VZCZCXRO3650
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1281/01 1592157
ZNR UUUUU ZZH
P 082157Z JUN 09 ZDK
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3537
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 6769
RUEHFK/AMCONSUL FUKUOKA 4436
RUEHOK/AMCONSUL OSAKA KOBE 8238
RUEHNAG/AMCONSUL NAGOYA 2024
RUEHKSO/AMCONSUL SAPPORO 4965
RUEHBJ/AMEMBASSY BEIJING 9707
RUEHUL/AMEMBASSY SEOUL 5733
RUCNDT/USMISSION USUN NEW YORK 5456

UNCLAS SECTION 01 OF 17 TOKYO 001281 
 
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 06/08/09 
 
TOKYO 00001281  001.3 OF 017 
 
 
INDEX: 
 
(1) Poll on Aso cabinet, political parties (Yomiuri) 
 
(2) Hurdles to Japan's sanctions on North Korea; Government rushing 
to consider specific policies (Nikkei) 
 
(3) High-level economic dialogue: Japan, China to cooperate to 
overcome financial crisis (Nikkei) 
 
(4) Cabinet Office estimates restoration of fiscal health delayed to 
2020 or beyond even with 10 PERCENT  consumption tax rate (Asahi) 
 
(5) Policy emphasis to shift to Secure Society Council (Nikkei) 
 
(6) Resumption of JICA aid to support private sector infrastructure 
projects in Asia mulled (Sankei) 
 
(7) Nago City, local firms planning to form new organization to 
promote 700-billion-yen new base-construction project in Okinawa, 
probably eyeing contracts (Akahata) 
 
(8) Anatomy of DPJ: U.S. distrustful of DPJ's foreign and security 
policies (Sankei) 
 
(9) "Seiron" column: Policies that the DPJ wants to implement are 
unclear (Sankei) 
 
(10) TOP HEADLINES 
 
(11) EDITORIALS 
 
(12) Prime Minister's schedule, June 6 (Nikkei) 
 
ARTICLES: 
 
(1) Poll on Aso cabinet, political parties 
 
YOMIURI (Page 6) (Full) 
June 8, 2009 
 
Questions & Answers 
(Figures shown in percentage) 
 
Q: Do you support the Aso cabinet? 
 
Yes 29.5 
No 61.0 
Other answers (O/A) 3.8 
No answer (N/A) 5.7 
 
Q: (Only for those who answered "yes" to the foregoing question) 
Pick only one from among the following reasons for your approval of 
the Aso cabinet. 
 
Something can be expected of its policy measures 22.1 
The prime minister has leadership ability 10.3 
There's something stable about the prime minister 10.1 
His cabinet's lineup is good 6.6 
Because it's a coalition of the Liberal Democratic Party and the New 
Komeito 39.8 
O/A 1.1 
 
TOKYO 00001281  002.3 OF 017 
 
 
N/A 9.9 
 
Q: (Only for those who answered "no" to the foregoing question) Pick 
only one from among the following reasons for your disapproval of 
the Aso cabinet. 
 
Nothing can be expected of its policy measures 28.5 
The prime minister lacks leadership ability 28.2 
There's nothing stable about the prime minister 20.8 
His cabinet's lineup is not good 4.1 
Because it's a coalition of the Liberal Democratic Party and the New 
Komeito 15.0 
O/A 0.4 
N/A 3.0 
 
Q: Which political party do you support now? Pick only one. 
 
Liberal Democratic Party (LDP) 28.5 
Democratic Party of Japan (DPJ or Minshuto) 27.7 
New Komeito (NK) 2.8 
Japanese Communist Party (JCP) 2.4 
Social Democratic Party (SDP or Shaminto) 1.0 
People's New Party (PNP or Kokumin Shinto) 0.1 
Reform Club (RC or Kaikaku Kurabu) --- 
New Party Nippon (NPN or Shinto Nippon) --- 
Other political parties 0.1 
None 35.2 
N/A 2.0 
 
Q: When comparing Prime Minister Aso and DPJ President Hatoyama, who 
do you think is more appropriate to be prime minister? 
 
Prime Minister Aso 32.9 
DPJ President Hatoyama 44.0 
N/A 23.1 
 
Q: Do you think the DPJ will be able to take the reins of government 
in the next election for the House of Representatives? 
 
Yes 40.5 
No 48.8 
N/A 10.7 
 
Q: It has been three weeks since Mr. Yukio Hatoyama became DPJ 
president. What's your impression of DPJ President Hatoyama? 
 
Improved 14.2 
Worsened 2.8 
Unchanged 78.1 
N/A 4.9 
 
Q: Mr. Ichiro Ozawa of the DPJ resigned as DPJ president in the form 
of taking responsibility for illicit political donations to his 
fund-managing body. He has now become the party's deputy president 
under its new leadership. Is this acceptable? 
 
Yes 30.9 
No 62.2 
N/A 6.9 
 
Q: The ruling and opposition parties are discussing the issue of 
hereditary candidates running from their parents' home 
 
TOKYO 00001281  003.3 OF 017 
 
 
constituencies. Do you think such hereditary candidates should be 
restricted? 
 
Yes 48.5 
No 46.2 
N/A 5.3 
 
Q: North Korea carried out a second nuclear test in May and has also 
repeated its missile launches. Do you think the international 
community should impose stronger sanctions on North Korea? 
 
Yes 88.1 
No 6.0 
N/A 5.9 
 
Q: Do you think the international community's imposing stronger 
sanctions on North Korea will work to stop North Korea from 
developing nuclear weapons and missiles? 
 
Yes 45.9 
No 45.0 
N/A 9.1 
 
Q: Do you think the government has been dealing appropriately with 
the new influenza? 
 
Yes 68.2 
No 26.4 
N/A 5.4 
 
Q: Do you think the House of Representatives should be dissolved for 
a general election right away, or do you think there's no need to 
hurry? 
 
Right away 38.4 
No need to hurry 52.2 
N/A 9.5 
 
Q: If an election were to be held now for the House of 
Representatives, which political party would you like to vote for in 
your proportional representation bloc? 
 
LDP 28.7 
DPJ 39.1 
NK 2.6 
JCP 3.2 
SDP 1.4 
PNP 0.1 
RC --- 
NPN --- 
Other political parties 0.0 
Undecided 19.2 
N/A 5.6 
 
Q: What form of government would you like to see after the next 
election for the House of Representatives? 
 
LDP-led coalition government 14.2 
DPJ-led coalition government 20.0 
LDP-DPJ grand coalition government 25.2 
Government under new framework after political realignment 34.1 
O/A 0.1 
 
TOKYO 00001281  004.3 OF 017 
 
 
N/A 6.3 
 
Polling methodology: The survey was conducted June 5-7 across the 
nation on a computer-aided random digit dialing (RDD) basis. 
Households with one or more eligible voters totaled 1,734. Valid 
answers were obtained from 1,057 persons (61.0 PERCENT ). 
 
(Note) In some cases, the total percentage does not add up to 100 
PERCENT  due to rounding. 
 
(2) Hurdles to Japan's sanctions on North Korea; Government rushing 
to consider specific policies 
 
NIKKEI (Page 2) (Slightly abridged) 
June 7, 2009 
 
Negotiations among members of the UN Security Council (UNSC) on the 
sanctions resolution against North Korea for conducting its second 
nuclear test have entered the final stage. Beginning this week, the 
Japanese government will study the implementation of specific 
sanctions. The DPRK is certain to react fiercely to the UNSC 
resolution as it did to the previous presidential statement, so the 
situation is dangerously close to a further heightening of tension. 
The government will make a decision based on an overall assessment 
of various factors, including North Korea's reaction, the 
effectiveness of the sanctions, and domestic legal provisions. 
 
Inspection of cargo on North Korean ships has emerged as one of the 
key sanction measures in the UNSC resolution. The purpose of this is 
to halt the flow of materials relating to nuclear weapons and 
missiles. A similar measure was included in the UNSC resolution 
adopted after the DPRK's nuclear test in 2006. If cargo inspections 
are implemented rigorously under the new resolution, this will be 
the provision to which North Korea will react most strongly. 
 
But it will be difficult for Japan to conduct cargo inspections in 
international waters under existing laws. Even though it can do so 
by designating an "emergency situation in areas surrounding Japan" 
or a "quasi-contingency," the government maintains its position that 
the recent nuclear test has not given rise to such an "emergency 
situation." 
 
The government therefore is considering either of the following: (1) 
amending the law on ship inspection operations; or (2) legislation 
of a new law. There are also moves in the Liberal Democratic Party 
to look at the possibility of submitting a bill by Diet members, 
because "it is ridiculous if Japanese domestic laws make it 
impossible (to inspect ships)." 
 
However, since this will also involve a discussion on relaxing the 
rules on the use of weapons by the Self-Defense Forces (SDF) and 
such other issues, there is a view in the Ministry of Defense (MOD) 
that senior official explained "Japan does not have the capability 
or the legislation needed for conducting ship inspections in 
international waters. We will end up with just stricter inspections 
at ports and providing information on North Korean ships to other 
countries." 
 
Meanwhile, the U.S. is pushing strongly for financial sanctions, 
which is the other main element in the additional sanctions on the 
DPRK, because the financial measures it took in 2005 against the 
Banco Delta Asia in Macau were effective. For now, the specific 
 
TOKYO 00001281  005.3 OF 017 
 
 
steps have not been decided upon, but the Japanese government is 
prepared to cooperate with the U.S. and other countries in 
implementing financial sanctions. 
 
In April, as one of its own additional sanctions, the Japanese 
government lowered the amount of cash that requires reporting if 
transferred to North Korea. This time, it is expected to consider a 
complete ban on transactions with the DPRK's settlement banks. 
However, "the actual effectiveness is said to be unclear." 
 
The impact of the above sanctions on North Korea is unpredictable. 
There are already signs that the DRPK is preparing to launch another 
long-range missile. The situation in that country has become 
increasingly volatile, partly in relation to the question of 
succession to General Secretary Kim Jong Il. Japan must consider 
what comes after the sanctions. 
 
(3) High-level economic dialogue: Japan, China to cooperate to 
overcome financial crisis 
 
NIKKEI (Page 3) (Abridged slightly) 
June 8, 2009 
 
Tokyo and China at the 2nd high-level economic dialogue, held in 
Tokyo on June 7, reached an agreement to protect intellectual 
property rights and assist Japanese and Chinese companies in 
advancing into various Asian countries. Both countries, the second- 
and third-largest economies in the world, took a stance of 
cooperating with each other in order to overcome the ongoing 
financial and economic crisis. However, with no major progress 
achieved regarding a system of obligating disclosure of technical 
information on their information and technology (IT) products (China 
Compulsory Disclosure - CCC - system) and food safety, these pending 
issues have been carried over to the next session, leaving 
unfinished tasks for the future. 
 
Among participants in the economic dialogue from Japan were Foreign 
Minister Hirofumi Nakasone, Finance Minister and State Minister for 
financial Services, Economic and Fiscal Policy Kaoru Yosano and 
Economy, Trade and Industry Minister Toshihiro Nikai. Vice Premier 
Wang Qishan, Foreign Minister Yang Jiechi and National Development 
and Reform Commission Chairman Zhang Ping took part from China. 
 
Yosano and Zhang explained economic measures of their respective 
countries. They agreed to cooperate to undergird their domestic 
economies with proactive fiscal measures as well as to turn around 
the global economy. Various government agencies and related 
organizations signed 11 documents of cooperation, including 
protection of intellectual property rights and financial cooperation 
in various Asian countries. 
 
Assistance to companies advancing into developing countries 
 
As cooperation in the financial area, the Development Bank of Japan 
(DBJ) and the Export-Import Bank of China (EIBC) will provide 
necessary funds when companies of their respective countries 
advancing into third countries in Asia. Since the Asia region is 
expected to serve as an economic engine of the global economy after 
the ongoing financial and economic crisis is over, Japan and China 
see backing companies advancing into that region is very meaningful. 
Both countries also agreed to set up a forum for dialogue between 
next-generation leaders of their respective countries and promote 
 
TOKYO 00001281  006.3 OF 017 
 
 
research into earthquakes. 
 
They also agreed to launch talks for promoting energy conservation, 
improving water quality of lakes, ponds and rivers and streamline 
goods distribution in China, although this was not put in writing. 
 
However, talks on issues, such as the compulsory disclosure of 
technical information on IT products and poisoning incidents 
involving frozen Chinese-made gyoza dumplings did not go beyond 
Japan conveying its interest, according to Nakasone. Nikai called on 
China to reconsider the CCC system of mandating companies to 
disclose technical details of their IT products expected to be 
introduced in May next year. Japanese, U.S. and European companies 
are concerned that secret information on their products could be 
leaked as a result. 
 
No progress achieved in gas field talks 
 
Japan suggested China takes part in the international mutual 
recognition framework joined by 26 countries. The aim is to rein in 
the moves of Beijing, which is calling for the disclosure of 
technical information for reasons of safety concern. Japan conveyed 
to China that it is ready to cooperate with it on the technical 
front. 
 
However, China stressed that it had forgone the introduction of the 
CCC system for a year at the request of Japan, the U.S. and Europe 
and boiled down the scope of products subject to the system to those 
procured by the government. It simply indicated a stance of 
continuing to hear views of various countries. Japan intends to 
continue to ask China to take a second look at its policy. The 
situation is, however, unclear. 
 
Concerning the greenhouse gas emissions issue, too, the two 
countries failed to reach an agreement with China indicated its view 
that how industrialized countries will respond first is important, 
when Japan asked it, a large emitter, to make a responsible 
response. No major progress was achieved over the joint development 
of gas fields in the East China Sea. 
 
Gist of economic dialogue 
 
(Global economy and financial situation) 
Q Steadily implement the agreement reached at the financial summit 
held in London in April. Cooperate for the recovery of the global 
economy. 
Q Recognized the need to constrain protectionism 
 
(Trade and Investment) 
Q Japan asked China to take a second look at the CCC system, which 
it is looking into introducing. 
Q Set up a forum for bureau director-level dialogue to promote 
cooperation in the goods distribution area. 
Q Promote mutual advance by financial institutions of respective 
countries 
Q Set up a taskforce joined by responsible government officials of 
both countries concerning intellectual property rights, such as 
measures against copied products. 
Q Reaffirmed that it is important to secure the safety of foods and 
products. Japan asked China to settle at an early date poisoning 
incidents caused by Chinese-made gyoza dumplings. 
 
 
TOKYO 00001281  007.3 OF 017 
 
 
 (Environment, energy) 
 
Q Japan insisted that both emerging and developing countries need to 
take responsibility regarding greenhouse gas emissions cuts. The 
Chinese side stressed the responsibility of industrialized 
countries. 
Q Strengthen measures on industrialized wastes and the disposal of 
drainage water. 
 
(Regional and international economic issue) 
Q Reaffirmed the need for an early settlement of multilateral trade 
liberalization talks (Doha Round) at the WTO 
Q The DBJ and the EIBC will assist the advance of Japanese and 
Chinese companies' into third countries through concerned financing 
Q Cooperation on the new influenza strain through information 
sharing 
 
(Others) 
Q Hold the next round of the economic dialogue in China by the end 
of 2010 
 
(4) Cabinet Office estimates restoration of fiscal health delayed to 
2020 or beyond even with 10 PERCENT  consumption tax rate 
 
ASAHI (Page 1) (Full) 
June 6, 2009 
 
The Cabinet Office has run estimates showing that even if the 
consumption tax rate is raised in stages to 10 PERCENT  from FY2011, 
fiscal balance can only be achieved in the early 2020s. Its 
estimates in January had shown that the goal would be met in FY2018. 
This delay is due to the ballooning of debts for the economic 
stimulation packages and the decline in tax revenues as a result of 
the economic downturn. 
 
The government has decided on a consumption tax hike from FY11 in 
late 2008 on condition of economic recovery but has not clarified 
the margin of increase. The latest estimates clearly show that an 
increase in consumption tax of over 5 PERCENT  will be necessary for 
fiscal restructuring, so the margin of increase will be the focus of 
the debate from now on. 
 
The Cabinet Office will report to the meeting of the government's 
Council on Economic and Fiscal Policy (CEFP) early next week. Its 
fiscal estimates were based on the assumption of an economic 
recovery and a consumption hike from FY11. According to the 
projection, a surplus in the primary fiscal revenues and 
expenditures - funding expenditures other than the repayment of 
debts with tax revenues - can only be achieved in the early 2020s. 
 
The January estimates had projected the achievement of a surplus by 
FY08 by increasing the consumption tax by 1 PERCENT  each year from 
FY11. The government had set the goal of achieving a surplus in FY11 
in 2006, but due to the worst minus growth in postwar history and 
the 15 trillion yen economic package in response to this, the 
achievement of the goal will be delayed significantly. 
 
The private sector members of the CEFP will come up with new goals 
for fiscal restructuring based on the above. They will first demand 
reducing the deficit in the primary balance by half in about five 
years from FY09. Beyond FY09, the ratio of government debt to GDP 
will be reduced steadily to a level befitting the size of the 
 
TOKYO 00001281  008.3 OF 017 
 
 
economy. The new goals will be incorporated in the basic policy for 
economic and fiscal reforms, the so-called "big-boned policies, 
2009" to be drawn up by the government by the end of June. 
 
However, with the general election approaching, the ruling parties 
are keen on avoiding any discussions on increasing the consumption 
tax. Actually, there is even pressure for increasing social security 
spending. It is uncertain whether a specific goal for achieving 
fiscal restructuring will be written into the "big-boned policies, 
2009." 
 
(5) Policy emphasis to shift to Secure Society Council 
 
NIKKEI (Page 2) (Full) 
June 8, 2009 
 
The central stage of making government policy measures aimed to 
demonstrate the leadership of the Prime Minister's Official 
Residence (Kantei) is now gradually shifting from the Council on 
Economic and Fiscal Policy to the Council to Realize a Secure 
Society (anshin-kaigi), which is a government advisory panel 
studying how to dispel people's anxieties about the future. With the 
next House of Representatives general election coming closer, the 
priority of such social issues as correcting income disparity has 
relatively heightened because the role of the Economic and Fiscal 
Policy Council, which was called "an engine to promote reforms," has 
been diminished. There is an observation that a report the Secure 
Society Council will release in mid-June would become a clear 
distinction for political realignment after the general election. 
 
"How should we explain the policy of aiming for a moderate level of 
social welfare with a moderate public burden?" Such questions flew 
when Kaoru Yosano, who concurrently serves as finance minister, 
state minister of financial services, and state minister of economic 
and fiscal policy, Chief Cabinet Secretary Takeo Kawamura, and 
experts of the advisory panel held a hot discussion on the contents 
of the report for more than two hours. 
 
Yosano is the person who suggested forming the panel. He called on 
Prime Minister Taro Aso in January to persuade with the list of 
panel members in his hands. He told Aso: 
 
"The Council on Economic and Fiscal Policy is a permanent panel 
responsible for designing institutional arrangements. We need one 
more panel made up of experts from outside the government." 
 
Aso then responded, saying: "I think that's a good idea." The 
Council on Economic and Fiscal Policy was formed based on the 
Cabinet Office Establishment Law. The Secure Security Council was 
set up based on a decision by the prime minister. It will hammer out 
policy to ease people's anxieties about such issues as widening 
disparities and growing unemployment. In order to cover public 
burden by such policy, a consumption tax hike is inevitable. Since 
many in the ruling and opposition camps have strong distrust in the 
Council on Economic and Fiscal Policy, a panel replacing it was 
needed. 
 
The government office district of Kasumigaseki is susceptible to 
chemical change. A senior official of the Ministry of Education, 
Culture, Sports, and Science and Technology was in contact with 
almost all Secure Society Council members in April and explained to 
them the need to provide free infant education. The senior ministry 
 
TOKYO 00001281  009.3 OF 017 
 
 
official told panel members: "The education-related budget ranks at 
a low-level among the industrialized countries." The ministry 
appears to have predicted that funds would be provided on a 
preferential basis to policy issues the Secure Society Council 
presented in case the consumption tax rate was increased. 
 
The Council on Economic and Fiscal Policy seems to have lost the 
leading role. The work on drawing up a fresh goal for fiscal 
reconstruction, the biggest task, is running into difficulties. A 
senior Cabinet Secretariat official said: "The possibility is strong 
that a goal will not restrict annual budgetary request guidelines" 
 
The big-boned economic policy guidelines for fiscal 2006, a basic 
policy for economic and fiscal management, which the Koizumi cabinet 
adopted in its last days, stipulated the reduction amounts of the 
items of expenditures for annual fiscal year, in order to bring the 
basic budget for fiscal 2011 back into the black. The Aso cabinet, 
which put that on the back burner, will unlikely to set forth a 
strong message, although Aso's aide said: "Some sort of a banner is 
needed." 
 
There is also a view in the ruling camp that the formation of the 
new council "is a strategic move by Yosano and others for political 
realignment or a grand coalition after the Lower House election" 
(senior member of the Liberal Democratic Party (LDP)). "It would be 
ideal if the Council's report becomes one of the banners when the 
political parties are realigned," a source said. The prediction is 
that if an LDP-led government is formed after the general election, 
the policy of the Council, which places importance on narrowing 
disparities, will become the glue holding it together. 
 
(6) Resumption of JICA aid to support private sector infrastructure 
projects in Asia mulled 
 
SANKEI (Page 2) (Full) 
June 8, 2009 
 
A growing number of Japanese companies plan to participate in 
infrastructure projects in Asian countries, not only by winning 
construction contracts, but also in terms of offering management and 
operational knowhow. Their common aim is to secure stable supplies 
of resources. The government has begun to consider the resumption of 
investments and loans by the Japan International Cooperation Agency 
(JICA) to give support to these private companies. 
 
Itochu Corporation is planning on becoming involved with a project 
to construct and operate freight railways on the Central Kalimantan 
island of Indonesia that is rich in high quality coal being mined. 
This company says: "We would like to make this a stable source (of 
coal) in the Asian market. This will also secure a supply for 
Japan." 
 
There is also great demand for infrastructure in India with a fast 
growing economy. NEXCO East Japan (East Nippon Expressway Company) 
has formed a group with consultancies and other firms to market 
Japanese style ETC (electronic toll collection) systems. 
 
Right now, the Japanese group is eyeing the outer ring road around 
the city of Hyderabad in southern India. Tomoyuki Fujino, overseas 
operations team leader of NEXCO East Japan, says confidently that: 
"The Japanese system has high expandability and flexibility. It is 
the most advanced in the world. It will be appropriate for India, 
 
TOKYO 00001281  010.3 OF 017 
 
 
which is planning to start building expressways." 
 
Plans are also afoot for participation in water supply projects. 
Metawater Company, which is the first company in Japan to win a 
contract to operate a water filtering plant from Yokohama City, is 
going into the Asian market. Vice President Hiroshi Komaki is very 
excited about this. He says: "We would like to embark on 
Japanese-style participation by cooperating with the local 
government and private companies in projects suitable for the 
situation in each country." 
 
In light of such moves in the private sector, the government is 
considering the resumption of investments and loans by JICA, which 
have been frozen since the reform of special public corporations in 
2001, to enable investments and loans for various infrastructure 
projects in Asia. 
 
(7) Nago City, local firms planning to form new organization to 
promote 700-billion-yen new base-construction project in Okinawa, 
probably eyeing contracts 
 
AKAHATA (Page 15) (Slightly abridged) 
June 6, 2009 
 
Nago Municipal Government and local companies are planning to launch 
a private-sector organization that would promote a plan of the 
Japanese and U.S. governments to construct a new U.S. military base 
in the Henoko district in Nago City, Okinawa Prefecture. The new 
organization will also call on the government to place orders with 
local companies on a priority basis. Critics claim that they intend 
to earn benefits from the construction project and bring the 
citizens to their side, with an eye on the mayoral election next 
year. 
 
A plan to establish the private-sector organization called "Camp 
Schwab support association" was unveiled for the first time in a 
meeting on April 29 of the administration committee that has been 
expanded to include the heads and administration committee members 
of the Kube area, centering on the Henoko, Kushi and Toyohara 
districts. Vice Mayor Bunshin Suematsu and Policy Promotion 
Department Head Masamitsu Tamaki of Nago City explained the plan 
about the new body. 
 
This idea was first proposed by some executive members of the Henoko 
administration committee last December. Tamaki said: "If Henoko 
takes action independently, it will not be able to exert enough 
influence. Given the strong image that a corporate intends to pursue 
profits, we instructed persons concerned to form an incorporated 
organization involving the city as a whole." 
 
According to its organization chart and rules, the planned 
organization will be composed of five groups - the three districts 
in Kube, the northern region promotion council to promote the new 
U.S. military base, and the Nago fishermen's cooperative. Nago City 
will join the organization as an observer. With "smooth promotion of 
the relocation project" as the slogan, they have already asked the 
Defense Ministry (Okinawa Defense Bureau) to give orders to local 
firms, use their materials, and place orders for projects in 
Okinawa. They have decided to ask major general contractors in the 
Japanese mainland and Okinawa to use local firms as subcontractors 
and procure materials from local firms. 
 
 
TOKYO 00001281  011.3 OF 017 
 
 
Even after the construction work is completed, the new body will 
continue to be involved in the management, operation and maintenance 
of facilities on the base, as well as in the placement of personnel, 
such as guards. 
 
According to the rules, a local company that receives an order 
directly from the Okinawa Defense Bureau will contribute to the 
organization a commission according to the amount of the contract it 
receives. A subcontractor will be required to pay a commission of a 
certain amount calculated by the organization. 
 
In responding to criticism of the planned body as an organization 
intended to pursue bid-rigging and profits from the new base 
project, Tamaki in Nago City said: "The association will use profits 
earned as contributions and commissions for regional promotion 
projects. But the brochure of the association notes: "The relocation 
project begins on a full scale, business opportunities will be 
created for local firms as the entire project is estimated to cost 
500 to 700 billion yen." 
 
Tamaki emphasized that the new association will be launched as soon 
as each group's participation is confirmed. 
 
Vice President Tsujimura of the Non-profit Organization Institute 
for the Study of Construction Policy, who is well-versed in the 
details of large-scale public works projects, said: "Major offshore 
engineering companies in the mainland of Japan are expected to win 
contracts for reclamation and dredge work in the new base 
construction project, leaving no room for local firms. Even if local 
companies undertake subcontracted work, such work will probably be 
temporary." 
 
Association of Commerce and Industry Chairman Nakamoto criticized 
the plan to set up the new organization: 
 
Of the people of Okinawa, 70 percent are against the construction 
plan, and a number of citizens voted against the plan. The 
government is aiming to build a town that allows the new base by 
mobilizing people in commerce and industry, while citing economic 
development in Okinawa as the reason for the envisioned 
organization. People in favor of the construction plan are aiming to 
proceed with the campaign for the mayoral election next year in 
their favor." 
 
(8) Anatomy of DPJ: U.S. distrustful of DPJ's foreign and security 
policies 
 
SANKEI (Page 3) (Abridged slightly) 
June 6, 2009 
 
United States' interest 
 
A group of representatives of the Association of the Families of 
Victims of Kidnapped by North Korea (AFVKN), the National 
Association for the Rescue of Japanese Kidnapped by North Korea 
(NARKN), and the parliamentary league on the abduction issue visited 
the United States in late April to exchange views with the Obama 
administration officials in charge of North Korea policy and 
concerned congressional members. During the visit, a research fellow 
responsible for security at an American think tank connected with 
the Democratic Party posed the following question to Democratic 
Party of Japan (DPJ) abduction issue taskforce deputy head, Jin 
 
TOKYO 00001281  012.3 OF 017 
 
 
Matsubara: "What would happen to U.S.-Japan relations if the DPJ 
were to take the reins of government?" 
 
Earlier, in Mid-April, a group of individuals, including journalist 
Yoshiko Sakurai, visited Washington to feel out the United States on 
its foreign policy. Receiving the group, former Deputy Secretary of 
State Richard Armitage who is knowledgeable about Japan, asked, "How 
is (former DPJ President) Ichiro Ozawa doing?" 
 
Matsubara felt that the United States' interest in the DPJ was 
growing. Sakurai thought speculation was growing in the United 
States that a DPJ administration would be launched in Japan. 
 
At the same time, there are concerns and doubts in the United States 
about the DPJ's security and foreign policies. Several individuals 
connected with the former Bush administration asked the AFVKN and 
others the following question, citing the names of DPJ Secretary 
General Katsuya Okada and Vice President Seiji Maehara: "The two of 
them recently made a statement in the United States to the effect 
that Japan's insistence on the abduction issue is an impediment to a 
solution to the nuclear issue. Has Japan shifted its policy of 
prioritizing the abduction issue over the nuclear issue?" 
 
On May 14, the day he announced his candidacy for the DPJ 
presidency, Okada met with AFVKN Secretary General Teruaki Nasumoto 
and others and explained that he had not said such a thing. 
Meanwhile, Maehara has not tried to explain anything. Masumoto takes 
this view: "Prioritizing the nuclear issue is Mr. Maehara's stock 
argument, so he has probably said something close to (the abduction 
issue being an obstacle)." 
 
A policy turnaround 
 
The DPJ has opposed almost all government security policies, 
including a new antiterrorism special measures law authorizing the 
Maritime Self-Defense Force's refueling operation in the Indian 
Ocean, antipiracy legislation, and a Japan-U.S. agreement on the 
relocation of U.S. Marine Corps from Okinawa to Guam. 
 
The major opposition is also opposed to the Japan-U.S. agreement 
reached in 2006 to relocate the U.S. Marine Corps' Futenma Air 
Station from Ginowan to Nago. The DPJ's "Okinawa Vision" calls for 
the air field's relocation to a site outside Okinawa (preferably 
outside Japan). DPJ President Yukio Hatoyama clearly indicated in 
his inaugural press conference on May 16 that his party has no 
intention of changing the view. 
 
Initially many in the DPJ had thought that the policy shift, which 
can said to be a violation of the agreement with the United States, 
would not make the party's manifesto (campaign pledges) for the next 
House of Representatives election, saying that the party would end 
up being criticized as vowing unrealistic matters. 
 
But at a May 26 news conference, Hatoyama signaled that his party 
would specify (the policy shift) it in its manifesto, saying, "Our 
manifesto should naturally specify that (Futenma Air Station) should 
be moved outside Japan." 
 
DPJ shadow cabinet defense minister Keiichiro Asao also indicated 
that if his party takes power, the MSDF's refueling operation in the 
Indian Ocean wil be discontinued, noting, "It would be illogical 
(for the new administration) to continue with something which (our 
 
TOKYO 00001281  013.3 OF 017 
 
 
party) has opposed twice at the Diet and which former President 
(Ichiro Ozawa) described as a violation of the Construction." 
 
U.S. Deputy Secretary of State James Steinberg held talks with Okada 
at DPJ headquarters on June 1, during which Okada developed his 
stock argument that Japan should urge the United States to abandon 
the preemptive use of nuclear weapons. In reply, Steinberg 
reportedly rebutted Okada, "Many countries declare in their 
doctrines the abandonment of the preemptive use of nuclear weapons, 
but that is only doctrine." 
 
Decisions postponed 
 
Security policy is the most controversial issue for the DPJ, which 
encompasses members from conservatives to former Japan Socialist 
Party ranks. For this reason, decisions have often been postponed or 
discussions have not been held at all. 
 
During the extraordinary Diet session in October last year, Deputy 
Secretary General Akihisa Nagashima (sic) said it would be quite 
effective for Self-Defense Force vessels to escort (Japan-related 
vessels). This prompted the government and the ruling parties to 
advance discussion on the option of dispatching the SDF to waters 
off Somalia. The DPJ, however, did not discuss it earnestly until 
February this year, four months after Nagashima made the proposal. 
 
Further, the DPJ did not produce its own plan amending the 
government's antipiracy legislation until April 14, the day the 
Lower House began discussing the government-presented legislation. 
 
The DPJ is also split over North Korea policy, a top priority for 
the nation's security. 
 
On April 1, the DPJ's foreign and defense departments held their 
executive meeting in which the party's abduction issue taskforce 
chaired by Hiroshi Nakai called for reinforced sanctions against the 
North in reaction to the emergence of signs showing the North's 
preparations for launching ballistic missiles. 
 
The North conducted its second nuclear test on May 25, but the 
departments have yet to make their conclusion. Nakai expressed his 
strong discontent in his blog on May 28: "I am aware that there are 
lawmakers in the DPJ who are associated with the pro-Pyongyang 
General Association of Korean Residents in Japan (Chongryon) and 
those who support North Korea. It is the same in the Liberal 
Democratic Party, and I don't care about them." 
 
How is the DPJ going to deal with its foreign and security policies? 
The party's ability to run the government is being tested. 
 
(9) "Seiron" column: Policies that the DPJ wants to implement are 
unclear 
 
SANKEI (Page 7) (Full) 
June 8, 2009 
 
Keio University Professor Heizo Takenaka 
 
Strong reaction expected 
 
With the election approaching, the Democratic Party of Japan (DPJ) 
has elected Mr. Yukio Hatoyama as its president and put in place a 
 
TOKYO 00001281  014.2 OF 017 
 
 
new leadership. It is believed that there are an increasing number 
of voters who want to give the DPJ a try at running the government 
because of the significant decline in the Liberal Democratic Party 
(LDP)-centered administration's ability to govern. President 
Hatoyama has declared that the main campaign issue in the next 
election will be whether there will be a change in government. Like 
in America, "change" is also needed in Japan. 
 
However, a change of government should only be a means. By logic, a 
party should define a clear set of policies that it wants to 
implement and call for a change of government to realize them. For 
sure, the DPJ has come up with new "viewpoints" for steering the 
administration, such as breaking away from bureaucratic control, but 
the substance of the policies it wants to implement remains vague. 
That is why the support rate for the DPJ remains surprisingly low. 
Even if it is able to capture power based on a passive choice by the 
people, thinking it is probably better than the present LDP, it will 
soon face a strong public reaction. The DPJ has the responsibility 
to come up with robust policies for the healthy growth of the 
Japanese economic society. I would like to raise three specific 
points regarding the problem with the DPJ's economic policies: 
 
Macroeconomic picture also vague 
 
First, a "macroeconomic" picture is completely absent from the DPJ's 
policy debate so far. For example, by how many percent is the 
Japanese economy capable of growing and how can this growth rate be 
raised through its policies in the future? The process of restoring 
fiscal health cannot be determined without such a macroeconomic 
scenario. In the past few years, the DPJ has proposed the 
restructuring of the budget, which means substituting certain items 
on the assumption of the same macroeconomic scenario and overall 
budget as the government and the ruling parties. For sure, it is 
meaningful to rearrange budget items, but is the overall framework 
of the government's budget appropriate? Is its economic outlook 
correct? The DPJ has never come up with any counterproposals on such 
questions. 
 
The DPJ will most probably argue that the ruling parties have the 
support of the bureaucracy while the opposition does not. If so, 
this contradicts the DPJ's core policy of independence from the 
bureaucrats. If the party is unable to discuss macroeconomics 
without relying on the bureaucrats, then it will still be controlled 
by them, even if it takes over the reins of government. 
 
Second, the substance of its main policy proposals remains vague. 
The DPJ has proposed some interesting policies on pension reform and 
other issues, some of which are commendable. However, its position 
on a number of major issues is unclear. First, what is the party's 
stance on postal privatization? At first, the DPJ had opposed 
privatization per se. After losing in the 2005 general election, it 
presented proposals to the Diet on the privatization of parts of the 
banking and insurance operations, while keeping government control 
on the postal services. But now, it advocates the freezing of the 
sale of Japan Post shares together with the People's New Party. What 
will be its position after taking over power? 
 
Another issue on which the DPJ is unclear is the proposed course for 
fiscal restructuring. Its policy choice of not debating the 
consumption tax for now is understandable. If Japan indulges in 
generous fiscal outlays, like what the LDP is doing now, while also 
increasing the consumption tax rate, it will unmistakably become a 
 
TOKYO 00001281  015.2 OF 017 
 
 
country of low welfare and high cost. That is also the reason why 
many pin their hopes on the DPJ's policy. Yet, the DPJ's proposed 
fiscal picture is unclear. 
 
Without an administration transition team 
 
Third, if the DPJ is serious about a change of government, why has 
it not formed an administration transition team right now? If a DPJ 
administration does come into existence, it is expected to have an 
extremely tough time in steering the administration because it will 
be taking over the Japanese economy and finances literally in their 
worst state. That is, it needs to make preparations now on the 
assumption of taking over the government in a scorched earth 
condition. 
 
For sure, the outcome of the election is unpredictable until the 
votes are counted. However, such preparations will be useful for the 
DPJ whether it becomes the ruling party or remains to be the 
opposition. For the past few years, the succeeding cabinets have 
been cabinets without a clearly-defined goal which have been 
criticized by the people for not having an "agenda." But come to 
think of it, such criticism also applies to the DPJ. A change of 
government is a means for implementing desired policies. The point 
of contention in the election should not be a change of government 
but should be the policy agenda set as the goal of the various 
political parties. 
 
(10) TOP HEADLINES 
 
Asahi: 
Three local elections to be held in run-up to Lower House general 
election 
 
Mainichi: 
National health insurance premiums differ 3.6 times by municipality 
 
Yomiuri: 
Sugaya says he made false murder confession to police officers after 
13 hours of denial 
 
Nikkei: 
Corporations to cut capital spending 15.9 percent in FY2009 
 
Sankei: 
Maritime Self-Defense personnel on antipiracy mission backed by 
their families and the public 
 
Tokyo Shimbun: 
Poll on Tokyo election: 32 percent for DPJ, 20 percent for LDP; 80 
percent to go to the polls 
 
Akahata: 
Labor bureau issues more than 20 guidances and advices to correct 
employment conditions 
 
(11) EDITORIALS 
 
Asahi: 
(1) Fertility rate of 1.37: Make our society a place where people do 
not have worry about having children and raising them 
(2) Japan qualifies for 2010 World Cup in South Africa 
 
 
TOKYO 00001281  016.2 OF 017 
 
 
Mainichi: 
(1) Bill managing official document: Still entrance for reform 
(2) Soccer World Cup: Thank "Oshimu effect" 
 
 
Yomiuri: 
(1) Reliance on Chinese money U.S. weak point 
(2) Hope Japan's soccer players will perform brilliantly in 2010 
World Cup 
 
Nikkei: 
(1) More social spending for children 
 
Sankei: 
(1) Postponement of restrictions on hereditary candidates: Has LDP 
given up self-purification effort? 
(2) Japan qualifies for 2010 World Soccer Cup: Look forward to 
seeing players' good performance 
 
Tokyo Shimbun: 
(1) It is too early to say the recession has bottomed out 
(2) Japanese soccer players to participate in 2010 World Cup 
 
Akahata: 
(1) Don't expand scope of Japan's host-nation support for USFJ 
 
(12) Prime Minister's schedule, June 6 
 
NIKKEI (Page 2) (Full) 
June 7, 2009 
 
10:25 Sent off the Emperor and the Empress leaving Haneda Airport to 
visit Fukui Prefecture to attend the 60th National Tree Planting 
Ceremony. 
11:35 Isetan Shinjuku Store. 
12:13 Tailor Moriwaki in North Aoyama. 
12:44 Tani Shirt Shop in Hotel Okura. Then had lunch with his 
secretary at Cameria at the same hotel. 
13:48 Had a haircut at Barber Sato at Hotel Pacific Tokyo in 
Takanawa. 
15:23 Arrived at the official residence. 
15:49 Went to mass in memory of late former Japan Telework president 
Koichiro Noda, his relative, held at Tokyo Cathedral St. Maria 
Cathedral. 
16:46 Attended a ceremony for the first anniversary of the death of 
Noda held at Chinzanso. 
18:59 Visited a house of his friend at a time when he was studying 
in the U.S. 
23:11 Arrived at the official residence. 
 
Prime Minister's schedule, June 7 
 
NIKKEI (Page 2) (Full) 
June 8, 2009 
 
07:36 Took a walk around the official residence. 
10:19 Inspected fire drill and solar energy generation panel at the 
No. 4 Primary School in Hachioji. 
11:01 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Hachiman-cho, Hachioji City. 
11:16 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Minami-cho, Hachioji City. 
 
TOKYO 00001281  017.2 OF 017 
 
 
11:34 Met with Parliament Secretary Hagiuda and Hachioji Mayor 
Kurosu at Hachioji L-City, a banquet hall in Hachioji City. 
12:38 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Akishima City. 
13:20 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election. 
13:55 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Kokubunji Station. 
14:54 Made sidewalk speech at the North entrance of JR Kichijoji 
Station. 
16:07 Arrived at the official residence. 
16:46 Sorted out documents at Imperial Hotel. 
19:00 Met with Secretary General Hosoda and Chief Cabinet Secretary 
Kawamura. 
21:18 Arrived at the official residence. 
 
ZUMWALT