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UNCLAS SECTION 01 OF 08 TOKYO 003305 
 
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 12/04/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Fiscal policy switch: 
4) Gov't veering away from fiscal reconstruction (Yomiuri) 
5) Gov't cites international cooperation to get over financial 
crisis as reason for fiscal policy changeover  (Yomiuri) 
 
Convention on Cluster Munitions: 
6) Cluster bomb ban inked in Oslo by about 90 countries, including 
Japan (Mainichi) 
7) U.S., Russia, China sit out (Sankei) 
 
8) Prime Minister Aso says Japan will work on U.S., China to join 
cluster bomb ban (Mainichi) 
 
9) Gov't to budget alternative ordnance (Yomiuri) 
 
North Korea problem: 
10) U.S., Japan, ROK band together, but still differ on how to 
verify North Korea's nuclear declaration (Tokyo Shimbun) 
11) Pyongyang reportedly to enter 2nd phase "by March next year" to 
abandon nuclear program (Nikkei) 
 
Defense & security agenda: 
12) House panel likely to approve MSDF refueling extension bill on 
Dec. 16 (Asahi) 
13) Base-hosting governors meet with USG, GOJ officials over U.S. 
military presence, seek to mitigate burden (Mainichi) 
 
Global warming: 
14) Japan to buy CO2 emission rights for 700 billion yen (Mainichi) 
 
Agricultural topics: 
 
15) MAFF to liberalize farmland lease for businesses (Asahi)   10 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Yomiuri & Tokyo Shimbun: 
Government sets budget principles, shelving spending cut policy 
 
Mainichi: 
Japan and some 90 countries sign treaty banning cluster bombs 
 
Nikkei: 
Nippon Oil, Nippon Mining to merge, creating world's 8th-largest 
petroleum firm 
 
Sankei: 
Big Three seek 3.2 trillion yen for bailout; GM in serious 
situation 
 
Akahata: 
Isuzu's non-permanent workers form union 
 
2) EDITORIALS 
 
TOKYO 00003305  002 OF 008 
 
 
 
Asahi: 
(1) Shift in spending cut policy: Fiscal discipline necessary to 
overcome crisis 
 
Mainichi: 
(1) Government should give more consideration to welfare and 
employment issues 
(2) Promise to free up revenues from road-related tax a lie? 
 
Yomiuri: 
(1) State budget for FY2009: Need to pay careful attention to 
economy and employment 
(2) Turmoil in Thailand: Find ways to ease political unrest 
 
Nikkei: 
(1) In order to revitalize economy, expenditures should be expanded 
(2) Bailout plan for Big Three appropriate? 
 
Sankei: 
(1) Budget compilation: Maintain fiscal discipline 
(2) State control: Recommendations should be completely implemented 
 
Tokyo Shimbun: 
(1) Shelving spending cut policy without debate unacceptable 
(2) Japan should learn lesson from Big Three 
 
Akahata: 
(1) Need for substantial change in "big-boned" economic and fiscal 
policy 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, December 3 
 
NIKKEI (Page 2) (Full) 
December 4, 2008 
 
07:58 
Met with LDP Tax System Research Commission Chairman Tsushima, 
Subcommittee Chairman Yanagisawa and advisors Noda, Machimura and 
Ibuki. 
 
10:22 
Met with Chugoku Economic Federation Chairman Fukuda at the Kantei. 
 
11:10 
Met with former Chinese Foreign Minister Li Zhaoxing, followed by 
Ashikaga Mayor Yoshitani and others. Then met with Utsunomiya Mayor 
Sato. 
 
12:03 
Award ceremony for persons of merit for promoting barrier-free 
universal design. 
 
14:14 
Met with Deputy Chief Cabinet Secretary Konoike, followed by Lower 
House member Jiro Akama. Then met with special advisor to party 
president Shimamura and Public Relations Headquarters chief Furuya. 
 
15:17 
Met with Cabinet Intelligence Director Mitani, followed by National 
 
TOKYO 00003305  003 OF 008 
 
 
Chamber of Agriculture President Ota and other. LDP Agricultural and 
Marine Product Research Commission Chairman Futa and Upper House 
member Kishi were present. Then met with Fukuoka Chapter Chairman 
Kurauchi. 
 
16:15 
Met with Deputy Foreign Minister Sasae. 
 
17:03 
Council of Economic and Fiscal Policy meeting. 
 
18:42 
Special cabinet meeting. 
 
19:07 
Met with LDP Policy Research Council Chairman Hori and his New 
Komeito counterpart Yamaguchi. 
 
19:37 
Met with Diet Affairs Committee Chairman Oshima, Lower House Diet 
Steering Committee Chairman Kosaka and Chief Cabinet Secretary 
Kawamura and Secretary General Hosoda were present. 
 
21:20 
Met with his secretary at a bar in Imperial Hotel. 
 
23:24 
Arrived at the private residence in Kamiyamacho. 
 
4) Government decides to shift from spending cut policy 
 
YOMIURI (Top play) (Lead para.) 
December 4, 2008 
 
The government at a special cabinet meeting yesterday adopted a 
basic policy on the compilation of the fiscal 2009 budget. Regarding 
the budget request guidelines for fiscal 2009, which incorporate 
constraint on growth in social security spending and a cut in public 
works, the basic policy includes the words "maintain the 
guidelines," which is weaker than the previous words "firmly 
maintain." In readiness for a further decline in the economy, the 
basic policy indicates a government stance of increasing public 
spending in a flexible manner with the expression that a decisive 
response will be made in a timely and flexible way. The government 
has thus clearly indicated a stance of giving priority to turning 
the economy around instead of implementing fiscal reconstruction, by 
effectively switching from the fiscal reconstruction policy line, 
which has been in place since 2006 during the Koiuzmi 
administration. 
 
5) Government sets budget principles: Policy shift with cooperation 
with U.S. and European countries as justification 
 
YOMIURI (Page 9) (Excerpts) 
December 4, 2008 
 
The government yesterday adopted a basic policy on the compilation 
of the fiscal 2009 budget, in which it included a decision to put 
off the fiscal reconstruction policy line. As justification for the 
policy switch, the government cited cooperation with the U.S. and 
European countries in addressing the financial crisis. Since there 
is concern that public spending will increase without principles in 
 
TOKYO 00003305  004 OF 008 
 
 
areas unrelated to efforts to address the financial crisis, the 
government will likely have to reset its guidelines for maintaining 
the fiscal discipline. 
 
Later in the day, Prime Minister Aso told reporters, "I will 
consider fiscal reconstruction over the medium term. I will focus on 
economic stimulus measures for the next three years." He thus denied 
the view that the government had shifted from the fiscal 
reconstruction policy line. State Minister for Fiscal and Financial 
Policy Nakagawa echoed his view: "The government will not abandon 
the fiscal discipline. However, it will give consideration to the 
economic situations in Japan and the world, as they are beginning to 
change." 
 
However, the adopted basic policy gives a strong impression that 
priority has been given to economic stimulus measures. The 
government has now backpedaled on its consideration for the fiscal 
discipline. 
 
Gist of basic policy on fiscal 2009 budget compilation 
 
? There is mounting concern that the downward trend of the Japanese 
economy will become protracted and serious. 
? Depending on circumstances, a decisive approach should be made in 
a timely and flexible way, based on the financial summit 
declaration, while maintaining the budget request guidelines for the 
fiscal 2009 budget. 
? "Peace of mind for people," "strengthening financial and economic 
stability" and "demonstration of local potential" should be made key 
areas. 
? Make efforts to achieve the goal of moving the primary balance of 
the central and local governments into the black by fiscal 2011. 
 
6) Some 90 countries, including Japan, sign treaty banning cluster 
bombs 
 
MAINICHI (Top play) (Lead paragraph) 
December 4, 2008 
 
Katsumi Sawada, Oslo 
 
A signing ceremony for the Convention on Cluster Munitions (Oslo 
treaty) banning the use, manufacturing, and possession of cluster 
bombs, was held at the Oslo City Hall on Dec. 3. Unexploded bomblets 
often cause damage to civilians. The treaty also stipulates support 
for victims and the disposal of unexploded bombs. Some 90 countries 
are expected to sign the treaty. The pact will come into effect 
about half a year after the first 30 countries have ratified it. 
Following the Landmine Ban Treaty (that went into effect in 1999), 
this is the second pact that will take effect under the initiative 
of like-minded countries and nongovernmental organizations (NGOs). 
Citizens-led disarmament diplomacy has opened up a new horizon. 
 
7) Some 100 countries, including Japan, sign cluster bomb ban 
treaty; U.S, Russia and China not included 
 
SANKEI (Page 2) (Excerpt) 
December 4, 2008 
 
Masato Kimura, London 
 
A signing conference for the Convention on Cluster Munitions was 
 
TOKYO 00003305  005 OF 008 
 
 
held in Oslo on December 3. Damage to civilians by unexploded 
bomblets has long been a problem. Some 100 countries, including 
Japan, the UK, Germany and France, signed the treaty. Finland, which 
borders Russia, did not sign the pact. The absence of such major 
producers as the United States, Russia and China also offered a 
glimpse into the severe reality of international politics. 
 
8) Aso to urge U.S., China to sign cluster bomb ban treaty 
 
MAINICHI (Page 2) (Full) 
December 4, 2008 
 
Keiichi Shirato 
 
Touching on the fact that Japan has signed the cluster munitions ban 
treaty, Prime Minister Taro Aso indicated to reporters at the Prime 
Minister's Office yesterday that he would urge such countries as the 
United States and China to join the treaty. He said: "I would like 
to work upon as many non-signatory countries as possible to join the 
treaty. This is a historic event." 
 
9) Cluster bomb treaty signed; Government to allocate funds for 
alternative weapons in supplementary budget 
 
YOMIURI (Page 2) (Full) 
December 4, 2008 
 
The government decided yesterday to include the maintenance cost of 
precision-guided bombs replacing cluster bombs in a fiscal 2008 
second supplementary budget to be submitted to the next regular Diet 
session in January. Approximately 7.3 billion yen is included in the 
budgetary request for fiscal 2009. But the government has now 
decided to frontload the cost, concluding that in order to maintain 
the country's defense capabilities, obtaining alternative weapons is 
indispensable. 
 
As alternative weapons, the Defense Ministry has decided to 
introduce precision-guided M-31 rockets for a multiple-launch rocket 
system and laser JDAM kits for fighters. Their maintenance costs 
were included in the fiscal 2009 budgetary request. 
 
10) Japan, U.S., ROK demonstrate solidarity, but gaps remain on how 
to verify North Korea's nuclear declaration 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
December 4, 2008 
 
Negotiators on North Korea's denuclearization -- Foreign Ministry 
Asian and Oceanian Affairs Bureau Director General Akitaka Saiki, 
U.S. Assistant Secretary of State Christopher Hill and South Korea's 
envoy Kim Sook -- held a meeting yesterday in Tokyo. Ahead of the 
next round of the six-party talks slated for Dec. 8, the three 
nuclear envoys banded together, but differences appeared in their 
positions on how to verify North Korea's nuclear declaration. 
 
In the meeting, the three negotiators agreed to aim at pressing the 
North to agree to verify its nuclear disarmament in writing, 
including sampling of nuclear materials. 
 
Although sampling is indispensable for verifying the amount of 
plutonium, Pyongyang has refused to accept it. The agreement reached 
in October between the United States and North Korea is unclear on 
 
TOKYO 00003305  006 OF 008 
 
 
this point. 
 
The Japanese government, therefore, has strongly demanded that a 
deal be put down in writing. The Japanese side appears to have 
reminded the Bush administration not to make an easy concession. 
After the meeting, Hill softly sought to constrain the Japanese 
government, which has insisted on the need for the codification of a 
verification protocol. He said: "North Korea's denuclearization is 
not the only purpose of the six-party-talks. Another purpose is to 
build relations among countries in the region." 
 
South Korea also has called for the codification of a verification 
protocol, but its real intention is to resume Inter-Korean dialogue 
by taking advantage of progress on the six-party talks. 
 
11) South Korean media report on completion by next March of second 
phase of North Korea's denuclearization 
 
NIKKEI (Page 2) (Full) 
December 4, 2008 
 
The chief delegates to the six-party talks of Japan, the United 
States and South Korea yesterday discussed in Tokyo steps to be 
taken at the next round of the six-party talks, which is expected to 
begin in Beijing on Dec. 8. They confirmed a policy course to aim at 
completing by next March the second-phase measures of the 
disablement of nuclear facilities and energy aid for the nuclear 
abolition of North Korea. 
 
They also agreed to let other countries take over Japan's share of 
aid equivalent to 950,000 tons of heavy fuel oil, which Tokyo has 
been refusing to provide due to a lack of progress on the abduction 
issue. These developments have been reported by some South Korean 
media as accounts from an official of its Foreign Affairs and Trade 
Ministry. A senior Japanese Foreign Ministry official has denied 
those developments, saying: "Such specifics were not discussed." 
 
The meeting was held among Foreign Ministry Asian and Oceanian 
Affairs Bureau Director-General Akitaka Saiki, U.S. Assistant 
Secretary of State Christopher Hill, and South Korean Foreign 
Affairs and Trade Ministry Korean Peninsula Peace and Security 
Affairs Special Representative Kim Sook. They also confirmed the 
need to put into writing an effective means to verity the nuclear 
programs declared by the North, including the sampling of its 
nuclear facilities. 
 
12) Upper House panel to take vote on refueling extension bill on 
Dec. 16 
 
ASAHI (Page 4) (Full) 
December 4, 2008 
 
Toshimi Kitazawa, chairman of the House of Councillors' Committee on 
Foreign Affairs and Defense, proposed yesterday in a committee 
meeting taking a vote on a bill amending the new Antiterrorism 
Special Measures Law designed to extend by one year the Maritime 
Self-Defense Force's refueling mission in the Indian Ocean. The 
expectation is that if the ruling and opposition camps can 
coordinate a timetable for intensive deliberations on civilian 
control, which the opposition bloc has called for, the committee 
will put the bill to a vote as early as Dec. 16. 
 
 
TOKYO 00003305  007 OF 008 
 
 
13) 14 base-hosting governors meet with Japanese, U.S. government 
officials, seek to lighten burden 
 
MAINICHI (Page 5) (Full) 
December 4, 2008 
 
The Japanese and U.S. governments held their first three-party 
liaison conference at the Foreign Ministry yesterday with 
representatives from the governments of 14 prefectures that host 
U.S. military bases, including Tokyo and Hokkaido. In the meeting, 
local government representatives asked the Japanese and U.S. 
governments to lessen their prefectures' base-hosting burden. 
Incidents and accidents involving U.S. Forces Japan have been 
discussed in an intergovernmental joint committee of Japan and the 
United States. However, the 14 base-hosting prefectures, represented 
by Kanagawa Gov. Shigefumi Matsuzawa, have asked the Japanese and 
U.S. governments to hold a three-party conference for a periodical 
exchange of views. 
 
In the meeting, Matsuzawa and other participants took up such issues 
as the noise problem of U.S. military bases in Japan and they 
insisted that the planned realignment of U.S. forces in Japan-which 
reached a bilateral agreement in 2006-should make headway in 
accordance with its roadmap. 
 
14) Japan to buy emission rights worth 700 billion yen 
 
MAINICHI (Page 1) (Excerpts) 
December 4, 2008 
 
The total amount of emission rights that the government and industry 
circles will purchase in order to meet Japan's target of reducing 
greenhouse gas emissions promised under the Kyoto Protocol on global 
warming was revealed yesterday. Japan will buy carbon emission 
rights at least 350 million tons worth approximately 700 billion yen 
in international markets. As domestic greenhouse gas emissions have 
been on the increase, if Japan fails to cut its emissions, its costs 
for emissions trading could increase further. 
 
The decision was reported in a joint meeting yesterday of the 
Environment Ministry and the Ministry of Economy, Trade and 
Industry. In the breakdown of the 350 million tons, the Federation 
of Electric Power Companies of Japan will purchase 190 million tons 
and the Japan Iron and Steel Federation 59 million tons. The 
government will also purchase about 100 million tons with tax money. 
In addition, about ten other industries are now considering buying 
emission rights. 
 
15) Agriculture Ministry decides to liberalize lease of farmland to 
boost entrance of corporations 
 
ASAHI (Page 7) (Full) 
December 4, 2008 
 
The Ministry of Agriculture, Forestry and Fisheries (MAFF) on 
December 3 announced a policy of reforming the farmland system 
featuring boosting the advance of corporations into the agricultural 
sector, by liberalizing, in principle, the lease of farmland. Its 
aim is to clarify the separation of the possession of farmland from 
the use of such, by amending the Agricultural Land Law enacted in 
1954, which stipulates that farmers should own the land. MAFF wants 
to submit a bill amending related bills, including the Agricultural 
 
TOKYO 00003305  008 OF 008 
 
 
Land Law, to the regular Diet session next year. MAFF Minister 
Ishiba presented the plan at a meeting of the government's Council 
on Economic and Fiscal Policy held the same day. 
 
When companies advance into the agricultural sector, they either 
lease farmland or set up an agricultural production corporation, 
which can own farmland. However, it is municipalities that decide 
whether to carry out the leasing of farmland. They can also 
designate farmland to be used in the business. Since farmland in 
poor condition has often been offered for such a purpose, business 
circles have been calling for improvement. 
 
The guidelines for establishing an agricultural production 
corporation limit the ceiling of one company's investment ratio to 
10 PERCENT  or lower. MAFF plans to ease this limit. It will work 
out a specific figure later. 
 
Farmers are exempt from paying the inheritance tax if they inherit 
farmland from their parents. MAFF plans to apply this system, even 
if inherited farmlands are leased. It will confer on the matter with 
the Finance Ministry. 
 
SCHIEFFER