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Viewing cable 07TOKYO5549, DAILY SUMMARY OF JAPANESE PRESS 12/13/07

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Reference ID Created Released Classification Origin
07TOKYO5549 2007-12-13 08:05 2011-08-26 00:00 UNCLASSIFIED Embassy Tokyo
VZCZCXRO0621
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #5549/01 3470805
ZNR UUUUU ZZH
P 130805Z DEC 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0269
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//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 7334
RUEHFK/AMCONSUL FUKUOKA 4938
RUEHOK/AMCONSUL OSAKA KOBE 8604
RUEHNAG/AMCONSUL NAGOYA 3667
RUEHKSO/AMCONSUL SAPPORO 5586
RUEHBJ/AMEMBASSY BEIJING 0621
RUEHUL/AMEMBASSY SEOUL 6663
RUCNDT/USMISSION USUN NEW YORK 7401
UNCLAS SECTION 01 OF 11 TOKYO 005549 
 
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 12/13/07 
 
 
Index: 
 
(1) Poll on Fukuda cabinet, political parties, MSDF refueling 
mission (Yomiuri) 
 
(2) Asahi poll: 66 PERCENT  of respondents say that regional 
economies have come to a standstill due to sharp rise in crude oil 
prices (Asahi) 
 
(3) MSDF warship depot held huge party with 250 suppliers (Akahata) 
 
(4) Former defense facilities administration bureau chief: Miyagi 
governor also used good offices when he was prefectural assemblyman 
(Akahata) 
 
(5) Future course of six-party talks: Question is whether North 
Korea will report all its nuclear programs before year's end 
(Yomiuri) 
 
(6) Steep road ahead for Japan to take initiative in environment 
diplomacy (Tokyo Shimbun) 
 
(7) Subprime loan calamity spreads: U.S. financial institutions 
likely to incur largest losses in postwar period; Idea of injection 
of public funds floated (Asahi) 
 
(8) TOP HEADLINES 
 
(9) EDITORIALS 
 
(10) Prime Minister's schedule, December 12 (Nikkei) 
 
ARTICLES: 
 
(1) Poll on Fukuda cabinet, political parties, MSDF refueling 
mission 
 
YOMIURI (Page 2) (Full) 
December 11, 2007 
 
Questions & Answers 
(Figures shown in percentage. Parentheses denote the results of a 
survey taken in November.) 
 
Q: Do you support the Fukuda cabinet? 
 
Yes 52.5 (52.2) 
No 35.3 (36.0) 
Other answers (O/A) 3.3 (3.3) 
No answer (N/A) 9.0 (8.6) 
 
Q: Which political party do you support now? Pick only one. 
 
Liberal Democratic Party (LDP) 35.3 (34.3) 
Democratic Party of Japan (DPJ or Minshuto) 17.1 (22.5) 
New Komeito (NK) 2.5 (2.7) 
Japanese Communist Party (JCP) 2.1 (2.3) 
Social Democratic Party (SDP or Shaminto) 0.8 (1.1) 
People's New Party (PNP or Kokumin Shinto) 0.3 (0.2) 
New Party Nippon (NPN or Shinto Nippon) 0.1 (0.2) 
Other political parties 0.2 (0.1) 
None 40.8 (36.0) 
 
TOKYO 00005549  002 OF 011 
 
 
N/A 
 
Q: Japan sent Maritime Self-Defense Force vessels to the Indian 
Ocean under the Antiterrorism Special Measures Law. In the Indian 
Ocean, they conducted refueling activities for vessels belonging to 
the multinational forces engaged in antiterror operations in 
Afghanistan. However, the law expired on Nov. 1. Japan has therefore 
wound up its refueling activities there. Do you support continuing 
the MSDF's refueling mission there? 
 
Yes 47.5 
No 41.1 
N/A 11.3 
 
Q: The government has now introduced a new bill to the Diet in order 
to continue the MSDF's refueling activities in the Indian Ocean. The 
new legislative measure limits the MSDF's activities in the Indian 
Ocean to fuel and water supply only. This bill does not require the 
government to ask the Diet for approval and sets the period of time 
for MSDF activities in the Indian Ocean at one year. Do you support 
this legislation? 
 
Yes 44.7 
No 42.6 
N/A 12.7 
 
Q: If this bill intended to continue the MSDF's refueling activities 
is voted down in the House of Councillors, the House of 
Representatives, in which the ruling coalition of the Liberal 
Democratic Party and New Komeito holds more than two thirds of the 
seats, can revote on it. Do you think it is appropriate to do so? 
 
Yes 42.5 
No 43.9 
N/A 13.6 
 
Q: Do you appreciate the DPJ's response in the current Diet 
session? 
 
Appreciate very much 3.6 
Appreciate somewhat 33.1 
Don't appreciate very much 41.7 
Don't appreciate at all 15.5 
N/A 6.1 
 
Polling methodology 
Date of survey: Dec. 8-9. 
Subjects of survey: 3,000 persons chosen from among all eligible 
voters throughout the country (at 250 locations on a stratified 
two-stage random sampling basis). 
Method of implementation: Door-to-door visits for face-to-face 
interviews. 
Number of valid respondents: 1,773 persons (59.1 PERCENT ). 
 
(2) Asahi poll: 66 PERCENT  of respondents say that regional 
economies have come to a standstill due to sharp rise in crude oil 
prices 
 
ASAHI (Page 1) (Full) 
December 13, 2007 
 
Asahi Shimbun carried out a survey of regional economies directed at 
 
TOKYO 00005549  003 OF 011 
 
 
business managers in 47 prefectures. Respondents who view the 
regional economies as having come to a standstill reached 66 PERCENT 
. The figure comes to 72 PERCENT , if those who replied, "Local 
economies are declining slowly" and those who said, "Local economies 
are worsening" are combined, up 24 points from the previous survey 
in June. Their perception of the economy is extremely severe, 
compared with the results of a survey of 100 leading companies 
carried out in November. The outcome indicates that high crude oil 
prices and stagnant consumption are dealing a further blow to the 
already exhausted local economies. 
 
The survey was carried out on Nov.15-30, targeting chambers of 
commerce and industry and regional banks in 47 prefectures. It was 
carried out, based on interviews with top executives, in principle, 
and 94 replied. 
 
Regarding the present state of the regional economies, 5 PERCENT  of 
pollees in the previous survey replied, "Regional economies are 
expanding." However, no such replies were made this time. The number 
of those who replied, "Local economies are gradually recovering," 
sharply dropped from 46 PERCENT  to 28 PERCENT . Pollees who 
replied, "Local economies have reached an impasse, but there are 
some signs of improvement" increased from 31 PERCENT  to 37 PERCENT 
. Those who replied, "Local economies have come to a standstill" 
increased from 15 PERCENT  to 29 PERCENT . Those who replied, "Local 
economies are slowing gradually," stood at 5 PERCENT . One percent 
replied that local economies are deteriorating. 
 
In a survey of 100 major companies carried out almost at the same 
time, pollees who replied either "The economy is expanding" or "It 
is recovering slowly" topped 60 PERCENT , though the figure dropped 
from the June survey. In comparison, more respondents in regional 
areas, where there are many mid-ranking, medium and small 
businesses, felt that the economy is slowing. The Niigata Chamber of 
Commerce and Industry president even said, "To begin with, there has 
hardly been economic recovery for small- to medium-sized businesses 
in our prefecture." 
 
If business sentiments felt in each prefecture are divided into 
three steps, the number of prefectures that see the economy 
indicating "an expansionary or recovery trend" dropped from 27 to 
ΒΆ14. The number of prefectures that see the economy "at a standstill 
or in a temporary lull" increased from 20 to 31. Business sentiments 
have improved only in Tokyo and two prefectures and deteriorated in 
18 prefectures. 
 
As future causes for concern (two replies were allowed), the largest 
number -- 53 PERCENT  -- of respondents cited "a rise in crude oil 
prices," followed by "stagnant personal consumption" given by 30 
PERCENT  and "the future of the U.S. economy," cited by 23 PERCENT . 
The results appear to have reflected the present situation where 
pressure is put on small and medium-size businesses in terms of 
income and earnings, because they are unable to pass the buck by 
raising prices. Hyakugo Bank President Maeda expressed concern, 
"Small and medium-size businesses are pressed to streamline their 
companies. Gaps between leading companies and small- and medium-size 
companies will further widen." 
 
Regarding the gap between major cities and regional areas, 94 
PERCENT  of respondents gave the reply "widening." 
 
(3) MSDF warship depot held huge party with 250 suppliers 
 
TOKYO 00005549  004 OF 011 
 
 
 
AKAHATA (Page 15) (Abridged slightly) 
December 13, 2007 
 
By military interest coverage team 
 
A former administrative vice-defense minister has been arrested on 
suspicion of taking bribes from a defense equipment trading house in 
return for giving favors. The existence of cozy relations between 
the Self-Defense Forces and their contractors is now a serious 
problem. Under such circumstances, it was found through the 
Akahata's investigation that the Maritime Self-Defense Force's 
(MSDF) warship depot (Yokosuka City, Kanagawa Prefecture) that 
repairs destroyers and submarines and procures their weapons and 
equipment had thrown a large party for their suppliers at which 
alcohol was served. 
 
The party took place on Dec. 10 at Heiankaku Yokosuka in the city of 
Yokosuka. The party started at 5:00 p.m. at a banquet hall following 
a procurement coordination liaison meeting to announce changes to 
the delivery methods that began at 3:00 p.m. The party was attended 
by representatives of 250 suppliers and some 500 SDF personnel. 
 
"We have never held such a huge party before," a depot official 
said. 
 
In front of the banquet hall, the military interest coverage team 
asked MSDF warship depot services and secretarial section chief, Lt. 
Hiroyuki Morita what was the party for. 
 
Lt. Morita explained: "Because the meeting brought together our 
suppliers, we planned the get-together party after the meeting in 
part to celebrate the depot's 90th anniversary." 
 
Lt. Morita stressed that it did not violate the SDF code of ethics 
because everyone -- the suppliers and SDF personnel alike -- paid 
5,000 yen. He declined the team's request to let them cover the 
party, saying: "There will be no speech by the depot chief; it's 
just a buffet party." 
 
Presenting their business cards, representatives of suppliers 
greeted and chatted cheerfully one after another with the uniformed 
officers lined up in the hallway. Sales representatives also 
actively exchanged information, swapping their business cards. 
 
The SDF explained that the procurement coordination liaison meeting 
was held to inform the suppliers of the changes in the procurement 
methods with the aim of correcting the problem of collusive ties 
between the SDF and the military industry that escalated into the 
arrest of the former vice-defense minister. 
 
But why have a party with suppliers? 
 
As if to exemplify improper relations with suppliers, it has just 
come to light that the commander and senior officers of the Air 
Self-Defense Force's Shariki detachment base in Aomori Prefecture 
had attended a dinner party held by a supplier. 
 
Warship depots' procurement costs are enormous. The great majority 
of the expenditures are for discretionary contracts awarded (without 
the bidding process) to major arms and military manufacturers that 
hire a good number of retired Defense Ministry officials and SDF 
 
TOKYO 00005549  005 OF 011 
 
 
officers. 
 
Defense contractor Yamada Corp., which had collusive ties with the 
former vice-defense minister, is suspected to have padded bills for 
landing crafts. 
 
A former senior MSDF officer noted: "Changing the contract system is 
aimed at removing such a collusive structure. Why was it necessary 
to hold a wining-and-dining party with suppliers by taking advantage 
of a meeting held for another purpose? Hungry for contracts, 
suppliers that received invitations never miss such events. Many 
suppliers make cash contributions when they have to miss such 
parties. Collusive ties with suppliers are now a major problem, so 
(SDF personnel) should demonstrate high morals." 
 
A Ministry of Defense official said: "We are aware that the meeting 
was held, but because the problem areas are not clear, I would like 
to refrain from making any comment." 
 
(4) Former defense facilities administration bureau chief: Miyagi 
governor also used good offices when he was prefectural assemblyman 
 
AKAHATA (Page 15) (Abridged slightly) 
December 13, 2007 
 
Former Sendai Defense Facilities Administration Bureau Director 
General Nobumasa Ota held a press conference in Tokyo on Dec. 11 
regarding allegations that lawmakers, such as Finance Minister 
Fukushiro Nukaga, used their good offices over bidding for 
construction work ordered by the former Defense Facilities 
Administration Agency. Ota said: "In 1999, a general contractor was 
introduced by Miyagi Governor Yoshihiro Murai, who was Miyagi 
prefectural assemblyman at the time." 
 
According to Ota's diary, Gov. Murai on Nov. 16, 1999, when he was 
still a prefectural assemblyman, said to Ota on the phone: "The 
chairman of the Association of General Contractors of Sendai wants 
to have some drinks with you." Murai, along with the chairman, 
called on Ota on Nov. 22, 1999. 
 
The chairman said: "Please keep the association's member companies 
in mind." He also reportedly said about the company run by him: "My 
company has not been designated (by the bureau) as a bidder over a 
dozen or so year years." 
 
Ota has a list of good offices used by lawmakers, compiled by his 
subordinate. The list has an entry saying that Gov. Murai introduced 
a contractor that day. 
 
Ota also revealed in the press conference that there had been 
telephone calls from three individuals, including a senior official 
and a former official of the then Defense Agency, and that some 
contractors were introduced to him when he met them in person. 
 
Following Ota's statement, Gov. Murai said on Dec. 11: "It is not 
just possible. I have met Mr. Ota, but I have no recollection of 
such a conversation. I am truly troubled. It's intolerable." 
 
(5) Future course of six-party talks: Question is whether North 
Korea will report all its nuclear programs before year's end 
 
YOMIURI (Page 15) (Full) 
 
TOKYO 00005549  006 OF 011 
 
 
December 12, 2007 
 
By Ichiro Ue, Yomiuri editorial writer 
 
Ichiro Ue says that the highlight of the future course of the 
six-party talks on North Korea's nuclear ambitions is whether the 
North reports its nuclear programs before the end of the year. 
 
The initial step of the implementation plan North Korea agreed in 
the six-party talks was to suspend the operations of its three 
nuclear facilities (a 5-megawatt nuclear reactor, a facility to 
reprocess spent nuclear fuel rods, and a facility to fabricate spent 
fuel rods) at Yongbyon, which is located in the northern part of 
Pyongyang. North Korea implemented this first step in July. 
 
It has been also decided in a joint document of the six-party talks, 
which was issued after the Oct. 3 round of the multinational talks 
that North Korea will disable the three nuclear facilities at 
Yongbyon and report all its nuclear programs by Dec. 31, 2007. 
 
There is a difference in the progress between the dismantlement and 
report. 
 
North Korea has steadily moved ahead with the work of disabling the 
three nuclear facilities, which started on Nov. 5 under the 
initiative of the United States. US Assistant Secretary of State 
Christopher Hill, who visited Pyongyang on Dec. 3-5, said: "The 
process has been carried out smoothly." The work of extracting and 
preserving fuel rods from the reactor will be started. 
 
However, contrary to Hill's optimistic prospect, Pyongyang has not 
presented any draft report of its nuclear programs. Hill talked 
about his meeting with North Korean Vice Foreign Minister Kim Kye 
Gwan after leaving Beijing: "There are gaps between the two sides." 
 
In negotiating with Hill, the North Korean side reportedly stressed 
its policy of taking "action for every action." It means that 
Pyongyang demanded that other member countries of the six-party 
talks give rewards in return for its effort to disable the nuclear 
facilities and to report all its nuclear programs. 
 
In return for suspending the nuclear facility operations and 
disabling the three nuclear facilities, North Korea has been 
promised that it will receive economic and energy support, such as 1 
million tons of heavy oil. Excluding Japan, which has conditioned 
its assistance for North Korea on progress in the abduction issue, 
South Korea, Russia, China and the United States are each providing 
the North with 50,000 tons of heavy oil. 
 
Pyongyang has been trying to improve relations with the U.S., aiming 
at concluding diplomatic ties with Washington, but it has shown 
reluctance to report its nuclear programs. Still, the North seeks to 
be removed from the U.S. list of states sponsoring terrorism. 
 
The U.S. aim, however, is to permanently disable the Yongbyon 
complex. The two countries have already engaged in maneuvering over 
a report on the North's nuclear programs by Dec. 31. 
 
Washington wants to have Pyongyang report all its nuclear programs, 
while hinting at a possible improvement in bilateral relations, 
which Pyongyang has long hoped for. North Korea, however, wishes to 
underreport the plutonium it has for weapons use and to keep as many 
 
TOKYO 00005549  007 OF 011 
 
 
developed nuclear weapons as possible. This is the reason that the 
North has stressed that the suspension and disablement of the 
nuclear facilities are a measure for not increasing nuclear 
weapons. 
 
U.S. Secretary of State Condoleezza Rice recently emphasized: "The 
report should be complete and accurate." Hill is also seeking to 
constrain North Korea, saying: "The report should mention not only 
the present issues but also the past nuclear activities." 
 
With a delay in the submission of the report, North Korea may try to 
make the U.S. impatient. Pyongyang presumes that the Bush 
administration will not destroy the framework of direct negotiations 
between the two countries, as long as it is enthusiastic about 
resolving North Korea's nuclear issues during its term, which will 
run out in one year. 
 
North Korea has invited the New York Philharmonic to Pyongyang next 
January and the U.S. government gave approval to the tour. The North 
appears to be trying to urge Washington to make a concession as 
early as possible by producing a mood of close relations. 
 
However, there is a doubt that the North Korea is really determined 
to completely abandon its nuclear weapons in the end. It may dream 
that it will join the international community still possessing 
nuclear weapons like India and Pakistan. The North Korean media has 
reiterated: "The issue of nuclear weapons should be discussed after 
U.S.-North Korea relations are improved." Until then, North Korea 
has no intention to abandon them. 
 
If the U.S. makes an easygoing concession to North Korea and that 
country joins the international community without abandoning its 
nuclear weapons, it will remain a threat to Japan. Japan needs to 
let the U.S. know its fears. 
 
(6) Steep road ahead for Japan to take initiative in environment 
diplomacy 
 
TOKYO SHIMBUN (Page 1) (Full) 
December 13, 2007 
 
"Japan is willing to positively contribute to resolving environment 
issues in the region by making use of its state-of-the-art 
technology. Japan is in the position of leading the world (in the 
environmental area)." Prime Minister Yasuo Fukuda proudly made this 
statement in the East Asia Summit in Singapore on Nov. 21. He then 
outlined Japan's support measures to protect the environment for 
East Asian countries, centering on financial disbursements. 
 
Cooperation from rapidly emerging countries in Asia is indispensable 
in adopting a post-Kyoto framework that involves all countries. The 
Japanese government envisions a scenario in which Japan would play 
up its presence in Asia and take the initiative in international 
negotiations that include the United States and China, both of which 
are large emitters of global warming gases. 
 
Prime Minister Fukuda has taken over the "Initiative to Cool Earth 
50" advocated by former Prime Minister Shinzo Abe and has deemed the 
issue of global warming as a key theme for his administration. The 
prime minister set up the post of special advisor to the cabinet for 
climate change issues this month and awarded the post to former 
Ambassador in Charge of Global Environmental Problems Mutsuyoshi 
 
TOKYO 00005549  008 OF 011 
 
 
Nishimura, demonstrating his determination to address environmental 
issues under the lead of the Prime Minister's Official. 
 
Such efforts by Fukuda reflect his desire to exercise leadership at 
the major summit conference (Lake Toya Summit in Hokkaido) next 
summer, in which global warming will be high on the agenda. He also 
aims to underscore achievements in the Summit by issuing a message 
agreed by all industrialized countries. 
 
Even so, it has been exposed at the ongoing 13th session of the 
Conference of the Parties (COP13) to the United Nations Framework 
Convention on Climate Change that there are wide perception gaps 
over a post-Kyoto framework among participant countries. Japan takes 
a neutral stance, so it volunteered to serve as a coordinator. But a 
government source responsible for negotiations said: "A coordinator 
will be made a victim of bullying," because of the wide gaps. 
 
Japan is required to reduce greenhouse gas missions by 6 PERCENT 
from 1990 levels under the Kyoto Protocol. In fiscal 2006, though, 
Japan discharged 1,341 million tons of gases, up 6.4 PERCENT  from 
fiscal 1990 levels as a result of increases in gas emissions from 
households and offices. 
 
The government has decided to revamp its plan to attain the goal 
this October and to come up with a revised version next March. But 
many companies are negative about proposed further efforts. A senior 
Foreign Ministry official grumbled: "Unless prospects are developed 
for Japan to meet its gas-reduction target, it will be impossible to 
propose a framework superior to the Kyoto Protocol." 
 
The current unstable political situation caused by the ruling camp's 
crushing defeat in the House of Councillors election in July is 
casting a pall over Japan's efforts. Although the government had 
decided that a new prime minister would deliver a speech in a United 
Nations high-level meeting on climate changes held in New York in 
September, since the Liberal Democratic Party presidential election 
and the meeting were on the same day, former Prime Minister Yoshiro 
Mori attended the meeting. The political situation is expected to be 
unstable in the future. If the prime minister is preoccupied with 
domestic affairs, he will be given no chance to demonstrate his 
policy imprint in the environment area. 
 
A steep path lies ahead for the prime minister, dogged by troubles 
both at home and abroad, to assume leadership in environmental 
diplomacy. 
 
(7) Subprime loan calamity spreads: U.S. financial institutions 
likely to incur largest losses in postwar period; Idea of injection 
of public funds floated 
 
ASAHI (Page 3) (Excerpts) 
December 13, 2007 
 
No prospects are in sight for settling the issue of unrecoverable 
subprime housing loans extended to people on low incomes. In an 
unprecedented move, five central banks of the U.S. and Europe 
announced on Dec. 12 a plan to inject in concert a large sum of 
capital into the market. Fluctuations in the financial markets are 
also linked to the soaring price of oil. There exists a serious 
dilemma of inflation and low growth battering the world economy. 
 
Sharp rise in prices of resources due to inflow of speculative 
 
TOKYO 00005549  009 OF 011 
 
 
funds: Japanese economy hard hit 
 
The subprime crisis is shaking not only the U.S. but also the world 
economy. Financial institutions in many countries have incurred 
losses due to investment in securitized loans. The crisis has 
ruptured the global flow of capital. The value of US stocks dropped 
significantly last month. Crude oil prices are now at 100 dollars 
(per barrel) for the first time. Soy bean futures have surged to a 
34-year high. The price of gold, which has been regarded as a stable 
asset for 28 years, has risen to a new high. 
 
The unanimous view of market insiders is that an influx of a large 
amount of speculative funds, such as hedge funds, has entered the 
market. Hedge funds, having incurred losses due to the confusion in 
the financial market, seem to have activated commodity investments, 
expecting benefits from rising prices. 
 
Sharp rises in resource prices will have a major impact on the 
Japanese economy. The over-the-counter price of regular gasoline 
(national average as of Dec. 10) was 155.5 per liter, up about 26 
yen since April. The consumer price index (excluding perishable 
foods) for October rose 0.1 point, compared with the previous year, 
for the first time in 10 months. There is an observation that the 
index would increase 0.7 points by next spring. 
 
Small and medium-size businesses, which employ 70 PERCENT  of 
persons in employment, prefer to cut wages, finding it impossible to 
raise the prices of their goods and services, according to the 
Economist. The subprime crisis could deal a double whammy to the 
family budget if retail prices are hiked and wages cut. 
 
A trend to move away from the dollar will also accelerate. 
Export-oriented companies have been booming. However, there is now 
concern that their earnings could deteriorate. The Organization for 
Economic Cooperation and Development (OECD) yesterday lowered 
estimates for Japan's economic growth for 2007 and 2008 by 0.5 
PERCENT  to 1.9 PERCENT  and 1.6 PERCENT  respectively from its May 
projection. 
 
(8) TOP HEADLINES 
 
Asahi, Mainichi, Nikkei & Tokyo Shimbun: 
Five U.S., European central banks to take joint steps to fight 
subprime problem by providing funds 
 
Yomiuri: 
MSDF officer to be arrested today for alleged leak of Aegis ship 
data 
 
Sankei: 
Social Insurance Agency finds 571 unidentified accounts whose 
holders were confirmed owing to receipts despite no records 
 
Akahata: 
Abolish new antiterrorism bill 
 
(9) EDITORIALS 
 
Asahi: 
(1) What are you going to do about pension fiasco, Mr. Masuzoe? 
(2) Ruling by Tokyo High Court in case of distributing JCP leaflets 
beyond common sense 
 
TOKYO 00005549  010 OF 011 
 
 
 
Mainichi: 
(1) DPJ should submit own bill to counter new antiterrorism bill to 
maintain civilian control 
(2) Distribution of leaflets: Greater ingenuity necessary to protect 
freedom of expression 
 
Yomiuri: 
(1) Federal rate cut: Uncertainty still looming over markets 
(2) More practical measures needed to rectify regional tax income 
differences 
 
Nikkei: 
(1) Make utmost efforts to trace unidentified pension accounts 
(2) U.S. monetary policy still on tight rope 
 
Sankei: 
(1) Strange plot of change of government in Russia 
(2) Politicians must make apology for pension mess 
 
Tokyo Shimbun: 
(1) Government's responsibility serious for violating pledge on 
pension mess 
(2) Guilty verdict in leaflets-distribution case cannot be 
overlooked 
 
Akahata: 
(1) A-bomb disease recognition study group: Why don't you listen to 
cries by victims? 
 
(10) Prime Minister's schedule, December 12 
 
NIKKEI (Page 2) (Full) 
December 13, 2007 
 
08:18 
Attended at Kantei oversea economic cooperation meeting. 
 
09:30 
Met with METI Vice Minister Kitabata, Natural Resources and Energy 
Agency chief Mochizuki and METI Industrial Science and Technology 
Policy and Environment Bureau chief Ishida. 
 
10:26 
Met with Cabinet Office Vice Minister Uchida and Quality-of-Life 
Policy Bureau chief Nishi. Met afterwards with Science and 
Technology Minister Kishida and Science, Technology Policy Council 
member Masuo Aizawa, and Assistant Deputy Chief Cabinet Secretary 
Saka, followed by Minister of People's Life Kishida. Met with LDP 
Election Committee Chairman Koga and Vice Chairman Suga. 
 
14:26 
Met with Asian and Oceanian Affairs Bureau chief Sasae, followed by 
former LDP Secretary General Nakagawa. 
 
15:28 
Met with NKK Line Honorary Chairman Jiro Nemoto, followed by Finance 
Minister Nukaga, Vice Finance Minister Tsuda, Budget Bureau chief 
Sugimoto, and Financial Bureau chief Katsu. 
 
16:29 
Minister in charge of Declining Birthrate Kawakami. Met later with 
 
TOKYO 00005549  011 OF 011 
 
 
Aichi Gov. Kanda. 
 
17:10 
Vice Agriculture Minister Shirasu, followed by Deputy Chief Cabinet 
Secretary Futahashi. 
 
SIPDIS 
 
19:16 
Returned to his private residence in Nozawa. 
 
SCHIEFFER