violence will disgrace 
national sport 
 
Nikkei: 
(1) Show path toward nuclear abolition instead of dramatizing 
inter-Korean reconciliation 
(2) Sumo Association should be aware that it is a public interest 
corporation. 
 
Sankei: 
(1) School textbook screening: Carry facts correctly, rejecting 
political intervention 
(2) Reform of government-affiliated financial institutions: Politics 
should support personnel appointed from private sector 
 
Tokyo Shimbun: 
(1) New antiterror legislation: Information disclosure essential 
(2) Fake cochin incident heightens distrust in food labeling 
 
Akahata: 
(1) Death of sumo wrestler: Root out violence from the professional 
sumo world 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, October 2 
 
NIKKEI (Page 2) (Full) 
October 3, 2007 
 
 
TOKYO 00004638  003 OF 012 
 
 
10:02 
Attended a cabinet meeting at the Kantei. Visited the office of 
global warming countermeasures headquarters. Later, met Vice Defense 
Minister Masuda. 
 
12:02 
Attended a liaison meeting of the government and the ruling 
parties. 
 
14:33 
et Cabinet Office's Vice Minister Uchida and Decoration Bureau 
Director General Fukushita. Followed by Japan Chamber of Commerce 
and Industry Chairman Yamaguchi and Japan Retailers Association 
Chairman Nakamura. 
 
15:22 
Met Education Vice Minister Zeniya. Followed by Special Assistant 
Yamatani. 
 
18:09 
Met Deputy Chief Cabinet Secretary Futahashi. 
 
19:00 
Arrived at his private residence in Nozawa. 
 
4) Government, ruling parties agree to mention UN resolution in new 
antiterrorism bill; Term likely to be set at two years 
 
YOMIURI (Top play) (Excerpts) 
October 2, 2007 
 
The government and ruling parties yesterday reached a broad 
agreement on new legislation replacing the Antiterrorism Special 
Measures Law for continuing the Maritime Self-Defense Force's 
refueling operations in the Indian Ocean. The MSDF operations will 
be limited to providing fuel and water to foreign vessels. The 
government will be required to report to the Diet regularly, 
removing the requirement of retroactive Diet approval from the 
current law. A senior ruling party lawmaker indicated last night 
that the term of the new law would be two years, saying: "It would 
be good for two years and the government would be required to report 
to the Diet a year after the law takes effect." 
 
Following the basic agreement on the draft legislation, the focus 
will shift to coordination of views with the major opposition 
Democratic Party of Japan (Minshuto or DPJ). The government and 
ruling parties intend to make a final decision on Oct. 4 and begin 
talks between the ruling and opposition camps with a Diet chiefs' 
meeting on the 5th. They are also planning to introduce a bill to 
the Diet before the end of the month for an early enactment of the 
new legislation. 
 
As grounds for the MSDF operation, the outline includes mention of 
UN Security Council Resolution 1997, adopted in September, which 
expressed appreciation for the maritime interdiction operations by 
the coalition forces, including the MSDF. 
 
The chief cabinet secretary, foreign minister, and defense minister 
held a meeting yesterday morning, and the antiterrorism project team 
chaired by former LDP Vice President Taku Yamasaki also met in the 
afternoon to finalize the outline. 
 
 
TOKYO 00004638  004 OF 012 
 
 
The government presented a plan to set the law's period at two 
years, while the New Komeito insisted on one year. Foreign Minister 
Komura in a media interview yesterday indicated that in order to 
conduct stable operations, two years would be better than one year. 
Also aiming to make it mandatory for the government to report to the 
Diet on the amounts of oil and water supplied by the MSDF and to 
increase the number of countries receiving services, the government 
is horridly coordinating views with the United States and other 
countries. 
 
5) Government eyes halting MSDF refueling service to supply vessels, 
sets new law's effective period at two years in outline 
 
ASAHI (Page 1) (Full) 
October 3, 2007 
 
The government yesterday launched a discussion on the possibility of 
discontinuing the Maritime Self-Defense Force's (MSDF) refueling 
service to other countries' supply vessels in its refueling mission 
in the Indian Ocean. This is because the final destination of the 
fuel supplied to replenishment vessels remains unknown. The 
government hopes to make MSDF operations more transparent by calling 
off the refueling service to supply ships. The government also 
presented an outline for a new bill to replace the Antiterrorism 
Special Measures Law to the ruling camp the same day. The outline 
sets the new law's effective period at two years. 
 
In a press conference with the Asahi Shimbun and other press 
companies yesterday, Defense Minister Ishiba indicated that the 
ministry would consider discontinuing the ongoing MSDF's refueling 
service to replenishment vessels. He said: "We will also have to 
study whether the suspension of the refueling operation to supply 
vessels would have some impact on overall maritime intercept 
operations." 
 
Ishiba also implied that the new legislation would include mention 
of a ban on refueling supply ships, remarking: "Although we have yet 
to reach the stage of making a definite statement, it is a matter of 
technology whether it is possible to put it in a provision or in 
official notes (exchanged between governments)." 
 
Meanwhile, the government presented the outline of the bill 
yesterday to the project team of the Liberal Democratic Party and 
the New Komeito, chaired by Taku Yamazaki. The outline sets the new 
law's effective period at two years. It also requires the government 
to annually report on the MSDF mission to the Diet, scrapping the 
clause in the current Antiterrorism Law that requires Diet 
approval. 
 
The ruling bloc will finalize the outline by Oct. 5 and submit it to 
the Democratic Party of Japan and other opposition parties the same 
day, hoping to start substantive talks at meetings of both houses 
scheduled for next week. 
 
Besides, the outline of the bill restricts the MSDF activities to 
supplying oil and water to vessels of other countries. The new bill 
would also specify that the MSDF mission is rooted in the United 
Nations Security Council Resolution 1368, adopted immediately after 
the terrorism attacks on the United States in 2001, and Resolution 
1776, which expresses appreciation for the operations by 
multinational forces, including Japan, intended to prevent the 
movement of terrorists and weapons. 
 
TOKYO 00004638  005 OF 012 
 
 
 
6) DPJ refuses prior consultations with government, ruling 
coalition 
 
NIKKEI (Page 2) (Full) 
October 3, 2007 
 
When asked whether to respond to prior discussions with the 
government and ruling coalition on the issue of the refueling 
mission in the Indian Ocean, Democratic Party of Japan (DPJ) 
President Ichiro Ozawa strongly denied yesterday, saying: 
 
"Since the position of the (DPJ) is that the Constitution does not 
allow (refueling mission), we cannot hold any discussions. If they 
accept our assertion, it would be a different story." 
 
Asked whether he would hold a meeting with Prime Minister Yasuo 
Fukuda, Ozawa responded flatly: "It is an issue that should be 
resolved in debate at the Diet." The DPJ intends to refuse the 
Liberal Democratic Party's proposal of setting up a consultative 
body. 
 
The DPJ, however, is concerned about trends of public opinion. Many 
in the party think that they want to prevent the public from seeing 
them as opposing the government for the sake of just opposing it. 
 
In an effort to win the public over to its side, the DPJ will pursue 
allegation of Japan's fuel being used for the Iraq war. In a meeting 
of the party's foreign affairs and defense division, Secretary 
General Yukio Hatoyama urged the officials in charge of foreign and 
defense affairs to disclose information, saying: "We want to know 
the truth." Hatoyama will bring up this issue at a questioning 
session at the Diet today. 
 
Tsuyoshi Yamaguchi, vice defense minister of the "Next Cabinet," 
 
SIPDIS 
said: "Without shedding light on the allegation, the refueling 
mission will not be allowed." The DPJ is looking into the 
possibility of evoking the right of the Diet to investigate state 
affairs. 
 
7) Allegation of fuel diversion: Government in written response 
says, "It is not position to know details" of operations by foreign 
ships 
 
NIKKEI (Page 2) (Full) 
October 3, 2007 
 
The government revealed yesterday in a written response adopted by 
the cabinet that it had received in 2003 an answer from the United 
States regarding allegations of fuel diversion. The answer from the 
US was that there had been no case in which Japan's fuel was used 
for purposes other than that stipulated in the Antiterrorism Special 
Measures Law. The fuel supplied by Japan would not be used for other 
purposes. 
 
As to the operations of foreign ships that were provided fuel by 
Japan's Maritime Self-Defense Force, the government's written 
response was: "The government is not in a position to know the 
details because each country decides its operations." 
 
8) Bill to extend refueling mission outlined by government and 
ruling bloc likely to bring about a full confrontation in Diet; New 
 
TOKYO 00004638  006 OF 012 
 
 
Komeito cautious about putting bill to revote 
 
NIKKEI (Page 2) (Full) 
October 3, 2007 
 
The government and the ruling bloc yesterday shaped an outline of a 
bill allowing the Maritime Self-Defense Force's (MSDF) refueling 
mission. They intend to show this outline to the opposition parties 
to discuss it, but the major opposition Democratic Party of Japan 
(DPJ) is unlikely to respond to discussion and to prefer a total 
confrontation with the ruling bloc. Now that the opposition parties 
control the Upper House, if the ruling parties fail to obtain the 
opposition parties' support for the bill, the major ruling Liberal 
Democratic Party (LDP) may put the bill to a revote in the Lower 
House and pass it into law by a two-third majority there, but some 
in the junior coalition partner New Komeito are cautious about doing 
so. Meanwhile, some in the DPJ noted that the party could not obtain 
the public's understanding if it simply opposes it. A battle over 
the bill is about to start in the Diet with both ruling and 
opposition parties harboring concerns. 
 
"It is important for us to draft a good bill and demonstrate through 
Diet debate that our bill is excellent," Prime Minister Yasuo Fukuda 
said at a liaison meeting yesterday of the government and the ruling 
parties. 
 
Afterwards, the ruling bloc held its working group meeting and 
decided there to specify in the bill (1) limiting the MSDF's 
operations to the supply of fuel and water and (2) a United Nations 
resolution adopted in September expressing appreciation for the 
MSDF's refueling mission. 
 
On the question of when the bill will expire, discussion between the 
government, the LDP and the New Komeito failed to reach agreement 
with the government and the LDP calling for the two-year duration of 
the bill, insisting that they don't want to discuss the same matter 
every year, and the New Komeito insisting on one year on the grounds 
that Diet's supervision should be strengthened. The government also 
sought to eliminate the provision of Diet approval, but it met with 
opposition from the LDP and the New Komeito. No agreement was thus 
reached on this matter, either. 
 
Considering the DPJ, they suggested establishing a consultative 
council to reflect the opposition bloc's ideas in the bill. If 
agreement were reached, they want to pass the bill into law by 
mid-December. LDP Secretary General Bunmei Ibuki noted: "If support 
for the bill widened, the opposition bloc would find it difficult to 
stick to opposition." 
 
When asked by reporters whether he has confidence in making the DPJ 
compromise, Fukuda said: "All I can do is to make efforts for 
that." 
 
9) Ruling bloc approves outline of new refueling legislation; 
Coordination underway for extending Diet by one month 
 
TOKYO SHIMBUN (Top play) (Abridged slightly) 
October 3, 2007 
 
The Liberal Democratic Party and New Komeito approved yesterday 
afternoon an outline of government-drafted new legislation enabling 
the Maritime Self-Defense Force to continue its refueling operations 
 
TOKYO 00004638  007 OF 012 
 
 
in the Indian Ocean. Following this, the ruling bloc asked the major 
opposition Democratic Party of Japan (Minshuto or DPJ) for talks, 
but the DPJ declined the request saying the legislation has yet to 
be made into a bill. There is no prospect that the new legislation 
will clear the Diet before it closes on Nov. 10. The government and 
ruling parties began studying the option of substantially extending 
the Diet session. Coordination is expected to proceed for extending 
the session for about one month. 
 
The LDP-New Komeito antiterrorism project team that met yesterday 
approved the outline of the government-drafted legislation except 
for the new law's period. Although the LDP agreed to the government 
plan to set the period for two years, the New Komeito called for one 
year, as is the case with the current Antiterrorism Special Measures 
Law, citing the Diet's need to check the MSDF operations. The two 
parties will aim at a final agreement through another session on 
Oct. 4. 
 
The outline specifies that: (1) the MSDF operations in the Indian 
Ocean will be limited to oil and water supply, (2) retroactive 
approval by the Diet will not be required, and (3) UN Security 
Council Resolution 1776 that expressed appreciation for the Maritime 
Interdiction Operations in the Indian Ocean, in which the MSDF is 
taking part, will be added to the purposes of the new law. 
 
The government and ruling parties plan to present the outline to the 
opposition bloc, including the DPJ, as early as Oct. 5 to make it 
into a bill after hearing views of the opposition bloc at a Lower 
House Budget Committee session next week, in order to introduce it 
to the Diet. 
 
The government and ruling parties have reached a conclusion that 
Diet deliberations would not begin until mid-October and that a Diet 
extension is inevitable for the enactment of the new law. The 
dominant view is to extend the session until around Dec. 10 so as 
not to affect the planned budget compilation for the next fiscal 
year. 
 
10) MSDF fuel not used in Iraq operation 
 
SANKEI (Page 5) (Full) 
October 3, 2007 
 
The government adopted at a cabinet meeting yesterday a statement on 
the alleged diversion of fuel provided by the Maritime Self-Defense 
Force for use in the Iraq operation. The amount of fuel provided to 
a US supply vessel on February 25, 2003, has now officially been 
corrected from the 200,000 gallons (760 kiloliters) to 800,000 
gallons. The statement also says that the fuel provided to a US 
aircraft carrier via the US supply ship was not used in the Iraq 
operation, which does not meet the spirit of the Antiterrorism 
Special Measures Law. The statement is in response to a question by 
House of Representatives member Kenji Eda. 
 
11) Six-party talks: Japan, US agree to accept draft agreement 
 
YOMIURI (Page 2) (Excerpts) 
October 3, 2007 
 
The government yesterday decided to accept a draft joint statement 
as provisionally agreed on in the six-party talks on Sept. 30 to 
discuss the North Korean nuclear issue. This decision reportedly has 
 
TOKYO 00004638  008 OF 012 
 
 
already been conveyed to China, the host of the talks. 
 
Foreign Minister Komura referred to the draft joint statement at a 
press briefing yesterday and indicated problematic factors about the 
statement by saying, "Nuclear programs should have been 'fully 
reported,' but (the joint statement in this regard) is not perfect. 
In addition, disablement is limited to several (nuclear-related 
facilities in Yongbyon." On the other hand, Komura commented, "I am 
sure it is one step forward toward (denuclearization). I hope it 
will take effect as quickly as possible," expressing his 
expectations that every member of the six-party talks will accept 
the statement. 
 
A senior Foreign Ministry official, as well, explained: "(The joint 
statement) is not necessarily satisfactory in part because nuclear 
facilities subject to disablement are limited to those in Yongbyon. 
But it has moved the six-party talks forward and is the first step 
forward toward achieving the final goal of denuclearizing the Korean 
Peninsula. That's why we can't oppose it." The contents of the joint 
statement has yet to be disclosed, but it includes a roadmap to 
implement by the end of the year the "next step," which consists of 
disabling North Korea's nuclear facilities and requiring the North 
to make a full report on its nuclear programs. 
 
Takashi Sakamoto, New York 
 
US Assistant Secretary of State Christopher Hill, the chief delegate 
to the six-party talks, yesterday told the Yomiuri Shimbun and other 
press companies at a New York hotel that the US government accepted 
the draft joint statement as provisionally agreed on in the 
six-party talks on Sept. 30 and yesterday conveyed this to China, 
the host of the six-party talks. Hill also revealed that the joint 
statement did not specify any deadline for the US to remove North 
Korea from the list of state sponsors of terrorism. 
 
12) Draft joint statement by six-party talks says delisting DPRK as 
state sponsor of terrorism "depends on how that country will behave 
from now on" 
 
ASAHI (Page 1) (Full) 
October 3, 2007 
 
During the recent six-party talks held in late September, 
host-nation China drafted the joint statement. Yesterday, the 
wording used in the statement on whether to delist North Korea as a 
state sponsoring terrorism was revealed. The phrase states: "We will 
delist North Korea depending on how it will behave." The draft shows 
neither a deadline for delisting nor requirements for delisting. 
 
Pyongyang appears to have taken it as meaning that if it disables 
its nuclear-related facilities located in three places in Yongbyon 
in accordance with the latest six-party agreement, the United States 
will agree to the delisting. The wording is likely to give cause for 
dispute in the process of promoting disablement in the future about 
whether it "rewards" the North. 
 
According to a source involved in the six-party talks, the draft 
joint statement includes wording about the North disabling by the 
end of the year its nuclear-related facilities in three places in 
Yongbyon. On the question of whether to delist the DPRK, the joint 
statement refers to the February six-party agreement, in which the 
US confirmed it would start such a process, as well as to the 
 
TOKYO 00004638  009 OF 012 
 
 
US-North Korea working group talks, which discussed the delisting 
issue. The joint statement also says, "Based on the consensus 
(understanding) of the US-North Korea working group and in response 
to North Korea's behavior, the US will refer to the February 
agreement and implement (the delisting)." 
 
North Korea's Vice Foreign Minister Kim Kye Gwan, the chief delegate 
to the six-party talks, yesterday told reporters: "The draft joint 
statement contains a timeframe (for the delisting)." The implication 
is that the North will call on the US to delist it as a state 
sponsor of terrorism if the North disables its nuclear facilities in 
Yongbyon within the year and meet the requirements for the 
delisting. 
 
Chief Cabinet Secretary Machimura, however, rejected (Kim's remark) 
at a press briefing yesterday, saying: "It is not true." 
 
13) Chief Cabinet Secretary Machimura denies Kim Key Gwan's remark 
that delisting date is specified 
 
TOKYO SHIMBUN (Page 2) (Full) 
October 3, 2007 
 
Referring to North Korean Vice Foreign Minister Kim Gye Gwan's 
remarks that the date when the United States will remove the North 
from its list of terrorist-sponsoring states is specified in a 
tentative six-party agreement, Chief Cabinet Secretary Nobutaka 
Machimura denied Kim's remarks, saying: "It is not true." 
 
Machimura stated on the tentative agreement: "We are not satisfied 
with the contents of the agreement, but the action plan incorporates 
the common perception to push forward with denuclearization of the 
Korean Peninsula." 
 
14) Inter-Korean summit: Japanese government has mixed feelings of 
expectation and alarm 
 
MAINICHI (Page 2) (Full) 
October 3, 2007 
 
The leaders of North and South Korea will hold talks for the first 
time in seven years. The Japanese government has mixed feelings of 
expectation and alarm, welcoming the event as leading to bringing 
about peace and stability to the Korean Peninsula while worrying 
that if the two Koreas promote rapprochement, the abduction issue 
might be left behind. 
 
Foreign Minister Komura said in a press conference yesterday: "The 
inter-Korean summit will contribute to denuclearizing the Korean 
Peninsula, resulting in peace and stability in the region. I hear 
that the issue of Japanese nationals abducted by North Korea will 
also be taken up in the summit." 
 
The Japanese government was carefully watching to see whether 
President Roh Moo Hyun's conciliatory policy toward North Korea 
would disrupt the unity of the international community. The 
government was favorably taking the cooperative policy maintained by 
the South Korean government until recently, seeing its decision to 
shelve energy aid to the North. The government, however, is also 
increasingly concerned about the current situation, with a senior 
Foreign Ministry official saying that the recent closer relationship 
between the United States and North Korea "has a delicate impact on 
 
TOKYO 00004638  010 OF 012 
 
 
North-South relations, making it easier for the Roh administration 
to take a conciliatory stance again." 
 
Komura talks about plan to extend sanctions against North Korea for 
six months 
 
In an interview with the Mainichi Shimbun and other press companies 
yesterday, Foreign Minister Masahiko Komura indicated his view that 
Japan should extend its economic sanctions against North Korea, 
which is due to expire on Oct. 13, for another six months. He said: 
"I do not think that North Korea has changed remarkably enough for 
Japan to remove its sanctions." This remark reflects his judgment 
that Japan needs to continue to apply pressure as no progress has 
been made on the abduction issue. 
 
Japan will extend the measures to prohibit the North from exporting 
any items to Japan and its ships from making port call in Japan. The 
government slapped these sanctions in reaction to North Korea's 
missile launch last July and nuclear test last October. 
 
15) Fukuda government responds quickly to Okinawa textbook issue due 
to huge public outcry in Okinawa 
 
MAINICHI (Page 2) (Excerpts) 
October 3, 2007 
 
References suggesting the Imperial Army forced civilians to commit 
mass suicides during the 1945 Battle of Okinawa have been deleted 
from history textbooks by the official textbook screening process. 
However, the government and ruling parties have now begun taking a 
stance of allowing textbook publishers to reconsider the deletion of 
the references. The move seems to demonstrate efforts by the 
government of Prime Minister Yasuo Fukuda to display a sharp 
contrast to his nationalistic predecessor, Shinzo Abe. 
 
On March 30, the results of the textbook screening were made public 
under the cabinet of then Prime Minister Abe. In June when Abe 
visited Itoman City in Okinawa, he was adamant about not retracting 
the results of the screening, saying: "The council on textbook 
screening looked into them with an academic viewpoint." 
 
In Okinawa on Sept. 29, however, 110,000 people staged a protest 
rally in Ginowan City, demanding the retraction of the results of 
the textbook screening. 
 
The Fukuda administration and ruling coalition were quick respond to 
Okinawa's anger. On Oct. 1 Chief Cabinet Secretary Nobutaka 
Machimura told Education, Culture, Sports and Science and Technology 
Minister Kisaburo Tokai to make an appropriate response. The 
government adopted on Oct. 2 a statement agreeing to revisions that 
would retain the references. 
 
In a meeting the same day of the government and ruling coalition, 
New Komeito leader Akihiro Ota proposed setting up a joint research 
panel of experts from the government and Okinawa. He stated: 
"Involvement of the Imperial Army cannot be denied. Based on 
history, we should accurately and correctly transmit such matters." 
Liberal Democratic Party (LDP) Deputy Secretary General Hiroyuki 
Hosoda also stated in a press conference: "It is important to 
acknowledge that a tragedy occurred." 
 
16) DPJ Watanabe's political organization declared 170 million yen 
 
TOKYO 00004638  011 OF 012 
 
 
during 12 years for non-existent office 
 
ASAHI (Page 31) (Excerpts) 
October 3, 2007 
 
It has been revealed that the political organization of House of 
Representatives member Kozo Watanabe (Fukushima No.4 District), 
supreme advisor to the Democratic Party of Japan (DPJ), had 
registered the apartment of Fukushima Governor Yuhei Sato, his 
nephew, as its main office with the Internal Affairs and 
Communications Ministry during the 12 years through 2004, though it 
actually had not used it. Sato, who used to be a secretary to 
Watanabe, said: "I just allowed the name to be used, receiving no 
rent or utility fees." But the organization declared a total 178 
million yen in its political funds reports during this period as 
office and other expenses. 
 
A secretary to Watanabe commented on the registration of Sato's 
private residence as the main office: "The main office is located in 
the Diet Members Office Building. If one claims that the report goes 
against the facts, it might be true." According to its political 
funds reports, the political organization's office is now located in 
a room of the apartment in Chiyoda Ward, Tokyo, owned by Watanabe, 
but during the 12 years between 1993 and 2004, the organization 
reported that its main office was in Sato's apartment in Shinjuku 
Ward. 
 
17) Citigroup to wholly own Nikko Cordial in first case of 
triangular merger 
 
ASAHI (Top Play) (Excerpts) 
October 3, 2007 
 
US financial giant Citigroup announced on Oct. 2 that it will wholly 
own the Nikko Cordial Group, in which it has about 68 PERCENT 
stake, by acquiring the remaining stocks using the triangular merger 
method next January. This will mark the first case of a foreign 
company acquiring a Japanese company by exchanging its own stocks 
for the Japanese company's Nikko shares, using the triangular merger 
method approved this May. The financial giant Citigroup's decision 
to use the triangular merger method could spur buyouts of Japanese 
companies by foreign companies. 
 
The Citigroup at present holds roughly 68 PERCENT  of Nikko stocks 
(on a voting right basis). It will transform Nikko Cordial into a 
wholly owned subsidiary through a stock swap with Nikko 
shareholders. 
 
The Nikko stocks yesterday closed at 1,462 yen, up 17 yen, on the 
Tokyo Stock Exchange, compared with the previous day. In the stock 
swap, Nikko stockholders will receive the equivalent of 1,700 yen -- 
the same value as set in the takeover bid this spring -- for each 
Nikko share. Stocks up for exchange are estimated to total 
approximately 530 billion yen. The exchange rate will be decided 
between this December and next January. 
 
18) Companies alarmed about first triangular merger: METI remains 
calm, noting it was carried out in anticipated manner 
 
ASAHI (Page 10) (Excerpts) 
October 3, 2007 
 
 
TOKYO 00004638  012 OF 012 
 
 
A triangular merger will be formed for the first time since the 
lifting of the ban on such in May. The removal of the ban on 
triangular mergers had long been put off because business circles 
were against the method out of fear of an increase in hostile merger 
bids by foreign companies. The Ministry of Economy, Trade and 
Industry (METI) has remained calm with one official noting, "The 
method will be used in an anticipated manner." However, companies 
are worried about the move. 
 
The same senior METI official said in a matter-of-fact manner, "This 
is only the first case since the approval of triangular mergers. The 
merger is within the same group. People overly made a fuss over the 
removal of the ban on triangular mergers, saying that the decision 
would pave the way for a flood of foreign companies to buy Japanese 
companies." 
 
Japanese companies had been alarmed about the removal of a ban on 
triangular mergers this May. In order to counter possible bids for 
triangular mergers, they purchased their own stocks with the aim of 
raising the value of them. They also increased cross holdings of 
stocks. 
 
According to Nomura Securities, the ratio of cross-held stocks among 
about 3,000 listed companies reached 12.0 PERCENT  in fiscal 2006, 
up 0.9 percent from the previous year, though the ratio had been on 
the decline since a survey started in fiscal 1990. 
 
In particular, the steel and paper industries, which underwent major 
reorganization last summer, made hard efforts to increase mutual 
equity holdings. Behind their effort is presumably a rising sense of 
crisis toward the removal of the ban on triangular mergers. 
 
However, there have been no triangular mergers over the past five 
months since the removal of the ban. The case this time is not based 
on a hostile merger. 
 
DONOVAN