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UNCLAS SECTION 01 OF 11 TOKYO 002849 
 
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 10/14/08-1 
 
INDEX: 
 
(1) U.S. strikes North Korea from terrorism backlist, agreement 
reached on verification method; Pyongyang to resume nuclear 
disablement (Tokyo Shimbun) 
 
(2) President Bush tells Prime Minister Aso: I understand Japan's 
concern (Nikkei) 
 
(3) Text of Prime Minister Aso's statement on U.S. delisting of 
North Korea (Sankei) 
 
(4) U.S. removal of North Korea from list of states sponsoring 
terrorism a blow to the Aso administration; Ruling camp losing 
confidence in the Japan-U.S. alliance (Nikkei) 
 
(5) Prime Minister Aso notified by President Bush only 30 minutes 
prior to official announcement that North Korea has been removed 
from terror blacklist (Yomiuri) 
 
(6) Government greatly surprised by U.S. delisting of North Korea; 
Notified by U.S. only four hours before official announcement 
(Nikkei) 
 
(7) Abductee families in disappointment call U.S. delisting of North 
Korea a breach of faith (Sankei) 
 
(8) Some family members of abduction victims take U.S. delisting of 
North Korea coolly (Mainichi) 
 
(9) Discontent in ruling camp at U.S. making light of Japan (Tokyo 
Shimbun) 
 
(10) When will the reinvestigation of the abduction issue start? No 
prospect in sight for the next set of talks (Nikkei) 
 
(11) U.S. decision to delist North Korea: Six-party members in 
disarray, South Korea critical of Japan for stance toward abduction 
issue (Asahi) 
 
(12) U.S. removes North Korea from terrorist backlist; Six-party 
talks to resume probable this month (Yomiuri) 
 
(13) Yomiuri poll: Aso cabinet support rate slips to 46 PERCENT , 
with 70 PERCENT  of public wanting priority given to economy over 
holding an election (Yomiuri) 
 
(14) Calls for second supplementary budget emerge in ruling camp: 
Supplementary budget to be approved on the 16th (Nikkei) 
 
(15) Participants in emergency G-20 meeting vow to address financial 
crisis, involving emerging countries: Nakagawa Initiative proposed 
to IMF (Yomiuri) 
 
(16)"The U.S. should inject capital into financial institutions," 
prime minister says about financial crisis (Nikkei) 11 
 
ARTICLES: 
 
(1) U.S. strikes North Korea from terrorism backlist, agreement 
reached on verification method; Pyongyang to resume nuclear 
disablement 
 
TOKYO 00002849  002 OF 011 
 
 
 
TOKYO SHIMBUN (Top play) (Excerpts) 
October 12, 2008 
 
Nakahiro Iwata, Washington 
 
The U.S. government announced on the morning of Oct. 11 (in the 
early hours of Oct. 12, Japan time) that it had removed North Korea 
from its list of state sponsors of terrorism. The decision came 
after agreement between Washington and Pyongyang on the method of 
verification of the contents of the North's nuclear declaration. The 
North will now resume the disablement of its nuclear facilities in 
Yongbyon. It has been 20 years and nine months since the U.S. first 
listed North Korea as a state sponsoring terrorism in January 1988, 
following the North's bombing of a KAL airline (on Nov. 29, 1987). 
 
According to the U.S. State Department, North Korea has agreed to 
allow experts to visit both declared and undeclared nuclear sites, 
and to take and remove samples and equipment for analysis. Pyongyang 
also has agreed to let the International Atomic Energy Agency (IAEA) 
play an important advisory and assisting role. 
 
The verification method reportedly will be applied to 
uranium-enrichment nuclear development, as well as to nuclear 
proliferation to other countries. 
 
President George W. Bush made the final decision to delist North 
Korea as a state sponsoring terrorism. However, a high U.S. 
government official said on Oct. 11 that the delisting "would be a 
temporary measure." The official also said that if North Korea 
violated the verification method agreed on this time, the United 
States would put the North back on its blacklist. 
 
(2) President Bush tells Prime Minister Aso: I understand Japan's 
concern 
 
NIKKEI (Page 1) (Full) 
October 12, 2008 
 
Prime Minister Taro Aso talked with U.S. President George W. Bush on 
the phone late at night on Oct. 11. The President explained his 
decision to delist North Korea as a state sponsor of terrorism. 
Referring to North Korea's abductions of Japanese nationals, he 
said: 
 
"I understand that the Japanese people have strong concern and 
anxiety (about the future of the abduction issue). I want to express 
my strong sympathy to the families of abduction victims. I also want 
to tell them my determination to resolve the issue." 
 
Aso received the call in Hamamatsu City. 
 
(3) Text of Prime Minister Aso's statement on U.S. delisting of 
North Korea 
 
SANKEI (Page 4) (Full) 
October 13, 2008 
 
The following is a gist of Prime Minister Taro Aso's statement in 
Hamamatsu City on the U.S. delisting of North Korea as a state 
sponsor of terrorism: 
 
 
TOKYO 00002849  003 OF 011 
 
 
-- Anxiety is spreading in families of victims of kidnapped by North 
Korea. 
 
"For the denuclearization of North Korea, it is best to establish a 
regime to conduct verification substantively. All six-party members 
but North Korea are in accord on this approach. There has been no 
progress on work to establish a regime for substantive verification, 
and the United States has used the delisting to achieve that. The 
United States has indicated from long before that this approach is 
effective. I understand the United States took the step (delisting), 
considering it would be better than leaving an issue totally 
immovable. It's one approach." 
 
-- The step might result in a loss of leverage on talks on the 
abduction issue. 
 
"(As if to interrupt the question) That won't happen. Your view is 
totally wrong. In his telephone conversation with me, President Bush 
talked about the families of victims of kidnapped by North Korea, 
and I think the country will respond to the matter properly. We will 
be able to discuss the abduction issue sufficiently in a variety of 
talks in the course of the six-party talks. We will not lose 
leverage because of this." 
 
(4) U.S. removal of North Korea from list of states sponsoring 
terrorism a blow to the Aso administration; Ruling camp losing 
confidence in the Japan-U.S. alliance 
 
NIKKEI (Page 2) (Excerpts) 
October 13, 2008 
 
The U.S.' removal of North Korea from the list of states sponsoring 
terrorism has dealt a blow to the Aso administration. Although Prime 
Minister Taro Aso has stressed that the abduction issue is not being 
left behind, comments critical of the United States are coming out 
of the government and ruling parties in succession. There is a 
possibility that the target of such criticism will turn toward the 
Aso administration if results on the abduction issue are delayed. A 
setback on the diplomatic front, which is Aso's forte, coupled with 
the global financial crisis, will affect the pending Diet 
dissolution and snap election. 
 
The Prime Minister on Oct. 12 met the press corps in Hamamatsu City 
and evaluated the delisting of North Korea as a step toward nuclear 
verification. Regarding concerns that Japan had lost leverage in its 
negotiations with the DPRK on the abduction issue, Aso stressed, 
"Absolutely not." He touched on the call he had received the night 
before from President Bush to appeal his case: "Before I could say 
anything, (President) Bush brought the subject up. I think that he 
is dealing with it." 
 
Chief Cabinet Secretary Takeo Kawamura, too, told the press corps: 
"Our policy toward Japan's abduction issue will not be set back at 
all by the delisting." But the government and ruling parties are not 
all taking the delisting decision the same way as the Prime Minister 
and his aides. 
 
"Extremely regrettable," was the way Finance Minister Shoichi 
Nakagawa put it when meeting the press. He was in Washington at the 
time. He raised his doubts about the way the U.S. had handled the 
decision, saying, "I do not know whether or not there was prior 
consultation with Japan as an ally."  Liberal Democratic Party (LDP) 
 
TOKYO 00002849  004 OF 011 
 
 
Deputy Secretary General Nobuteru Ishihara, appearing on a TV-Asahi 
program, was critical: "It was unexpected. The timing of it was a 
confusing mess." 
 
(5) Prime Minister Aso notified by President Bush only 30 minutes 
prior to official announcement that North Korea has been removed 
from terror blacklist 
 
YOMIURI (Top play) (Excerpts) 
October 13, 2008 
 
Prime Minister Taro Aso on Oct. 12 showed a degree of understanding 
for the delisting of North Korea as a state sponsor of terrorism by 
the United States, while indicating that there would be no change in 
Japan's stance on resolving the abduction issue. But the government 
and ruling coalition are visibly shocked by the United States' steps 
leading up to the delisting. The government's previous response is 
drawing fire from opposition parties. 
 
Prime Minister Aso on Oct. 12 in Hamamatsu made this comment to the 
press corps: "I understand that the United States has (delisted the 
North) in the judgment that it would be better to take the step 
rather than leaving (the nuclear issue) stalled. It's one approach." 
Asked about the step's possible impact on the abduction issue, he 
said: "There will be no impact. It doesn't mean a loss of leverage." 
Contrary to his words, Japan has been at the mercy of the United 
States. 
 
Prime Minister Aso was notified directly by President George W. Bush 
only 30 minutes prior to the U.S. State Department's official 
announcement on the delisting. It was three hours after Secretary of 
State Condoleezza Rice signed the delisting document. The notice 
came on the night of Oct. 11 when the prime minister was in a 
meeting with former Japan Junior Chamber presidents and others at a 
lounge of the Grand Hotel Hamamatsu in the city of Hamamatsu. There 
was a sense of urgency among his aides shortly after 11:00 p.m., and 
the prime minister disappeared into a separate room. It was to place 
a call to President Bush. He talked with the President on the phone 
for about 10 minutes. During that period, the prime minister was not 
accompanied by a secretary hailed from the Foreign Ministry. There 
was not even an interpreter in the room, according to an informed 
source. The teleconference was reportedly conducted by using a 
telephone line via a place where there was an interpreter. 
 
After a telephone conversation with Secretary Rice, Foreign Minister 
Hirofumi Nakasone explicitly said on the night of Oct. 10: "The 
delisting would not be decided on this weekend." That was because 
Nakasone took the Secretary's words that the President would like to 
adjust the nuclear verification framework with Japan and South Korea 
as an indication that the United States would not delist the North 
until the step became acceptable to Japan and South Korea, according 
to a senior Foreign Ministry official. Although there have been 
reports on a decision on the delisting, U.S. Republican sources have 
conveyed a hopeful outlook to Japan. 
 
(6) Government greatly surprised by U.S. delisting of North Korea; 
Notified by U.S. only four hours before official announcement 
 
NIKKEI (Page 2) (Full) 
October 13, 2008 
 
The U.S. government contacted the Japanese government about the 
 
TOKYO 00002849  005 OF 011 
 
 
decision to remove North Korea from the list of states sponsoring 
terrorism approximately four hours before the official announcement 
early on Oct. 12 (Japan time). Although the Japanese government 
through its negotiations with the U.S. government had gathered that 
the delisting was near, it was not until 8:00 o'clock in the evening 
that a senior Foreign Ministry official received a telephone call 
from U.S. Ambassador to Japan Schieffer. 
 
Ambassador Schieffer, his voice somewhat flustered, notified the 
official of the decision to delist, and said, "President Bush would 
definitely like to talk to Prime Minister Taro Aso." When the same 
official took the position that the decision to delist need not be 
so hurried, Ambassador Schieffer stressed, "The President is aware 
of all of Japan's assertions and fully understands them." He sought 
understanding, indicating that consideration had been given to 
Japan's concerns regarding the abduction issue and the nuclear 
verification problem. 
 
In connection with the abduction issue, Foreign Minister Hirofumi 
Nakasone, in a telephone conversation with Secretary of State Rice 
on the evening of the 10th, had just  pointed out the problem areas 
in the U.S.-North Korean draft agreement and transmitted his view 
that it was premature to remove the DPRK from the terror blacklist. 
Rice, too, explained, "The President has still not made a decision 
on the delisting. We will keep in close contact with Japan." She 
reportedly was complaint, saying, "Let us continue to talk." 
 
(7) Abductee families in disappointment call U.S. delisting of North 
Korea a breach of faith 
 
SANKEI (Page 26) (Excerpts) 
October 12, 2008 
 
Families of Japanese abductees by North Korea were disappointed at 
the U.S. decision to delist North Korea as a state sponsor of 
terrorism on Oct. 11. They asked the Japanese government, which was 
unable to dissuade the U.S. from delisting the North, what action it 
would take now. 
 
Shigeo Iizuka, chairman of the Association of the Families of 
Victims Kidnapped by North Korea, said in Nara City, which he 
visited to attend a gathering: "We feel helpless as everything has 
been decided in places outside our reach. . . .  Since we have lost 
our major card for negotiations on the abduction issue, we expect 
the Japanese government to take policies satisfactory enough to 
cover the loss." He added: "I wonder if the Japanese government told 
the U.S. in a strong tone that North Korea should absolutely not be 
removed from the list since it is a serious matter for Japan." 
 
Association Director General Teruaki Masumoto, who attended a 
gathering in Sapporo on the 11th, said: "How can the nation that was 
unable to dissuade its ally from delisting persuade the North to 
send back the abduction victims to Japan? I regret the government's 
lack of diplomatic capability." He also criticized the U.S.: "The 
U.S. deceived its ally, without helping save its people's lives." 
 
(8) Some family members of abduction victims take U.S. delisting of 
North Korea coolly 
 
MAINICHI (Page 2) (Full) 
October 13, 2008 
 
 
TOKYO 00002849  006 OF 011 
 
 
Many family members of Japanese abductees expressed their anger 
yesterday at the U.S. removal of North Korea from its list of 
terrorism-sponsoring nations. But Shigeru Yokota, 75, commented 
coolly: "U.S. Ambassador to Japan Thomas Schieffer told us that only 
one of some 60 sanctions will be removed, so I do not think there 
will be significant effects." He added: "Japan should urge the North 
to implement (the reinvestigation of the abduction issue) based on 
the Japan-North Korea agreement in August. If it refuses to respond 
to it, Japan should independently impose sanctions. In my view, 
there is no need to connect the delisting issue to the abduction 
issue." 
 
His wife, Sakie, 72, said: "The news shocked me. Since we have heard 
that unless (North Korea) observes its promise, there is the 
possibility of cancelling the delisting, we must carefully watch how 
things will develop from now." 
 
Shigeo Iizuka, 70, chairman of the Association of the Families of 
Victims Kidnapped by North Korea, told reporters in Osaka: "With its 
economic problems settled, North Korea has a major card in 
negotiations with Japan. I am worried that the nation might delay or 
suspend tackling the abduction issue." 
 
(9) Discontent in ruling camp at U.S. making light of Japan 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
October 13, 2008 
 
Prime Minister Aso indicated understanding yesterday about the U.S. 
government's decision to remove North Korea from the list of state 
sponsoring terrorism. But criticism has erupted from opposition 
members and families of abduction victims. Such reactions might 
affect support for the cabinet. This issue has developed into a new 
headache for the Aso administration. 
 
Democratic Party of Japan Secretary General Yukio Hatoyama rapped 
the Japanese government response in a street-corner speech: "This is 
a disgrace for Japanese diplomacy. Japan was not informed of the 
decision until the very last minute." 
 
Former Minister of Economy, Trade and Industry Takeo Hiranuma, 
chairman of a group of Diet members dealing with the abduction 
issue, told reporters in Honjo City, Saitama Prefecture: "President 
Bush met Ms. Sakie Yokota (family member of an abduction victim) and 
told her that I will never forget the abduction issue. All the more 
for this, the decision (to delist North Korea) is beyond my 
understanding." 
 
(10) When will the reinvestigation of the abduction issue start? No 
prospect in sight for the next set of talks 
 
NIKKEI (Page 2) (Full) 
October 13, 2008 
 
On the question of Japanese abducted by North Korea, the most 
important pending issue between Japan and the DPRK, the government 
is seeking the return of all abduction victims, an uncovering of all 
the facts, and the turning over of those who committed the crime of 
abduction. North Korea has promised in bilateral talks to 
reinvestigate the cases, but so far it has yet to start doing 
anything. The government, using its own cards, such as economic 
sanctions, has been pressing the DRPK for an early start of the 
 
TOKYO 00002849  007 OF 011 
 
 
reinvestigation. 
 
In working-level talks between Japan and North Korea that were held 
this June after a hiatus of approximately eight months, North Korea 
promised to reinvestigate the abduction issue. Agreement was reached 
to set up a committee for the reinvestigation in August and to 
complete the investigation as best as possible by the fall. It 
seemed that a way had been found to make progress on the abduction 
issue. 
 
After that, North Korea, citing as the reason Japan's changing 
administrations from Fukuda's to Aso's, announced it was delaying 
setting the committee. The government asked the North to carry out 
the promise quickly, in return for the removal of two of the 
sanctions, but North Korea to date has shown no indication of 
honoring its commitment. 
 
A senior Foreign Ministry official said: "There is absolutely no 
prospect in sight for resuming bilateral talks with the North." 
There is a strong possibility that North Korea will strongly seek 
the implementation of assistance, citing as the reason the progress 
just made on the nuclear front, but the government seems perplexed 
about how to respond, the abduction issue holding it back. 
 
(11) U.S. decision to delist North Korea: Six-party members in 
disarray, South Korea critical of Japan for stance toward abduction 
issue 
 
ASAHI (Page 4) (Full) 
October 13, 2008 
 
(Makino, Seoul) 
 
Following the U.S. government's decision to remove North Korea from 
its list of terrorism-sponsoring nations, the members of the 
six-party talks will meet soon. Friction has already arisen between 
Japan and the U.S. over the U.S. decision. In addition, South Korea 
criticized Japan on Oct. 12 for its negative stance about energy aid 
to North Korea. China and Russia are not eager to promote 
denuclearization. Disarray among the five members of the six-party 
talks is thus coming to the surface. 
 
South Korean envoy and director of  Korean Peninsula peace 
negotiations Kim Suk said on Oct. 12: "It is unacceptable that a 
certain nation's issue will stand in the way of the six-party talks' 
ultimate goal." He indirectly lashed out at Japan for its reluctance 
to provide North Korea with 200,000 tons of heavy oil for the reason 
of the unresolved issue of North Korea's past abductions of Japanese 
nationals. 
 
In the South Korea government, there is irritation at Japan's stance 
of dwelling on the abduction issue, as one official remarked: "Japan 
should be more flexible." With the U.S. decision to delist North 
Korea, criticism of Japan may escalate among the other six-party 
members, including China and Russia. 
 
Kim also indicated that the agreement reached between the U.S. and 
North Korea over a verification regime includes wording that can be 
taken as meaning that the U.S. unilaterally interpreted Pyongyang 
would accept a mechanism for verifying North Korea's uranium 
enrichment program and nuclear activities. This could be a source of 
contention for the future. 
 
TOKYO 00002849  008 OF 011 
 
 
 
A Japanese government source commented: "Fearing a collapse of the 
six-party talks, the U.S. reached the agreement, even though it was 
aware that the full verification of North Korea's program and 
activities would be impossible." Meanwhile, China and Russia are not 
expected to strictly pursue the contents of the U.S.-North Korea 
agreement, based on the view that there will be no problem if the 
U.S. and North Korea hold talks again after the North is removed 
from the list. 
 
In the final stage of abandoning its nuclear programs, North Korea 
is expected to call on the U.S. to hold nuclear disarmament talks. 
In this case, South Korea will inevitably react to its exclusion. 
Stormy negotiations are expected in work to determine a final-stage 
process. 
 
(12) U.S. removes North Korea from terrorist backlist; Six-party 
talks to resume probable this month 
 
YOMIURI (Page 1) (Full) 
October 12, 2008 
 
Takeo Miyazaki & Satoshi Ogawa, Washington 
 
The U.S. State Department announced on the morning of Oct. 11 (in 
the early hours of Oct. 12, Japan time) that it had delisted North 
Korea as a state sponsor of terrorism following the agreement on the 
verification method of the North's nuclear report. Pyongyang has 
informed Washington of its decision to resume its work to disable 
(the Yongbyon complex). The six-party talks will be resumed as early 
as before the end of this month, and the details of the verification 
procedure will be put into a written form. Since North Korea will 
unlikely to agree to the complete verification, the development of 
nuclear process remains unclear. 
 
According to the Department of State, North Korea has agreed to 
allow experts to visit all nuclear facilities it declared in June. 
However, experts will be allowed to visit undeclared nuclear sites 
based on an agreement by both sides. Therefore, North Korea's 
approval will be required for visits by experts on nuclear sites 
other than the Yongbyon complex. 
 
Meanwhile, the United States and North Korea agreed on the sampling 
of nuclear materials, aimed at verifying nuclear proliferation 
activities and uranium-enrichment programs. 
 
Since the U.S. designation of North Korea as a state sponsor of 
terrorism is one of the reasons for it to impose economic sanctions 
on the North, even if the North is delisted, there will remain many 
sanction measures. North Korea, however, had demanded for a long 
time the United States delist it as a symbol of the U.S.' "enemy 
policy." 
 
The U.S. government informed Congress on June 26 of its decision to 
remove the North from its terrorism blacklist after Pyongyang had 
presented its nuclear report. Washington, however, delayed delisting 
as the two sides had failed to agree on verification procedure. 
 
President George W. Bush, ahead of the announcement, called Prime 
Minister Taro Aso to tell him his decision. He also expressed his 
intention to continue to cooperate with Japan to resolve the 
abduction issue, saying: "I hold strong feelings about the abduction 
 
TOKYO 00002849  009 OF 011 
 
 
issue." 
 
(13) Yomiuri poll: Aso cabinet support rate slips to 46 PERCENT , 
with 70 PERCENT  of public wanting priority given to economy over 
holding an election 
 
YOMIURI (Page 1) (Full) 
October 13, 2008 
 
The approval rating for Prime Minister Taro Aso's cabinet dropped to 
45.9 PERCENT , according to a Yomiuri Shimbun nationwide 
telephone-interview survey conducted on Oct. 10-12. The approval 
rating was down 3.6 points from the previous survey conducted on 
Sept. 24-25, immediately after the inauguration of the cabinet. At 
the same time, the cabinet's disapproval rating increased by 5.2 
points to 38.6 PERCENT . Asked about the timing of the next Lower 
House election in view of the ongoing U.S.-triggered global 
financial crisis, 70 PERCENT  of respondents said the government 
should prioritize the implementation of economic pump-priming 
measures over calling a general election, while 25 PERCENT  said 
that the government should pursue economic measures after the next 
election. 
 
Some 88 PERCENT  indicated that the worldwide financial crisis and 
stock plunge would adversely affect the Japanese economy. 
 
Asked when the Lower House election should be held, 34 PERCENT  said 
it should be held before September 2009, when the current Lower 
House members' term expires, and 23 PERCENT  said it should be held 
around next spring. This means nearly 60 PERCENT  of respondents 
expressed their hopes to go to the polls next spring or later. 
Another 25 PERCENT  said the election should be held immediately, 
while12 PERCENT  pointed to sometime around the end of the year. 
Asked which party they would vote for in the proportional 
representation system, 39 PERCENT  cited the LDP, up 2 points from 
the previous survey, and 31 PERCENT  cited the DPJ, also up 2 
points. As for rates of support by party, the LDP marked 38.7 
PERCENT , up 1.3 points, and the DPJ 24.3 PERCENT , up 1.5 points. 
 
Asked about the Maritime Self-Defense Force's refueling mission in 
the Indian Ocean, 47 PERCENT  said they support it, while 40 PERCENT 
 said they do not support it. 
 
(14) Calls for second supplementary budget emerge in ruling camp: 
Supplementary budget to be approved on the 16th 
 
NIKKEI (Page 2) (Full) 
October 13, 2008 
 
The Diet will enter into deliberations on the fiscal 2008 
supplementary budget at the Upper House Budget Committee starting on 
October 14. The bill is expected to secure Diet approval as early as 
the 16th with the DPJ indicating support for it. The DPJ then agreed 
to deliberate on the bill extending Japan's refueling mission in the 
Indian Ocean and its early adoption. It will then urge Prime 
Minister Taro Aso to dissolve the Diet soon. Following the financial 
crisis that is gripping the world now, some ruling party members are 
calling for compiling a second supplementary budget incorporating 
additional economic pump-priming measures. Opposition parties are 
opposing the idea. 
 
Liberal Democratic Party (LDP) Policy Research Council Chairman 
 
TOKYO 00002849  010 OF 011 
 
 
Kosuke Hori on an NHK talk show on the 12th said that a second 
supplementary budget should be compiled before dissolution of the 
Diet. He noted, "The economic stimulus measures should be given 
shape in the form of a supplementary budget bill. We should first 
focus on economic stimulus measures instead of holding an election." 
Regarding the specifics of the second supplementary budget, he 
noted, "We intend to boost a loan framework for small- and 
medium-size businesses." 
 
Acting LDP Secretary General Nobuteru Ishihara on a TV Asahi talk 
show pointed out that the supplementary budget bill now under 
deliberation incorporates a loan framework worth 9 trillion yen. He 
then said that the second supplementary budget should be twice as 
large as that amount. Referring to a fixed-sum tax break, New 
Komeito Policy Research Council Chairman Natsuo Yamaguchi on an NHK 
TV program said, "The amount should be over 2 trillion yen. Funds 
can be drawn from the special fiscal investment and loans account." 
 
The government and the ruling parties plan to finalize a package of 
additional economic stimulus measures before the end of next week. 
If that is all to be handled, the Diet can be dissolved in October 
for a Lower House election in November. However, if a second 
supplementary budget is to be compiled and submitted to the current 
Diet session, it would be impossible to hold a Lower House election 
before year's end. Some have said that should that occur, the 
compilation of the fiscal 2009 budget would be delayed, thus putting 
the cart before the horse. 
 
DPJ Policy Research Council Chairman Masayuki Naoshima on an NHK TV 
talk show warned against the move, saying, "We should establish a 
new administration by holding a general election at an early date 
and then implement economic stimulus measures." Deputy President Kan 
Naoto the same day stressed that a second supplementary budget 
should be compiled after a Lower House election. 
 
(15) Participants in emergency G-20 meeting vow to address financial 
crisis, involving emerging countries: Nakagawa Initiative proposed 
to IMF 
 
YOMIURI (Page 2) (Excerpts) 
October 2008 
 
Finance ministers and central bank governors from 20 countries, 
including Japan, the U.S., European countries, as well as emerging 
countries, met on October 11 (12th, Japan time) in an emergency 
session. Concerned about the current situation in which a financial 
crisis that started in the U.S. has spilled over to affect even 
emerging countries, the participants agreed that all countries 
should adopt economic stimulus packages that employ all sorts of 
policy measures. President Bush took part in the meeting on short 
notice. He called for unity, saying, "We will do our utmost to 
address the crisis." 
 
The International Monetary and Financial Committee (IMFC) of the 
International Monetary Fund (IMF), which held a meeting prior to the 
G-20, pointed out in a joint statement, "The crisis is serious and 
requires exceptional vigilance and cooperation and bold action." 
Finance Minister and State Minister for Fiscal and Financial Affairs 
Shoichi Nakagawa during the meeting proposed his own initiative that 
calls on the IMF to set up a new financial system to help emerging 
countries procure capital. 
 
 
TOKYO 00002849  011 OF 011 
 
 
The emergency G-20 meeting was held at the initiative of the U.S., 
following a growing concern that the global economy would slide 
further into recession with stock prices and currencies of emerging 
countries, such as Brazil, China and India, plummeting due to the 
ongoing financial crisis. 
 
The joint statement noted that industrialized countries and emerging 
countries would strengthen ties to tide over the crisis and deepen 
cooperation for the improvement of financial regulations, 
supervision and functions. It also underscored that every possible 
economic and financial measure should be taken for the stabilization 
of the financial market. As key areas which all countries should 
tackle, the joint statement cited macro-economic measures, the 
supply of fluidity and the putting banks on a healthy footing and 
the protection of depositors. 
 
(16)"The U.S. should inject capital into financial institutions," 
prime minister says about financial crisis 
 
NIKKEI (Page 2) (Full) 
October 13, 2008 
 
Prime Minister Taro Aso on October 12 expressed expectations for 
responses various countries would make to an action program adopted 
at a meeting of the Group of Seven financial ministers and central 
bank governors, which includes the injection of capital using public 
money. He said, "It is desirable for a program with such specifics 
to be implemented." He thus indicated his view that the U.S. should 
pump public money into financial institutions. 
 
Regarding the emergency meeting of industrialized countries, held in 
an effort to stave off a financial crisis, the prime minister 
indicated his perception that it depends on the U.S., saying: "If 
those countries decided to inject capital into financial 
institutions, it would be a big step forward. However, if the U.S. 
or some other countries do not join the move, the confusion would 
further deepen." 
 
SCHIEFFER