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UNCLAS SECTION 01 OF 12 TOKYO 001683 
 
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 06/19/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
 
Defense and security affairs: 
3) Mainichi poll finds 74 PERCENT  of public supports Japan's 
decision to enter pact to ban cluster bombs  (Mainichi) 
4) Government putting off submission this fall of bill to create 
permanent SDF dispatch law  (Asahi) 
5) Government's survey mission to Afghanistan returns to Japan 
(Asahi) 
 
North Korea problem: 
6) Secretary Rice invited to visit Pyongyang  (Mainichi) 
7) Senior Foreign Ministry official defines "progress" on the 
abduction front when the reinvestigation starts  (Asahi) 
8) Former Prime Minister Abe blasts LDP's Taku Yamasaki for favoring 
a dialogue instead of a pressure approach in dealing with North 
Korea  (Sankei) 
 
China and Taiwan ties: 
9) Japan announces agreement with China on developing two gas fields 
in the E. China Sea  (Nikkei) 
10) Gas-field agreement is a triumph of cooperation over national 
interest but the profitability of the arrangement remains in doubt 
(Asahi) 
11) Containing criticism that China made concession to Japan a 
priority for Beijing (Yomiuri) 
 
12) Demonstrators in Taiwan burn the Japanese flag  (Yomiuri) 
13) Taiwan reportedly sending warships to the Senkakus  (Yomiuri) 
 
Political agenda: 
14) 80 PERCENT  of surveyed Diet members against constraining social 
security spending, including over half of the ruling camp  (Tokyo 
Shimbun) 
15) Fierce political reaction to the issuance of the policy 
guidelines that stress reducing expenditures  (Mainichi) 
16) LDP fiscal research center head predicts that the consumption 
tax next year may have to be raised to 10 PERCENT   (Mainichi) 
17) Democratic Party of Japan in political ploy wants to revisit the 
issue of privatization of postal services  (Yomiuri) 
18) DPJ President Ozawa making round of visits to regional areas 
(Mainichi) 
19) Rebel lawmakers Muneo Suzuki and Watanuki planning new united 
group in the Diet  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
MHLW to increase number of doctors after finally admitting shortages 
 
 
Mainichi, Yomiuri, Nikkei, Sankei, & Tokyo Shimbun: 
Japan, China reach final agreement on joint development of gas 
fields in East China Sea; Japanese firms to invest in Shirakaba 
project 
 
Akahata: 
 
TOKYO 00001683  002 OF 012 
 
 
Battle intensifying over issue of consumption tax hike 
 
2) EDITORIALS 
 
Asahi: 
(1) Japan, China able to make practical compromises on gas field 
development 
(2) Prime minister needs to demonstrate leadership to promote 
decentralization 
 
Mainichi: 
(1) More efforts needed for Japan, China to make East China Sea an 
area of cooperation 
(2) Prime minister should hike consumption tax if he thinks it 
necessary 
 
Yomiuri: 
(1) Gas field agreement a major step forward toward mutually 
beneficial bilateral relationship 
(2) Work out program to train and properly post doctors 
 
Nikkei: 
(1) Persist with policy of reviewing revenues and expenditures 
simultaneously 
(2) We hope East China Sea can be a sea of peace with gas field 
agreement between Japan, China 
 
Sankei: 
(1) Consumption tax hike should be premised on thorough expenditure 
cut 
(2) Japan-China gas field agreement: Negotiations on equal footing 
finally possible 
 
Tokyo Shimbun: 
(1) Gas field accord shows how to avoid conflict of national 
interests 
(2) Conduct thorough discussion on how to cut wasteful expenditures 
 
Akahata: 
(1) Withdraw notice of reducing transport expenses to go to hospital 
for welfare recipients 
 
3) Poll: 74 PERCENT  approve Japan's consent to anti-cluster treaty 
 
MAINICHI (Page 2) (Full) 
June 19, 2008 
 
Unexploded ordnance (UXO) from cluster bombs has been causing 
serious damage. The government has now agreed to the text of a draft 
treaty for an immediate and total ban on such cluster bombs, with 
the exception of "smart" cluster munitions. Asked about this 
consent, affirmative answers added up to 74 PERCENT , with negative 
answers accounting for only 13 PERCENT , in a recent telephone-based 
nationwide public opinion survey conducted by the Mainichi Shimbun 
on June 14-15. Meanwhile, public opinion was split over the 
government's decision to forgo Japan's dispatch of Self-Defense 
Forces aircraft to China in the aftermath of a recent earthquake 
that devastated Sichuan Province. Answers also varied with ages. 
 
In the survey, respondents were asked about the government's consent 
to the cluster ban treaty. In response to this question, affirmative 
answers came from 79 PERCENT  of those who support the Fukuda 
 
TOKYO 00001683  003 OF 012 
 
 
cabinet and 78 PERCENT  of those who do not support it. In addition, 
affirmative answers came from 80 PERCENT  of those who support the 
ruling Liberal Democratic Party and also from those who support the 
leading opposition Democratic Party of Japan (Minshuto). These 
figures show that the general public is taking a favorable view of 
the government's consent to the treaty. Among men, "yes" to this 
question accounted for 82 PERCENT . Among women, it was 66 PERCENT 
. 
 
The government has now forgone its dispatch of SDF aircraft to China 
on a relief mission for those affected by the Sichuan earthquake. In 
the survey, respondents were asked if they thought it was an 
appropriate judgment or it might have been better to send SDF 
aircraft. To this question, 48 PERCENT  answered that it might have 
been better to send SDF aircraft, with 42 PERCENT  saying it was an 
appropriate judgment. 
 
"It would have been better" accounted for 70 PERCENT  among those in 
their 20s. This figure, however, goes down in higher age brackets. 
It was 37 PERCENT  among those aged 70 and over. Generations with 
war memories were cautious about dispatching SDF aircraft to China. 
"Appropriate" came from 44 PERCENT  of those who support the Fukuda 
cabinet and also from 44 PERCENT  of those who do not support it. 
 
4) Gov't to forgo SDF legislation this fall 
 
ASAHI (Page 4) (Full) 
June 19, 2008 
 
The government has decided to forgo presenting a bill to the Diet 
this fall for a permanent law that will allow Japan to send the 
Self-Defense Forces on overseas missions. The Antiterrorism Special 
Measures Law, under which the Maritime Self-Defense Force is 
currently tasked with a refueling mission in the Indian Ocean, is 
set to run out in January next year. The ruling Liberal Democratic 
Party therefore had a plan to enact a permanent law to continue the 
MSDF mission. However, the LDP's coalition partner, New Komeito, is 
cautious about the plan. The Diet is now divided with the ruling 
coalition holding a majority of the seats in its lower chamber and 
the opposition camp controlling its upper chamber. As it stands, the 
government judged that the legislation cannot be expected to clear 
the Diet. 
 
"It's quite difficult to present the permanent legislation to the 
Diet at this fall's extraordinary session," Chief Cabinet Secretary 
Machimura told a news conference yesterday. "The ruling parties have 
studied the feasibility of this legislation," Machimura said. "But," 
he added, "it wouldn't be easy when we look at the opposition 
parties and the House of Councillors." 
 
5) Survey team returns from Afghanistan 
 
ASAHI (Page 4) (Full) 
June 19, 2008 
 
A survey mission made up mainly of personnel from the foreign and 
defense ministries that the government had sent to local areas in 
Afghanistan to investigate the possibility of a Self-Defense Force 
dispatch returned to Japan on June 18. The team left Japan on June 8 
and centering its travels to around the capital city of Kabul 
observed the activities of ISAF, the international security 
assistance force sent by NATO. In addition to Afghanistan itself, it 
 
TOKYO 00001683  004 OF 012 
 
 
also surveyed the airfield facility in neighboring Tajikistan that 
is being used by the U.S. forces. The government will now look into 
the possibility of air transport assistance to the multinational 
force through the use of Air Self-Defense Force transport aircraft 
and Ground Self-Defense Force helicopters. 
 
6) North Korean vice minister requests visit to Pyongyang by U.S. 
secretary of state 
 
MAINICHI (Page 1) (Full) 
June 19, 2008 
 
Shoji Nishioka, Beijing 
 
North Korean Vice Foreign Minister Kim Kye Gwan requested during his 
meeting late last month with Assistant Secretary of State 
Christopher Hill, the U.S. chief negotiator in the six-party talks, 
that Secretary of State Condoleezza Rice visit the country, it was 
learned yesterday through information provided by a source connected 
to the six-party talks. North Korean appears to be motivated to make 
a visit by Secretary Rice a stepping stone to normalizing diplomatic 
ties with the United States. 
 
The two chief negotiators met on May 27-28 in Beijing and exchanged 
views on such issues as North Korea's expected declaration of its 
nuclear programs and delisting the North as a state sponsor of 
terrorism. 
 
Hill reportedly did not respond immediately to Kim's proposal that 
Secretary Rice visit the country. 
 
7) Senior Foreign Ministry official says "progress" on the abduction 
front is when the reinvestigation starts 
 
ASAHI (Page 4) (Excerpts) 
June 19, 2008 
 
A senior Foreign Ministry official yesterday commented on the 
reinvestigation of the abduction issue, as promised by North Korea: 
"We will regard 'progress' for the first time only when the North 
indicates its specific method (of reinvestigating) that is 
convincing to the Japanese side, and when that process begins." 
 
In the bilateral talks that took place in Beijing on June 11-12, 
North Korea changed its stance of insisting that the abduction 
problem had been settled, and promised a reinvestigation that Japan 
had sought. But the senior official pointed out, "It is not enough 
by itself for North Korea to have changed its previous assertion." 
 
8) Abe criticizes Yamasaki over North Korea 
 
SANKEI (Page 5) (Abridged slightly) 
June 19, 2008 
 
Former Prime Minster Shinzo Abe of the Liberal Democratic Party 
delivered a speech at a Tokyo hotel on June 18. Touching on the fact 
that the Parliamentary League to Promote Diplomatic Normalization 
between Japan and North Korea, chaired by former LDP Vice President 
Taku Yamasaki, is calling for the removal of sanctions against North 
Korea and a shift to a dialogue policy, Abe said: "If lawmakers say 
something that is more lenient than what is said by government 
officials in talks, that would immensely harm the government's 
 
TOKYO 00001683  005 OF 012 
 
 
negotiating ability. That is worse than useless." 
 
Further, in regard to the fact that Yamasaki described what Abe said 
as naive, the former prime minister slammed Yamasaki, saying, "(Mr. 
Yamasaki's) Japanese language ability is not good. It does no good 
and a lot of harm. Every lawmaker should act based on national 
interests." 
 
Abe also sounded an alarm regarding the fact that Pyongyang in the 
recent Japan-DPRK working-level meeting announced a plan to conduct 
a reinvestigation in the issue of Japanese nationals abducted to the 
North, saying: "Japan has been duped by the North many times over. 
This time around, we must raise our guard so as not to repeat that 
mistake." Abe also warned Washington regarding its moves to delist 
the North as a state sponsor of terrorism, saying, "It might end up 
losing the leverage in addressing the abduction issue." 
 
9) Japan, China reach agreement on joint development of gas fields 
 
NIKKEI (Top play) (Excerpts) 
June 19, 2008 
 
The Japanese and Chinese governments have reached agreement on the 
pending issue of developing gas fields in the E. China Sea. Setting 
up a "joint-development zone" in the northern part of the sea that 
straddles the median line between Japan and China, the two sides 
will narrow down the drilling locations through joint exploration. 
Such aspects as the means of allocating earnings from the projects 
will be settled by negotiations. On the question of the Shirakaba 
(Chinese name: Chunxiao) oil field that a Chinese company has been 
developing independently, a Japanese corporation will provide 
financing and in this way, Japan will secure a certain amount of 
rights and interests in it. It has been four years since Japan 
protested China's development of gas fields in June 2004, but now 
the issue has been generally settled 
 
Major points of agreement between Japan and China: 
 
? Until boundary lines can be demarcated, Japan and China will 
cooperate without damaging their respective legal positions. 
 
? A joint development zone will be established in the southern seas 
near Asunara (Chinese name: Longjing), Through joint exploration, 
locations will be selected for joint development. 
 
? In accordance with Chinese law, a Chinese company will continue to 
develop the gas field of Shirakaba (Chinese name Chunxiao), with 
capital participation from a Japanese company. 
 
? Talks will continue on the other gas fields in the sea so that 
joint development can be realized at an early date. 
 
? Efforts will be made so that there will be an early signing of the 
necessary documents. 
 
10) Japan, China agree on joint gas field development in East China 
Sea, giving priority to cooperation over profits 
 
ASAHI (Page 6) (Excerpts) 
June 19, 2008 
 
Japan and China have reached a final agreement on gas exploration 
 
TOKYO 00001683  006 OF 012 
 
 
projects in the East China Sea, but a spate of issues, like economic 
sovereignty, have been left for future negotiations. Negotiations on 
Japan's concession rights for the Shirakaba (Chunxiao in Chinese) 
gas field also have yet to start. The two governments are trying to 
play up their friendship, but many barriers stand in the way of the 
joint development. 
 
Question about profitability 
 
"I hope (the East China Sea) will become an important energy source 
for both Japan and China," Minister of Economy, Trade and Industry 
Amari emphasized in a press conference yesterday. 
 
Although experts point out that the amount of gas reserves in the 
East China Sea is small, an executive of Teikoku Oil Co., which has 
concession rights near the Shirakaba gas field and other areas, 
said: "The total amount of reserves (in the East China Sea) might 
become one of the largest for Japan." 
 
Teikoku Oil applied for concession rights in 1969, but the 
procedures had long been frozen given a dispute over demarcation 
between Japan and China. The company won the rights in 2005, but 
even after that, it had to wait for the start of negotiations 
between the two governments. The areas that are covered by the 
agreement yesterday are outside the reach of its rights, but 
President Masatoshi Sugioka issued this comment yesterday: "We would 
like to earnestly work out the details in future negotiations," 
indicating his strong interest in the joint-development projects. 
 
As for the Chinese-operated Shirakaba gas field, the focus of 
attention is on who will invest in the Chinese companies involved in 
the project. 
 
In addition to petroleum companies, such as Teikoku Oil, trading 
houses and government-affiliated institutes could be involved. For 
private firms, however, there is the problem of limited 
profitability, with a major oil company executive posing a question 
about profitability. Negotiators have also said that it will not 
pay. 
 
To transport exploited natural gas to Japan, it is necessary to 
build a pipeline connecting the reserves and Kyushu or Okinawa with 
a massive investment. China has already started work to build a 
pipeline. A person in the oil industry said: "Even if Japan obtains 
concession rights, it will have no choice but to sell the product to 
China. China may buy it at the price it desires." 
 
There is the possibility, however, that the agreement this time will 
become a major step toward the joint development of latent natural 
resources in the East China Sea. 
 
Difficult negotiations expected on concession rights 
 
Negotiations on concession rights will be a major hurdle for the two 
countries to launch joint development. China started resource 
exploitation in the East China Sea in the 1970s and 1980s and has 
steadily drilled test gas fields. Seen from the Chinese perspective, 
the joint development of the Shirakaba oil field means Japan's 
participation in China's project. Japan might be asked to pay a huge 
amount of money to gain concession rights for the gas field. 
 
11) Containing criticism that China made concession to Japan a 
 
TOKYO 00001683  007 OF 012 
 
 
priority for Beijing 
 
YOMIURI (Page 2) (Abridged) 
June 19, 2008 
 
Chinese Foreign Ministry spokeswoman Jiang Yu released yesterday a 
statement on a (Japan-China) agreement on the exploration of gas 
fields in the East China Sea saying that the results will serve the 
interests of the two countries and be beneficial for the stability 
of bilateral relations. It is extremely important for the Hu Jintao 
administration, which has shifted to a strategically and mutually 
beneficial policy course, to give the impression that it has not 
made concessions to Japan in order to minimize criticism at home. 
 
Meanwhile, some 20 Chinese civic group members claiming China's 
sovereignty over the Senkaku (Diaoyu) Islands yesterday staged a 
demonstration in front of the Japanese Embassy in Beijing chanting, 
"Japan, get out of the East China Sea!" while holding a banner 
expressing opposition to the Japan-China agreement. 
 
Messages opposing making concessions to Japan have begun to increase 
on Internet bulletin boards. In the event the agreement generates 
the impression that China has made a concession to Japan over the 
sovereignty issue, the Hu administration might come under fierce 
fire. At the same time, the administration might find itself under 
heavy pressure from former President Jiang Zemin and other elders, 
leftists, and the military, who take a hard-line stance toward 
Japan. 
 
Beijing, which puts high priority on domestic policy, has emphasized 
that the exploration of the Shirakaba gas field (Chunxiao in 
Chinese) has nothing to do with sovereignty. "We welcome the 
participation of Japanese companies under relevant Chinese laws," 
Jiang Yu said in the statement yesterday. 
 
12) Japanese flag torched in anti-Japanese rally in Taiwan over 
Senkaku accident 
 
YOMIURI (Page 2) (Abridged) 
June 19, 2008 
 
In the wake of an accident in which a Taiwanese sport-fishing boat 
sank after colliding with a Japan Coast Guard patrol boat in waters 
near the Senkaku Islands (known as Tiaoyutai in Taiwan), members of 
Hong Kong's Action Committee for Defending the Diaoyu Islands 
(ACDDI) and Taiwanese pro-China activists on June 18 staged a 
protest in front of the Interchange Association, Japan, (IAJ) Taipei 
Office, and burned a Japanese flag while shouting, "Japanese, get 
out of Tiaoyutai!" 
 
The ACDDI members entered Taiwan in order to head for the Senkakus, 
but they gave up a demonstration at sea because they failed to find 
a fishing boat to get there. On June 12, fishermen also staged a 
protest in front of the IAJ office demanding an apology from the 
Japanese government. Meanwhile, the IAJ disseminated pamphlets to 
Japanese schools and other places urging Japanese nationals living 
in Taiwan to be alert to growing anti-Japanese sentiment. As if to 
fan anti-Japanese sentiment, a local assemblyman has begun calling 
for a boycott of Japanese products. 
 
13) Taiwanese defense minister expresses willingness to send 
warships to Senkaku Islands 
 
TOKYO 00001683  008 OF 012 
 
 
 
YOMIURI (Page 2) (Abridged slightly) 
June 19, 2008 
 
According to Taiwan's Central News Agency, National Defense Minister 
Chen Chao-min announced on June 18 that he was willing to dispatch 
warships to Japanese territorial waters near the Senkaku Islands 
(known as Tiaoyutai in Taiwan), over which Taiwan has also claimed 
sovereignty, if needed. Chen was responding to question from a 
Kuomintang lawmaker taking a hard-line stance toward Japan at the 
national assembly. 
 
Chen indicated that in the event there was a request for assistance 
from Taiwan Coast Guard patrol boats in accordance with an agreement 
between the coast guard and the defense ministry, Taiwanese warships 
should head for (Japanese territorial waters near the Senkakus) to 
provide assistance. 
 
The administration of President Ma Ying-jeou considered sending 
warships to waters near the Senkakus this week but called off the 
plan, saying that it would put high priority on a peaceful 
settlement through dialogue. Ma also said on June 17, "We must take 
action when necessary, and we will defend our territory and 
sovereignty with all our might." The Taiwanese president clearly 
remains hard-edged toward Japan over the issue. 
 
14) Diet poll: 80 PERCENT  opposed to curbing social security 
spending 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
June 19, 2008 
 
The government plans to annually constrain 220 billion yen in the 
growth of spending on social security, including medical and nursing 
care services. The Tokyo Shimbun conducted an urgent questionnaire 
survey of all lawmakers in the Diet over the advisability of curbing 
social security spending and what to do about funding resources. 
There were answers from 157 lawmakers. Among them, 136 legislators 
(87 PERCENT ) were opposed to the government's plan to continue 
holding down the growth of social security spending. In Japan, 
medical services are collapsing, and nursing care services in 
particular are on the decline. Most of those who responded to the 
survey said the government should review its plan to hold down 
social security spending. 
 
In the breakdown of those who responded to the urgent survey, there 
were answers from 110 lawmakers from the opposition parties or who 
are independents. They were all opposed to the government's plan to 
hold down social security spending. Meanwhile, there were answers 
from 39 lawmakers belonging to the ruling Liberal Democratic Party. 
Among these LDP lawmakers, 19 persons supported the government's 
plan, with 20 saying they are against it. In the case of New Komeito 
as the LDP's coalition partner, there were answers from eight of its 
lawmakers. Among them, six persons were opposed to holding down 
social security spending. As seen from these figures, the two ruling 
parties were also divided in opinion. 
 
The questionnaire was sent to all 722 lawmakers in the Diet, and 565 
persons did not respond. The response rate was 22 PERCENT . 
 
15) LDP fiercely opposing spending cut policy of basic policy 
guidelines out of sense of crisis concerning next Lower House 
 
TOKYO 00001683  009 OF 012 
 
 
election 
 
MAINICHI (Page 2) (Abridged slightly) 
June 19, 2008 
 
The government has drafted basic policy guidelines on economic and 
fiscal management and structural reforms for the fiscal 2008 
national budget. Many Liberal Democratic Party (LDP) members 
yesterday, June 18, called for revising the spending cut policy 
included in the draft. Behind the call for increased spending is a 
sense of crisis concerning the next Lower House election. A 
tug-of-war between the Prime Minister's Official Residence (Kantei) 
and the LDP over the issue of whether to keep fiscal discipline firm 
or to boost expenditures has moved into full swing with the LDP 
motivated by the desire to regain leadership over budget 
compilation, after a period under the Koizumi administration when 
the Kantei was in charge. 
 
The LDP on the 18th held a plenary session of the Policy Research 
Council. The session lasted for three hours. More than 30 lawmakers 
participating in the session held a microphone one after another and 
voiced their opposition to the spending cut policy. Only two 
supported the proposal for keeping fiscal discipline firm. 
Participants loudly expressed their disgruntlement with the draft, 
which clarifies the need for maximum spending cuts both at the 
central and local government levels. 
 
A Land, Infrastructure and Transport Division-related meeting then 
followed. Participants even mapped out a resolution seeking a 
revision of the 3 PERCENT  cut in public works stipulated in the 
draft. Moves to water down the spending cut policy line during the 
Fukuda administration have become visible in one sweep. 
 
Prime Minister Fukuda on the 17th hinted at his stance that it would 
be unavoidable to raise the sales tax, flaring up intraparty 
arguments. 
 
Former Home Affairs Minister Takeshi Noda and Hiroyuki Sonoda, 
senior deputy chairman of the Policy Research Council, gave a high 
score to the prime minister's remark at a study meeting hosted by 
former Chief Cabinet Secretary Kaoru Yosano. They said that the 
prime minister's remark was appropriate. Participants in the meeting 
included many lawmakers in favor of hiking the consumption tax. 
Yosano told reporters after the meeting, "The prime minister's 
remark is reasonable in view of the LDP's past commitment as well." 
 
On the other hand, former Secretary General Tsutomu Takebe, chairman 
of the Fresh Wind," an intraparty group mainly joined by junior 
lawmakers, fiercely checked the argument calling for a hike in the 
consumption tax, underscoring, "It is not possible to hike the 
consumption tax amid a series of scandals, including the arrests of 
staff members of the Hokkaido Development Bureau." Yuji Tsushima, 
chairman of the Tsushima faction, who serves as the party's Tax 
System Research Commission, at his faction's staff meeting reminded, 
"It would be better if the prime minister comes up with many policy 
proposals without thinking about the tax code." 
 
Regarding his consumption tax statement, the prime minister on the 
evening of the same day told reporters, "First things first. We must 
boil down various policy proposals and work out fiscal resources to 
finance those proposals. Whether to hike the consumption tax or not 
is the issue to be discussed after that." He thus tried to put the 
 
TOKYO 00001683  010 OF 012 
 
 
situation to rest. 
 
16) LDP Fiscal Reform Study Group Chairman Sonoda hopes to see 10 
PERCENT  consumption tax next fall: Rate on food to be reduced 
 
MAINICHI (Page 2) (Excerpts) 
June 19, 2008 
 
Hiroyuki Sonoda, senior deputy chairman of the Liberal Democratic 
Party's (LDP) Policy Research Council and the chairman of the LDP 
Fiscal Reform Study Council during an interview with the Mainichi 
Shimbun said, "We want to finalize a package of proposals including 
when to hike the consumption tax and the margin of the hike, based 
on a debate on the tax code this fall, and make it the party's 
manifesto." He thus clarified his stance that a concrete consumption 
tax hike proposal should be incorporated in tax code revision 
guidelines the ruling parties will finalize at year's end. 
 
Regarding Prime Minister Yasuo Fukuda's statement that now is the 
time to decide on a consumption tax hike, Sonoda indicated his 
perception that the government would accelerate discussions on a 
consumption tax hike discussion, saying, "The prime minister's 
statement will have a major impact on tax code reform discussions." 
 
Concerning the timeline for raising the consumption tax and the 
margin of the hike, Sonoda said, "We want to raise the tax to 10 
PERCENT  as early as October 2009, if we can obtain the 
understanding of the people." He made that remark in view of the 
fact that raising the state contribution to the basic pension in 
fiscal 2009 will require 2.3 trillion yen.  At the same time, he 
said that reduced rates would be applied to such items as food. 
 
17) DPJ to include postal privatization review in campaign pledges 
in consideration of JPGU, PNP 
 
YOMIURI (Page 4) (Full) 
June 19, 2008 
 
The Democratic Party of Japan's (DPJ) Deputy President Naoto Kan 
yesterday revealed that his party would include a policy of 
reviewing the postal privatization program in a set of campaign 
pledges (manifesto) for the next House of Representatives election, 
expecting support from the Japan Postal Group Union (JPGU). The 
largest opposition party also appears to be giving consideration to 
the People's New Party (PNP), which was founded in opposition to 
postal privatization. However, since there is a cautious view about 
the policy in the DPJ, internal coordination is expected to stall. 
 
Kan attended the JPGU's first national convention held yesterday in 
Sapporo. Kan said in a speech: "My party has to start working on a 
new manifesto. We want to do our best in reviewing the postal 
privatization program, while hearing your views and consulting with 
the PNP." He then asked for their support for his party (in the next 
Lower House election), saying: "We wish the JPGU to achieve its goal 
of having a membership of 300,000, and we will rely on you in the 
next Lower House election." 
 
The Japan Postal Workers' Union (JPU) and the All Japan Postal Labor 
Union merged last October into the JPGU with a membership of about 
224,000, the largest labor union in Japan. The JPGU is one of the 
organizations, with which the DPJ wants to step up its ties. 
 
 
TOKYO 00001683  011 OF 012 
 
 
For the largest opposition party, cooperation with the PNP is also 
important for the coalition of opposition parties in the Diet. The 
DPJ and PNP jointly presented a bill revising the postal 
privatization program to the House of Councillors last October, 
which was the PNP's condition to form a coalition in the Upper 
House. The Upper House adopted the bill last December. The PNP has 
urged the DPJ to incorporate a pledge to review postal privatization 
in its manifesto for the next Lower House election. PNP Deputy Chief 
Shizuka Kamei said: "DPJ President Ichiro Ozawa promised to include 
it in the manifesto." 
 
Following Kan's remark, PNP Chief Tamisuke Watanuki commented: 
"There is a possibility that the postal privatization program will 
be revised (if the opposition gains a majority in the Lower House) 
like the Upper House in the next Lower House election." Some say 
that many DPJ lawmakers favor postal privatization. A mid-level 
member expressed concern saying: "A review of the postal 
privatization program will have a negative impact on our party in 
the Lower House election." 
 
18) DPJ President Ozawa making round of visits to regional areas: 
Last resort for next Lower House election is Rengo 
 
MAINICHI (Page 5) (Excerpts) 
June 19, 2008 
 
Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa 
will be frequently visiting regional areas this month in the run-up 
to an anticipated next Lower House election. He is focusing on 
strengthening ties with the Japanese Trade Union Confederation 
(Rengo), the party's largest support organization, instead of just 
making street-corner speeches. He is determined to make the trade 
organization the DPJ's "sincere friend," by cozying up to labor 
leaders, even by setting up wining and dining sessions as a venue 
for exchanging views, according to an informed source. 
 
Ozawa on June 18 made a speech in front of about 30 participants in 
an opinion exchange meeting with the Rengo Local of Oita: "The DPJ 
is still a new organization. We would like to have help from Rengo 
members throughout the nation. I appreciate your responding to our 
request with readiness." 
 
The membership of Rengo is approximately 6.6 million as of 2007, 
down 16 PERCENT  in comparison with the peak year of 1994, according 
to a survey by the Ministry of Health, Labor and Welfare. Some say 
that the organization's influence over its members' voting behavior 
has declined. Some veteran lawmakers are skeptical about Rengo's 
vote-gathering power, with one noting, "Rengo votes are nothing 
great." However, Ozawa has softly opposed those veteran lawmakers, 
saying: "Our junior members do not have their own organizations. 
Rengo is the only organization that works for them most devotedly at 
a crucial moment." 
 
In his round of visits to regional areas, Ozawa holds exchanges of 
views with senior members of Rengo's local branches to hear their 
policy requests and situations in their constituencies, followed by 
a press conference and then a dinner meeting. He occasionally 
inspects various facilities. However, he is no longer giving 
sidewalk speeches to directly appeal his policy stance to voters. 
 
19) Some Lower House members considering forming parliamentary group 
with eye on next Lower House election 
 
TOKYO 00001683  012 OF 012 
 
 
 
YOMIURI (Page 5) (Full) 
June 19, 2008 
 
A plan to form a parliamentary group in the House of Representatives 
has emerged among the People's New Party (PNP), the New Party Daichi 
and some conservative lawmakers. The aim is to secure a casting vote 
in case the ruling and opposition camps are dead even in the next 
Lower House election. They are expected to form a group of a dozen 
or so. Five Lower House members -- PNP President Tamisuke Watanuki, 
New Party Daichi leader Muneo Suzuki, independent lawmaker Takeo 
Hiranuma, who is a former trade minister, former Minister of 
Construction Kishiro Nakamura, and Mikio Shimoji held a meeting last 
night at a Japanese restaurant in Tokyo. The five confirmed that 
they would strengthen cooperation with an eye on forming a 
coalition. The five and PNP Secretary General Hisaoki Kamei have 
regularly held meetings. 
 
In the Lower House, the four PNP members, Hosei Norota, independent 
and former agriculture minister, and Shimoji have formed a group 
called "PNP, Sozo and Mushozoku." The group will expand if Suzuki 
and Nakamura join. A person close to Hiranuma said: "(Hiranuma) has 
no intention to take part in any parliamentary group," since he has 
mentioned the possibility of forming his own new party before the 
Lower House election. 
 
SCHIEFFER