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RUCNDT/USMISSION USUN NEW YORK 2831

UNCLAS SECTION 01 OF 09 TOKYO 003339 
 
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 12/09/08 
 
Index: 
 
Diplomatic agenda: 
1) Gulf remains wide in Six-Party Talks with North Korea unwilling 
to cooperate on documenting verification  (Asahi) 
2) Japan, U.S., ROK in trilateral meeting at the director-general 
level agree to cooperate on Africa policy, including environmental 
and energy fields  (Nikkei) 
3) Chinese vessels intrude into Japanese waters; Tokyo protests 
(Nikkei) 
 
4) Government asking for 80 - 100 billion yen allocation in defense 
budget for USFJ realignment expenditures  (Nikkei) 
 
Political agenda: 
5) Bank recapitalization bill to pass the Diet Dec. 12; Regular Diet 
session will open Jan. 5  (Nikkei) 
6) Feeling of impasse in the ruling party LDP, with some talking of 
political realignment  (Mainichi) 
7) Now that Aso cabinet support rate is close to 20 PERCENT , the 
opposition camp is toughening its Diet stance even more, some 
talking of no-confidence motion  (Yomiuri) 
8) Bureaucrats, too, are distancing selves from Aso administration, 
making it more difficult for the prime minister to place his policy 
imprint on the budget  (Yomiuri) 
 
9) Government, ruling camp considering economic stimulus package of 
20 trillion yen over three years, focused on environment, medical 
care  (Yomiuri) 
10) Regional decentralization committee recommends cutting 34,600 
central-government personnel posted locally, scrapping nine 
organizations  (Mainichi) 
 
11) Former Prime Minister Nakasone hospitalized after fall at home 
that breaks shoulder  (Asahi) 
 
Articles: 
 
1) Six-party talks: Gap remains over codifying nuclear verification 
protocol 
 
ASAHI (Page 1) (Full) 
December 9, 2008 
 
Shinji Inada, Jun Okudera, Beijing 
 
A six-party talks delegation heads meeting to discuss North Korea's 
denuclearization began at the Diaoyutai State Guesthouse in Beijing 
on the afternoon of Dec. 8. China, chair of the six-party talks, is 
expected to present on Dec. 9 to the member countries a draft 
agreement specifying verification methods and subjects of the 
nuclear programs the North declared in June. The North has rejected 
a call from Japan, the United States, and South Korea for putting 
the sampling of nuclear-related materials into writing. The talks 
that resumed after a lapse of five months are expected to run into 
difficulties. 
 
According to a six-party talks source, the session is slated to last 
three days but it could be extended. Chances are that this is the 
last six-party meeting for the Bush administration, which will step 
down in January. 
 
 
TOKYO 00003339  002 OF 009 
 
 
According to U.S. chief delegate and Assistant Secretary of State 
Christopher Hill, the members will discuss on the first day: (1) the 
nuclear programs verification protocol, (2) economic and energy aid 
to the North, and (3) the nuclear facilities disablement roadmap. 
Japan's chief envoy and the Foreign Ministry's Asian and Oceanian 
Affairs Bureau Director-General Akitaka Saiki said after the day's 
session: "There is a large gap between North Korea and the other 
five countries over how the programs should be verified." 
 
A South Korean source indicated that a broad agreement has been 
reached to complete by next March the second denuclearization phase 
specifying energy aid in return for the disablement, conditioned on 
codifying the verification protocol. The source also indicated that 
in talks with the South, the North has agreed to transport to 
overseas the unused fuel rods to be used for nuclear reactors in the 
disablement process. 
 
According to a Japan-ROK negotiations source, the North has 
criticized Japan, which has not joined aid to the country due to the 
abduction issue, saying that it does not recognize Japan as a member 
of the talks. At the same time, the North has reportedly agreed to 
receiving 200,000 tons of heavy fuel oil from Australia and other 
non-member countries in place of Japan. 
 
2) Japan, China, South Korea to cooperate on Africa policy: First 
bureau-director-level talks to be held to discuss environment, 
energy conservation 
 
NIKKEI (Page 1) (Full) 
Evening, December 8, 2008 
 
Ken Sato, Beijing 
 
Japan, China and South Korea will cooperate regarding their policies 
toward Africa. They will hold their first policy talks to look into 
a joint assistance project for measures on the environment, energy 
conservation, and the prevention of desertification. Japan has thus 
far frequently competed with China. However, it has changed that 
policy to one of cooperation. Though there is a limit to the amount 
of official development assistance (ODA) funds, the three countries 
will aim to counter European countries and the U.S., which are 
making a rapid approach to African countries with an eye on their 
interests in natural resources. 
 
The three countries will also confirm their policy cooperation at 
the tripartite summit to be held in Fukuoka Prefecture on December 
¶13. Talks on the 12th will be joined by Foreign Ministry bureau 
directors. Deputy Foreign Minister Yoshitaka Akimoto will represent 
Japan. Measures against infectious diseases, such as AIDS, 
agricultural technology and the nurturing of human resources will 
also be on the agenda. 
 
Japan and China have pledged to double assistance to African 
nations. Japan has pointed out problems with China's approach, such 
as its assistance even to countries whose governing systems have 
drawn criticism. However, it has become unable to compete with China 
in terms of boosting the amount of assistance. With more than 40 
PERCENT  of its foreign assistance going to Africa, China is drawing 
fire as a neocolonialist power. It intends to learn from Japan, 
which has been pouring energy also in social assistance, attaching 
importance to recipient countries' self-supporting efforts. South 
Korea, which is lagging behind the two countries in terms of 
 
TOKYO 00003339  003 OF 009 
 
 
assistance to Africa, wants to explore measures to catch up with 
them. 
 
3) Two Chinese ships enter Japanese waters near Senkaku Islets; 
Government files protest 
 
NIKKEI (Page 2) (Abridged slightly) 
December 9, 2008 
 
The patrol boat Kunigami of the 11th Regional Japan Coast Guard 
Headquarters spotted two Chinese survey ships cruising in waters 
some 6 km southeast of Uotsuri Island of the Senkaku Islets in 
Japan's territorial waters at around 8:10 a.m. Dec. 8. The two 
vessels stayed in Japanese waters for over nine hours in defiance of 
the Kunigami's warning and left in the evening. The Japanese 
government was busy filing a protest with China through diplomatic 
channels. 
 
According to the patrol boat, the two vessels were the 1,100 ton 
Haijian No. 46 and the 1,900-ton Haijian No. 51 of the China State 
Oceanic Administration. 
 
Prime Minister Taro Aso last night expressed strong displeasure to 
reporters, saying: "It is quite regrettable, as it was clearly an 
intrusion into Japanese territorial waters." Filing a protest with 
Chinese Ambassador to Japan Cui Tiankai, Administrative Vice Foreign 
Minister Mitoji Yabunaka demanded that the two Chinese vessels leave 
the waters in question. Foreign Ministry Asian and Oceanian Affairs 
Bureau Director-General Akitaka Saiki, who was visiting Beijing for 
the six-party talks, also lodged a protest with his Chinese 
counterpart, Vice Foreign Minister Wu Dawei. 
 
Japan, China and South Korea are scheduled to hold in Japan on Dec. 
13 their first trilateral summit separate from international 
conferences. About the incident that occurred days before the 
landmark event, a high-ranking government official said, "Honestly 
speaking, the incident is incomprehensible." Speculation has spread 
among some government officials that the incident might reflect the 
thinking of Chinese hardliners, such as the military. 
 
With the aim of breaking the impasse in the controversial issue of 
developing gas fields in the East China Sea, Tokyo and Beijing 
reached an agreement in June to jointly develop a gas field in the 
northern area straddling the Japan-China median line. "Discontent is 
simmering in China about what is agreed upon," said a source close 
to Japan-China relations. Working-level talks to finalize specific 
conditions have yet to be set in motion. The latest incident might 
complicate the matter further. 
 
4) Defense Ministry requests 80 billion to 100 billion yen be 
included in fiscal 2009 budget for U.S. force realignment 
 
NIKKEI (Page 2) (Full) 
December 9, 2008 
 
The Defense Ministry has begun coordination with the Finance 
Ministry for incorporating 80 billion to 100 billion yen -- four to 
five times the amount in the current fiscal year -- in the fiscal 
2009 state budget as the cost of the realignment of U.S. forces in 
Japan. The United States has asked Japan for a greater financial 
contribution to the planned relocation of U.S. Marines from Okinawa 
to Guam, which is expected to move into full swing in the next 
 
TOKYO 00003339  004 OF 009 
 
 
fiscal year. 
 
The Guam relocation requires the construction of military housing 
and other buildings starting in fiscal 2009. Coordination is 
underway to earmark about 40 billion yen for that. 
 
The demolition of existing facilities for the relocation of Futenma 
Air Station and the construction of hangers and family housing for 
the relocation of a carrier-based air wing to the Iwakuni base are 
projected to cost several tens of billions of yen. 
 
The 2006 basic economic and fiscal policy guidelines specify that 
the nominal growth rate of defense spending should be held below 
zero. The Defense Ministry is insisting that part of the realignment 
cost should be placed under a separate budget framework. 
 
5) Financial bill to clear Diet on Dec. 12; Next regular Diet 
session to be convened on Jan. 5 
 
MAINICHI (Page 1) (Full) 
December 9, 2008 
 
Liberal Democratic Party (LDP) Upper House Diet Affairs Committee 
Chairman Seiji Suzuki and his Democratic Party of Japan (DPJ) 
counterpart Susumu Yanase yesterday agreed to take a vote in a full 
session on Dec. 12 on a bill revising the Financial Functions 
Strengthening Law to allow the government to inject public funds 
into local financial institutions. The expectation is that a 
DPJ-submitted bill will be approved in the House of Councillors by a 
majority of lawmakers from the opposition parties. The ruling 
coalition, however, will vote it down and pass its own bill with a 
two-thirds vote in the House of Representatives. The government and 
ruling parties then decided to close the current extraordinary 
session on Dec. 25 and convene the next regular session on Jan. 5. 
 
Meanwhile, the DPJ intends to vote down a bill amending the new 
Antiterrorism Special Measures Law to extend Japan's refueling 
mission in the Indian Ocean in a full session of the upper chamber 
before Dec. 20, when the Lower House can take a second vote on the 
bill. Therefore, the outlook is that the new antiterrorism 
legislation will be readopted in the Lower House and it will be 
enacted next week. 
 
6) Sense of impasse spreading in LDP, with momentum for political 
realignment waning 
 
MAINICHI (Page 2) (Full) 
December 9, 2008 
 
The sharp plunge of public support for the Aso cabinet in opinion 
polls conducted by press companies has greatly shocked the 
government and the ruling parties. An executive of the Liberal 
Democratic Party (LDP) irritatingly said: "We have not carried out 
politics based on public support." Although mid-ranking and junior 
party members have criticized Prime Minister Taro Aso, they remain 
unable to find a viable successor. Momentum for political 
realignment by veteran lawmakers is also waning. The LDP remains 
unable to come up with an effective strategy, with an eye on the 
next House of Representatives election. Meanwhile, Aso is trying to 
find ways to shore up his political base, as seen from his seeking a 
meeting this week with former Secretary General Hidenao Nakagawa, 
who has distanced himself from Aso over fiscal and other policies. 
 
TOKYO 00003339  005 OF 009 
 
 
 
"There were good responses during his round of visits to isolated 
islands. I was disappointed at the cabinet support ratings announced 
today." Deputy Secretary General Mikio Hayashi, prior to an LDP 
executive meeting last evening, referred to the prime minister's 
visit to Kyushu over the weekend. In response, Diet Affairs 
Committee Chairman Tadamori Oshima said: "You should not mention 
support ratings." Aso said in the executive meeting: "The 
responsibility for the steep decline in public support totally rests 
with me." 
 
Former State Minister for Administrative Reform Yoshimi Watanabe and 
23 other mid-ranking and junior party members will discuss today 
what approach they should take. A key member of this group, though, 
commented: "It would be rational for the prime minister to take care 
of Diet deliberations, because he compiled the budget." Some junior 
members are moving to form a parliamentary group separate from those 
sharply criticizing the government. As it stands, there is no 
solidarity in the LDP. 
 
The fact that they remain unable to draw up a post-Aso scenario is 
cited as one of the major reasons for the lack of unity in the 
party. They cannot find in the party a post-Aso successor who can 
lead the party to an election win. 
 
In the latest survey by the Mainichi Shimbun, the support rate of 
the Aso cabinet fell 15 points to 21 PERCENT . Asked to choose 
between the Democratic Party of Japan (DPJ) and the LDP, 46 PERCENT 
picked the DPJ, while 29 PERCENT  chose the LDP. If the DPJ wins a 
sole majority in the next Lower House election, momentum for 
political realignment will fade away. Veteran lawmakers eager for 
political realignment, such as Nakagawa, are being pressed to revamp 
their strategy. 
 
7) Opposition stepping up criticism of Prime Minister Aso 
 
YOMIURI (Page 4) (Slightly abridged) 
December 9, 2008 
 
Opposition parties seeking a change in government have strengthened 
criticism of the administration of Prime Minister Taro Aso, whose 
public support ratings have plummeted in the polls. Some members of 
the Democratic Party of Japan (DPJ), the largest opposition party, 
are calling for submitting to the Diet during the current session a 
no-confidence motion against the Aso cabinet and a censure 
resolution against the prime minister. However, other DPJ lawmakers 
are cautious about such an idea, judging that the party should keep 
close tabs on the 'self-destruction of the Aso administration,' 
since the largest opposition party has regarded the next regular 
session to be convened in January as the main battlefield for Diet 
debate. The government is expected to present a second supplementary 
budget for fiscal 2008 to the regular session. 
 
DPJ President Ichiro Ozawa told reporters yesterday in Iwata City, 
Shizuoka Prefecture: 
 
"The figures mean that the public is suggesting (the prime minister) 
quit his job if he can't do anything. I think (dissolution of the 
House of Representatives) could occur early next year." 
 
When asked by a reporter about whether his party would submit to the 
ongoing Diet session a no-confidence motion against the cabinet or a 
 
TOKYO 00003339  006 OF 009 
 
 
censure motion against Aso, Ozawa just replied: "I think the members 
in charge will consider it, but (Aso) will not be able to resist 
public pressure asking him for a vote of confidence." 
 
Tadayoshi Ichida, head of the secretariat of the Japanese Communist 
Party, pointed out at a press conference: "There is no question as 
to the submission of a no-confidence motion against the cabinet and 
prime minister." Social Democratic Party Chairperson Mizuho 
Fukushima stressed in an outdoor speech in Tokyo: "Why don't we ask 
the Aso cabinet to resign?" 
 
There is a hard-line argument in the DPJ that the party should speak 
for the public's voice as stated in opinion polls. Some members have 
called for submitting a no-confidence motion against the cabinet to 
the Lower House and a censure resolution against the prime minister 
to the Upper House. Their aim is that the move will become the 
impetus to attract junior lawmakers in the ruling Liberal Democratic 
Party, who are considering forming a new party, assuming that they 
will not win in the next Lower House election under Aso's 
leadership. Secretary General Yukio Hatoyama yesterday told 
reporters: 
 
"As to the question of whether to submit a no-confidence motion or 
censure resolution, we need to consider how the extraordinary 
session should be proceeded in consideration of the situation in 
which public distrust in the cabinet is growing." 
 
Hatoyama did not deny the possibility of his party presenting such a 
motion to the Diet. 
 
Many in the DPJ, however, are negative about the submission of a 
motion, with one member saying: 
 
"It is difficult for even LDP lawmakers who have stepped up anti-Aso 
movements to vote for a no-confidence motion presented by the 
opposition. If a no-confidence motion is voted down, it will mean 
that the Aso cabinet wins confidence. It could eventually rescue the 
prime minister." 
 
Some DPJ members are concerned about the possibility of being drawn 
into the vortex of political realignment due to turmoil in the LDP. 
A senor member of the People's New Party gave the DPJ a warning: "If 
working on political realignment under the economic slump, the 
public will criticize the opposition." 
 
8) Aso may find it difficult to demonstrate own policy identity on 
budget, with bureaucrats distancing themselves from government 
 
YOMIURI (Page 2) (Full) 
December 9, 2008 
 
The steep drop in public support for the Aso cabinet is expected to 
affect work to compile the fiscal 2009 budget. Prime Minister Aso 
hopes to shore up his administration's political base by 
demonstrating his own policy identity in the budget-compilation 
process, but fierce resistance is expected as he loses his political 
strength. 
 
The focus of attention in the compilation process is on to what 
extent fiscal disbursements will be increased. 
 
In its guidelines for the compilation of the fiscal 2009 budget, the 
 
TOKYO 00003339  007 OF 009 
 
 
government specified that it will flexibly boost government spending 
while maintaining the guideline for ceiling on budgetary requests. 
 
In a liaison meeting of the government and the ruling parties 
yesterday, Aso emphasized the need to maintain a balance, saying: 
"We must follow the guidelines. But it is also necessary to take 
steps to deal with the most abnormal economic situation of the 
century." The emphasis of the need for balance stems from a judgment 
that a significant increase in government spending, deviating from 
the structural reform line that has been continued since the Koizumi 
government, might draw fire from the public. 
 
In the Liberal Democratic Party, however, many members are 
ratcheting up pressure on the government to augment spending. 
 
A senior party member said: "The compilation of the fiscal 2009 
budget is the sole chance for the prime minister to play up his own 
policy imprint prior to the next House of Representatives election. 
He should increase expenditures without thinking about fiscal 
resources." Calls for increasing outlays for public works projects 
also remain strong in the party. It is uncertain whether Aso will be 
able to reject such calls from party members. 
 
The government has so far curbed expected natural increases in 
social security expenses by 220 billion yen a year. Aso has 
indicated that the government would review this policy, but the 
question is where the fiscal resources will come from. 
 
The government and the ruling parties were looking into raising the 
cigarette tax or reducing the rate of the burden that the 
unemployment insurance program places on the national treasury. But 
tobacco farmers, a voting base for the LDP, have raised strong 
objections. Criticism is also erupting of the proposed reduction in 
the rate of the burden shouldered by the government due to the 
deteriorating job market. Under these circumstances, the issue of 
fiscal resources is unlikely to be resolved easily. 
 
The steep plummet of public support for the Aso cabinet is also 
casting a pall over bureaucrats' loyalty to Aso. 
 
A senior Finance Ministry official remarked: "LDP members have begun 
to criticize the government coolly. Frankly speaking, we now find it 
difficult to be close to the Aso administration." A senior official 
of the Education, Science and Technology Ministry stated: "Keeping a 
possible change of government in mind, we have started calling on 
members of the Democratic Party of Japan." 
 
9) Government, ruling camp start mulling economic stimulus measures 
costing 20 trillion yen with focus on environment, medical services 
 
YOMIURI (Page 1) (Full) 
December 9, 2008 
 
The government and the ruling parties on December 8 started looking 
into a new set of economic stimulus measures that will require 
fiscal disbursements worth 15-20 trillion yen over a three-year 
period starting in fiscal 2008. Their plan is to promote the 
creation of a basis for growth of the Japanese economy over the 
medium to long term until it fully recovers, which is expected to 
take three years, according to Prime Minister Aso. Emphasis will be 
given to the environment, distribution, and medical services. 
 
 
TOKYO 00003339  008 OF 009 
 
 
With regard to the environment, the promotion of new forms of 
energy, including fuel cells and energy-saving measures, will be 
promoted. In terms of distribution, projects that will lead to a cut 
in companies' distribution costs, including the improvement of 
Haneda Airport, ports and harbors, as well as the frontloading of 
the construction of highways, will be included. 
 
In order to improve the problem of sick persons being refused by one 
hospital after another, emergency rooms where only basic medical 
care is provided will be built. 
 
While the second package of economic stimulus measures for the 
period from August and beyond focused on emergency measures 
following the financial crisis, the new package will give priority 
to projects that will lead to the expansion of domestic demand and 
people's peace of mind over the medium to long term. 
 
The size of projects has yet to be worked out. Given the fact that 
the additional economic stimulus measures adopted in October cost 5 
trillion yen in terms of fiscal spending and 27 trillion yen in 
terms of project scale, the new set of measures will likely become a 
major one. 
 
Funding will be drawn from an increased second supplementary budget. 
PM Aso is expected to decide on the use of funds in the key issue 
promotion framework in the initial budget for fiscal 2009. Portions 
of those funds will also be used to fund the new package. When it 
adopted a basic policy on the compilation of the fiscal 2009 budget 
on December 3, the government took the position of maintaining the 
budget request guidelines, while making a decisive response in a 
separate framework. 
 
10) Decentralization reform panel recommends consolidating central 
government's local branches involving cutting 34,600 jobs 
 
MAINICHI (Top Play) (Excerpts) 
December 9, 2008 
 
Chairman Uichiro Niwa (Itochu Corporation chairman) of the 
government's Decentralization Reform Promotion Committee on December 
8 submitted a second set of recommendations finalizing revisions to 
the central government's local branches to Prime Minister Taro Aso. 
The report recommends reducing 34,600 jobs or one third of the total 
number of 95,836 (as of the end of March, 2008) at 15 branch offices 
of eight government agencies, by transferring services to local 
governments and downsizing organizations. It also seeks the 
consolidation of nine branch offices, including the Land, 
Infrastructure and Transport Ministry's regional development bureaus 
and the Agriculture, Forestry and Fisheries Ministry's Regional 
Agricultural Administration Office, possibly by three years later. 
 
Gist of revisions to central government's local branches 
 
? Devolution of power over 116 administrative duties to local 
municipalities 
? Cut the number of central government officials working at those 
local branch offices by 34,600 officials, by transferring them to 
local municipalities 
? Set up a new local branch that consolidates regional development 
bureaus and the Regional Agricultural Administration Office possibly 
by three years later. 
? Split the newly established regional government bureau into a 
 
TOKYO 00003339  009 OF 009 
 
 
regional promotion bureau and a regional engineering and 
construction bureau and place them under the jurisdiction of the 
Cabinet Office. 
? Set up a regional promotion committee for local municipalities to 
monitor the regional promotion bureau and the regional engineering 
and construction bureau. 
? Keep telecommunications bureaus and the Regional Civil Aviation 
Bureau in place. 
 
11) Former Prime Minister Nakasone hospitalized 
 
ASAHI (Page 4) (Full) 
December 9, 2008 
 
Former Prime Minister Yasuhiro Nakasone, 90, has been admitted to a 
Tokyo hospital with a broken right arm after falling at his home on 
the night of Dec. 7. According to Nakasone's office, he remains 
conscious and he will be hospitalized for about ten days. 
 
SCHIEFFER