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UNCLAS SECTION 01 OF 10 TOKYO 000511 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 03/06/09 
 
INDEX: 
(1) North Korea steadily preparing missile launch (Part 1): Newly 
constructed structure seems designed to inject fuel confirmed 
(Asahi) 
 
(2) North Korea steadily preparing missile launch (Part 2): 
Pyongyang aiming to break impasse in relations with U.S. (Asahi) 
 
(3) DPJ coordinating vote against Guam pact (Okinawa Times)  3 
(4) Ozawa's statement contradicts the facts, such as agreement and 
use of good offices (Sankei) 
 
(5) Asahi survey of local governments on cash handout scheme: 
Majority of municipalities will start distribution in April or 
later: 36 PERCENT  reply they are looking forward effects of measure 
(Asahi) 
 
(6) Employment reconstruction - labor, management in anguish - part 
1: Banks suddenly change attitude in face of possible March crisis: 
Company resorting to "repayment crunch" at risk of corporate life 
(Tokyo Shimbun) 
 
(7) TOP HEADLINES 
 
(8) EDITORIALS 
 
(9) Prime Minister's schedule, March 5 (Nikkei) 
 
(Corrected copy): North Korean missile: Japan, U.S. confirm close 
collaboration (Nikkei) 
 
(Corrected copy): Premier plans to visit Europe during early May 
Golden Week holidays: Coordination under way for Japan-EU summit in 
Czech (Nikkei) 
 
ARTICLES: 
 
(1) North Korea steadily preparing missile launch (Part 1): Newly 
constructed structure seems designed to inject fuel confirmed 
 
ASAHI (Page 2) (Abridged) 
March 6, 2009 
 
North Korea is steadily preparing to launch possibly a long-range 
ballistic missile, Taepodong-2. Although a missile has yet to be 
installed on the launch pad, the assembly work may have been almost 
completed. 
 
Present state of missile base 
 
There is a missile base in Musudan, North Hamgyong province, which 
is located very close to the Sea of Japan. Based on information on 
mobilization of goods obtained through spy satellites, authorities 
of the U.S. and South Korea governments have said that North Korea 
has almost completed the assembly work as of March 5, leaving only 
such works as installing what is to lift off on the launch pad and 
injecting fuel. 
 
The two governments detected a new structure that seems designed to 
send out fuel into a rocket. The injection of liquid fuel through an 
underground pipeline is expected to be completed in a day or so, 
though it took four or five days by tanker at the time of the last 
 
TOKYO 00000511  002 OF 010 
 
 
missile test-firing in July 2006. According to experts of Japan, the 
U.S. and South Korea expect three days, at the earliest, to be taken 
until the missile lifts off after it is taken out. 
 
A freight car that took on containers left a munitions plant in 
North Pyongan in late January and the containers were transported 
into an assembly building in the military base. Seeing North Korea's 
ongoing moves are very similar to the scenes observed when it fired 
the Taepodong-2 in 2006, the South Korean Defense Ministry believes 
the North is preparing the same type of missile.  But there is no 
sign of an actual missile on the base yet. 
 
Since Feb. 24, North Korea has repeatedly announced it is preparing 
to launch a satellite. It has also said that it is planning to 
launch within several years working satellites needed for national 
economic development, such as telecommunications, resource 
exploration, and weather forecasting. 
 
A South Korean government source said: "North Korea would most like 
to have its own satellites." In its past test fires, North Korea 
fired a missile in the direction of the east. But some analysts 
anticipate that this time, a missile might be fired in the direction 
of the north - the direction of Russia and China - or the south - 
the Kyushu part of Japan, in order to put the satellite on the polar 
orbit that connects the North Pole and the South Pole. 
 
(2) North Korea steadily preparing missile launch (Part 2): 
Pyongyang aiming to break impasse in relations with U.S. 
 
ASAHI (Page 2) (Full) 
March 6, 2009 
 
Why at this time 
 
Seeing North Korea's moves to launch a missile, many analysts 
speculate that Pyongyang is aiming at increasing tensions to draw 
attention from the Obama administration and carry out negotiations 
in its favor. They also see the North's desire to solidify unity in 
the nation and enhance national prestige. 
 
North Korea has invited U.S. experts on peninsula affairs to visit 
the nation, as represented by its invitation to Special 
Representative for Policy on North Korea Stephen Bosworth last 
month, even before he assumed his post. The North is undoubtedly 
hoping to break the impasse in its relations with the U.S., taking 
advantage of the inauguration of a new Democrat administration. 
Meanwhile, the U.S. government is willing to continue the policy of 
dialogue, even while taking a tough stance, as Secretary of State 
Hillary Clinton said: "A missile launch is provocative and would be 
unhelpful (to moving forward its relationship with the U.S.) 
 
Ambassador Bosworth, who arrived in Japan as part of an Asian tour 
yesterday, set Seoul as the last destination of the tour in 
preparation for visiting Pyongyang if there is a call from that 
nation. A researcher at the Korea Institute for Defense Analyses 
said: "There is a 70 PERCENT  possibility of the North launching a 
missile, but a drastic compromise (between the U.S. and North Korea) 
is also 70 PERCENT  possible." 
 
North Korean leader Kim Jong Il's health problems have been reported 
since last summer. Since early this year, Kim has provided more 
"field guidance" than in past years. A number of measures have been 
 
TOKYO 00000511  003 OF 010 
 
 
taken to strengthen the regime, such as steps to tighten market 
regulations. The North Korean media have also reported on 
"preparations to launch a satellite," encouraging the people with 
these words: "The nation will take a major step toward becoming an 
major economic power." 
 
When will the North actually fire a missile? North Korea has 
fiercely reacted to the planned joint military drill by the U.S. and 
South Korea from March 9 - 20, but an observer said: "During this 
period, machinery will freeze up, it will be difficult to conduct 
precise work." 
 
The Supreme People's Congress will be held in April, in which Kim is 
expected to be reelected as National Defense Committee chairman. In 
1998, the North fired a Taepodong-2 several days before the Supreme 
People's Congress opened. April 15, is the birthday of the late Kim 
Il Sung. April 25 is the day of commemoration of the establishment 
of the Korean People's Army. On these days, the launch of a missile 
could be effectively stage-managed. 
 
(3) DPJ coordinating vote against Guam pact 
 
OKINAWA TIMES (Page 1) (Abridged) 
March 6, 2009 
 
The Japanese and U.S. governments have now signed an agreement 
relating to the planned relocation of U.S. Marines in Okinawa to 
Guam, and the Guam relocation pact is now before the Diet for its 
approval. In response, the leading opposition Democratic Party of 
Japan (Minshuto) has entered into final coordination to vote against 
the pact. The Japanese Communist Party, the Social Democratic Party, 
the People's New Party, and other opposition parties have also 
decided to vote against it. The ruling and opposition parties are 
clearly at odds with the government over the Guam agreement. 
 
The Guam relocation pact, a treaty up for Diet ratification, is 
expected to enter into parliamentary deliberations at the House of 
Representatives Foreign Affairs Committee on March 25 or later. The 
ruling coalition of the Liberal Democratic Party and the New Komeito 
wants to have the Guam relocation pact passed through the House of 
Representatives in early April and send it to the House of 
Councillors. The Guam pact, even if it is voted down in the House of 
Councillors, will likely come into effect in late April or in early 
May with the House of Representatives' constitutional precedence 
over the House of Councillors. 
 
When the Diet was in its ordinary session last year, the House of 
Representatives Foreign Affairs Committee deliberated for two days 
on a new special agreement regarding Japan's burden of sharing costs 
for the stationing of U.S. forces in Japan (omoiyari yosan or 
literally "sympathy budget"). A similar schedule is expected for the 
Guam relocation pact as well. 
 
The DPJ is aiming for a change of government in the next election 
for the House of Representatives, so the party is expected to avoid 
raising an explicit objection to the realignment of U.S. forces in 
Japan from its stance of attaching importance to relations with the 
United States. However, the DPJ will oppose the Guam relocation pact 
while pointing to the Japanese government's murky spending on the 
Guam relocation and its lack of explanations. 
 
A DPJ executive told the Okinawa Times: "We have said the government 
 
TOKYO 00000511  004 OF 010 
 
 
has been failing to fulfill its accountability on what is related to 
the U.S. force realignment. We will continue to pursue this." 
 
The opposition bench is therefore expected to oppose the Guam 
relocation pact, asserting that the Diet has not fully deliberated 
on it. The ruling coalition, which holds a majority of the seats in 
the House of Representatives, is highly likely to ram the pact 
through the Diet. 
 
(4) Ozawa's statement contradicts the facts, such as agreement and 
use of good offices 
 
SANKEI (Page 1) (Abridged slightly) 
March 6, 2009 
 
Democratic Party of Japan (DPJ) President Ichiro Ozawa held a news 
conference (on March 4) in connection with the case of his 
fund-management organization having received de facto corporation 
donations from Nishimatsu Construction Co. in violation of the 
Political Funds Control Law. Although Ozawa flatly denied during his 
press conference any wrongdoing, the investigation by the special 
unit of the Tokyo District Public Prosecutors Office has exposed 
several areas that conflict with Ozawa's explanation. The special 
investigation unit is likely to question Ozawa. It is inevitable 
that calls will grow for Ozawa to offer additional explanations to 
the public regarding those contradictions. 
 
Awareness 
 
In the March 4 news conference, Ozawa indicated that he did not 
think there was a problem, saying, "My view was that the money was 
donations from political organizations and that is why my 
fund-management body received them." 
 
According to the investigation, Ozawa's first state-paid secretary 
and Rikuzan-kai's chief accountant Takanori Okubo, 47, is believed 
to have decided with the Nishimatsu side to set the total amount of 
annual donations at about 25 million yen. The investigation team 
believes this shows Ozawa's deep involvement in the donation 
scandal. 
 
As a general rule, in the past, a person who violated the Political 
Funds Control Law was indicted without arrest or detention. This 
time around, it seems that the investigation squad arrested (Okubo 
and others) after the raid, taking seriously Nishimatsu's cunning 
practice of returning its employees' payments to the Ozawa side in 
the form of adding those amounts to their bonuses. 
 
Ozawa expressed his anger with the "unprecedented investigation," 
saying, "I don't think there have been any examples of arrests and 
compulsory investigations over this sort of problem in the past." If 
an agreement had existed between the Ozawa side and Nishimatsu on 
donations, that would make Ozawa's 
donations-from-political-organizations explanation false. 
 
Discrepancies 
 
Although Ozawa remained calm throughout the new conference, he 
raised his voice when answering a reporter's question asking whether 
or not his side had given favors to any parties in return for 
receiving donations. 
 
 
TOKYO 00000511  005 OF 010 
 
 
Ozawa replied: "If I or my secretary had provided favors to the 
donating party, we would readily accept the investigation. But 
neither of us has done such a thing." 
 
But discrepancies have emerged from the investigation. For instance, 
Okubo allegedly used his good offices in connection with the 
construction of facilities linked to the Isawa Dam project in Iwate 
Prefecture that was ordered in March 2006 by the Land and 
Infrastructure Ministry's Tohoku Regional Development Bureau. Former 
Nishimatsu President Mikio Kunisawa, 70, and others allegedly 
admitted that they had asked Okubo to maneuver to award some 
construction works to Nishimatsu and that they won some works 
because of large donations. 
 
Checking 
 
In the press conference, Ozawa offered the explanation by using the 
words "common sense," saying: "It is common sense not to pry into 
where the money comes from. We simply trust people's goodwill. The 
income and expenditures of my political organization have been fully 
disclosed." 
 
A reporter posed a question asking about his responsibility to check 
matters as the head of Rikuzan-kai. Ozawa replied: "It is impossible 
for me to check where every single donation comes from." Asked if he 
intended to offer an apology, Ozawa said: "I do not see any reason 
to do so." 
 
Ozawa also declared, "There is no problem," despite the fact that he 
had neither checked the donations nor knew about the details. That, 
too, can be said to be contradictory. Investigators are expected to 
question Ozawa about such a view, as well. The DPJ president is 
likely to be pressed for additional explanation at a news conference 
and other venues. 
 
(5) Asahi survey of local governments on cash handout scheme: 
Majority of municipalities will start distribution in April or 
later: 36 PERCENT  reply they are looking forward effects of 
measure 
 
ASAHI (Page 1) (Excerpts) 
March 5, 2009 
 
Bills related to the fiscal 2008 second extra budget designed to 
secure fiscal resources to finance the government's cash handout 
scheme were enacted on March 4. However, according to a poll the 
Asahi Shimbun conducted on municipalities throughout the nation, a 
majority of them will not be able to distribute benefits until April 
or later. The Aso administration has pledged to distribute benefits 
within the current fiscal year. However, the pledge has now been 
effectively broken. Nearly half the respondents replied that they 
are trying to take various measures to encourage recipients to use 
the money locally. The poll also found that they it will be 
difficult to find ways to distribute the benefits to homeless 
people, as well. 
 
Questionnaires were sent to all 1,804 municipalities by mail, 
eliciting responses from 1,691 municipalities or 94 PERCENT . 
Nishi-Okoppe Village in Hokkaido and Nishimeya Village in Aomori 
Prefecture will start distribution from the 5th. 
 
Only 16 PERCENT  replied that they would be able to start 
 
TOKYO 00000511  006 OF 010 
 
 
distribution before the end of the current fiscal year. Others 
replied, "do not know." The number of municipalities that will not 
be able to distribute until the new fiscal year starts will likely 
increase. 
 
Since application forms will be sent, based on the basic resident 
registers, it is impossible to give the handouts to those whose 
names are not listed in the registers, such as homeless people. The 
reply "looking into ways to distribute the money to such people as 
well" was chosen by 32 PERCENT  of the respondents. However, almost 
no municipalities gave specific measures, noting that they are 
waiting for an instruction from the state. 
 
Many municipalities gave a number of specific measures to promote 
local consumption, such as issuing coupons attached with premiums to 
have them purchased by recipients. Under this method, the premiums 
will be financed by the municipalities that issued those coupons. 
The premiums will like be between 10 PERCENT -20 PERCENT  of the 
cash handout. Nishi-Okkope Village will subsidize 67 PERCENT  -- the 
largest among respondents. Municipalities that are considering 
methods to urge local consumption reached 47 PERCENT . 
 
To a question on the effects of cash handouts in terms of helping 
people's livelihood and stimulating the economy, 36 PERCENT 
replied, "Such effects can be expected," while 11 PERCENT  replied, 
"Such effects cannot be expected." To a question on whether pollees 
think the policy satisfies citizens, the reply "do not think so" was 
given by 20 PERCENT  of respondents, while 13 PERCENT  answered 
otherwise. As reasons why they are not satisfied, the replies 
"pork-barrel largesse" and "passing the buck to the future" were 
cited. Some replied that the distribution of handouts will boost 
public approval ratings (for the cabinet). However, it appears 
difficult to expect such an effect under the present circumstances. 
 
The cash handout scheme is characterized as an administrative duty 
to be carried out by local governments, based on their own 
judgments. However, the overwhelming portions of respondents -- 77 
PERCENT  -- replied that the scheme should have been characterized 
as an administrative duty legally entrusted by the government to 
local governments. It appears that local governments feel 
implementing the government-led policy, which allows them little 
discretion, can hardly be called autonomy. 
 
(6) Employment reconstruction - labor, management in anguish - part 
1: Banks suddenly change attitude in face of possible March crisis: 
Company resorting to "repayment crunch" at risk of corporate life 
 
TOKYO SHIMBUN (Top Play) (Abridged slightly) 
March 6, 2009 
 
Labor-management negotiations in annual spring wage-increase 
offensive are going on under the banner of a demand for unified wage 
hikes for the first time in eight years. However, the employment 
situation has critically deteriorated due to the global recession. 
Serious anxieties are enveloping the Japanese society. Tokyo Shimbun 
has probed into corporate efforts to find the end of the tunnel, 
while delving into the present state of the crisis and its 
background. 
 
The president of a certain construction-materials manufacturer, 
which has an office in Tokyo, earlier this month received a reminder 
from a major bank, its line bank asking for payments of borrowings. 
 
TOKYO 00000511  007 OF 010 
 
 
That is because the company has been falling behind its debt 
repayment. 
 
It has been more than 70 years since the father of the president 
established the company. It has about 30 employees. Its annual 
business has expanded to 800 million yen. The company achieved a 
surplus in the previous account settlement. 
 
The situation changed late last year. A bank officer in charge of 
his company's acounts said, "We are afraid that we will not be able 
to meet your request for fresh loans." 
 
The president borrowed money from that bank, putting up his own home 
and factory as collateral six years ago. Since then, he has repaid 
several million yen a month without delay. He has continued to 
receive loans worth about 30 million yen at the end of each year, 
putting that creditworthiness as collateral. The president said, 
"All small and medium-sized businesses are doing business this way. 
It is like an annual event." Bank borrowings are the working capital 
for small and medium-sized companies, which operate with only small 
amounts. They are the companies' lifeline. 
 
The bank officer in charge did not reveal the reason. The president 
felt he was talking with a stranger from some other bank. He thought 
that the bank's notice is tantamount to a death sentence to small 
and medium-sized businesses. 
 
After much anguish, he chose to protect the employees and their 
families, instead of allowing his company to go down, by giving 
priority to debt payments. He decided to counter the banks' credit 
crunch with a "repayment crunch," meaning delaying debt repayments 
until the very last moment. He said, "This is a situation that can 
occur once in a century. Our lives are at stake." 
 
The financial crisis that started in the U.S. and a sharp decline in 
demand throughout the world have hit corporate cash management, 
which is a lifeline for companies. 
 
Major companies are procuring capital by issuing commercial papers 
(CP). As turbulence spread in the market spreads, the market has 
come to accept only CPs issued by companies with high 
creditworthiness. 
 
Tension among market participants rose to the utmost extent late 
last year because of the rumor that Japan's blue-ribbon companies 
would go bankrupt. The targets of the rumor included leading auto 
and electronic-appliance manufacturers. It is fair to say that the 
auto and electronic-appliance industries are Japan's key 
industries. 
 
Facing a decline in business performances and cash management, 
financial managers of many listed companies resorted to bank loans. 
As a result, small and medium-sized businesses have been ousted and 
made the targets of credit crunch. 
 
Giving heed to the situation, the government and the Bank of Japan 
extended assistance in an unprecedented manner, including the 
purchases of CPs. However, according to Tokyo Shoko Research, 994 
companies went bankrupt in 2008 due to a shortage of operating 
capital, topping the 678 companies that collapsed in 1998, a year 
when domestic banks went under successively. Tension is once again 
mounting in the run-up to the end of March, when many companies 
 
TOKYO 00000511  008 OF 010 
 
 
close their books. 
 
 (7) TOP HEADLINES 
 
Asahi: 
Nishimatsu holds disguised fund-raising parties 
 
Mainichi: 
Donations from Nishimatsu-linked group mostly go to Ozawa side 
 
Yomiuri: 
Ozawa's ex-secretary sought donations from Nishimatsu 
 
Nikkei: 
Government to spend up to 3 trillion yen to help cash-strapped 
firms 
 
Sankei: 
Tokyo prosecutors to question Nikai, his faction members 
 
Tokyo Shimbun: 
Nishimatsu-linked groups' donations aimed at construction orders in 
Tohoku region 
 
Akahata: 
Action for spring wage offensive: Need for domestic demand expansion 
for raising wages and for increasing jobs 
 
(8) EDITORIALS 
 
Asahi: 
(1) China's National People's Congress: China aims at 8 PERCENT 
growth in 2009 
(2) We look forward to seeing expect good games in World Baseball 
Classic 
 
Mainichi: 
(1) We expect China's expanding domestic demand 
(2) Historical towns also should be preserved 
 
Yomiuri: 
(1) Strengthen cooperation to prevent North Korea from firing 
Taepodong missile 
(2) We want to enjoy the heart of baseball through World Baseball 
Classic 
 
Nikkei: 
(1) Hope for China's expansion of domestic demand, transparency of 
military spending 
(2) Strategy of next generation cell phones to be questioned 
 
Sankei: 
(1) DPJ, don't escape from clearing up doubts 
(2) China, explain huge national defense expenditures 
 
Tokyo Shimbun: 
(1) China should expand domestic demand to support global economy 
(2) Flood hazard map for protecting residents 
 
Akahata: 
(1) Cash-handout plan: Government, ruling parties are "base" 
 
 
TOKYO 00000511  009 OF 010 
 
 
(9) Prime Minister's schedule, March 5 
 
NIKKEI (Page 2) (Full) 
March 6, 2009 
 
07:25 
Met with Deputy Chief Cabinet Secretaries Matsumoto and Konoike at 
the Kantei. 
 
09:00 
Upper House Budget Committee meeting. Then met with METI Minister 
Nikai. 
 
12:02 
Arrived at the Kantei. 
 
13:00 
Upper House Budget Committee meeting. 
 
17:35 
Overseas economic cooperation conference at the Kantei. Nikai 
remained. 
 
18:15 
Met with Chief Cabinet Secretary Kawamura, followed by Lower House 
member Seishiro Eto, chairman of the   Dietmen's League to Promote 
Maritime Nation. 
 
19:07 
Dined with Chugai Pharmaceutical Co. President Osamu Nagayama, his 
younger brother Yutaka and others. 
 
21:55 
Arrived at the official residence. 
 
(Corrected copy): North Korean missile: Japan, U.S. confirm close 
collaboration 
 
NIKKEI (Page 2) (Full) 
March 6, 2009 
 
Special Representative for North Korea Policy Stephen Bosworth on 
March 5 met with Akitaka Saiki, director general of the Foreign 
Ministry Asian and Oceanian Affairs Bureau, at the Foreign Ministry. 
Concerning North Korea showing signs of test-launching a ballistic 
missile, both agreed to ask that nation to restrain itself. They 
confirmed their stance of closely cooperating with each other, 
including filing a complaint with the UN Security Council, in the 
event the DPRK went ahead with the launch. 
 
This is the first meeting between Japanese and U.S. working-level 
officials in charge of the North Korea issue since the inauguration 
of the Obama administration. 
 
They confirmed the understanding that the launching of a missile by 
North Korea is in breach of a UNSC resolution adopted, following its 
launch of ballistic missiles and nuclear test in 2006. 
 
(Corrected copy): Premier plans to visit Europe during early May 
Golden Week holidays: Coordination under way for Japan-EU summit in 
Czech 
 
 
TOKYO 00000511  010 OF 010 
 
 
NIKKEI (Page 2) (Full) 
March 6, 2009 
 
The Nihon Keizai Shimbun learned on March 5 that Prime Minister Taro 
Aso is considering visiting Europe during Golden Week holidays in 
early May. Coordination is now under way for visiting the Czech 
Republic, the host country of the EU, to hold a Japan-EU summit with 
Prime Minister Topolanek. He also wants to visit various east 
European countries, where economic woes are continuing due to the 
global recession. 
 
Economic cooperation with the Czech Republic, Hungary, Poland and 
Slovakia (V4) is one of the pillars of the Arc of Freedom and 
Prosperity, a diplomatic strategy the prime minister advocated when 
he was foreign minister. 
 
ZUMWALT