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FM AMEMBASSY TOKYO
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RHHMUNA/HQ USPACOM HONOLULU HI
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RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
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RUEHFK/AMCONSUL FUKUOKA 0352
RUEHOK/AMCONSUL OSAKA KOBE 4098
RUEHNAG/AMCONSUL NAGOYA 8421
RUEHKSO/AMCONSUL SAPPORO 0925
RUEHBJ/AMEMBASSY BEIJING 5810
RUEHUL/AMEMBASSY SEOUL 1810
RUCNDT/USMISSION USUN NEW YORK 2068

UNCLAS SECTION 01 OF 06 TOKYO 002859 
 
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 10/14/08-2 
 
INDEX: 
 
(17) DPJ puts off security items from manifesto; Shies away from 
presenting principles for SDF dispatch (Asahi) 
 
(18) DPJ releases set of financial countermeasures; Some begin 
drafting bill (Asahi) 
 
(19) MOD reform plan: Joint Staff Office to have policy planning 
function centered on operation of units (Asahi) 
 
(20) Government, BOJ to freeze sales of 2 trillion yen worth of bank 
shareholdings (Nikkei) 
 
(21) Governments of Japan, India to reach agreement to establish 
joint fund worth 15 billion yen before year's end: Consolidation of 
infrastructure to be promoted (Nikkei) 
 
(22) DPJ Lower House member Maeda found to have received 11 million 
yen from pyramid sales companies as lecture fees and donations 
(Asahi) 
 
ARTICLES: 
 
(17) DPJ puts off security items from manifesto; Shies away from 
presenting principles for SDF dispatch 
 
ASAHI (Page 4) (Abridged slightly) 
October 11, 2008 
 
By Nao Fujita 
 
The Democratic Party of Japan has unveiled a set of foreign and 
security policies that will be included in its manifesto (set of 
campaign pledges) for the next Lower House election. The manifesto 
pledges to achieve a firm and equal alliance with the United States, 
as well as active participation in UN peacekeeping operations based 
on President Ichiro Ozawa's three principles. At the same time, the 
manifesto, stopping short of specifying the principle for the 
overseas dispatch of the Self-Defense Forces, contains many 
ambiguous points. The major opposition party has obviously shelved 
some difficult challenges until after taking over the reins of 
government, which may or may not occur after the next general 
election. 
 
Defining the Japan-U.S. alliance as the cornerstone of Japan's 
foreign policy, the manifesto specifies that Japan shall share roles 
with the United States and actively fulfill its own 
responsibilities. The manifesto, however, stops short of 
specifically discussing the contents of role-sharing. It is unclear 
whether role-sharing would be confined to matters that deeply 
concern the security of Japan or would include the war on terror 
going on in various parts of the world. 
 
Although the manifesto proclaims Japan's active participation in UN 
peacekeeping operations (PKO), it precludes the phrase "including 
those under UN Charter Article 42" that was in the party's 2006 
basic policy platform. Article 42 allows the use of force. Japan's 
participation requires either constitutional amendment or changes to 
the government's interpretation of the Constitution. Many in the 
party are negative about Japan actively taking part in UN 
peacekeeping operations. The party apparently needs to nail down its 
 
TOKYO 00002859  002 OF 006 
 
 
own position before taking over the reins of government. 
 
Although President Ozawa bases the overseas dispatch of SDF troops 
on a clear UN resolution, the manifesto does not specify it. As the 
reason of opposing the refueling mission in the Indian Ocean, the 
manifesto simply cites the government's lack of an explanation and 
its efforts to verify the effectiveness of the mission without 
referring to the absence of a clear UN resolution. 
 
The manifesto also indicates the party will respond to strong U.S. 
expectations for assistance to Afghanistan based on DPJ-presented 
legislation on elimination of terrorism, which is now under 
discussion. The DPJ-presented legislation, which is good only for 
one year, is designed to allow the dispatching of ground troops 
strictly on a humanitarian assistance mission based on a ceasefire 
agreement, which seems difficult at this point in time. The 
manifesto can hardly be taken as showing the DPJ's basic 
principles. 
 
About the fact that the manifesto contains many ambiguous points, 
Policy Research Committee Chairman Masayuki Naoshima explained: "We 
don't know how we will respond to some diplomatic issues until we 
take power." The terrorism eradication legislation specifies that 
the government shall swiftly enact a basic security law, alluding 
that the DPJ will finalize the legislation after taking power. 
 
(18) DPJ releases set of financial countermeasures; Some begin 
drafting bill 
 
ASAHI (Page 4) (Abridged slightly) 
October 11, 2008 
 
By Shinji Muramatsu 
 
A financial team of the Democratic Party of Japan on Oct. 10 came up 
with a set of financial crisis countermeasures, which includes a 
temporary reinstatement of the Law to Strengthen Financial 
Functions, an approach the ruling coalition is also considering. The 
DPJ aims to take the initiative in the discussion by setting forth a 
policy ahead of the government and ruling bloc. 
 
The team led by Kohei Otsuka, a former Bank of Japan official, and 
Tsutomu Okubo, who used to work at a foreign securities firm, has 
been discussing countermeasures since the collapse of Lehman 
Brothers Holdings Inc. Both Otsuka and Okubo are Upper House 
members. Some have begun drafting a bill with the aim of presenting 
it to the ongoing extraordinary Diet session. They are set to press 
the government and ruling bloc to accept the bill as is. 
 
Main points in the DPJ's financial crisis countermeasures 
 
(Protection of depositors and insurance policyholders) 
 
? Reinstating the Financial Function Strengthening Law (for two 
years) 
? Extending public assistance to the Life Insurance Policyholder 
Protection Corporation of Japan for two years 
 
(Protection of corporations and securities market) 
 
? Reinstatement of the special credit guarantee system for small and 
midsize companies 
 
TOKYO 00002859  003 OF 006 
 
 
? Extension of tax breaks on dividends 
 
(Securing the liquidity of funds) 
 
? Using reserve funds in the special account on foreign exchange 
funds 
? Lowering the BOJ reserve deposit rate 
 
(19) MOD reform plan: Joint Staff Office to have policy planning 
function centered on operation of units 
 
ASAHI (Page 4) (Abridged slightly) 
October 11, 2008 
 
By Akihiro Yamada 
 
The Ministry of Defense (MOD) has unveiled, as part of its 
organizational reform, a step to strengthen the functions of the 
Joint Staff Office (JSO) to be responsible for the operation of 
units of the Ground, Maritime, and Air Self-Defense Forces. The 
steps are designed to shift the civilian group's policy planning 
function related to the operation of units to the JSO. Integrating 
the shift in organizational reform basic views, to be drawn up later 
this month, the MOD aims to implement reform plans starting in 
fiscal 2010. 
 
The government's Council on Reform of the Defense Ministry proposed 
in July the operation and planning bureau, an internal bureau, be 
abolished and the operation of units be placed under the JSO to 
strengthen its functions. The council also called for the JSO be 
staffed with personnel from both the civilian and uniformed groups. 
The MOD has been considering how the new organization should be 
based on the council proposals. 
 
Defining the JSO as a special organ with the functions of an 
internal bureau, the revealed steps to strengthen the JSO are 
designed to add: (1) the planning function of the system; and (2) 
the function to liaise with other government agencies. 
 
From the viewpoint of civilian control, it has been customary for 
nearly half a century that civilian MOD officers answer questions at 
the Diet. For this reason, the MOD will continue considering Diet 
measures and how bills should be drawn up with an eye on a MOD 
reform plan to be produced in December. 
 
(20) Government, BOJ to freeze sales of 2 trillion yen worth of bank 
shareholdings 
 
NIKKEI (Top Play) (Excerpts) 
October 13, 2008 
 
The government (GOJ) and the Bank of Japan (BOJ) purchased shares 
worth 2 trillion yen from major banks between 2002 and 2006, a time 
when the nation was in its own financial crisis. Now, with global 
stock prices plunging, the government and BOJ have decided to freeze 
the sales of those shares for the time being. The reason is the fear 
that there is still a possibility of the market instability 
continuing into the beginning of next week, even a meeting of the 
finance ministers and central bank governors from the Group of Seven 
Nations (G-7) came up with an action program designed to stabilize 
the financial market. The GOJ and BOJ have been selling the 
purchased stocks little by little since fiscal 2006. However, 
 
TOKYO 00002859  004 OF 006 
 
 
following the observation that the sales of such shares would work 
as downward pressure on stock prices, they decided to freeze the 
action in the hope of the decision leading to an improved 
supply-demand situation on the stock market. 
 
In an effort to address the nation's financial crisis in the wake of 
the collapse of the asset-inflated "bubble" economy, the government 
and BOJ bought bank stocks, including those they held in 
cross-holdings, between 2002 and 2006 as an emergency measure. That 
is because banks were at the time facing valuation losses on their 
shareholdings due to a decline in stock prices, and concerns over 
having too little capital were causing them to sell cross-held 
shares and drive stock prices lower. 
 
At the peak, the government-backed Banks' Shareholdings Purchase 
Corp (BSPC) had approximately 1.6 trillion yen in terms of book 
value, and the BOJ approximately 2 trillion yen in book value terms. 
They began selling large numbers of these shares on the market in 
fiscal 2006 due to a rise in stock prices. The outstanding 
shareholdings as of March 31 were down to about 500 billion yen for 
the government and about 1.4 trillion yen for the central bank. 
 
Both the government and BSPC had indicated that they planned to sell 
those stocks every six months -- in the spring and the fall. They 
plan to undertake coordination with the possibility of freezing the 
sales of those shares for about six months starting this fall. Since 
the BSOC has purchased portions of bank stocks held by business 
corporations as well, their freezing the sales of those stocks is 
meant to shore up the prices of bank stocks, which are plunging due 
to the financial crisis. They do not intend to sell stocks unless 
the stock market recovers. Chances are that the moratorium period 
will be extended further. 
 
(21) Governments of Japan, India to reach agreement to establish 
joint fund worth 15 billion yen before year's end: Consolidation of 
infrastructure to be promoted 
 
NIKKEI (Page 5) (Full) 
October 11, 2008 
 
The governments of Japan and India are expected to reach an 
agreement to set up before year's end a project development fund 
designed for feasibility surveys and development programs for the 
consolidation of the infrastructure between New Deli, the capital, 
and Mumbai, a commercial city. Their aim is to build commercial 
facilities in areas located between the two cities. The two 
countries will split the total investment cost of 15 billion yen. 
The project will help India promote development of the area and 
nurture the manufacturing industry there. As a result, Japanese 
companies will find it easier to advance into that nation once 
infrastructure has been developed. 
 
A formal agreement is expected to be reached between Prime Minister 
Singh, who will be visiting Japan starting on the 21st, and Prime 
Minister Taro Aso. 
 
The Japanese government, mainly the Ministry of Economy, Trade and 
Industry, has been showing a cooperative stance toward the 
Industrial Aorta Initiative designed to concentrate industrial 
facilities along areas stretching for 1,500 kilometers between New 
Deli and Mumbai. 
 
 
TOKYO 00002859  005 OF 006 
 
 
The fund to be launched by the two countries would conduct a 
feasibility survey, including the building of infrastructure and 
industrial complexes for individual development areas, and compile a 
basic development program. It would then sell various plans as a 
package to private companies in open public-bidding. Successful 
private companies will be responsible for conducting the actual 
consolidation of infrastructure. Twenty-four development areas are 
up for the inclusion of the program. The plan is to promote the 
development of six areas first. 
 
The Japan External Trade Organization (JETRO) will likely join the 
investment committee established within the fund. The government 
wants to hear the views of Japanese companies that are considering 
advancing into India and reflecting them in the development program, 
thereby promoting the advance of Japanese companies into that 
nation. 
 
Many Japanese companies see India as a promising market. Some 
questionnaire surveys found that some respondents cited the 
insufficient infrastructure as a challenge. 
 
Chances are that if the consolidation of infrastructure progresses, 
more companies will consider advancing into India. 
 
(22) DPJ Lower House member Maeda found to have received 11 million 
yen from pyramid sales companies as lecture fees and donations 
 
ASAHI (Page 1) (Full) 
October 13, 2008 
 
It has been learned that the two fund-raising bodies of Yukichi 
Maeda, a House of Representatives member belonging to the main 
opposition Democratic Party of Japan (DPJ), received at least 11.56 
million yen as lecture fees and donations from many companies 
involved in pyramid-style sales from 2004 through 2007. Maeda posed 
questions supporting the multilevel marketing system at Diet 
sessions over the four years. Therefore, his cozy ties with this 
industry have now emerged. 
 
According to the political funds reports submitted by Maeda's two 
fund-raising bodies, of the 11.56 million yen, 9.96 million yen was 
lecture fees. The pyramid companies paid Maeda 100,000 yen to 1.3 
million yen per lecture, with most around 300,000 yen. Corporate 
donations to individual politicians are prohibited. Some experts 
have pointed out that paying a lecture fee is a different type of 
corporate contribution. 
 
A pyramid sales scheme is called a network business, under which 
purchasers become salespersons to expand markets. Problems have 
arisen in that end-salespersons carry excessive inventories. 
 
Maeda, who serves as chief of the secretariat of a parliamentary 
group backing pyramid schemes, has taken the floor as a questioner 
at the subcommittee of the Lower House Budget Committee for the past 
four years. 
 
Maeda once said at a subcommittee session: "Some unscrupulous firms 
in the pyramid scheme have caused many honest companies trouble." He 
expounded his theory that corporate members should be included in 
the government's Industrial Structural Council's sub-panel. In a 
subcommittee session in March 2006, he stated: "A law to protect and 
nurture the (multilevel marketing system) is necessary." 
 
TOKYO 00002859  006 OF 006 
 
 
 
According to the Network Business Political Union (NPU), Maeda 
always conferred with senior NPU officials before posing questions. 
NPU Deputy Director Kotaro Uchiyama said: "I asked him to do 
something to dispel prejudice against pyramid schemes." 
 
In 2005, a year later, Maeda said at the subcommittee, the NPU 
contributed 500,000 yen to Maeda's fund-rising body called the 
"Future Policy Study Group." Another pyramid firm donated to the 
Aichi No. 6 chapter a total of 1.1 million yen in 2006 and 2007. 
 
 
As lecture fees, Maeda received 2.9 million yen from three companies 
in 2004, 2.6 million yen from five firms in 2005, 1.7 2.76 million 
yen from seven companies in 2007. Of the lecture fees, about 45 
PERCENT  went to the Future Policy Study Group and about 55 PERCENT 
went to the Aichi No. 6 chapter. 
 
Dream of Total Communication Company (Minato Ward, Tokyo), which 
paid Maeda 1.5 million yen in lecture fees over four years, was 
ordered by the Ministry of Economy, Trade and Industry in November 
2007 to suspend business for three months due to its misleading 
advertisements. 
 
Although the Asahi Shimbun sent a letter to and called on Maeda's 
office on Oct. 8 -12 to respond to interview requests, it has not 
yet received any reply. 
 
Maeda, a native of Aichi Prefecture, is now serving his third term 
in the Lower House. He also serves as chief of the secretariat of 
the party's policy group "Isshin-kai," which supports DPJ President 
Ichiro Ozawa. He is one of the official candidates the DPJ announced 
on Sept. 12 as its first picks. 
 
SCHIEFFER