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UNCLAS SECTION 01 OF 10 TOKYO 002357 
 
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 08/28/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
War on terror: 
4) Killing of Japanese NGO aid worker in Afghanistan: "Feelings 
toward Japan are worsening"  (Tokyo Shimbun) 
5) Killing of aid worker a blow to Japanese NGOs in Afghanistan: 
Nine organizations may pull out  (Nikkei) 
6) Afghan aid facing crisis: Government pressed to review human 
contributions  (Nikkei) 
7) With worsening security environment in Afghanistan, hurdle may 
now be too high for dispatching SDF for reconstruction assistance 
(Sankei) 
8) DPJ's Seiji Maehara: Afghan assistance is extremely important 
(Mainichi) 
9) Government still stressing contributing to war on terror by 
one-year extension of MSDF's Indian Ocean refueling mission  (Tokyo 
Shimbun) 
10) Opposition camp in the Diet refusing to even discuss with the 
ruling parties the bill to extend the Indian Ocean refueling mission 
 (Nikkei) 
11) LDP Diet Affairs Chairman Oshima hints at possibility of Japan 
contributing to war on terror in Afghanistan by other means than 
refueling mission  (Nikkei) 
 
Defense and security issues: 
12) With ban on defensive use of space lifted, government to create 
a space technology planning office to implement the new policy 
(Yomiuri) 
13) Six seamen on U.S.S. George Washington punished in connection 
with May's fire on the carrier  (Asahi) 
 
14) Secret agreement among Japan, U.S., Europe to protect the dollar 
during the March crisis  (Nikkei) 
 
15) Japan, South Korea, ASEAN delegates to meet today to discuss EPA 
and other trade agenda items  (Nikkei) 
 
16) Coordination of views between government, ruling parties about 
comprehensive economic stimulus package reach final stage  (Nikkei) 
 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Mainichi, Yomiuri, Sankei, and Tokyo Shimbun: 
Body of kidnapped aid worker Ito found; May have been killed by 
Taliban 
 
Nikkei: 
Japan, Europe, U.S. secretly agreed to defend plunging dollar in 
March, prepared joint intervention 
 
2) EDITORIALS 
 
Asahi: 
(1) Aid worker Ito's vision must be realized 
(2) Economic stimulus package: Pork-barrel spending will not result 
 
TOKYO 00002357  002 OF 010 
 
 
in peace of mind 
 
Mainichi: 
(1) Aid worker Ito's goodwill lost to violence 
(2) North Korean statement: Country must keep marching toward 
denuclearization 
 
Yomiuri: 
(1) Pyongyang suspends disablement work 
(2) Tochigi tragedy resulted from ignored calls to police and fire 
stations 
 
Nikkei: 
(1) U.S. housing market still plummeting 
(2) North Korea's intimidation tactics will not work 
 
Sankei: 
(1) Russia no longer qualifies to be G-8 member 
(2) U.S. must not budge from strict North Korea nuclear verification 
regime 
 
Tokyo Shimbun: 
(1) Killing of Ito a blow to Japan's international contributions 
(2) EU diplomacy to be tested in new Cold War 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, August 27 
 
NIKKEI (Page 2) (Full) 
August 28, 2008 
 
09:29 
Met State Minister for Consumer Administration Noda at the Kantei. 
Followed by former Special Assistance Yamatani. 
 
12:12 
Met Deputy Chief Cabinet Secretary Futahashi. 
 
13:04 
Met Finance Minister Ibuki, METI Minister Nikai, Economic and Fiscal 
Policy Minister Yosano, and Chief Cabinet Secretary Machimura. 
 
14:30 
Met Cabinet Intelligence Director Mitani. 
 
15:08 
Met British Ambassador Warren. 
 
16:00 
Met Chairman Miyaji of the ruling camp's parliamentary group 
"Council on the Iwo Jima Issue" and others. Later met with 
Indonesian Foreign Minister Hassan. 
 
16:40 
Met Vice Cabinet Minister Miyazawa, Nikai, and Assistant Deputy 
Chief Cabinet Secretary Saka. Miyazawa stayed behind. 
 
17:33 
Issued an official appointment to Special Assistant Tokai, with 
Machimura, deputy chief cabinet secretaries Shiotani, Iwaki, and 
Futahashi present. Tokai stayed behind. 
 
TOKYO 00002357  003 OF 010 
 
 
 
18:33 
Returned to his official residence. 
 
4) NGO head: Worsening feeling toward Japan possibly behind slaying 
of Japanese NGO worker 
 
TOKYO SHIMBUN (Page 1) (Excerpts) 
August 28, 2008 
 
(Furuta, Bangkok) 
 
Following the discovery of the body of kidnapped aid worker Kazuya 
Ito outside Jalalabad, eastern Afghanistan, Tetsu Nakamura, a doctor 
who heads activities for the nongovernmental organization 
Peshawar-kai, said last evening: "The security situation and 
feelings toward Japan in Afghanistan have been growing worse. We had 
an inaccurate understanding of it. This kind of incident was 
unthinkable before." The Peshawar-kai has conducted activities in 
Pakistan and Afghanistan for more than 20 years. 
 
Nakamura replied to questions by reporters before leaving an 
international airport in Bangkok, the capital of Thailand, to visit 
Jalalabad. Nakamura once said: "We have continued our activities, 
encouraged by the good feeling of Afghan people." Nakamura looked 
shocked, because worsening feeling toward Japan is considered to be 
behind the incident. Saying: "There might be some connection between 
the slaying and the moves by the Self-Defense Force," Nakamura 
pointed to Japan's refueling mission in the Indian Ocean and the 
issue of a dispatch of the Ground Self-Defense Force to 
Afghanistan. 
 
The NGO returned about half of the 20 Japanese in Jalalabad to Japan 
this April due to the worsening security situation there. The group 
is planning to send the remaining Japanese members back to Japan by 
the end of the year. Ito was among them. 
 
Nakamura indicated that the organization would return all Japanese 
staff as soon as by the end of this month, saying: "We must not 
allow more people to become victims." 
 
Ito was giving agricultural advice to local residents. He was 
worrying about drought becoming more serious every year. Nakamura 
expressed his determination to continue the aid with local staff, 
remarking: "Although we return the Japanese staff for the sake of 
safety, we will abide by his hopes and will never stop the project." 
 
 
5) Killing of Kazuya Ito a shock to Japanese NGOs; 9 NGOs now 
operating in Afghanistan may return to Japan 
 
NIKKEI (Page 3) (Full) 
August 28, 2008 
 
According to the Foreign Ministry, nine Japanese non-governmental 
organizations, including Peshawar-kai (headquartered in Fukuoka 
City), have been operating in Afghanistan. Following the discovery 
of the body of kidnapped aid worker Kazuya Ito yesterday, Japanese 
NGOs are now starting to evacuate their aid workers to other 
countries. The impact of the incident unavoidably will affect their 
future operations. 
 
 
TOKYO 00002357  004 OF 010 
 
 
Peshawar-kai dispatched 10 aid workers, including Kazuya Ito, to 
Afghanistan. The group's director, Manji Fukumoto, told the press 
yesterday: "After consulting with Tetsu Nishimura, local 
representative of the aid workers, there is a possibility that some 
our members may return home." He stressed that the group intends to 
continue its activities in Afghanistan. 
 
The Association for Aid Relief, Japan (headquartered in Tokyo), 
which is involved with de-mining efforts from its base in Kabul, the 
capital of Afghanistan, immediately evacuated its two aid workers to 
India and Pakistan. Chief of Secretariat Yoshiaki Horie said: "We 
are deeply shocked, all the more because we have heard that 
Peshawar-kai has had good relations with the local population, since 
it has carried out aid activities for a long time." 
 
The Japan International Cooperation Agency (JICA), which has 
dispatched the largest number of aid workers, 39, of all Japanese 
organizations in Afghanistan, announced that it would decide on 
responses after collecting information from local authorities and 
the Japanese embassy. According to JICA, two of its members who have 
provided agricultural support for local residents in Jalalabad are 
now standing by at home. 
 
6) NGO worker's body found: Government may review personnel aid to 
Afghanistan 
 
NIKKEI (Page 3) (Excerpts) 
August 28, 2008 
 
The slaying of Kazuya Ito, a member of the nongovernmental 
organization Peshawar-kai, may press the Japanese government to 
review its future assistance in reconstructing Afghanistan. The 
government had envisioned that it would offer "visible aid" by 
Japanese aid groups, in addition to the ongoing refueling operation 
in the Indian Ocean, as part of support for the U.S.-led war on 
terror. The government is likely to be pressed to review this 
scenario. 
 
Learning of Ito's death, Prime Minister Yasuo Fukuda criticized the 
crime last night, issuing this statement: "I feel resentment at the 
slaying of Mr. Ito, who had high aspirations and was working for the 
local people and with the local people." He then said: "I pray for 
the repose of his soul and offer my condolences to his family." 
 
Before Ito's death was confirmed, Fukuda told reporters: "It is very 
regrettable that (Mr. Ito) was involved in an incident. But we will 
continue to make international contributions," indicating that Japan 
would continue to be involved in Afghan reconstruction. 
 
Fukuda, though, said: "There must be other ways" of assistance. In a 
press conference yesterday morning, Chief Cabinet Secretary Nobutaka 
Machimura also suggested the possibility of reconsidering support 
activities in Afghanistan by members of the Japan International 
cooperation Agency (JICA) and private organizations, saying: "We 
must promptly discuss with persons concerned whether the ongoing 
assistance should be continued or should be scaled down." 
 
7) High barrier to SDF dispatch 
 
SANKEI (Page 2) (Abridged) 
August 28, 2008 
 
 
TOKYO 00002357  005 OF 010 
 
 
Kazuya Ito, a 31-year-old Japanese volunteer from a nongovernmental 
organization, has been found dead in the eastern part of 
Afghanistan. This incident clearly shows the difficulty of assisting 
Afghanistan, where the security situation is worsening. "Japan 
remains committed to assisting with Afghanistan's reconstruction, 
maintaining and strengthening public security in that country, and 
contributing to the war on terror." With this, Foreign Ministry 
Press Secretary Kazuo Kodama stressed the government's Afghan aid 
stance. However, it is now becoming uncertain whether the Maritime 
Self-Defense Force's refueling mission in the Indian Ocean will be 
continued. As it stands, it seems difficult for the government to 
reach a conclusion on what kind of assistance is possible and 
effective. 
 
"We will look into what is behind the incident and what caused the 
incident," Kodama told a press conference yesterday. "Based on our 
findings," he added, "we will work out a future course of action 
(for Afghan aid)." This means that the government cannot take 
countermeasures soon, because the group that killed Kodama has yet 
to state its demands or purpose at this point. 
 
The MSDF's current refueling mission in the Indian Ocean, conducted 
under the Antiterrorism Special Measures Law, is set to terminate in 
January next year. However, the opposition parties, which hold a 
majority of the seats in the House of Councillors, are opposed to 
continuing the MSDF's refueling activities there. The ruling 
coalition of the Liberal Democratic Party and the New Komeito will 
therefore need to take a second vote in the House of Representatives 
to override the upper chamber's decision in order for Japan to 
continue the MSDF's refueling activities. Yet the New Komeito is 
strongly opposed to taking an override vote, so the MSDF's refueling 
mission cannot be expected to continue. 
 
However, an LDP executive noted, "Japan, which depends on oil from 
the Middle East, is the largest beneficiary of the war on terror." A 
senior Foreign Ministry official also said, "If Japan alone pulls 
out, it means that Japan caved in to terrorism." 
 
In June, the government sent a fact-finding survey team to 
Afghanistan in order to explore the feasibility of engaging the SDF 
in transportation activities in Afghanistan. This was also forgone 
due to the New Komeito's opposition. However, one government 
official anticipated that it could come up as a realistic option if 
the MSDF's refueling mission in the Indian Ocean is called off. 
However, it may safely be said that the hurdle is higher now as the 
incident this time is drawing public attention to the local security 
situation, which is going from bad to worse. 
 
8) DPJ's Maehara: Support for Afghanistan extremely important 
 
MAINICHI (Page 3) (Full) 
August 28, 2008 
 
Democratic Party of Japan Vice President Seiji Maehara delivered a 
speech in Tokyo yesterday in which he said: "In view of national 
interests, support for Afghanistan is extremely important." He also 
indicated that the new Antiterrorism Special Measures Law 
authorizing the refueling mission in the Indian Ocean must not be 
extended and that the Air Self-Defense Force, now conducting 
activities in Iraq, should engage in airlift activities in 
Afghanistan instead. 
 
 
TOKYO 00002357  006 OF 010 
 
 
9) Placing high priority on war on terror, government to submit bill 
extending Indian Ocean refueling mission by one year 
 
TOKYO SHIMBUN (Page 2) (Full) 
August 28, 2008 
 
The government decided yesterday to submit to the next extraordinary 
Diet session to be convened on Sept. 12 a bill to extend the new 
Antiterrorism Special Measures Law (refueling law), scheduled to 
expire in January, by one year so that the Maritime Self-Defense 
Force will be able to continue its refueling operation in the Indian 
Ocean. 
 
Prime Minister Yasuo Fukuda, in consideration of the fact that many 
countries place high priority on the war on terror in and around 
Afghanistan, has concluded that the continuation of the refueling 
operation since 2001 is the most effective and safest way for Japan 
to contribute to the international community. 
 
Based on the government's policy course, the ruling coalition 
informed the opposition bloc on Aug. 27 of its plan to submit a bill 
amending the law to the Diet. The government and ruling parties 
intend to begin deliberations on the bill in early or mid-October 
after taking care of a fiscal 2008 supplementary budget that 
includes measures against soaring crude oil and other commodity 
prices. 
 
The opposition bloc is against the anti-terror bill. Chances are 
high that the opposition bloc, which holds a majority in the Upper 
House, will protract deliberations with the aim of blocking the 
Lower House readopting the legislation. 
 
With such an eventuality in mind, the government envisages extending 
the session until Nov. 20 to allow the Lower House to readopt the 
legislation 60 days after the legislation cleared the lower chamber 
in accordance with a constitutional provision. 
 
The New Komeito is reluctant to use the overriding-vote approach for 
fear of its negative impact on the next general election. 
 
Some LDP members share the New Komeito's view. It is unclear whether 
the ruling parties can unite on extending the session that would 
ensure the legislation's passage. 
 
10) Extra Diet session: LDP, New Komeito seek consultations with 
opposition camp, which refuses to reply on the Indian Ocean 
refueling mission 
 
NIKKEI (Page 2) (Full) 
August 28, 2008 
 
Liberal Democratic Party (LDP) Diet Affairs Committee Chairman 
Tadamori Oshima and New Komeito Diet Affairs Committee Chairman 
Yoshio Urushibara met yesterday respectively with their counterparts 
of the four opposition parties in succession to discuss the upcoming 
extraordinary Diet session, which will be convened on Sept. 12. 
Although Oshima and Urushibara called for consultations between the 
ruling and opposition camps on a bill extending Japan's refueling 
mission in the Indian Ocean, as well as on a package of economic 
stimulus measures, the opposition side refused to reply. In the main 
opposition Democratic Party of Japan (DPJ), a view is emerging 
calling for intensive deliberations on the issue of Agriculture, 
 
TOKYO 00002357  007 OF 010 
 
 
Forestry and Fisheries Minister Seiichi Ota's office expenditures. A 
tug-of-war has already started between the ruling and opposition 
camps. 
 
Oshima and Urushibara cited as key Diet issues: 1) a package of 
economic stimulus measures and supplementary budget, 2) extending 
the refueling law, 3) establishing a consumer affairs agency, and 3) 
enacting bills carried over from the previous Diet session. They 
said they wanted to deliberate on these issues with the opposition 
side in a serious manner. With an eye on each party's representative 
interpellations in both chambers of the Diet for Sept. 16-17, they 
told their opposition counterparts that the ruling camp planned to 
carry them out as early as possible. The opposition side, however, 
failed to give any responses. 
 
Later in the day, DPJ Diet Affairs Committee Chairman Kenji Yamaoka 
and People's New Party Diet Affairs Committee Chairman Masaaki 
Itokawa agreed to call for resignation of Agriculture Minister Ota. 
Regarding the timetable for the each party's representative 
interpellations, Yamaoka said that the session should be held after 
Sept. 21, the day for the DPJ presidential election, but Itokawa 
insisted that the ruling camp's idea be accepted in order to 
increase opportunities to pursue the government and ruling camp. 
They failed to find common ground. The four opposition parties will 
hold a meeting on Sept. 29 of their Diet affairs committee chiefs to 
coordinate strategy for the extra Diet session. 
 
11) LDP's Oshima hints of options other than simple extension of 
refueling operation 
 
NIKKEI (Page 2) (Full) 
September 28, 2008 
 
When asked by reporters about a bill extending Japan's refueling 
operation in the Indian Ocean, one of the key agenda items at the 
upcoming extraordinary Diet session, Liberal Democratic Party (LDP) 
Diet Affairs Committee Chairman Tadamori Oshima said yesterday: "The 
ruling parties will discuss it from a variety of different angles. 
If we reach an agreement, there would be (no simple extension)." He 
indicated in his remarks that there may be an option other than a 
simple extension, which the government is now preparing to enact, 
based on conditions to be agreed between the LDP and its coalition 
partner New Komeito. 
 
12) Space use eyed for defense 
 
YOMIURI (Page 2) (Abridged) 
August 28, 2008 
 
The Space Law, which lifts Japan's self-imposed ban on its use of 
space for defense and incorporates industrial development and other 
purposes, came into effect yesterday. The Defense Ministry has 
decided to set up a space technology planning office at the 
Technical Research and Development Institute. The ministry yesterday 
reported it to the ruling Liberal Democratic Party at a joint 
meeting of its defense and relevant divisions in order to study 
technologies usable in space for defense. 
 
The now-enforced law stipulates that the government will set up a 
space development strategy headquarters, which is to be headed by 
the prime minister, and will formulate a basic plan for space 
development and use. 
 
TOKYO 00002357  008 OF 010 
 
 
 
The government has so far limited Japan's use of space to 
nonmilitary purposes in conformity with a Diet resolution. The law 
redefines Japan's space use as being based on the United Nations 
Outer Space Treaty's nonaggressive principle and the Constitution's 
pacifism. This redefinition will now make it possible for Japan to 
launch early warning satellites designed to monitor missile launches 
at all times. In addition, Japan can also launch high-performance 
reconnaissance satellites and communication satellites. 
 
In July, the Defense Ministry set up a space and ocean policy 
office. In addition, the Defense Ministry is also planning to create 
an in-house committee, headed by its senior vice minister, to 
explore space utilization. Meanwhile, the ministry will work out a 
new midterm defense buildup program next year. For this new defense 
program, the ministry will work out a space utilization plan in 
concrete terms. Moreover, it will also earmark in its budgetary 
estimate for fiscal 2009 costs for research on technologies 
applicable to the defense area. 
 
The Self-Defense Forces, according to a senior Defense Ministry 
official, has so far gone no further than to use space "mainly as a 
user of commercial satellites," excluding space technologies related 
to missile defense and intelligence-gathering satellites. It 
therefore took more than a year to lay down a network of encoded 
communications for operational intelligence when the Ground 
Self-Defense Force was sent to Iraq, according to ministry 
officials. 
 
Meanwhile, the LDP envisions Japan's defense and space utilization, 
aiming to introduce early warning satellites, reconnaissance 
satellites, and communication satellite systems by 2015. 
 
13) Six U.S. carrier members disciplined for fire 
 
ASAHI (Page 38) (Full) 
August 28, 2008 
 
In connection with the fire aboard the nuclear aircraft carrier USS 
George Washington in May, six crewmembers have been disciplined for 
safety violations and professional negligence, according to informed 
sources yesterday. The carrier is slated to be deployed at the U.S. 
Yokosuka Navy Base in Yokosuka, Kanagawa Prefecture, in late 
September. According to the U.S. Navy, a cigarette ignited 90 
gallons (about 340 liters) of oil for air conditioners that was on a 
site different from the designated storage site. 
 
14) Japan, U.S., Europe secretly agreed to defend falling dollar 
during March financial crisis: Prepared concerted intervention 
 
NIKKEI (Top Play) (Excerpts) 
August 28, 2008 
 
The Nihon Keizai Shimbun has discovered that with the dollar 
plunging due to the financial crisis in the U.S. triggered by the 
subprime mortgage debacle, monetary authorities of the U.S. Europe 
and Japan secretly agreed to defend the dollar through concerted 
currency intervention to buy dollars. Their aim was to prevent the 
plunging value of the dollar from creating havoc in the global 
economy. They also prepared an emergency joint statement aimed at 
stabilizing the exchange market. U.S. President Bush was cautious 
about currency intervention, but he apparently felt he had no choice 
 
TOKYO 00002357  009 OF 010 
 
 
but to change his policy in the face of a serious trend of investors 
moving away from the dollar. It is almost unprecedented for the U.S. 
to take the lead in a move to defend the dollar. The dollar crisis 
is still lingering due to financial troubles for housing companies 
in the U.S. Chances are that currency officials of those countries 
might search for cooperation again. 
 
Sense of crisis concerning key currency 
 
According to several international monetary sources, currency 
officials of those countries started boiling down measures to defend 
the dollar in mid-March, when the financial troubles at U.S. 
investment bank Bear Stearns Cos. surfaced, triggering renewed 
concerns about the financial system. The dollar and stocks had 
continued to plunge. In response to the wishes of the U.S., which 
was increasingly alarmed about the situation, currency officials of 
the U.S., Japan and Europe held telephone talks on the weekend of 
March 15-16. They coordinated views on ways for concerted currency 
intervention. 
 
Gist of agreement among Japan, U.S. and Europe 
 
? In the event of a decision being reached that there is a strong 
fear of the dollar taking a nosedive, concerted intervention should 
be carried out. 
? Consider issuing an emergency statement through the Group of Seven 
industrialized nations. 
? Japan supplies yen funds to the U.S. for yen-selling and 
dollar-buying. 
 
15) Japan, China, South Korea and ASEAN to confer on EPA: Economic 
ministerial today 
 
NIKKEI (Page 5) (Full) 
August 28, 2008 
 
Japan, China, South Korea and the Association of Southeast Asian 
Nations (ASEAN) will hold an economic ministerial in Singapore 
today, August 28. Participants will discuss an economic partnership 
agreement (EPA) covering East Asia and measures to address the steep 
rise in crude oil and food prices. Economy, Trade and Industry 
Minister Toshihiro Nikai, who will represent Japan, is expected to 
propose holding a symposium in Tokyo in December to discuss the 
impact of the surging crude oil and food prices on East Asia. 
 
Concerning the widespread development of the Mekong region, which 
straddles Thailand and Vietnam and which Japan characterizes as a 
hub in the broad-based development of East Asia, Nikai will announce 
a policy of holding an international conference under the auspices 
of the Economic Research Institute for ASEAN and East Asia (ERIA), 
an international think-tank, in Phnom Penh in October. 
 
Automobile plants are concentrated in Bangkok, Thailand. Many 
Japanese electronic manufacturers are operating in Ho Chi Minh City, 
Vietnam. However, the road network linking the two cities is poor. 
The Japanese government believes that the consolidation of a 
distribution network and a power-supply system will greatly spur 
trade and investment in the region. 
 
Nikai will stress the need to resume the multilateral trade 
liberalization talks (Doha Round) under the World Trade Organization 
(WTO). He will call on participating countries to aim at reaching a 
 
TOKYO 00002357  010 OF 010 
 
 
consensus on rules for liberalization of trade in the mined and 
manufactured, and agricultural areas before year's end. 
 
The meeting will be held under three frameworks -- Japan and ASEAN, 
ASEAN plus 3 (Japan, China and South Korea) and ASEAN plus 6 (Japan, 
China, South Korea, India, Australia and New Zealand). 
 
16) Coordination of views between government, ruling parties about 
comprehensive economic stimulus package reach final stage: Battle 
over fixed-rate tax break; Gap between LDP, New Komeito remains 
wide 
 
NIKKEI (Page 2) (Excerpts) 
August 28, 2008 
 
The government and the ruling parties on August 27 continued to 
coordinate views on a comprehensive economic stimulus package to be 
readied by end of the month. The New Komeito pressed for the 
inclusion of a fixed-rate tax cut for low and middle income earners. 
However, the government and the Liberal Democratic Party (LDP) were 
cautious about the proposal. The gulf remains wide between the two 
parties. Maneuvering between the two sides is likely continue until 
the package is formally adopted on the evening of the 29th. 
 
The LDP and the New Komeito on the afternoon of the 27th held a 
meeting of policy chiefs in the Diet to discuss the specifics of the 
package. According to one participant, State Minister for Economic 
and Fiscal Policy Kaoru Yosano revealed a plan to indicate the scale 
of items contained in the package and the amount of real spending - 
direct spending from the budget. He did not rule out the possibility 
of issuing deficit-covering government bonds. 
 
The New Komeito repeatedly called for the inclusion of a fixed-rate 
tax break, noting that the package must have a perspective of 
relieving the burdens of middle and low income earners, who are 
facing difficulties due to soaring prices. The LDP opposed the 
proposal, noting that the matter should be discussed in the year-end 
annual tax code revision. However, the New Komeito rebutted this 
counterproposal, saying that it was too late. The meeting, which 
lasted nearly two hours, ended without reaching a conclusion. 
 
The New Komeito is taking an aggressive approach, because it is 
aiming for dissolution of the Lower House and a snap election around 
the end of the year or beginning of the next. Commenting on a 
fixed-rate tax break, Policy Research Council Chairman Natsuo 
Yamaguchi flatly said, "We will tackle this issue with serious 
resolve." Other senior officials have also took a bullish stance 
with one noting: "If we fail to realize a fixed-rate tax break, our 
party will have difficulty in the next Lower House election. We 
should pursue talks with the LDP, even hinting at the possibility of 
our pulling out of the coalition." 
 
ZUMWALT