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UNCLAS SECTION 01 OF 12 TOKYO 000090 
 
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 1/16/09 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Anti-piracy measure: 
4) MSDF might be dispatched for anti-piracy action in waters off 
Somalia as early as March (Yomiuri) 
5) Prime Minister Aso trying to rush MSDF dispatch to waters off 
Somalia but faces cautious Defense Ministry, coalition partner New 
Komeito  (Asahi) 
6) Details worked out for escorting Japanese ships through 
pirate-infested waters, with ex-post facto reporting to Diet  (Tokyo 
Shimbun) 
7) Defense Minister, pressed by shipping association, vows to speed 
up dispatch of MSDF for escort duties off Somalia  (Tokyo Shimbun) 
8) Hasty start to MSDF escort mission in pirate waters off Somalia 
has left no time for government to focus on possible new law 
broadening duties  (Yomiuri) 
 
9) Government decides to provide Afghanistan with 14.1 billion yen 
in assistance to improve security  (Asahi) 
 
10) Symposium held on Obama theme: Japan should proactively propose 
suggestions to new U.S. administration  (Tokyo Shimbun) 
 
Political agenda: 
11) Upper House to enter into heated deliberations on 19th on second 
supplementary budget  (Yomiuri) 
12) Democratic Party of Japan planning to target tax hike in next 
attack on Liberal Democratic Party, aiming at attracting LDP rebels 
over to its side  (Nikkei) 
13) Rising objections in the LDP to telling voters their taxes will 
be raised  (Nikkei) 
14) Prime Minister Aso trying to persuade objectors in party to go 
along with his consumption tax-hike policy line  (Yomiuri) 
15) Finance Ministry's advisory council wants the cash-handout plan 
removed from the supplementary budget, doubting its economic effect 
(Asahi) 
16) Scandal involving close aide deals another blow to the ailing 
Aso administration  (Tokyo Shimbun) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Agents swindle commissions in 10,000 life insurance contracts with 
corporate customers 
 
Mainichi: 
Mainichi poll: 80 PERCENT  of Hanshin quake survivors dissatisfied 
with public assistance 
 
Yomiuri: 
Nishimatsu Construction president crafted shady political donation 
scheme 
 
Nikkei: 
Nissan to move production of key subcompact to Thailand 
 
 
TOKYO 00000090  002 OF 012 
 
 
Sankei: 
China urges Japan to eliminate Tiananmen incident in joint history 
study 
 
Tokyo Shimbun: 
Rearrested Nishimatsu executive tell investigators that he reported 
president on slush funds 
 
Akahata: 
Prime minister, finance minister confirm plan to specify consumption 
tax hike in budget-related bills 
 
2) EDITORIALS 
 
Asahi: 
(1) Spring labor-management wage negotiations start: Speedy, deep 
discussion on employment essential 
(2) Slush funds must be eliminated form general contractor industry 
 
Mainichi: 
(1) Work-sharing: Protection of non-permanent workers requires 
emergency measures 
(2) Obama era: Japan's standpoint and wishes must be respected 
 
Yomiuri: 
(1) Time for management, labor to work together 
(2) Reduce disasters in dense residential areas 
 
Nikkei: 
(1) Maintenance of employment, wages takes efforts 
(2) Review of rice acreage reduction policy inevitable 
 
Sankei: 
(1) Cancellation of Kampo no Yado inns transfer deal requires 
rational reason 
(2) How Nishimatsu used slush funds must be uncovered 
 
Tokyo Shimbun: 
(1) Labor-management wage negotiations at critical times 
(2) Resumption of operation of Monju fast-breeder reactor postponed 
 
Akahata: 
(1) Kita-kyushu City Assembly election: Vote for party to protest 
employment and people's livelihoods 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, January 15 
 
NIKKEI (Page 2) (Full) 
January 16, 2009 
 
09:00 
Met with Land, Infrastructure, Transport Minister Kaneko and Senior 
Vice Transport Minister Kano at The Prince Park Tower in Shiba-koen. 
Attended "meeting of ministers on environment, energy on 
transportation areas." 
 
10:56 
Met at Kantei with Finance Minister Nakagawa, Vice Finance Minister 
Sugimoto, Deputy Vice Minister Katsu, Budget Bureau Director General 
Tango and Tax Bureau Director General Kato. 
 
TOKYO 00000090  003 OF 012 
 
 
 
13:08 
LDP Kagawa Prefectural Assembly Chairman Shirai, followed by 
European Commission Vice President Tayani. 
 
14:15 
Met participants in "Ship of World Youth." 
 
15:03 
Met national track drivers contest winner Ito and others. Met later 
with Hokkaido Gov. Takahashi, attended by former Chief Cabinet 
Secretary Machimura and Senor Vice Foreign Minister Hashimoto. 
 
15:41 
Met with Economic and Fiscal Policy Minister Yosano, Assistant 
Deputy Chief Cabinet Secretary Fukuda and Cabinet Office Director 
General Yamasaki. 
 
16:29 
Met with Chief Cabinet Secretary Kawamura, followed by Cabinet 
Intelligence Director Mitani. 
 
18:51 
Held summit with Ireland Prime Minister Cowen. 
 
19:36 
Hosted dinner party for Cowen. 
 
21:13 
Met with secretary at Japanese restaurant Yamazato at Okura Hotel. 
 
22.19 
Returned to his private residence in Kamiyama-cho. 
 
4) Government, ruling bloc plan to send MSDF to Somalia possibly in 
March under maritime police action clause 
 
YOMIURI (Page 1) (Excerpts) 
January 16, 2009 
 
The government and the ruling parties decided yesterday to dispatch 
Maritime Self-Defense Force destroyers to fight piracy in waters off 
Somalia, Africa, as early as March by invoking Article 82 on 
maritime police action of the Self-Defense Forces Law. Prime 
Minister Taro Aso is expected to make a final decision before the 
end of the month and Defense Minister Yasukazu Hamada is likely to 
issue an order to start preparations for the dispatch. Two 
destroyers are likely to participate in the mission. They will start 
escorting Japan-related vessels in waters off Somalia, including the 
Gulf of Aden, as early as the end of March. 
 
The government has already started considering establishing a new 
law tentatively called the anti-piracy punishment law to enable the 
SDF to engage in anti-piracy missions in various parts of the world. 
But the government decided to use the existing law to dispatch MSDF 
vessels solely for the mission off Somalia in an effort to deal with 
increasing piracy in the area. 
 
The ruling coalition of the Liberal Democratic Party and New Komeito 
has been discussing measures in their anti-piracy project team, 
which was established on Jan. 9. Though the New Komeito was 
initially cautious about dispatching the MSDF by invoking the 
 
TOKYO 00000090  004 OF 012 
 
 
clause, it began showing understanding. The ruling coalition plans 
to come up with a joint opinion as early as next week seeing an 
official announcement of maritime police actions. 
 
After receiving the defense minister's order to start preparations 
for the dispatch, the MSDF would spend about one month drawing up 
guidelines to deal with various situations, as well as conducting 
defense training and servicing its equipment. The cabinet would then 
approve maritime police mission, followed by the defense minister's 
order dispatching an MSDF unit for the anti-piracy mission. It is 
expected to take about 20 days for the MSDF vessels to reach waters 
off Somalia. 
 
5) Aso in a hurry to send MSDF vessels against pirates; Defense 
Ministry, New Komeito still cautious 
 
ASAHI (Page 4) (Full) 
January 16, 2009 
 
The government and the ruling parties are now in the final stage of 
coordination to expedite measures against pirates in waters off 
Somalia. The government plans to send Maritime Self-Defense Force 
vessels for maritime security operations under the Self-Defense 
Forces Law. Meanwhile, the Defense Ministry and the New Komeito, the 
ruling Liberal Democratic Party's coalition partner, remain 
reluctant about the idea of sending MSDF vessels under the current 
law. Chief Cabinet Secretary Kawamura and the LDP's defense policy 
clique are trying to persuade them in response to Prime Minister 
Aso's direction. In the case of maritime security operations, 
however, the MSDF will have to act under such constrains as the 
government-set guidelines to use weapons. There are also arguments 
calling for creating a new law in order for the government to send 
MSDF vessels. 
 
The ruling coalition's antipiracy project team met yesterday, and 
the project team basically concurred there on a government-proposed 
action plan for maritime security operations with the exception of 
the guidelines for weapons use. When it comes to the Diet's role, 
the project team suggested the need for the government to report a 
masterplan to the Diet after adopting it in a cabinet meeting. The 
project team is expected to reach a conclusion on Jan. 20. 
 
Aso is the one who is most positive about sending the MSDF. There is 
something ambiguous about the weapons use guidelines-or the 
so-called rules of engagement (ROE)-for maritime security 
operations. Still, he is not concerned about it, saying, "Do you 
know any mugger who will try to attack someone in the Self-Defense 
Forces?" He meant to say the presence of an MSDF destroyer is an 
effective deterrence and it will be possible to avoid using 
weapons. 
 
The Foreign Ministry shores up Aso. Late last year, China decided to 
send naval vessels to waters off the Somalia coast. At that time, a 
senior official of the Foreign Ministry suggested Aso send MSDF 
vessels at an early date. Aso is scheduled to attend a financial 
summit in April. Ahead of that event, the Foreign Ministry is 
exploring an opportunity for Aso to meet with U.S. President-elect 
Obama for the first time, thereby expecting that Japan can make an 
appeal on its international contributions. 
 
Meanwhile, the Defense Ministry and the New Komeito remain 
cautious. 
 
TOKYO 00000090  005 OF 012 
 
 
 
One senior official of the Defense Ministry raised a question: "Can 
we send the MSDF out without the Diet's engagement, without 
geographical constraints, and even without a time limit?" The 
Defense Ministry is concerned that a new law may not be enacted and 
that the MSDF's maritime security operations may continue 
semipermanently. Another senior official of the Defense Ministry is 
worried about public opinion, saying someone in the MSDF may be 
killed or the MSDF may kill a pirate or a civilian. The New Komeito 
has been cautious about sending the Self-Defense Forces overseas. 
This time as well, the party will assume a wait-and-see attitude. 
"We can't say 'yes' unless we work it out in detail," a party 
executive said. 
 
6) MSDF to convoy ships against pirates: gov't plan 
 
TOKYO SHIMBUN (Page 2) (Full) 
January 16, 2009 
 
The government decided yesterday to have Maritime Self-Defense Force 
destroyers escort Japanese ships against pirates in waters off the 
eastern African coast of Somalia. In addition, the government has 
also confirmed that it would report a basic course of action for 
MSDF activities there to the Diet after adopting it in a cabinet 
meeting. 
 
The government came up with the antipiracy action plan to the ruling 
coalition's project team in its meeting yesterday and obtained 
approval. 
 
Various countries have sent fleets to waters off Somalia for 
escorting. In addition, their naval vessels have been patrolling 
specific areas or escorting ships contracted with the United Nations 
World Food Program (WFP) to transport humanitarian relief supplies. 
 
Meanwhile, the government has forgone engaging the MSDF in other 
naval activities because there may be ships that cannot be under the 
MSDF's protection in its maritime security operations to be 
conducted under the Self-Defense Forces Law. Escorted ships have 
never been attacked by pirates, and this is also a factor for that 
decision. 
 
Diet reporting is not legally mandatory, but the government made a 
report to the Diet when the government issued its first order to the 
MSDF for maritime security operations. The government took this fact 
into consideration as well. 
 
7) Gov't in a hurry to study antipiracy measures for shipowners: 
Hamada 
 
TOKYO SHIMBUN (Page 2) (Full) 
January 16, 2009 
 
Hiroyuki Maekawa, chairman of the Japanese Shipowners' Association 
(JSA) and president of Kawasaki Kisen Kaisha, Ltd., and other JSA 
executives called on Defense Minister Yasukazu Hamada yesterday at 
the Defense Ministry and made a request for measures against pirates 
in waters off Somalia. "We want the government to do whatever it can 
under the current law," Maekawa said. He added, "We also want every 
possible measure taken immediately, including sending Maritime 
Self-Defense Force vessels." 
 
 
TOKYO 00000090  006 OF 012 
 
 
"I am well aware of the situation," Hamada said. "But," he added, 
"we have to work it out the details for sending them, so we're now 
hurriedly studying measures." 
 
8) MSDF likely to be dispatched to waters off Somalia for 
anti-piracy operations before new law is enacted 
 
YOMIURI (Page 4) (Abridged slightly) 
January 16, 2009 
 
The possibility has become strong that the government will dispatch 
the Maritime Self-Defense Force to waters off Somalia, Africa, to 
conduct anti-piracy operations by invoking the Article 82 provision 
on maritime police operations under the Self-Defense Forces Law. 
Although there are still cautious views in the government and the 
ruling camp regarding weapons-use standards, the government has been 
pressed for the decision due to strong pressure from the business 
community that is alarmed about piracy. 
 
There is thinking in the Defense Ministry that problems could be 
raised, given the many restrictions imposed on maritime police 
actions. 
 
Defense Minister Yasukazu Hamada yesterday told Japan Ship-owners' 
Association President Hiroyuki Maekawa, who had visited him at the 
ministry in order to request escort service by MSDF vessels: "We are 
well aware of the circumstances, but in order to dispatch (the SDF), 
various matters must first be finalized." 
 
In the event the maritime police operations clause is invoked, the 
law governing police performing their duties would be applied to the 
use of weapons by MSDF members. This would allow them to fire shots 
at pirates to inflict harm strictly in cases of legitimate 
self-defense and emergency evacuations. 
 
The ruling bloc's anti-piracy project team held a meeting yesterday 
in which the Defense Ministry disseminated data noting that it is 
difficult to make a decision on firing shots to inflict harm in such 
cases as pirates continuing to approach a commercial vessel, despite 
warning shots, and when a pirates' attack occurred off in the 
distance. 
 
Those problems would be resolved with the establishment of a new 
law. Defense Minister Hamada underlined the need for new legislation 
during his meeting on Jan. 14 with Chief Cabinet Secretary Takeo 
Kawamura and Foreign Minister Hirofumi Nakasone. 
 
A Liberal Democratic Party lawmaker also expressed concern, saying: 
"We can get the Democratic Party of Japan involved in the matter 
under a new law. But if the dispatch is carried out under existing 
legislation, the ruling parties might end up bearing the brunt of 
criticism in the event problems occurred." 
 
China has already dispatched its naval vessels to waters off 
Somalia, and South Korea is expected to follow suit shortly. A 
senior Foreign Ministry official expressed frustration with Japan, 
which has yet to take any action. A senior LDP lawmaker, too, said 
apprehensively: "If a Japanese vessel is taken over by pirates 
before the government does anything, the cabinet would collapse." 
Chances are growing that the MSDF will be dispatched before all 
questions are resolved. 
 
 
TOKYO 00000090  007 OF 012 
 
 
9) Government to extend assistance worth 14.1 billion yen to 
Afghanistan 
 
ASAHI (Page 4) (Full) 
January 16, 2009 
 
The government has decided to extend approximately 14.1 billion yen 
in assistance for the reconstruction of Afghanistan to be used for 
salaries paid to policemen engaging in activities to secure public 
order. It also plans to bear the cost of police vehicles. It will 
work out a specific sum, based on the Afghan government's request. 
According to the Foreign Ministry, there are about 800,000 policemen 
in Afghanistan as of April last year. There have been many cases in 
which the Afghan government fell behind in its payment of salaries 
to policemen. The Japanese government has decided to extend 
assistance because Afghanistan needs to reinforce the number of 
policemen in preparation for the presidential election this year. 
 
10) In symposium, Japan urged to proactively make proposals to Obama 
administration 
 
TOKYO SHIMBUN (Page 1) (Slightly abridged) 
January 16, 2009 
 
Prior to U.S. President-elect Barack Obama taking the oath of office 
next week to become the President of the United States, the Tokyo 
Shimbun (co-sponsored by Toyota Motor Co. and Toshiba Solutions Co.) 
yesterday held a symposium titled "How the World Will Change under 
an Obama-led America," inviting experts on Japan-U.S. relations, 
including Columbia University Prof. Gerald Curtis. The symposium was 
held at the Japan Business Federation Hall in Chiyoda Ward, Tokyo. 
 
Following a speech by Chunichi Shimbun President Bungo Usui, Curtis 
delivered a keynote speech, in which he pointed out: "All eyes are 
now focused on how (the next U.S. president) will negotiate with 
Congress in order to implement his economic policy." He also stated 
that rather than be concerned about changes in policy toward Japan 
by the new U.S. administration, "It is time for Japan to proactively 
make proposals as part of the international community." 
 
Former Administrative Vice Foreign Minister Shotaro Yachi and 
Doshisha University Prof. Hama also participated in the panel 
discussion. 
 
11) Upper House to enter into deliberations on second supplementary 
budget on January 19, both camps agree 
 
YOMIURI (Page 2) (Full) 
January 16, 2009 
 
The chairs of the Upper House Diet affairs committees of the Liberal 
Democratic Party (LDP) and the Democratic Party of Japan (DPJ) met 
in the Diet yesterday and agreed to start deliberations in the House 
of Councilors on the fiscal 2008 second supplementary budget that 
contains a 2-trillion yen scale fixed-sum cash payment program and 
to adopt at the same time in the plenary session three related 
bills. The ruling camp would like to have the budget adopted by the 
Upper House full session on Jan. 23 and enacted the same day, but 
objections to this timetable have arisen from the opposition camp. 
 
DPJ Upper House Diet Affairs Committee Chairman Susumu Yanase after 
the meeting told reporters, "We agreed to adopt the supplementary 
 
TOKYO 00000090  008 OF 012 
 
 
budget bill and the related bills as a set." He indicated that there 
was a possibility of the bills being passed on the 23rd. However, 
President Ozawa, Vice President Kan, and Secretary General Hatoyama 
met in the city last evening and agreed on the view, "We are still 
not in a situation yet for setting a date for their passage." With 
the Upper House under the control of the opposition camp, the 
outlook is for adoption of that camp's bill revising the 
supplementary budget and a related bill removing from each the 
cash-handout portion. The bills would then be sent back to the Lower 
House. 
 
In response, the second supplementary budget bill would be passed as 
originally written under a provision in Article 60 of the 
Constitution by joint consultation of the two chambers. The Upper 
House revision of the related bill would be restored to original by 
an override vote of two-thirds of the Lower House under a provision 
in Article 59 of the Constitution. 
 
The ruling parties, once the related bills are disposed of, plan to 
have four policy speeches by the government in both houses on the 
26th, and to then enter into deliberations on fiscal 2009 budget. 
 
12) DPJ to next attack ruling camp on planned consumption tax hike, 
aiming to lure rebels to their side 
 
NIKKEI (Page 2) (Excerpts) 
January 16, 2009 
 
The Democratic Party of Japan (DPJ) yesterday started looking into a 
plan in which if the government included in a bill related to 
taxation reform for fiscal 2009 an additional clause authorizing a 
raise in the consumption tax -- Prime Minister Aso's policy decision 
-- the party would submit a bill that would remove the clause. 
Focusing on strong objections in Liberal Democratic Party (LDP) to a 
consumption tax hike, the DPJ is aiming to encourage more ruling 
party members to vote against the bill in the House of 
Representatives and drive the government of Prime Minister Taro Aso 
into a corner. The DPJ also plans to study the possibility of 
submitting a bill amending the government's bill to free up road 
revenues, given that some LDP members have also criticized them as 
insufficient. 
 
In a meeting with his LDP counterpart Seiji Suzuki yesterday, Upper 
House Diet Affairs Committee Chairman Susumu Yanase of the DPJ 
agreed to start deliberations on the fiscal 2008 second extra budget 
bill in the House of Councillors on Jan. 19. After the meeting, 
Suzuki told reporters: "We agreed on a plan to vote the extra budget 
bill and related bills in a plenary session on the 23rd." Yanase 
also acknowledged the plan. 
 
But DPJ Diet Affairs Committee Chairman Kenji Yamaoka, after 
confirming views of senior Upper House members, said that the party 
would not agree to take a vote. President Ichiro Ozawa met with 
Deputy President Naoto Kan and Secretary General Yukio Hatoyama in 
Tokyo last night and told them: "We have not yet reached the stage 
of taking a vote." Party executive members have decided to shortly 
discuss the matter again, but a senior member pointed out a lack of 
communications between members of both houses." 
 
Fearing that a protracted boycott by the DPJ of deliberations on the 
second supplementary budget could incur public criticism of the 
party, many party members take the view that taking a vote on the 
 
TOKYO 00000090  009 OF 012 
 
 
23rd would be unavoidable. With regard to a special measures bill on 
the government's cash handout scheme, as well, the dominant view in 
the DPJ is that it would be difficult to prevent the bill from being 
enacted within this fiscal year, seeing only a few number of LDP 
members voted against it. While continuing to grill the ruling camp 
over employment and other issues in deliberations on the second 
extra budget bill in the Upper House, the DPJ will begin to shift 
the focus of its attack to the fiscal 2009 budget bill. 
 
Chairman Azuma Koshiishi of the DPJ's caucus in the Upper House said 
in a press conference yesterday: "Confusion has been caused over a 
consumption tax hike in the LDP." Kan also said that the DPJ and LDP 
members raising objections to the tax-hike plan "share the view that 
preparing only a tax hike plan is improper." 
 
13) LDP members against a consumption tax hike 
 
NIKKEI (Page 2) (Full) 
January 16, 2009 
 
In the Liberal Democratic Party, various views were voiced yesterday 
over the question of whether to include the policy of raising the 
consumption tax in fiscal 2011 in a supplementary provision of a 
bill related to taxation reform. Some members voiced opposition to 
the tax-hike policy, fearing its negative effect on the next House 
of Representatives election, while the leadership tried to calm down 
the situation by mobilizing senior members of the party's Tax System 
Research Commission. 
 
Speaking before reporters yesterday, former Secretary General 
Hidenao Nakagawa, a major opponent to the tax hike policy, renewed 
his call for changing the policy. He said: "I expect Prime Minister 
Taro Aso will make a bold decision for the sake of the people. 
Making the decision is the demonstration of his leadership, and that 
does not mean showing an inconsistent stance." 
 
In a meeting of the Machimura faction, in which Nakagawa, Nobutaka 
Machimura and Shuzen Tanigawa serve as representatives, Tanigawa 
made this remark: "There is no need to write down what we don't have 
to say. We should prepare ourselves to pretend not to notice matters 
that would work negatively to our election campaign." 
 
Concerned about growing criticism in the party, the LDP executive 
called in senior members of the tax panel who were involved in the 
tax-reform discussion late last year and had Hakuo Yanagisawa, 
Fukushiro Nukaga and other members participated in sectional 
meetings to seek understanding of the tax-hike plan from those 
raising objections to the plan. 
 
Each faction leader also tried to strengthen unity. In a meeting of 
his faction, Makoto Koga said: "Our party should play our role 
unanimously," and Bunmei Ibuki also remarked in a meeting of his 
party: "The disagreement in opinion between the party and the 
government must not be shown outside the party." 
 
Meanwhile, Prime Minister Aso told reporters last night: "(The 
tax-hike policy) has already been approved. That is a conflict in 
the party but there is no dispute in the Prime Minister's Office." 
 
14) Specifying the timing for increase in consumption tax: Prime 
minister to try to persuade party members with dissenting views 
 
 
TOKYO 00000090  010 OF 012 
 
 
YOMIURI (Page 4) (Full) 
January 16, 2009 
 
Prime Minister Taro Aso intends to specify in a clause attached to 
bills related to amendment of the tax code that there will be a hike 
in the consumption tax in fiscal 2011. However, some Liberal 
Democratic Party (LDP) members are opposed to the plan. The prime 
minister himself on January 15 tried to persuade such members. 
 
On the morning of the 15th, he telephoned heavyweights of various 
factions in the party, including former Chief Cabinet Secretary 
Nobutaka Machimura, and sought their understanding by explaining his 
policy. Koki Chuma, chairman of the Aso faction, at the order of Aso 
visited senior officials of various factions and asked for their 
cooperation, saying: "The prime minister is firmly resolved. I would 
appreciate your understanding and cooperation." 
 
The prime minister then called Finance Minister Nakagawa to the 
Kantei and confirmed his policy of specifying the hike in a clause 
attached to bills related to amendment of the tax code. He 
apparently took a preemptive approach, viewing that if many members 
voice their objections to his policy at plenary meetings of various 
factions to be held at noon, confusion would grow. 
 
As a result, a situation in which many faction members would voice 
views opposing his policy was avoided. Masahiko Koumura, chairman of 
the Koumura faction, expressed his support for the prime minister's 
policy, saying, "Constraining discussions of the consumption tax 
issue would not have a good impact on consumption." 
 
Former Secretary General Hidenao Nakagawa at a plenary meeting of 
the Machimura faction expressed his discontent, saying, "Is the 
prime minister's policy appropriate under this economic situation?" 
Machimura underscored immediately after he made that comment, "If 
the prime minister retracts his policy, people would say that he has 
changed his stance, producing a negative impact in political terms." 
Confrontation in the views of two leaders of the Machimura faction 
thus surfaced. 
 
The Group of Voluntary Lawmakers Who Seek Immediate Realization of 
Policies joined by mid-ranking and junior lawmakers, including 
former Chief Cabinet Secretary Yasuhisa Shiozaki, held a meeting on 
the evening of the 15th. Participants decided to continue to urge 
the prime minister to reconsider his sales tax hike policy. They 
also confirmed a policy of proposing to the prime minister such 
reform proposals as a 40 PERCENT  cut in the number of lawmakers. In 
the meantime, coordination is now under way in the party through the 
mediation of former Prime Minister Abe and Machimura for adopting 
more indirect wording to be included in the clause, such as 
"creating a framework so that the consumption tax can be raised in 
fiscal 2011 or later." 
 
15) Fiscal System Council urges retraction of cash-handout scheme 
 
ASAHI (Page 5) (Full) 
January 16, 2009 
 
Participants in a meeting of the Fiscal System Council, an advisory 
panel reporting to the finance minister, on January 15 agreed in 
general outline to call on the government to retract its 
cash-handout scheme totaling 2 trillion yen which is now under 
deliberation in the current Diet session The panel will urge the 
 
TOKYO 00000090  011 OF 012 
 
 
ministry to take a second look at the use of the fund. The panel 
will shortly convey its opinion to Finance Minister Nakagawa. It is 
unusual for any advisory panel to criticize a policy adopted by the 
government. 
 
The panel also agreed elect for a third term Taisho Nishimuro to the 
chairman's position. Participants then discussed the fiscal 2008 
second supplementary budget bill and the fiscal 2009 budget bill. 
Meeting the press after the meeting, Chairman Nishimuro revealed 
that many panel members criticized the flat-sum cash handout scheme 
incorporated in the fiscal 2008 supplementary budget. One member 
noted: "What should be corrected should be corrected. If the 
government comes up with proposals like this one after another, the 
state's finances would collapse." Another member said, "It is better 
to use the fund for something really useful (like stimulating the 
economy.)" 
 
Nishimuro said: "If Diet deliberations on the budget become stalled, 
it would have a major impact on the economy. We believe it is 
necessary for the ruling and opposition parties to pursue 
substantial discussion on the 2 trillion yen package." 
 
16) Scope column: Kantei confident about drawing curtain on aide's 
scandal 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
January 16, 2009 
 
Allegations against Deputy Chief Cabinet Secretary Yoshitaka 
Konoike, a close aide to Prime Minister Aso, for having an affair 
with a woman hit the Aso administration directly yesterday. Konoike, 
however, denied a weekly magazine article that he allegedly let his 
female friend stay at his lodging in the parliamentarians' compound. 
He also turned down a demand from the opposition that he quit his 
current post as deputy chief cabinet secretary. Although the Prime 
Minister's Official Residence (Kantei) appears to be confident about 
bringing the curtain down on the alleged scandal, there exists the 
possibility that Konoike may have to consider whether he should 
resign or stay on, depending on how the media and the opposition 
camp pursue him. 
 
Last night, Konoike insisted on his innocence to reporters at the 
Kantei, saying: "The (woman) is a friend of mine and I know her 
husband, as well. I swear that I haven't an affair with her. I have 
no intention (to resign)." 
 
Prior to this, Chief Cabinet Secretary Takeo Kawamura got an account 
of Konoike's story. Kawamura then gave him a strong warning, saying: 
"It is inappropriate for a person holding a cabinet post to be 
misunderstood." The chief cabinet secretary, however, agreed that 
Konoike would remain in his current post, saying: "I would like you 
to fulfill your official duty without letting down your guard." 
 
Prime Minister Aso was desperately trying to put a cap on the issue 
last night. He told reporters: "There is no problem when a person 
visits the parliamentarians' compound." 
 
The Kantei side initially had the view that the issue would not 
result in calls for Konoike to step down from his post, according to 
a person close to Aso. Konoike was at first reluctant to comment on 
the allegations. However, dissatisfaction grew in the New Komeito, 
which is sensitive about sex scandals, with Deputy Chief 
 
TOKYO 00000090  012 OF 012 
 
 
Representative Toshiko Hamayotsu saying: "He needs to give a clear 
account." Kawamura then worked hard to persuade Konoike. A high 
government official sighed as he said: "It's good he could clearly 
account for it. He did not leak national secrets. This was a 
personal issue." 
 
Meanwhile, Yukio Hatoyama, secretary general of the main opposition 
Democratic Party of Japan (DPJ), on Jan. 14 demanded that Konoike 
quit his post. However, next day, views implying a wait-and-see 
approach were presented in succession from the opposition parties, 
with DPJ Upper House Chairman Azuma Koshiishi saying: "There is no 
need to make a comment." 
 
However, some members in the ruling camp are concerned that if 
follow-up articles come up, there will be nothing we can do." A 
senior opposition member pointed out: "We might bring it up in the 
Diet." The scandal will not go away just like that. 
 
ZUMWALT