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UNCLAS SECTION 01 OF 11 TOKYO 001895 
 
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 07/10/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
G-8 diplomacy: 
4) President Bush satisfied with results of G-8 Summit at Lake Toya 
in Hokkaido  (Mainichi) 
5) G-8 agreement to halve greenhouse-gas emissions by 2050 now goes 
to the UN for follow up, with Prime Minister Fukuda expressing 
desire to take lead  (Asahi) 
6) G-8 Summit seen as doing little to tackle the global food crisis 
(Sankei) 
7) Prime Minister Fukuda breathes satisfied sigh of relief as G-8 
summit ends  (Yomiuri) 
 
Fukuda diplomacy: 
8) Japan, India in summit meeting agree to closely cooperate on 
global warming issues, speed up EPA negotiations  (Nikkei) 
9) Russian President Medvedev says northern territories issue will 
be resolved based on past principles  (Nikkei) 
10) Prime Minister Fukuda plans to improve the social-welfare 
situation of Brazilians living in Japan  (Nikkei) 
11) Japan, Australia agree on need to create a new organ for nuclear 
non-proliferation  (Nikkei) 
12) Japan-China talks: Fukuda will not remove sanctions on North 
Korea for sees not movement on the abduction front  (Mainichi) 
 
North Korea problem: 
13) Little hope for progress on the abductions issue at the 
Six-Party Talks that start today  (Sankei) 
14) North Korea's nuclear declaration does not mention plutonium 
prior to the 1993 crisis  (Nikkei) 
15) Abductee family association, Diet league critical of G-8 Summit 
for not doing enough on abduction issue  (Nikkei) 
16) Abductee family association blasts LDP's Koichi Kato for 
statement that abductees should have been returned to North Korea 
(Sankei) 
 
Political agenda: 
17) With foreign policy results under his belt, Prime Minister 
Fukuda returns to politics, by hinting at shuffling of his cabinet 
soon  (Nikkei, Yomiuri) 
18) Looking to make a bid for the prime minister's seat, LDP's 
Shoichi Nakagawa criticizes Fukuda's economic policy, issues 
proposals of his own  (Asahi) 
19) Shoichi Nakagawa presents set of emergency economic measures in 
article in current issue of prestigious monthly magazine  (Yomiuri) 
 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Long-term target to reduce greenhouse gas emissions by 50 PERCENT 
by 2050 now put to debate at UN 
 
Mainichi: 
Fukuda says G-8's long-term target agreement "contributed to 
building momentum for UN negotiations" 
 
TOKYO 00001895  002 OF 011 
 
 
 
Yomiuri: 
Emerging economies also commit to curbing greenhouse gas emissions; 
Major economies agree to continue talks 
 
Nikkei: 
Sony, Toshiba, other firms to join forces to develop core technology 
for mass-producing large organic electroluminescence panels in 
attempt to overtake South Korea 
 
Sankei: 
Lake Toya summit ends without setting numerical targets due to 
conflict of national interests among emitters 
 
Tokyo Shimbun: 
Prime minister releases summit chairman's summary specifying 
emission trading within country 
 
Akahata: 
Lake Toya summit closes: Industrialized nations fail to fulfill 
responsibilities on global warming, food, speculative money 
 
2) EDITORIALS 
 
Asahi: 
(1) G-8 summit ends: Numerical targets disappeared overnight 
(2)  Oita teacher recruitment corruption scandal 
 
Mainichi: 
(1) Lake Toya summit: Action must follow on global warming 
 
Yomiuri: 
(1) G-8 summit closes: Continued dialogue needed on world's woes 
 
Nikkei: 
(1) Did G-8 display ability to resolve problems? 
 
Sankei: 
(1) Summit closes: A step forward, yet dissatisfaction lingers 
(2) Six-party talks: Resolving abduction issue still a basic 
principle 
 
Tokyo Shimbun: 
(1) Summit ends: Sense of global crisis must be shared by all 
(2) Six-party talks: Take advantage of international opinion 
 
Akahata: 
(1) Lake Toya summit: G-8 nations must behave as true major powers 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 9 & 10 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
July 9 
08:47 
Attended a meeting with the leaders of the G-8 nations and five 
emerging countries at a hotel in Toyakocho, Hokkaido. 
 
09:46 
 
TOKYO 00001895  003 OF 011 
 
 
Met with South Korean President Lee Myung Bak. 
 
10:37 
Attended a meeting of major greenhouse gas emitters. 
 
12:25 
Posed for a photo with the leaders of the G-8 nations, eight 
emerging countries, and international organizations. Attended a 
working lunch. 
 
15:30 
Gave a press conference at the International Media Center. 
 
17:00 
Met Chinese President Hu Jintao at a hotel. 
 
17:54 
Met Indian Prime Minister Singh. 
 
18:35 
Met Mexican President Calderon. 
 
19:02 
Met Brazilian President Lula. 
 
19:35 
Met Indonesian President Yudhoyono. 
 
20:02 
Met Australian Prime Minister Rudd. 
 
22:27 
Left New Chitose Airport by a government plane. 
 
23:36 
Arrived at Haneda Airport. 
 
July 10 
 
00:10 
Returned to his official residence. 
 
4) President Bush expresses sense of satisfaction about his 
leadership in fight against global warming 
 
MAINICHI (Page 8) (Abridged slightly) 
July 10, 2008 
 
U.S. President George W. Bush, who will leave office next January, 
headed home yesterday after winding up his participation in the G-8 
Lake Toya Summit, his last such experience. The President 
contributed to the reaching of a G-8 consensus on greenhouse gas 
emissions cuts, the most controversial issue at the summit, by 
shifting policy weight to international cooperation. Mr. Bush has 
begun demonstrating greater flexibility in the last stage of his 
presidency. How is he going to deal with Iraq, Iran, and North 
Korea, countries once he referred to as an "axis of evil"? 
 
The leaders' conference yesterday of the Major Economies Meeting on 
Energy Security and Climate Change (MEM), held under the lead of 
President Bush, came up with a position in favor of sharing a 
long-term target for reducing greenhouse gas emissions. This means 
 
TOKYO 00001895  004 OF 011 
 
 
that the group has succeeded in bringing China and India into the 
same game and in paving the way for the global task. The Bush 
administration, which has been labeled as passive about cutting 
greenhouse gas emissions, seems to be taking the matter as having 
begun to head in the direction it had wanted to see. 
 
At the conclusion of the summit, President Bush expressed a sense of 
satisfaction, saying: "In order to address climate change, all major 
economies must be at the table, and that's what we had here today. 
We made clear the setting of (an interim goal for each 
industrialized nation). And we made significant progress." 
 
In the Lake Toya summit, the G-8 leaders adopted on July 8 a 
statement setting a long-term goal of halving greenhouse gas 
emissions by 2050 as a global target, and the July 9 MEM agreed to 
support a plan to share the vision of the long-term target. 
 
James Connaughton, chairman of the White House Council on 
Environmental Quality, indicated that the G-8 accord stands only 
when there is an agreement by all other countries. In the event the 
MEM, which includes such major emitters as China and India, fails to 
take action, the agreement would turn into a dead letter. 
 
According to Connaughton, there were objections to the G-8 agreement 
at the MEM session, but many members also supported it, and one even 
said that they had reached a point where there was no turning back. 
The prevalent view is that the Bush administration, which remains 
cautious about cutting emissions, could not go any further than 
demonstrating its "policy shift" at the summit. 
 
5) Long-term target to halve greenhouse gas emissions by 2050 now 
put to debate at UN: Premier eager to display leadership 
 
ASAHI (Top Play) (Excerpts) 
July 10, 2008 
 
The Hokkaido Lake Toya Summit, which brought together 22 leaders 
from industrialized and emerging countries, yesterday closed, 
winding up its three-day schedule. The focus of attention has been 
on measures to deal with global warming. Regarding the global 
long-term target of cutting greenhouse gas emissions by 50 PERCENT 
by 2050, summit leaders sought the adoption of the target at the UN, 
declaring that they would seek to have all countries share the 
target. The next challenge is whether they will be able to persuade 
emerging countries, which are seeking stricter numerical goals from 
industrialized countries, to share the target. 
 
The Group of Eight (G-8) summit and the Major Economies Meeting on 
Energy Security and Climate Change (MEM), including G-8 nations and 
eight other countries, such as China, India and Brazil, have now 
come to the starting point in their efforts to share the long-term 
goal in combating global warming. However, since emerging countries 
are strengthening their unity to counter industrialized countries, 
it will likely be difficult to get them to compromise. 
 
Prime Minister Fukuda, who served as the chairman, on the afternoon 
of July 9 held a press briefing at the International Media Center in 
Rusutsu Village. He underscored the achievements, noting: "G-8 
nations have shown a common perception, overcoming differences, and 
made contributions to giving impetus to talks at the UN. I would 
like to display leadership so that emerging economies, such as China 
and India, will share the long-term target and the target will be 
 
TOKYO 00001895  005 OF 011 
 
 
adopted at talks at the UN." 
 
G-8 nations aim at having the long-term target adopted as part of 
the next-term framework from 2013 that will replace the Kyoto 
Protocol at the UN Climate Change Conference (COP15) to be held at 
the end of 2009. The G-8 will seek approval of the target of cutting 
emissions by 50 PERCENT  by 2050 from all signatory nations in the 
run-up to the COP15. 
 
The agreement to cut emissions by 50 PERCENT  by 2050 was not 
included in the summit declaration. Regarding this, Fukuda said, 
"The declaration is naturally based on the premise that G-8 nations, 
including the U.S., have agreed to seek to have developing countries 
share the target." Concerning the base year for emissions, he said, 
"The G-8 agreement envisages a 50 PERCENT  cut from the level of the 
present time." 
 
6) G-8 Summit: No clues in sight about addressing the food issue; 
Hands off the cause of high prices being speculation 
 
SANKEI (Page 2) (Excerpt) 
July 10, 2008 
 
On the issue of soaring food prices, Prime Minister Fukuda on July 9 
stressed a stance of making sure that assistance was provided, 
stating in the chairman's summary statement: "We renew our 
commitment to take all the measures at our disposal." However, what 
the developing countries have been strongly seeking are measures 
that the advanced industrialized countries have been hesitant to 
take, such as placing restrictions on speculation. The message is 
that G-8 leaders' measures for emerging from the food crisis are not 
likely to function. 
 
7) Prime Minister Fukuda, relieved after completing great mission, 
says, "We had a productive three days" 
 
YOMIURI (Page 4) (Full) 
July 10, 2008 
 
Prime Minister Yasuo Fukuda, who had took office last year following 
the sudden resignation of then Prime Minister Shinzo Abe, now feels 
greatly relieved for being able to complete his most important task 
of chairing the Group of Eight (G-8) Hokkaido Toyako Summit. Fukuda 
also feels satisfied because the G-8 summit produced some 
achievements. 
 
Fukuda, who looked tired yesterday afternoon, played up the 
achievements of the G-8 summit at a press conference as the G-8 
chair, saying: "There were some scenes of heated discussions, but we 
achieved many significant results. We had a productive three days." 
 
Although Abe paved the way for the G8 summit, having picked the 
location Lake Toya in Hokkaido as the venue, Fukuda had to assume a 
heavy responsibility as the chairman to deal with such serious 
international issues as global warming, a global economic slowdown 
triggered by the U.S. subprime mortgage crisis, and soaring oil and 
food prices. "He looks like a load has been lifted from his 
shoulders" said a person close to Fukuda. 
 
All opposition parties, however, criticized the results of the G-8 
summit. 
 
 
TOKYO 00001895  006 OF 011 
 
 
Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama 
told reporters yesterday in Tokyo: "(Regarding measures against 
global warming,) the G-8 nations alone should have dispatched a 
stronger message." He faulted Fukuda for a "lack of leadership." 
Tadayoshi Ichida, head of the secretariat of the Japanese Communist 
Party, also was critical: "As representatives of the industrialized 
countries, the G-8 leaders failed to fulfill their responsibility." 
Social Democratic Party Chairperson Mizuho Fukushima told the press: 
"I was disappointed at the results that will have no impact and make 
no results." 
 
8) Japan, India affirm cooperation in fighting global warming, 
discuss accelerating EPA negotiations 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
Prime Minister Yasuo Fukuda and Indian Prime Minister Manmohan Singh 
agreed last evening to continue to keep in close contacts with each 
other in addressing global warming. In the bilateral meeting held on 
the sidelines of the just-concluded Toyako Summit, Fukuda expressed 
his hope to accelerate negotiations on concluding an economic 
partnership agreement (EPA) with India. Singh made a positive reply: 
"The EPA initiative has also strong support from the Indian 
industry." 
 
Singh expressed his gratitude for having been invited to outreach 
sessions at the Toyako Summit. He then indicated a feeling of 
anticipation for Japan's expanded investment in railway construction 
and other projects in India. 
 
Fukuda said that Japan is willing to extend cooperation particularly 
on global warming, food and energy policies, and UN reform on a 
priority basis. 
 
9) Russian President: "Solution of territorial issue should be based 
on past principles" 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
In a press conference held after the end of the Group of Eight (G-8) 
Summit, Russian President Dmitry Medvedev said: "We agreed with 
Japan that both sides will continue efforts to resolve the Northern 
Territories issue based on the principles the two countries agreed 
on in the past." He stopped short of referring to whether the past 
principles include what was written in the 1993 Tokyo Declaration. 
The declaration specified that the dispute over the possession of 
the four Northern Territories should be resolved on the basis of the 
principles of law and justice. But Medvedev renewed his willingness 
to continue negotiations towards a solution of the issue. 
 
Medvedev identified the Japan-Russia meeting as one of the most 
important bilateral talks at the summit, indicating his eagerness to 
resolve the territorial issue. Former President Vladimir Putin (now 
prime minister) insisted that a solution over the disputed islands 
be based on the 1956 Japan-Russia Joint Declaration, which noted 
that Russia would transfer the Habomai Islands and Shikotan to 
Japan. It remains to be seen whether Medvedev intends to make a 
policy switch. 
 
10) Fukuda promises to improve situation for Brazilians living in 
 
TOKYO 00001895  007 OF 011 
 
 
Japan 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
In a meeting with Prime Minister Yasuo Fukuda last night, Brazilian 
President Silva called for Japan's strengthened cooperation for 
better treatment to Brazilians living in Japan. Fukuda said in 
agreement: "Brazilians living in Japan have played a significant 
role in deepening mutual understanding between the peoples of the 
two countries. I would like to step up efforts to resolve social 
security, education, and other problems for them." 
 
11) Japanese, Australian leaders agree on initiative to set up 
nuclear nonproliferation panel 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
Prime Minister Yasuo Fukuda held a meeting with Australian Prime 
Minister Kevin Rudd last night. Rudd briefed Fukuda on an initiative 
to set up a nuclear nonproliferation and disarmament international 
committee. Rudd and former Foreign Minister Gareth Evans proposed 
that Japan co-chair the envisioned panel. Agreeing to the offer, 
Fukuda said he would appoint former Foreign Minister Yoriko 
Kawaguchi as co-chairperson. In reference to the whaling issue, Rudd 
said: "We should make efforts to prevent the issue from negatively 
affecting bilateral relations." 
 
In conclusion, Rudd emphasized: "The Toyako Summit was highly 
successful. I praise the leadership of Prime Minister Fukuda as 
chair of the summit." 
 
12) Japan not in situation to lift N. Korea sanctions: Fukuda 
 
MAINICHI (Page 1) (Abridged) 
July 10, 2008 
 
Prime Minister Yasuo Fukuda met with Chinese President Hu Jintao 
yesterday at a hotel where the Group of Eight (G-8) summit was held. 
In the meeting, Fukuda asked Hu to work on North Korean leaders for 
a solution to the issue of Japanese nationals abducted to North 
Korea. At the same time, Fukuda said, "North Korea has not taken any 
specific action to reinvestigate the abduction issue, and Japan is 
not in a situation to lift some of its sanctions." Hu went no 
further than to answer: "I understand Japan's concern about the 
abductions. China hopes that Japan and North Korea will hold 
dialogue and resolve contradictions. We have made efforts." 
 
It has been a month since Japan and North Korea held a meeting of 
working-level officials, in which North Korea agreed to 
reinvestigate the abduction issue and Japan also agreed to lift some 
of its economic sanctions on North Korea. The government has 
explained that the agreement is neither stagnant nor in retreat and 
that Japan and North Korea in the next meeting will talk about when 
and how to reinvestigate the abduction issue. There is no knowing 
when the next meeting will take place. Meanwhile, Fukuda has 
indicated that he will wait until North Korea begins to move. As a 
result, the agreement's feasibility is now even murkier. 
 
Fukuda and Hu confirmed that Japan and China will conclude a treaty 
at an early date for gas field development in the East China Sea. 
 
TOKYO 00001895  008 OF 011 
 
 
 
13) Slim chance of abduction issue making headway: Six-party talks 
to give top priority to nuclear verification 
 
SANKEI (Page 5) (Excerpts) 
July 10, 2008 
 
The government is determined to seek a sincere response from 
Pyongyang at a heads-of-delegation meeting of the six-party talks on 
denuclearizing North Korea to be held in Beijing starting today, so 
that tangible progress can be achieved. The aim of the meeting this 
time, however, is to pave the way for a detailed verification of 
North Korea's nuclear report and to move forward the process of 
denuclearization of the Korean Peninsula. Since there is a slim 
chance of the abduction issue becoming a main topic of discussion at 
the meeting, it appears impossible for the issue to move toward a 
settlement. Prime Minister Yasuo Fukuda during a meeting with 
Chinese President Hu Jin Tao on July 9 categorically expressed his 
resolve that there will be no normalization of ties with North Korea 
without a settlement of the abduction of Japanese nationals by that 
nation. Chief Cabinet Secretary Nobutaka Machimura at a press 
conference also held yesterday pointed out, "The major aim of the 
six-party talks starting tomorrow is to set principles or a system 
at the outset so as to ensure a solid verification of North Korea's 
nuclear report." 
 
North Korea at the bilateral working-level talks in June pledged to 
reinvestigate the abduction issue. Following the move, Japan pledged 
to lift portions of sanctions against that nation in return for 
that. However, the issue remains deadlocked with no concrete 
progress made on implementing the promised reinvestigation. 
 
14) N. Korea fails to declare plutonium produced before 1993 nuclear 
crisis 
 
NIKKEI (Page 3) (Abridged) 
July 10, 2008 
 
The members of the six-party talks over the North Korean nuclear 
issue will hold a meeting of their chief delegates today in Beijing. 
Meanwhile, on June 26, North Korea submitted a declaration of its 
nuclear programs in the second phase of its nuclear abandonment. The 
declaration, however, does not specify the amount of plutonium 
extracted before the International Atomic Energy Agency's 
inspections, sources revealed yesterday. In 1993, Pyongyang withdrew 
from the Nuclear Non-Proliferation Treaty (NPT). In this nuclear 
crisis, North Korea was suspected of having already developed 
nuclear weapons. In its nuclear declaration this time, North Korea 
again avoided disclosing details about its suspected nuclear 
development. Japan, the United States, and other six-party members 
called on North Korea to come up with a full disclosure of its 
nuclear programs. The gap with this will likely come up in a meeting 
of chief delegates. 
 
The declaration was unveiled by several sources familiar with the 
six-party talks. Pyongyang has so far declared that North Korea 
created plutonium amounting to about 38 kilograms and extracted 
about 30 kilograms of plutonium and that the North still has about 8 
kilograms contained in spent nuclear fuel rods. Regarding the 30 
kilograms, North Korea explains that it used about 2 kilograms for 
its nuclear test in October 2006 and manufactured nuclear weapons 
with about 26 kilograms, according to the sources. Pyongyang also 
 
TOKYO 00001895  009 OF 011 
 
 
explains that about 2 kilograms was "disposed of," the sources 
said. 
 
North Korea allegedly extracted plutonium at its Yongbyon nuclear 
facility when its graphite-moderated nuclear reactor was in 
operation from 1986 through 1992. In its nuclear declaration, North 
Korea touches on this suspicion, according to the sources. However, 
North Korea explains that it removed some damaged fuel rods and 
extracted a very small quantity of plutonium, the sources said. The 
declaration seems to have gone no further than to follow Pyongyang's 
previous assertions. 
 
15) Abductee families, lawmakers criticize G-8 for failing to focus 
on abductions 
 
NIKKEI (Page 2) (Full) 
July 10, 2008 
 
The families of those abducted by North Korea and a suprapartisan 
parliamentary league, headed by Takeo Hiranuma, held a joint 
executive meeting yesterday, in which the Group of Eight (G-8) 
summit held at Lake Toya in Hokkaido was criticized for failing to 
take up the abduction issue for sufficient discussion. 
 
Shigeo Iizuka, who represents the families of abductees, said: "They 
hardly mentioned the abductions. I can't help but feel 
disappointed." Sakie Yokota also stressed, "I wanted Prime Minister 
Yasuo Fukuda to make a little stronger statement." 
 
16) Abductee family association, National Association for the Rescue 
of Japanese Kidnapped by North Korea file protest against Kato over 
his statement "Abductees should have been returned to North Korea" 
 
SANKEI (Page 5) (Almost full) 
July 10, 2008 
 
Former Liberal Democratic Party (LDP) Secretary General Koichi Kato 
said, "Since it was a pledge made between the countries, Japan 
should have returned (the five repatriated abductees) to North 
Korea." In response to this statement, the Abductees Family 
Association, chaired by Shigeo Iizuka, and the National Association 
for the Rescue of Japanese Kidnapped by North Korea, chaired by 
Yoshiaki Fujino, on July 9, issued a statement of protest, noting 
that they are indignant at Mr. Kato, who does not understand the 
feelings and anxieties of abductees and their families at all. 
 
Referring to the government decision not to return to North Korea 
the five abductees who returned to Japan in the fall of 2002, when 
then Prime Minister Junichiro Koizumi visited Pyongyang, Kato on a 
TV program on the evening of July 7 said, "The government, centered 
on then Deputy Chief Cabinet Secretary Shinzo Abe, decided that the 
abductees should not be returned to North Korea. This is the reason 
Japan and North Korea remain unable to find a breakthrough on the 
abduction issue. In my view, if they had been returned to North 
Korea, there would have been repeated visits to Japan by those 
abductees. This is a difference in a diplomatic sense." Commenting 
on General Secretary Kim Jong Il, who admitted to the abduction 
issue and offered an apology, Kato said, "He is a person who is in a 
position similar to that of the Emperor." 
 
The statement of protest pointed out that it is clear to those who 
have any diplomatic sense that if those five abductees had been 
 
TOKYO 00001895  010 OF 011 
 
 
returned to North Korea, they would have been forced to say that 
they returned on their own will and used as a tool for North Korea 
to insist that the abduction issue had already been settled. 
 
The statement then criticized Kato, contending that is statement was 
shameful and calling into question his mental nature. 
 
17-1) Prime Minister Fukuda accomplishes pending foreign policy 
issues, even attaining a modicum of success on the abduction issue; 
Focus now will be on shuffling his cabinet 
 
NIKKEI (Page 2) (Excerpts) 
July 10, 2008 
 
Prime Minister Fukuda yesterday completed the schedule of events at 
the G-8 Summit at Lake Toya in Hokkaido. This being his first time 
to chair a summit, he achieved some successes, including the 
mentioning of the abduction issue in key statements, but there is no 
predicting how much this will improve his ratings in the polls, 
which have consistently been low. Can he regain his administration's 
footing by the time the next extraordinary Diet session is convened 
in late August? The interest of the ruling parties turns now turns 
the timing of his expected cabinet shuffle and the next Lower House 
election. 
 
Expectation of cabinet support recovery 
 
"It was a satisfying three days," the Prime Minister told the press 
corps at the closing of the summit. He reportedly was able to 
display his presence in his forte, foreign diplomacy, by personally 
coordinating difficult issues by phoning each G-8 leader. When Chief 
Cabinet Secretary Machimura called to express his appreciation, the 
Prime Minister replied in good spirits, "It went fine!" 
 
Will his cabinet support rate now rise? 
 
17-2) Prime Minister Fukuda begins considering cabinet shuffle to 
boost administration's popularity 
 
YOMIURI (Page 1) (Full) 
July 10, 2008 
 
With the closing of the Group of Eight (G-8) Toyako Summit, Prime 
Minister Yasuo Fukuda yesterday began to consider a cabinet shuffle 
in order to step up his efforts to deal with such issues as social 
welfare reform with the aim of boosting his administration's 
popularity. He is expected to shuffle his cabinet sometime between 
late July and early August. Since some in the ruling parties are 
negative about shuffling the cabinet, he intends to make a final 
decision after keeping close watch on the moves in the ruling camp. 
 
Since the National Council on Social Security, an advisory panel to 
the government, will come up this fall with a final report on 
pensions, medical services and nursing care, Fukuda envisions a 
review of the system to push forward with social welfare reform. He 
also hopes to speed up reform of the civil service and tax systems. 
Therefore, he is gradually strengthening the view that it would be 
desirable for him to deal with an extraordinary Diet session, which 
is expected to be convened in late August, with a new cabinet 
lineup. 
 
A person close to Fukuda said: "The Prime Minister himself will 
 
TOKYO 00001895  011 OF 011 
 
 
consider a cabinet lineup after ascertaining the state of progress 
in drafting policies and how cabinet ministers are doing their 
jobs." 
 
A senior Liberal Democratic Party member said yesterday: "The Prime 
Minister may shuffle the cabinet in late July or afterward." In the 
ruling camp, some look forward to a cabinet shuffle, believing that 
a cabinet shuffle is necessary to play up Fukuda's political 
identity, while others assert that the cabinet should not be 
shuffled, worrying that new problems may come up over new cabinet 
members at the extra Diet session. 
 
18) LDP's Shoichi Nakagawa criticizes tax hikes; Will he seek to 
succeed Fukuda? 
 
ASAHI (Page 4) (Full) 
July 10, 2008 
 
Shoichi Nakagawa, former policy chief of the ruling Liberal 
Democratic Party (LDP), reveals a set of 13 proposals for 
revitalizing Japan's economy in the monthly magazine Chuokoron, on 
sale on July 10. The main proposals include the notions of covering 
basic pensions by using tax revenues and of reinstating the 
temporary tax cut system. Since it is the first time for Nakagawa to 
come up with such proposals, the rumor may come up that he may plan 
to run in the LDP presidential election. 
 
Nakagawa proposes making part-time workers eligible to receive a 
welfare pension, reducing the corporate tax, creating a non-tax plan 
for small amount of capital gains and government-affiliated fund, 
and cutting three percent from the previous year's public works 
spending. He criticizes former Chief Cabinet Secretary Kaoru Yosano, 
who favors tax hikes and former LDP Secretary General Hidenao 
Nakagawa, who is negative about a consumption tax hike, placing 
importance on economic growth. He said in the magazine: "I don't 
understand what they want to realize. I think they are looking the 
wrong way." 
 
19) Shoichi Nakagawa to unveil emergency economic measures 
 
YOMIURI (Page 4) (Full) 
July 10, 2008 
 
Shoichi Nakagawa, former LDP Policy Research Council chairman, will 
unveil in the monthly magazine Chuo Koron's August issue that will 
go on sale today an emergency set of economic measures, including 
the revival of corporate tax cuts and of a fixed-rate cut in income 
and individual residential taxes, with the aim of avoiding an 
economic slowdown because of soaring oil prices. Describing the 
present state of the Japanese economy as in something like a third 
oil shock, Nakagawa proposes 2 trillion yen in corporate tax cuts, 
the revival of 2.6 trillion yen fixed-rate tax cuts, and a pension 
system totally funded by taxes. 
 
SCHIEFFER