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UNCLAS SECTION 01 OF 12 TOKYO 002538 
 
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//08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
U.S. financial crisis: 
4) Impact of Lehman Brothers' collapse spreads; U.S., Japan, Europe 
pump 36 trillion yen into markets  (Nikkei) 
5) AIG insurance giant in trouble in Japan, as well  (Nikkei) 
6) Japanese banks hit by wave from U.S. financial crisis to tune of 
44 billion yen  (Nikkei) 
7) Japan has no cards to play to counter U.S. financial crisis 
(Mainichi) 
8) Market insiders deeply worried about impact on Japanese economy 
of U.S. financial crisis  (Yomiuri) 
9) Financial crisis in U.S. could affect Diet-dissolution strategy 
(Asahi) 
10) U.S. financial crisis, tainted rice issue hit the Japanese 
government at a time when it is falling into a political vacuum 
(Nikkei) 
11) Government denies there will be a significant impact on Japan 
from the U.S. financial crisis  (Tokyo Shimbun) 
 
Defense affairs: 
12) State Department Japan Desk Director Russel calls on Japan to 
continue oil-refueling mission in the Indian Ocean  (Yomiuri) 
13) Chief Cabinet Secretary Machimura to probe into delay of Kantei 
receiving report of intrusion of foreign submarine into Japanese 
waters  (Asahi) 
 
Political season: 
14) Taro Aso virtually assured of garnering majority in first ballot 
in LPD presidential election  (Asahi) 
15) Okazaki City protests to Aso for gaffe about it being good that 
heavy rains had fallen there and not elsewhere  (Yomiuri) 
16) Former Prime Minister Koizumi cheers on Yuriko Koike in the LDP 
presidential race  (Nikkei) 
17) Ota reelected head of the New Komeito  (Yomiuri) 
18) Japanese Communist Party cuts by half its officially sponsored 
candidates in the upcoming Lower House election, giving the ruling 
LDP jitters about impact  (Yomiuri) 
19) Democratic Party of Japan on verge of merging with splinter 
party People's New Party  (Nikkei) 
20) Kono Yohei to resign post of Lower House speaker  (Nikkei) 
 
ARTICLES: 
 
1) TOP HEADLINES 
 
Asahi: 
Monetary authorities of Japan, U.S., Europe pump 35 trillion yen 
into money markets after Lehman Brothers collapses 
 
Mainichi: 
Tainted rice distributed to 118 hospitals, facilities in 24 
prefectures 
 
Yomiuri: 
U.S. financial markets shaken in aftermath of Lehman's failure; 
AIG's credit rating downgraded 
 
 
TOKYO 00002538  002 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
Nikkei: 
Fund injection amounts to 36 trillion yen in Japan, U.S., Europe 
 
Tokyo Shimbun: 
Hinode Town to shoulder medical bills for elderly patients starting 
next fiscal year 
 
Akahata: 
With Lehman's failure, JCP Secretary General Ichida stresses need to 
review policy of following U.S. 
 
2) EDITORIALS 
 
Asahi: 
(1) Collapse of Lehman Brothers: First make efforts to stop chain 
reaction 
 
Mainichi: 
(1) U.S. must do utmost to prevent larger crisis from Lehman's 
failure 
(2) Sales of tainted rice: Strictly pursue Agriculture Ministry's 
responsibility 
 
Yomiuri: 
(1) U.S. paying the price for hesitating to inject public funds 
 
Nikkei: 
(1) Take bold measures to prevent U.S.-triggered financial panic 
 
Tokyo Shimbun: 
(1) Make utmost efforts to prevent chain of bankruptcies in 
aftermath of Lehman failure 
(2) LDP-New Komeito government must take deplorable political vacuum 
seriously 
 
Akahata: 
(1) Put end to casino-type capitalism 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, September 15 
 
NIKKEI (Page 2) (Full) 
September 17, 2008 
 
Spent the whole day at his official residence. 
 
Prime Minister's schedule, September 16 
 
NIKKEI (Page 2) (Full) 
September 17, 2008 
 
09:28 
Met at the Kantei with Justice Minister Yasuoka, MHLW Minister 
Masuzoe, MAFF Minister Ota, National Safety Commission Chairman 
Hayashi, Consumer Administration Minister Noda, Chief Cabinet 
Minister Machimura, and Deputy Chief Cabinet Secretary Futahashi, 
followed by Defense Minister Hayashi, Vice Defense Minister Masuda, 
Machimura and Hayashi. 
 
10:01 
Attended a cabinet meeting, followed by a meeting of 
 
TOKYO 00002538  003 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
financial-affairs-connected cabinet ministers. 
 
11:14 
Attended an administrative spending examination meeting. Afterward 
met Noda. 
 
12:12 
Met Cabinet Intelligence Director Mitani, Deputy Chief Cabinet 
Secretary for Crisis Management Ito, followed by Futahashi. 
 
14:27 
Met incoming and outgoing Supreme Court Justices Sakurai and Yokoo. 
 
15:02 
Met Gunma Gov. Osawa, followed by Machimura. 
 
16:43 
Met Futahashi. 
 
17:05 
Met Defense Ministry Defense Policy Bureau chief Takamizawa, Defense 
Intelligence Headquarters chief Hokazono, and Mitani. Mitani stayed 
on. Afterward met Noda. 
 
18:01 
Returned to his official residence. 
 
4) Fallout from Lehman Brothers' collapse continues: Funds injection 
by Japan, U.S., Europe totals 36 trillion yen in two days; Dollar 
temporarily tests 103 yen-range; Nikkei Stock Average records 
year-to-date low 
 
NIKKEI (Top Play) (Lead para.) 
September 17, 2008 
 
The failure of Lehman Brothers, a major U.S. securities house, is 
sending shockwaves across markets around the world. The 225-issue 
Nikkei Stock Average on September lost more than 600 points on the 
Tokyo market, recording the lowest level in six months. Asian 
markets have also suffered sharp falls. Dollars were sold on the 
foreign exchange market. The selling spree sent the U.S. dollar to 
the 103-yen range. The central banks of Japan, the U.S. and Europe 
the same day injected funds worth over 23 trillion yen in order to 
quell market jitters. More than 36 trillion yen was injected in two 
days. European and U.S. markets opened broadly lower. The market 
continues to be shaky. 
 
5) Uncertainty over AIG with six life, non-life insurers in Japan 
 
NIKKEI (Page 3) (Full) 
September 17, 2008 
 
Uncertainty over American International Group Inc.'s (AIG) situation 
also will unavoidably affect its business in Japan. The company has 
three life insurance and three non-life insurance companies in 
Japan. As of the end of March, AIG has concluded 9 million contracts 
for life insurance policies alone. The company received 2.5 trillion 
yen in life and non-life insurance premium revenues in fiscal 2007. 
If simply compared, its business scale is equivalent to that of 
Sumitomo Life Insurance Co., Japan's leading life insurer. 
 
AIG's life insurance companies in Japan are Alico Japan, AIG Edison 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
Life Insurance Co., and AIG Star Life Insurance Co. The company 
earns a total of 2.1 trillion yen, accounting for one-fourth of the 
total revenue earned by all life insurance businesses across the 
world. AIG has also non-life insurers in Japan, including AIU 
Insurance Co., American Home Insurance Co. These companies' 
businesses are firmly managed, as Nobuyasu Uemura, chief analyst at 
Rating and Investment Information Inc., said: "The group's 
contributions are rated high and stable." 
 
6) Japanese banks may suffer losses totaling over 230 billion yen 
with 440 billion yen worth of loans to Lehman Brothers 
 
NIKKEI (Page 3) (Excerpts) 
September 17, 2008 
 
Lehman Brothers Japan (Minato Ward, Tokyo), the Japanese arm of 
Lehman Brothers Holdings Inc., filed for bankruptcy protection 
yesterday with the Tokyo District Court. The business failure of the 
major U.S. securities firm is expected to hit not only the financial 
institutes and companies that are doing business with Lehman but 
even many areas in Japan, including individual investors and real 
estate companies investing their money in the company. 
 
Leading banks, local banks, and insurance companies that have loan 
claims on Lehman Brothers and hold bonds issued by that company 
revealed the values of such assets yesterday. The total amount of 
their investments in and lending to Lehman exceeds 440 billion yen. 
Of this amount, more than 230 billion yen will not likely be covered 
by collaterals or transactions to avert losses. 
 
The extent of the losses the Japanese firms will suffer in the end 
will depend on how Lehman Brothers will dispose of its holdings, but 
each financial institution will inevitably have to write off bad 
loans to the company. The disposal of losses related to Lehman will 
likely deal another blow to banks that have already been suffering 
from non-performing loans claims to domestic firms in the current 
worsened economic climate. Japanese leading financial institutions 
(six major banks and Nomura Holdings) disposed of nonperforming 
loans worth 1.4 trillion yen linked to the U.S. subprime mortgage 
crisis by the year that ended in June 2008. 
 
7) Failure of Lehman Brothers: Japan's hands tied; Ministers rule 
out impact of bankruptcy 
 
MAINICHI (Page 8) (Abridged slightly) 
September 17, 2008 
 
Following the bankruptcy of Lehman Brothers, a major U.S. securities 
house, the government on the morning of September 16 held an 
emergency cabinet meeting. Amid growing concern that the ensuing 
global stock plunge could deal a serious blow to the Japanese 
economy, Prime Minister Fukuda ordered ministers, "Take all possible 
measures to prepare for every situation." However, it is impossible 
for him to take drastic measures, as he has a lame-duck cabinet due 
to his recent announcement of his decision to step down, and the 
Liberal Democratic Party (LDP) presidential election campaign is now 
in progress. As such, participants just confirmed that as of this 
moment, no serious impact on Japan's financial institutions is 
expected, as State Minister for Financial Policy Motegi revealed. 
The meeting brought together Chief Cabinet Secretary Machimura, 
Finance Minister Ibuki, State Minister for Economic and Fiscal 
Policy Yosano as well as Motegi. Bank of Japan Governor Shirakawa 
 
TOKYO 00002538  005 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
also took part. Yosano said that participants agreed to consider 
what Japan can do for international cooperation. 
 
However, measures that can be taken for the moment are limited to 
the BOJ boosting money-market liquidity and aiming to bring about 
economic pump-priming measures that include measures to help small- 
and medium-size businesses. However, whether the fiscal 2008 
supplementary budget intended to finance the economic stimulus 
package will secure Diet approval in the next extraordinary session 
depends on when the next prime minister to be chosen in the LDP 
presidential election will dissolve the Lower House for a snap 
election. 
 
8) Lehman Brothers collapses: Banks intensifying move to avoid risk; 
Market observers expects serious impact of failure of leading U.S. 
securities house 
 
YOMIURI (Page 8) (Full) 
September 17, 2008 
 
Most market observers view the failure of Lehman Brothers, a leading 
U.S. securities firm, as serious. Banks had hoped that the U.S. 
would not allow the firm to fail because of its huge size. However, 
with their expectations let down, they are now increasingly taking a 
stance of avoiding any risks involved in the Lehman Brothers 
collapse. There is fear that economies throughout the world will 
lose momentum. If companies that are in a bind try to cut jobs in an 
effort to reduce expenses as much as possible, the unemployment rate 
would jump, adversely affecting personal consumption. 
 
Nomura Securities Financial and Economic Research Center Economic 
Research Department chief Kiuchi pointed out: "There is a 
possibility of a recurrence of the financial problem that pushed up 
crude oil prices. The triple evil of the high yen, low stock prices, 
and high crude oil prices could apply further downward pressure on 
the Japanese economy, which has already entered a recessionary 
phase." 
 
"The impact would not be deep" 
 
State Minister for Economic and Fiscal Policy Yosano during a press 
conference on the 16th took an optimistic view about the impact of 
the failure of Lehman Brothers on Japan. He noted, "It is 
predictable that U.S.-bound exports will drop. But this has been 
expected since last year. It is unlikely that the failure of Lehman 
Brothers will have an immediate impact of any depth." 
 
9) Global financial crisis likely to affect ruling coalition's 
strategy of holding early Lower House election 
 
ASAHI (Page 1) (Full) 
September 17, 2008 
 
With Liberal Democratic Party (LDP) Secretary General Taro Aso 
gaining support from LDP Diet members and prefectural chapters for 
the Sept. 22 presidential election, Aso and Democratic Party of 
Japan (DPJ) President Ichiro Ozawa will likely fight the next House 
of Representatives election with an eye on the reigns of government. 
The opposition camp intends to bring up the tainted rice issue and 
ongoing global financial crisis as campaign issues. The developments 
of the financial crisis will likely have an impact on the ruling 
coalition's strategy of holding an early Lower House election. 
 
TOKYO 00002538  006 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
 
An Asahi Shimbun survey has found that Aso now has about 230 or 60 
PERCENT  of the 386 LDP lawmakers and 141 local votes. Aso, 
therefore, is certain to become the new LDP president. The ruling 
camp's election strategy is to dissolve the Lower House at the 
outset of the upcoming extraordinary Diet session to call a general 
election. Some in the LDP even hope for a general election on Oct. 
¶26. 
 
However, Lehman Brothers' bankruptcy, the tainted rice issue, and 
the pension-record mess have begun to have an impact on the ruling 
coalition's election strategy. DPJ Deputy President Naoto Kan said 
yesterday: "The present situation is that the government has 
abandoned its responsibility to respond to the global crisis." 
Opposition parties plan to call for closed-hearing sessions during 
the Diet recess in order to pursue the government and ruling camp. 
 
The ruling camp, however, cannot ignore the situation. Aso yesterday 
questioned the U.S. government's response, saying: "I have serious 
questions about whether doing nothing and ignoring the situation is 
the best way to resolve the global crisis." 
 
The New Komeito, the LDP's coalition partner, and its major backer, 
religious sect Soka Gakkai, have already prepared for the general 
election, with a Nov. 9 vote in mind. So, it is now difficult to 
delay the election until late November. 
 
10) Lehman, tainted rice directly hit "political vacuum" 
 
NIKKEI (Page 2) (Excerpts) 
September 17, 2008 
 
The failure of the U.S. major securities firm Lehman Brothers 
Holding Inc. and the illegal resale of tainted rice have directly 
hit Japan's "political vacuum." Even after announcing his 
resignation, Prime Minister Yasuo Fukuda has been busy dealing with 
critical events. Finding appropriate measures for them is becoming 
an issue in the ongoing LDP presidential race to determine a 
successor to Fukuda. But there is no silver bullet and the matter 
must be left to the next administration. Some in the ruling bloc 
have expressing concern that those issues will dampen plans to move 
up the next Lower House election to the ruling camp's favor. 
 
Late at night on Sept. 15, the prime minister telephoned his 
secretary from his official residence to instruct him to set up a 
venue for concerned cabinet ministers to discuss a response to the 
Lehman issue the following morning. The prime minister strongly 
asked for the attendance of Bank of Japan Governor Masaaki 
Shirakawa. 
 
Fukuda experienced many financial crises during his tenure as chief 
cabinet secretary. Before reporters on the evening of Sept. 16, 
Fukuda said: "It is necessary to grasp the situation and manage the 
economy and financial markets in close cooperation with other 
countries." His comment shows that there is no master plan other 
than watching the situation. 
 
LDP presidential candidates cannot afford to ignore the situation, 
either. In a meeting on Sept. 16 with Machimura faction supporters, 
Secretary General Taro Aso said: "It is clear what will happen to 
the market economy if it is left as is." Economic and Fiscal Policy 
Minister Kaoru Yosano will skip today's LDP presidential election 
 
TOKYO 00002538  007 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
speech meeting in Okayama. In yesterday's open discussion held by 
the LDP Youth Bureau, former Policy Research Council Chairman 
Nobuteru Ishihara commented: "The dire situation has resulted from 
lending money to parties that did not deserve it." Former Defense 
Minister Yuriko Koike said: "I am shocked by the failure of 
Lehman." 
 
Although one can take great satisfaction in criticizing the 
U.S.-model market principles, what Japanese politics can do about 
the global financial turmoil is limited. Some have indicated that 
the country's food safety, which is again at risk, is far more 
serious. 
 
The Agriculture, Forestry and Fisheries Ministry's explanation on 
the evening of Sept. 15 that it has failed to clarify the names of 
companies involved in the resale of tainted rice enraged the prime 
minister. He immediately ordered the ministry to produce a complete 
list of companies involved in the illegal resale. As a result, the 
ministry revealed on Sept. 16 the names of companies that 
distributed tainted rice via Mikasa Foods. Although all opposition 
parties have condemned the bureaucracy for dereliction of duty, 
hardly anyone has mentioned lawmakers' failure to take steps to 
prevent such a case. 
 
Policy Research Council Chairman Kosuke Hori on Sept. 16 called in 
the policy officers of the five LDP presidential candidates and 
asked them to actively take up the Lehman and tainted rice issues. 
 
11) Government denies impact of U.S. financial crisis, while 
focusing on handling of supplementary budget 
 
TOKYO (Page 2) (Full) 
September 17, 2008 
 
With the bankruptcy of the U.S. securities house Lehman Brothers, 
the government, eager to wipe away domestic anxieties, has called 
for a cool-headed response from the nation. Although it is 
anticipated that public opinion would clamor for measures to prop up 
Japan's economy, the Fukuda administration is already on its last 
legs. With the prospects of a Lower House dissolution and snap 
election bearing down, there is no environment being built for the 
next administration to immediately tackle a package of economic 
stimulus measures. 
 
In the extraordinary Diet session set to convene of Sept. 24, the 
administration will directly face the issue of what to do about the 
fiscal 2008 supplemental budget bill that includes a comprehensive 
economic package, when setting the timing for Diet dissolution. 
Prime Minister Yasuo Fukuda, speaking to the press core at the 
Kantei, his official residence, called for a cool-headed response: 
"The impact on financial institutions here is not that great. 
Instead, it is somewhat small. Calm responses are being sought." He 
then added: "It is important to properly deal with the supplementary 
budget." 
 
Chief Cabinet Secretary Machimura also told the press corps: "The 
effect on domestic financial institutions and their customers is 
very limited." Although State Minister for Economic and Fiscal 
Policy Yosano denied that there would be a major impact (from the 
U.S. financial crisis), he put off attending the LDP presidential 
campaign rally today in order to devote his time to handling the 
issue.  At a meeting of LDP supporters, LDP Secretary General Aso 
 
TOKYO 00002538  008 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
said: "There will be a major impact on the Japanese economy. Right 
now, the number one priority is measures to stimulate the economy." 
He stressed the need to quickly deal with a package of economic 
measures. 
 
On the other hand, Democratic Party of Japan Vice President Naoto 
Kan at a party meeting lashed out at the government and the LDP, 
saying, "There is no response at all to the global crisis. They are 
abandoning their responsibility." 
 
12) Japan Desk: U.S. hopes for continued refueling 
 
YOMIURI (Page 4) (Full) 
September 17, 2008 
 
Satoshi Ogawa 
 
WASHINGTON-Daniel Russel, the newly appointed director for Japanese 
affairs (Japan Desk) at the U.S. Department of State, told the 
Yomiuri Shimbun in an interview on Sept. 15 that Afghanistan and 
Iraq are of "extremely high priority" among current international 
issues in connection with the United States' hopes for Japan's 
international contributions. Regarding the Maritime Self-Defense 
Force's refueling activities in the Indian Ocean, Russel stated: "In 
addition to substantial effectiveness, they have an extremely 
symbolic and political meaning for Japan. I know there is political 
strife in Japan, but we strongly hope the Japanese government and 
people will continue the activities or find ways to resume them (if 
discontinued)." 
 
Russel also said, "If the political situation in Japan becomes a 
little clearer and if a government that can properly take action 
appears, we will be happy." With this, he implied that the U.S. 
government was increasingly concerned about the Japanese 
government's declining ability to translate its policies into action 
as the Diet has been divided since the summer of last year with the 
ruling parties holding a majority of the seats in its lower chamber 
and the opposition parties dominating its upper chamber. 
 
13) Kantei probing into MSDF's delayed reporting on sub intrusion 
 
ASAHI (Page 4) (Full) 
September 17, 2008 
 
Chief Cabinet Secretary Machimura, meeting the press yesterday, 
raised a question about the Maritime Self-Defense Force's recent 
action upon its destroyer's spotting of a submarine of unknown 
nationality in Japan's territorial waters. "We're now probing into 
this since I think there might have been some problem about the time 
it took until the report came in to the Kantei (prime minister's 
office) after they spotted something like a periscope," Machimura 
said. The MSDF took 1 hour and 40 minutes to touch base with a 
secretary of the prime minister to report on the submarine's 
intrusion after confirming its periscope. Machimura indicated that 
the Kantei would look into the communication arrangements. He also 
revealed that the MSDF had discontinued its search for the submarine 
yesterday at 3 p.m. 
 
14) Aso locks up majority 
 
ASAHI (Page 4) (Full) 
September 17, 2008 
 
TOKYO 00002538  009 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
 
According to the Asahi Shimbun's coverage of the situation in the 
ruling Liberal Democratic Party's ongoing presidential election, LDP 
Secretary General Taro Aso is now certain to win the race with a 
majority of votes for him in the first ballot. Kaoru Yosano is 
expected to garner nearly 50 votes, outpacing three other 
candidates-Yuriko Koike, Nobuteru Ishihara, and Shigeru Ishiba. 
 
Among the LDP's 386 lawmakers in both houses of the Diet, Aso has 
now locked up around 70 PERCENT  of the Machimura faction, the 
largest faction in the LDP, and more than 50 PERCENT  of the Koga 
faction and nearly 90 PERCENT  of the Ibuki, Nikai, and Koumura 
factions. Aso has also gained support from about 40 PERCENT  of the 
Tsushima faction, from which Ishiba is running. Aso has secured 
support from about 30 PERCENT  of the party's unaffiliated 
lawmakers, and about 60 PERCENT  of all LDP lawmakers are backing 
him. 
 
Aso is gathering momentum among the LDP's local chapter executives 
(adding up to 141 votes) as well. Its local chapters in the 
prefectures of Miyagi, Gumma, and Oita, which said "no idea" as the 
campaign was in its initial phase, have now indicated that they will 
cast their respective three votes for Aso. Miyazaki Prefecture, 
which has switched from the d'Hont formula, will also cast its three 
votes for Aso. 
 
Former Prime Minister Koizumi has now clarified his support for 
Koike. However, Koike does not appear to be gaining broad support 
among the LDP's local leaders across the nation. Kanagawa 
Prefecture, which is Koizumi's home turf, is also expected to cast 
its three votes for Aso. 
 
15) Okazaki City sends protest note to Aso over gaffe 
 
YOMIURI (Page 37) (Full) 
September 17, 2008 
 
The ruling Liberal Democratic Party's Secretary General Aso, 
currently running in his party's presidential election, upset the 
Aichi prefectural cities of Okazaki and Anjo with his recent gaffe 
in a campaign speech he made in front of JR Nagoya Station on Sept. 
¶14. In the stumping speech, Aso, referring to a heavy rainfall that 
had hit the two cities' area in late August, said: "The heavy 
rainfall in Okazaki recorded 140 mm per hour. It was Anjo and 
Okazaki, so that's good. But if that had happened in Nagoya, all 
this area would have been under water." The cities of Okazaki and 
Anjo sent letters of protest to Aso yesterday. 
 
The letter of protest sent from Okazaki City is under the joint 
signatures of Deputy Mayor Masaru Ishikawa, acting for the mayor, 
and Municipal Assembly Speaker Masahiro Yamamoto. The letter notes: 
"The heavy rainfall caused an unprecedented disaster, including two 
victims. Our recovery efforts are still going on. The remarks were 
inappropriate and inconsiderate." 
 
16) Koizumi encourages Koike camp 
 
NIKKEI (Page 2) (Abridged slightly) 
September 17, 2008 
 
Former Prime Minister Junichiro Koizumi had lunch yesterday at a 
Tokyo Italian restaurant with former Defense Minister Yuriko Koike, 
 
TOKYO 00002538  010 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09//08 
 
an LDP presidential candidate, and others. Koizumi gave Koike this 
advice: "A bigger battlefield awaits. You should deal with the race 
as one step in the process, a good experience." 
 
Touching on his failure to win the presidency in his first attempt, 
Koizumi also said: "That made me who I am today. People on your side 
might become your enemies someday. People criticizing me became my 
powerful supporters later on. That's the political world. You 
shouldn't pay too much attention to people criticizing you." 
 
Meanwhile, the Machimura faction, to which Koike belongs, launched 
an election campaign headquarters yesterday morning for Secretary 
General Taro Aso. Chief Cabinet Secretary Nobutaka Machimura, who 
heads the faction, declared: "Let us build a system for the Seiwaken 
(Machimura faction) to faithfully back Mr. Aso till the end." Aso 
received a letter of recommendation with the signatures of 60 
lawmakers, or 70 PERCENT  of the faction's members. 
 
17) Ota to be reelected as New Komeito leader 
 
YOMIURI (Page 4) (Full) 
September 17, 2008 
 
Unchallenged by other candidates, Akihiro Ota was assured yesterday 
that he would remain leader of the New Komeito. The 62-year-old 
Ota's reelection will be formally endorsed at a party convention 
scheduled for Sept. 23. At a press conference after his reelection 
was assured, Ota expressed eagerness for adding some more Diet seats 
to his party's present 31, citing victory in the House of 
Representatives election as the top priority for his second term as 
party head. 
 
Ota will serve as head of the New Komeito through September 2010. He 
is expected to retain key party executives, including Secretary 
General Kazuo Kitagawa and Policy Research Council Chairman Natsuo 
Yamaguchi. 
 
Ota, at the press conference, stressed that he would do his best to 
increase the party's presence in the next Lower House election. He 
stated: "I will make clear our party's stance of supporting the 
daily lives of people." He also took a position of stepping up his 
party's demands toward its coalition partner, the Liberal Democratic 
Party (LDP). He said that the relations between his party and the 
LDP have grown mature. 
 
When asked by reporters about the rumor that Democratic Party of 
Japan (DPJ) President Ichiro Ozawa may run from the Tokyo No. 12 
district, which he represents, Ota said: "I will win the election at 
any cost." 
 
New Komeito's executives have accelerated preparations for the 
general election and they plan to finish up before the end of 
September the compilation of a manifesto (set of campaign pledges) 
for the next Lower House election. 
 
18) JCP announces it will file 138 candidates for Lower House 
election, half of its usual number 
 
YOMIURI (Page 4) (Excerpts) 
September 17, 2008 
 
The Japanese Communist Party (JCP) announced yesterday that it plans 
 
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to field 138 persons for the next House of Representatives election 
as candidates to run in the single-seat constituency race. Although 
the JCP has said that it will add some more candidates, the number 
of the JDP candidates will likely be reduced by half from the 275 it 
ran in the 2005 Lower House race. Since it is predicted that many 
votes in electoral districts for which the JCP has not yet fielded 
any candidates would go to candidates on the Democratic Party of 
Japan's (DPJ) ticket, the reduction in the JCP candidates is certain 
to affect the results of the general election. 
 
JCP Head of the Secretariat Tadayoshi Ichida explained the reason 
for his party's decision to cut its candidates to reporters 
yesterday: "It is desirable for us to devote the utmost effort for 
the proportional representation segment race. It means we will carry 
out a realistic election." 
 
A deposit for candidacy in a single-seat constituency is 3 million 
yen. If a candidate fails to secure 10 PERCENT  of the votes, the 
deposit will be forfeited. Therefore, another reason is that the JCP 
wants to reduce its financial costs. 
 
The JCP's reduction in its candidates will have a major impact on 
other parties. Because if votes in 162 electoral districts, for 
which the JCP has not yet fielded its candidates, go to DPJ 
candidates, there will be a great change in which party wins in the 
single-seat constituencies. 
 
The ruling Liberal Democratic Party (LDP) has become increasingly 
alarmed, with one member saying: "We will have a close contest with 
the DPJ in every electoral district. It is not good that JCP votes 
will go to the DPJ." A midlevel LDP member pointed out: "We should 
attract conservative voters by asking them whether they want to 
entrust the political helm to the DPJ, which cooperates with the 
JCP." 
 
19) DPJ, PNP in final coordination for merger in bid to take reins 
of government under Ozawa's leadership; Decision next week 
 
NIKKEI (Page 2) (Abridged slightly) 
September 17, 2008 
 
The Democratic Party of Japan and the People's New Party yesterday 
undertook coordination to finalize their plan to merge the two 
parties. The plan is being implemented under the leadership of DPJ 
President Ichiro Ozawa, who is determined to take the reins of 
government through the next Lower House election. But because there 
are some objections in the PNP, the two parties will discuss 
conditions for reaching a conclusion early next week. 
 
After his meeting with PNP representative Tamisuke Watanuki in the 
Diet building on Sept. 16, Ozawa said to Watanuki, "Let us join 
hands again." Although the two leaders did not touch on the possible 
merger in their talks, the DPJ had conveyed the plan to the PNP 
behind the scenes. DPJ Secretary General Yukio Hatoyama told 
reporters in Tokyo on the same day, "(The merger) is one of the 
strong options." Ozawa, Hatoyama and others are scheduled to 
exchange views today to make a formal proposal before long. 
 
In response to Ozawa's proposal, the PNP last evening held a general 
meeting of its Diet members from both chambers and discussed the 
matter. Although many endorsed the plan, some expressed concern that 
the party's policies would sink into insignificance after the 
 
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merger. As such, the party has decided to re-discuss the matter 
after receiving a formal proposal from the DPJ. Meanwhile, Watanuki 
also met Takeo Hiranuma, who does not belong to any party, in Tokyo 
and gave up the idea of forming a joint parliamentary group before 
the next Lower House election. 
 
Ozawa's move to merge with the PNP comes from the hope to push ahead 
with coordination for overlapping constituencies with the party with 
the aim of winning total support from the postal policy study group 
that backs the PNP. Ozawa also apparently plans to win "third 
forces" to the DPJ's side in advance in order to turn the political 
situation after the election in the DPJ's favor. 
 
20) Lower House Speaker Kono to retire from politics 
 
NIKKEI (Page 2) (Abridged) 
September 17, 2008 
 
Lower House Speaker Yohei Kono, 71, has now decided not to run in 
the next Lower House race and to retire from politics after the 
current term, a senior LDP lawmaker revealed yesterday. Kono, who 
represents the Kanagawa No. 17 constituency, currently does not 
belong to the LDP as the Lower House speaker. Work to select his 
successor is underway centering on the LDP's Kanagawa chapter. 
 
Kono was born in 1937 to former agriculture minister Ichiro Kono. He 
left the LDP after criticizing it for its money-oriented nature in 
the wake of the Lockheed scandal and launched the now-defunct New 
Liberal Club. He returned to the LDP in 1986, and served as 
president of the LDP when it was an opposition party in 1993. 
 
In January 1994, he, along with then Prime Minister Morihiro 
Hosokawa, played a central role in reaching an agreement on revising 
political-reform-connected bills featuring the introduction of 
single-seat constituencies and proportional representation. In the 
same year, the LDP became a ruling party by making Socialist Party 
lawmaker Tomiichi Murayama prime minister, and Kono later served as 
deputy prime minister and foreign minister. He gave up seeking a 
second term in the 1995 LDP presidential race and became the only 
LDP president not to become prime minister. 
 
Known as a dove and a defender of the Constitution, Kono remained 
cautious about supporting the United States even after then Prime 
Minister Junichiro Koizumi announced that Japan would back the 
United States in the Iraq war. He became Lower House speaker in 
November 2003. 
 
SCHIEFFER