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UNCLAS SECTION 01 OF 12 TOKYO 001753 
 
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 06/26/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Diplomatic agenda: 
4) President Bush in telephone conversation with Prime Minister 
Fukuda stresses that U.S. will not forget the abduction issue 
(Sankei) 
5) G8 Foreign Ministers Meeting today to focus on response to North 
Korea's nuclear declaration  (Tokyo Shimbun) 
6) Government's plans to play up at the G8 Summit the dispatch SDF 
personnel to Sudan as Japan's international contribution  (Nikkei) 
7) Secret emissary sent to Pyongyang by Baghdad last month prior to 
nuclear declaration, possibly to ask for no mention of secret pact 
between DPRK, Iran  (Sankei) 
8) METI Minister Imari suddenly visits Iraq, promises cooperation, 
including technical training, to boost oil production  (Nikkei) 
9) Foreign Ministry set ups new China and Mongolia Division 
(Sankei) 
 
10) IWC working group set up at annual meeting, but resistance 
coming from Australia, anti-whaling groups  (Sankei) 
 
Economic agenda: 
11) LDP scrutinizing harshly the government's draft set of economic 
and fiscal policy guidelines  (Tokyo Shimbun) 
12) Government and ruling camp set to work on drafting a 
supplemental  budget  (Yomiuri) 
13) Prime minister's statements on tax increases shake up his party 
(Mainichi) 
 
Political agenda: 
14) Democratic Party of Japan (DPJ) to end boycott of Diet and 
return to session during the extraordinary session if only to pummel 
the LDP on medical care, etc.  (Nikkei) 
15) Opposition to President Ozawa is building in the DPJ, spreading 
across junior to mid-level lawmakers, who want a real party 
presidential election in the fall  (Mainichi) 
16) LDP team, upset by the pub taxi scandal, to propose a freeze on 
entertainment expenses by bureaucrats  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Sankei: Tokyo Shimbun 
More than 1400 bureaucrats receive gifts from taxi drivers; 33 
punished 
 
Mainichi: 
Government to allow unregistered children to be listed on resident 
certificates 
 
Yomiuri: 
Eel trader paid 10 million yen in hush money to cover false 
labeling 
 
Nikkei: 
Top truck manufacturers raise prices of all models for first time; 3 
PERCENT -5 PERCENT  starting in August 
 
TOKYO 00001753  002 OF 012 
 
 
 
Akahata: 
Not delivered today 
 
2) EDITORIALS 
 
Asahi: 
(1) Shareholders meeting: Tensions generated with reappointments of 
presidents voted down 
(2) Papers on two Aegis duty officers sent to prosecutors: Are they 
only crewmen responsible for accident? 
 
Mainichi: 
(1) Goodwill to pull out of labor dispatch business: Protect 
dispatched workers 
(2) New strains of flu: Concrete measures needed 
 
Yomiuri: 
(1) Regular inspection of nuclear power plants: Balance safety with 
operation 
(2) Use resourcefulness to develop bicycle that can carry two 
children 
 
Nikkei: 
(1) There are issues that are more important than regulating 
convenience stores 
(2) Prime minister should not slight Yanai report on security 
 
Sankei: 
(1) North Korea's nuclear declaration: Call for resubmission, if 
incomplete 
(2) Goodwill to pull out of dispatch business: Serious warning to 
labor dispatch business operators 
 
Tokyo Shimbun: 
(1) Carbon dioxide emissions measures set by Tokyo metropolitan 
government 
(2) Decentralization: Downsize local offices of central government 
 
Akahata: 
(1) Not delivered today 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, June 25 
 
NIKKEI (Page 2) (Full) 
June 26, 2008 
 
10:00 
Met at the Kantei with LDP Youth Section Head Inoue and Election 
Campaign Department Head Shibayama. Later, met Deputy Foreign 
Minister Sasae. 
 
11:15 
Met LDP Human Rights Research Council Chairman Ota. Followed by 
Deputy Chief Cabinet Secretary Futahashi. 
 
12:07 
Met Futahashi. 
 
13:28 
 
TOKYO 00001753  003 OF 012 
 
 
Met Futahashi. 
 
14:25 
Met Health, Labor and Welfare Ministry's Employment Security Bureau 
Director General Ota. Met Asia Peace Contribution Center President 
Haruo Nishihara. 
 
15:22 
Met Special Advisor Ito. Followed by Aged Society NGO Association 
President Keiko Higuchi. 
 
17:01 
Underwent treatment by a dentist in Minami-Aoyama. 
 
18:02 
Dined with Tokyo University Professor Hiroshi Yoshikawa, chairman of 
the Social Security National Conference, Special Advisor Ito, and 
others at a Japanese restaurant in the Imperial Hotel. 
 
20:30 
Talked with U.S. President Bush on the phone at his official 
residence. 
 
4) U.S. will not forget abduction issue: Bush 
 
SANKEI (Page 5) (Abridged) 
June 26, 2008 
 
Prime Minister Yasuo Fukuda had a telephone conversation with U.S. 
President Bush yesterday evening and exchanged views on North Korea. 
In the talks, Bush told Fukuda that he "will never forget" the 
pending issue of Japanese nationals abducted to North Korea. Bush 
added, "I fully understand Japan's concern, and the United States 
wants to continue to cooperate closely with Japan." With this, Bush 
reiterated what he told Fukuda during their meeting in November last 
year, stressing that he remains committed to attaching importance to 
the abduction issue. Fukuda said, "We're making utmost efforts in 
our talks with North Korea to resolve various pending problems, 
including the abduction issue, but I'd like to ask for the United 
States' continued cooperation." Meanwhile, North Korea is expected 
to declare its nuclear programs today. In this connection, Fukuda 
noted that it is important to push ahead with the six-party process 
of having North Korea abandon its nuclear programs. 
 
The telephone conversation was held for about 20 minutes. The U.S. 
government has indicated that it will inform the U.S. Congress of 
its intention to remove North Korea from its terrorism blacklist. In 
Japan, there has been a strong reaction to the idea of delisting 
North Korea. Given this fact, Fukuda offered on June 24 to hold 
talks with Bush over the telephone. Fukuda is scheduled to meet with 
Bush on July 6 on the sidelines of the upcoming summit meeting of 
Group of Eight (G-8) leaders to be held at Lake Toya in Japan's 
northernmost main island Hokkaido. 
 
5) G-8 foreign ministers meeting starts today, with focus on 
response to North Korea's pending nuclear declaration 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 26, 2008 
 
A two-day meeting of the foreign ministers of the Group of Eight 
starts today at the State Guesthouse in Kyoto. In the run-up to the 
 
TOKYO 00001753  004 OF 012 
 
 
G-8 summit in July, the ministers are expected to exchange views on 
such subjects as North Korea's denuclearization, reconstruction 
assistance to Afghanistan, and peace in the Middle East. 
 
With Pyongyang expected to make a declaration on its nuclear 
activities June 26, the participants are likely to discuss how to 
proceed in pressing the North to steadily scrap its nuclear 
programs. Japan intends to obtain the understanding and cooperation 
of the G-8 member countries on an early implementation by the DRPK 
of its pledge to reinvestigate the abduction issue, as promised in 
recent bilateral working-level talks. 
 
Foreign Minister Masahiko Koumura, in a separate meeting with U.S. 
Secretary of State Condoleezza Rice on the afternoon of June 27, is 
expected to ask Washington once again to proceed cautiously in 
delisting North Korea as a state sponsor of terrorism in return for 
Pyongyang's nuclear declaration. 
 
As part of efforts of reconstruction assistance to Afghanistan, the 
G-8 foreign ministers are expected to draw up a joint statement that 
promises added assistance to the region bordering Pakistan, which 
has become a breeding ground for terrorists. 
 
Foreign Minister Koumura will meet separately with his British, 
Italian and Canadian counterparts on the afternoon of June 26 prior 
to the G-8 ministerial. The ministers meeting will be followed by 
other events, including a meeting between the foreign ministers of 
Japan and Australia, as well as a trilateral Japan-U.S.-Australia 
strategic dialogue. 
 
6) Government to dispatch SDF personnel to UNMIS headquarters in 
Sudan to demonstrate eagerness for international contributions 
 
NIKKEI (Page 2) (Full) 
June 26, 2008 
 
The government has decided to dispatch several Self-Defense Force 
personnel to the Headquarters of the United Nations Mission (UNMIS) 
for peacekeeping operations (PKO) in southern Sudan. Prior to the 
Group of Eight Summit (Lake Toya Summit) starting on July 7, which 
Japan will chair, the government aims to demonstrate its eagerness 
for international contributions. The plan will be announced next 
week. The government is also mapping out measures of reconstruction 
assistance in Afghanistan. It intends to hurriedly work out 
details. 
 
These plans are part of Prime Minister Yasuo Fukuda's promise to 
make Japan a "peace cooperation state." The government plans to 
dispatch two SDF personnel to UNMIS in August or later. It intends 
to dispatch an advance team composed of officials of the Foreign 
Ministry, the Defense Ministry, and other relevant government 
agencies to Sudan in July. 
 
The UNMIS Headquarters in Khartoum is a core unit tasked with 
controlling all squads. The SDF personnel to be dispatched there are 
expected to engage in coordinating activities by more than 70 
countries participating in the mission. The duties to be performed 
by UNMIS include having refugees return home and removing land 
mines. The government is also keeping in mind the possibility of 
dispatching a full-scale unit to UNMIS in Sudan in the future. 
 
The Foreign Ministry, eager to send SDF personnel to join PKO in 
 
TOKYO 00001753  005 OF 012 
 
 
southern Sudan from the beginning, has dispatched the senior vice 
foreign minister and a parliamentary minister to collect information 
there. In the Defense Ministry, many officers initially voiced 
caution about the dispatch plan out of concern for security, but 
they appear to have changed their minds about it, with an eye on the 
upcoming Lake Toya Summit, in which African development will be high 
on the agenda. 
 
On reconstruction assistance in Afghanistan, the government's 
fact-finding team consisting of representatives from the Cabinet 
Secretariat, the Foreign Ministry, and the Defense Ministry visited 
the nation on June 8-18. The group had a first-hand look at the 
activities of the North Atlantic Treaty Organization's (NATO) 
International Security Assistance Force (ISAF) in Kabul, the capital 
of Afghanistan, and other places. 
 
Chief Cabinet Secretary Nobutaka Machimura, Foreign Minister 
Masahiko Koumura, and Defense Minister Shigeru Ishiba met yesterday 
to discuss the dispatch plan, based on the results of the team's 
visit to Afghanistan. But one of the participants said: "We have yet 
to determine any specific direction." 
 
As specific assistance measures for Afghanistan, the government has 
in mind logistic support for ISAF and participation in the 
Provisional Reconstruction Team (PRT). To implement these measures, 
however, new legislation will become necessary. Foreign Minister 
Koumura said in a speech on June 24: "We must fully consider whether 
new legislation will be adopted under the current Diet situation." 
 
7) Iran gagged N. Korea 
 
SANKEI (Page 2) (Full) 
June 26, 2008 
 
WASHINGTON-North Korea is expected to declare its nuclear programs 
today under an agreement reached at the six-party talks over its 
nuclear issue. In this connection, a special envoy from Iran visited 
North Korea in late May and asked North Korea not to touch on 
cooperative ties with Iran over nuclear development. In return, Iran 
promised more jobs for North Korean workers, including positions as 
nuclear scientists. This was revealed by an intelligence source with 
expertise on the Korean Peninsula. 
 
According to the source, the Iranian envoy is a high-ranking 
intelligence official. An official older than the high-ranking 
official was initially to have visited North Korea from Iran's 
Revolutionary Guard, a crack unit rumored to be taking part in 
nuclear development. However, this official fell sick. This is why 
Iran sent the intelligence official to North Korea instead. 
 
Iran also sent a delegation to Pyongyang in February this year. On 
that occasion, the Iranian delegation asked North Korea not to 
unveil its cooperative ties with Iran to the United States. The 
Iranian envoy's visit to North Korea this time was in response to a 
provisional agreement reached between the United States and North 
Korea in April. 
 
According to the source, the Iranian envoy in North Korea met with a 
high-ranking official for North Korea's nuclear policy. In that 
meeting, the envoy praised North Korea for its "brave attitude" of 
not caving in to the United States' pressure for a "complete and 
correct declaration" of North Korea's nuclear programs in this 
 
TOKYO 00001753  006 OF 012 
 
 
April's talks between the United States and North Korea. In the 
provisional agreement, North Korea went no further than to word its 
"awareness" of concerns in the United States and other countries 
about its nuclear programs through proliferation and uranium 
enrichment. The envoy stressed that it was "an achievement for both 
North Korea and Iran." 
 
The Iranian envoy also told Pyongyang that Iran would accept more of 
North Korea's nuclear engineers and experts who want to work in Iran 
as a measure in return for North Korea's cooperation with Iran. At 
the same time, the envoy also promised to hire them for a long 
period of time, according to the source. 
 
North Korea is now in the process of disabling its nuclear facility 
in Yongbyon. Meanwhile, North Korea can secure jobs for its nuclear 
engineers and others. Moreover, it will be possible for North Korea 
to maintain its technological capability for nuclear development. 
 
The Iranian embassy in Japan released a comment, saying: "The 
Iranian Embassy strongly denies such a rumor. At the same time, 
Iran's nuclear technology for peaceful purposes-which is under the 
International Atomic Energy Agency's complete inspection-is 
developed by Iran's engineers, and we again stress that in this area 
Iran has no cooperative ties with any foreign countries at all. 
Several foreign sources spread falsehoods about relations between 
Iran and North Korea in an aim to confuse relations between Iran and 
Japan. We regret that the media carries articles about such 
falsehoods." 
 
8) METI minister in Baghdad promises to help Iraq increase oil 
output 
 
NIKKEI (Page 1) (Full) 
June 26, 2008 
 
Minister of Economy, Trade and Industry Akira Amari, now visiting 
the Middle East, suddenly visited Baghdad, the capital of Iraq, on 
June 25 and met Prime Minister Nouri al-Maliki, Oil Minister Hussain 
al-Shahristani, and other Iraqi government officials in succession. 
In the meetings, both sides agreed on the importance of revitalizing 
the Iraqi oil industry, which was seriously damaged in the Iraq war, 
as well as the increase of oil output as part of efforts to 
rehabilitate its economy. The two countries issued a joint statement 
specifying Japan's promise to cooperate in training engineers and 
constructing infrastructure. By offering assistance to Iraq, which 
has the world's third-largest oil reserves, Japan is also aiming to 
curb oil price hikes. 
 
Amari left Kuwait for Baghdad on the morning of the 25th, local 
time, by a Self-Defense Force C-130 transport plane and stayed there 
for about seven and a half hours. He is the second cabinet minister 
to visit Iraq since the end of the Iraq war, following then Foreign 
Minister Taro Aso in August 2006. 
 
To advance the reconstruction of Iraq, both sides agreed on the need 
to deepen wide-ranging bilateral economic cooperation mainly in the 
energy area. The two sides also shared strong concern about the 
negative effect of recent soaring oil prices on the world economy 
and developing countries. 
 
As measures to train oil and natural gas engineers, Japan promised 
to accept 100 trainees annually for five years starting in 2009. 
 
TOKYO 00001753  007 OF 012 
 
 
 
Amari also indicated a willingness to continue extending up to 3.5 
billion dollars in yen loans to reconstruct Iraq, including 
infrastructure construction as a measure to resuscitate its oil 
industry. 
 
9) Name of China Division to be changed to China and Mongolia 
Division 
 
SANKEI (Page 5) (Full) 
June 26, 2008 
 
The name of the China Division of the Foreign Ministry's Asian and 
Oceanian Affairs Bureau will be changed on June 27 to the China and 
Mongolia Division. The purpose of the change is to show Japan's 
stance of placing emphasis on Mongolia, a friendly country, in 
addition to matching international standards. The government will 
issue an ordinance and the Foreign Ministry's decision will come 
into effect the same day. Some have contended that it is not 
consistent because the China Division is in charge of China, 
Mongolia, and Taiwan. 
 
In his telephone talks January last year with then Prime Minister 
Shinzo Abe, Mongolian President Nambaryn Enkhbayar expressed support 
for Japan's bid for a nonpermanent seat on the United Nations 
Security Council, withdrawing his country's bid for a nonpermanent 
UNSC seat. With this, Japan will likely win a seat in the election 
this fall. Mongolia reportedly was pleased with the Japanese 
government's decision, with one official saying: "Our long-cherished 
dream has been realized." 
 
However, the China Division has identified itself internationally in 
English as the "China and Mongolia Division." But it is called in 
Japanese, the "China Division" because pro-China politicians opposed 
the idea of changing the name, according to a Foreign Ministry 
source. 
 
It is said that some ruling coalition members were concerned that 
the change might irritate China. China, meanwhile, appears to be 
indifferent, with one official saying: "That's Japan's internal 
problem." 
 
10) IWC agrees to set up coastal whaling working group: Australia, 
antiwhaling groups stunned by unexpected move 
 
SANKEI (Page 6) (Excerpts) 
June 26, 2008 
 
The International Whaling Commission (IWC) at its 60th plenary 
meeting in Santiago, Chile, agreed to set up a working group for 
discussion of key issues regarding which concessions cannot be 
expected due to conflict among member nations. Censure resolution 
submission matches and threats of secession have been usual scenes 
at IWC plenary meetings. This time, however, the meeting has been 
going unusually quietly. With "normalization" as the keyword, no 
resolutions or motions have been submitted. Members of delegations 
and nongovernmental organizations, which have been harshly 
criticizing Japan, were stunned by the outcome. 
 
The Australian delegation is critical of Japan's research whaling 
and sympathetic toward radical protest activities by environmental 
groups. Environment Minister Peter Garrett is taking part in the 
 
TOKYO 00001753  008 OF 012 
 
 
meeting from Australia. 
 
Garrett is a former vocalist of "Midnight Oil," a popular Australian 
rock band. He has many fans. He is highly interested in 
environmental protection. He was first elected as a lawmaker in 2004 
and became the environment minister of the Rudd administration, 
which was inaugurated in 2007. 
 
Garrett in an interview before leaving for Santiago said 
flamboyantly: "I will never, ever make a compromise with Japan. It 
is impossible for me to make concessions and allow it to kill 
whales, even if it's a few." 
 
However, most participating countries supported the chairman's 
management policy calling for an agreement instead of taking a vote. 
Participants also agreed to establish a working group for 
normalization aimed at finding a breakthrough in the stalemate 
through comprehensive talks on confrontational issues joined by a 
small number of persons. This has even generated the atmosphere of a 
thaw at the meeting. 
 
Garrett, left to fend for himself, stressed: "We are now at the 
threshold of a constructive discussion. We are not going to make a 
deal. There is no change in our policy of making no compromise with 
Japan." However, reporters responded skeptically, with one saying, 
"Perhaps you should face facts. Japan will never compromise unless 
it gets something in return." 
 
Glen Inwood, a staff member of the Institute of Cetacean Research 
who serves as the Japanese government's spokesman responsible for 
the foreign media, made an acrimonious remark: "Most member nations 
have come to Santiago with the determination to do something with 
the IWC, which is on the brink of collapse. Mr. Garrett has come 
with yet another new demand. He may be under some kind of 
misconception." 
 
11) After stormy developments, LDP decides to leave draft 2008 basic 
economic and fiscal reform policies to Tanigaki; Matter likely to 
rekindle during budget compilation 
 
TOKYO SHIMBUN (Page 2) (Abridged) 
June 26, 2008 
 
The Liberal Democratic Party Policy Research Council yesterday 
discussed a draft of 2008 basic policies for economic and fiscal 
reform compiled by the government. Although the meeting erupted with 
fierce opposition to the policy to reduce social security expenses 
by 220 billion yen annually, council chairman Sadakazu Tanigaki 
managed to obtain the council's approval to leave the matter to him 
in the end. The government intends to adopt it at a cabinet meeting 
on June 27 after it is finally approved by the LDP General Council 
on the 26th. A renewed pitched battle is certain to take place over 
reducing spending during budget compilation. 
 
In the meeting, Tanigaki came under fire, with some members saying, 
"You are at the beck and call of the Finance Ministry," of "If this 
situation persists, Japan will sink." 
 
The draft specifies that the government will cut spending as deeply 
as possible. The draft is specifically designed to reduce social 
security spending by 1.1 trillion yen over five years from fiscal 
2007 and to trim down public works. The draft had been presented to 
 
TOKYO 00001753  009 OF 012 
 
 
a Policy Research Council meeting on June 24, but meeting with 
strong objections, it failed to win its endorsement. 
 
In yesterday's meeting, many members, mostly health and welfare 
policy specialists, raised objections to the draft, citing 
financially strapped local districts and the next Lower House 
election. 
 
Tanigaki asked the members to leave the matter to him, saying that 
trimming spending as much as possible is Prime Minister Fukuda's 
policy. But health and welfare policy specialists still insisted on 
revising the draft to keep social security spending intact. This 
prompted Tanigaki's deputy Hiroyuki Sonoda to propose carrying their 
discussion over to the upcoming budget compilation, thereby 
convincing the members to leave the matter to Tanigaki for now. 
 
After the meeting, Health, Labor and Welfare Division chief Seiichi 
Eto indicated to reporters that he would continue opposing the draft 
policy. 
 
The prime minister, too, expressed to the press his intention to 
uphold the reduction policy. 
 
12) Government and ruling camp planning to compile supplemental 
budget, aiming a building internal solidarity; DPJ expected to join 
deliberations 
 
YOMIURI (Page 4) (Excerpts) 
June 26, 2008 
 
The government and the ruling parties have decided informally to 
present to the extraordinary session of the Diet that opens in late 
August a supplemental budget for fiscal 2008 that would contain such 
outlays as measures to counter soaring oil prices and measure to 
restore the areas in Iwate and Miyagi devastated by the earthquake. 
The decision reflects alarm that with soaring oil prices, the lives 
of the people have been greatly affected, so unless something is 
done immediately to alleviate the situation, it could lead to a 
further destabilization of the Fukuda administration. 
 
This time, the compilation of the supplemental budget will be under 
the lead of the ruling parties. The Liberal Democratic Party's (LDP) 
and New Komeito's policy research council heads, Tanigaki and Saito, 
respectively, on the 24th met with Chief Cabinet Secretary Machimura 
and pointed out the need for compiling a supplemental at the time of 
presenting a set of measures to counter rising oil prices. Machimura 
reportedly indicated he would study such in association with the 
package of measures to deal with the natural disaster. 
 
13) Prime Minister Fukuda's remarks about consumption tax confuse 
and shake up the ruling camp, disappointing those favoring a tax 
hike 
 
MAINICHI (Page 2) (Excerpts) 
June 26, 2008 
 
Prime Minister Yasuo Fukuda has been wavering back and forth in his 
remarks about raising the consumption tax. In an interview on June 
17 to news companies of G-8 countries, he took a forward-looking 
stance, saying, "It's time to make a decision," but on his press 
conference on the 23rd, he retreated, only saying, "I was thinking 
in long units, such as two or three years." The prime Minister, who 
 
TOKYO 00001753  010 OF 012 
 
 
already has lost momentum in fiscal reconstruction and suppressing 
expenditures, has now irritated the ruling camp, prior to the 
drastic tax-reform exercise this fall. 
 
"It would be better not to heat up the issue." The prime minister 
made this remark at a cabinet meeting on the 24th, driving the point 
home so that the ruling camp would not overreact to his consumption 
tax remark. He has let his aides know that he did not want anybody 
to talk about the consumption tax in August. The prime minister's 
latest remark has been taken a retreat by the LDP, but former Chief 
Cabinet Secretary Yosano could not conceal his disappointment. But 
former Secretary General Hidenao Nakagawa, who is cautious about 
raising taxes, told his aides, "The debate about raising the 
consumption tax has generally peaked." 
 
14) Calls growing in DPJ to swiftly return to deliberations in next 
extra Diet session in order to pursue government over medical 
insurance system for elderly and other matters 
 
NIKKEI (Page 2) (Excerpts) 
June 26, 2008 
 
In the closing stage of the previous regular Diet session, the major 
opposition Democratic Party of Japan boycotted Diet deliberations. 
Many in the party are voicing their eagerness to return swiftly to 
deliberations the in the next extraordinary Diet session that is 
likely to open in late August. The reason is that in order to 
realize President Ichiro Ozawa's plan to force the prime minister to 
dissolve the Lower House for a snap general election in the fall or 
beyond, it is essential to pursue the government in Diet 
deliberations on such issues as the medical insurance system for 
people 75 and older and the reform of road tax revenues. A plan has 
also cropped up to conduct deliberations right from the beginning of 
the upcoming Diet session after talks between the ruling and 
opposition camps. 
 
In an interview with Nikkei, Deputy President Naoto Kan said: 
"Absurdity has deepened (since the previous Diet session) over such 
issues as the medical and pension systems and bureaucrat-initiated 
bid-rigging scandals. It is important to discuss such issues, and 
they must be dealt with flexibly." 
 
In the last Diet session, the DPJ totally gutted deliberations after 
Prime Minister Yasuo Fukuda effectively ignored the adoption by the 
Upper House of a censure motion against him. A hard-line stance was 
dominant in the DPJ leadership. 
 
But even after deciding to boycott deliberations, the DPJ continued 
attending sessions to discuss disaster countermeasures and the 
abduction issue as exceptions from a humanitarian viewpoint. After 
the previous Diet session closed, Secretary General Yukio Hatoyama 
said in a softer tone, "It is necessary to deal with matters 
flexibly in consideration of public opinion." 
 
On the night of June 23, Ozawa instructed Hatoyama to consult 
closely with the Upper House regarding future Diet affairs. They 
also confirmed a policy of making decisions after closely watching 
the trend of public opinion. 
 
15) Junior, mid-level DPJ lawmakers looking for rival candidates 
against Ozawa for party leadership race 
 
 
TOKYO 00001753  011 OF 012 
 
 
MAINICHI (Page 5) (Excerpts) 
June 26, 2008 
 
Prior to the September presidential election, groups in the main 
opposition Democratic Party of Japan (DPJ), including one led by 
former President Seiji Maehara, will hold study group sessions 
starting today. It seems that most party executive members and many 
DPJ lawmakers want to carry out a smooth election, reelecting Ichiro 
Ozawa so that he will lead the party until the next House of 
Representatives election. However, groups of junior and mid-level 
lawmakers, having distanced themselves from Ozawa, are trying to 
find rival candidates against the incumbent president. They are 
aiming at holding a full-fledged election by letting party members 
and supporters take part in the election for the first time in six 
years. 
 
The group called Ryoun-kai, headed by Maehara, will hold a study 
group session on June 26-27 in Kiso Town, Nagano Prefecture. The 
Maehara group will work out a strategy for the party leadership 
race, inviting Kozo Watanabe, a supreme advisor to the party, as a 
lecturer to the session. The group is in favor of fielding other 
candidates besides Ozawa, arguing that they cannot hold policy 
debate under Ozawa's leadership. Maehara, however, has remained 
silent since writing an article for a monthly magazine in which he 
challenged Ozawa along policy lines, caused a major fuss in which 
e-mails criticizing Maehara were sent to all his group members. A 
person close to Maehara said: "The article will serve as the policy 
platform for the leadership race. Since he has no intention to run 
in the election, he wanted to come up with constructive statements." 
But a different group member said: "His stance of facing down Ozawa 
is too strong, so it is difficult to win middle of the road members 
over our side." There is a party rumor that Yoshito Sengoku and 
Yukio Edano may become candidates. 
 
The group called Kasei-kai, led by Public Relations Committee 
Chairman Yoshihiko Noda, will hold a study session on July 2-3 at a 
hotel in Odawara, Kanagawa Prefecture. Many in the group believe 
that the party needs a leadership election, in which candidates talk 
straightforwardly about the future of Japan. Yesterday, Noda and his 
followers got together in the Diet to prepare for the session. 
Attention is on whether Noda will express his intention to run in 
the presidential election. 
 
16) LDP group proposes suspending entertainment expenditures for 
bureaucrats 
 
YOMIURI (Page 4) (Full) 
June 26, 2008 
 
The Liberal Democratic Party's (LDP) project team to stop the 
wasteful use of tax money (chaired by Senior Secretary General 
Hiroyuki Sonoda) decided yesterday to call on the government to 
suspend all entertainment expenditures for the ministries and 
agencies in the budget for fiscal 2008. The team will seek 
abolishment in principle in compiling a budget for fiscal 2009. 
Coming up with a set of proposals in early next week, the group will 
present it to the government. 
 
Entertainment expenditures for civil servants of the central 
government are disbursed from the welfare budget for health 
promotion and benefits of personnel. It has been discovered that 
some agencies spent tax money to purchase massage chairs and to hold 
 
TOKYO 00001753  012 OF 012 
 
 
bowling contests. These practices came under heavy criticism. 
 
The LDP team has judged that it is unnecessary to disburse funds for 
entertaining expenses and decided to freeze the budget for such use 
this fiscal year. 
 
SCHIEFFER