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UNCLAS SECTION 01 OF 11 TOKYO 002442 
 
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 09/05/08 
 
INDEX: 
 
(1) Poll on Fukuda's resignation, political parties, post-Fukuda 
premiership (Tokyo Shimbun) 
 
(2) Shock of Fukuda's resignation announcement (Part1): Next prime 
minister should dissolve Lower House as soon as possible to end 
political stalemate (Nikkei) 
 
(3) Shock from Fukuda resignation (Part 3): Japan-U.S. alliance must 
not be allowed to deteriorate (Nikkei) 
 
(4) LDP presidential election: Where will anti-Aso votes go? 
Supporters of Ishihara also supporting Koike; Yosano with personnel 
network among senior government officials (Yomiuri) 
 
(5) If Obama wins presidency, there will be no need to worry about 
"Japan bashing" (Mainichi) 
 
(6) FTC to ask BHP Billiton to submit plan for takeover bid for Rio 
Tinto (Asahi) 
 
(7) Prime Minister's schedule, September 4 (Nikkei)  10 
 
ARTICLES: 
 
(1) Poll on Fukuda's resignation, political parties, post-Fukuda 
premiership 
 
TOKYO SHIMBUN (Page 2) (Full) 
September 4, 2008 
 
Questions & Answers 
(Figures shown in percentage. Parentheses denote the results of the 
last survey conducted Aug. 1-2. The total percentage of multiple 
answer choices is over 100 PERCENT .) 
 
Q: Prime Minister Yasuo Fukuda announced his resignation on Sept. 1. 
What do you think about his resignation still in office? 
 
He's irresponsible 67.8 
Don't think he's irresponsible 28.0 
Don't know (D/K) + no answer (N/A) 4.2 
 
Q: What do you think the new cabinet should pursue first? Pick only 
one. 
 
Social security, including pension issues 36.0 
Constitutional revision 2.9 
Social divide 8.8 
Politics and money 9.6 
Economic measures, job security 22.6 
Tax system 3.6 
Education 6.2 
Diplomacy, national security 3.1 
Administrative, fiscal reforms 5.2 
Other answers (O/A) 0.5 
D/K+N/A 1.5 
 
Q: What do you want the next prime minister to have? Pick up to two 
from among those listed below. 
 
 
TOKYO 00002442  002 OF 011 
 
 
Leadership 43.6 
Public accountability 44.0 
Experience, actual results 11.5 
Public sensitivity 26.8 
Sincerity, modesty 16.3 
Political ethics, cleanness 23.8 
O/A 1.3 
D/K+N/A 3.0 
 
Q: The Liberal Democratic Party's newly elected president is 
expected to become the successor to Prime Minister Fukuda. Who do 
you think is appropriate to be the next prime minister? Pick only 
one from among those listed below. 
 
Taro Aso 35.3 
Nobuteru Ishihara 7.1 
Yuriko Koike 9.2 
Junichiro Koizumi 15.0 
Masahiko Koumura 0.5 
Sadakazu Tanigaki 2.8 
Fukushiro Nukaga 0.4 
Yoichi Masuzoe 8.5 
Nobutaka Machimura 2.0 
Kaoru Yosano 1.6 
O/A 2.0 
D/K+N/A 15.6 
 
Q: Would you like the present LDP-led coalition government to 
continue, or would you otherwise like it to be replaced with a 
DPJ-led coalition government? 
 
LDP-led coalition government 43.3 (34.8) 
DPJ-led coalition government 41.7 (48.2) 
D/K+N/A 15.0 (17.0) 
 
Q: The House of Representatives' current term of office is up until 
September next year. When would you like the House of 
Representatives to be dissolved for a general election? 
 
Right away 30.2 
Within the year 24.0 
When the Diet opens its ordinary session early next year 11.9 
Around next spring after the budget for next fiscal year clears the 
Diet at its ordinary session next year 8.8 
Upon the current term's expiry in September next year 17.9 
D/K+N/A 7.2 
 
Q: Which political party are you going to vote for in the next 
election for the House of Representatives under the proportional 
representation system? 
 
Liberal Democratic Party (LDP) 38.4 
Democratic Party of Japan (DPJ or Minshuto) 34.9 
New Komeito (NK) 4.3 
Japanese Communist Party (JCP) 2.2 
Social Democratic Party (SDP or Shaminto) 2.0 
People's New Party (PNP or Kokumin Shinto) 0.5 
New Party Nippon (NPN or Shinto Nippon) 0.5 
Other political parties 0.3 
D/K+N/A 16.9 
 
Q: The government and the ruling parties decided on a package of 
 
TOKYO 00002442  003 OF 011 
 
 
economic stimulus measures totaling 11.7 trillion yen in order to 
boost the nation's economy and stabilize prices. In addition, the 
government plans to implement an across-the-board tax break for the 
income and individual residential taxes in fiscal 2008. Do you 
appreciate these measures? 
 
Yes 48.8 
No 37.5 
D/K+N/A 13.7 
 
Q: Do you support the Fukuda cabinet? 
 
Yes 23.5 (31.5) 
No 68.7 (48.1) 
D/K+N/A 7.8 (20.4) 
 
Q: Which political party do you support? 
 
LDP 36.8 (28.7) 
DPJ 27.0 (30.2) 
NK 2.5 (3.4) 
JCP 1.7 (2.9) 
SDP 1.9 (1.1) 
PNP 0.4 (0.5) 
NPN 0.8 (0.7) 
Other political parties, groups --- (---) 
None 26.8 (31.2) 
D/K+N/A 2.1 (1.3) 
 
Polling methodology: The survey was conducted across the nation from 
the evening of Sept. 2 through Sept. 3 by Kyodo News Service on a 
computer-aided random digit dialing (RDD) basis. Among randomly 
generated telephone numbers, those actually for household use with 
one or more eligible voters totaled 1,460. Answers were obtained 
from 1,013 persons. 
 
(2) Shock of Fukuda's resignation announcement (Part1): Next prime 
minister should dissolve Lower House as soon as possible to end 
political stalemate 
 
NIKKEI (Page 1) (Slightly abridged) 
September 3, 2008 
 
By Mutsumi Nishida, editorial writer 
 
Another cabinet has been toppled because it was unable to bear the 
strain of the politically divided Diet. Following former Prime 
Minister Shinzo Abe, who resigned from his post just one year after 
taking office, Prime Minister Yasuo Fukuda could not hold sway over 
his administration for even one year. Everything has come to a 
standstill since Fukuda failed to come up with a strategy to enact a 
bill extending the Maritime Self-Defense Force's refueling operation 
in the Indian Ocean. This triggered his decision to resign as prime 
minister. 
 
In an attempt to put an end to the divided Diet situation, Prime 
Minister Fukuda, who took office last September, tried to form a 
grand coalition with the Democratic Party of Japan (DPJ), headed by 
Ichiro Ozawa. However, this idea hit a roadblock because many 
lawmakers in the DPJ opposed it. Since then, there has been no doubt 
that Fukuda has found it difficult leading his government. 
 
 
TOKYO 00002442  004 OF 011 
 
 
Opportunity for policy debate 
 
As the cabinet's approval rate gradually dropped, the Prime Minister 
could no longer play his sole card, dissolving the Lower House for a 
snap election. Fukuda, who lacks the ability to appeal directly to 
the public, was unwilling to risk dissolving the Lower House. 
 
The main reason that Fukuda quit his post was probably the New 
Komeito's estrangement from him. Because the New Komeito, as the 
Liberal Democratic Party's coalition partner, wanted to exert all 
its energy in next summer's Tokyo Metropolitan assembly election, it 
begun to press for dissolution of the Lower House at the end of the 
year or early next year. Many New Komeito members even thought that 
it would better if the party went into the election for the Tokyo 
Metropolitan Assembly without Fukuda being in office. The rift 
between Fukuda and the New Komeito become increasingly obvious. 
 
Following Fukuda's announcement of his intention to resign as prime 
minister, the LDP decided to announce on Sept. 10 that it will hold 
a presidential election on the 22nd. Secretary General Taro Aso 
already has expressed his intention to throw his hat in the ring. 
The focus now is whether former Defense Minister Yuriko Koike will 
also run in the election. 
 
There is serious discord in the LDP as to whether the Koizumi reform 
initiative should be maintained or modified. With an eye on the next 
Lower House election, the LDP presidential race will be a good 
opportunity for the party to display its policies, including social 
security and tax and fiscal policy reform, by engaging in active 
policy debate. 
 
The campaign promises of the next party president will become the 
contents of the LDP's campaign pledges for the Lower House election. 
With this in mind, Aso should come up with specific policy measures. 
In order to restore the public's battered confidence in the LDP due 
to the sudden resignation of two prime ministers two years in a row, 
the party must have a set of shiny new policies. 
 
Ichiro Ozawa, a DPJ presidential candidate, will unveil his policy 
platform in an extraordinary party convention on Sept. 11. The 
policy statement will have great significance since it will be 
reflected in the party's campaign pledges. Unless the DPJ can come 
up with policies that are feasible, it would soon reach a cul de 
sac. The party should consider what impact there would be on 
Japan-U.S. relations if it continues to oppose the MSDF's refueling 
mission. It should also come up with convincing measures for Japan 
to make its international contributions. If the party just follows 
its campaign pledges for last year's Upper House election, concern 
about its capability of assuming the political helm will not 
disappear. 
 
A power struggle will take place in the next Lower House election. 
If the DPJ takes over the reins of government, the divided Diet 
situation will end for while. Even if the LDP-New Komeito coalition 
government fails to secure two-thirds of the Lower House seats, the 
government will become more confident because it has received the 
judgment of people. 
 
After the Lower House election, the notion of forming a grand 
coalition, as well as other moves seeking new arrangements, would 
emerge again. The terms of the Lower House members will expire next 
September, but if the next prime minister puts off the election 
 
TOKYO 00002442  005 OF 011 
 
 
until then, the political vacuum will only be prolonged. In an 
attempt to put an end to the current political turmoil, the next 
prime minister should not hesitate to dissolve the Lower House. It 
is time for the will of voters to bring change to politics. 
 
(3) Shock from Fukuda resignation (Part 3): Japan-U.S. alliance must 
not be allowed to deteriorate 
 
NIKKEI (Page 1) (Full) 
September 5, 2008 
 
Prime Minister Yasuo Fukuda's abrupt resignation will unavoidably 
bring about a huge loss to the nation's diplomatic relations. A 
matter of most concern is the blow dealt to the Japan-U.S. 
alliance. 
 
Sharp drop in amount of oil supplied to U.S. warships 
 
On July 7, the eve of the opening day of the Hokkaido Toyako Summit, 
there was an undisclosed conversation between Prime Minister Fukuda 
and President Bush. Fukuda conveyed to Bush that it would be 
difficult for Japan to dispatch Self-Defense Force (SDF) troops to 
Afghanistan under the current situation. 
 
Bush seemed to have considered such unavoidable. After the summit, 
however, "Unconvinced U.S. government officials came closer to ask 
why the dispatch is impossible," according to a government source. 
In July, U.S. Deputy Assistant Secretary of Defense for Central Asia 
Bobby Wilkes and other officials rushed to Japan to listen to the 
circumstances. 
 
Not only the Bush administration but even the Democratic Party has 
placed emphasis on support for Afghanistan, the main battlefield in 
the U.S.-led war on terrorism. At such a crucial juncture, Prime 
Minister Fukuda suddenly announced his resignation. If diplomatic 
matters are made a political issue in the upcoming extraordinary 
Diet session and if Japan decides to shrink its international 
contributions, the Japan-U.S. alliance would further deteriorate. 
 
There is a dangerous sign. The amount of oil supplied to U.S. naval 
ships in the SDF's refueling mission in the Indian Ocean has sharply 
decreased recently. The total volume of oil supplied from February, 
when the mission was resumed, through July was only 800 kiloliters, 
just one-sixth of that in the same period a year ago. Japan refueled 
U.S. ships just twice, one-fifth of that a year ago. 
 
A source connected to Japan-U.S. relations explained why the amount 
decreased so significantly: "Although the U.S. military presented a 
huge volume of data to Japan last year, Japan continued to question 
the U.S. over the alleged use of supplied fuel for Iraq. The U.S. 
must have begun to consider that if it continued to depend largely 
on Japan's fuel, there might be some trouble or inconvenience at the 
critical moment." 
 
In the extra Diet session, the issue of extending the refueling 
mission in the Indian Ocean, beside a supplementary budget bill, 
will also be high on the agenda. This mission is the sole visible 
cooperation Japan has still offered in the war on terror. The ruling 
coalition intends to submit a bill extending the relevant law to 
continue the mission beyond its expiration next January. 
 
But the opposition bloc remains opposed to the bill. If the 
 
TOKYO 00002442  006 OF 011 
 
 
Democratic Party of Japan (DPJ) and other opposition parties 
continue to oppose it, they should present an alternative feasible 
contribution plan in a proper way. 
 
The environment surrounding Japan is so severe that we must not 
allow the Japan-U.S. alliance to deteriorate further. China and 
India are gaining influence, and the fissure between the U.S. and 
Russia is becoming serious. Politics should be responsible for 
giving a reply to a question about how to utilize the alliance in 
order for Japan to secure its national interests. 
 
Confrontation between U.S., Russia 
 
It is particularly important to focus on what effect the 
confrontation between the U.S. and Russia is likely to have on 
Japan's economic and security benefits. 
 
Russia is intensifying its offensive toward Japan with a hard and a 
soft approach. A senior Russian Foreign Ministry official tried to 
shake the Japan-U.S. alliance, saying: "The U.S. and China in 
cooperation are set to launch a Japan bashing. In such a case, there 
will be no other means but for Japan and Russia to join hands." 
Russia has cast amorous glances toward Japan over energy and other 
cooperation. But a Japanese security official said: "(Russia) is 
continuing military buildup in the Asian region." 
 
Meanwhile, the U.S. and Britain have urged to Japan to join hands 
with them in dealing with Russia. British Ambassador David Warren 
called on Prime Minister Fukuda late last month and urged Japan to 
take a hard-line stance toward Russia. The showdown between the U.S. 
and Russia has made Japan's position difficult. 
 
The political vacuum in Japan would allow North Korea to move the 
six-party talks and negotiations on the abduction issue in its 
favor. Tokyo had asked Pyongyang to start reinvestigation of the 
abduction issue by the end of August. But the North has made no 
reply. A government source speculated: "North Korea might be 
surmising that even if it delays the reinvestigation, there will be 
no problem if the responsibility is shifted onto Japan's political 
confusion." 
 
Japan, which has no natural resources, has so far overcome 
difficulties by joining forces with super powers since the Meiji 
Restoration. The Japan-Britain alliance in the Japan-Russia War and 
the Japan-U.S. alliance in the U.S.-Soviet Union Cold War can be 
cited as successful cases. In World War II, Japan's attempt to 
become an imperial power, antagonizing the U.S., Britain, China, and 
Soviet Union, ended in failure. 
 
Being a blind follower of the U.S. is not a rational way to 
strengthen the Japan-U.S. alliance. But even Germany, France, and 
Canada, all of which were against the Iraq war, have dispatched 
their troops to Afghanistan. Will Japan continue the ongoing 
refueling mission or come up with an alternative plan? In the coming 
extra Diet session, a "zero reply" on international contributions is 
unacceptable. 
 
(4) LDP presidential election: Where will anti-Aso votes go? 
Supporters of Ishihara also supporting Koike; Yosano with personnel 
network among senior government officials 
 
YOMIURI (Page 3) (Abridged slightly) 
 
TOKYO 00002442  007 OF 011 
 
 
September 5, 2008 
 
With former Defense Minister Yuriko Koike, State Minister for 
Economic and Fiscal Policy Kaoru Yosano and former Policy Research 
Chairman Nobuteru Ishihara declaring their candidacies against 
Secretary General Taro Aso, the Liberal Democratic Party's (LDP) 
presidential election is showing signs of turning into a melee. 
Which candidates will obtain the anti-Aso votes? Who will those who 
advocate structural reforms support? 
 
Aim of Ishihara to make preemptive move 
 
Ishihara on the morning of September 4 expressed his intention to 
run in the race and played up his determination to do his utmost to 
secure 20 endorsement signatures. He said, "I haven't got many days 
left. I must make a desperate effort to collect endorsement 
signatures." 
 
At the time, he still thought he would have to clear some barriers 
before securing 20 endorsement signatures. Even so, he has decided 
to run, presumably because he aimed at drawing the attention of 
party members by making a preemptive move that would lead to 
securing backers. 
 
Ishihara believes that he had played a key role during the Koizumi 
administration as state minister for administrative reform. He 
endorsed Koizumi when he for the first time faced the challenged of 
an LDP presidential election in 1995. Looking back on that election, 
Ishihara said, "Mr. Koizumi had difficulty collecting endorsement 
signatures in that election. I was involved in that process." 
 
Reformist 
 
Ishihara's declaration of his candidacy has created a stir among 
other factions. In particular, Koike seems to have been inspired to 
join the race. 
 
Koike had been envisaging a scenario of announcing her bid for LDP 
presidency as a champion of the reformists against Aso, who gives 
priority not to structural reforms but to economic stimulus 
measures. There is a strong possibility of supporters of Ishihara 
also supporting Koike. 
 
One veteran lawmaker, who backs Koike, said, "It would be better if 
she draws attention by delaying an announcement of her stance, and 
then draw in support in one stroke." However, she now has no time to 
remain idle. She underscored that she was the quintessence of the 
reformists, saying, "Whether structural reforms can really be 
promoted and whether they can be surely implemented are being put to 
the test. That is the key point." 
 
Policy debate 
 
Yosano, who attaches importance to fiscal discipline, takes a 
different stance from the other three. His forte is his personnel 
network among senior government officials. 
 
On the 4th, he visited former Prime Minister Nakasone, whom he 
respects as his mentor, and former head of LDP caucus in the Upper 
House Mikio Aoki, with whom he has had a long-term relationship. He 
there conveyed his resolve to run in the presidential race. Aoki has 
strong influence not only over the Tsushima faction, to which he 
 
TOKYO 00002442  008 OF 011 
 
 
belongs, but also over Upper House members of other factions. 
Chances are that if Yosano obtains Aoki's support, he would be able 
to gain support also from veteran and mid-ranking lawmakers. 
 
Aso keeps low profile 
 
Aso on the afternoon of the 4th continued to write letters to his 
acquaintances using a writing brush and rolled letter papers in a 
traditional manner. He has been keeping a low profile out of concern 
that if he makes a proactive move, while remaining in the post of 
secretary general, party members would react negatively. 
 
However, his camp is already on the move. Twenty-five lawmakers who 
belong to Taro-Kai, a support group for Aso, the same day assembled 
at a Tokyo hotel. 
 
Taro-kai was formed in 2006, when the general election, in which Aso 
lost to former Prime Minister Abe, was held. Former Justice Minister 
Kunio Hatoyama during the meeting raised his voice, saying: "We are 
fellow soldiers. We have held informal meeting 19 times since two 
years ago. Fifty of us should rally together." 
 
Voting by party members to be held at 46 local chapters to carry 
weight 
 
Local chapters aside from the Ibaraki Chapter will hold voting by 
party members. Chances are that voting by party members, instead of 
voting by lawmakers, could determine the outcome of the presidential 
election as a whole. 
 
The presidential election involves 304 votes from Lower House 
members, 83 votes from Upper House members and 141 votes given to 
local chapters totaling 528 votes. Voting by party members, which is 
not necessarily mandatory, is held in order to decide on a candidate 
their local chapters should vote for. 
 
The party views that holding voting by party members will lead to a 
public appeal that the LDP is an open party. Thirty five local 
chapters held voting by party members in the previous election. This 
time, 46 will hold such, apparently reflecting a strong sense of 
alarm about the abrupt resignation announcement by Prime Minister 
Fukuda. 
 
The voting -- both by lawmakers and local chapters -- will take 
place on the 22nd. However, voting by party members will be held one 
after another, once the official announcement to hold the 
presidential election is made. The party headquarters plans to 
notify local chapters that they should not reveal the outcome of the 
voting until the 22nd so that the voting behavior at local chapters 
will not affect voting by lawmakers. Many local chapters will likely 
disobey this order. 
 
If no one obtains a majority in the first election, a runoff 
election would be held by lawmakers alone. When there are many 
candidates, there is a strong possibility of a runoff election 
taking place. There could be a case of the camps of candidates who 
took second or lower places aiming at turning the table in a final 
vote, by joining forces. Once the campaigning moves into full scale, 
maneuvering will likely become active among various camps with a 
possible run-off taken into consideration. 
 
(5) If Obama wins presidency, there will be no need to worry about 
 
TOKYO 00002442  009 OF 011 
 
 
"Japan bashing" 
 
MAINICHI (Page 2) (Excerpts) 
Evening, September 4, 2008 
 
By Sumire Kunieda 
 
In the United States, Democratic and Republican national conventions 
took place in succession recently in the run-up to the presidential 
election in November. The U.S. presidential race is now in full 
swing. How would U.S. policy change if Democratic presidential 
candidate Barack Obama, 47, wins the presidency? The newspaper asked 
Sumitomo Shoji Research Institute senior analyst Masahiko Adachi'a 
for his analytical views about members on the Obama policy advisory 
team. 
 
The Democratic Party brings back memories of "Japan bashing" in the 
early days of the Clinton administration. Many people may recall the 
nightmare of the Japan-U.S. trade dispute that resulted from the 
U.S. trade deficit with Japan. Will Japan bashing flare up again if 
an Obama administration is launched? 
 
Adachi said with a wry smile: "Japan-U.S. relations cooled down 
during the Clinton administration, and many people are still 
dwelling on that traumatic experience. But this time around, there 
is no need to worry." 
 
According to Adachi, when Japan bashing occurred in 1994, the U.S. 
trade deficit with Japan accounted for 40 PERCENT  of its total 
trade deficit. Today, it will be China that will be so targeted by 
the United States. U.S. Commerce Department statistics showed that 
the U.S. trade deficit was 60 billion dollars as of April 2008 and 
that of it, China accounted for one-third. In addition, in the 
Democratic Party, there is a wing called the "San Francisco 
Democrats" who attach importance to human rights. There is a 
possibility of "China bashing" arising as a result of House Speaker 
Nancy Pelosi and others locking horns with Beijing over Tibet and 
other issues by joining hands with anti-Chinese Republicans who 
regard China as an economic and military threat. 
 
Will an Obama administration's Asia policy center on Japan or shift 
weight to China? 
 
Adachi has analyzed Obama's foreign policy advisers and finds no 
concern that they would advocate a China-centered policy. 
 
Obama's Japan policy advisory team includes former Vice President 
Walter Mondale and former House Speaker Thomas Foley, both former 
ambassadors to Japan; Michael Schiffer, a former fellow at the 
National Institute for Defense Studies in Japan; and Robert Orr, a 
former Boeing Japan president who has lived in Japan for some 20 
years with his Japanese wife. Adachi also predicted: "Obama's policy 
team include some pro-Japan individuals who speak fluent Japanese. 
There will be no decline in communication channels between Japan and 
the United States." 
 
Adachi also noted: "The Democratic Party's economic policy will take 
a middle-of-the road position. Under an Obama administration, 
economic policy will head for a social safety net based on the 
free-trade principle." The Bush administration's foreign policy has 
been characterized by unilateralism, a tendency to turn a deaf ear 
to the opinions of other countries. "If Obama takes power, the 
 
TOKYO 00002442  010 OF 011 
 
 
United States would return to a dialogue and cooperation policy 
course with its allies," Adachi said. 
 
(6) FTC to ask BHP Billiton to submit plan for takeover bid for Rio 
Tinto 
 
ASAHI (Page 7) (Full) 
September 4, 2008 
 
The Fair Trade Commission (FTC) has decided to order mining giant 
BHP Billiton to submit a plan on its bid to acquire smaller rival 
Rio Tinto. It is the first time that Japan will call for submission 
of a plan regarding a takeover bid between foreign entities, based 
on the Antimonopoly Law. This decision came as BHB Billiton has 
refused to voluntarily submit its plan. The FTC will soon send a 
written order to its main office in Melbourne, Australia. 
 
BHB Billiton offered a takeover bid to Rio Tinto in February. If the 
two mining giants are merged, the two companies will hold a 40 
PERCENT  share of the global iron ore market and supply about 60 
PERCENT  of Japan's iron ore imports. If resource prices surge as a 
result of their control of the global market, the prices of our 
daily products may also go up. 
 
Based on the judgment that a merger between the two giants could 
undermine competition, the FTC has decided to issue an order. If the 
antimonopoly watchdog judges the takeover bid will unavoidably have 
some negative effect on the Japanese market, the FTC will be allowed 
to hand out a corrective action order to BHP Billiton. 
 
BHP Billiton has already submitted the takeover plan to the 
antimonopoly authorities of the European Union (EU) and Australia. 
But the Japanese law does not require the company to submit a plan 
in advance. The FTC asked BHP to present a paper similar to that 
given to the EU antimonopoly authorities on a voluntary basis, but 
BHP reportedly has yet to respond. 
 
The EU authorities will decide this December or next January on 
whether to approve the takeover plan. The Japanese watchdog is also 
expected to come up with a conclusion around that time. 
 
The FTC has started screening the takeover plan. In July it set up 
an exclusive team of eight members, including a lawyer. It is quite 
unusual for the FTC to establish an exclusive team, except for a 
group formed in dealing with the merger between Yahata Steel Corp. 
and Fuji Steel Corp. in 1970. 
 
Japan's leading steel corporations agreed on a plan to raise the 
prices of iron ore procured from BHP Billiton and Rio Tinto by about 
80 PERCENT  in fiscal 2008 over the previous fiscal year. Such 
Japanese companies are now alarmed at the possible business 
integration between BHP Billiton and Rio Tinto. Five companies, 
including Nippon Steel Corp. and JFE Steel Corp., submitted an 
opinion paper expressing their concern to the FTC on Sept. 1. 
 
(7) Prime Minister's schedule, September 4 
 
NIKKEI (Page 2) (Full) 
September 5, 2008 
 
10:01 
Experts meeting to discuss the proper way of managing government 
 
TOKYO 00002442  011 OF 011 
 
 
documents at the Cabinet Office. 
 
10:30 
Met with Deputy Chief Cabinet Secretary Futahashi at the Kantei. 
 
11:00 
Met with Defense Ministry Defense Policy Bureau Director General 
Takamizawa, Defense Intelligence Headquarters chief Hokazono and 
Cabinet Intelligence Director Mitani. Mitani remained. 
 
11:50 
Met with State Minister for Financial and Administrative Policy 
Motegi and Tachibana, executive director of the National Government 
Employee System Reform Promotion Headquarters. 
 
12:45 
Chair Ozaki of the experts' council to discuss the proper way of 
managing government documents, and National Archives of Japan 
Director Kikuchi. 
 
14:27 
Met with Internal Affairs Minister Masuda and Miyawaki, executive 
director of the decentralization reform promotion committee. Masuda 
remained. 
 
15:40 
Met with Chief Justice of the Supreme Court Shimada. 
 
16:10 
Met with former General Council Chairman Horiuchi, followed by Vice 
Economy, Trade and Industry Minister Mochizuki and Industrial 
Science and Technology Policy and Environment Bureau Director 
General Suzuki. 
 
17:47 
Arrived at the official residence. 
 
18:58 
Met with Nippon Kedanren Chairman Mitarai, Hiroshi Okuda, an advisor 
to Toyota Motors and Takashi Imai, honorary chairman of Nippon Steel 
Corporation at Kensington Terrace at Hotel Okura. 
 
21:19 
Arrived at the official residence. 
 
ZUMWALT