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UNCLAS SECTION 01 OF 10 TOKYO 000274 
 
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 2/05/09 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
4) Secretary of State Clinton now likely to visit Japan Feb. 16-17 
(Yomiuri) 
 
Defense and security affairs: 
5) In drafting new anti-piracy law, government to expand weapons-use 
rules to allow MSDF to fire on pirates to halt their vessels 
(Asahi) 
 
Political merry-go-round: 
6) Yomiuri poll: 4.5 PERCENT  see Taro Aso as "appropriate" to be 
premier, with favorite still being former Prime Minister Koizumi 
(14.4 PERCENT ), followed by DPJ head Ozawa  (Yomiuri) 
7) In Diet Budget Committee deliberations, Democratic Party of 
Japan's (DPJ) Maehara blasts Prime Minister Aso as a "con man" and 
"tax thief"  (Mainichi) 
8) DPJ pursuing ruling camp in Diet on four issues; consumption tax 
hike, amakudari (retired officials in cushy jobs), jobs, and 
road-funding resources  (Nikkei) 
 
9) DPJ deliberately dragging out action on bills related to the 
second supplementary budget  (Tokyo Shimbun) 
10) Diet showdowns with opposition camp threaten to upset Prime 
Minister Aso's schedule of diplomatic events to attend  (Tokyo 
Shimbun) 
11) Talk of still another supplementary budget to fix the economy 
raises specter of fading scenario for April dissolution of the Diet 
(Tokyo Shimbun) 
 
Economic crisis: 
12) Former Bank of Japan Deputy Governor Muto predicts job losses by 
end of the year could total 2.7 million  (Yomiuri)    9 
13) Keidanren (Japan Business Federation) propose raising 
consumption tax to 17 PERCENT  in order to pay for escalating social 
security costs  (Yomiuri) 
14) Japan's premier airline JAL may need billions in yen in public 
assistance in order to stay flying  (Asahi) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi & Mainichi: 
Panasonic to cut 15,000 jobs worldwide 
 
Yomiuri: 
Metropolitan Police Department to build first case against blog 
"flamers" 
 
Nikkei: 
Food, cosmetic firms pruning lineups to keep costs down 
 
Sankei: 
Many LDP members criticize government's agricultural reform 
 
Tokyo Shimbun: 
Influenza: Epidemic of mutant virus? Vaccine could be ineffective 
 
TOKYO 00000274  002 OF 010 
 
 
 
2) EDITORIALS 
 
Asahi: 
(1) Buy American products provision: U.S. must eliminate 
protectionism 
(2) Diet debate: Ruling, opposition parties should clarify options 
 
Mainichi: 
(1) FY2009 extra budget: First thing to do is changing or correcting 
the budget 
(2) North Korea's provocation shows lack of the regime (Tetsuo 
Nakajima, editorial writer) 
 
Yomiuri: 
(1) Buy American products: Protectionism unacceptable 
(2) Resumption of coastal whaling: IWC whaling proposal serves 
Japan's interests 
 
Nikkei: 
(1) Japan should not neglect preparations and strategy for 
introducing international accounting standards 
(2) Need for giving priority to ODA 
 
Sankei: 
(1) North Korea's preparations for Taepodong launch: Japan, U.S., 
South Korea must strengthen unity 
(2) Amakudari: Make rule to completely abolish golden parachute 
system 
 
Tokyo Shimbun: 
(1) Lower House committee: Preliminary skirmish ahead of general 
election 
(2) Support for new farmers: Agricultural system should be changed 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, February 4 
 
NIKKEI (Page 2) (Full) 
February 5, 2009 
 
07:28 
Met with Deputy Chief Cabinet Secretary Matsumoto at the Kantei. 
 
09:00 
Lower House Budget Committee meeting. 
 
12:05 
Arrived at the Kantei. 
 
13:00 
Lower House Budget Committee meeting. 
 
17:21 
Met with Vice Foreign Minister Yabunaka at the Kantei. 
 
18:06 
Met with Deputy Chief Cabinet Secretary Uruma. Then met with Chief 
Cabinet Secretary Kawamura. 
 
18:46 
 
TOKYO 00000274  003 OF 010 
 
 
Arrives the official residence. 
 
4) U.S. State Secretary Clinton likely to visit Japan on Feb. 16-17 
 
YOMIURI (Page 2) (Full) 
February 5, 2009 
 
U.S. Secretary of State Hillary Clinton is likely to visit Japan on 
Feb. 16-17, according to government sources yesterday. It will be 
her first overseas trip after she assumed office, and she plans to 
visit South Korea and China after Japan. 
 
Clinton is scheduled to meet Prime Minister Aso and Foreign Minister 
Nakasone. They are expected to confirm the need for Japan and the 
U.S. to cooperate in addressing the global financial and economic 
crisis and the North Korean nuclear and abduction issues. On the 
17th, she is slated to visit U.S. Yokota Air Base, which Tokyo is 
calling for using as joint military-civilian airport. 
 
5) Gov't to expand MSDF's weapons use to allow firing on pirate 
ships to halt them 
 
ASAHI (Page 1) (Abridged) 
February 5, 2009 
 
The government has now finalized the outline of the anti-piracy 
legislation to be presented to the Diet in early March. The newly 
planned law will expand the scope of the Self-Defense Forces' 
authorized use of weapons, whereby the SDF will be allowed to fire 
on pirate ships in order to halt them. The SDF's use of weapons on 
its overseas missions will be authorized for the first time in order 
for the SDF to carry out its duties. The new law will also allow the 
SDF to protect foreign ships that are irrelevant to Japan. 
 
The government is now preparing to dispatch two Maritime 
Self-Defense Force destroyers for an antipiracy mission in waters 
off the coast of Somalia by invoking an action for maritime security 
policing activities under the Self-Defense Forces Law. In the case 
of maritime security policing activities, however, the SDF is not 
allowed to protect foreign ships and its use of weapons is limited 
to legitimate self-defense and emergency evacuation. The government 
is therefore preparing to enact a new anti-piracy law. 
 
The newly envisaged law's authorization for the SDF's overseas use 
of weapons is based on the Japan Coast Guard Law's Article 20, which 
allows JCG personnel to fire on unidentified ships in Japan's 
territorial waters only. This article was added to the JCG law in 
its 2001 amendment after a suspicious ship's violation of Japan's 
territorial waters off the Noto Peninsula in 1999. This will be made 
applicable to the high seas and will be expanded to the SDF. Under 
the new law, the SDF will act in concert with the JCG and undertake 
antipiracy measures within the scope of policing activities. 
 
In the meantime, the Antiterrorism Special Measures Law and the Iraq 
Special Measures Law required the government to ask the Diet for its 
approval of SDF deployment. The Diet, however, is currently divided, 
with the ruling parties holding a majority of the seats in its lower 
chamber and the opposition parties dominating its upper house. As it 
stands, the government cannot expect Diet approval. The government 
will therefore go no further than to report its SDF deployment 
masterplan to the Diet. 
 
 
TOKYO 00000274  004 OF 010 
 
 
The SDF's maritime security policing is to cover Japanese-registered 
ships, foreign ships with Japanese nationals aboard, and foreign 
ships carrying Japanese shipments. However, foreign ships will be 
included as well. In addition, the SDF will be also allowed to share 
information with foreign naval vessels. The government takes the 
position that the SDF's information sharing with foreign vessels is 
a form of exercising police authority against pirates and does not 
fall under collective self-defense. 
 
6) Poll: Koizumi ranks top for premiership 
 
YOMIURI (Page 2) (Abridged) 
February 5, 2009 
 
In a recent face-to-face nationwide public opinion survey conducted 
by the Yomiuri Shimbun on Jan. 31 and Feb. 1, respondents were asked 
to pick the one lawmaker in the Diet most "appropriate" to be prime 
minister. In this popularity poll, former Prime Minister Junichiro 
Koizumi ranked at the top with 14.4 PERCENT , followed by Democratic 
Party of Japan (Minshuto) President Ozawa at 13.7 PERCENT , and 
Health, Labor and Welfare Minister Masuzoe at 7.5 PERCENT . Prime 
Minister Aso was at 4.7 PERCENT , slightly higher than former 
Administrative Reform Minister Yoshimi Watanabe, who drew public 
attention with his secession form the Liberal Democratic Party. 
 
Among LDP lawmakers, LDP Deputy Secretary General Nobuteru Ishihara, 
who ran in the LDP's presidential race in September last year, was 
at 2.7 PERCENT , with former Defense Minister Yuriko Koike at 1.5 
PERCENT , and Economic and Fiscal Policy Minister Kaoru Yosano at 
1.4 PERCENT . Even among LDP supporters, Aso was at 13 PERCENT , 
with Koizumi at 25 PERCENT . Among DPJ lawmakers, DPJ Deputy 
President Kan was at 3.1 PERCENT , ranking next to Ozawa. DPJ 
Secretary General Hatoyama was at 2.4 PERCENT , and DPJ Vice 
President Seiji Maehara at 1.9 PERCENT . Among DPJ supporters, 40 
PERCENT  picked Ozawa, with only 9 PERCENT  choosing Kan. Among 
those with no particular party affiliation, Koizumi topped all 
others at 13 PERCENT , with Ozawa and Masuzoe respectively at 8 
PERCENT  and Aso at only 2 PERCENT . 
 
Popularity ranking for prime minister 
 
¶1. Junichiro Koizumi 14.4 PERCENT 
¶2. Ichiro Ozawa 13.7 PERCENT 
¶3. Yoichi Masuzoe 7.5 PERCENT 
¶4. Taro Aso 4.7 PERCENT 
¶5. Yoshimi Watanabe 4.6 
¶6. Naoto Kan 3.1 
¶7. Nobuteru Ishihara 2.7 
¶8. Yukio Hatoyama 2.4 
¶9. Seiji Maehara 1.9 
¶10. Katsuya Okada 1.7 
¶11. Yuriko Koike 1.5 
¶12. Kaoru Yosano 1.4 
¶13. Sadakazu Tanigaki 1.2 
¶14. Shinzo Abe 1.0 
 Others 3.9 
(Total percentage not 100 PERCENT  due to rounding.) 
 
7) DPJ's Maehara accuses Prime Minister Aso as "habitual con artist" 
who makes empty promises 
 
MAINICHI (Page 5) (Abridged slightly) 
 
TOKYO 00000274  005 OF 010 
 
 
February 5, 2009 
 
Takenori Noguchi 
 
In yesterday's Lower House Budget Committee session, Democratic 
Party of Japan (DPJ) Vice President Seiji Maehara lashed out at 
Prime Minister Taro Aso, calling him "a peerless con artist" and "a 
tax thief." The session was suspended temporarily with the ruling 
parties' demand that Maehara's words be expunged form the minutes. 
 
Touching on the question of freeing up road-related revenues for 
general spending, Maehara said: "The prime minister is a habitual 
con artist who makes empty promises. You said that you would call an 
election, but you did not do so. You also promised to allocate 
highway tax revenues for general expenditures, but that did not 
happen." 
 
Maehara's accusation of the prime minister escalated, and committee 
chair Seishiro Eto warned Maehara, saying, "Your words are rude." 
The prime minister shot back at Maehara: "You must watch your 
tongue. Deception is a crime." Maehara still did not back down. 
 
8) Belligerent DPJ asks provocative questions over a set of four 
issues in Lower House Budget Committee session; Prime minister 
remains calm; Debates go nowhere 
 
NIKKEI (Page 2) (Abridged) 
February 5, 2009 
 
The Lower House Budget Committee continued with its basic 
question-and-answer session yesterday in which the ruling and 
opposition blocs engaged in a war of words. Four Democratic Party of 
Japan (DPJ) debaters, including Deputy President Naoto Kan, grilled 
Prime Minister Taro Aso over a set of four issues, including the 
policy of transferring revenues from road-related taxes into the 
general account and the question of amakudari, in which senior 
bureaucrats assume postretirement jobs at entities related to the 
sectors they formerly oversaw. Despite the DPJ's provocative 
questions, the prime minister maintained his cool. The two sides 
remained wide apart. 
 
Seiji Maehara, who took the floor as the first questioner, attacked 
the prime minister, saying: "In my eyes, the prime minister is a 
habitual con artist who makes empty promises. You said that you 
would call a general election, but you did not do so, and you also 
promised to free up road tax revenues for general purposes, but that 
did not happen." This threw the committee room into a commotion 
filled with jeering and heckling. Unable to keep watching, committee 
chairman Seishiro Eto of the Liberal Democratic Party (LDP) gave a 
warning to Maehara, saying: "What you said was graceless. Caution 
must be practiced before making statements." Maehara rebutted, "What 
is wrong with stating facts?" 
 
The DPJ continued to fiercely attack the prime minister over the 
amakudari issue, as well. Maehara argued: "If there is no amakudari, 
4,600 public-interest corporations are unnecessary." Akira Nagatsuma 
demanded uncovering the details of behind-the-scenes amakudari 
practice in which former bureaucrats help other ex-government 
officials find postretirement jobs without the involvement of 
ministries and agencies. Nagatsuma apparently intended to shed light 
on the prime minister's promise to ban government agencies from 
helping their officials find reemployment starting next year. The 
 
TOKYO 00000274  006 OF 010 
 
 
prime minister simply replied: "The government cannot intervene in 
matters between private citizens." 
 
Kan, who took the floor as the last questioner, noted cynically: 
"The prime minister has avoided calling an election over the last 
134 days since taking office, and as a result you have lost public 
trust. You contrast sharply with U.S. President Barack Obama." Kan 
also pointed out differences in approaches to the economy and 
employment between the DPJ and the government. Kan maintained that 
his party had explained the fiscal resources, indicating that the 
DPJ's economic measures totaled 87 trillion yen, including 57 
trillion yen in actual fiscal spending. 
 
Kan went on to ask: "As seen in the cash handout plan, are you going 
to dole out pork-barrel money? I can say with confidence that our 
proposals, including a plan to make hospitals earthquake resistant, 
will benefit the people of Japan." Despite Kan's provocative 
question amid fierce jeers from the ruling parties, the prime 
minister remained composed. 
 
9) DPJ refuting ruling side's criticism of it as "trying to delay 
deliberations" on bills related to second extra budget 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 5, 2009 
 
The Democratic Party of Japan (DPJ) is frantically trying to dismiss 
the ruling camp's criticism that the party is deliberately delaying 
the start of deliberations in the House of Councillors on bills 
related to the fiscal 2008 second supplementary budget bill that 
includes the necessary fiscal resources for the government's cash 
handout program. 
 
DPJ Secretary General Yukio Hatoyama emphasized in a meeting of the 
shadow cabinet yesterday: "We are not playing stalling tactics". 
Diet Affairs Committee Chairman Kenji Yamaoka also argued back: 
"(The ruling side) is trying to create an image that the DPJ is 
stalling deliberations." 
 
The second extra budget bill and related bills cleared the House of 
Representatives on Jan. 13. The second extra budget was enacted on 
Jan. 27, but deliberations on the related bills have yet to start in 
the Upper House. The Liberal Democratic Party (LDP) has sharply 
reacted to this situation, with Diet Affairs Committee Chairman 
Tadamori Oshima arguing: "The Upper House DPJ is deliberately 
slowing down action on the related bills." 
 
The DPJ's defensive response reflects its fear that the party may 
allow the public to think that the responsibility for the slow 
progress lies with the DPJ and to harbor antipathy toward it. 
 
In the DPJ's view, it is the ruling camp that is unwilling to start 
deliberations in the Upper House. Even if the opposition bloc 
refuses to start debate in the Upper House, the related bills will 
pass through the Diet on March 14 with an override vote 60 days 
after it passes the Lower House. 
 
To be sure, the ruling side is eager to start deliberations on the 
fiscal 2009 budget bill earlier than those on the related bills, 
which will automatically clear the Diet. If the bills are 
deliberated on in the Upper House, Finance Minister Shoichi Nakagawa 
and other officials concerned will become unable to attend meetings 
 
TOKYO 00000274  007 OF 010 
 
 
of the Lower House Budget Committee. 
 
The DPJ has the feeling that it has been exposed to unreasonable 
criticism. By indicating its willingness to begin discussion in the 
Upper House at an early date, the main opposition party wants to 
underscore that the ruling camp is moving to delay the enactment of 
the related bills. 
 
10) Aso in quandary over conflict between Diet affairs and 
diplomatic events 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 5, 2009 
 
Prime Minister Aso is now in a quandary over how to realize planned 
key diplomatic events at the time when the showdown between the 
ruling and opposition camps is about to enter a crucial moment over 
the fiscal 2009 budget bill. 
 
Coordination is underway for Aso to meet with U.S. Secretary of 
State Hillary Clinton, who is scheduled to visit Japan on Feb. 16. 
If the meeting is realized, Aso will meet for the first time a key 
member of the administration of President Barack Obama, which was 
inaugurated in January. It will be an important meeting in which the 
two are expected to discuss Japan-U.S. relations, responses to the 
global economic crisis, North Korea's nuclear development and 
abduction, and other issues. 
 
Russian President Dmitry Medvedev has invited Aso to attend a 
ceremony in commemoration of the start of liquefied natural gas 
(LNG) production to be held on the Sakhalin Island on Feb. 18. In a 
summit meeting, the two leaders are expected to discuss Northern 
Territories and other issues. 
 
Aso is "full of vigor" to be on the international stage, as on of 
his aides said. He wants to score points on the diplomatic front to 
give a boost to his administration, which has been distressed by low 
public support ratings. 
 
But the ruling side has decided to pass the fiscal 2009 budget bill 
in mid-February. Given this, it is difficult to schedule these 
meetings definitely. 
 
Keeping in mind the fact that Clinton picked Japan as the 
destination of her first overseas trip in her new role, the 
government wants to bring about an Aso-Clinton meeting without fail. 
But regarding a visit to Russia, a source of the Prime Minister's 
Office commented: "Whether he can go or not depends entirely on 
developments in the Diet. It is impossible to say how things will 
turn out." 
 
11) Scope column: Will dissolution of the Lower House come in April 
or by postponed? 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 5, 2009 
 
Persons close to Prime Minister Taro Aso are now proposing compiling 
another supplementary budget immediately after the Diet approves the 
fiscal 2009 budget. This has prompted all sorts of conjectures in 
the ruling parties about dissolution of the House of 
Representatives. There are two views in the ruling coalition: one is 
 
TOKYO 00000274  008 OF 010 
 
 
that the prime minister will dissolve the Lower House in April, 
taking advantage of the compilation of another extra budget as good 
material for the next election campaign; and the other is he might 
delay dissolution in order to pass the extra budget. 
 
A senior Liberal Democratic Party (LDP) member said: "I think the 
Lower House will be dissolved in April and the snap election will be 
held in May, with the official campaign kicking off after the early 
May Golden Week of holidays." 
 
The outlook is that the fiscal 2009 budget will clear the Diet in 
late March and then related bills in late April. Underlying the 
prospect for the election in May seems to be the judgment that there 
is a mood building to call on the people for a vote of confidence 
after the passage of the budget. 
 
Considering the just started full-scale deliberations on the fiscal 
2009 budget bill, the senior officials of the government and ruling 
camp have ostensibly denied the rumor that they are looking into 
compiling another supplementary budget. One ruling coalition member, 
however, referred to a scenario that the ruling camp would compile 
an extra budget just for the general election. If this is the case, 
the extra budget compilation would be considered still more 
pork-barrel spending, following the current 2 trillion yen cash 
handout program. 
 
Meanwhile, a group of LDP lawmakers who have distanced themselves 
from the Aso government sees the compilation of an extra budget for 
fiscal 2009 Aso's strategy of dragging down Lower House dissolution. 
 
 
If passage of the extra budget is being eyed, it will be impossible 
to hold the snap election in May. A former LDP executive member said 
just recently: "There is a rumor that the official campaign will 
start on July 21 and that the election will take place on Aug. 2." 
He believes the prime minister has a scenario of holding the 
election after the passage of the extra budget bill and the Group of 
Eight summit, which will begin on July 8. 
 
Actually, a senior member of the Aso faction said: "It will be held 
after the Tokyo Metropolitan assembly election and the summit. The 
general election will never be held before the Tokyo assembly 
election." He was negative about Lower House dissolution before the 
supplementary budget is passed. 
 
According to a lawmaker close to Aso, it is obvious that "there will 
appear a view calling for moving up the general election" from 
within the LDP prior to the expiration of the LDP presidency. There 
is a possibility that the New Komeito, the LDP's coalition partner, 
will frown on the idea of holding the snap election on Aug. 2 
immediately after the Tokyo election. However, Aug. 2 is the 
last-minute timing for Aso to contain a drive in the LDP to remove 
him from office, while putting off Lower House dissolution. 
 
Those views in the LDP demonstrate that many ruling coalition 
lawmakers are concerned about fighting the general election under 
Aso's lead. 
 
12) "2.7 million jobs may be lost," says former BOJ Deputy Governor 
Muto 
 
YOMIURI (Page 2) (Full) 
 
TOKYO 00000274  009 OF 010 
 
 
February 5, 2009 
 
Daiwa Institute of Research Director Toshiro Muto, former Bank of 
Japan (BOJ) deputy governor, on February 4 delivered a speech at the 
Yomiuri International Economic Society (YIES) held at Imperial Hotel 
in Uchisaiwaicho, Tokyo. During it, he gave his outlook that the 
employment situation will worsen, saying, "There is a possibility of 
2.7 million jobs being lost (over a year starting in December 
2008)." Regarding the outlook for economic growth in fiscal 2009, he 
pointed out that there is a possibility of growth falling under the 
Daiwa Institute of Research's estimate of minus 3.8 PERCENT . 
 
On recovery of the world economy, Muto only said, "It will take 
time, because personal consumption is sluggish." He then cited 
conditions needed for an economic turnaround: (1) end of a drop in 
housing prices in the U.S.: (2) disposal of bad loans held by U.S. 
financial institutions; and (3) normalization of U.S. financial 
institutions that have received public money. 
 
Concerning the world economy after the financial crisis, he 
underscored: "It will not return to the former state. It will take 
on a new structure. If is very important for Japan to make 
investments and manage the economy in a strategic manner." 
 
13) Nippon Keidanren recommends hike in consumption tax to 17 
PERCENT  by fiscal 2025 in its social security reform proposal 
 
YOMIURI (Page 2) (Full) 
February 5, 2009 
 
The final draft of a report on reform of the social security system, 
which Japan Business Federation (Nippon Keidanren) is expected to 
issue shortly, was revealed on January 4. The draft proposes 
adopting a basic pension system financed entirely from tax revenues, 
such as consumption tax revenues, so as to increase the proportion 
of public money injected into medical services for the elderly and 
the nursing care insurance system. 
 
The draft report calculates that a hike in the sales tax to about 12 
PERCENT  could finance the funds additionally needed for the reform. 
If the full amount is to be financed with sales tax revenues, it 
would be necessary to raise the rate to 17 PERCENT . 
 
At present, the portion of basic pension paid out of public funds is 
one-third. The proportion is to be increased to one-half, starting 
in fiscal 2009.  . 
 
As the first stage of the process, the draft report estimated that 
it would be necessary to increase the portion of basic pension paid 
out of public funds to two-thirds by fiscal 2015. This is in order 
to secure fiscal resources equivalent to a 5 PERCENT  hike in terms 
of the consumption tax rate. If the full amount needed is to be 
financed with consumption tax revenues, the rate will have to be 
raised from the current 5 PERCENT  to 10 PERCENT . 
 
If the full amount is to be financed with public funds at the second 
stage through fiscal 2025, the final consumption tax rate would be 
17 PERCENT . 
 
14) JAL looking into applying for public assistance from DBJ worth 
several billion yen 
 
 
TOKYO 00000274  010 OF 010 
 
 
ASAHI (Page 1) (Full) 
February 5, 2005 
 
Asahi Shimbun learned on February 4 that Japan Airlines (JAL), which 
is now implementing management reconstruction measures, is looking 
into applying for assistance from the Development Bank of Japan 
(DBJ) in order to deal with its own financial crisis. Its aim is to 
have ample funds in hand with the future becoming even more 
uncertain due to a sharp decline in air-travel demand following the 
worsening economy. It appears that the company is considering 
applying for several billion yen in assistance. 
 
The emergency financing system to help companies address the 
financial crisis started in December last year, following the 
government's new comprehensive economic stimulus package. Funds 
worth 1 trillion yen are available for fiscal 2008 and fiscal 2009 
respectively. 
 
JAL had estimated as of last fall that it would be able to secure 13 
billion yen in net profits in the consolidated financial settlement 
for the term ending in March 2009. However, companies are now 
holding off overseas business trips. The number of tourists has also 
declined sharply. This situation has hit demand for international 
flights. Demand for domestic flights and air cargo service is also 
sluggish. It appears unavoidable for JAL to make a substantial 
downward revision to its 3rd quarter financial settlement to be 
released on February 6. 
 
JAL last spring increased capital worth approximately 150 billion 
yen for third party allocation. It is now implementing management 
reconstruction measures. 
 
JAP President Haruka Nishimatsu as chairman of the Scheduled 
Airlines of Association of Japan, which is also joined by All Nippon 
Airways (ANA), on the 4th spoke with Transport Minister Kaneko about 
financial assistance to the aviation industry. Kaneko indicated that 
the government would ready package of assistance measures before the 
end of the current fiscal year. To be precise, a reduction in 
landing charges, which are higher in Japan than overseas, will 
likely be up for consideration. If realized, assistance measures for 
the aviation industry will likely produce the effect of indirectly 
assisting JAL's application for financial assistance. 
 
However, since the root cause of JAL's poor business performance is 
its high-cost structure, the company will likely be pressed to cut 
more costs before receiving financial assistance. 
 
ZUMWALT