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UNCLAS SECTION 01 OF 11 TOKYO 000068 
 
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 1/14/09 
 
TOKYO 00000068  001.2 OF 011 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
U.S.-Japan relations: 
4) Secretary of State designate Hillary Clinton at congressional 
confirmation hearing reaffirms: U.S.-Japan alliance is the 
cornerstone of our Asia policy  (Yomiuri) 
5) Former Vice Foreign Minister Yachi picked as special 
representative to strengthen ties with new Obama administration 
(Sankei) 
 
Anti-piracy measures: 
6) Government mulling dispatch of P-3C patrol aircraft to waters off 
Somalia to spot pirates and report information to other countries 
(Sankei) 
7) Government's basic anti-piracy policy is to protect Japanese 
cargo, even if it is on a foreign ship  (Tokyo Shimbun) 
8) Ruling camp's project team approves police action by Maritime 
Self-Defense Force to protect Japanese cargo in pirate-ridden waters 
near Somalia  (Asahi) 
 
Diet affairs: 
9) Lower House after tumultuous session passes second supplementary 
budget with two LDP lawmakers rebelling  (Mainichi) 
 
10) LDP's Kenta Matsunami resigns his parliamentary secretary's post 
after abstaining in protest from vote on second supplementary budget 
 (Nikkei) 
11) Matsunami's sudden resignation from post takes the LDP by 
surprise  (Yomiuri) 
12) Former Administrative Reform Minister Yoshimi Watanabe makes 
good his promise to quit the LDP, leaving with a defiant press 
conference  (Yomiuri) 
13) Yoshimi Watanabe, having quit the LDP, may be aiming to form a 
new party but so far no followers  (Yomiuri) 
14) Magma of resentment against Prime Minister Aso building up in 
the LDP and could erupt as the next election approaches  (Nikkei) 
 
15) Huge number of bankruptcies, 12,681 cases, filed in 2008, 
including record number of first tier companies  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Former Nishimatsu vice president to be charged over 100 million yen 
slush fund in violation of Foreign Exchange and Foreign Trade 
Control Law 
 
Mainichi and Yomiuri: 
Second supplementary budget passes Lower House; Parliamentary 
Secretary Matsunami abstains from voting 
 
Nikkei: 
Toshiba wrapping up talks to buy Fujitsu's hard disk drive 
operations 
 
Sankei: 
 
TOKYO 00000068  002 OF 011 
 
 
Government considering sending P-3Cs to Somalia against piracy 
 
Tokyo Shimbun: 
Tokyo District Public Prosecutors Office special investigation team 
to launch full-fledged investigation into Nishimatsu over slush 
funds 
 
Akahata: 
LDP, New Komeito take forced vote on second supplementary budget 
 
2) EDITORIALS 
 
Asahi: 
(1) Will of the people on cash handout plan is not reaching the 
prime minister 
(2) Supreme Court appointments must be open to the public 
 
Mainichi: 
(1) Cash benefit program passes the Lower House in defiance of 
public opinion 
(2) Obama era: Japanese politics called into question with 
redefinition of Japan-U.S. alliance 
 
Yomiuri: 
(1) Budget deliberations should proceed at a fast pace 
(2) Linear motor bullet-train project 
 
Nikkei: 
(1) Speedy enactment of second supplementary budget requires talks 
between ruling and opposition parties 
(2) Home appliance industry business models must be reformed 
 
Sankei: 
(1) Supplementary budget clears the Lower House: Ruling and 
opposition camps must find breakthrough in deadlocked Diet 
deliberations 
(2) Japan Proton Accelerator Research Complex 
 
Tokyo Shimbun: 
(1) Forced vote taken on supplementary budget in defiance of popular 
will 
(2) Gaza tragedy: Excessive Israeli forces 
 
Akahata: 
(1) Sending SDF to Somalia anti-piracy operations is not a foregone 
conclusion 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, January 13, 2009 
 
NIKKEI (Page 2) (Full) 
January 14, 2009 
 
07:11 
Met Deputy Chief Cabinet Secretary Matsumoto at the Kantei. 
 
08:01 
Attended a meeting of the taskforce to deal with new strains of 
influenza. Attended a cabinet meeting. Later, Met Chief Cabinet 
Secretary Kawamura. 
 
 
TOKYO 00000068  003 OF 011 
 
 
98:37 
Attended a Lower House Budget Committee meeting. 
 
13:16 
Met New Komeito President Ota. 
 
14:02 
Attended a meeting of the Lower House's Fiscal and Monetary 
Committee. 
 
17:01 
Met U.S. Ambassador Schieffer at the Kantei. 
 
18:07 
Attended a Lower House plenary session. 
 
19:26 
Met Kawamura at the Kantei. 
 
20:15 
Dined with his secretaries at a Japanese restaurant in the Hotel 
Okura. 
 
23:25 
Returned to his private residence in Kamiyama-cho. 
 
4) Secretary of State-designate Clinton in confirmation hearing 
calls Japan-U.S. alliance the cornerstone of U.S. policy toward 
Asia 
 
YOMIURI (Page 2) (Full) 
January 14, 2009 
 
Keiichi Honma, Washington 
 
Senator Hillary Clinton, who has been selected to be secretary of 
State by President-elect Barack Obama, stated on Jan. 13 that the 
incoming administration would bid farewell to the Bush 
administration's unilateralism. She made the following remarks in a 
statement before the Senate Foreign Relations Committee during her 
confirmation hearing on Jan. 13: 
 
"The U.S. cannot resolve imminent issues independently, and the 
world cannot resolve these issues without the U.S., either. ... 
Foreign policy should not be based on rigid ideology but must be 
based on the principle of blending ideals and reality." 
 
Clinton also said: "The Japan-U.S. alliance is indispensable to 
maintaining peace and prosperity in the Asia-Pacific region. It is 
the cornerstone of U.S. policy toward Asia." Regarding relations 
with China, Clinton defined them as important, but she took a 
cautious view about deepening relations with that nation, remarking: 
"It depends on what choices China will make in its domestic and 
foreign policies." 
 
In referring to the Iraq war, Clinton articulated: "I am determined 
to end the war in a responsible manner." She added that the U.S. 
instead intends to shift emphasis to Afghanistan. 
 
5) Yachi to become gov't delegate for stronger ties with next U.S. 
administration 
 
 
TOKYO 00000068  004 OF 011 
 
 
SANKEI (Page 2) (Abridged) 
January 14, 2009 
 
Former Administrative Vice Foreign Minister Shotaro Yachi, 65, will 
become a government delegate to represent the Japanese government 
and consult with foreign countries, sources said yesterday. Prime 
Minister Taro Aso wants to establish a strong relationship with U.S. 
President-elect Obama and his administration by appointing Yachi, 
who has wide-ranging channels with the United States, China, and 
South Korea. His appointment will be referred to a cabinet meeting 
on Jan. 20 for approval. 
 
Yachi retired in January last year. He was in the post of 
administrative vice foreign minister when Aso was foreign minister 
in the Abe cabinet. Yachi was most trusted by Aso at the Foreign 
Ministry, according to a government source. When Aso was foreign 
minister, he announced his initiative to build an "arc of freedom 
and prosperity" to back up free nations ranging from Northern Europe 
to Asia and Oceania. Yachi is one of those who proposed the 
initiative. 
 
After his retirement, Yachi taught at Waseda University and Tokyo 
University. Aso asked Yachi to become government delegate, but Yachi 
was reluctant at first, according to another government source. 
However, Yachi accepted the post at Aso's repeated requests. The 
government delegate used to have an office in the Foreign Ministry. 
Yachi, however, will be based at the prime minister's office. 
 
6) Government considering dispatch of P-3C patrol aircraft for 
anti-piracy mission over waters off Somalia, with surveillance 
information transmitted to concerned countries 
 
SANKEI (Top play) (Abridged) 
January 14, 2009 
 
It was learned on Jan. 13 that the government is considering the 
dispatch of the Maritime Self-Defense Force's (MSDF) P-3C (Orion) 
maritime patrol aircraft on an anti-piracy mission to waters off 
Somalia in Africa. The aircraft are expected to be sent to Djibouti, 
where the EU unit deployed for anti-piracy operations off Somalia is 
centered, and from there carry out air surveillance of the moves of 
pirate ships. Since there are restrictions on escort ships deployed 
for maritime police action, such as not being able to protect 
foreign ships, the aim of dispatching patrol planes is to play an 
international cooperative role by providing surveillance information 
gathered by the P-3C aircraft to concerned countries. 
 
The government also yesterday expressed its view at a meeting of the 
ruling camp's project team for anti-piracy measures that foreign 
ships carrying Japanese cargo would be subject to protection by MSDF 
escort vessels under the order for maritime police action. Since 
only 60 PERCENT  of Japanese cargo transported through waters off 
Somalia is carried aboard ships registered as Japanese flag 
carriers, the remaining 40 PERCENT  being aboard foreign ships, the 
government's stance is to expand protection to cover these ships 
under the anti-piracy measure, as well. 
 
It will be necessary to sign a status of forces agreement (SOFA) 
with the country (Djibouti) in order for the dispatched P-3C 
aircraft to use a ground base. For this reason, there is a view that 
an early dispatch may be difficult. 
 
 
TOKYO 00000068  005 OF 011 
 
 
However, as of yesterday, France and other members of the EU unit 
had informed persons connected to the Japanese government their 
outlook that a SOFA could be signed quickly if Japan were added to 
the one that the EU unit has already signed with Djibouti. It should 
be possible to plan for an early dispatch once such preparations as 
training the P-3C crew are done. 
 
The government plans to dispatch an escort ship to waters off 
Somalia as early as March under a maritime police action order. 
However, since Japan could not protect unrelated foreign ships under 
that order, there is deep-seated reluctance to go, with a senior 
official in the Defense Ministry saying, "It is not linked to 
international cooperation." The dispatched P-3C patrol aircraft 
would have the duty of providing information to the Japanese escort 
ship about where pirate ships are deployed. But it would not be a 
violation of the law to provide the obtained information to ships of 
other countries carrying out anti-piracy operations. 
 
7) Japan cargoes also under MSDF's protection in security operations 
against pirates 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
January 14, 2009 
 
The government yesterday firmed up a basic course of action to be 
followed when issuing orders to the Maritime Self-Defense Force for 
maritime security operations against pirates off the eastern African 
coast of Somalia and sending MSDF destroyers. The MSDF is to protect 
ships sailing under the flag of Japan. In addition, the MSDF will 
also protect foreign ships, including those carrying Japanese 
nationals or Japanese cargoes and those chartered by Japanese 
shipping companies. The MSDF will have Japan Coast Guard (JCG) 
sheriffs onboard its destroyers to detain and interrogate pirates. 
 
The government came up with the basic course of action in a meeting 
of the ruling coalition's antipiracy project team yesterday and 
obtained approval. 
 
8) Ruling coalition approves maritime security operations against 
pirates 
 
ASAHI (Page 4) (Abridged) 
January 14, 2009 
 
The ruling coalition of the Liberal Democratic Party and the New 
Komeito held a meeting of its project team yesterday to discuss 
measures to take against pirates in waters off the coast of Somalia. 
In the meeting, the project team approved the government's proposal 
of maritime security operations to be conducted by the Maritime 
Self-Defense Force, which is to be tasked with such activities as 
protecting commercial ships and is to be allowed to use weapons in 
accordance with government-set guidelines. The LDP and the New 
Komeito, based on the next stage of discussions, will start internal 
party procedures. The focus will be on Prime Minister Aso's final 
decision. 
 
The Self-Defense Forces Law stipulates that the purpose of maritime 
security operations is to protect (Japanese) lives or assets. The 
government has therefore indicated that the MSDF is to protect 
Japanese ships, Japanese-chartered ships, and Japanese nationals 
boarding foreign ships. Aso also made a similar statement in his 
Diet reply in October last year. 
 
TOKYO 00000068  006 OF 011 
 
 
 
In the project team meeting, however, the government came up with an 
expanded interpretation of the law's stipulation to cover foreign 
ships carrying Japanese cargoes. Japanese shipping companies charter 
foreign freighters, which are said to carry about 40 PERCENT  of all 
cargoes to and from Japan. In view of this fact, the government 
judged that these cargoes are also Japanese assets. 
 
In connection with the weapons use guidelines or the so-called rules 
of engagement (ROE), the government cited two actual cases that took 
place off the Somalia coast in November last year. One of the two 
cases is a shootout incident in which a British naval vessel 
exchanged fire with a pirate ship and killed two of the ship's 
crewmen believed to be pirates. The other case is that an Indian 
naval vessel sank a Thai trawler that was hijacked by pirates and 
would not halt. The government sees both cases as legitimate 
self-defense or emergency evacuation, indicating that the MSDF is 
also allowed to use weapons in similar situations. 
 
Government-proposed guidelines for maritime security operations 
 
Geographic scope: The government may order the MSDF to conduct 
maritime security operations not only in Japan's territorial waters 
but also in waters off Somalia. 
 
Protection: The MSDF may protect Japanese ships, flag-of-convenience 
ships (including Japanese-owned ships), Japanese nationals boarding 
foreign ships, foreign freighters carrying Japanese cargoes. 
 
Weapons use: The MSDF may use weapons for legitimate self-defense or 
emergency evacuation as the British and Indian navies fought back 
against pirates. 
 
Pirates detained: Japan Coast Guard (JCG) officials onboard MSDF 
vessels are to deal with pirates detained. 
 
Mutual cooperation with other countries: This action is not 
allowable because maritime security operations are intended to 
protect Japanese nationals and assets. 
 
9) Second extra budget clears Lower House: Kenta Matsunami absents 
himself, defying LDP 
 
MAINICHI (Top Play) (Full) 
January 14, 2009 
 
The second fiscal 2008 supplementary budget that incorporates a 2 
trillion yen flat-sum cash handout scheme and related bills on the 
evening of January 13 passed the Lower House's plenary session with 
the backing of the Liberal Democratic Party and the New Komeito. The 
bills then were sent to the Upper House. Members of the Democratic 
Party of Japan (DPJ) and the Social Democratic Party walked out of 
the session when the bills were brought to a vote. Former State 
Minister in charge of Administrative Reform Yoshimi Watanabe (56), a 
fourth-term lawmaker time from the Tochigi Prefecture No. 3 
constituency, who has just quit the LDP, abstained from the voting. 
Kenta Matsunami (37) of the LDP, Cabinet Office parliamentary, a 
second-term lawmaker elected from the Osaka No. 10 Constituency, 
also walked out when voting occurred. The DPJ is determined not to 
attend deliberations in the Upper House for the time being. The Diet 
session from the 14th will likely become even more stormy. 
 
 
TOKYO 00000068  007 OF 011 
 
 
DPJ to boycott Upper House deliberations 
 
Matsunami after the plenary session visited Chief Cabinet Secretary 
Takeo Kawamura at the Kantei and submitted a letter of resignation 
from his position, which was accepted. 
 
Following the adoption of the second supplementary budget at the 
Lower House Budget Committee, the ruling camp on the afternoon of 
the 13th successively approved related bills at the Financial 
Affairs Committee, the Internal Affairs Committee and the Land, 
Infrastructure and Transport Committee and submitted them to the 
Lower House plenary session. The DPJ, the SDF and the People's New 
Party (PNP) did not take part in the vote. The Japanese Communist 
Party voted against the government-sponsored bills at all those 
committees. 
 
Concerning the second extra budget, the focus of attention will 
shift to how long the DPJ will delay deliberations. If the DPJ goes 
too long, the bill will automatically be enacted at 0:00 a.m. on 
February 12, making it possible to take a revote on related bills 
after March 14. 
 
The government and the ruling camp will submit the fiscal 2009 
budget bill and related bills to the Lower House in the hope of 
simultaneously holding deliberations on the second extra budget 
bill. However, the LDP leadership needs to strengthen its guard 
against a possible spread of rebellion. Diet steering will likely 
continue to be harsh. 
 
The ruling parties at Upper House Budget Committee directors' 
meeting on the afternoon of the 13th called for starting 
deliberations on the 14th. However, the meeting ended in failure. 
Chances are that the Upper House Budget Committee will become 
stalled for some time to come due to the DPJ's boycott of 
deliberations. 
 
Goshi Hosono of the DPJ, making a speech opposing the flat-sum cash 
benefit scheme before a roll call at the plenary session, said, 
"Such a program is ultimate populism." Genichiro Sata of the LDP, 
making a speech supporting the scheme, stressed, "Such a scheme is 
in force in the U.S. It is certainly an effective economic stimulus 
measure." 
 
10) LDP's Matsunami resigns as Cabinet Office parliamentary 
secretary 
 
NIKKEI (Full) 
January 14, 2009 
 
Parliamentary Secretary of the Cabinet Office Kenta Matsunami, who 
had walked out of the full session of the House of Representatives 
before a vote on the second supplementary budget for fiscal 2008, 
handed his resignation to Chief Cabinet Secretary Takeo Kawamura and 
it was accepted. Matsunami told the press corps: 
 
"The 2 trillion yen cash-handout program should be revised through 
discussion between the ruling and opposition parties. It is 
important to quickly come up with a revised plan that would please 
the public." 
 
He denied any cooperation with Yoshimi Watanabe. He also said that 
he had no intention to quit the ruling Liberal Democratic Party. 
 
TOKYO 00000068  008 OF 011 
 
 
 
Immediately after abstaining from voting, Matsunami told reporters: 
"Although I am in the post of parliamentary secretary of the Cabinet 
Office, argument on the issue did not come down to our level." He 
indicated in his remarks that he had continued to have a doubt about 
the cash-payment program. He did not confer beforehand with Kawamura 
and Bunmei Ibuki, who heads a faction to which Matsunami belongs to. 
 
 
After his meeting with Matsunami, Kawamura told the press corps: "It 
is extremely regrettable. We were negligent and were unaware of what 
he was thinking." He then met with LDP Secretary General Hiroyuki 
Hosoda to ask him for amicable treatment for Matsunami. 
 
11) Matsunami's abstention from voting surprises senior LDP members 
 
YOMIURI (Page 4) (Full) 
January 14, 2009 
 
Besides Yoshimi Watanabe, a former administrative reform minister 
who has just resigned from the ruling Liberal Democratic Party 
(LDP), Cabinet Office Parliamentary Secretary Kenta Matsunami, an 
LDP lawmaker, abstained from the vote on the second supplementary 
budget for fiscal 2008 and related bills at a plenary session of the 
House of Representatives. Senior LDP officials did not expect 
Matsunami to take this action, which revealed that underlying 
discontent exists in the LDP. 
 
After the full session was over, Matsunami explained the reason for 
his abstention from voting. He told reporters: "The 2 trillion yen 
cash-benefit program should have been discussed between the ruling 
and opposition parties and the 2 trillion yen should be used in a 
way that would please the public." Asked whether he intended to 
leave the LDP, he responded: "I will never quit the party." He then 
revealed that he would vote for the state budget for fiscal 2009. 
 
When asked by reporters at the Prime Minister's Office about the 
relations between his abstention and Watanabe's move, Matsunami 
said: "I'm offended that you think I had sided with him." 
 
LDP Secretary General Hiroyuki Hosoda made this comment on 
Matsunami's abstention from voting: "It is regrettable because I 
thought that no party member would stay away from voting. The Party 
Ethics Committee will consider what punishment should be given to 
him." The reason for Hosoda's quick reference to the treatment of 
Matsunami is because discontent with the second extra budget is 
smoldering in the party. Koichi Kato, former LDP secretary general, 
stated: 
 
"There are many LDP members who voted for the second extra budget in 
consideration of election cooperation between the LDP and New 
Komeito, even though they are unhappy with the cash-payment program. 
The party leadership should have considered measures to revise the 
budget." 
 
Former Chief Cabinet Secretary Yasuhisa Shiozaki told reporters 
about Watanabe's resignation: "It is very regrettable. I think we 
both love our country. So I would like continue to cooperate with 
him as friends." 
 
Taku Yamasaki, former LDP vice president, expressed concern about 
the party's situation, saying: 
 
TOKYO 00000068  009 OF 011 
 
 
 
"Despite Watanabe having voted for a resolution calling for 
dissolving the Lower House, it was generous for the party to accept 
his letter of resignation. I hope this should not become a bad 
practice." 
 
12) Watanabe to form "people's council" 
 
NIKKEI (Full) 
January 14, 2009 
 
Former Administrative Reform Minister Yoshimi Watanabe, who has quit 
the ruling Liberal Democratic Party (LDP), held yesterday a press 
conference in the Diet building. In it, he stated: "The major reason 
for my resignation from the LDP was that under Aso, politics was 
carried out that was rejected by the people. I want to form a 
people's council (kokumin kaigi) with persons of high purpose from 
all over the country." He revealed his intention to launch a 
preparatory meeting as early as before the end of the month. 
 
In the meeting, he intends to unveil the general outline of the 
planned council this week. He is expected to call on people on a 
broad range of areas, including governors, mayors, local assembly 
members, and corporate managers, to join him. He said: "I have no 
intention to ask Diet members to join." He revealed yesterday that 
Osaka Gov. Toru Hashimoto had turned down his request. As such, it 
remains to be seen how many will join his plan. 
 
13) Yoshimi Watanabe quits LDP to aim at forming new party that will 
attract followers, but no sympathizers at present 
 
YOMIURI (Page 4) (Excerpts) 
January 14, 2009 
 
Former State Minister for Administrative Reform Yoshimi Watanabe, 
who has left the Liberal Democratic Party (LDP), will shortly form a 
policy group with the aim of laying the groundwork for the next 
Lower House election. He expects that there will appear 
sympathizers, following a political gridlock permeating the LDP due 
to the sluggish public support ratings for the Aso cabinet. However, 
whether such a move will actually grow is unclear. 
 
Watanabe during a press conference on January 13 underscored his 
plan to stage a national movement along with non-affiliated 
lawmakers and leaders of municipalities, advocating the slogans 
"from under the leadership of bureaucrats to under political 
leadership" and "from centralization to local sovereignty." During a 
TBS television program, he said, "Setting up a new party after a 
national movement is one option." He hinted that in the event many 
more LDP members leave the party, he wanted to make create a 
situation that would lead to a new party. 
 
"The LDP is now like the Titanic. I will become the rescue boat 
going around the sinking ship (to save the passengers)." Likening 
the LDP to Britain's luxury liner that sank in 1912, Watanabe 
revealed the true reason why he had decided to leave the party to an 
LDP lawmaker close to him. As a matter of fact, one Upper House 
member took the view that because of his high-name recognition, 
Watanabe may lure junior lawmakers who are expected to have a 
difficult battle in the next Lower House election. Many LDP members 
support Watanabe's call for reforming the public-servant system, 
including the abolition of a system under which the prime minister 
 
TOKYO 00000068  010 OF 011 
 
 
approves job referral services each government agency provides to 
retired officials. He adheres to this stand presumably motivated by 
the desire to attract followers. 
 
There also remains an observation that Watanabe would join hands 
with the DPJ on such policy targets as reforming the public-servant 
system. DPJ President Ozawa tried to lure Watanabe, telling 
reporters on the 13th in the Diet building: "It appears that Mr. 
Watanabe is harboring resentment in the same way we are. I think we 
can share a political stance." 
 
14) Underlying magma anti-Aso sentiment may erupt with the approach 
of next Lower House election 
 
NIKKEI (Page 2) (Abridged slightly) 
January 14, 2009 
 
In the vote yesterday in the Lower House plenary session on a second 
supplementary budget, two Liberal Democratic Party members defied 
the party line. The two are former Administrative Reform Minister 
Yoshimi Watanabe and Parliamentary Secretary for Economic and Fiscal 
Policy at the Cabinet Office Kenta Matsunami. Matsunami's unexpected 
refusal to join the voting disclosed growing discontent with the 
party leadership. Strong discontent might erupt with the approach of 
the next Lower House election. Prime Minister Taro Aso is likely to 
be forced to continue walking a tightrope. 
 
An LDP lawmaker from the Kansai area, from which Matsunami also 
comes, commented: "A rebellious act in a vote on the cash-handout 
plan would impress Osaka." Matsunami has been playing a role 
assisting Economic and Fiscal Policy Minister Kaoru Yosano. His 
rebellious act has dealt a blow to the prime minister. LDP Secretary 
General Hiroyuki Hosokawa commented about the defiant acts by the 
two: "I had not expected anyone would rebel against the party's 
decision. It is regrettable that one person did not fall in line." 
 
Meanwhile, a junior LDP member close to Watanabe, noted yesterday 
about Watanabe's resignation from the party: "Although his feelings 
are understandable, I feel angry at his act." 
 
Watanabe was able to leave the party because he is not worried about 
his re-election. Given no prospects for collaboration with the main 
opposition Democratic Party of Japan and for launching a new party, 
for many LDP lawmakers, defying the party line could mean the loss 
of official party endorsement and the absence of cooperation from 
the New Komeito. The prevalent view at this point is that Watanabe's 
departure from the party would not directly result in a movement to 
topple the Aso cabinet or to push political realignment. 
 
There are fault lines, however. Mid-level and junior members are 
frustrated with the fact that the Aso cabinet's support ratings are 
plummeting and that DPJ President Ichiro Ozawa is now regarded more 
suitable to become the next prime minister than Aso. 
 
Former Secretary General Tsutomu Takebe, who heads a group called 
New Breeze which mainly consists of first-term Lower House members, 
urged Watanabe yesterday to keep attending the group's meetings, 
even after leaving the party. Takebe said: "Our relationship with 
Mr. Watanabe will not change. We must understand what he thinks." 
 
Also yesterday, junior to mid-level LDP lawmakers launched a 
safety-net study group. Inviting representatives of non-profit 
 
TOKYO 00000068  011 OF 011 
 
 
groups that support the needy, 17 members, including 
bureaucrats-turned lawmakers, discussed measures against the 
termination of temporary contracts. The group's prospectus indicated 
that it has obtained Secretary General Hosoda's informal consent. 
 
Meanwhile, Hidenao Nakagawa and Koichi Kato, who have been keeping 
themselves at arm's length from the prime minister, are looking 
separately for banners for political realignment that could occur 
before or after the next Lower House election. Some mid-level LDP 
members are pressing the prime minister for a policy shift by 
pointing to their possible rebellion as their trump card. There are 
landmines in the party that could upset Prime Minister Aso's 
foothold. 
 
15) Corporate bankruptcies total 12,681 last year, with 11.9113 
trillion yen in total debt 
 
YOMIURI (Page 2) (Full) 
January 14, 2009 
 
Corporate bankruptcies in Japan totaled 12,681 cases in 2008 with 
debt of more than 10 million yen each, up 15.7 PERCENT  over the 
previous year and the largest since 2001, according to the private 
credit research company Teikoku Databank yesterday. Listed 
companies' bankruptcies totaled 34 (including one case after 
delisting), marking the largest number of such cases in the postwar 
period. The total debt of the bankrupt companies also increased 
about 2.2 times more than that in the previous year to 11.9113 
trillion yen. Even compared with those in 2000 and before, the total 
debt is the 7th largest in the postwar period. 
 
The increase in bankruptcies is attributed mainly to the 
deteriorating business environment because of rising prices of raw 
materials, economic recession after the financial crisis, and 
difficulty in capital procurement. Bankruptcies due to bad economic 
conditions totaled 9,992, up 18.3 PERCENT  over the previous year 
and accounting for 78.8 PERCENT  of the total. The bankruptcies in 
2008 went up in all industries over the previous year. In the 
construction industry, 3,446 companies went bankrupt, up 17.3 
PERCENT , and those in the retailing industry numbered 1,950, up 
18.6 PERCENT . In the transport and telecommunications industries, 
as well, 500 companies, up 37 PERCENT , filed for bankruptcy. 
 
The total debt of the Japan unit of failed Lehman Brothers, a 
leading U.S. securities company, was 3.4314 trillion yen, marking it 
the second largest single bankruptcy in the postwar period. As shown 
in this case, many of the failed companies were saddled with a huge 
debt. 
 
SCHIEFFER