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FM AMEMBASSY TOKYO
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RUEHKSO/AMCONSUL SAPPORO 9347
RUEHBJ/AMEMBASSY BEIJING 4277
RUEHUL/AMEMBASSY SEOUL 0266
RUCNDT/USMISSION USUN NEW YORK 0679

UNCLAS SECTION 01 OF 07 TOKYO 001878 
 
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 07/08/08 
 
INDEX: 
 
(1) Prime Minister Fukuda makes his summit debut as chair; Can he 
turn the tables and improve his support ratings (Yomiuri) 
 
(2) Nuclear and Abductions: Fukuda administration to seek "straight 
gate," while eyeing public opinion (Nikkei) 
 
(3) Shadow of globalization: G-8 countries groping for new economic 
order (Mainichi) 
 
(4) Mayor Iha off to U.S. on July 27 to seek elimination of 
dangerous aspects of Futenma Air Station (Ryukyu Shimpo) 
 
(5) Ruling parties to set up council in mid-July to work out 
specific measures to shift road-tax revenues into general budget 
(Yomiuri) 
 
(6) LDP's Koga approves reallocation of road funds for such 
expenditures as social security (Asahi) 
 
(7) 90 PERCENT  of DPJ's local execs back Ozawa in party race 
(Nikkei) 
 
ARTICLES: 
 
(1) Prime Minister Fukuda makes his summit debut as chair; Can he 
turn the tables and improve his support ratings 
 
YOMIURI (Page 4) (Abridged slightly) 
July 8, 2008 
 
Prime Minister Yasuo Fukuda made his "summit debut" yesterday with 
an expanded dialogue between the Group of Eight nations and African 
leaders, the first conference in the G-8 Lake Toya Summit. As the 
chair of this year's summit, the prime minister aims to buoy up his 
administration by making the international conference a success. At 
the same time, if the results turn out to be insufficient, he would 
not be able to put an end to his low support ratings. The prime 
minister is facing a crucial test. 
 
Prime Minister Fukuda shook hands with each one of the 20 leaders of 
the expanded luncheon meeting on their way to the venue, Windsor 
Hotel Toya, even exchanging words with them in English. Fukuda, who 
is well known for his dislike of grandstanding, even tapped the 
glass with a spoon at the luncheon table to signal the opening of 
the event in a Western style. 
 
"Once the discussion started, the prime minister expedited the 
proceeding calmly as usual," a senior Foreign Ministry official 
said. 
 
There is every reason for Prime Minister Fukuda to become excited 
during the G-8 summit, the diplomatic highlight in his premiership. 
 
Thorough preparations were made for the big event. In May, the 
government hosted the fourth Tokyo International Conference on 
African Development (TICAD) to play up Japan's eagerness to extend 
aid to Africa. In June, the prime minister announced the Fukuda 
vision to combat global warming. 
 
A Fukuda aide commented: "I think Prime Minister Fukuda has special 
 
TOKYO 00001878  002 OF 007 
 
 
feelings about chairing the summit, something his father was not 
able to achieve." Fukuda's father, the late Prime Minister Takeo 
Fukuda was forced to step down after failing to win the LDP 
leadership race in December 1978, the year before Japan was to host 
the 1979 G-7 summit. 
 
With no prospects in sight for the G-8 nations to reach an agreement 
on a long-term greenhouse gas emission reduction target, the 
environment surrounding Fukuda remains severe. 
 
Katsuya Okada, vice president of the major opposition Democratic 
Party of Japan, predicted: "Prime Minister Fukuda will not be able 
to demonstrate the leadership in the upcoming summit. Japan has not 
fulfilled its promise (under the Kyoto Protocol). It is hardly 
possible for such a country to tell other countries to get things 
done." Poor results of the Lake Toya summit would end up providing 
the opposition camp with additional ammunition. Chairing the G-8 
summit is a double-edged sword for Prime Minister Fukuda. 
 
(2) Nuclear and Abductions: Fukuda administration to seek "straight 
gate," while eyeing public opinion 
 
NIKKEI (Page 2) (Full) 
July 3, 2008 
 
With the United States starting the process of lifting North Korea 
as a state sponsor of terrorism, there was growing concern in Japan 
on June 26 that the issue of abductions of Japanese nationals would 
be left behind. Asked by reporters about how Japan would respond the 
situation, Prime Minister Yasuo Fukuda stressed on June 27: 
"Denuclearization is important. Along with that, we will have to 
resolve the abduction issue, as well." According to a government 
source, "The Prime Minister's remark was a result of careful 
arrangements in his government." The Fukuda administration has come 
up with a strategy of resolving the issues of abductions of Japanese 
nationals and North Korean nuclear programs at the same time. 
Appearing on NHK talks show on June 29, Foreign Minister Masahiko 
Koumura said: "Progress on the nuclear issue is better than no 
progress on both issues." 
 
Need to avoid isolation 
 
While the Six-Party Talks are entering a new phase, if Japan places 
priority on making progress on the abduction issue alone, it would 
be isolated. Japan has no other choice but to urge Pyongyang to 
resolve the abduction issue, while carefully scrutinizing the North 
Korea's nuclear declaration along with other countries. 
 
On June 19, a meeting of bureau director-general class officials 
from Japan, the United States, and South Korea was held in the 
Ministry of Foreign Affairs. In the session, U.S. Assistant 
Secretary of State Christopher Hill said: "I've heard that the 
present situation reminds North Korea of the Hussein government 
before the Iraqi war." When Hill said that North Korea was refusing 
the International Atomic Energy Agency's (IAEA) participation in the 
verification of the nuclear declaration, Asian and Oceanian Affairs 
Bureau Director General Akitaka Saiki gave Hill a warning: "The IAEA 
should be involved to the end." 
 
The worst scenario for Japan is that Pyongyang will not fulfill its 
obligation after Washington delists it and that the Six-Party Talks 
will move forward without resolving the nuclear issue. With no 
 
TOKYO 00001878  003 OF 007 
 
 
improvement made on the abduction issue, Japan will have to face a 
nuclear-armed North Korea. In an attempt to prevent such a risk, the 
government will ask other six-party talks members to let it join the 
verification of Pyongyang's nuclear declaration, besides the United 
States, China and Russia, all of which are nuclear powers. 
 
What Japan should do to resolve both nuclear and abduction issues is 
to join effort to provide energy assistance, as agreed at the 
six-party talks in return for North Korea's pledge to disable its 
nuclear facilities and nuclear declaration. Japan has maintained a 
principle of not taking part in the framework of providing energy 
assistance to Pyongyang before progress is made on the abduction 
issue. 
 
Other members of the Six-Party Talks are expected to provide energy 
to North Korea for the time being in place of Japan. Therefore, it 
is uncertain how much Japan's pressure on Pyongyang will be 
effective, according to a source connected to the talks. The source 
also said that Russia was calling on Japan to join them. 
 
Japan's other diplomatic leverage is its own economic sanctions 
against North Korea. The government intends to gradually lift 
sanctions when Pyongyang begins the reinvestigation into the 
abduction issue. 
 
However, political circles and the public have erected heavy 
barriers. Ruling Liberal Democratic Party (LDP) lawmakers, including 
former Prime Minister Shinzo Abe and Shoichi Nakagawa, who take a 
hard-line stance toward North Korea, are cautious about easing 
sanctions. In a poll Nikkei conducted recently, a majority of the 
public are against relaxing sanctions. 
 
The Fukuda administration will have to find a way that the public 
accepts, while facing off against North Korea. 
 
(3) Shadow of globalization: G-8 countries groping for new economic 
order 
 
MAINICHI (Page 2) (Full) 
July 8, 2008 
 
In the Lake Toya Summit in Hokkaido, economic issues are taking 
center stage again, although political issues such as antiterrorism 
measures were high on the agenda at the summits held over the past 
several years. But the economic issues caused by globalism are too 
complicated to be easily resolved under the lead of major 
industrialized countries. 
 
The current economic issues include soaring food and energy prices, 
global warming, international financial crisis triggered by the 
credit woes stemming from the U.S. subprime mortgage crisis, as well 
as inflation. 
 
These critical factors are closely connected with each other as a 
result of the rapid integration of the global economy. The 
U.S.-induced financial crisis has generated an enormous amount of 
investment money that has nowhere to go and also has pushed up food 
and oil prices. The countries that are emerging owing to the 
advancement of globalization are gulping huge amounts of grains and 
energy, causing global supply shortages. The industrialized 
countries are now being pressed to resolve these problems. 
 
 
TOKYO 00001878  004 OF 007 
 
 
After the collapse of the Soviet Union, the U.S. dominated the world 
as a huge power, and U.S.-dispatched money and information 
technology flew around global markets. As a result, information 
instantly reaches the other side of the world through the Internet 
now. Former socialist countries, China, and India, after 
incorporated in the market mechanism, became rich incredibly 
speedily. 
 
Set off by the subprime loan problem last summer, however, changes 
are going on in the U.S., which should have used state-of-the-art 
financial technologies, resulting in disrupting international 
financial markets. Large amounts of U.S. stocks and dollars were 
sold, and the funds that flowed out of stock and real estate markets 
drove up oil and food prices. President Bush, who used to lead the 
political summits, has seen the U.S.' international leadership 
decline in the last days of his presidency. The President can hardly 
be expected to play a leading role in the summit. 
 
The combined population of China and India is approximately 2.5 
billion, about 40 PERCENT  of the world population. China used to be 
an oil exporting nation but turned to be an oil importing nation in 
the mid-1990s owing to its rapid economic growth. As seen from also 
the fact that China has become nation importing soybeans since the 
start of this century, that nation is now a highly-developed 
consumer society. The recent steep rise in resource and grain prices 
is attributed to growing consumption of China. 
 
The Group of Eight (G-8) leaders will discuss how to control the 
surge in grain and oil prices. But now that the U.S. economy has 
slowed, it might be difficult for the G-8 alone, without China and 
India, to find an answer. That might be the reason the Lake Toya 
Summit is bringing together the leaders of 22 countries, the largest 
ever number, including the leaders of such emerging countries as 
China and India, as well as African nations. 
 
(4) Mayor Iha off to U.S. on July 27 to seek elimination of 
dangerous aspects of Futenma Air Station 
 
RYUKYU TIMES (Page 2) (Full) 
July 8, 2008 
 
Ginowan 
 
Ginowan Mayor Yoichi Iha will make a six-day four-night visit to the 
United States starting on July 27 to ask for the removal of 
dangerous aspects of Futenma Air Station. His itinerary, including a 
visit to U.S. Pacific Command (PACOM) headquarters in Hawaii, was 
set yesterday. Funds to visit the United States were eliminated from 
a supplementary budget bill that was presented to the city assembly 
in June. Given that situation, the mayor will visit the United 
States at his own expense. It will be his third visit to the United 
States as major. Iha said: "I intend to make the U.S. military 
realize that it is violating its own safety standards and to urge 
them to remove the dangerous aspects and make efforts toward 
reversion." 
 
Mayor Iha will call for the elimination of dangerous aspects of 
Futenma and an early return of the base. He will say that the 
absence of a clear zone (area where land use is prohibited) from 
Futenma Air Station constitutes a violation of U.S. military safety 
standards. His itinerary includes visits to PACOM headquarters, 
PACOM Marine Corps headquarters, and Senator Daniel Akaka, D-HI, a 
 
TOKYO 00001878  005 OF 007 
 
 
member of the Senate Committee on Armed Services. 
 
Mayor Iha will be accompanied by an interpreter, a city official, 
and Okinawa assembly members Kiyoko Tokashiki and Seiryo Arakaki, 
both representing Ginowan. 
 
As mayor, Iha first visited the United States in July 2004. In 
fiscal 2005 and 2006, the city assembly voted down expenses for U.S. 
visits. In 2005, he was able to visit the United States owing to 
donations from citizens. In March this year, the municipal assembly 
voted down a peaceful communities fund ordinance envisaging expenses 
for a U.S. visit. In June, the assembly passed the supplementary 
budget bill that did not include U.S. travel expenses. 
 
(5) Ruling parties to set up council in mid-July to work out 
specific measures to shift road-tax revenues into general budget 
 
YOMIURI (Page 4) (Full) 
July 8, 2008 
 
The Liberal Democratic Party (LDP) and the New Komeito started 
preparations to launch possibly in mid-July a council to discuss the 
issue of moving the tax revenues now dedicated to highway 
construction and maintenance projects into the general budget 
starting in FY2009. Since negotiations between the ruling and 
opposition blocs on this issue remain at a standstill, the ruling 
coalition judged it necessary to start drafting concrete measures 
independently. 
 
Immediately after the ruling parties began discussion on fundamental 
tax system reform for FY2009, LDP Policy Research Council Chairman 
Tanigaki sounded out his counterpart of the New Komeito on the idea 
of setting up a panel. As panel members, the ruling parties intend 
to pick the Policy Research Council chairman, the party's Tax System 
Research Commission chairman, and policy chiefs responsible for road 
construction and other local administrative affairs. 
 
The ruling camp initially gave priority to discussions with the 
opposition bloc, but no negotiations have been held since May 28 due 
to conflict between the two camps over the issue of the provision 
gasoline tax rate. Some members suggested that the ruling camp 
prepare a package of proposals first in order to set the stage for 
both sides to hold discussion. 
 
The new panel is expected to discuss the propriety of a plan to 
convert the gasoline tax into an environmental tax, the setting of 
tax rates, and the total amount of money needed for highway 
construction and maintenance projects. The government's annual 
economic and fiscal policy guidelines for 2008 released in June 
specified a plan to study the introduction of an environmental tax. 
The New Komeito is agreeable to the plan. 
 
LDP lawmakers with ties to the road construction industry are ready 
to actively participate in discussions in an attempt to secure a 
sufficient budget for highway construction and maintenance. 
 
Election Committee Chairman Koga in a speech in Fukuoka yesterday 
expressed his intention to allow the gasoline tax revenues for other 
purposes than their initial one up until the consumption tax is 
hiked. He said: 
 
"We would like to consider the possibility of using (the gasoline 
 
TOKYO 00001878  006 OF 007 
 
 
tax revenues) for social security, education, and other purposes 
even by freezing highway construction projects that are necessary 
over the next several years." 
 
Koga, however, said: "We cannot make concessions on budgetary 
allocations for local highway construction projects," stressing that 
the targets for the freeze should be only those in Tokyo, Osaka, and 
Nagoya. Executive Council Chairman Nikai stressed: "It is imperative 
to have the people understand that (the gasoline tax rate) cannot be 
easily lowered." As it stands, difficult negotiations are expected 
in the ruling camp. 
 
(6) LDP's Koga approves reallocation of road funds for such 
expenditures as social security 
 
ASAHI (Page 4) (Full) 
July 8, 2008 
 
Makoto Koga, chairman of the Election Committee of the Liberal 
Democratic Party (LDP) on July 7 gave a speech in Fukuoka City. 
Referring to the reallocation of special-purpose road construction 
revenues for other uses, he indicated his stance of approving of 
such funds being used for social security, etc., noting: "We will 
abide by fiscal discipline. However, we could perhaps make up for a 
shortage even at the cost of placing a freeze on the construction of 
necessary roads." He pointed out: "When it comes to the question of 
whether we can win a mandate even if we reform the tax code 
immediately and make arrangements this year for a consumption tax 
hike, it is impossible." He thus indicated his view that it would be 
unavoidable to reallocate road funds for such expenses as social 
security, instead of raising the consumption tax. However, he 
insisted that a ban should be first placed on the construction of 
new roads in urban areas, noting: "We will secure the construction 
of roads in rural areas. However, there are surely some road 
construction plans whose implementation can wait for three years in 
urban areas, where a public transportation system is 
well-developed." 
 
Koga warned that there must not be a dissolution of the Lower House 
-- the term of office of members of the Lower House expires in 
September next year -- and a general election within this year, 
because the ruling camp is bound to be defeated. Concerning the 
right timing for an election Prime Minister Fukuda should choose, he 
said, "He could decide at the outset of the regular Diet session to 
be convened in January next year. The end of March or April could 
also be an option" He then called on the prime minister to make up 
his mind whenever he thinks best timing after the passage of the 
budget bill for the next fiscal year.. 
 
(7) 90 PERCENT  of DPJ's local execs back Ozawa in party race 
 
NIKKEI (Page 2) (Abridged) 
July 4, 2008 
 
The leading opposition Democratic Party of Japan (Minshuto) is 
slated to hold a presidential election in September. Ahead of the 
race, the Nihon Keizai Shimbun conducted a questionnaire survey of 
the party's local executives from June 30 through July 3. In 
response, 43 of the DPJ's local chapters or 90 PERCENT  of the 
party's local chapters answered that it would be desirable for the 
DPJ to reelect its incumbent president, Ichiro Ozawa. The survey 
showed that a majority of the DPJ's local leaders want Ozawa to stay 
 
TOKYO 00001878  007 OF 007 
 
 
on, envisaging a change of government in the next election for the 
House of Representatives. Meanwhile, 35 local chapters or more than 
70 PERCENT  said the DPJ should hold an election with multiple 
candidates running for its presidency. 
 
The survey was carried out by sending a questionnaire form to the 
DPJ's 47 local chapters across the nation or by calling their 
executives, including secretaries general. Answers were obtained 
from all of the party's local chapters. 
 
The DPJ is to elect its head with votes from its Dietmembers and 
local assembly members. In addition, its members and supporters 
across the nation, totaling about 270,000, have the right to vote. 
The DPJ has held no presidential election involving its members and 
supporters since 2002. Among those calling for a presidential 
election, the DPJ's local chapter in Aomori Prefecture suggested the 
need for the party to give a voting opportunity. Some of the DPJ's 
local chapters answered that they want the DPJ to display its 
presence through policy debate, with its local chapter in Nagano 
Prefecture saying it would be better to heighten police debate. 
 
However, there were no negative answers at all from the DPJ's local 
executives to a question asking if they thought it was desirable for 
the DPJ to reelect Ozawa to its presidency. The local chapters in 
the prefectures of Kyoto, Nara, Hiroshima, and Tokushima did not 
answer this question. However, all other local chapters supported 
the idea of retaining Ozawa in his current post, with a DPJ local 
executive in Shizuoka Prefecture saying Ozawa is the best choice for 
the party's stability. Many of the DPJ's local leaders want to ride 
out the next election for the House of Representatives under Ozawa's 
continued leadership following the party's victory under his helm in 
last year's election for the House of Councillors and in this 
April's by-election in Yamaguchi Prefecture's District 2. 
 
SCHIEFFER