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UNCLAS SECTION 01 OF 08 TOKYO 002879 
 
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 10/16/08 
 
INDEX: 
 
(1) South Korea learned of delisting of North Korea from U.S. the 
day before Japan received report (Asahi) 
 
(2) Former Prime Minister Abe: Japan should not toss away its 
sanction card against North Korea (Yomiuri) 
 
(3) PAC-3 live-fire test successful, but Nodong missiles beyond 
scope of assumption (Tokyo Shimbun) 
 
(4) Spillover of financial crisis into real economy: Export-oriented 
companies' business performance worsening (Nikkei) 
 
(5) TOP HEADLINES 
 
(6) EDITORIALS 
 
(7) Prime Minister's schedule, October 15 (Nikkei) 
 
ARTICLES: 
 
(1) South Korea learned of delisting of North Korea from U.S. the 
day before Japan received report 
 
ASAHI (Page 4) (Abridged slightly) 
October 15, 2008 
 
The U.S. removal of North Korea from its list of 
terrorism-sponsoring nations has taken the Japanese government by 
surprise. It has also shaken Japan's trust in the United States, its 
ally, and has exposed the government's insufficient ability to 
analyze information. 
 
On the night of Oct. 11, the U.S. media reported that Washington 
would announce the delisting of North Korea in just several hours. 
But Foreign Ministry officials all denied such a development, with 
one saying, "The report is groundless," and another commenting, "If 
the North was delisted today, that means we were deceived." 
 
Tokyo had expected that sooner or later, Washington would delist the 
North. Tokyo was also certain that Washington would dutifully inform 
the Japanese government before making a final decision. 
 
But according to a U.S. State Department press conference, President 
George W. Bush decided on the delisting on the afternoon of Oct. 10, 
local time. It was immediately after Foreign Minister Hirofumi 
Nakasone conveyed Japan's position to Secretary of State Condoleezza 
Rice on the phone, saying, "There still remain some points that need 
to be confirmed." 
 
Time went by without any report from the United States, and a senior 
Foreign Ministry official commented on the night of Oct. 11: "The 
President has not made a final decision." Foreign Minister Nakasone 
stayed at home that night assuming that the delisting would not 
occur before the end of the day. 
 
Meanwhile, a senior South Korean official revealed on Oct. 14 that 
the ROK Presidential Office had been informed of the delisting by 
the United States on the night of Oct. 10. 
 
According to the South Korean official, U.S. Assistant Secretary of 
 
TOKYO 00002879  002 OF 008 
 
 
State Christopher Hill, upon winding up his trip to North Korea on 
Oct. 3, briefed South Korean government officials and others in 
Seoul on the results of his trip. The official also quoted Hill as 
saying in the briefing: "Because I did not plan to brief the 
Japanese government, (Asian and Oceanian Affairs Bureau 
Director-General Akitaka Saiki) came (to Seoul) from Japan." 
 
U.S. newspapers reported that Japan's stern posture on the 
verification of North Korea nuclear programs delayed the delisting. 
There is a possibility that some U.S. government forces that aim to 
get the Six-Party Talks back on track by the Nov. 4 U.S. 
presidential election tried to contain Japan's objection by cutting 
off information. 
 
Japan has been left completely out of the loop. Even so, Chief 
Cabinet Secretary Takeo Kawamura in a press conference on Oct. 14 
desperately tried to deny speculation about discord between Japan 
and the United States, saying: "I think a final decision (on the 
delisting) was supposed to be made between the President and the 
Prime Minister. It is not true that there was a lack of close 
cooperation between Japan and the United States." 
 
A prime ministerial aide noted: "It was like a bat and a ball being 
thrown at the batter in the box before he was ready for them. In 
such a situation, the umpire usually calls time, but that did not 
happen." 
 
President Bush, who seemed to have a deep understanding of the 
abduction issue and a severer view toward the North than those of 
Secretary Rice and Assistant Secretary Hill, had been expected to 
stop the delisting. The aide's comment reflected his disappointment 
with President Bush. 
 
Another prime ministerial aide said self-mockingly: "Witnessing such 
a development, I feel that Japanese diplomacy is not that great. I 
cannot believe it." A former cabinet minister of the Liberal 
Democratic Party criticized the foreign minister's response, saying: 
"When he had a long (telephone) conversation with Secretary Rice, 
Foreign Minister Nakasone believed that he was able to reject (the 
delisting). Things are not that easy." 
 
Aso modifies his stance into "dissatisfaction with delisting" 
 
In an Upper House Budget Committee meeting on Oct. 14, Prime 
Minister Aso said: "I have repeatedly said that I am dissatisfied 
with the delisting." Asked about his view immediately after the 
delisting took place, Aso had described the step as "one method." 
The prime minister has now subtly shifted his stance. 
 
Now that the "delisting card" is no longer available, Japan will 
have to move its talks with the North forward with its own sanctions 
and other means as the leverage. 
 
In bilateral talks in August, Japan and North Korea agreed for Tokyo 
to lift the ban on travel between the two countries and charter 
flights from North Korea once Pyongyang set up a panel to 
reinvestigate into the fate of Japanese abductees. 
 
In the wake of the resignation of former Prime Minister Yasuo 
Fukuda, the North has put off the establishment of the panel. Under 
the new Aso administration, Japan has repeatedly asked for the start 
of the reinvestigation, but there has been no response from the 
 
TOKYO 00002879  003 OF 008 
 
 
North. 
 
The Six Parties have also agreed to complete providing energy aid to 
the North by the end of October in return for the North's 
disablement of its nuclear facilities at the Yongbyon nuclear 
complex. There is a strong likelihood that the implementation 
deadline will be put off. At the same time, other Six-Party members 
are likely to apply pressure on Japan, which has not joined the aid 
on the reason for the abduction issue. 
 
Yesterday, Prime Minister Aso categorically told the Upper House 
Budget Committee: "Japan will not join (energy aid) unless there is 
progress on the abduction issue." Nevertheless, there is no denying 
that the delisting has made the North less enthusiastic about 
addressing the abduction issue. There is no guarantee that Japan 
will not be pressed for prioritizing the nuclear issue over the 
abduction issue. 
 
(2) Former Prime Minister Abe: Japan should not toss away its 
sanction card against North Korea 
 
YOMIURI (Page 4) (Full) 
October 16, 2008 
 
It is regrettable that the U.S. government delisted North Korea as a 
state sponsoring terrorism, although it had been expected. Although 
the United States made that decision, it will not do to let the 
relationship between Japan and the United States become sour as a 
result. Tokyo and Washington should continue to cooperate closely so 
as not to give Pyongyang any chance to (drive a wedge between the 
two countries). 
 
The agreement on verification procedures between the United States 
and North Korea will probably lead to a temporary halt in 
Pyongyang's nuclear programs. President George W. Bush appears to 
have a strong desire to stop that country's nuclear development 
programs before he leaves office. 
 
However, the main purpose of the deal was supposed to make North 
Korea abandon the development of plutonium. The agreement this time 
around is but one step toward the North's complete abandonment of 
its nuclear programs. It is necessary to verify what happened to the 
extracted plutonium and nuclear weapons, as well as the nuclear 
programs. 
 
There has been no progress on the issue of North Korea's abductions 
of Japanese nationals. I think it is good that Prime Minister Taro 
Aso expressed Japan's concern to the United States in order to have 
Washington and other countries involved know Japan's position. 
 
Under the Fukuda administration, Japan and North Korea agreed that 
the North would (reinvestigate the abductions) with an eye on 
resolving the issue, but Pyongyang has yet to start. Unless both the 
nuclear and abduction issues are resolved, Japan will not budge an 
inch. North Korea will not take any action unless that message is 
driven home. It is important for Japan to maintain a "dialogue and 
pressure" policy of attaching special importance to pressure. If 
Japan removes its sanction measures, North Korea will gain ground as 
Japan will have the only the assistance card to play. 
 
Japan should seek understanding for the abduction issue from the 
next American government. The presidential election will be held 
 
TOKYO 00002879  004 OF 008 
 
 
next month. If (Republican presidential candidate) Sen. John McCain 
is elected president, it will not necessary to explain the issue to 
the (Republican) staff. If (Democratic presidential candidate) Sen. 
Barack Obama is elected, Japan will need to explain its position 
well. It is also necessary for Tokyo to work on Washington to 
maintain its remaining sanctions against Pyongyang. 
 
(3) PAC-3 live-fire test successful, but Nodong missiles beyond 
scope of assumption 
 
TOKYO SHIMBUN (Page 20) (Full) 
October 13, 2008 
 
The Air Self-Defense Force (ASDF) successfully shot down a mock 
ballistic missile in Japan's first live-fire test of the land-based 
Patriot Advanced Capabilit-3 (PAC-3) interceptor in New Mexico on 
September 17. But uncertainty is still looming over its performance. 
According to the U.S. non-governmental organization (NGO) that 
developed the PAC-3, North Korea's Nodong-class missiles are not 
envisioned as possible targets of counterattacks by the PAC-3. 
 
In July 2006, North Korea conducted a test-fire in waters off 
Russia, which prompted Japan to decide to deploy the PAC-3 system 
ahead of schedule. As the target of counterattacks, Japan naturally 
envisioned Nodong missiles with a (1,300-kilometer) range that 
covers all of Japan, excluding some part of Hokkaido and Okinawa. 
 
In this test, a surface-to-air PAC-2 missile was used as the target, 
but this missile reportedly has a range of only about 100 
kilometers. A missile with a shorter range comes down rapidly. This 
means that although the test was conducted successfully, it is still 
unknown whether the PAC-3 is capable of shooting down Nodong-class 
missiles. 
 
Motoaki Kamiura, a military journalist, said: "The Defense Ministry 
has not disclosed information" about the details of the PAC-3's 
performance. 
 
But here is a hint. The Center for Defense Information (CDI), the 
U.S. NGO that developed the PAC-3, put together data on experiments 
of the interceptor into a report this April. The CDI is an 
authoritative independent institute established in 1972 by 
ex-servicemen. The report spells out 27 test cases conducted from 
September in 1997 through July in 2007. The data show that 20 tests 
using cruise, anti-radiation, and other kinds of missiles as the 
target were conducted successfully. 
 
The largest missile among those used as the target in the successful 
cases was a Scud-class missile with a 600-kilometer range. It has 
been revealed that Nodong-class missiles with a 1,300-kilometer 
range are beyond the scope of the assumption. 
 
In actual warfare, a PAC-3 interceptor successfully hit Ababile 100 
missiles (with a range of 250-200 kilometers). 
 
Hiromichi Umebayashi, president of the Peace Depot, a NPO 
corporation, said angrily: "In North Korea, 200 Nodong-class 
missiles reportedly have been deployed, but there is no data that 
shows the PAC-3 is capable of shooting down such missiles. There is 
no explanation by the government, either. Some quibble that there is 
no evidence that the PAC-3 is unable to hit that class of 
missiles." 
 
TOKYO 00002879  005 OF 008 
 
 
 
Kamiura commented: "A Nodong missile falls at mach 10. In terms of 
speed, the PAC-3 is unable to hit it. In addition, it is known in 
tests from where the missiles were launched. But Nodong missiles can 
be carried by trailers, it is more difficult to hit them." 
 
Despite such circumstances, why is Japan preparing to deploy the 
PAC-3 system? Kamiura takes this view: "That is because of the 
Japanese-version military-industrial complex. The PAC-3 missiles 
manufactured by Mitsubishi Heavy Industries under license have been 
deployed starting this fiscal year. The Japan-U.S. missile defense 
(MD) system is a gold mine for the Japanese military industry." 
 
The PAC-3 test in New Mexico cost about 2.5 billion yen that 
includes service charges paid to the U.S. the Defense Ministry has 
earmarked a total of 127.9 billion yen as MD system-related outlays 
in its budgetary request for next fiscal year. 
 
(4) Spillover of financial crisis into real economy: Export-oriented 
companies' business performance worsening 
 
NIKKEI (Page 1) (Full) 
October 16, 2008 
 
Business performances of export-oriented companies are increasingly 
deteriorating as the financial crisis that started in the U.S. 
spills over to affect the real economies of the world. The operating 
profit of the Sony group for fiscal 2008 will most likely fall short 
of expectations by more than 100 billion yen. The profit growth of 
Komatsu is also expected to slow. More companies are expected to 
make a downward revision to their business performance projections 
in the run-up to the account settlement for the April-September 
period to be released toward the end of this month. 
 
The sluggish consumption in the U.S. is casting a pall over the 
Christmas holiday selling season, the busiest season for 
export-oriented companies. Sony had enjoyed relatively solid sales 
of digital cameras and LCD televisions up until the April-June 
quarter. However, its profits are now worsening due to the 
increasingly downward trend of the prices of those mainstay products 
since the summer, when the financial turmoil became serious. 
 
The sales of new cars of Toyota Motors in the U.S. dropped 32 
PERCENT  in September. The sales of not only large cars but also 
fuel-efficient compacts are in bad shape. Its group operating profit 
is expected to drop 40 PERCENT , worse than the 30 PERCENT  fall 
originally projected. 
 
In Europe, where the economy is slowing due to the spillover of the 
financial crisis, construction of houses and commercial facilities 
is in a slump. Komatsu had projected 360 billion yen in group 
operating profits for the current term, up 8 PERCENT  from the 
preceding term. However, the growth will be no more than about 340 
billion yen, a 2 PERCENT  increase. 
 
The strong-yen and weak-euro trend, which has advanced since August 
because of the deteriorated European economies, is putting a dent in 
companies' business performances. If the yen hovers at around 140 to 
the euro in the second half of fiscal 2009, Komatsu will lose 7 
billion yen in profits. 
 
As the slowdown of consumption becomes clear, companies that ship 
 
TOKYO 00002879  006 OF 008 
 
 
electronic parts to plants in rapidly emerging economies, such as 
China, are beginning to be affected. TDK is suffering from a sharp 
decline in demand for home electronics and PCs. It had estimated 
about a 50 PERCENT  decline in the group's operating profit for the 
April-September period this year, compared with the preceding year. 
However, the decline appears to have expanded to 70 PERCENT . Its 
group operating profit for the whole financial year will likely be 
in the red for the first time since fiscal 2002. 
 
Many export-oriented companies project improved performances for the 
period after September. Even companies that revised projections for 
their business performances for July and August suspended 
projections for the second half of the financial year. However, amid 
economic indicators, such as consumer spending in the U.S. and 
employment statistics, worsening more than estimated, 
export-oriented companies are urged to further revise down their 
operating profit projections. 
 
The high prices of crude oil and raw materials, a major factor in 
the economic slowdown up until the summer, have taken a downward 
turn. This is a factor that provides the underpinning for many 
companies, such as steel companies. Since the downward trend 
reflects a decline in global demand for such products, this is not 
something companies can rejoice about unreservedly. 
 
Listed companies had registered increased profits for six 
consecutive quarters up to the previous one. There had been a 
projection that their consolidated operating profits for this 
quarter would slide 9 PERCENT . However, the scope of the decline 
will likely reach a double-digit figure in further downward 
revisions. 
 
(5) TOP HEADLINES 
 
Asahi: 
Ruling coalition mulling use of reserves in special accounts for 
fixed-sum tax cut 
 
Mainichi: 
Defense academy professor arrested on suspicion of taking bribes 
 
Yomiuri: 
Yomiuri recommends allocating doctors across nation under plan, as 
part of medical reform 
 
Nikkei: 
European Central Bank to help stabilize European financial markets 
 
Sankei: 
Chinese beans found contaminated with pesticide; Moves afoot to 
review procurement sources 
 
Tokyo Shimbun: 
Compressing facilities for unburnable garbage in six wards to be 
disbanded due to improved disposal system 
 
Akahata: 
Abolish elderly health insurance system 
 
(6) EDITORIALS 
 
Asahi: 
 
TOKYO 00002879  007 OF 008 
 
 
(1) NHK should streamline itself in wake of reduction in TV viewing 
fees 
(2) Speed up moves to stabilize situation in Georgia 
 
Mainichi: 
(1) NHK management plan: There are more challenges to tackle besides 
viewing fees 
(2) Death of MSDF member: Apply scalpel to problems in organization 
 
Yomiuri: 
(1) It's time to dispel public concern about health care 
 
Nikkei: 
(1) With vacated post of vice governor, BOJ should step up efforts 
in dealing with financial crisis 
(2) Tainted frozen beans imported from China sparking concern 
 
Sankei: 
(1) U.S. should inject capital and purchase nonperforming loans in 
package 
(2) Japan, China must cooperate to quickly clear up cause of tainted 
Chinese beans incident 
 
Tokyo Shimbun: 
(1) Understanding from generations still working needed for 
reviewing elderly health plan 
(2) Fully investigate tainted Chinese beans incident, based on 
lessons from dumpling case 
 
Akahata: 
(1) Promptly abolish elderly health plan in response to criticism 
 
(7) Prime Minister's schedule, October 15 
 
NIKKEI (Page 2) (Full) 
October 16, 2008 
 
07:26 
Met with Deputy Chief Cabinet Secretary Konoike. 
 
09:01 
Upper House Budget Committee meeting. 
 
12:00 
Met with LDP Ibaraki Prefectural Chapter Chairman Yamaguchi and 
Deputy Secretary General Arai. 
 
13:00 
Upper House Budget Committee meeting. 
 
17:30 
Abduction Issue Countermeasures Headquarters meeting at the Kantei. 
 
18:40 
Reception for the World Cultural Award ceremony commemorating Prince 
Takamatsu at Meiji Memorial Hall in Moto-Akasaka. Then dined with 
his secretary at a Japanese restaurant in the Hall. 
 
20:26 
Dined with staff members of the Aso Office at a Japanese restaurant 
in Hiroo. 
 
 
TOKYO 00002879  008 OF 008 
 
 
22:09 
Arrived at his private residence in Kamiyama-cho. 
 
SCHIEFFER