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UNCLAS SECTION 01 OF 09 TOKYO 003235 
 
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 11/26/08 
 
Index: 
 
1) President-elect Obama's economic dream team likely to escalate 
demands on Japan  (Tokyo Shimbun) 
 
Defense and security affairs: 
2) Government plans to expand cooperation with NATO, fund weapons 
disposal in the former Soviet Union bloc, and possibly line up 
assistance to Afghanistan  (Nikkei) 
3) Government's basic plan for outer space will expand defense use 
(Nikkei) 
4) Japan to provide 600 million yen in assistance to victims of 
cluster bombs  (Yomiuri) 
 
Political agenda: 
5) Prime Minister Aso announces delay of submission of second 
supplementary budget until early next year during regular Diet 
session  (Nikkei) 
6) Opposition camp against extending the Diet session  (Mainichi) 
7) Aso alarmed by sharp reaction to his decision to delay second 
extra budget from opposition Democratic Party of Japan (DPJ) and 
even within his own party  (Yomiuri) 
8) Bills related to the second extra budget will not be adopted soon 
and may even be scrapped  (Nikkei) 
9) DPJ, angry at Aso dilatory tactics, ready to submit its own 
economic package to the Diet  (Mainichi) 
10) Views of junior and mid-level LDP lawmakers split on issue of 
second supplementary budget  (Mainichi) 
11) Distrust between Aso and DPJ head Ozawa escalates as war of 
words continues  (Nikkei) 
 
12) Government uncertain about whether progress on abduction issue 
will result from restarted Six-Party Talks and alarmed at U.S.' soft 
stance toward DPRK  (Tokyo Shimbun) 
 
Articles: 
 
1) Obama's economic team may intensify pressure on Japan 
 
TOKYO SHIMBUN (Page 8) (Full) 
November 26, 2008 
 
Masakazu Furukawa, Washington 
 
U.S. President-elect Barack Obama announced the lineup of his 
economic policy team in a press conference yesterday, as well as 
unveiled plans to reveal the outline of a planned economic stimulus 
package that is said to be worth 700 billion dollars, or about 68 
trillion yen, within a few weeks. The announcement of members of his 
economic team before naming key members shows his eagerness to 
address economic issues on a priority basis, out of a strong sense 
of alarm at a further downturn of the U.S. economy. 
 
 
He has named heavyweights with a sufficient experience and a proven 
track record as members of his economic team. Lawrence Summers, who 
has been appointed to chair the National Economic Council (NEC), 
successfully turned the U.S. economy around as treasury secretary in 
the Clinton administration. Owing to his policy, the U.S. economy 
enjoyed good times over a long term. 
 
New York Federal Reserve Bank President and treasury 
 
TOKYO 00003235  002 OF 009 
 
 
secretary-designate Timothy Geithner devoted himself to containing a 
financial crisis in cooperation with Treasury Secretary Henry 
Paulson. Former Federal Reserve Board Chairman Volcker, who is said 
to have established the foundation for economic expansion by 
stemming inflation under the Carter administration, is included in a 
team of economic advisors. Even so, there is concern that a 
large-scale economic stimulus package could push down the values of 
the dollar and U.S. government bonds as a result of fiscal deficits 
expanding and eventually negatively affect the global economy. 
Investment in projects from the long-term viewpoint, such as 
education, cannot be expected to take effect immediately. 
 
Meanwhile, economic policy giving priority to domestic industries 
might lead to intensified pressure on foreign governments. Summers 
made severe requests mainly for economic stimulus measures to Japan 
after the burst of the bubble economy. In the Obama administration, 
too, he may come up with harsh demands to Japan, which has sunken 
deeper into recession. 
 
2) Japan to expand cooperation with NATO 
 
NIKKEI (Page 2) (Full) 
November 26, 2008 
 
The government is planning to expand cooperation with the North 
Atlantic Treaty Organization (NATO). Specifically, Japan will offer 
to financially help NATO with its efforts to scrap weapons in former 
Soviet Union constituents and East European countries and to lay 
down ordnance control in Afghanistan. The government is ready to 
strengthen Japan's channels to NATO, which has been conducting 
public security operations in Afghanistan. This move is likely in 
preparation for Japan's future assistance with Afghan 
reconstruction. 
 
Meanwhile, Prime Minister Taro Aso has also insisted on the 
necessity of cooperating with NATO. In May 2006, when Aso was 
foreign minister, he addressed a NATO council meeting in Brussels. 
He was the first Japanese minister to speak there, and he then set 
about strengthening dialogue with NATO. 
 
NATO has been working to scrap unnecessary weapons and landmines in 
former Soviet Union member states and East European countries in 
order to prevent them from going into the hands of terrorists. Japan 
will outlay about 100,000 euros (approximately 12.3 million yen) for 
these undertakings. This funding cooperation is intended for NATO 
activities in such countries as Georgia and Ukraine. The government 
will continue to assist NATO with its efforts there next year and 
afterward. 
 
Another pillar of Japan's funding cooperation to NATO is ordnance 
control in Afghanistan. NATO is currently in a hurry to introduce 
security and monitoring systems for arsenals and ammunition depots 
in order to improve public security in Afghanistan. This spring, 
Japan, in order to back up such efforts, outlaid 3 million euros 
(approx. 369 million yen), about 50 PERCENT  of the total costs, for 
such purposes as renovating ordnance storages. 
 
Many in the government presume that the United States will ask Japan 
to make additional contributions for Afghan reconstruction after the 
Obama administration comes into office. However, the government will 
need legislative measures in order for Japan to send the 
Self-Defense Forces to Afghanistan. In this case, the hurdle is 
 
TOKYO 00003235  003 OF 009 
 
 
considerably high. Given such circumstances, the government's plan 
to expand Japan's cooperation with NATO also means a defense to fend 
off the United States' possible request for Japan's SDF dispatch to 
Afghanistan. 
 
3) Gov't eyes expanding Japan's use of space for defense 
 
NIKKEI (Page 2) (Full) 
November 26, 2008 
 
A government taskforce for Japan's space activities and 
strategies-headed by Prime Minister Taro Aso-will set forth its 
first masterplan. According to an unveiled outline of the 
masterplan's basic course of action, the government plans to use 
outer space for Japan's national security within the bounds of its 
defense-only posture and push ahead with space diplomacy focusing on 
technological cooperation with foreign countries. In addition, the 
government will also utilize Japan's space technologies in order to 
elucidate the mechanisms of earth environment changes. 
 
The outlined basic course of action classifies Japan's future space 
policy into five pillars. In addition to the use of outer space for 
national security and the promotion of space diplomacy, the basic 
course of action suggests the need to bolster Japan's space policy 
from such aspects as: 1) constructing infrastructure for the public, 
including an intelligent transport system (ITS); 2) developing 
strategic industries in the 21st century; and 3) investing in 
mankind's dreams and in the next generation. 
 
4) Japan to endow cluster bomb victims with 600 million yen 
 
YOMIURI (Page 2) (Full) 
November 26, 2008 
 
Foreign Minister Nakasone will deliver a speech at a signing 
ceremony that is scheduled to be held in Oslo on Dec. 3 for a treaty 
banning cluster bombs. According to his draft speech revealed 
yesterday, Nakasone will announce that Japan will contribute 6 
million dollars (approximately 600 million yen) within a year to aid 
cluster bomb victims. In his speech, Nakasone will suggest the need 
to envision reconstruction and peace after conflicts even in the 
case of weapons for self-defense. 
 
Unexploded cluster bomblets have caused many civilian casualties. In 
this regard, Nakasone will emphasize that weapons spreading enmity 
should not be used. He will call on the international community for 
cooperation in post-conflict reconstruction. In addition, he will 
also clarify Japan's readiness to play a proactive role. 
 
5) Government, ruling coalition decide to submit second extra budget 
to next Diet session; Aso-Ozawa debate to be held on Nov. 28 
 
NIKKEI (Page 1) (Full) 
November 26, 2008 
 
Prime Minister Taro Aso met yesterday with senior ruling Liberal 
Democratic Party (LDP) and its coalition partner New Komeito at the 
Prime Minister's Official Residence (Kantei). In the meeting, Aso 
and senior ruling coalition members decided to forgo submitting a 
fiscal 2008 second supplementary budget to the ongoing Diet session. 
They have judged that if the government rushes the submission of the 
second extra budget, it could have some impact on the compilation of 
 
TOKYO 00003235  004 OF 009 
 
 
a state budget for next fiscal year toward the end of the year. The 
government plans to convene the next regular session in early 
January and to submit the second extra budget for fiscal 2008 to the 
regular session immediately after the session is opened, aiming at 
an early enactment of the extra budget. 
 
After the meeting, Aso told reporters: 
 
"I want to submit a second additional budget early next year. I 
intend to have the ordinary session convened in early January so 
that deliberations on the second extra budget will be started 
quickly." 
 
Aso explained the reporters that his government would come up with a 
fiscal 2008 second supplementary budget around Dec. 20, when a 
downward revision for this fiscal year is carried out due to a drop 
in tax revenues. The notion being floated in the government and 
ruling parties is extending the current session until around Jan. 5 
and opening the next regular session as early as Jan. 7. 
 
The Aso administration has decided to put off submitting a second 
extra budget because it predicted that even if the budget cleared 
the Diet, the budget-related bills would likely be killed due to 
unfinished deliberations. Since the Diet Law specifies that an 
ordinary session should be convened in January, there is a limit to 
an extension of the current session. 
 
LDP Secretary General Hiroyuki Hosoda met yesterday with his 
Democratic Party of Japan (DPJ) counterpart Yukio Hatoyama in the 
Diet building and conveyed the decision to submit a second extra 
budget to the next regular session to Hatoyama. Hatoyama strongly 
rebutted, noting: "We cannot agree to it." 
 
Meanwhile, DPJ Diet Affairs Committee Chairman Kenji Yamaoka and his 
LDP counterpart Tadamori Oshima yesterday reached a general 
agreement on a plan to hold on Nov. 28 a first debate in the Diet 
between Prime Minister Aso and DPJ President Ichiro Ozawa. 
 
6) Opposition parties against Diet extension 
 
MAINICHI (Page 5) (Full) 
November 26, 2008 
 
The Diet affairs committee chiefs of four opposition parties -- the 
Democratic Party of Japan (DPJ), Japanese Communist Party (JCP), 
Social Democratic Party (SDP) and People's New Party (PNP) -- held a 
meeting yesterday in the Diet building and they agreed to oppose an 
extension of the ongoing Diet session. The agreement is based on 
their judgment that an extension of the current session is 
unnecessary because Prime Minister Taro Aso decided yesterday to 
forgo submitting a second supplementary budget for fiscal 2008 to 
the next ordinary session, which will be convened in January. They 
also confirmed that the opposition parties would make a decision on 
whether to take a vote on a bill amending the new Antiterrorism 
Special Measures Law, as well as on a bill revising the Financial 
Functions Strengthening Law -- both bills now in the House of 
Councillors for deliberations -- at the end of this month, when the 
government decides on the length of an extension. 
 
7) Prime minister's decision reflects alarm at DPJ offensive, but 
even ruling party members are criticizing him 
 
 
TOKYO 00003235  005 OF 009 
 
 
YOMIURI (Page 2) (Excerpts) 
November 26, 2008 
 
Prime Minister announced yesterday that the government would not 
submit a supplementary budget bill for fiscal 2008 to the current 
Diet session. In addition to the official explanation that a bill 
could not be compiled on short notice, the decision largely reflects 
a judgment that if the government submits a bill, Diet deliberations 
could come to a standstill due to attacks from the Democratic Party 
of Japan (DPJ). But the decision has evoked criticism even from 
among ruling party members, with one lawmaker assailing: "It is hard 
to understand that the (prime minister) decided to delay the 
submission, even though he has been saying he would give priority to 
buoying up the economy." In the face of such criticism, the prime 
minister might further lose political ground. 
 
A reported asked Aso yesterday, "Isn't the decision contradictory to 
your stance of prioritizing economic stimulus measures?" Aso 
replied: "There is no contradiction at all. The first supplementary 
budget will finance emergency economic measures. The end of the 
fiscal year will be a crucial moment, different from the end of the 
year." 
 
The second extra budget would finance an additional economic 
stimulus package unveiled on Oct. 30. A Liberal Democratic Party 
source said: "The prime minister had initially suggested a plan to 
submit some measures in the package to the current Diet session. But 
he faced opposition from his aides and changed his mind." 
 
Asked whey he made the decision, Aso said that it would take time to 
work out the details of the measures needed to help the people's 
livelihoods and to estimate to what extent tax revenues would 
decrease due to the current economic downturn. But the prime 
minister apparently harbors concern that if the government submits 
an extra budget bill, despite uncertainly about the fate of the 
bill, and if Diet deliberations come to a standstill, his 
administration might stall. 
 
8) Delay in submission of second supplementary bill to Diet: Alarm 
now about delay in passage of related bills, fear they might even be 
killed if DPJ carries them over to next session 
 
NIKKEI (Page 2) (Full) 
November 26, 2008 
 
The government and the ruling parties have decided to put off the 
submission of the second supplementary budget to the current Diet 
session because of their deep-seated distrust in the Democratic 
Party of Japan's (DPJ) Diet strategy in the divided Diet. 
 
If the opposition camp adopts a strategy of delaying a vote on that 
bill in the Upper House, where they hold the majority, the budget 
bill will automatically be enacted 30 days after it clears the Lower 
House. However, it is impossible to handle in time related bills 
designed to secure funding resources. Should that occur, the passage 
of the fiscal 2009 budget within the current fiscal year could be 
seriously affected. 
 
If the second extra budget is to be deliberated during the current 
Diet session, the prime minister and related cabinet ministers would 
be tied to Budget Committee meetings in both Houses, giving rise to 
a possibility of the compilation of the fiscal 2009 budget bill 
 
TOKYO 00003235  006 OF 009 
 
 
being carried over into the new year. There is also the need to 
compile a third supplementary budget to make a downward revision to 
the estimate for tax revenues for this fiscal year. Many ruling 
party members had been prudent about the idea of deliberating the 
second supplementary budget bill during the current session with one 
noting, "Budgetary compilation would become even more complicated" 
and another saying, "Doing so could give the opposition camp an 
opportunity to attack the government." 
 
Chances are that if the DPJ in the Upper House decides to carry over 
bills related to the second supplementary budget bill to the next 
session, the bills would be voted down in the next Diet session and 
scrapped. The government and the ruling parties appeared to have 
feared the worst situation in which it would become impossible to 
re-submit those related bills to the regular Diet session because of 
the principle of not deliberating on the same measure during the 
same Diet session. 
 
9) DPJ's economic stimulus package based on four pillars; Related 
bills outlined 
 
MAINICHI (Page 2) (Full) 
November 26, 2008 
 
Following Prime Minister Taro Aso's announcement on Nov. 25 of the 
postponement of the submission of the fiscal 2008 second 
supplementary budget to the current Diet session, the Democratic 
Party of Japan (DPJ) has outlined bills related to a package of 
economic and financial measures to be submitted to the current 
session. The package features the following four pillars: (1) 
abolish the provisional gas tax; (2) assistance for child-rearing; 
(3) financial measures for small- and medium-size businesses; and 
(4) employment measures, including improving the treatment of 
non-regular employees. The package thus incorporates measures for 
small- and medium-size businesses, which would likely become 
cash-strapped toward the end of the year, and key policies included 
in the party's manifesto for the next Lower House election. Their 
aim is to highlight differences from the government and the ruling 
parties, which have failed to take any economic stimulus measures 
due to the delay in the submission of the second supplementary 
budget to the current session, as one senior member of the DPJ 
Policy Research Council put it. The DPJ intends to submit those 
related bills to the Upper House as a showcase in the extended Diet 
session. 
 
DPJ President Ichiro Ozawa on the 23rd revealed that his party was 
considering submitting bills related to the economic and financial 
measures to the current Diet session. DPJ Policy Research Council 
Chairman Masayuki Naoshima at an executive meeting on the 25th said 
that the party will start adjusting the bills at a meeting of the 
Next Cabinet" to be held on the 26th. 
 
Regarding the abolition of the provisional tax rate among measures 
incorporated in the related bills, the public's financial burden 
worth 2.6 trillion yen would be reduced by abolishing the 
road-related provisional tax rate. For assistance for child-raising, 
a child allowance for 26,000 yen per child will be established. The 
DPJ is also considering making some expressways toll-free ahead of 
the timetable. 
 
The measures for small- and medium-size businesses consist of two 
bills -- a bill designed to smoothen local financing, which will 
 
TOKYO 00003235  007 OF 009 
 
 
mandates financial institutions to disclose loan terms, and a bill 
to prevent major companies from bullying small- and medium-size 
businesses in order to constrain their unilateral cost-cutting 
demand to subcontractors. 
 
10) Views of junior, mid-level LDP lawmakers split over submitting 
second supplementary budget to current Diet session 
 
MAINICHI (Page 5) (Full) 
November 26, 2008 
 
The views of junior and mid-level lawmakers of the ruling Liberal 
Democratic Party are split over whether to call on the government to 
submit a fiscal 2008 second supplementary budget to the current Diet 
session. Although former Administrative Reform Minister Yoshimi 
Watanabe, an active leader of the group, has taken a stance of not 
hesitating to topple the cabinet of Prime Minister Taro Aso if 
necessary, some other group members have a more realistic view that 
it is impossible to replace the prime minister at this point. Taking 
advantage of discord in the group, the LDP leadership and faction 
chiefs have launched an effort to calm down the lawmakers. 
 
The group of 24 LDP lawmakers from both chambers of the Diet, 
including former Chief Cabinet Secretary Yasuhisa Shiozaki and 
Watanabe, has called for submitting the second extra budget to the 
ongoing session. Watanabe has stepped up criticism of Aso, arguing: 
"Since the prime minister has said that he places priority on policy 
over politics, we must do something." House of Councillors member 
Taichi Yamamoto is advocating an early dissolution of the House of 
Representatives. 
 
The group, however, yesterday refrained from criticizing the Aso 
administration's decision to push back the submission of the second 
extra budget to the next session. A group member, who served as 
parliamentary secretary, said: "We cannot support the government 
decision, but if we criticize it now, we would create a trend toward 
(toppling the cabinet). It is a vexing situation." 
 
Meanwhile, in a General Council meeting yesterday, Yuji Tsushima, 
who heads a faction in the LDP, asked senior party members to tell 
group members "not to show mercy to the enemy" (Democratic Party of 
Japan). Senior members of the Machimura faction confirmed yesterday 
that they would closely watch moves of the group so that it would 
not become overly excited. 
 
A veteran lawmaker took an icy view toward the group, saying: "It's 
a publicity stunt by lawmakers who will likely be defeated in the 
next election." 
 
11) Confrontation and distrust between Aso and Ozawa drags on as 
likelihood grows that Lower House will not be dissolved until after 
the spring 
 
NIKKEI (Page 2) (Abridged slightly) 
November 26, 2008 
 
Confrontation between Prime Minister Taro Aso and Democratic Party 
of Japan (DPJ) President Ichiro Ozawa is expected to escalate with 
the planned extension of the current Diet session. Mutual distrust 
between the two, which has turned into a name-calling game, has 
grown to new heights, making it more difficult to settle complex 
issues brought on by the divided Diet. Amid the prospect that the 
 
TOKYO 00003235  008 OF 009 
 
 
next Lower House election will not be held before next spring 
gaining ground, due to the delay in the submission of the fiscal 
2008 second supplementary budget bill, both parties will face off in 
the extended Diet session, saddled with contradictory arguments. 
 
Prime minister on the defense 
 
When he announced his decision to put off the submission of the 
extra budget to the current Diet session, the prime minister 
stammered for a moment, "Basically, the situation is not yet 
conductive to allow the submission of the bill right away ..." 
 
Prime Minister Aso in late October announced his plan to compile a 
second extra budget, which would finance a package of additional 
economic stimulus measures. To do this, he would have to delay Lower 
House dissolution. Until recently, Aso has been searching for the 
right timing for submitting the bill in the belief that people's 
attitudes play a major role in the state of the economy. 
 
His explanation was awkward. Concerning the expansion of credit 
guarantee for small- and medium-size businesses, the showcase of the 
additional package, Aso said, "Borrowers' cash management will not 
become difficult in December or January next year. The problem is 
the end of the year." However, the prime minister had originally 
stressed, "Cash management by small and medium-sized businesses 
would become difficult toward the end of the year." 
 
The second extra budget will include the issuance of 
deficit-covering government bonds to make up for a drop in tax 
revenues. One reason for the delay in the submission of the second 
extra budget is because the amount of the issuance of such bonds has 
yet to be fixed. However, the prime minister, when he released the 
additional package, had categorically said, "I will not issue 
deficit-covering government bonds." During Diet deliberations, he 
will have to give an awkward explanation about this discrepancy. 
 
 
The prime minister has no other choice even at the cost of coming 
under fire as his words and actions being contradictor. The 
submission of the second supplementary budget bill to the current 
Diet session was an aggressive tactic with an eye on a Lower House 
dissolution for a snap election at the end of the year. Now he has 
no choice but to stay of the defensive, because the economy is 
slowing and his administration is starting to unravel due to his own 
wavering statements. 
 
The prime minister and Chief Cabinet Secretary Takeo Kawamura on the 
25th vowed to do their utmost with a determination to make a fresh 
start. 
 
12) Progress on abduction issue uncertain in next round of six-party 
talks; Government wary of possible U.S. concession 
 
TOKYO SHIMBUN (Page 2) (Full) 
November 26, 2008 
 
The government has welcomed plans to resume the six-party talks on 
the North Korean nuclear issue on Dec. 8. But there are signs of the 
U.S. making concessions to North Korea, given that country's adamant 
stance on the nuclear issue. Relations between the U.S. and North 
Korea might move closer than before. The government is wary about 
the possibility this would inevitably affect the resolution of the 
 
TOKYO 00003235  009 OF 009 
 
 
issue of Japanese nationals abducted by North Korean agents. 
 
Foreign Minister Hirofumi Nakasone told reporters yesterday: "Japan 
has no objection to that (schedule); we think it is fine." The 
government hopes to move negotiations on the stalled abduction issue 
forward by taking advantage of the resumption of the six-party 
talks. It has thus welcomed the planned resumption of the talks. 
 
North Korea, however, has come up with a set of new demands on 
nuclear verification methods, a hot issue in the next round of the 
talks. Tokyo hopes to put a verification regime into writing, but 
Pyongyang has refused codifying the proposed collection of samples, 
which is indispensable for examining the output of plutonium. 
 
The agreement reached in October between the U.S. and North Korea 
makes no reference to sampling, just noting "scientific protocol." 
The government is worried that the Bush administration, impatient to 
produce diplomatic accomplishments in its final days, might try to 
make concessions to North Korea. 
 
If that becomes the case, Japan will lose its leverage - namely, 
pressure by the U.S. on the North -- in negotiating the abduction 
issue. If North Korea takes advantage of Japan's weak situation and 
resorts to strong-arm tactics, the future of Japan-North Korea 
negotiations on the abduction issue will become even murkier. 
 
That is why Nakasone emphasized, "We hope that what have been agreed 
on between the U.S. and North Korea will be firmly put in writing." 
 
The U.S. virtually ignored Japan's wishes by delisting North Korea 
as a state sponsor of terrorism. The next round of the six-talks 
might turn out to even more severe for the Japanese government. 
 
SCHIEFFER