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RUCNDT/USMISSION USUN NEW YORK 7868

UNCLAS SECTION 01 OF 17 TOKYO 000134 
 
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 01/17/08 
 
INDEX: 
 
(1) Poll on Fukuda cabinet, political parties, new antiterror law 
(Yomiuri) 
 
(2) Poll on Fukuda cabinet, political parties, MSDF refueling 
mission (Sankei) 
 
(3) DPJ enjoys high support rating despite its blunders; People pin 
hopes on the party being better than others (Tokyo Shimbun) 
 
(4) Overheated row over gasoline tax between LDP and DPJ (Asahi) 
 
(5) No criticism against Ozawa raised in DPJ in order to win Lower 
House race; Ozawa instead strengthens self-confidence (Sankei) 
 
(6) Sapporo to call for self-restraint on events at three parks 
before and after Lake Toya Summit, as security measure against 
violence or terrorist acts (Mainichi) 
 
(7) Australia's new government intensifies antiwhaling position, 
urges Japan to stop killing whales (Tokyo Shimbun) 
 
(8) Kisha no Me (Reporter's eye) column by Nakae Ueno: Okinawa faces 
contradictions between U.S. bases and economic packages (Mainichi) 
 
(9) Editorial: Bring about growth with M&As that can turn change 
into opportunity (Nikkei) 
 
ARTICLES: 
 
(1) Poll on Fukuda cabinet, political parties, new antiterror law 
 
YOMIURI (Page 2) (Full) 
January 16, 2008 
 
Questions & Answers 
(Figures shown in percentage. Parentheses denote the results of a 
survey taken in December last year.) 
 
Q: Do you support the Fukuda cabinet? 
 
Yes 45.6 (52.5) 
No 41.6 (35.3) 
Other answers (O/A) 3.5 (3.3) 
No answer (N/A) 9.3 (9.0) 
 
Q: Which political party do you support now? Pick only one. 
 
Liberal Democratic Party (LDP) 35.5 (35.3) 
Democratic Party of Japan (DPJ or Minshuto) 16.9 (17.1) 
New Komeito (NK) 2.2 (2.5) 
Japanese Communist Party (JCP) 2.3 (2.1) 
Social Democratic Party (SDP or Shaminto) 1.0 (0.8) 
People's New Party (PNP or Kokumin Shinto) 0.2 (0.3) 
New Party Nippon (NPN or Shinto Nippon) --- (0.1) 
Other political parties --- (0.2) 
None 40.7 (40.8) 
N/A 1.3 (0.7) 
 
Q: The Diet has now enacted a new antiterror law to resume the 
Maritime Self-Defense Force's refueling activities in the Indian 
 
TOKYO 00000134  002 OF 017 
 
 
Ocean for naval vessels belonging to multinational forces engaging 
in antiterror operations in Afghanistan. Do you appreciate this 
legislation? 
 
Appreciate very much 16.1 
Appreciate somewhat 31.3 
Don't appreciate very much 26.1 
Don't appreciate at all 17.8 
N/A 8.8 
 
Q: The new antiterror law was enacted in a second vote of the House 
of Representatives after it was voted down in the House of 
Councillors. Do you think it was appropriate? 
 
Yes 41.4 
No 45.7 
N/A 12.9 
 
Q: On the issue of pension record-keeping flaws, the government 
promised to check about 50 million unaccounted-for pension records 
for benefit payments to all. Late last year, however, the government 
admitted that it would be difficult to identify all. Do you think 
this is a breach of public pledge? 
 
Yes 54.8 
No 40.5 
N/A 4.7 
 
Q: Prime Minister Fukuda announced that the government would provide 
across-the-board relief to all hepatitis C victims of 
government-approved blood products over their class action lawsuits 
against the government, and the Diet has now enacted a law for that 
purpose. Do you appreciate Prime Minister Fukuda for his response to 
this issue on the whole? 
 
Appreciate very much 38.0 
Appreciate somewhat 43.5 
Don't appreciate very much 11.8 
Don't appreciate at all 4.0 
N/A 2.7 
 
Q: Currently, gasoline prices include a tax for roads in conformity 
with a law. This law is due to expire at the end of March this year. 
If the tax is not added thereafter, gasoline prices will go down. 
However, the government and local public entities will fall into a 
substantial shortfall of revenues for their budgets. Do you think it 
would be better to continue this tax by extending the law, or do you 
otherwise think it would be better to discontinue the tax? 
 
Continue 29.9 
Discontinue 61.1 
N/A 9.0 
 
Q: Prime Minister Fukuda visited China late last year and met with 
Chinese leaders, including President Hu Jintao. Do you appreciate 
his China visit this time on the whole? 
 
Appreciate very much 23.4 
Appreciate somewhat 41.2 
Don't appreciate very much 20.2 
Don't appreciate at all 7.1 
N/A 8.1 
 
TOKYO 00000134  003 OF 017 
 
 
 
Q: Do you appreciate the DPJ's response in the current Diet session 
on the whole? 
 
Appreciate very much 5.7 
Appreciate somewhat 28.2 
Don't appreciate very much 41.5 
Don't appreciate at all 17.2 
N/A 7.3 
 
Q: Do you think the DPJ is competent to take office? 
 
Yes 29.2 
No 59.8 
N/A 11.0 
 
Q: When would you like the House of Representatives to be dissolved 
for a general election? Pick only one from among those listed 
below. 
 
As early as possible 19.6 
In the spring of this year 9.3 
After this July's G-8 summit 22.2 
Within this year 18.0 
Sometime during the current term up until September 2009 22.2 
N/A 8.7 
 
Q: If an election were to be held now for the House of 
Representatives, which political party would you like to vote for in 
your proportional representation bloc? Pick only one from among 
those listed below. 
 
LDP 34.7 
DPJ 22.2 
NK 2.7 
JCP 3.0 
SDP 1.5 
PNP 0.5 
NPN --- 
Other political parties --- 
Undecided 34.4 
N/A 0.9 
 
Polling methodology 
Date of survey: Jan. 12-13. 
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: 1,780 persons (59.3 PERCENT ). 
 
(2) Poll on Fukuda cabinet, political parties, MSDF refueling 
mission 
 
SANKEI (Page 5) (Full) 
January 16, 2008 
 
Questions & Answers 
(Figures shown in percentage, rounded off.) 
 
Q: Do you support the Fukuda cabinet? 
 
TOKYO 00000134  004 OF 017 
 
 
 
Yes 36.6 (41.1) 
No 47.3 (40.3) 
Don't know (D/K) + Can't say which (CSW) 16.1 (18.6) 
 
Q: Which political party do you support? 
 
Liberal Democratic Party (LDP) 32.1 (32.2) 
Democratic Party of Japan (DPJ or Minshuto) 25.0 (26.5) 
New Komeito (NK) 4.0 (3.6) 
Japanese Communist Party (JCP) 3.5 (3.1) 
Social Democratic Party (SDP or Shaminto) 2.1 (2.6) 
People's New Party (PNP or Kokumin Shinto) 0.6 (0.7) 
New Party Nippon (NPN or Shinto Nippon) 0.3 (0.1) 
Other answers (O/A) 0.9 (1.3) 
None 30.6 (28.2) 
D/K + Can't say (C/S) 0.9 (1.7) 
 
Q: Do you appreciate Prime Minister Fukuda and his government on the 
following points? 
 
His personal character 
Yes 58.0 (62.3) 
No 33.4 (22.6) 
D/K+CSW 8.6 (15.1) 
 
His leadership 
Yes 24.4 (28.5) 
No 62.7 (43.1) 
D/K+CSW 12.9 (28.4) 
 
Foreign policy 
Yes 30.9 
No 48.8 
D/K+CSW 20.3 
 
Economic policy 
Yes 17.0 
No 64.7 
D/K+CSW 18.3 
 
North Korea policy 
Yes 14.0 (15.5) 
No 70.2 (60.3) 
D/K+CSW 15.8 (24.2) 
 
Response to Defense Ministry scandals 
Yes 17.5 (13.3) 
No 73.2 (66.9) 
D/K+CSW 9.3 (19.8) 
 
Response to pension issues 
Yes 28.0 (31.2) 
No 64.0 (53.9) 
D/K+CSW 8.0 (14.9) 
 
Response to hepatitis C infections 
Yes 74.1 (43.5) 
No 20.1 (37.5) 
D/K+CSW 5.8 (19.0) 
 
Q: What do you think about those listed below in connection with the 
 
TOKYO 00000134  005 OF 017 
 
 
newly enacted antiterrorism law intended to resume the Maritime 
Self-Defense Force's refueling mission for multinational forces in 
the Indian Ocean? 
 
The new antiterror law was enacted 
Good 45.1 
Questionable 43.8 
D/K+CSW 11.1 
 
The Diet took time to deliberate, and the MSDF pulled out 
Good 52.5 
Questionable 35.2 
D/K+CSW 12.3 
 
The opposition-dominated upper chamber took time to deliberate 
Good 48.8 
Questionable 42.0 
D/K+CSW 9.2 
 
The ruling parties took a second vote in the lower chamber with a 
majority of two-thirds 
Good 39.4 
Questionable 48.4 
D/K+CSW 12.2 
 
DPJ President Ozawa abstained from voting in the lower chamber's 
last plenary sitting 
Good 12.1 
Questionable 77.0 
D/K+CSW 10.9 
 
Q: The ruling coalition holds a majority of the seats in the House 
of Representatives, and the opposition bench dominates the House of 
Councillors. What do you think about this lopsidedness in the Diet? 
Pick only one from among those listed below. 
 
That's good because there's political tension 13.8 (13.9) 
The ruling and opposition parties should compromise 40.1 (41.3) 
The House of Representatives should be dissolved at an early date 
for a general election 43.7 (41.3) 
DK+C/S 2.4 (3.5) 
 
Q: Do you support a "grand coalition" of the LDP and the DPJ? 
 
Yes 33.7 
No 54.6 
D/K+CSW 11.7 
 
 
Q: The Fukuda cabinet has taken over almost all of the former Abe 
cabinet's ministers. Do you think the Fukuda cabinet should be 
shuffled substantially at an early date? 
 
Yes 44.0 (41.1) 
No 51.1 (49.2) 
D/K+CSW 4.9 (9.7) 
 
Q: When would you like the House of Representatives to hold its next 
election? 
 
During the first half of this year 23.6 (35.8) 
After this July's G-8 summit in Japan and during the latter half of 
 
TOKYO 00000134  006 OF 017 
 
 
this year 45.9 (29.9) 
Upon the current term's expiry or early next year 29.0 (19.9) 
D/K+C/S 1.5 (4.8) 
 
Q: Which political party's candidate would you like to vote for in 
the next election for the House of Representatives? 
 
LDP 34.4 
DPJ 33.9 
NK 4.1 
JCP 3.9 
SDP 2.6 
PNP 0.5 
NPN 0.3 
O/A 9.2 
D/K+C/S 11.1 
 
Q: What form of government would you like to see after the next 
election for the House of Representatives? 
 
LDP-led coalition government 28.5 (29.7) 
DPJ-led coalition government 32.5 (32.1) 
LDP-DPJ grand coalition 34.4 (29.3) 
D/K+C/S 4.6 (8.9) 
 
 
Q: How long do you think the Fukuda government will continue? 
 
Until around the next election for the House of Representatives 46.7 
(56.2) 
Until the fall of next year 34.0 (21.9) 
Continue until after the fall of next year 15.8 (10.3) 
D/K+C/S 3.5 (6.9) 
 
Q: A gasoline tax law is due to expire this spring. What do you 
think about this? 
 
Extend the gasoline tax for local traffic networks 28.6 
Abolish the gasoline tax in view of rising oil prices and other 
circumstances 66.2 
D/K+C/S 5.2 
 
(Note) Figures in parentheses denote the results of the last survey 
conducted Nov. 10-11 last year. 
 
Polling methodology: The survey was conducted Jan. 13-14 by the 
Sankei Shimbun and Fuji News Network (FNN) over the telephone on a 
computer-aided random digit dialing (RDD) basis. For the survey, a 
total of 1,000 persons were sampled from among males and females, 
aged 20 and over, across the nation. 
 
(3) DPJ enjoys high support rating despite its blunders; People pin 
hopes on the party being better than others 
 
TOKYO SHIMBUN (Page 2) (Abridged) 
January 17, 2008 
 
The major opposition Democratic Party of Japan (DPJ or Minshuto) 
held a convention yesterday in which it adopted an action program 
for 2008 specifying that the party will aim at achieving an Ichiro 
Ozawa administration. In various opinion polls, the party's support 
rates have been high since the House of Councillors election last 
 
TOKYO 00000134  007 OF 017 
 
 
July. If a House of Representative election is held this year, the 
10th anniversary of the establishment of the DPJ, the party might 
win and assume power despite its blunders. Why? 
 
The DPJ's support rates in the past often fluctuated a around the 10 
PERCENT  level. Rates occasionally topped the 20 PERCENT  line 
following the party's leaps in national elections, but they always 
retuned to the usual low level in just several months. 
 
The party's support rate marked a record 37.6 PERCENT  immediately 
after last year's Upper House election. In a poll in mid-January, 
nearly six months after the previous election, the party scored 27.0 
PERCENT , only 5 points behind the Liberal Democratic Party (LDP). 
Given a series of blunders by the DPJ during that period, including 
Ozawa's resignation fiasco, this phenomenon seems mysterious. 
 
One plausible explanation is that people may now think the DPJ is 
better than the LDP that has been taking the wrong steps. 
 
Despite the ruling coalition's crushing defeat in the Upper House 
election, former Prime Minister Shinzo Abe announced that he would 
stay in office, but he soon resigned from the post at the beginning 
of the previous extraordinary Diet session. Chief Cabinet Secretary 
Nobutaka Machimura and others offered improper explanations about 
pension-record mismanagement, drawing heavy fire. A senior DPJ Upper 
House member noted: "People are increasingly distrustful of the 
government because of the pension fiasco. They think that management 
by the current administration is so sloppy that they are willing to 
accept (an administration) by any other party." 
 
High approval ratings seem to be connected to some extent with the 
increased presence of the DPJ, which has become the largest party in 
the Upper House. Being a relatively young party, the DPJ was 
occasionally mistaken for the former Democratic Socialist Party in 
rural areas. The Upper House election has transformed the DPJ into a 
party holding the key to the enactment of bills. 
 
It is certain that the DPJ's popularity comes from growing public 
interest in politics due to the divided Diet where the ruling bloc 
no longer holds absolute numerical superiority. 
 
The public also has a keen sense of urgency because of growing 
socioeconomic disparities and other factors. 
 
Today's data are far more serious than those when the Hosokawa 
non-LDP coalition cabinet was established in August 1993. At 
present, one out of three is a nonpermanent employee and is not 
paying into the National Pension Plan. National and local debts have 
also ballooned. 
 
Feeling anxious about the future, people seem to be willing to let 
the DPJ run the government for a change. "Voters have greater 
expectations for regime change than us," a mid-level DPJ member 
said. 
 
The DPJ, however, has passed up opportunities to take over the reins 
of government over the last several years. At the party convention, 
Ozawa declared that he will stake his political life on the next 
Lower House election. 
 
Interview with Masaki Taniguchi, associate professor at the 
University of Tokyo 
 
TOKYO 00000134  008 OF 017 
 
 
 
The Tokyo Shimbun asked Masaki Taniguchi, a University of Tokyo 
associate professor of modern Japanese politics, why the DPJ has 
been able to enjoy high support rates since the Upper House election 
last summer. 
 
For one thing, the LDP has been sloppy. The party has yet to come up 
with a plan to build a solid socioeconomic system since suffering a 
crushing defeat in the Upper House election last summer. Although 
the Fukuda cabinet seemingly wants to win greater public support by 
implementing specific policies, there have been noticeable delays 
and failures. Public opinion is that the DPJ is better than the 
LDP. 
 
The DPJ's plan to provide the child allowance of 26,000 yen per 
month is a policy of interest to urban areas with dropping 
birthrates. A plan to implement an income-subsidy system for farmers 
is appealing to local districts, and another plan to reform the 
pension system is a policy of interest to a wide range of people 
from the young to elderly. The DPJ has been more skillful to play up 
its livelihood-oriented policies than the LDP. It seems easy to find 
reasons to support the DPJ. 
 
The DPJ's shift toward bread-and-butter policies under the 
leadership of Ichiro Ozawa seems to have struck a chord with general 
voters. 
 
But in terms of foreign and security policies, the gap between DPJ 
supporters and its lawmakers is bigger than that of other parties. 
The party has put some policies on the back burner because views in 
the party are diverse. When that part comes under close scrutiny, 
some might initiate a "political realignment game" in the capitol 
district of Nagatacho irrespective of public expectations. 
 
(4) Overheated row over gasoline tax between LDP and DPJ 
 
ASAHI (Page 2) (Slightly abridged) 
January 17, 2007 
 
The Democratic Party of Japan (DPJ) held its annual convention 
yesterday, in which President Ozawa defined the upcoming regular 
Diet session as a session that will focus on the challenge of 
lowering gasoline prices. He stressed his resolve to block the 
government's plan to maintain the provisionally high tax rate on 
gasoline. If related bills are not passed by the time of its 
expiration in late March, gasoline prices will be lowered. Given 
that the gasoline issue is directly linked to family finances, the 
government and the ruling camp, out of a sense of alarm, emphasize 
that (if gasoline prices come down,) local governments will suffer 
revenue shortages and their finances will eventually be thrown into 
confusion. Industrial circles concerned are also worried about the 
overheated showdown over the gasoline issue. 
 
"Now that the rises in gasoline and light oil prices are hitting the 
people's lives, we must step up efforts in the Diet to scrap the 
current provisional tax rate on gasoline, demonstrating our efforts 
to the people. We must lower the current gasoline prices by 25 yen 
(per liter)." 
 
In the party convention in Yokohama, Ozawa positioned the regular 
Diet session as the first step toward a general election and 
stressed his enthusiasm to break the vested-interest structure over 
 
TOKYO 00000134  009 OF 017 
 
 
financial resources for road construction. Ozawa expects it will be 
possible to obtain public understanding because gasoline rates are 
part of living expenses. The Social Democratic Party (SDP) also 
decided to call for abolishing the provisional gasoline tax rate. 
With the Japanese Communist Party also joining them, the opposition 
bloc now locks arms against the government's plan. 
 
Under the DPJ's plot, the party would prolong deliberations in the 
House of Representatives on a bill amending the tax special measures 
law, which includes a measure to extend the provisional tax rate 
beyond its expiration, up until early March and have the bill 
expired in the House of Councillors. If the ruling camp resorts to 
its two-thirds overriding vote in the Lower House, the opposition 
camp will adopt a censure motion against the prime minister in the 
Upper House, calling on the government to dissolve the Lower house 
while boycotting deliberations "with an indomitable resolve," as 
said by Diet Affairs Committee Chairman Kenji Yamaoka. 
 
In a meeting of the national LDP secretaries generals held at party 
headquarters yesterday, the secretary general of the Wakayama 
Prefectural Chapter commented: "We want the government to make more 
efforts to explain that the extension of the provisional gasoline 
tax rate will be better for local people's lives. Our party is 
behind the DPJ over this issue." 
 
Reflecting such voices, the LDP leadership has drawn up a rollback 
strategy. The leadership distributed to lawmakers materials 
detailing that the abolishment of the provisional tax rate will 
inevitably deal a blow to local finances and people's lives, with a 
list of the expected amount of financial shortages to be accrued for 
each local government. Deputy Secretary General Hiroyuki Hosoda 
said: "Is it possible to win DPJ members in prefectural chapters 
over to our side? We expect you to make efforts to persuade local 
opposition members to be against the plan of lowering gasoline 
prices." 
 
LDP prefectural assemblies' members will hold a rally on Jan. 23 to 
call for maintaining the provisional tax rate. About 20 
DPJ-affiliated prefectural assembly members and DPJ lawmakers, 
including House of Councillors member Yasuhiro, are also expected to 
participate in the rally. 
 
Concern is also growing in the DPJ. In the party convention 
yesterday, a representative from the Aomori Prefectural Chapter 
complained: "Local government heads are taking lead in preparing to 
attack the DPJ, out of the dissatisfaction that it will be 
impossible to construct roads and to use snowplows. I hope the party 
leadership will give a full explanation on its policy." 
 
Both ruling and opposition camps are concerned about public opinion. 
In a speech in front of JR Sakuragi-cho Station in Yokohama City 
after the party convention, DPJ Deputy President Naoto Kan 
emphasized: "Public power is indispensable. I want you to stage 
citizens' campaign to prevent the ruling bloc from using an override 
vote in the Lower House. 
 
(5) No criticism against Ozawa raised in DPJ in order to win Lower 
House race; Ozawa instead strengthens self-confidence 
 
SANKEI (Page 5) (Full) 
January 17, 2008 
 
 
TOKYO 00000134  010 OF 017 
 
 
The main opposition Democratic Party of Japan (DPJ or Minshuto) 
stressed in its annual convention yesterday a policy of forcing 
Prime Minister Yasuo Fukuda to dissolve the House of Representatives 
as early as possible. Advocating its determination to scrap the 
provisional gasoline tax, the DPJ is expected to turn up the heat on 
the government of Prime Minister Yasuo Fukuda with such issues as 
the government's mishandling of pension premium payment records. 
Diet Affairs Committee Chairman Kenji Yamaoka stated in a street 
corner speech that the DPJ would present a censure motion against 
the Prime Minister if the ruling coalition takes a lower chamber 
override vote on annual revenue-related bills to maintain the 
provisional tax rates. In the annual convention, however, no 
criticism was raised against President Ichiro Ozawa's dogmatic acts. 
This appears to be the weakness of the DPJ, which relies on Ozawa's 
political power. 
 
When asked in a press conference after the convention about 
criticism against his conduct of having left the plenary session on 
Jan. 11 of the Lower House, Ozawa responded in a strong tone: "I 
promised from before to go to Osaka to support the gubernatorial 
campaign. As party head, I make my own priorities about my own 
duties." He rebutted with his argument mixed up the official duties 
of cabinet ministers and party duties: "The prime minister and state 
ministers do not attend all plenary sessions, do they? Why do you 
criticize me but not them?" 
 
In the DPJ there was a view critical about Ozawa's abstention from 
voting. Some DPJ members were perplexed at his act. Concerned about 
more criticism of Ozawa coming up, Secretary General Yukio Hatoyama 
and other senior party members apologized on behalf of Ozawa. In the 
press briefing, Ozawa bluntly said, "I don't know what the secretary 
general talked about." 
 
It seems that the fact that there was no view criticizing Ozawa in 
the convention is one of the reasons Ozawa has bolstered his 
self-confidence. 
 
A veteran lawmaker explained: "In a bid to win the Lower House 
election, the DPJ has to rely on Ozawa's political power. It is not 
time to criticize him." The said lawmaker made this comment: "The 
political dynamics that is the same as the one in the internal 
uproar last November over Ozawa's on again off again resignation is 
now operating." 
 
There were DPJ members who expressed dissatisfaction to reporters. 
The party executives intend to conduct soon an opinion poll in all 
the Lower House single-seat districts. Election Campaign Committee 
Hirotaka Akamatsu said: "(Looking at the results of the survey) we 
may change candidates." This appears to become one of the reasons 
for preventing DPJ members from criticizing Ozawa. 
 
The DPJ considers March the best chance to force the Fukuda 
government to dissolve the Lower House to call a snap general 
election because the annual revenue-related bills on the provisional 
tax rates, including the gasoline tax, are set to expire at the end 
of March. 
 
The government and ruling parties initially pledged to complete the 
work of matching pension accounts that remain unidentified by the 
end of March as well. Therefore, the DPJ intends to force Fukuda 
dissolve the Lower House around that time. 
 
 
TOKYO 00000134  011 OF 017 
 
 
Yesterday after the annual convention, a group of junior and 
mid-level lawmakers calling for reducing the gasoline prices, which 
was formed on Jan. 15, gave street corner speeches in front of JR 
Sakuragicho Station in Yokohama. 
 
Among regional organizations of the DPJ and local assembly members, 
there still remains a view cautious about abolishing the provisional 
tax rates as they are concerned that road projects will be delayed. 
 
Another issue remains unsolved is to form a coalition of opposition 
parties. The opposition camp failed to reach a consensus over how 
their response to the new antiterrorism special measures bill in the 
latest extraordinary Diet session. If a similar thing happens, "We 
will be unable to force the Prime Minister to dissolve the Lower 
House for a general election in March; as a result, we may have to 
act on the defensive," said a senior member. The DPJ is in financial 
difficulty, with Financial Committee Chair Taisuke Sato saying, 
"Although the leadership says funds should be mainly allocated to 
the election campaign, our party has a shortage of money. We will 
collect the deeds of the houses of senior party members to get 
loans." There are a number of hurdles for the DPJ to overcome before 
taking over power. 
 
(6) Sapporo to call for self-restraint on events at three parks 
before and after Lake Toya Summit, as security measure against 
violence or terrorist acts 
 
MAINICHI online (Full) 
January 12, 2008 
 
The Sapporo municipal government announced on Jan. 11 that if 
applications are filed for events planned at Odori, Nakajima, or 
Maruyama parks in Chuo Ward during the July 1-11 period, before and 
after the Lake Toya Summit, the government will ask their sponsors 
to cancel the events themselves or to change the places or times. 
This measure stems from the fear that events in the central part of 
the city may lead to violence or terrorist acts. The municipal 
government explains that this is not a regulation but a request. 
However, non-government organizations (NGOs) and civic groups, 
taking the measure as a move to restrict gatherings and speech, 
asked the city not to restrict the use of "parks open to the 
citizens." 
 
An official of the city's administrative division said: "This is a 
measure giving top priority to the safety of the citizens. Ordinary 
gatherings will not be subject to the measure." Sapporo has in mind 
the Heiligendamm Summit, at which a large-scale demonstration was 
staged in the area and many people were injured or arrested in 
clashes between police and demonstrators. 
 
The city explains that if an application is filed after the issuance 
of a request and if it is judged the planned event would not bother 
other people, based on the city ordinance on parks, the city would 
give permission. Even so, there are no definite standards. For 
gatherings or demonstrations in the three parks, permission from the 
municipal government is needed. Given this, NGOs are concerned that 
the city's move might become a regulatory measure in effect. 
Representative Koji Akiyama of the G-8 Summit Civic Forum Hokkaido, 
which has already applied for permission, complained: "It is 
excessive to restrict the use of the parks that should be opened to 
the public." 
 
 
TOKYO 00000134  012 OF 017 
 
 
Free PMF concert canceled 
 
The municipal government has decided to cancel the annual Odori Park 
concert, a free concert as part of the international education music 
festival scheduled for July 6. Regarding a flower festival, the 
Sapporo summer festival, the creation of a flower garden, and a flea 
market to be held at Odori Park, as well, coordination is underway 
to delay the dates. 
 
(7) Australia's new government intensifies antiwhaling position, 
urges Japan to stop killing whales 
 
TOKYO SHIMBUN (Page 6) (Full) 
January 16, 2008 
 
Michio Yoshieda, Manila 
 
The Australian Labor Party-led government, which was established in 
last December, is bolstering its antiwhaling position by mobilizing 
patrol boats to watch Japanese research whaling vessels. When the 
new government was formed, it committed itself to implementing 
hard-line policies. Perhaps because of this stance, it has behaved 
in a way quite different from its predecessor government. Yesterday, 
antiwhaling activists including one Australian from an environmental 
protection organization created a commotion by jumping aboard a 
Japanese research whaling vessel on the high seas. 
 
"The Australian government will formally urge Japan to stop killing 
whales." Both Foreign Minister Smith and Environment Minister 
Garrett of the Rudd government made this remark last December, when 
they described Japan's research whaling as a meaningless and cruel 
act. The two ministers declared they would put all their efforts 
into preventing whaling. 
 
In Australia, whales are considered a symbol of environmental 
protection, so opposition against whaling is deep-seated among the 
people. The former Howard administration, mainly consisting of 
members of the Liberal Party, was also opposed to whaling, but the 
Labor Party in its election campaign criticized the Howard 
government as being lenient on whaling and declared it would be 
ready to send naval vessels to track the Japanese whaling fleet. The 
Labor Party also announced it would conduct monitoring when a new 
government was launched. 
 
Monitoring includes watching research whaling by patrol boats and 
air planes, reinforcing the coalition of antiwhaling countries at 
the International Whaling Commission (IWC), and making protests 
against whaling. Furthermore, the Labor Party reportedly has a plan 
to send a special envoy for protection of whales to Japan in order 
to press it to stop whaling. 
 
Monitoring is a visible, concrete action, so the Labor Party has 
drawn a lot of responses. The Customs' patrol boat "Oceanic Viking" 
and airplanes are tracing the Japanese whaling fleet navigating in 
the Antarctic Ocean. (The Labor Party) also says it will collect 
"evidence," such as photos, envisioning the possibility of taking 
the case to an international court. It is working for that end, but 
the government has been silent on the details of the Labor Party's 
activity. When asked about relations with Japan, Foreign Minister 
Smith reiterated that "because relations with Japan are close, they 
will not be affected." But some of the opposition parties are 
voicing concern about possible adverse effects. 
 
TOKYO 00000134  013 OF 017 
 
 
 
Local media and environmental protection groups are inciting the 
government. Regarding monitoring, for instance, they criticized the 
Labor Party as being slow to implement it. Three weeks after the 
announcement of monitoring, the party started such action, but some 
criticized monitoring as lacking substance or criticized the party 
as apparently being hesitant and not serious about monitoring 
Japanese ships. 
 
Meanwhile, on Jan. 15, the Federal Court of Australia issued an 
order for research whaling in the protection zone designated by 
Australia to be stopped. This order has no binding force in terms of 
international law, but the anti-whaling campaign in that country is 
likely to further heat up. 
 
(8) Kisha no Me (Reporter's eye) column by Nakae Ueno: Okinawa faces 
contradictions between U.S. bases and economic packages 
 
MAINICHI (Page 6) (Abridged) 
January 17, 2008 
 
Nakae Ueno 
 
I visited Okinawa in last December to collect news materials for a 
serial titled "The Age of 'Emperor Moriya." This serial was to delve 
into the areas of defense policy in which former Administrative Vice 
Defense Minister Takemasa Moriya was involved. When I was collecting 
news information in the prefecture, I realized that contradictions 
existed between the presence of U.S. military facilities and 
economic packages offered by the central government. 
 
"The problem Okinawa is facing is also a 10-year-old pending issue 
for me. No person other than me can explain why 10 years have been 
lost," Moriya told me in the fall of 2005, when I visited him before 
being transferred to the Mainichi Shimbun's West Japan Head Office. 
In response, I said, "I'm going to gather news materials in 
Okinawa." 
 
"The lost 10 years" point to the problem of the return of the U.S. 
Marine Corps Futenma Air Station (in Ginowan City, Okinawa) to 
Okinawa, which has become a political challenge for both Japan and 
the United States following the occurrence of a rape of an 
elementary school girl by U.S. soldiers. Agreement on the full 
reversion of the Futenma base was reached in 1996 between Prime 
Minister Ryutaro Hashimoto and U.S. Ambassador to Japan Mondale. 
Local protests greeted the plan to relocate Futenma to an offshore 
airfield. 
 
Later, Japan and the U.S. struck a deal on a plan to relocate the 
Futenma base to the coastal area of Camp Schwab. But the way Japan's 
central government and the U.S. government negotiated that plan, 
without consulting Okinawa, resulted in strong objections in 
Okinawa. The Defense Agency (now Ministry of Defense) continued 
negotiations with Nago City and later added changes to the initial 
plan and decided to construct two airstrips that would be V-shaped. 
In May 2006, Japan and the U.S. again reached an accord (on the 
V-shaped airstrips plan). But Okinawa remains unconvinced even now 
two years after the accord was reached. It continues to call on the 
central government to alter the plan. Strains continue between 
Okinawa and the central government. 
 
Why has there been a lost of a decade? I will answer the question 
 
TOKYO 00000134  014 OF 017 
 
 
for Moriya. The reason is because the relocation of the Futenma base 
and a package of economic development measures for the northern part 
of Okinawa have been made a set. I felt the remarks made by Moriya 
just before he was arrested were on target: "The governor is the 
problem. Isn't there anyone among the heads of municipalities in the 
northern region of Okinawa who is willing to play the role of a bad 
guy?" 
 
The initial reason dates back a decade. The central government came 
out with a set of economic promotion measures for 12 municipalities 
in the northern part of Okinawa in order to influence a referendum 
in Nago City on the construction of an offshore heliport, but the 
result of the referendum was that a majority opposed the 
construction. In December 1997, however, Tetsuya Higa, then mayor of 
Nago City, accepted the construction plan on the condition that a 
package of economic measures would be provided to the northern 
region, but he then declared he would step down as mayor. After some 
bumps and detours, the Okinawa governor expressed his opposition to 
the economic package for the northern region. The package was being 
implemented in line with a promise that the package would be worth 
100 billion yen over 10 years starting in 2000. 
 
By obtaining cooperation from those heads of municipalities in the 
northern region who sought to continue the economic package, Moriya 
forced Okinawa to accept the V-shaped airstrips construction plan. 
He then decided to halt implementing the package, citing as the 
reason that "if they continue to receive money even though there has 
been no progress on the relocation plan, they are simply portraying 
themselves as lacking self-reliance." Later, however, Moriya, 
meeting with calls by heads of northern-region municipalities for 
the continuation of the package, revived the package but in name 
only. Until he stepped down as vice minister, Moriya would not allow 
the budget for the package to be used. 
 
The people of Okinawa denounced "carrot-and-stick approach" used by 
the government for the set of economic measures for the northern 
region.  Moriya criticized the package as stemming from Okinawa's 
"lack of self-reliance." But relations between the bases and such 
economic measures go back to Okinawa's reversion to Japan in 1972. 
 
Tsuneo Oshiro, professor emeritus at the University of the Ryukyus 
 
SIPDIS 
who was involved in the Okinawa Promotion and Development Plan 
(currently Okinawa Promotion Plan) the central government had 
hammered out when Okinawa was reverted to Japan, made this comment: 
"The package of economic measures for Okinawa from the beginning has 
been linked to the U.S. bases." "For the central government, the 
primary purpose of the development plan is 'how to maintain U.S. 
bases in a stable manner.' This purpose was made much clearer with 
the addition of promotion measures including those for the northern 
region, which were taken after the elementary school girl rape 
incident," Oshiro continued. The central government offers financial 
resources and works out projects to be implemented. Simply in terms 
of the effects, the package of pump-priming measures for the 
northern region is a microcosm of the economic promotion measures 
for Okinawa as a whole. 
 
In the 2006 gubernatorial election, in which incumbent Governor 
Hirokazu Nakaima was elected, there were signs that the Okinawan 
people were prioritizing economic affairs and were tolerating the 
presence of the bases. But the reality is that because of the 
existence of bases, Okinawa has no choice but to call for economic 
measures. The more Okinawa seeks such measures, the more it finds 
 
TOKYO 00000134  015 OF 017 
 
 
itself unable to separate itself from the bases. This vicious spiral 
has continued since Okinawa's reversion to Japan. The spiral has 
been even worse after the agreement was reached on the return to 
Okinawa of the Futenma base, whose theoretical purpose was to reduce 
Okinawa's base burden. 
 
Last month, the central government decided to lift the freeze on the 
implementation of the set of economic measures for the northern 
region with the aim of letting Okinawa sit at the table for talks on 
the Futenma relocation. But this is not a real solution. Some 75 
PERCENT  of U.S. military bases in Japan are concentrated in 
Okinawa, forcing it to shoulder most of the burden of the Japan-US 
security alliance. If the central government forces Okinawa to 
continue to play that role in the future, the first matter to do is 
to discuss a new set of measures that will actually help Okinawa to 
become economically self-reliant. The populace in Okinawa desire 
neither a burden reduction in name only nor promotion measures 
financed by the central government in return for Okinawa's 
acceptance of the base burden. All this raises a fundamental 
question about the Japan-U.S. security arrangements. 
 
(9) Editorial: Bring about growth with M&As that can turn change 
into opportunity 
 
NIKKEI (Page 2) (Full) 
January 15, 2008 
 
It was revealed early in the new year that JFE Holdings and IHI have 
started talks to integrate their ship-building businesses. Mergers 
and acquisitions (M&A) are bound to become a major focus of 
corporate management this year as well. The business environment is 
unclear, what with such concerns as the slowing of the U.S. economy, 
the soaring of natural-resource and energy prices, and plummeting 
stock prices. We would like to see business managers opt for M&As 
that will turn change into opportunity for corporate growth, instead 
of their being swayed by the changes going on. 
 
Japan's global share stands at only about 3 PERCENT 
 
An increasing number of Japanese companies now use M&As as an option 
for corporate management. However, M&As in Japan are not so highly 
visible. According to Thomson Financial, a financial information 
service provider, the value of M&As throughout the world last year 
reached approximately $4.48 trillion, resetting a record high. Japan 
was involved in less than 3 PERCENT  of that activity. Given the 
fact that Japan accounts for about 10 PERCENT  of the aggregate 
market value and gross domestic product (GDP) in the world, the 
figure is small. 
 
The subprime loan issue surfaced last summer. Since then, European 
and American banks have become cautious about highly risky lending 
of funds for purchases of companies, deteriorating investment funds' 
capital procurement capability. As such, some take the view that the 
global M&A boom has passed its peak. 
 
However, it could be taken instead that now is the chance for 
Japanese companies, whose financial structure is strong and 
corporate performances are good. That is because there is a better 
chance of carrying out M&As with lower costs, as can be seen in the 
fact that competition with investment funds over target companies 
for mergers and acquisition has decreased. Teijin President Toru 
Nagashima said, "Now is the best opportunity to carry out M&As, 
 
TOKYO 00000134  016 OF 017 
 
 
looking at it from the opposite perspective." Canon President 
Tsuneji Uchida and Mitsubishi Corporation President Yorihiko Kojima 
 
SIPDIS 
expressed in their New Year messages their determination to tackle 
M&As in a proactive manner. 
 
Of course, cost is not the only condition for a successful M&A. For 
a successful M&A, it is essential to first clarify a mid- to 
long-term business strategy and goals to tackle at the 
pre-negotiation stage. M&As are prone to fail to work if an 
acquiring company tries to diversify its business into areas remote 
from its main line of business, without having a basic policy 
regarding which business areas should be strengthened. 
 
Looking at companies that have expanded operations through M&As, 
many of them clarified the main line of business to be strengthened, 
as can be seen in that Nidec Corporation focused on motors and JS 
Group Corporation centered on the diversification of housing-related 
businesses. Kirin Holdings last year decided to purchase Kyowa 
Hakko. It also acquired a leading Australian dairy products company. 
These decisions are apparently made, based on the company's key 
business areas of food and health. 
 
Acquiring companies is not the only aspect of M&As. Companies should 
be positive about the idea of becoming a seller of business areas in 
order to sell off unprofitable businesses for the sake of selecting 
out and concentrating operations and introducing other companies' 
capital, technology and management know-how. In particular, there is 
large room for introducing foreign capital. 
 
According to Recof, an M&A service provider, foreign companies 
acquired a record number of 308 Japanese companies last year. Japan 
in May last year lifted a ban on triangular mergers, which enable 
foreign companies to buy Japanese companies using their own stocks 
as merger consideration. However, there was only one successful case 
last year -- the purchase of Nikko Cordial Securities by Citigroup 
of the U.S. 
 
Many companies now cross-hold stocks to fend off hostile takeover 
bids. However, it would not be possible to attract capital both from 
domestic and foreign investors, if they fail to show a growth 
strategy to investors, giving the impression that their stance is 
inward-looking. The global flow of money has drastically changed. 
Investment funds, newly emerging countries, such as China, and 
oil-producing countries in the Middle East have emerged as 
investors. In order to attract global money, by changing the image 
that Japanese companies have a closed nature, it may be worth 
considering that Japan Airlines, for instance, which thinks itself 
as Japan's representative carrier, procures funds from foreign 
companies. 
 
How to manage new company after M&A counts 
 
Needless to say, it is important to produce management results after 
the achievement of an M&A. In an M&A between companies in the same 
line of business, there are many cases in which expected effects 
were not produced, because a merger between rival companies could 
give rise to friction due to differences in their corporate 
climate. 
 
In the merger carried out by Nidec Corporation, President Shigenobu 
Nagamori himself spearheaded a cost reduction effort and reform of 
staff-consciousness in the merged company. Japan Servo, which it 
 
TOKYO 00000134  017 OF 017 
 
 
bought from Hitachi, had been running an operating deficit for two 
straight terms until the previous term. However, its operational 
performance moved into the black six months after the merger. 
 
There is no fixed method of running a merged company. Kenjiro 
Unshod, the founder of Tostem, a leading construction material 
company, and the former chairman of JS Group Corporation, said, 
"Whether businesses acquired through an M&A will get on track will 
largely depends on who will manage those businesses." Selecting such 
a person is one of the key jobs of the top leader. 
 
When the top persons of previous companies share chairmanship and 
presidency, how closely they communicate will largely determine the 
integrity of the new company. A gap in the management policies of 
the two top persons would bring about an internal split. Top 
management personnel are responsible for paving the way for 
producing synergy effects, by disseminating the management policy of 
the new company. 
 
DONOVAN