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RUCNDT/USMISSION USUN NEW YORK 1555

UNCLAS SECTION 01 OF 09 TOKYO 002460 
 
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 09/09/08 
 
Index: 
 
Election season  LDP: 
1) Yomiuri poll: 43 PERCENT  of public want lower-house election as 
soon as possible; LDP support rate steady at 29.7 PERCENT , but 
DPJ's slips 1.8 points to 16.9 PERCENT   (Yomiuri) 
2) Yosano, Koike declare they are running in the LDP presidential 
race, but Yamamoto drops out, unable to gather enough backers 
(Yomiuri) 
3) Former Prime Minister Mori, wanting to be kingmaker, backs Taro 
Aso in the LDP presidential race  (Yomiuri) 
 
Election season - DPJ: 
4) Ichiro Ozawa declares candidacy for DPJ presidency for 3rd time, 
running unopposed, promises to make the DPJ the ruling party 
(Yomiuri) 
5) The upcoming lower-house election is seen as Ozawa's last chance 
to lead a party to victory and grab the reins of government 
(Nikkei) 
6) Some members of the DPJ still fuming that Ozawa will be reelected 
without a vote  (Yomiuri) 
7) Ozawa's policy pledges include cut in existing budget but lack 
specifics on where necessary revenues will come from  (Yomiuri) 
8) Ozawa targets small election districts in nationwide campaign, 
expects to win in a majority of them  (Nikkei) 
 
9) LDP presidential candidates set to attack Ozawa's political 
approach and DPJ campaign pledges  (Tokyo Shimbun) 
 
10) Japan goes along with the ban on nuclear exports to India but 
the decision was a hard one to make  (Yomiuri) 
 
11) METI's new energy strategy spotlights tax cuts to encourage 
capital investment that will save energy  (Yomiuri) 
 
12) Japan Business Federation (Nippon Keidanren) calls for a 10 
PERCENT  consumption tax by fiscal 2011  (Yomiuri) 
 
Articles: 
 
1) Poll: 43 PERCENT  call for snap election at earliest possible 
time 
 
YOMIURI (Page 2) (Abridged) 
September 9, 2008 
 
Some 43 PERCENT  of the public would like the House of 
Representatives to be dissolved as soon as possible for a general 
election, the Yomiuri Shimbun found from its recent face-to-face 
nationwide public opinion survey conducted Sept. 6-7. "Within this 
year" accounted for 27 PERCENT , and a total of 70 PERCENT  thought 
that the general election should take place by the end of this year. 
In the wake of Prime Minister Fukuda's abrupt announcement of his 
resignation, an increasing number of people want a snap election, 
the survey shows. 
 
In the poll, respondents were asked what they thought about Fukuda's 
sudden announcement of his resignation. To this question, 71 PERCENT 
 said he was "irresponsible." In the breakdown of public support for 
political parties, however, the ruling Liberal Democratic Party 
remained almost flat at 29.7 PERCENT , down only 0.8 percentage 
points from last month. This shows that the LDP's support rate was 
 
TOKYO 00002460  002 OF 009 
 
 
not markedly affected by Fukuda's announcement of his resignation. 
The public is apparently trying to find out developments in the 
LDP's presidential election. Meanwhile, the leading opposition 
Democratic Party of Japan (Minshuto) was at 16.9 PERCENT , down 1.8 
points from last month. 
 
Respondents were also asked who they thought would be most 
appropriate among ruling and opposition lawmakers for prime 
minister. To this question, LDP Secretary General Taro Aso, who will 
run in the LDP race, scored 30.6 PERCENT , followed by former Prime 
Minister Koizumi at 11.8 PERCENT  and DPJ President Ozawa at 9.6 
PERCENT . Aso rose from 24.7 PERCENT  in last month's survey and 
remained most popular. Former Defense Minister Yuriko Koike, who is 
expected to run for LDP presidency, was at 4.7 PERCENT  (1.0 PERCENT 
 in last month's survey). Former LDP Policy Research Council 
Chairman Nobuteru Ishihara was at 4.1 PERCENT  (0.9 PERCENT  in last 
month's survey) and Economic and Fiscal Policy Minister Kaoru Yosano 
at 1.8 PERCENT  (0.4 PERCENT  in last month's survey). All were up 
from last month, showing the effects of the LDP's presidential 
race. 
 
The survey was conducted of 3,000 persons chosen from among the 
nation's voting population, and answers were obtained from 1,835 
persons (61.2 PERCENT ). 
 
2) Yosano, Koike announce candidacies for LDP presidential race 
 
YOMIURI (Page 1) (Slightly abridged) 
September 9, 2008 
 
Economic and Fiscal Policy Minister Kaoru Yosano,70, and former 
Defense Minister Yuriko Koike, 56, officially announced yesterday 
their candidacies for the Sept. 22 presidential election of the 
ruling Liberal Democratic Party (LDP) at the party's headquarters 
respectively. House of Councillors member Ichita Yamamoto, however, 
revealed the press corps yesterday his intention to give up running 
in the presidential race. Since Yasufumi Tanahashi, former science 
and technology minister, has yet to secure 20 recommendations, the 
LDP presidency will be contested by five candidates -- Koike, 
Yosano, Secretary General Taro Aso, former policy chief Nobuteru 
Ishihara and former Defense Minister Shigeru Ishiba. 
 
Koike told reporters: 
 
"The key word is reform. I want to change the system of Japanese 
society and implement politics from the viewpoint of the public, 
while preserving tradition, family ties and the solidarity of 
community." 
 
Koike is the first Japanese woman to seek the LDP presidency. 
 
Yosano, meanwhile, said revealed the he would set drastic tax system 
reform, including a consumption tax hike, as a administrative 
concept. He said: 
 
"I would like to gain public understanding not only for the 
consumption tax but also for the overall tax system. We should not 
give optimistic and misleading ideas to the public." 
 
Ishiba yesterday came up with a policy of establishing a permanent 
law enabling Japan to dispatch the Self-Defense Forces overseas 
whenever necessary instead of the New Antiterrorism Special Measures 
 
TOKYO 00002460  003 OF 009 
 
 
Law that allows the Maritime Self-Defense Force to carry out its 
refueling operation in the Indian Ocean. 
 
3) Mori to back Aso 
 
YOMIURI (Page 4) (Full) 
September 9, 2008 
 
Former Prime Minister Mori, a supreme advisor to the ruling Liberal 
Democratic Party's Machimura faction, clarified in a general meeting 
of the faction yesterday that he will support LDP Secretary General 
Taro Aso, who belongs to the Machimura faction, in the LDP's 
forthcoming presidential election. 
 
The meeting was held after former Defense Minister Yuriko Koike, 
also belonging to the Machimura faction, announced her bid for the 
LDP presidential election. One of those who attended the meeting 
quoted Mori as saying: "Do you know what impuku (ritual suicide 
conducted in secret) is? As I talk to you now, I'm prepared to quit 
Seiwaken (Machimura faction). This time, we will not support anyone 
as a faction. As an individual, I will support Mr. Aso." 
 
Meanwhile, former LDP Secretary General Hidenao Nakagawa, one of the 
Machimura faction's leaders, is standing behind Koike in the party 
race. "She has put her political career on the line," Nakagawa said 
in the meeting. "So," Nakagawa went on, "there will be some people 
who will support her as comrades, and that's understandable to me." 
The difference between Mori and Nakagawa, who are the Machimura 
faction's leaders, is now clear, and the faction could therefore 
split. 
 
4) DPJ President Ozawa reelected third term; "I will do my best to 
take the country's political helm," he says 
 
YOMIURI (Page 1) (Full) 
September 9, 2008 
 
Ichiro Ozawa was reelected yesterday uncontested for his third term 
as president of Democratic Party of Japan (DPJ). The 66-year-old 
Ozawa expressed, at a press conference held at the party's 
headquarters, his determination to put all his energy into taking 
over the reins of government in the next House of Representatives 
election. He stated: 
 
"I will do my best on the assumption that it is my last chance to 
put an end to the Liberal Democratic Party-led government and 
realize politics and government that places priority on the daily 
lives of people." 
 
The DPJ will hold an extraordinary party convention on Sept. 20 in 
Tokyo to formally reelect Ozawa as its top leader. Ozawa will be 
serving in his post for two years until September 2010. He is 
expected to retain Deputy President Naoto Kan, Secretary General 
Yukio Hatoyama and Azuma Koshiishi, chairman of the LDP caucus in 
the House of Councillors, in their respective posts. 
 
At the press meeting, Ozawa revealed that he would begin a 
nationwide stumping tour on Sept. 9 for the next Lower House 
election and announce the party's first officially picked candidates 
before the end of this week. He said: 
 
"Since a dissolution of the Lower House and consequent general 
 
TOKYO 00002460  004 OF 009 
 
 
election are imminent, I will do my utmost to prepare for them. We 
will win a majority of the single-seat constituencies by all 
means." 
 
Ozawa revealed a set of administrative concepts that will serve as a 
basis for a set of campaign pledges (manifesto) that the DPJ will 
announce in its campaign for the next Lower House election. He 
said: 
 
"I will create a Japanese-style safety net system in such fields as 
pension, medical services, child-rearing, employment, the 
agriculture, forestry and fisheries industries, and small- and 
mid-sized enterprises. I will also completely change the nation's 
system of government so that the people can participate in politics. 
I will secure fiscal resources for this system." 
 
5) Ozawa sees next Lower House election as last chance for change of 
government 
 
NIKKEI (Page 2) (Full) 
September 9, 2008 
 
Democratic Party of Japan President Ichiro Ozawa in a press 
conference yesterday expressed his strong resolve to win the next 
Lower House election. He said: "I will make utmost efforts, thinking 
it is the last opportunity to put an end to LDP-led politics and 
realize our party's vision of a people-oriented politics and 
administration." 
 
Fifteen years have passed since he left the LDP. Touching on this 
fact, Ozawa said: "(The next election) will be the culmination of my 
life." 
 
He also described Prime Minister Yasuo Fukuda's abrupt decision to 
step down as a golden opportunity for change of government, saying: 
"Many people have come to realize that the long LDP administration 
has not brought happiness to them." 
 
The view is spreading in the party that Ozawa intends to risk his 
political life. 
 
6) DPJ President Ozawa to speed up coordination on candidates for 
Lower House election 
 
YOMIURI (Page 2) (Excerpts) 
September 9, 2008 
 
Democratic Party of Japan (DPJ) President Ozawa, who has been 
reelected to a third term, intends to speed up coordination on the 
party's candidates for the next House of Representatives election, 
as well as the selection of the party executive lineup. However, 
there is smoldering frustration among DPJ lawmakers toward Ozawa's 
reelection to another term uncontested while the presidential 
election of the ruling Liberal Democratic Party (LDP) is drawing 
attention. The question is whether Ozawa will be able to make 
adequate preparations to seize power. This is his real challenge. 
 
Ozawa, at a press conference yesterday, stressed: "I will be 
officially reelected on Sept. 21 (at the party's convention). But I 
will fulfill my duty without making any political vacuum and do my 
best to prepare for a general election." 
 
 
TOKYO 00002460  005 OF 009 
 
 
Amid the Fukuda cabinet's slump in the polls, the largest opposition 
party has gained confidence that it can win the next Lower House 
election. With Fukuda's abrupt announcement of his resignation, all 
eyes are now fixed on the LDP presidential race. Therefore, the view 
is gaining ground in the DPJ that the trend of opinion has slightly 
changed. 
 
The DPJ initially had planned to contest the Lower House election by 
playing up the need for political change, grilling the government 
and ruling coalition over soaring prices and the issue of poisoned 
Chinese-made frozen dumplings at the upcoming extraordinary Diet 
session. However, the ruling camp is now coordinating a timetable 
for a dissolution of the Lower House election in early October. On 
this point, as well, the DPJ's calculation has been off. 
 
At yesterday's press meeting, Ozawa underscored his concern, saying: 
"I have continued to say on various occasions that we cannot win the 
Lower House election on the mood alone. The situation is very 
difficult." 
 
7) Ozawa's plan for DPJ administration emphasizes budget cuts for 
existing projects but lacks specifics about fiscal resources 
 
YOMIURI (Page 11) (Excerpts) 
September 9, 2008 
 
Democratic Party of Japan President Ichiro Ozawa was reelected for a 
third term without a formal vote yesterday. The blueprint for a new 
administration he unveiled yesterday emphasizes the need to 
significantly cut current expenditures in order to squeeze out 
fiscal resources to implement his major policy plans. But more than 
15 trillion yen will be needed to realize the plans. Given this, 
unless he presents specific spending cuts by the time of the next 
House of Representatives election, he will unavoidably be criticized 
as a profligate spender. 
 
The blueprint incorporates measures to create a system to give 
income support to individual farmers and to provide households with 
up to 26,000 yen per month as a child care allowance until a child 
graduates junior high school. Most of the measures in his blueprint 
were in the party's manifesto for the House of Councillors election 
in 2007, but other measures, such as a system to offer income 
support for individual fishing households, are in the manifesto, so 
the amount of needed financial resources is likely to be larger than 
the 15.3 trillion yen estimated at the time of the 2007 Upper House 
election. 
 
In a press conference yesterday, Ozawa said regarding fiscal 
resources: "Many allocations have been used for other purposes than 
their initial ones, and (in the government's budget) there are items 
that we think are unnecessary." He stressed that he would boldly cut 
wasteful spending and expenditures for existing projects that the 
DPJ places low on its list of priorities. 
 
Ozawa said: "Public highway maintenance and improvement has been 
carried out to a considerable extent," indicating that he would 
significantly reduce the highway budget. 
 
However, many government officials take a cool view about Ozawa's 
blueprint, with a senior Finance Ministry official commenting: 
"There are a lot of budgetary allocations that cannot be slashed, 
such as those to redeem national bonds and to pay social insurance 
 
TOKYO 00002460  006 OF 009 
 
 
benefits. It will be difficult to cut more than 15 trillion yen." 
 
An attempt to discontinue existing projects will inevitably evoke 
protest from the industries and voters who benefit from the 
projects. Some DPJ members, keeping such a possibility in mind, 
might oppose Ozawa's idea, and debate in the party might eventually 
heat up. 
 
8) DPJ gearing up for Lower House election 
 
NIKKEI (Page 2) (Excerpts) 
September 9, 2008 
 
Democratic Party of Japan President Ichiro Ozawa sealed his third 
term unopposed yesterday. The party will now gear up for the next 
Lower House election that might follow the dissolution of the Lower 
House at the outset of the next extraordinary Diet session to be 
convened on Sept. 24. In a press conference yesterday, Ozawa 
stressed the party's target of winning a majority in the Lower House 
that holds 300-single seats. The DPJ is aiming to become the largest 
party in the lower chamber, while the Liberal Democratic Party is 
eager to turn around the situation via its leadership race and the 
installation of a new prime minister. 
 
In the press conference held at party headquarters, Ozawa played up 
the party's stance to unanimously make preparations for the next 
Lower House election. Immediately after the press conference, Ozawa 
discussed the party's election measures with Secretary General Yukio 
Hatoyama and other executives. After the meeting, he headed for a 
photo-shoot session for campaign posters. 
 
Starting today, Ozawa is scheduled to resume his nationwide 
political tour to visit constituencies in which the party has yet to 
determine its candidates. Ozawa said to his aide last evening: "I 
will devote myself to the nationwide tour and campaigning. You have 
to see the secretary general regarding other matters." 
 
The party's Upper House Caucus Chairman Azuma Koshiishi, too, 
explicitly said to reporters yesterday that his party would focus 
its attention on campaigning for the next election. The party is 
scheduled to assemble its Upper House proportional-representation 
members on Sept. 10 to build a solid cooperation system to obtain 
the cooperation of support organizations. 
 
Ozawa also told the news conference yesterday that he would renew 
the party leadership and the shadow cabinet in a way that can win 
public trust through the next election. 
 
Deputy President Naoto Kan, Secretary General Hatoyama, and Upper 
House Caucus Chairman Koshiishi are likely to retain their posts. 
Some in the leadership think Ozawa will also retain Kenji Yamaoka as 
Diet Affairs Committee chairman. Amid such speculations, Ozawa 
intends to consider giving posts to individuals who can draw much 
attention. 
 
The DPJ's extra efforts for the next election come from the 
likelihood that the LDP will restore its popularity after the next 
general election the change over of the prime minister. A DPJ 
lawmaker predicted that if the next prime minister dissolves the 
Lower House soon after the convocation of the next Diet session by 
taking advantage of his popularity, it would be difficult for the 
DPJ to become the largest party, overtaking the LDP's place. 
 
TOKYO 00002460  007 OF 009 
 
 
 
As such, the party will move up the time to determine the fist batch 
of its official candidates from within September to this week. The 
party will also increase the number of its official candidates from 
about 150 to over 200 to aim at garnering more than 150 single 
seats. But given a lack of preparedness, Ozawa indicated in the 
press conference difficulty attaining the target under the current 
situation. 
 
9) LDP presidential candidates set to attack Ozawa's political 
approach and DPJ campaign pledges 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
September 9, 2008 
 
How are the candidates running in the LDP presidential race going to 
deal with Democratic Party of Japan President Ichiro Ozawa, who has 
won a third term, in the next Lower House election? Major candidates 
have played up their confrontational stances toward Ozawa's 
political approach to apply pressure on the Ozawa-led DPJ ahead of 
the next election. 
 
Secretary General Taro Aso, who is regarded as the frontrunner in 
the presidential race, in a speech on Sept. 6 played up his ability 
to counter Ozawa, saying: "The next LDP president will have to lock 
horns with Mr. Ozawa. That has to be taken into consideration in 
selecting the new LDP president." He also criticized the DPJ's 
presidential election without a vote, saying: "A party that does not 
allow members to throw their hats in the ring to run in the race is 
strange." Aso indicated that once elected LDP president, he would 
attack Ozawa's heavy-handed approach to politics. 
 
Former Policy Research Council Chairman Nobuteru Ishihara, too, 
zeroed in on Ozawa's political style, saying to reporters yesterday: 
"Some members expressed their eagerness to run in the race, but they 
were not able to do so. I am certain that they are now wondering why 
their party did not carry out an election." 
 
Economic and Fiscal Policy Minister Kaoru Yosano in a press 
conference indicated that he would focus on problems in the DPJ 
manifesto for the next Lower House election presented by Ozawa. 
Yosano said: "In view of fiscal resources, most plans are difficult 
to implement. The party needs to spell out how it intends to raise 
the funds." 
 
Former Defense Minister Yuriko Koike, who was at Ozawa's side in 
launching the now-defunct New Frontier Party, praised Ozawa, saying: 
"I was able to learn many things from him. He is the best at dealing 
with politics." At the same time, Koike expressed a willingness to 
hold a debate with Ozawa on security policy, over which the DPJ is 
split, noting: "I will have the public make a decision on the 
concreteness and feasibility of the DPJ's policies, especially in 
the security field." 
 
Former Defense Minister Shigeru Ishiba, on a commercial TV program, 
also indicated that he would pursue Ozawa on security, saying: "The 
DPJ has pronounced the Maritime Self-Defense Force's refueling 
mission in the Indian Ocean unconstitutional. That is strange." 
 
10) Japan makes tough decision to support lifting nuclear embargo on 
India 
 
 
TOKYO 00002460  008 OF 009 
 
 
YOMIURI (Page 4) (Full) 
September 9, 2008 
 
The Nuclear Suppliers Group (NSG), a 45-member international body 
overseeing its members' nuclear technology exports, has now reached 
a consensus to waive its embargo on nuclear reactors and nuclear 
fuel to India, a non-signatory to the Nuclear Nonproliferation 
Treaty (NPT). Japan, which is also an NSG member, is now in a 
complicated position. Japan joined in the international consensus. 
However, Japan has insisted on stepping up the NPT regime while 
upholding its policy of pushing for nuclear disarmament. Japan's 
approval of the NSG's decision this time is contradictory in part to 
that nuclear disarmament policy. 
 
Chief Cabinet Secretary Machimura, meeting the press yesterday, said 
Japan has "decided from a comprehensive perspective" to join the 
consensus on the exceptional waiver of nuclear trade with India. 
Machimura said the nuclear trade waiver would help India promote 
nuclear power generation and cut greenhouse gasses. He added that 
India has agreed with the International Atomic Energy Agency to let 
the IAEA inspect that country's nuclear facilities and that this 
safeguards agreement will increase its nuclear activities' 
transparency. 
 
Japan has called for the NPT regime to be enhanced in an aim to 
limit the nuclear powers to the United States, Russia, Britain, 
France, and China. However, such an effort could lose its 
persuasiveness. "North Korea and Pakistan may also tell us to allow 
them to have nuclear weapons," said Hirofumi Tosaki, chief 
researcher at the Japan Institute of International Affairs. 
 
11) Revised economic strategy report propose tax cuts for 
investments in energy-conservation facilities 
 
YOMIURI (Page 2) (Excerpts) 
September 9, 2008 
 
The Ministry of Economy, Trade and Industry (METI) yesterday 
unveiled draft revisions to its report titled "new economic growth 
strategy" for Japan to sustain its economic growth despite recent 
soaring resource prices. The report includes measures to reduce 
taxes for companies' capital investment in energy-conservation 
facilities. It also suggests the need to press major companies to 
raise wages, aiming to boost households' buying power. METI will 
seek approval for the revised report in a cabinet meeting today. The 
ministry wants to have the report reflected in the government's 
annual economic and fiscal policy guidelines due out next summer. 
 
Based on the view that the Japanese economy is faced with severe 
problems due to soaring resource prices, leaving Japan mired in a 
sense of helplessness, METI concluded that it is necessary to add 
more measures to overcome the steep rise in prices. The ministry 
aims to encourage companies and households to promote investment for 
conserving energy and resources, as well as to expedite exports to 
resource-supplying countries and emerging countries. 
 
The revised version stresses that Japan should aim to become a 
country rich in natural resources by making use of solar power. It 
also includes major tax-cut measures to allow multiple companies to 
jointly introduce an energy-conservation facility. 
 
12) Keidanren to call for raising consumption tax to 10 PERCENT  in 
 
TOKYO 00002460  009 OF 009 
 
 
fiscal 2011 
 
YOMIURI (Page 2) (Full) 
September 9, 2008 
 
The Japan Business Federation (Nippon Keidanren) decided yesterday 
to call on the government to raise the consumption tax from the 
current 5 PERCENT  to 10 PERCENT  in fiscal 2011 as a medium-term 
reform of the tax system. After the plan is formally decided by the 
chairman and vice chairman, the business group will announce the 
plan, possibly later in September. 
 
In Chairman Fujio Mitarai's vision released in January 2007, 
Keidanren proposed hiking the consumption tax to 10 PERCENT  in two 
stages by 2015. Based on its recent estimate, however, the business 
group concluded that in order to maintain the current medical, 
pension and other social security systems, the consumption tax 
should be raised at one stroke at an earlier date than scheduled. 
 
Keidanren set forth the government's plan to return the nation's 
primary balance to the black in fiscal 2011 as a precondition for 
stable growth of the Japanese economy. It also thinks it is 
necessary to take measures to reduce the burden on middle-income and 
lower earners in order to mitigate the blow to individual consumers 
from the consumption tax hike. 
 
Specifically, Keidanren intends to incorporate tax cuts for families 
with small children and tax cuts for middle-income and lower earners 
worth several trillion yen. 
 
ZUMWALT