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UNCLAS SECTION 01 OF 09 TOKYO 002185 
 
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 08/08/08 
 
INDEX: 
 
(1) Nagasaki Prefecture to propose rejecting port calls by nuclear 
sub at Sasebo (Mainichi) 
 
(2) Economic slowdown (Part 1): 18 trillion yen estimated to flow 
out of Japan due to soaring resource prices (Yomiuri) 
 
(3) Government's study group opposes restrictions on foreign 
investment in airports (Asahi) 
 
(4) Interview with Foreign Minister Masahiko Koumura: Refueling 
activities need to be continued (Yomiuri) 
 
(5) Japan fed up with being betrayed by America's diplomacy (Sankei) 
 
 
(6) Cabinet support rating varies with media outlets (Mainichi) 
 
(7) TOP HEADLINES 
 
(8) EDITORIALS 
 
(9) Prime Minister's schedule, August 8, 2008 (Nikkei) 
 
ARTICLES: 
 
(1) Nagasaki Prefecture to propose rejecting port calls by nuclear 
sub at Sasebo 
 
MAINICHI (Internet edition) (Full) 
August 8, 2008 
 
In connection with the issue of the nuclear-powered submarine 
Houston having leaked radiation, Nagasaki Prefecture today to reject 
further port calls by that vessel at Sasebo Port (Sasebo City in the 
prefecture) until the cause of the leakage is cleared up and steps 
to prevent a recurrence are made clear. The prefecture then informed 
the Foreign Ministry by phone. According to a prefectural assembly 
member from the Japanese Communist Party, the prefecture's disaster 
and crisis manager, Hiroshi Furukawa, called at the prefectural 
office building this morning to discuss this issue. 
 
Although the right to reject port calls by U.S. vessels is not held 
by local governments, based on the Japan-U.S. Status of Forces 
Agreement, Crisis Manager Furukawa pointed out, "The current 
situation has cause great anxiety among the prefectural residents, 
so consideration should be given." The prefecture then decided to 
express its intention to reject port calls (by the submarine). 
 
Governor Genjiro Kaneko on August 5 asked Chief Cabinet Secretary 
Machimura for such responses as measures to stop reoccurrences. 
 
(2) Economic slowdown (Part 1): 18 trillion yen estimated to flow 
out of Japan due to soaring resource prices 
 
YOMIURI (Page 1) (Full) 
August 8, 2008 
 
Isamu Jinguji, the head of the finance processing division of Japan 
Airlines Corp., said in a press conference yesterday: "We will have 
to raise fuel surcharges to absorb skyrocketing costs due to the 
 
TOKYO 00002185  002 OF 009 
 
 
recent steep rise in oil prices." 
 
The company estimates its jet fuel costs for FY2008 at 532 billion 
yen, 119.3 billion yen more than that in the previous year. All 
Nippon Airways Co. also expects its fuel bill for the same fiscal 
year to reach 307 billion yen, an increase of 41 billion yen over 
the previous year. 
 
Resource-poor Japan has to buy not only oil but even iron ore, coal 
and other resources from overseas. If their prices rise; more money 
will flow out of Japan. 
 
The Japan Research Institute estimates approximately 18 trillion yen 
in assets flowed outside the country in FY2008. This figure accounts 
for about 3.5 PERCENT  of the nation's gross domestic product 
(GDP). 
 
The funds that should have been used for renewing companies' 
production facilities or have gone into household accounts have 
decreased. The outflow of assets is exactly the main cause for the 
current economic contraction in Japan. 
 
During negotiations on coal prices, an executive of a major foreign 
resource company suddenly showed pictures to an executive of a 
certain leading Japanese steel company, saying: "See, coal mines in 
Australia were flooded by torrential rains." The negotiations were 
carried out at the pace of the seller, who emphasized that business 
was declining. When a contract was concluded in April, the Japanese 
company had to accept purchase prices about three times higher than 
those in the previous year. 
 
 
The foreign resource company executive also said: "If raw material 
prices jump, why don't you raise steel prices?" The Japanese 
executive grumbled: "If we could do that, we would not be in such 
trouble." 
 
The prices of coal and ironstone have soared about triple and up to 
twice, respectively, but the prices of steel materials set when they 
are delivered to automakers have been about only 40 PERCENT  higher. 
Toyota Motor Corp and Nissan Motor Co. see that they can raise 
showroom prices by 1 PERCENT  to 3 PERCENT , at most. 
 
It is an imminent task for companies suffering from skyrocketing raw 
material prices to pass along the steep rise in costs on the prices 
of products. But consumers' awareness of protecting their livelihood 
is becoming stronger. Companies close to the frontline of consumers 
find it difficult to raise prices, so they eventually see their 
profits shrink. Small businesses have been placed in a more serious 
situation. 
 
A forwarding agent in western Japan said: "I succeeded in persuading 
a cargo owner to agree to a 3 PERCENT  rise in freight charges, but 
the owner suddenly canceled our contract." A fishing gear 
manufacturer in Ishikawa Prefecture said: "Many of fishing nets are 
petroleum-based products. Our customers are fishermen, who are 
suffering from the steep rise in fuel prices, so we cannot increase 
prices." 
 
Major six leading banks earmarked a total of 234.4 billion yen in 
funds to dispose of bad loans during the April-June period this 
year, including added bad debt reserves. This figure is about three 
 
TOKYO 00002185  003 OF 009 
 
 
times larger than the 78.3 billion yen in the same period a year 
ago. 
 
The Financial Services Agency is keeping a closer watch on banks' 
moves, based on the view that banks are becoming more reluctant to 
lend money, though their tight lending attitude had been eased due 
to economic recovery for a while." The environment surrounding 
companies is rapidly deteriorating. 
 
(3) Government's study group opposes restrictions on foreign 
investment in airports 
 
ASAHI (Page 5) (Full) 
August 8, 2008 
 
The government's study group to consider restricting investment in 
airports on August 7 held its first meeting at the Kantei. A 
representative from the Ministry of Land, Infrastructure and 
Transport (MLIT) gave an explanation on the need to restrict foreign 
investment from the perspective of security. A number of experts on 
the panel offered negative views. The panel is charged with reaching 
a decision on whether or not to restrict foreign investment in 
airports. 
 
The panel will look into in concrete terms the role of airports and 
airport facility-related companies in security terms and what is 
missing in regulations set under current law. It intends to 
consider, as well as foreign investment restrictions, a wide range 
of issues, including capital restrictions covering domestic capital 
as well, a behavior regulation designed to designate in advance what 
must not be done, and the government ownership of a designated 
number of stocks for a long period of time. 
 
The representative of MLIT reported on various capital regulations 
in force in industry sectors other than domestic airports and cases 
of foreign airports. This official also reported on cases of 
airports being acquired by foreign funds in countries like Britain, 
Italy and Belgium, where there are no foreign capital restrictions. 
This official then indicated his ministry's stance that it is common 
for foreign countries that have liberalized investment to allow 
public involvement and impose foreign investment restrictions 
regarding key infrastructures. 
 
Though panel members took the stance that it would be necessary to 
regulate airport operators, who usually monopolistically run an 
airport, in some way or other, they took a negative stand to a 
proposal for restricting foreign investment with one saying, "To 
begin with, the reason that foreign companies cannot invest in 
airports just because they are foreign companies is not valid." 
Another member noted: "Shutting out foreign company will not settle 
any security issues." There was also a view there that there should 
a means to allowing local airports, which are in financial 
difficulties, to introduce foreign capital. 
 
MLIT was supposed to submit to the regular Diet session this year a 
bill amending the Airport Consolidation Law (currently called the 
Airport Law), which includes the introduction of a regulation 
restricting the foreign ownership of stocks to less than one-third 
in terms of voting securities to Narita International Airport 
Corporation, which plans to join the market, and a company that 
operates Haneda Airport facilities. 
 
 
TOKYO 00002185  004 OF 009 
 
 
However, the ministry deleted the segment concerning foreign 
investment restrictions from the bill, meeting criticism from the 
LDP. It has decided to continue intragovernmental discussions. 
 
Regarding Haneda Airport, the purchase of about 20 PERCENT  of 
stocks of a passenger facilities company (Japan Airport Terminal 
Col) by an Australian company has boosted a call for introducing 
foreign investment restrictions. 
 
(4) Interview with Foreign Minister Masahiko Koumura: Refueling 
activities need to be continued 
 
YOMIURI (Page 2) (Full) 
August 8, 2008 
 
-- Japan and North Korea will hold working-level talks from Aug. 11. 
How will Japan deal with North Korea? 
 
Foreign Minister Koumura: We want North Korea to come up with a 
specific method for discovering survivors (abducted to North Korea) 
and then to repatriate them. 
 
-- Is it possible to hope for specific progress on the abductions 
and other issues? 
 
Koumura: If we think the possibility is zero, we would not be 
holding talks with them. But we cannot be optimistic about them, 
either. 
 
-- Will Japan participate in energy aid to North Korea? 
 
Koumura: If we're ready, we will do so. That means we are seeing 
progress on the abduction issue. The other countries participating 
in the six-party talks understand it. It all depends on North 
Korea. 
 
-- Did you work on the U.S. government over the issue of delisting 
North Korea as a state sponsor of terrorism? 
 
Koumura: I told U.S. Secretary of State Rice that North Korea is 
doing nothing (on the abduction issue) 
 
-- How about the issue of continuing the Maritime Self-Defense 
Force's refueling activities in the Indian Ocean? 
 
Koumura: The government has yet to make a formal decision on that 
matter. But I myself want the MSDF's refueling mission continued. 
Many countries have sent troops to Afghanistan for the war on 
terror. However, Japan cannot send the Self-Defense Forces there. 
The largest amount of crude oil that Japan imports comes through the 
Indian Ocean. It is not too much to say that Japan is the largest 
beneficiary. Can we ask other countries to do troublesome things for 
us, and expect to only receive the benefits? Such a situation just 
will not do. We must continue the mission there not only from the 
aspect of Japan's contributions to the international community but 
also from the aspect of Japan's national interests. 
 
-- The Chinese government admitted that China also had victims 
suffering food poisoning from frozen 'gyoza' dumplings made in 
China. 
 
Koumura: In early July, China told Japan that there was food 
 
TOKYO 00002185  005 OF 009 
 
 
poisoning from frozen gyoza dumplings that contained methamidophos. 
They said they were still investigating the incident. They also said 
if they found out something, they would let us know, so they did not 
want us to make it public for the time being. They asked us not to 
make it public, so we didn't make it public. Non-disclosure is a 
general principle in the world of intelligence. 
 
-- Do you think China will change its attitude on this issue? 
 
Koumura: Yes. They reported it. I appreciate this fact. I hope they 
will further investigate the incident and let us know anything they 
find out about the cases. 
 
(5) Japan fed up with being betrayed by America's diplomacy 
 
SANKEI (Page 6) (Abridged slightly) 
August 6, 2008 
 
By Hiroshi Yuasa, Sankei Shimbun Tokyo special correspondent 
 
Ambrose Bierce's Devil's Dictionary defines politics as "a strife of 
interests masquerading as a contest of principles." At the same 
time, principles and views can shift for political gain. 
 
European history is filled with tales of alliances and ruptures. 
Countries were reportedly constantly in fear of being betrayed by 
their allies. 
 
Japan has experience betrayals by its ally through two recent 
events: the United States' decision to delist North Korea as a state 
sponsor of terrorism and its changing of the geographical listing of 
Takeshima. 
 
The U.S. Board on Geographic Names (BGN) recently changed its 
listing of Takeshima, which is Japan's inherent territory, from 
"South Korean" to "undesignated sovereignty," but then quickly 
reversed its decision in response to mounting criticism in South 
Korea. In anticipation of fierce protest demonstrations, the United 
States must have made the decision not to irritate South Korea ahead 
of President George W. Bush's trip to that country on August 6. 
 
The United States' decision was clearly wrong in view of its own 
diplomatic documents. During the drafting of the text of the San 
Francisco Peace Treaty, the United States listed Takeshima as 
"Japanese territory." 
 
Acting Political Advisor in Japan William J. Sebald's telegram 
(dated November 14, 1947) to the Secretary of State also stated: 
"Japan's claim to these islands is old and appears valid." A letter 
(dated August 10, 1951) from United States Assistant Secretary Dean 
Rusk to the South Korean ambassador also read: "This normally 
uninhabited rock formation was never treated as part of Korea, and 
since about 1905, has been under the jurisdiction of the Oki Islands 
Branch Office of Shimane Prefecture of Japan." 
 
The Bush administration made the decision on Takeshima under the 
rule of The Devil's Dictionary in defiance of the past documents. 
This can be called a betrayal or cunning. 
 
In view of Japanese feelings, it is an act of disloyalty. A recent 
Sankei-FNN opinion poll clearly showed that the Japanese public is 
fed up with being betrayed by the U.S. 
 
TOKYO 00002185  006 OF 009 
 
 
 
In the poll, 32.3 PERCENT  responded positively to an extension of 
the new Antiterrorism Special Measures Law to logistically support 
U.S. military operations, while 53 PERCENT  responded negatively. In 
last November's poll, the rate of approval was higher than the 
disapproval rate five to four. This year's poll also posed questions 
about assistance for the United States. Japan has assisted U.S. 
forces in Iraq and Afghanistan, thinking its military strength is 
the only way to prevent North Korea from carrying out provocative 
acts. It was also a senior U.S. official that declared, "Abduction 
is an act of terrorism." 
 
The United States tends to adopt a reconciliatory policy toward an 
adversary once it succeeds in carrying out a nuclear test. In fact, 
The U.S. immediately shifted its stance toward France, Israel, 
India, and Pakistan once they had completed their nuclear tests. 
 
Kyoto University Professor Terumasa Nakanishi refers to such a trend 
common in the Anglo-Saxon world as pragmatic thinking to join hands 
with unbeatable rivals. 
 
The Wall Street Journal, describing the delisting of North Korea as 
betrayal of Japan, has warned that it would harm the U.S.-Japan 
alliance. It is good to know that U.S. views are split on how to 
handle North Korea. 
 
If its alliance with the United States is indispensable in dealing 
with China, Tokyo has no other option but to win Washington over to 
its side by pulling the Bierce-style diplomatic stunt of telling a 
patriotic lie. 
 
(6) Cabinet support rating varies with media outlets 
 
MAINICHI (Page 3) (Full) 
August 6, 2008 
 
Q: The news media conducted opinion polls in the wake of Prime 
Minister Yasuo Fukuda's recent shuffle of his cabinet. The rate of 
public support for the new Fukuda cabinet varied considerably 
depending on the media outlets, didn't it? 
 
A: It did. In the Mainichi Shimbun's poll, the new Fukuda cabinet's 
support rate was 25 PERCENT , up 3 percentage points from the last 
survey taken in July. In the Asahi Shimbun's poll, it was 24 PERCENT 
, which is the same as in the last survey. Meanwhile, the Yomiuri 
Shimbun and the Nihon Keizai Shimbun also conducted their respective 
public opinion surveys almost at the same time. However, the two 
dailies came up with comparatively high figures for the new Fukuda 
cabinet, with the Yomiuri Shimbun posting 41.3 PERCENT  and the 
Nihon Keizai Shimbun scoring 38 PERCENT . In both dailies, the new 
Fukuda cabinet's public approval rating rose more than 10 points 
from their last surveys. So the various dailies were divided in 
their evaluation of the cabinet shuffle. Some dailies said the 
results were good, while other dailies said they were not. 
 
Q: Do you mean the results of some polls do not accurately reflect 
public opinion? 
 
A: Umm... Indeed, there's a support rate gap of nearly 18 points 
between the highest figure, which came from the Asahi, and the 
lowest figure, which is from the Yomiuri. But then, I'd like you to 
take a look at the disapproval ratings? Their gap is within a range 
 
TOKYO 00002185  007 OF 009 
 
 
of 8 points. In their findings, the Fukuda cabinet's disapproval 
ratings are almost the same at around 50 PERCENT . So we cannot 
definitely say certain data were inaccurate. 
 
Q: If that is the case, I wonder why only the support ratings 
differ. 
 
A: That is, I think, primarily because of the different ways of 
asking the question. Not all of the sampled persons decide 
beforehand on whether they support the cabinet or not. There are 
also some people who answer that they "don't know." These people may 
be classified in the category of those who gave "no answer." Some 
dailies may further ask, "If you had to choose, which would be your 
answer 'yes' or 'no'?" In this way, depending on how to ask, we will 
see different results. There are also some people who answer that 
they are "not interested" or who give "other answers." Their 
proportion is about 20 PERCENT  in the polls taken by the dailies 
that came up with low support rates. Meanwhile, this proportion is 
only about 10 PERCENT  in the case of the dailies that posted high 
support. 
 
Q: What does that mean? 
 
A: There are people whose answer is unclear when they are asked 
whether they support the cabinet or not. These people are asked 
again to "dare" to choose between "yes" and "no." As a result, some 
of them may reluctantly answer "yes." Their proportion could be 
added up to the cabinet's support rate. This is conceivably included 
in the data of high support for the cabinet. When asking the 
question, pollsters from some dailies referred to Prime Minister 
Fukuda shuffle of his cabinet. So respondents may have had a fresh 
image and better impression of the new Fukuda cabinet. Masao 
Matsumoto, a professor of political science at Saitama Prefecture, 
says: "The Fukuda cabinet's image is unclear, so their different 
polling methodologies can be easily reflected in the results of 
their polls." 
 
(7) TOP HEADLINES 
 
Asahi, Yomiuri: 
Japanese economy may enter contraction 
 
Mainichi & Tokyo Shimbun: 
Number of pupils refusing to attend classes increases 2nd straight 
year 
 
Nikkei: 
TEPCO to set up recharging sites in 200 locations next fiscal year 
for electric cars 
 
Sankei: 
Opening of Beijing Olympics today, with China's overreaction to 
reputations 
 
Akahata: 
Sub leaked radiation for two years in 11 port calls in Japan 
 
(8) EDITORIALS 
 
Asahi: 
(1) Opening of Beijing Olympics 
 
 
TOKYO 00002185  008 OF 009 
 
 
Mainichi: 
(1) Prime Minister Fukuda must urge China to clear up truth of 
tainted dumpling cases 
(2) Government must hold on to principles on fiscal reconstruction 
 
Yomiuri: 
(1) Opening of Olympics: China is drawing world attention 
 
Nikkei: 
(1) Economic recession shows limits to dependence on exports 
(2) Human rights problem still left in growing Asia 
 
Sankei: 
(1) Fukuda must tackle dumpling poisoning cases from viewpoint of 
Japanese consumers 
(2) Stop doling out subsidies and promote structural reform to perk 
up economy 
 
Tokyo Shimbun: 
(1) Uncovering details of tainted Chinese dumpling cases the best 
way to restore confidence 
(2) Monetary policy holds key in dealing with economic recession 
 
Akahata: 
(1) Give priority to livelihood in economic policy 
 
(9) Prime Minister's schedule, August 8, 2008 
NIKKEI (Page 2) (Full) 
 
10:41 
Met with Special Advisor Ito at the Kantei. 
 
11:12 
Met with Japan Business Federation (Nippon Keidanren) Chairman 
Mitarai. 
 
12:44 
Met with Chief Cabinet Secretary Machimura. 
 
13:00 
Administrative Expenditures Overall Check-up meeting 
 
15:32 
Met with a group of elementary and middle school "reporters" from 
Okinawa and Hakodate. Then, met with incumbent Chairman Miyata and 
incoming Chairman Mogi of the Central Union of Agricultural 
Cooperatives (Zenchu). 
 
16:03 
Met with Finance Minister Ibuki. Then meeting of monthly economic 
report-related-ministers. 
 
17:11 
Met with Cabinet Intelligence Director Mitani. 
 
18:16 
Met with Machimura and Deputy Chief Cabinet Secretary Futahashi. 
Futahashi remained. Then roundtable to discuss the way welfare and 
labor administration. 
 
18:44 
Arrived at the official residence. 
 
TOKYO 00002185  009 OF 009 
 
 
 
SCHIEFFER