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UNCLAS SECTION 01 OF 12 TOKYO 001991 
 
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 07/18/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
Prime Minister's daily schedule: On vacation in Tokyo 
 
3) Jiji poll has the Fukuda Cabinet support rate rising 2 points to 
21.1 PERCENT , still well in the "danger zone"  (Tokyo Shimbun) 
 
Defense and security affairs: 
4) Government to put off dispatch of SDF to mainland Afghanistan due 
to divided views in the ruling parties  (Asahi) 
5) In shelving dispatch of SDF to Afghanistan, Fukuda government is 
giving priority to political stability over contributing to U.S. 
effort  (Asahi) 
6) Tokyo high court orders central government to pay 194 million yen 
compensation to homeowners who filed lawsuit over Yokota aircraft 
noise  (Tokyo Shimbun) 
 
Diplomatic agenda: 
7) Following G-8 summit triumph, Prime Minister Fukuda hit with 
series of diplomatic challenges, including Korean Peninsula, Afghan 
aid issues  (Tokyo Shimbun) 
8) Investigation of abductions promised by Pyongyang remains up in 
the air, with no prospects in sight for a Japan-North Korea foreign 
ministers' meeting at ARF  (Mainichi) 
 
9) China's Vice Foreign Minister Wu in meeting with LDP's Yamasaki 
in Beijing urges Japan to join energy aid effort toward North Korea 
(Asahi) 
10) Former Prime Minister Abe blasts LDP's Koichi Kato for 
suggesting that the five repatriated abductees should have been 
returned to DPRK as promised  (Yomiuri) 
11) Abductee family association to send questionnaire to Diet 
members querying the propriety of removing sanctions now imposed on 
North Korea  (Sankei) 
12) South Korea's ambassador to Japan: Planned September visit to 
Japan by President Lee may be cancelled  (Mainichi) 
13) Nukaga in Middle East wooing oil money to Japan  (Asahi) 
14) Coordination between Japan and Russia to have Prime Minister 
Putin visit Japan in December  (Yomiuri) 
15) Vietnam ODA scandal: PCI Company to be tried on bribery charge 
(Mainichi) 
 
Political scene: 
16) Prime Minister Fukuda, now vacationing at a hotel, meets aide, 
fuels speculation he is planning cabinet shuffle  (Mainichi) 
17) Convening of extraordinary Diet session planned for late August 
may be put off until September  (Mainichi) 
18) Possibility of supplementary budget planned for extra Diet 
session may be put off until after regular session of the Diet is 
convened  (Nikkei) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Government forgoes plan to dispatch SDF troops to Afghanistan 
 
Mainichi: 
Tokyo prosecutors likely to file charges against ex-PCI executives 
 
TOKYO 00001991  002 OF 012 
 
 
for bribing Vietnamese official over acceptance of 90 million yen 
order 
 
Yomiuri: 
Government decisions on pension claims vary widely among 
prefectures 
 
Nikkei: 
Inflation rates higher than central bank-set target rates in many 
countries 
 
Sankei: 
24 baseball players chosen for Beijing Olympics; Uehara makes cut 
for Beijing 
 
Tokyo Shimbun: 
Fulltime doctors decrease at public hospitals 
 
Akahata: 
Need for hourly wage of at least 1,000 yen 
 
2) EDITORIALS 
 
Asahi: 
(1) Darfur: Put an end to this tragedy 
(2) Fukawa retrial: Lessons for jury-judge system 
 
Mainichi: 
(1) Phone fraud: Need for measures to protect the elderly 
(2) Cluster bombs: Next U.S. government should join treaty 
 
Yomiuri: 
(1) Revision of the Swords and Firearms Control Law: Will daggers be 
prohibited? 
(2) Akutagawa Prize: Japanese literature turns page with foreign 
writers 
 
Nikkei: 
(1) U.S. government to shift its Iran policy 
(2) Future of Chinese economy is not optimistic 
 
Sankei: 
(1) Illegal hiring of teaches: Oita Prefecture must conduct re-exams 
to restore public confidence 
(2) Bus hijacking: How to prevent crimes involving minors 
 
Tokyo Shimbun: 
(1) Bus hijacking: What a shortsighted act! 
(2) Archive management: Good opportunity to reform Kasumigaseki 
 
Akahata: 
(1) A consumer agency plan: Politicians must reflect on the 
situation 
 
3) Poll: Cabinet support up slightly to 21.1 PERCENT 
 
TOKYO SHIMBUN (Page 2) (Abridged) 
July 18, 2008 
 
The public approval rating for Prime Minister Yasuo Fukuda's cabinet 
slightly rose 2.0 percentage points from last month to 21.1 PERCENT 
in an opinion poll conducted by Jiji Press on July 10-13. The Fukuda 
 
TOKYO 00001991  003 OF 012 
 
 
cabinet's support rate, which had been on the decline since last 
November, has stopped dropping for the time being. The disapproval 
rating was 57.1 PERCENT , down 4.7 points from last month. However, 
the Fukuda cabinet's support rate is still in a 'danger zone.' 
Fukuda presided over the July 7-9 Group of Eight (G-8) summit held 
at Lake Toya in Hokkaido, and he tried to display leadership as its 
chair. However, the figures show that the event did not boost his 
popularity. 
 
In the breakdown of public support for political parties, the ruling 
Liberal Democratic Party fell 2.2 points to 18.1 PERCENT , hitting 
an all-time low since the Hashimoto cabinet that came into office in 
January 1966. Meanwhile, the leading opposition Democratic Party of 
Japan (Minshuto) stood at 15.6 PERCENT , up 1.1 points. The 
proportion of those with no particular party affiliation increased 
0.5 points to 57.7 PERCENT . 
 
The survey was conducted across the nation on a face-to-face basis 
with a total of 2,000 persons chosen from among men and women aged 
20 and over. The response rate was 67.8 PERCENT . 
 
4) Government to forgo sending SDF to Afghanistan; Ruling coalition 
remains divided on option 
 
ASAHI (Top play) (Abridged slightly) 
July 18, 2008 
 
The government is likely to forgo a plan to dispatch Self-Defense 
Force troops to mainland Afghanistan. The reason is because there is 
opposition in the ruling bloc, including the New Komeito, and also 
because there is no prospect for enacting the necessary new 
legislation. The government intends to enact a bill extending the 
refueling assistance special measures law beyond next January during 
the next extraordinary Diet session in the fall, while continuing 
the refueling operation in the Indian Ocean. 
 
Japan has been conducting refueling activities in the Indian Ocean 
as part of its assistance to the war on terror in the wake of the 
9/11 terrorist attacks on America. Japan has been asked not only for 
sea-based assistance but also for ground-based support by the U.S. 
military and NATO forces in Afghanistan who have been forced to 
increase their troop strengths for their protracted stationing in 
that country. Japan has been informally asked to send the Ground 
Self-Defense Force's large transport helicopters and to provide 
logistical support for the International Security Assistance Force 
(ISAF) and the Provincial Reconstruction Team (PRT) effort. 
 
In compliance with such a request, the government sent in June a 
fact-finding team to Afghanistan and its neighboring countries. 
Based on its findings, the government has considered the possibility 
of dispatching the Air Self-Defense Force's C-130 transport planes, 
in addition to GSDF helicopters. But it is difficult to assure their 
safety in Afghanistan where suicide bombings and insurgents' attacks 
are still rampant. 
 
Further, opposition is strong in the New Komeito, with its 
representative Akihiro Ota voicing to reporters on July 12 his 
cautious view about sending the SDF to Afghanistan. In the divided 
Diet, in which the opposition DPJ controls the House of Councillors, 
the ruling coalition cannot use a two-third House of Representatives 
override vote to pass legislation without the New Komeito's 
endorsement. There is no prospect for enacting a bill that includes 
 
TOKYO 00001991  004 OF 012 
 
 
a new SDF mission. 
 
Given the situation, the view is prevalent among LDP foreign and 
defense policy specialists that the ruling bloc would not be able to 
come up with a uniformed view because there are too many obstacles. 
 
A senior government official has recently explained to a visiting 
U.S. Defense Department official that extending additional 
assistance would be difficult. 
 
Thinking the refueling operation in the Indian Ocean must be 
continued, the government plans to submit to the next extra Diet 
session, which is likely to open in late August, a bill to extend 
the refueling assistance special measures law beyond the January 15 
expiry. In order to enact the law in January this year, the ruling 
coalition had to use a two-third Lower House override vote because 
the opposition camp refused to approve it in the Upper House. 
 
The opposition camp is certain to oppose the envisaged bill to 
extend the law. The government plans to enact the legislation before 
the end of the year even with the 60-day rule in mind. 
 
The United States has emphasized the need for additional assistance. 
The government will look for such means as enhancing personnel 
assistance to the Japan International Cooperation Agency (JICA) and 
NGOs that are carrying out activities in Afghanistan. 
 
5) Decision to shelve dispatch of SDF to Afghanistan shows priority 
of stabilizing the Fukuda administration over contributing to the 
U.S. effort; Government would suffer a great blow if SDF casualties 
occur 
 
ASAHI (Page 4) (Excerpt) 
July 18, 2008 
 
The government is heading in the direction of putting off the 
dispatch of Self-Defense Forces troops to mainland Afghanistan. The 
reason is that even if a bill to authorize the dispatch is submitted 
to the Diet in the fall extraordinary session, it would only stall 
due to the views in the ruling camp opposing the move and the 
attacks of the opposition camp. For the Fukuda administration, whose 
popularity remains low even after the G-8 Summit, the situation 
inevitably has required giving priority to shoring up its footing 
over giving consideration to the alliance with the United States. 
 
"The U.S. is growing tired over its alliance relationship with 
Japan. An Afghan dispatch would have been a great chance for Japan 
for expectations are very high in the U.S. about such." A Foreign 
Ministry source cited this as the reason for consideration having 
been given to an SDF dispatch to Afghanistan. 
 
6) Court orders gov't to pay 194 million yen in compensation for 
Yokota base noise 
 
TOKYO SHIMBUN (Page 27) (Abridged) 
July 18, 2008 
 
The Tokyo High Court yesterday ordered the government to pay 
approximately 194 million yen in compensation for noise damage to 
residents living in the vicinity of the U.S. Air Force's Yokota base 
located across Fussa and other municipalities in Tokyo. A group of 
some 260 residents living near the base filed a class action lawsuit 
 
TOKYO 00001991  005 OF 012 
 
 
with the Tokyo District Court at its Hachioji branch against the 
state, seeking to suspend U.S. military aircraft's late night and 
early morning flights and to pay compensation for noise damage. The 
Tokyo District Court's Hachioji branch ordered the government to pay 
about 160 million in compensation for noise damage in the past. The 
Tokyo High Court rectified this court ruling of first instance. The 
high court upheld the district court's ruling that turned down the 
plaintiffs' demand for flight suspension and future damages. 
 
Presiding Judge Hidetoshi Munemiya acknowledged the residents' right 
to claim for damages, noting that the noise damage is beyond the 
limits of tolerance and is unlawful. The high court ruling added 
about 34 million yen for noise damage during the period of time from 
the first instance trial's conclusion through the second instance 
trial's conclusion. 
 
The high court ruling confirmed the district court's decision to 
dismiss the plaintiffs' appeal for flight suspension, stating that 
the U.S. military has base operational authority and it is 
inappropriate to demand state action for suspending U.S. military 
operations that are beyond the scope of Japan's claim. 
 
7) Tough challenges continue to face Prime Minister Fukuda after G-8 
Summit 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
July 18, 2008 
 
Prime Minister Yasuo Fukuda has been encountering one tough issue 
after another on the diplomatic front. Already faced with mounting 
domestic issues resulting from soaring oil prices, he cannot afford 
to lose points on diplomacy, an area in which he takes pride. There 
seems to be no end to the worries of the prime minister, who has 
just began his summer vacation after successfully handling this 
year's G-8 summit as the chair. 
 
The issue of Takeshima/Dokdo, over which both Japan and South Korea 
have claimed sovereignty, flared up again just before the prime 
minister's summer vacation. Reacting strongly to the government's 
decision to specify the ownership of Takeshima for the first time in 
a middle school teachers' manual, South Korea has recalled its 
ambassador to Japan. 
 
Seoul has also rejected Tokyo's call for a Japan-ROK foreign 
ministerial on the sidelines of an international conference in 
Singapore next week. 
 
The Takeshima issue might also take a toll on the Japan-ROK summit, 
planned for September in Japan as the first bilateral summit 
independent of any international conferences. 
 
The prime minister's message highlighting the need to deepen the 
understanding of each other by overcoming differences in positions 
has apparently not reached South Korea. 
 
The issue of Japanese nationals abducted to the North remains 
stalled despite the fact that the question of denuclearizing North 
Korea has been moving toward disabling its nuclear facilities in the 
wake of the United States' decision to delist the North as a state 
sponsor of terrorism. 
 
North Korea promised to reinvestigate the fate of Japanese abductees 
 
TOKYO 00001991  006 OF 012 
 
 
in Japan-DPRK working-level talks held on June 12 after a nine-month 
hiatus. It has been over one month, but not even how to 
reinvestigate them has not been decided. 
 
The clock is ticking for the United States to officially take the 
North off its list of terrorism-sponsoring nations on August 11. If 
the North is delisted before any progress is made on the promised 
reinvestigation, the prime minister is certain to come under fierce 
fire. 
 
A thorny path also lies ahead for the prime minister's aim of 
expanded personnel assistance in Afghanistan in line with his slogan 
of turning Japan into a peace cooperation country. 
 
Chief Cabinet Secretary Nobutaka Machimura simply reiterated in a 
press conference yesterday that the government is considering what 
kind of cooperation is possible. The government also eyes 
legislation enabling the SDF to extend new assistance, in addition 
to personnel contributions under existing legislation. 
 
But a cautious view is strong in the New Komeito about allowing the 
SDF to join the International Security Assistance Force (ISAF) which 
has lost many lives in conflicts with insurgents. 
 
Even if the government and ruling parties manage to reach a 
consensus, the matter is likely to become a source of dispute in the 
next extraordinary Diet session, expected to open in late August, 
given the opposition bloc's control of the Upper House. 
 
8) North Korea's reinvestigation of abduction issue deadlocked, with 
no prospects for progress in expected Japan-North Korea foreign 
ministerial at ARF 
 
MAINICHI (Page 2) (Excerpts) 
July 18, 2008 
 
North Korea's promise to reinvestigate the issue of Japanese 
nationals abducted by DPRK agents that was made during official 
bilateral working-level talks in June has reached a deadlock. An 
informal foreign ministerial meeting of six countries will be held 
on July 24 on the sidelines of the annual Association of Southeast 
Asian Nations Regional Forum (ARF) in Singapore, where Foreign 
Minister Koumura and his North Korean counterpart Pak are supposed 
to hold a meeting. But there are no signs that the North plans to 
bring up the abduction issue. No prospects are in sight for the next 
round of working-level talks. If the blank period becomes 
protracted, the validity of the agreement itself may be undermined. 
 
Since both sides agreed on the reinvestigation, Japan has repeatedly 
called on North Korea for bilateral talks to determine a specific 
method for the reinvestigation, but the North has made no response. 
Foreign Ministry's Asian and Oceanian Affairs Bureau Director 
General Akitaka Saiki said when he met members of the Association of 
the Families of Victims Kidnapped by North Korea yesterday: "Nothing 
has been decided about the next round of talks." 
 
Based on the view that the abduction issue should be on the agenda 
at the six-party talks, Tokyo has prepared a strategy to move the 
abduction issue forward in line with progress in the North Korean 
nuclear problem. In actuality, however, only discussions on the 
nuclear issues at foreign ministerial and other meetings under the 
six-party framework have made headway, while the abduction issue has 
 
TOKYO 00001991  007 OF 012 
 
 
been left behind. 
 
9) China urges Japan to take part in energy aid to N. Korea 
 
ASAHI (Page 4) (Full) 
July 18, 2008 
 
BEIJING-Taku Yamasaki, chairman of the ruling Liberal Democratic 
Party's Research Commission on Foreign Affairs, met yesterday in 
Beijing with Chinese Vice Foreign Minister Wu Dawei, who presides 
over the six-party talks, to exchange views on the North Korean 
nuclear issue. Japan has not taken part in economic and energy aid 
to North Korea in return for its disabling its nuclear facilities. 
Wu, however, urged Japan to respect the six-party framework, 
according to Yamasaki. "Japan should take action with the big 
picture in mind," Yamasaki quoted Wu as saying. 
 
According to Yamasaki, Wu stressed: "We're resolutely against the 
idea of having another country take over Japan's portion. That would 
cast a shadow on relations between Japan and North Korea. Besides, 
it will also hurt the international image of Japan." Wu added, 
"North Korea will also tackle the abductions issue in earnest, but 
we also want Japan to consider energy aid in earnest." With this, Wu 
urged Japan to take part in energy aid to North Korea. 
 
10) Former Prime Minister Abe blasts LDP's Koichi Kato for 
suggesting that the five repatriated abductees should have been 
returned to DPRK as promised  (Yomiuri) 
 
 
Former Prime Minister Shinzo Abe of the Liberal Democratic Party 
(LDP) in a speech given in Toda City, Saitama Prefecture, strongly 
rebutted former LDP Secretary General Koichi Kato's criticism of Abe 
and others, who in 2002 took the lead in not returning the five 
repatriated abductees to North Korea (as promised in the 
negotiations). Abe stressed: "Japan never promised (to return the 
victims to North Korea). It was North Korea itself that betrayed 
Japan with its assertion. Mr. Kato is greatly mistaken in his 
thinking." 
 
11) Family association to survey lawmakers' views about lifting 
sanctions against North Korea 
 
SANKEI (Page 2) (Full) 
July 18, 2008 
 
The Association of the Families of Victims Kidnapped by North Korea 
and the National Association for the Rescuing of Japanese Kidnapped 
by North Korea distributed questionnaires to all 722 members of the 
Diet yesterday to find out what they think about the government's 
plan to partially lift the economic sanctions it has imposed on 
North Korea. Setting the deadline for July 23, the groups expect to 
announce the survey result on the 28th if possible. 
 
The questions probe:  (1) the proper timing for the removal of 
economic sanctions; and (2) the propriety of placing additional 
sanctions on the North if its reinvestigation does not repatriate 
more abductees. Respondents must sign their names. 
 
In the Japan-North Korea working-level talks in June, North Korea 
promised to reinvestigate the abduction issue. The Japanese 
government at that time said that it would partially lift its 
 
TOKYO 00001991  008 OF 012 
 
 
economic sanctions, but this provoked opposition from the families' 
association, who insisted that Japan should not lift the sanctions 
until all abductees come home. 
 
In a press conference, Teruaki Masumoto, director general of the 
families' association, stated: "We would like to convey our view 
about sanctions (to lawmakers through the questionnaire). We want to 
notify the people of our view that it is still premature to remove 
the sanctions." 
 
12) South Korean ambassador: "Presidential visit to Japan in 
September may be difficult" due to Takeshima issue 
 
MAINICHI (Page 2) (Full) 
July 18, 2008 
 
(Akiko Horiyama, Seoul) 
 
South Korean Ambassador to Japan Kwon Chul Hyun, who has temporarily 
returned home in protest of Japan's decision to refer to the 
disputed Takeshima islets (Dokdo islets in South Korean) in a 
teaching guideline for middle schools, responded to an interview 
request from the Japanese media yesterday. 
 
Upon saying that this was his personal view, Kwon indicated that 
unless Japan took proper measures, it would be difficult for 
President Lee Myung-bak to visit Japan for a bilateral summit 
planned for September in Tokyo. He said: 
 
"I wonder if our people would agree to a visit to Japan by the 
President. I am negative about his going unless Japan takes 
corrective measures." 
 
In reference to cooperation between Japan and South Korea at the 
six-party talks, Kwon indicated that the bilateral relations could 
become strained, remarking: "(South Korea) has expressed its 
understanding of Japan's position on the issue of abductions (of 
Japanese nationals by North Korean agents), but I cannot predict 
whether (bilateral relations) will end up on the rocks in the 
future." 
 
Asked about when he plans to return to his post in Japan, Kwon 
replied with a look of disappointment: "I do not want to go back. 
Now that the relationship of trust between Japan and South Korea has 
collapsed, I cannot see what I should do." 
 
13) Government, companies trying to lure Middle Eastern nations' 
government- affiliated investment funds 
 
ASAHI (Page 7) (Full) 
July 18, 2008 
 
Moves to lure into the Japanese market the rich oil money of Middle 
Eastern nations are accelerating due to the steep rise in crude oil 
prices. An increasing number of companies are dispatching missions 
to the Middle East. The government has also sought investment in 
Japan from Middle Eastern countries by dispatching Finance Minister 
Nukaga to the United Arab Emirates (UAE) and other countries. The 
government is desperate to receive investments in Japan by Middle 
Eastern funds that would serve as a boost for the domestic economy. 
 
Nukaga, who visited the UAE on July 16, met with an official of the 
 
TOKYO 00001991  009 OF 012 
 
 
government-affiliated fund Abu Dhabi Investment Council and the UAE 
state minister for financial affairs and encouraged UAE investment 
in Japan. There reportedly was a positive response with one high 
official saying, "Japan's real estate market is attractive. We are 
interested in it." 
 
The Finance Minister visited Kuwait on the 17th and urged investment 
in Japan in a meeting with Prime Minister Nasser. Nasser. The Prime 
MInister replied, "At present, our investment in Japan stands at 15 
billion dollars (approximately 1.6 trillion yen). We want to 
extensively increase this amount." 
 
Middle Eastern nations' government-affiliated investment funds were 
established for the purpose of their managing huge amounts of 
foreign currencies gained from exports of crude oil, etc. They are 
trying to increase their assets by investing in foreign stocks, 
bonds, and real estate. 
 
According to resources and finance department chief Maeda of the 
Japan Bank for International Cooperation (JBIC), Middle Eastern 
countries' government funds tend to invest from a long-term 
perspective and do not interfere in corporate management. They can 
thus become stable stockholders. 
 
There are about 40 government-affiliated funds through the world, 
including those in the UAE and Kuwait. The total assets held by 
those funds are estimated at 2.9 trillion dollars (approximately 305 
trillion yen). They have reportedly invested 60 billion dollars in 
Asia (approximately 6.3 trillion yen) over the past five years. Half 
of that amount has been invested in Japan. However, given the 
financial power of those investment funds, there is still tremendous 
room for more investment. 
 
European and U.S. investors pulled out of Japan's investment market, 
following the   subprime mortgage crisis in the U.S. Japanese 
companies' stock prices remain sluggish. As such, companies pin high 
hopes on Middle Eastern countries' government affiliated investment 
funds. An increasing number of Japanese companies are sending 
delegates to the Middle East, seeking promising investors. 
 
However, Japan is lagging behind other countries in an approach to 
those funds. One senior official of the Finance Ministry visited 
Kuwait's Investment Authority to ask for its investment in Japan's 
government bonds. A senior official of the KIA said to this Finance 
Ministry official, "What is Japan doing? Chinese and South Korean 
officials visit us everyday to lure our investment." The briefing 
session for investors in the Middle East held that day was only the 
second, following the one in April last year. Japan's approach lacks 
vigor, compared with other countries' proactive sales activities, as 
Nukaga put it. 
 
Another barrier is the Japanese market's allergy to foreign capital. 
Japan regulated foreign capital when a British fund tried to 
increase its stake in J-Power. The incident has given the impression 
that the Japanese market is closed. 
 
Moves to look into a system for expanding investment in Japan have 
also appeared in the government. Concerning restrictions in 
investment in areas related to state security, such as electric 
power, Nukaga in a speech given in June referred to the possibility 
of creating a rule that would bar discriminating between domestic 
and foreign investors. The aim is to open the market to foreign 
 
TOKYO 00001991  010 OF 012 
 
 
investors under the same conditions as those attached to domestic 
investors and make it serve as a trigger for investment by 
government-affiliated investment funds. 
 
Maeda of the JBIC said, "It is unlikely for government-affiliated 
funds to turn into "vocal investors." He pointed out that the 
challenge is for Japan to tide over its allergy to foreign capital. 
 
14) Coordination for Putin visit to Japan in December 
 
YOMIURI (Page 4) (Full) 
July 18, 2008 
 
The Japanese and Russian governments have entered the final stage of 
coordination on the timing of the visit to Japan of Prime Minister 
Putin, centering on late December. Since Prime Minister Putin 
continues to have great foreign-policy influence even after the 
inauguration of President Medvedev, he is seen as an important 
official who holds the key to resolving the northern territories 
issue, and it would appear that when he comes to Japan, the focus 
will be on whether progress is achieved. During the Japan-Russia 
summit meeting that took place on the sidelines of the Hokkaido 
Toyako Summit, there was general agreement that Putin would visit in 
the latter half of the year. 
 
15) Tokyo prosecutors likely to file charges against former PCI 
executives for bribing Vietnamese official over acceptance of 90 
million yen order 
 
MAINICHI (Top Play) (Excerpts) 
July 18, 2008 
 
It has been learned that former executives of Pacific Consultants 
International (PCI, in Tama City, Tokyo) are strongly suspected of 
handing a total of 800,000 dollars (approximately 90 million yen) to 
a senior Ho Chi Minh City official in 2003 and 2006 in return for 
the acceptance of orders for projects regarding official development 
assistance (ODA) in Vietnam. The special investigation squad of the 
Tokyo Public Prosecutors Office appears to have decided to file 
charges against former PCI executives on suspicion of violating the 
unfair competition prevention law, which prohibits bribery of 
foreign public officials, after increasing the number of prosecutors 
in charge of the case as early as next week. 
 
The special investigative task force asked Vietnamese judicial 
authorities for cooperation through diplomatic channels. Japanese 
prosecutors have then conducted investigations in Vietnam. In the 
presence of the prosecutors, the Vietnamese authorities seem to have 
taken testimony from the senior Ho Chi Minh City official, who 
allegedly received the money. 
 
16) Prime Minister Fukuda's staying at a hotel, accompanied by 
private secretary, causes speculation about cabinet shuffle 
 
MAINICHI (Page 5) (Full) 
July 18, 2008 
 
Prime Minister Yasuo Fukuda on July 17, the second day of his summer 
vacation, stayed overnight at a Tokyo hotel with his wife Kiyoko. 
Staying at the same hotel was Fukuda's private secretary. Although 
the explanation for the private secretary being there was said to be 
for personal reasons, with rumors flying about regarding the 
 
TOKYO 00001991  011 OF 012 
 
 
possibility of a cabinet shuffle, the hotel stay caused speculation 
in political circles that there might be secret meetings late at 
night or early in morning. 
 
The Prime Minister, wearing a sports jacket and necktie-less shirt, 
around evening left his private residence with his wife to check 
into a hotel. His private secretary on duty, accompanied by his 
wife, met them there and the four had dinner, staying in the 
restaurant one hour after closing. One Liberal Democratic Party 
lawmaker nervously said, "Perhaps he was too unsettled to stay at 
either the official or the private residence." 
 
17) Ruling camp floats suggestion to put off convening extra Diet 
session to mid-September 
 
MAINICHI (Page 1) (Excerpts) 
July 18, 2008 
 
The suggestion was floated yesterday in the ruling coalition parties 
of postponing the convocation of the next extraordinary Diet session 
from late August, the timing that the government is considering, to 
the middle of September, according to several senior members of the 
ruling Liberal Democratic Party (LDP). The reason is that many 
ruling camp members are concerned that if the extra session is 
convened soon, the government and the ruling bloc will come under 
fire from the opposition camp for a number of issues including 
soaring oil prices. Such a situation consequently would be used by 
the main opposition Democratic Party of Japan (DPJ) in its 
presidential election, which will be announced Sept. 8. The 
expectation is that Prime Minister Yasuo Fukuda will make a final 
decision on the matter, as well as on a possible cabinet shuffle, 
after his summer vacation ends on the 21st. 
 
A senior member of the LDP Upper House Diet Affairs Committee 
stressed yesterday: "If the extra session is convened in late 
August, we will be just attacked by the opposition. I think it is 
better to hold off until September." One of the four LDP executive 
members also said on July 16: "The convocation of the extra session 
will probably be delayed to sometime beyond late August." Another 
senior LDP member pointed out: "It is necessary to closely watch all 
possible aspects, including the DPJ presidential election." The 
ruling coalition's views have already been conveyed to Fukuda. 
 
The government will submit to the next extra Diet session a bill to 
extend the new Antiterrorism Special Measures Law, which allows 
Japan to conduct refueling activities in the Indian Ocean, since the 
law will expire next January. However, since the DPJ may not respond 
to deliberations on the bill in the House of Councillors, the ruling 
camp is determined that it is necessary to secure 60 days to enable 
it to enact the bill under the constitutional rule that the Lower 
House decision stands even if the Upper House disagrees or fails to 
take action within 60 days. Since discussion of drastic tax reform 
will be carried out in December, the ruling camp has been 
considering a timetable for the extra session from late August to 
late November. 
 
18) Government considering putting off submission of supplementary 
budget bill to extraordinary Diet session to avoid attacks from 
opposition camp 
 
NIKKEI (Page 2) (Excerpts) 
July 18, 2008 
 
TOKYO 00001991  012 OF 012 
 
 
 
The government and the ruling parties have started considering the 
possibility of dealing with the supplementary budget for fiscal 2008 
at the outset of the regular Diet session to be convened in January 
next year, instead of submitting it to the extraordinary session. 
The aim is to stave off a clash with the opposition camp. Another 
plan to delay the timing for convening the extraordinary Diet 
session from late August as originally planned to September or later 
has also surfaced. The New Komeito is seeking a postponement of the 
submission of a bill extending the law on refueling operations in 
the Indian Ocean, which expires in the middle of January next year. 
 
Do it in the regular Diet session 
 
The secretaries general and Diet Affairs Committee chairmen of the 
Liberal Democratic Party (LDP) and the New Komeito held a meeting at 
a Tokyo hotel on July 17. They shared the view that fiscal resources 
to address the soaring crude oil prices and natural disasters should 
be secured in principle in the initial budget for this fiscal year. 
Hidehisa Otsuji, head of the LDP caucus in the Upper House, said, 
"It is desirable to deal with the supplementary budget during the 
regular Diet session next year." A senior official of the Diet 
Policy Committee of the LDP also said, "It is difficult to do so 
during the extraordinary Diet session." 
 
Behind their view is concern about the opposition camp launching an 
offensive in the extraordinary Diet session. If they submit the 
supplementary budget bill, it would necessitate holding Budget 
Committee sessions both in the Upper and Lower Houses, in which 
Prime Minister Fukuda is supposed to attend, giving opposition 
parties to chance to pursue the issue of pension record errors. 
 
Mapping out measures to address the steep rise in crude oil prices 
is a pressing issue. If they are to be implemented before year's 
end, it would be too late to earmark budgetary funds for them in the 
supplementary budget. Funds will have to be drawn from reserve funds 
(350 billion yen) in the original budget. Some ruling party members 
are still insisting that fiscal resources for measures to expand 
domestic demand and to reduce the burden of medical expenses paid by 
the elderly should be earmarked in the supplementary budget. 
 
The government is also considering convening the extraordinary Diet 
session in September as usual. This is a measure to cope with the 
DPJ. Regarding a bill extending the law on refueling operations in 
the Indian Ocean, the focal point of a battle between the ruling and 
opposition camps, the ruling parties do not want the opposition camp 
to be alarmed that the ruling parties are trying to forcibly adopt 
the bill once again in the Lower House, using the 60-day rule. 
 
ZUMWALT