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UNCLAS SECTION 01 OF 12 TOKYO 000388 
 
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 2/20/09 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Politics in disarray: 
4) Arguments heating up in the Liberal Democratic Party (LDP) to 
have Prime Minister Aso step down after the budget is passed by the 
Diet  (Asahi) 
5) Lower House passage of the fiscal 2009 budget bill delayed until 
the 26th, after the prime minister's U.S. trip  (Tokyo Shimbun) 
6) Democratic Party of Japan (DPJ) perplexed if Aso is toppled, 
fearing a public backlash against their party as the cause 
(Sankei) 
7) Aso's private secretary used his good offices to get a student 
accepted by a medical school  (Mainichi) 
8) Aso's secretary Muramatsu: "What's wrong with my writing a letter 
of introduction? Denies taking money in connection with medical 
school incident  (Mainichi) 
9) Aso cuts down on nightly visits to bars by more than half 
(Asahi) 
10) After Nakagawa incident in Rome, LDP lawmakers cutting down on 
the booze at official parties  (Tokyo Shimbun) 
11) Disgraced former Finance Minister Nakagawa had been drinking 
wine with reporter, and after infamous press conference, went 
sightseeing around Vatican  (Sankei) 
 
Economy in disarray: 
12) Holding three economic cabinet portfolios starting to take its 
toll on weary Minister Yosano  (Nikkei) 
13) Government's February report finds the economy in a "severe 
situation," revises downward the outlook for fifth month in row 
(Nikkei) 
14) Government, ruling camp actively considering another stimulus 
package given the economy's tough situation  (Tokyo Shimbun) 
 
15) Vice Foreign Minister Yabunaka to visit Washington for talks 
with Deputy Secretary Steinberg  (Tokyo Shimbun) 
 
Defense and security affairs: 
16) After five years, a Japanese defense minister is finally 
visiting Beijing to continue exchanges  (Nikkei) 
17) Government in new anti-piracy law now being drafted will allow 
use of weapons fire prior to being attacked by marauders  (Tokyo 
Shimbun) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi & Sankei 
Woman becomes pregnant after wrong fertilized egg implanted 
 
Mainichi: 
Aso's secretary acted as intermediary between ex-education official 
and father of student who wanted to enter medical department 
 
Yomiuri: 
70 PERCENT  of ex-postal real estate resold 
 
Nikkei: 
 
TOKYO 00000388  002 OF 012 
 
 
BOJ to prepare strengthened measures to ease credit crunch 
 
Tokyo Shimbun: 
Government, ruling coalition mulling time-limited system to pay full 
amount of each project in additional economic package 
 
Akahata: 
Shii calls for intensive deliberations on employment and economy 
 
2) EDITORIALS 
 
Asahi: 
(1) Clinical training should be reviewed, with aim of producing good 
doctors 
(2) U.S. plan to rescue house owners expected to remove main cause 
of financial crisis 
 
Mainichi: 
(1) Various views must be reflected in reviewing clinical training 
(2) Rescue of U.S. automakers: Japan must be on alert for possible 
inclination toward protectionism 
 
Yomiuri: 
(1) Measures in clinical training review cannot fix doctor shortage 
(2) In spring wage offensive, give priority to erasing employment 
uncertainty 
 
Nikkei: 
(1) Government urged to review projects under its jurisdiction to 
promote decentralization 
(2) Media must report in fair manner 
 
Sankei: 
(1) Increase in U.S. troops in Afghanistan: Japan should participate 
in drawing up strategy 
(2) Besides review of clinical training, more measures needed to 
settle doctor shortage 
 
Tokyo Shimbun: 
(1) Japanese finance minister's absence from international 
conferences undesirable 
(2) Japan should take cautious approach on territorial dispute with 
Russia 
 
Akahata: 
(1) Physically handicapped self-support law: New legislation to 
protect human rights needed 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, February 19 
 
NIKKEI (Page 2) (Full) 
February 20, 2009 
 
07:49 
Met with Deputy Chief Cabinet Secretary Matsumoto at the Kantei. 
 
08:57 
Met with LDP Research Council Senior Deputy Chairman Sonoda in the 
Diet building. 
 
 
TOKYO 00000388  003 OF 012 
 
 
08:59 
Attended a Lower House Budget Committee meeting. 
 
13:02 
Met at the Kantei with Asian Development Bank President Kuroda, 
followed by Assistant Chief Cabinet Secretary Fukuda, Yamazaki of 
the Cabinet Office, Cabinet Office policy directors general 
Matsumoto and Saito. 
 
14:03 
Met with British State Minister for Africa, Asia and the United 
Nations Malloch-Brown, followed by Vice Foreign Minister Yabunaka 
and Chief Cabinet Secretary Kawamura. 
 
15:14 
Met with Japan Institute of International Affairs incoming and 
outgoing presidents Yoshiji Nogami and Yukio Sato, followed by 
Nishi-Nippon City Bank President Kubota, Royal Holdings Chairman 
Kusumoto, and others, in the presence of Deputy Chief Cabinet 
Secretary Konoike. Kubota stayed on. Afterward met with Takashi 
Kiriku, who will become new Japan Pension Organization president. 
 
16:27 
Met with LDP Secretary General Hosoda, Diet Affairs Committee 
Chairman Oshima, New Komeito Secretary General Kitagawa, Diet 
Affairs Committee Chairman Urushibara, and Kawamura. Hosoda, 
Kitagawa and Kawamura stayed on. 
 
17:02 
Met with Cabinet Intelligence Director Mitani. Afterward attended a 
Council on Economic and Fiscal Policy meeting. 
 
18:11 
Attended a monthly economic ministers meeting. 
 
19:23 
Met at his official residence with Defense Minister Hamada, LDP 
Senior Deputy Secretary General Hayashi, Diet Affairs Committee 
Deputy Chairman Okonogi. 
 
4) Mood for replacing prime minister gaining ground in LDP: Faction 
leaders eyeing his stepping down after passage of budget 
 
ASAHI (Page 1) (Full) 
February 20, 2009 
 
A mood for replacing Prime Minister Aso is gaining ground in the 
Liberal Democratic Party (LDP). The dominant view not only among 
anti-Aso forces but also among faction leaders and senior members is 
that it has become impossible to go into the next general election 
with Prime Minister Aso. Many are determined to support the prime 
minister until the fiscal 2009 budget bill is enacted this spring. 
However, coordination for a post-Aso political situation will likely 
move into full swing in preparation for the upcoming general 
election. 
 
Chairman Koki Chuma at a plenary meeting of the Aso faction on 
February 19 said, "What is most important is not so much helping Mr. 
Aso but passing the budget." He then revealed that faction 
leader-class members at a meeting on the morning of the 18th agreed 
to do their utmost for the enactment of the budget, leaving the rest 
behind to be worked out later. He hinted at a possibility of the 
 
TOKYO 00000388  004 OF 012 
 
 
prime minister stepping down after passage of the budget. 
 
The meeting on the 18th brought together Chuma, former Chief Cabinet 
Secretary Nobutaka Machimura, Tax System Research Commission 
Chairman Tsushima, Election Committee Chairman Makoto Koga, former 
Secretary General Taku Yamasaki, former Secretary General Bunmei 
Ibuki and Economy, Trade and Industry Minister Nikai. One 
participant said, "The situation does not permit us to go into the 
election with Prime Minister Aso. We must think about the situation 
after the election." Another participant rebutted, "What is most 
important now is to enact the budget." The meeting thus reportedly 
vowed to contain criticism of the prime minister until passage of 
the budget. 
 
Former Prime Minister Mori, former LDP caucus in the Upper House 
Chairman Mikio Aoki and Yamasaki held talks. Tsuneo Watanabe, 
chairman of the Yomiuri Shimbun Group Head Office Chairman, was also 
present. 
 
According to a participant, some said, "We cannot go into the 
election with Prime Minister Aso." Mori took the part of the 
listener. A lawmaker close to Mori on the 19th indicated his view 
that there are indications that Mori is changing his stance, saying, 
"Mr. Mori supported Mr. Aso. However, that was before Mr. Nakagawa 
resigned as finance minister." 
 
However, there is no candidate most likely to replace Aso. As such, 
as long as the prime minister desires to maintain his 
administration, it is difficult to replace him. The prime minister's 
plan is to contain the move to oust him by coming up with an 
additional stimulus package after passage of the budget. The 
situation is that once the fiscal 2009 budget clears the Lower 
House, bargaining between the Kantei and the LDP will start over the 
prime minister's future course of action. 
 
5) Prime Minister Aso gives up on taking vote on fiscal 2009 budget 
in Lower House before visiting U.S. 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 20, 2009 
 
Prime Minister Taro Aso met yesterday afternoon with the secretaries 
general and Diet affairs committee chiefs of the ruling Liberal 
Democratic Party (LDP) and New Komeito, the LDP's junior coalition 
partner, at the Prime Minister's Official Residence (Kantei). In the 
meeting, Aso and ruling coalition officials agreed to put off taking 
a vote on the fiscal 2009 budget legislation to after Feb. 25, when 
Aso returns from the United States. Although the ruling parties 
initially had a plan to pass the budget in the House of 
Representatives on Feb. 23, ahead of his departure for Washington, 
they gave up the plan due to strong resistance by the opposition 
parties. The waning power of the Aso administration has now spread 
to its Diet management. 
 
Aso, referring in the meeting to handling of the budget, said: "It 
is important to enact it before the end of the current fiscal year, 
at any rate. I do not at all think that the budget need be passed 
before I leave for Washington." 
 
After the meeting, LDP Diet Affairs Committee Chairman Tadamori 
Oshima explained the decision to put off passing the budget in the 
Lower House, saying: "Objectively, there is the problem of former 
 
TOKYO 00000388  005 OF 012 
 
 
Finance Minister Shoichi Nakagawa. There is a diplomatic schedule 
problem. Deliberations are insufficient." He then added: "We take 
humbly (these problems). We will not take a forced vote before the 
prime minister returns." 
 
The ruling coalition will continue to hold a question-and-answer 
session in the Lower House Budget Committee while Aso is in the 
United States. The ruling camp also plans to take a vote on the 
budget on the 26th in the committee and adopt it in a Lower House 
plenary session so that the bill will clear the Lower House next 
week. 
 
However, if the ruling bloc expects natural passage of the budget 30 
days after it clears the Lower House base on the Constitution, the 
budget must be passed by the Lower House by March 2. 
 
6) DPJ perplexed by drive in LDP to unseat Aso, concerned about 
change in public opinion 
 
SANKEI (Page 5) (Excerpts) 
February 20, 2009 
 
The main opposition Democratic Party of Japan (DPJ) is now being 
puzzled about growing momentum in the ruling Liberal Democratic 
Party (LDP) to remove Prime Minister Aso from office. This is 
because the DPJ is concerned that even though the party succeeded in 
driving Aso into a corner by forcing the resignation in disgrace of 
Finance Minister Shoichi Nakagawa, if the LDP presidential election 
is speeded up and there is a new president and thus prime minister, 
the popularity of the new president, might rise. 
 
Asked yesterday by reporters about calls in the LDP for Aso to step 
down from office, Azuma Koshiishi, chairman of the DPJ caucus in the 
House of Councillors, stressed that the Lower House should be 
dissolved as quickly as possible for a general election. He stated: 
"I wonder whether we should let such a government manage state 
affairs. I want (the government) to receive the judgment of the 
people." Deputy President Naoto Kan also said: "The LDP now utterly 
lacks the capability of maintaining itself in power." 
 
With the exposure of such government's weaknesses as the Nakagawa's 
abrupt resignation and Aso's remarks on a review of the postal 
privatization program, a junior DPJ lawmaker said: "Even if we don't 
do anything, the prime minister himself will stumble." The same 
lawmaker added: "The best scenario" for the DPJ is to force the 
prime minister, who is under increasing pressure, to dissolve the 
Lower House after enactment of the fiscal 2009 budget. 
 
DPJ President Ichiro Ozawa, as well, has said: "We have no intention 
of unnecessarily dragging out deliberations. The election will be 
held in April after the budget is enacted." 
 
Meanwhile, the DPJ is worried about a possibility that if a new 
government is inaugurated after Aso is forced out by LDP forces 
opposing him, the trend of public opinion will change. 
 
A senior DPJ member said: "What we have to do is to protect the 
prime minister. It is important to prevent him from stepping down. 
" 
 
7) Aso's secretary used good offices by sending letter to former 
deputy health minister regarding dentist's son desiring to enter 
 
TOKYO 00000388  006 OF 012 
 
 
medical school 
 
MAINICHI (Top play) (Abridged slightly) 
February 20, 2009 
 
Prime Minister Taro Aso's parliamentary private secretary, Ichiro 
Muramatsu, last summer introduced a former deputy health minister to 
a Tokyo dentist after he was consulted about the son's desire to 
enter a private medical school, it was learned from documents 
obtained by the Mainichi Shimbun. Muramatsu explained: "It is a fact 
that I asked (the former deputy minister) for his guidance about 
entering a school, but not even one yen was paid. What is wrong with 
that?" Now that the use of good offices by Prime Minister Aso's aide 
has become clear, it is likely to spark controversy over its 
propriety. 
 
Back then, Aso was not yet prime minister, and Muramatsu was his 
parliamentary private secretary. The former deputy minister said, "I 
received the document but I did not do anything." Although the 
dentist in question indicated that he did not know anything, the 
dentist's wife told Muramatsu, "(Our son) passed the examination." 
 
According to Muramatsu's explanation, he was consulted by the Bunkyo 
Ward dentist who has a dental clinic in Kita Ward about his son who 
had failed an entrance exam but wished to enter a private Tokyo 
medical school. Muramatsu wrote a letter mentioning the matter to 
the former deputy minister. 
 
Muramatsu said: "I wrote, 'Since I am not well-versed in the matter, 
I would like to ask for your guidance.' Guidance meant guidance for 
higher education. I simply introduced the case (to the former deputy 
minister), and I don't know anything about what took place between 
(the former deputy minister and the dentist) afterward." He also 
said: "I heard from the (dentist's) wife, '(Our son) passed the 
examination.'" 
 
Meanwhile, the former deputy minister said in an interview with the 
Mainichi Shimbun: "I have no recollection of it." But in an 
interview after Muramatsu admitted his involvement, the former 
deputy minister reversed his stance and said: "I checked my 
notebook, and I found a memo (mentioning the letter)." But about 
Muramatsu's explanation of the letter, he said: "There was no 
explanation. He just told me, 'I will send you (the document).'" In 
the first interview, he also denied his contact with the dentist, 
and answered, "I have no recollection," about the possible 
introduction of the matter to a person connected with an entrance 
examination of a different college. The dentist refused to give an 
interview. 
 
Muramatsu became Aso's secretary in 1986 and his policy secretary in 
¶1994. After assuming such posts as the internal affairs and 
communications minister's secretary in 2003, he became Aso's 
secretary when Aso became prime minister last September. Meanwhile, 
the former deputy minister futilely ran in the 1998 Upper House 
proportional representation segment on the LDP ticket after serving 
in such posts as physical education and sports supervisor. His 
contacts with Aso began around 1988 when Aso was serving as served 
as education parliamentary secretary. Currently, he is a director of 
the Women's Japan Basketball League Organization, which is chaired 
by Aso. 
 
8) Secretary Muramatsu used good offices for medical school; "What 
 
TOKYO 00000388  007 OF 012 
 
 
is wrong with introduction?" Denies involvement of money 
 
MAINICHI (Page 21) (Excerpt) 
February 20, 2009 
 
While the political world is still in turmoil due to Shoichi 
Nakagawa's resignation as finance minister and financial services 
minister, it has come to light that Prime Minister Taro Aso's 
parliamentary private secretary, Ichiro Muramatsu, had introduced a 
former deputy education minister in order to give "guidance" to a 
dentist about his son who was desiring to enter a medical school. 
About using good offices, Muramatsu said, "What is wrong with that?" 
In 2002, House of Representatives member Kazuaki Miyaji resigned as 
health, labor, and welfare minister for allegedly telling the 
examination identification number of a person connected with his 
supporter association to the university that gave the examination. 
 
9) Prime Minister Aso, fatigue piling up, has been returning home an 
hour and a half earlier than usual, cuts back bar hopping to 10 to 4 
evenings 
 
ASAHI (Page 4) (Excerpt) 
February 20, 2009 
 
It has been a month since Prime Minister Aso moved from his private 
residence at Kamiyama-cho in Tokyo to the prime minister's official 
residence (Kotei). Compared to the one-month period prior to moving 
to his new home, the average time for his returning home on 
weeknights is an hour and a half earlier than before: it is now 9:04 
pm instead of 10:35 pm. The main reason is that he has cut down on 
nightly meetings. 
 
There has been a crescendo of criticism of the Prime Minister's 
nightly forays. Liberal Democratic Party (LDP) special assistant to 
the president Yoshinobu Shimamura, a former Agricultural Minister, 
repeatedly urged Aso: "I don't know whether your intention is have a 
nightcap or boost your spirits, but your drinking will be 
misunderstood. It is not just your personal business." In actuality, 
before the residence move, Aso used to go out after work to fancy 
restaurants and hotel bars 25 times a month, but has now cut it back 
to 10 times. He has cut back on bar hopping from 10 to four times in 
a month. 
 
10) Senior LDP members dine without imbibing after Nakagawa's 
disgraceful performance 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 2009 
 
Chief Cabinet Secretary Takeo Kawamura and the secretaries general 
of factions in the Liberal Democratic Party (LDP) last night took a 
meal together at a Japanese restaurant in Tokyo. Learning lessons 
from the resignation in disgrace of Shoichi Nakagawa as finance 
minister, the senior LDP members dined without alcoholic drinks. 
They appear to have been cautious before media cameras so that they 
would not come under criticism from the public. 
 
One member said that they had drunk only tea, although the 
restaurant served blowfish dishes. Yoshiro Yatsu, a member of the 
Tsushima faction, who arranged the meeting, told reporters: "I did 
not let them drink sake. I let those who asked for alcohol to return 
home earlier." Therefore, some participants stayed at the restaurant 
 
TOKYO 00000388  008 OF 012 
 
 
for only 40 minutes. 
 
11) Nakagawa visited Vatican after press conference; Wine ordered by 
him 
 
SANKEI (Page 3) (Full) 
February 20, 2009 
 
Former Finance Minister and State Minister for Financial Services 
Shoichi Nakagawa visited a Vatican museum in Rome after holding the 
press conference following the G-7 finance ministers and central 
governors meeting that became the cause of his resignation, it was 
learned yesterday. Nakagawa visited Vatican City for about two hours 
from around 4 p.m. Feb. 14. He was accompanied by Finance Ministry 
International Bureau Director General Rintaro Tamaki, the ambassador 
to Italy and others. He left Rome for Japan at 7:30 p.m. 
 
This became clear from the Financial Ministry's explanation on 
Nakagawa's actions and who accompanied him. On Feb. 14, the day the 
press conference in question took place, Nakagawa had a pasta lunch 
for about 35 minutes at a hotel after the G-7 meeting. At the dinner 
table were Tamaki, two Finance Ministry officials, a secretary, an 
interpreter, an acquaintance, and a reporter. Nakagawa reportedly 
ordered wine and offered it to the people around the table. 
 
He then returned to his hotel room and attended the Japan-Russia 
finance ministerial from 2:50 p.m. After the meeting, he rested for 
about 30 minutes in a chair in the room where the meeting took place 
and scanned through the data. He then returned to his room and spent 
several minutes there and headed for the press conference in 
question, telling the Finance Ministry officials, "Let's go." 
 
Meanwhile, Prime Minister Taro Aso apologized before the House of 
Representatives Budget Committee yesterday for Nakagawa's behavior 
and the subsequent developments: "Mr. Nakagawa's attitude invited 
anxiety and distrust in the world. It is truly regrettable. I feel 
deeply sorry that while the fiscal 2009 budget is being discussed, 
the finance minister, who takes charge, has been replaced." Aso also 
admitted his responsibility for appointing Nakagawa, saying: "The 
responsibility for appointing him as a cabinet minister naturally 
rests with me." 
 
12) Serving in three posts concurrently, Yosano walking on 
tightrope: Increased burden affecting actual work, as seen in his 
absenting himself from key meetings or postponing such 
 
NIKKEI (Page 2) (Abridged slightly) 
February 20, 2009 
 
Yosano is serving in three posts -- minister of finance, state 
minister for financial services, and state minister for economic and 
fiscal policy - and walking on a tightrope. Though this is an urgent 
situation, the weight of the burden placed on him is unprecedented. 
When Democratic Party of Japan (DPJ) Deputy President Naoto Kan at a 
meeting of the Lower House Budget Committee on February 19 said to 
him, "It is tough, isn't it?," he complained, "I wish you could 
serve in one of my three posts." 
 
Top priority given to Diet deliberations 
 
Yosano is giving top priority to Diet deliberations on such issues 
as the fiscal 2009 budget bill. He has decided to absent himself 
 
TOKYO 00000388  009 OF 012 
 
 
from a meeting of the Association of Southeast Asian Nations (ASEAN) 
and a financial ministerial meeting slated for the 22nd. A meeting 
of the fiscal system council, an advisory body reporting to the 
finance minister, has also been postponed. 
 
However, he must play a role of the control tower in compiling an 
additional stimulus package when presiding over a meeting of the 
Council on Economic and Fiscal Policy. He is scheduled to attend 
along with Prime Minister Aso the 2nd emergency financial summit to 
be held in London on April 2. Aides to Yosano are worried whether he 
can manage his responsibilities concerning the financial summit. 
 
Yosano has five secretaries, who are close to the prime minister. 
Some are concerned about their relations with one senior Cabinet 
Office noting: "Their personal relationships are good. However, I 
wonder whether they can maintain that friendly relationship, when 
they represent government offices to which they originally belong." 
 
Referring to Yosano serving in three posts, Japan Chamber of 
Commerce and Industry President Tadashi Okamura expressed his 
expectation: "Heavy duties have been assigned to Mr. Yosano. Given 
his health condition, it would be better if his burden is lighter. 
However, Mr. Yosano is the only person who can overcome this 
difficult situation" 
 
De facto "Yosano administration" 
 
According to the Cabinet Office Law, there is no limit to the number 
of posts one cabinet minister can serve concurrently. However, it is 
very unusual for such key posts as finance minister and state 
minister for economic and fiscal policy to be held by one person, as 
an official of the Cabinet Secretariat said. Authority over economic 
matters is now concentrated in one person. As such, one senior 
ruling party member, who is distancing self from Yosano, is 
increasingly alarmed about the situation, noting, "This is a de 
facto Yosano administration." 
 
Yosano will likely serve in the current posts until the fiscal 2009 
budget and related bills secure Diet approval. One reason that 
Yosano was picked as a successor to Nakagawa is handiness, that is 
to say, his assuming the post of finance minister and state minister 
for financial services does not require an attestation ceremony and 
he is able to make stable Diet replies readily. Some in the ruling 
parties view that if he is relieved of the current burden, he will 
remain as finance minister and state minister for financial 
services, and somebody else will succeed as state minister for 
economic and fiscal policy. Others, however, maintain that his 
successor should be formally chosen from among those who have 
previously served as finance minister. 
 
13) Economy in severe situation, monthly report for February notes: 
Downward revision made for fifth consecutive month; Consumption 
drops for first time 
 
NIKKEI (Page 2) (Full) 
February 20, 2009 
 
The government on February 19 finalized its monthly economic report 
for February, downgrading the overall economic assessment for the 
fifth consecutive month. The report notes that the economy is under 
harsh conditions with rapid economic deterioration continuing. It 
has determined that the global recession had cooled off Japan's 
 
TOKYO 00000388  010 OF 012 
 
 
domestic demand and consumer spending had for the first time begun 
declining slowly. Exports, production and capital investment by 
companies are in a slump. The report indicates a possibility of the 
recession becoming protracted, noting that there exist risks that 
will further depress the economy. 
 
According to the Cabinet Office, records of its overall economic 
assessments since 1998 are tractable. The downward revision for five 
consecutive months is the longest-ever record. The previous record 
was the February - June period of 2001, when the economy took a 
downward turn, following the collapse of the IT bubble. 
 
In making overall economic assessment for February, the office has 
added with the words "a severe condition" to the January report, 
which mentioned that the economy was "deteriorating rapidly." It is 
strongly aware that the level of economic activities is low. There 
are no signs of exports and industrial output, which marked the 
steepest-ever fall around the end of last year, recovering. The 
operating rate index of the manufacturing sector, which the Ministry 
of Economy, Trade and Industry compiles, marked the lowest-ever 
level in December 2008. The stagnation in corporate activities has 
become noticeable. 
 
14) Government, ruling coalition mulling time-limited system to pay 
full amount of each project in additional economic package 
 
TOKYO SHIMBUN (Top Play) (Full) 
February 20, 2009 
 
The government and the ruling parties plan to submit an additional 
economic stimulus package after the fiscal 2009 budget is enacted. 
They intend to use government money to finance the public works 
projects in the package, without asking regional governments to bear 
a certain level of the total expense of each project, according to 
informed sources yesterday. 
 
The Local Government Finance Law requires the local government 
concerned to disburse a certain percentage of the total cost of a 
public works project ordered by the central government. If this plan 
is adopted, it will be a major policy switch. 
 
The government and the ruling camp have decided to work out details 
of the package in mid-March, but they expect to adopt a special 
system with a time limit, for instance, under a special measures 
law. They are also considering the possibility of reviewing the 
current burden-sharing system itself over a medium to long term. 
Giving consideration to growing calls for a review of the 
burden-sharing system from local governments beset by fiscal 
straits, the government intends to reduce the burden on their 
finances and raise the effectiveness of the economic package. 
 
The budget scale of the package has yet to be decided, but 
construction bonds are likely to be used as the main source of 
revenue. The projects now under consideration include those related 
to infrastructure construction and environmental investment, such as 
rebuilding or repairing old bridges, making public facilities 
earthquake-resistant, and spreading solar power generation devices 
across the nation. A government source said: "Investment will be 
made mainly in areas that are expected to produce a major effect." 
The government will also look into creating a new system to extend 
interest-free loans to the local governments involved in new 
Shinkansen bullet-train projects. 
 
TOKYO 00000388  011 OF 012 
 
 
 
In response to a request by Osaka Governor Toru Hashimoto to review 
the burden-sharing of his government for projects under its 
immediate supervision, the government reduced the amount to be borne 
by Osaka in the fiscal 2009 budget bill. Since then, future options 
for burden-sharing between the central and local governments have 
been earnestly discussed. The National Governors' Association also 
asked Land, Infrastructure, Transport and Tourism Minister Kazuyoshi 
Kaneko to review the burden-sharing system. 
 
Niigata Governor Hirohiko Izumida was pressed with a higher bill 
than the initial amount that his government should pay for a project 
to extend the Hokuriku Shinkansen line and decided to freeze it, 
complaining: "The central government has not given a sufficient 
explain." Other local governments located along the line have also 
voiced complaints. 
 
15) Vice foreign minister to visit U.S. 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 20, 2009 
 
The Foreign Ministry announced yesterday Administrative Vice Foreign 
Minister Mitoji Yabunaka will visit the United States from today to 
meet with U.S. Deputy Secretary of State Steinberg. 
 
Yabunaka will exchange views on such issues as North Korea policy 
and economic crisis management in preparation for the first summit 
meeting of Prime Minister Aso and President Obama to be held in 
Washington on Feb. 24. 
 
16) Defense chief to visit China next month 
 
NIKKEI (Page 2) (Full) 
February 20, 2009 
 
The Japanese and Chinese governments are coordinating a schedule for 
Defense Minister Yasukazu Hamada to visit China next month. Hamada 
will be the first defense chief to visit China in five and a half 
years since Defense Agency Director General Shigeru Ishiba visited 
that country in September 2003. In mid-March, Japan will host a 
security meeting of working-level diplomatic and defense officials 
in Tokyo. The two governments will accelerate defense exchanges in 
order to provide for growing uncertainties over the security 
situation in East Asia and contingencies. 
 
During his visit to China, Hamada will meet with Chinese Defense 
Minister Liang Guanglie and other officials and is expected to 
exchange views on such matters as sharing information regarding 
antipiracy activities in waters off the eastern African coast of 
Somalia and improving the transparency of China's defense spending 
in its military modernization process. Hamada may touch on the 
Chinese defense ministry's plan to build aircraft carriers. 
 
The security dialogue between Japan and China was last held in July 
¶2006. The two countries will discuss how to push ahead with 
bilateral cooperation on United Nations peacekeeping operations as 
well as disaster relief activities and how to communicate between 
the two governments in the event of emergencies. They are also 
expected to discuss the increasingly uncertain situation in North 
Korea that is reportedly preparing to launch a long-range ballistic 
missile. 
 
TOKYO 00000388  012 OF 012 
 
 
 
Japan and China were inactive in their bilateral defense exchanges 
when the Koizumi cabinet was in office. Recently, however, the two 
countries have been activating such exchanges. In August 2007, 
China's defense minister visited Japan for the first time in nine 
and a half years. On Feb. 19, Ge Zhenfeng, deputy chief of the 
Chinese People's Liberation Army general staff, who visited Japan, 
met with Hamada and agreed to realize Hamada's China visit at an 
early date and propel exchanges between the Self-Defense Forces and 
the PLA. 
 
"The new U.S. administration under President Obama has now set forth 
its policy of attaching importance to Afghanistan," a senior Defense 
Ministry official said. "In such a situation," this official went 
on, "there's no doubt that the relationship between Japan and China 
will become more important in East Asia." He added, "Although we're 
at odds on some points, we'll need to strengthen relations between 
the two countries." 
 
17) Antipiracy legislation allows firing on pirate ships 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
February 20, 2009 
 
The government is planning to present a bill to the Diet next month 
for a new law against pirates, and its outline was revealed 
yesterday. The focus is on easing the government's guidelines for 
the Self-Defense Forces to use weapons or the so-called rules of 
engagement (ROE). In this regard, the SDF will be allowed under the 
currently existing police duty execution law to fire on pirate ships 
even if Japan Coast Guard or Maritime Self-Defense Force vessels are 
not under direct attack. 
 
The government is now preparing to send out MSDF destroyers in 
mid-March for an antipiracy mission in waters off the eastern 
African coast of Somalia by invoking an action for maritime security 
operations under the current SDF law. The MSDF's use of weapons will 
be under the police duty execution law and will be limited to either 
legitimate self-defense or emergency evacuation stipulated in 
Article 7 of the law. 
 
The police duty execution law, in its paragraph 2 under Article 7, 
also allows police officers to use weapons in order to carry out 
their duties. However, whether the SDF can be allowed to fire on 
target ships under that paragraph has been regarded as a 'gray 
zone.' Accordingly, there may be some cases where the commanding 
officer will waver over the use of weapons. 
 
The new law will therefore specify that the SDF may use weapons 
under that paragraph's provisions. In concrete terms, the MSDF will 
be allowed to fire on armed pirate ships in order to stop them. 
 
ZUMWALT