VZCZCXRO9408
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0008/01 0050118
ZNR UUUUU ZZH
P 050118Z JAN 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9804
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4029
RUEHFK/AMCONSUL FUKUOKA 1676
RUEHOK/AMCONSUL OSAKA KOBE 5463
RUEHNAG/AMCONSUL NAGOYA 9598
RUEHKSO/AMCONSUL SAPPORO 2238
RUEHBJ/AMEMBASSY BEIJING 7051
RUEHUL/AMEMBASSY SEOUL 3066
RUCNDT/USMISSION USUN NEW YORK 3117

UNCLAS SECTION 01 OF 08 TOKYO 000008 
 
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 1/05/09 
 
Index: 
 
Anti-piracy operation: 
1) MSDF vessel escorting ships off Somalia will crack down on 
pirates under Japanese criminal law, same used by Japan Coast Guard 
for local waters  (Sankei) 
2) Idea floated in Brussels for EU to incorporate MSDF into its 
anti-piracy fleet  (Yomiuri) 
 
3) In telephone call to Palestinian Authority President Abbas, Prime 
Minister Aso promises 900 million yen in humanitarian assistance 
(Nikkei) 
 
4) Japan protests China's violation of bilateral agreement on joint 
development of gas fields in E. China Sea  (Asahi) 
 
5) Japan and the Organization for Security and Co-operation in 
Europe (OSCE) to co-sponsor 56-country policy dialogue  (Nikkei) 
 
6) Survey of 107 major Japanese companies finds 90 PERCENT 
expecting the recession to continue through the year  (Sankei) 
 
7) Ruling camp studying ways to stop the rising price of imported 
beef  (Sankei) 
 
Political agenda: 
8) Regular Diet session convenes today for 150 days, with initial 
clash between two camps over cash-handout issue  (Mainichi) 
9) Gist of Prime Minister Aso's New Year's comments on Lower House 
election, U.S.-Japan relations, collective self-defense, and 
Palestinian situation  (Sankei) 
10) Gist of Democratic Party of Japan President Ozawa's press 
conference on Lower House election, change of government, 
cash-handout issue (Sankei) 
11) Former Administrative Reform Minister Yoshimi Watanabe intends 
to quit the Liberal Democratic Party, angry at the policies of the 
Aso government  (Mainichi) 
12) LDP bigwig Hidenao Nakagawa says time for him to refrain from 
action is over, calls for political realignment  (Asahi) 
 
Articles: 
 
1) MSDF ships operating in waters off Somalia to crack down on 
pirates under same criminal law used by Japan Coast Guard 
 
SANKEI (Page 1) (Excerpt) 
January 3, 2009 
 
As a measure to deal with pirates in the waters off Somalia, Africa, 
the government on Jan. 2 firmed up its policy course of applying the 
authority used by the Japan Coast Guard (JCG) to Maritime 
Self-Defense Force (MSDF) vessels escorting Japanese commercial 
ships.  By applying the provision for overseas crimes of the 
Criminal Code, pirates can be captured, arrested and charged for 
serious crimes, including murder of crewmembers of Japanese 
commercial ships and resisting arrest. The government has begun to 
consider sending JCG personnel to a country neighboring Somalia and 
to set up an airstrip to fly in suspects and a facility for 
processing them. 
 
2) EU thinking of including MSDF vessels into its anti-piracy 
operation off Somalia, but a legal barrier may block the 
 
TOKYO 00000008  002 OF 008 
 
 
implementation of the idea 
 
YOMIURI (Page 2) (Excerpts) 
January 4, 2009 
 
Brussels 
 
It was learned on Jan. 3 that the European Union (EU) is considering 
incorporating MSDF vessels into its fleet deployed to waters off 
Somalia, Africa, for anti-piracy operations. The EU has been carried 
out discussions at the working level among member nations to add 
vessels other than EU ships to its anti-piracy operations off 
Somalia, and Japan has been floated as a likely candidate. 
 
However, there are major constraints to implementing this idea, 
including the limitation of protection by MSDF ships to Japanese 
commercial ships, based on the maritime police action ordinance that 
the government is considering to apply under the Self-Defense Forces 
(SDF) Law. EU ships can protect any vessel, regardless of 
nationality, if it is attacked by pirates. It appears to be 
impossible for the SDF to actually carry out a similar role under 
the current legal provisions. 
 
There is concern, according to a government source, that if Japan is 
not able to fully contribute under the EU command, it would be 
distrust. 
 
3) Prime Minister Aso pledges 900 million yen-scale humanitarian aid 
to Palestinian leader Abbas 
 
NIKKEI (Page 2) (Full) 
January 5, 2009 
 
Prime Minister Taro Aso held a telephone conversation with 
Palestinian leader Mahmoud Abbas for about 15 minutes on Jan. 3 from 
his private residence in Tokyo. Aso urged Abbas to make an effort 
for an early ceasefire in the Gaza Strip, and he revealed his 
intention to extend $10 million (approximately 900 million yen) in 
humanitarian aid for the Gaza Strip where many Palestinians have 
been killed or wounded by Israeli air strikes. Abbas expressed his 
appreciation. 
 
Aso categorically said: "I hope for the realization of an early 
continuous ceasefire, as well as for the resumption of efforts to 
promote the peace process by Israel and Palestinians." Abbas then 
responded: "I will call for an immediate ceasefire through the 
United Nations Security Council. I also want to keep close contact 
with Japan." 
 
4) China continuing exploration work at gas field Kashi in East 
China Sea: Japan files protests, noting such activities are in 
violation of agreement 
 
MAINICHI (Page 2) (Full) 
January 5, 2009 
 
Tokyo and Beijing last June failed to reach agreement on the joint 
development of gas fields known as Kashi in Japan and Tianwaitian in 
China. The issue has been carried over to the next session. Mainichi 
Shimbun has learned that China is continuing to develop the gas 
fields on its own. Tokyo has lodged a protest with Beijing, noting 
unilateral development of the gas fields while the talks are ongoing 
 
TOKYO 00000008  003 OF 008 
 
 
is in violation of the agreement. 
 
Among gas fields that are located near the median line between the 
two countries, the border line as claimed by Japan, Japan and China 
last June agreed to jointly develop Shirakaba (Chunxiao) and Asunaro 
(Longjing) -- both located on the southern side of the median line. 
However, regarding talks on the development of Kashi and Kusunoki 
(Duanqiao) have been carried over to the next session, because China 
insisted on independent development. 
 
A survey by the Air Self-Defense Force has found that China is 
continuing the development of Kashi even after June. The government 
filed a protest against China through a diplomatic channel. The 
Chinese side reportedly rebutted it, insisting that it saw no 
problem in continuing work in the gas fields. One senior Foreign 
Ministry official on January 4 said, "The finding will not affect 
future talks on the two gas fields, which the two countries have 
already agreed to jointly develop." China has as of 2005 made 
considerable preparations for the development of Kashi. 
 
Chinese Foreign Ministry says that China's development activities 
constitute the exercising of its sovereign right 
 
Chinese Foreign Ministry spokesman Qin Gang released a statement on 
the development of Kashi, a natural gas field in the East China Sea, 
which went, "The gas fields are located in waters controlled by 
China that are not under dispute. China's development activities in 
such gas fields constitute the exercising of its sovereign right." 
 
5) Government to hold policy dialogue with OSCE in June 
 
NIKKEI (Page 2) (Slightly abridged) 
January 4, 2009 
 
The government has decided to hold a policy dialogue in Tokyo in 
June with the Organization for Security and Cooperation in Europe 
(OSCE), made up of European countries, the United States and Russia. 
In order to discuss Asian security issues, Tokyo will invite the 
representatives of 56 OSCE member countries. The aim is to find ways 
to cooperate with Europe regarding North Korea's nuclear programs, 
as well as on response to the rapid rise of the Chinese economy. 
 
The policy dialogue is planned to be held in the form of co-hosting 
by Japan and the OSCE for two days on June 10-11. Ambassador-level 
officials are expected to attend the session, assuming that more 
than 50 countries will take part in it. The outlook is that 
ambassadors to Japan will participate in it. Such a Japan-OSCE 
meeting will be held for the first time in five year, the last being 
¶2004. 
 
In the meeting, "Japan will make an effort to have the OSCE 
understand the East Asian security situation and call for 
cooperation" said a senior Foreign Ministry official. The 
expectation is that such issues as China's military build-up, the 
Taiwan Strait situation and democracy in Asia will be discussed. 
 
Since there are many European countries which have diplomatic ties 
with North Korea, the government intends to ask them for cooperation 
in resolving the issue of North Korea's abductions of Japanese 
nationals. 
 
6) Survey of leading companies: 90 PERCENT  say, "Economic recession 
 
TOKYO 00000008  004 OF 008 
 
 
will continue" 
 
SANKEI (Page 1) (Full) 
January 5, 2008 
 
In a survey that Sankei Shimbun conducted on 107 leading companies, 
92 PERCENT  of the respondents expected that the recession affecting 
the domestic economy would continue. The economy not expected to 
recover until 2010 or later, according to 75 PERCENT  of the 
companies surveyed. Most companies cited a recovery of the U.S. 
economy as a prerequisite for the domestic economy to pick up. 
Regarding the outlook for business performances for fiscal 2008, 65 
PERCENT  estimated a drop in current profits. There is concern that 
corporate downsizing and constraints on capital investment will 
accelerate due to poor business results. 
 
Regarding prospects for the domestic economy in fiscal 2009, 65 
PERCENT  replied, "The economy will decline," and 27 PERCENT  said, 
"The economy will worsen gradually." 
 
As to the time when the economy will pick up, the largest number -- 
51 PERCENT  -- thought it would be between January and June in 2010, 
followed by 13 PERCENT  who predicted it would be between July and 
December in 2010. Another 11 PERCENT  stated it would not be until 
¶2011. Concerning when the U.S. economy might pick up -- key to a 
recovery of the domestic economy -- 46 PERCENT  thought it would be 
between January and June in 2010. 
 
Due to poor business results, only 9 PERCENT  of respondents replied 
that they would increase their plans for capital investment in 
fiscal 2009. The number of companies that replied that they would 
cut back on such a plan reached 26 PERCENT . 
 
The largest number -- 28 PERCENT  -- predicted the benchmark Nikkei 
Stock Average at the end of 2009 would be between over 10,000 yen 
and below 11,000 yen. The figure comes to 37 PERCENT , if those that 
cited below 10,000 yen are combined. Few companies thus expect a 
full recovery the stock market in Japan. 
 
7) Ruling parties again looking into bridging bill to prevent hikes 
in price of imported beef 
 
SANKEI (Page 3) (Full) 
January 5, 2008 
 
Assuming a case in which revenue-related bills (time-limit bills) 
attached to the fiscal 2009 budget bill fail to secure Diet approval 
within the current fiscal year in the regular Diet session to be 
convened on January 5, the ruling parties have started looking into 
a bridging bill designed to extend preferential tax measures. 
 
This is because there is fear that should the preferential measures 
expire, prices of imported beef and beer using imported malt will 
rise. The ruling parties want to extend the existing preferential 
measures by one to two months starting on April 1, using a bridging 
bill. 
 
The preferential measures applied to 415 food items will expire at 
the end of March. Regarding imported food items, in particular, it 
is necessary to change tariff rates at talks sponsored by the World 
Trade Organization (WTO), necessitating the government to annually 
renew such rates. 
 
TOKYO 00000008  005 OF 008 
 
 
 
If those preferential measures expire, the prices of imported beef 
and malt will rise. The tariff on imported beef will rise from the 
current 38.5 PERCENT  to 50 PERCENT . A simple calculation shows 
that one package of imported beef costing 600 yen would go up by 69 
yen. 
 
The ruling camp submitted a bridging bill to maintain the 
provisional gas tax rate during the regular Diet session in 2008. 
However, accepting the Democratic Party of Japan's (DPJ) claim that 
such a bill was a "forceful act" that rejected Diet deliberation, it 
retracted the measure, following mediation by the Upper House 
President and the Lower House Speaker. However, with the 
confrontation between the ruling and opposition parties flaring up 
again, the provisional rate expired, causing havoc for a month. 
 
8) Ruling, opposition parties to lock horns over cash benefit plan 
in regular Diet session that opens today 
 
MAINICHI (Page 2) (Abridged slightly) 
January 5, 2009 
 
Kota Takamoto 
 
The 171st regular Diet session that opens today could be a prelude 
to the next Lower House election, with the Lower House members' term 
of office scheduled to expire in September. The government and 
ruling coalition will aim for an early enactment of a second 
supplementary budget for fiscal 2008, the fiscal 2009 budget and 
related bills, while the opposition camp is expected to challenge 
the government on its 2-trillion yen flat-sum cash benefit plan that 
is incorporated in the second extra budget. Meanwhile, former 
Administrative Reform Minister Yoshimi Watanabe of the Liberal 
Democratic Party has expressed his intention to leave the party if 
his calls for a retraction of the cash-benefit plan and other plans 
are ignored. Stormy developments are expected to unfold at the Diet 
which is scheduled to remain in session for 150 days through June 
¶3. 
 
Prime Minister Taro Aso dined at a Tokyo hotel last night with Chief 
Cabinet Secretary Takeo Kawamura, New Komeito Representative Akihiro 
Ota, and other ruling party leaders. Over dinner, Aso sought the 
cooperation of the ruling parties for an early enactment of the 
fiscal 2008 second extra budget and the fiscal 2009 budget, while 
expressing his resolve, saying: "I will take economic recovery 
measures, overcoming any thing that gets in the way. I am determined 
to do my utmost." 
 
Some in the LDP regard the New Komeito-led flat-sum cash handout 
plan as a pork-barrel action. The major opposition Democratic Party 
of Japan plans to introduce to the Diet a plan to eliminate the 
flat-sum handout spending from the second extra budget-related bill. 
If 17 ruling-party members rebel against the budget-related bills, 
it could force the ruling bloc to give up on using a two-thirds 
overriding vote to get the bills pass through the Lower House, 
forcing the Aso administration into a corner. 
 
The Diet session opens today in the presence of the Emperor. 
Minister of Finance and State Minister for Financial Services 
Shoichi Nakagawa will deliver fiscal policy speeches on the second 
extra budget at both chambers of the Diet. Representative of 
political parties will pose questions at a Lower House plenary 
 
TOKYO 00000008  006 OF 008 
 
 
session on Jan. 6 and at an Upper House plenary session on Jan. 7. 
The ruling bloc intends to get the second extra budget to clear the 
Lower House by Jan. 13 and the fiscal 2009 budget by early 
February. 
 
By giving top priority to the enactment of the fiscal 2009 budget 
before the end of the current fiscal year, the government and ruling 
parties have decided to convene the regular Diet session on Jan. 5, 
the earliest date since the Diet Law was revised in 1992. 
Nevertheless, with the Aso cabinet's support ratings having 
plummeted to the 20-percent level and a growing number of LDP 
mid-level and junior members are turning their backs on Prime 
Minister Aso, the ruling bloc now finds it difficult to manage Diet 
affairs. 
 
9) Gist of Prime Minister Aso's New Year press conference 
 
SANKEI (Page 5) (Full) 
January 5, 2009 
 
? Lower House dissolution, general election 
 
Dissolution will be decided by Taro Aso as the prime minister. It is 
important to get the budgets and budget-related bills passed by the 
Diet at an early date. I will not consider dissolving the Lower 
House until then. Even if the Diet reaches a deadlock, I am not 
thinking of dissolving the Lower House through talks (with the 
Democratic Party of Japan), either. 
 
Stabilizing people's livelihoods will be the main campaign issue in 
the next Lower House election. We will be able to take measures to 
jumpstart the economy and improve people's livelihoods in an 
effective and swift manner. I have called for a consumption tax hike 
after the economy picks up because (maintenance) of a mid-level 
social security system definitely requires a mid-level burden. It is 
unacceptable for the government and the Liberal Democratic Party to 
act irresponsibly. 
 
? Japan-U.S. relations, financial crisis 
 
President-elect Barack Obama will be sworn in on Jan. 20 and launch 
his administration. We will make arrangements on when to hold a 
Japan-U.S. summit after the new U.S. administration is launched. As 
a major player, Japan must play a responsible role in the ongoing 
(global) financial crisis. A new international financial order must 
be established. 
 
? Use of the right to collective self-defense 
 
Although there has been no change in the (government's) 
constitutional interpretation that the country is not allowed to 
exercise the right to collective self-defense, there is need for 
discussions. The issue must be discussed based on specific subjects, 
such as anti-piracy measures in waters off Somalia. 
 
? Situation in Palestinian territories 
 
The government has urged both (Israel and the Palestinian Authority) 
to constrain their forces. Reaching a ceasefire in the conflict will 
not be that easy. The deployment of ground troops (by Israel) has 
worsened the situation. I am truly concerned. 
 
 
TOKYO 00000008  007 OF 008 
 
 
10) Gist of DPJ President Ozawa's New Year press conference 
 
SANKEI (Page 5) (Full) 
January 5, 2009 
 
? Lower House election, change of government 
 
The LDP-New Komeito administration has no tools to overcome the 
severe situation since the financial crisis last year. We will 
realize an administration that will place top priority on defending 
the people's livelihoods based on their own perspective. We will 
convince the public that we can achieve that goal. We will make this 
year a great year for the people of Japan and the DPJ. The economic 
situation is expected to become severer toward the end of the 
current fiscal year. I believe public criticism of the government 
and calls for Prime Minister Taro Aso to seek a public mandate 
through an election will grow louder than his intent to maintain his 
administration. 
 
Defending the people's lives and livelihoods is the mission of 
politics. The people no longer need an administration that has 
failed to achieve that goal, that has widened the gap between the 
rich and the poor in the name of globalization, and that has failed 
to take any effective steps to turn around the economy. 
 
? Regular Diet session, fixed-sum cash benefits 
 
We will do our outmost so that our views will be reflected in plans 
for employment and for small businesses to raise operating capital 
as a basic policy course. The 2 trillion yen for the cash handout 
plan can be used more effectively elsewhere. Some 70 PERCENT  of the 
people are opposed to the plan, regarding it as ridiculous. We 
cannot allow the government to implement a plan that seems to be 
trying to make fools of the general public and to waste money ahead 
of the next election. 
 
11) Yoshimi Watanabe likely to quit LDP 
 
MAINICHI (Page 1) (Full) 
January 5, 2009 
 
In a gathering of supporters in Nasukarasuyama City, Tochigi 
Prefecture, Yoshimi Watanabe, a member of the Liberal Democratic 
Party (LDP) and former state minister for administrative reform, 
called for an early dissolution of the House of Representatives, as 
well as for scrapping the flat-sum cash-payout plan that is included 
in the second supplementary budget for fiscal 2008. Watanabe then 
said: "I feel anger from deep in my heart toward the Aso cabinet. If 
such cannot be done, I will leave the LDP." 
 
Watanabe delivered speeches yesterday in the cities of Nasushiobara 
and Nasukarasuyama. In addition to Lower House dissolution and the 
withdrawal of the flat-sum cash-payment plan, he called on Aso to 
set up a crisis management cabinet after the next Lower House 
election, reform the civil servant system, and thoroughly carry out 
reform of independent public administrative corporations. 
 
At his first press conference of the year, Aso expressed his 
intention not to dissolve the Lower House before the Diet passes the 
fiscal 2009 budget. Chances are slim that Aso will accept Watanabe's 
calls. Therefore, Watanabe's remarks are regarded as his declaration 
of quitting the LDP. 
 
TOKYO 00000008  008 OF 008 
 
 
 
After the gathering, Watanabe clearly told reporters: "I'm ready. I 
will stand on my beliefs." Asked about his political activities 
after leaving the LDP, Watanabe said with confidence: "I don't think 
that I will be alone. Regardless of Diet members or not, there are 
those who support my position." He will submit his resignation to 
Secretary General Hiroyuki Hosoda as early as this week and make a 
final decision after ascertaining the party leadership's response. 
 
12) Former LDP Secretary General Nakagawa eager for political 
realignment 
 
ASAHI (Page 2) (Full) 
January 5, 2009 
 
Hidenao Nakagawa, former secretary general of the ruling Liberal 
Democratic Party (LDP), delivered a speech in Kaita Town, Hiroshima 
Prefecture. In it, he underscored his intention to play the central 
role in political realignment that may occur after the next House of 
Representatives election. He stated: 
 
"I believe that my probation period, which had begun after the 
party's defeat in the 2007 House of Councillors election, was over 
at the end of last year. We will have to break the present political 
impasse and move forward to the next stage of the structural reform 
program by creating a new alliance under a new initiative." 
 
 
SCHIEFFER