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Viewing cable 09TOKYO1284, JAPANESE MORNING PRESS HIGHLIGHTS 06/09/09

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Reference ID Created Released Classification Origin
09TOKYO1284 2009-06-09 00:43 2011-08-26 00:00 UNCLASSIFIED Embassy Tokyo
VZCZCXRO3711
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1284/01 1600043
ZNR UUUUU ZZH
P 090043Z JUN 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3556
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 6786
RUEHFK/AMCONSUL FUKUOKA 4453
RUEHOK/AMCONSUL OSAKA KOBE 8255
RUEHNAG/AMCONSUL NAGOYA 2041
RUEHKSO/AMCONSUL SAPPORO 4982
RUEHBJ/AMEMBASSY BEIJING 9724
RUEHUL/AMEMBASSY SEOUL 5750
RUCNDT/USMISSION USUN NEW YORK 5473
UNCLAS SECTION 01 OF 13 TOKYO 001284 
 
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 06/09/09 
 
Index: 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
4) Anti-piracy bill likely to be enacted on June 19  (Sankei) 
 
North Korea problem: 
5) Prime Minister Aso presses China's deputy premier for cooperation 
on North Korea sanctions  (Mainichi) 
6) Liberal Democratic Party (LDP) planning to use its strong North 
Korea stance as a campaign tactic to appeal to the public in the 
Lower House election  (Yomiuri) 
7) Government again on alert for a North Korea missile launch, 
prepared to issue destruct order if necessary  (Yomiuri) 
8) Government worried that its planned law to allow searches of 
North Korean ships will get bogged down in the divided Diet 
(Mainichi) 
9) Tug of war over whether searches of North Korea cargo ships would 
be carried out by the Japan Coast Guard or the Maritime Self-Defense 
Force  (Asahi) 
10) LDP use of the "arms-expansion card" - such as preemptive strike 
capability - against North Korea may be a double-edged sword if it 
causes anxiety in Asia  (Tokyo Shimbun) 
 
Economy: 
11) In releasing the latest set of economic "big-bone" guidelines 
today, government to include pledge to cut the fiscal deficit in 
half over 5 years, as percentage of GDP  (Mainichi) 
12) Return of foreign investors is starting to boost the sagging 
stock market  (Mainichi) 
 
13) Prime Minister Aso to announce mid-term target to reduce 
greenhouse-gas emissions by 14 PERCENT , compared to level in 2005 
(Nikkei) 
 
Political agenda: 
14) Prime Minister Aso vows to hold sway in tiff with Internal 
Affairs Minister Hatoyama over controversial appointment of head of 
Japan Post  (Sankei) 
15) LDP project team to start drafting political campaign pledges 
(manifesto) for upcoming Lower House election  (Sankei) 
16) Ruling parties to adopt set of constitutional deliberation rules 
in order to shake up the opposition camp, reluctant about 
constitutional revision  (Nikkei) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Municipalities achieved only half of targeted increases in capacity 
for nursing care facilities 
 
Mainichi: 
24 prefectures prohibit offering scholarships to high school 
students receiving student loans from other groups 
 
Yomiuri: 
Primary balance deficit to be halved in five years 
 
Nikkei: 
 
TOKYO 00001284  002 OF 013 
 
 
Government to put off goal of fiscal reconstruction until 2020 
 
Sankei: 
Business environment has deteriorated due to falling birthrate, 
recession; Immediate reforms required 
 
Tokyo Shimbun: 
A-bomb disease lawsuit: Government to give up on final appeal 
 
Akahata: 
JCP to show path of 21st century and take action: Shii 
 
2) EDITORIALS 
 
Asahi: 
(1) Japan cannot afford to postpone agricultural administration 
reform 
(2) Anxiety and expectations about new South African president 
 
Mainichi: 
(1) Child porn: We should listen to international criticism 
(2) Tourist-oriented nation: Number of tourists alone is no 
achievement 
 
Yomiuri: 
(1) Cargo inspections on North Korean ships: Fix laws to implement 
UN resolution 
(2) Next-generation supercomputer to determine future of 
"electronics-oriented country" 
 
Nikkei: 
(1) Relisting North Korea as state sponsor of terrorism is the 
obvious choice 
(2) China should withdraw policy of requiring foreign companies to 
disclose IT information 
 
Sankei: 
(1) U.S. government must decide to relist North Korea as state 
sponsor of terrorism 
(2) Japan-China economic dialogue: Avoidance of key pending issues 
regrettable 
 
Tokyo Shimbun: 
(1) Japan-China economic dialogue: Consultation system between Japan 
and China falls behind that of U.S. and China 
(2) Biodiversity: Aim for Nagoya protocol 
 
Akahata: 
(1) Make switch to place importance on natural energy 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, June 8 
 
NIKKEI (Page 2) (Full) 
June 9, 2009 
 
07:30 Took a walk around the official residence. 
10:37 Met with persons affiliated with his supporters association 
for his constituency. 
11:01 Met with Chinese Deputy Premier Wang Qishan, followed by 
Chairman Kiyoko Shimizu of the Japan Nursing Federation. 
 
TOKYO 00001284  003 OF 013 
 
 
12:03 Attended government-ruling party liaison council meeting. Then 
met with Internal Affairs Minister Hatoyama, Chief Cabinet Secretary 
Kawamura, Deputy Chief Cabinet Secretary Uruma, Assistant Deputy 
Chief Cabinet Secretary Fukuda and Vice Internal Affairs Minister 
Takino. Kawamura remained. Then met with Press Secretary Ogawa. 
14:03 Met with Japanese Trade Union Confederation Chairman Takagi. 
Kawamura was present. Then met with Japan Federation of Basic 
Industry Workers' Unions Central Executive Committee Chairman Naito 
and Federation of Electric Power Related Industry Workers Unions of 
Japan Chairman Nagumo. Kawamura was present. 
15:52 Met with Fukuda. 
16:33 Met with Finance Minister Yosano. 
17:06 Attended party executive meeting in the Diet building. 
Secretary General Hosoda and Acting Secretary General Ishihara 
remained. 
 
18:01 Met with Japan Business Federation Chairman Mitarai, Japan 
Chamber of Commerce and Industry Chairman Okamura, TEPCO Chairman 
Katsumata and Nippon Steel Corporation Chairman Mimura at the 
Kantei. Kawamura was present. 
19:32 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Omori-kita. 
20:00 Visited the office of a person expected to run for the Tokyo 
Metropolitan Assembly election in Kamata. 
21:01 Dined with his secretary at a Chinese restaurant at Hotel 
Okura. 
22:59 Arrived at the Kantei. 
 
4) Antipiracy bill likely to be enacted into law June 19 
 
SANKEI (Page 1) (Abridged) 
June 9, 2009 
 
The government and the ruling parties decided yesterday to enact an 
antipiracy bill into law as drafted without revising it. The bill 
will allow the government to send out the Self-Defense Forces 
overseas as needed to cope with pirates. The ruling Liberal 
Democratic Party and its coalition partner, the New Komeito, are now 
holding revision talks with the leading opposition Democratic Party 
of Japan (Minshuto) in the House of Councillors. However, the ruling 
coalition judged that it would be difficult to reach an agreement 
with the DPJ due to a wide gap between their standpoints. The DPJ 
will not draw out the deliberations. The bill will be voted down at 
the House of Councillors Foreign Affairs and Defense Committee and 
in a plenary sitting of the House of Councillors. After that, the 
bill is expected to be enacted into law on June 19 with the House of 
Representatives' override of the House of Councillors' decision in a 
second vote. 
 
The government invoked maritime security operations this March 
against pirates in waters off the eastern African coast of Somalia, 
and two Maritime Self-Defense Force destroyers have been on an 
antipiracy mission there to escort Japanese ships. The antipiracy 
bill allows the MSDF to escort foreign ships as well while MSDF's 
maritime security operations under the Self-Defense Forces Law are 
limited to Japanese ships and Japan-linked ships. The new 
legislation will also allow the MSDF to fire on pirate ships in 
order to halt them. The two MSDF destroyers, currently deployed to 
Somalia waters, are to be replaced in July. The government will 
apply the new law to their replacements to fulfill the mission. 
5) Aso asks for Chinese vice-premier's cooperation for sanctions on 
North Korea 
 
TOKYO 00001284  004 OF 013 
 
 
 
MAINICHI (Page 5) (Full) 
June 9, 2009 
 
Prime Minister Taro Aso held talks with visiting Chinese 
Vice-Premier Wang Qishan at the Prime Minister's Official Residence 
(Kantei) yesterday. In the meeting, Aso asked for China's 
cooperation in adopting a strong UN Security Council resolution, 
saying, "We pin hopes on the role of China, which has a significant 
influence over North Korea in trade as well." Wang simply said in 
response, "We are firmly opposed to North Korea's nuclear tests. We 
would like to continue extending cooperation." 
 
6) Gov't, LDP eager for legislation to inspect N. Korean ships 
 
YOMIURI (Page 4) (Abridged) 
June 9, 2009 
 
There are now growing calls from within the government and the 
ruling Liberal Democratic Party insisting on the necessity of 
legislative measures for Japan to participate in cargo inspections 
for ships to and from North Korea. What lies behind the move is that 
the United Nations Security Council is now in the final stage of 
coordination on a resolution to impose sanctions on North Korea and 
the resolution is expected to require cargo inspections. The LDP 
apparently wants to make it a campaign issue in the forthcoming 
election for the House of Representatives. 
 
Chief Cabinet Secretary Kawamura, meeting the press yesterday, 
referred to Japan's own legislation for cargo inspections, saying: 
"If the U.N. Security Council resolution requires (cargo inspections 
including) ship inspections, then we will have to consider our 
action. We will also have to think about what the government can do 
now." With this, Kawamura stressed the need to consider enacting a 
new law. 
 
Under Japan's current laws, the Self-Defense Forces and the Japan 
Coast Guard are limitedly allowed to conduct cargo inspections in 
such cases as criminal investigations, neighboring contingencies 
that will seriously affect Japan's security, and armed attacks. 
 
The government has been taking the position that it cannot say there 
is a neighboring contingency due to North Korea's nuclear test. 
Accordingly, the government will need to amend such laws as the Ship 
Inspection Law or otherwise to enact a new law in order for Japan to 
participate in cargo inspections. 
 
Main legal basis for ship inspections 
Law Territorial waters High seas 
Territorial Waters and Foreign Ships Navigation Law The JCG inspects 
suspicious ships remaining in Japan's territorial waters without 
good reason. The JCG is allowed to use weapons if there is a good 
reason that is recognized to be necessary in such cases as 
preventing criminals from fleeing and securing legitimate 
self-defense. Inapplicable. 
Ship Inspections Law The SDF conducts ship inspections as trade and 
economic restrictions in the event of a neighboring contingency or 
in the case where there is a U.N. resolution or there is concurrence 
from the flag state. The SDF is allowed to use weapons for 
legitimate self-defense or in other unavoidable cases only. Possible 
on the high seas around Japan. 
Foreign Military Supplies Shipment Control Law In the event of an 
 
TOKYO 00001284  005 OF 013 
 
 
armed attack, the SDF inspects ships that are suspected of carrying 
foreign military supplies, etc., as a measure to exercise the right 
to self-defense. The SDF is allowed to use weapons within the scope 
of rational necessity. Possible on the high seas around Japan. 
 
7) Gov't on alert for N. Korea's missile launch 
 
YOMIURI (Page 2) (Full) 
June 9, 2009 
 
The government is on the alert, anticipating that North Korea may 
come out with a military action of provocation if the United Nations 
Security Council adopts a resolution on sanctions against North 
Korea. The government will also consider issuing orders to the 
Self-Defense Forces to mobilize its missile defense system and 
destroy ballistic missiles should they be launched. 
 
Chief Cabinet Secretary Kawamura, meeting the press yesterday, 
indicated that the government would make efforts to collect and 
analyze intelligence regarding North Korea. Kawamura said: "We 
cannot rule out the possibility of North Korea launching another 
missile in its reaction to the United Nations Security Council's 
moves to adopt a resolution. We will do whatever we can." 
 
North Korea has issued a warning that prohibits sea traffic in 
waters east of Wongsan on June 10-30 from 8 a.m. through 8 p.m. 
"They may launch a short-range ground-to-ship as a warning to the 
United Nations Security Council against its resolution," a senior 
official of the Defense Ministry said. 
 
This April, North Korea launched a long-range ballistic missile from 
Musudanri in its northeastern part. North Korea is now possibly 
preparing to launch an intermediate-range missile from Kitairei in 
its southeastern part and a long-range ballistic missile from 
Tongchangri in its northwestern part. 
 
If the possibility that North Korea will launch another long-range 
ballistic missile becomes strong, the government will issue 
destruction orders to the SDF as it did this April since the missile 
may pass over Japan. An intermediate-range missile also can cover 
Japan entirely, so the government is strongly on the alert. However, 
the government will forgo destruction orders in that case. "A 
missile will land in Japan," a government source said, "only when 
they intentionally launch at Japan." The source added, "North Korea 
is surely not hoping to start a war, and even if they launch a 
missile, they will make it land in the Sea of Japan." 
 
8) Government having difficulty improving legislation to impose 
sanctions on North Korea; Ship inspections might not be possible 
 
MAINICHI (Page 5) (Abridged slightly) 
June 9, 2009 
 
Yasushi Sengoku, Yudai Nakazawa 
 
The Japanese government is having trouble improving domestic 
legislation to inspect ships of North Korea, which recently 
conducted a nuclear test. Japan, along with the United States, is 
calling for the adoption of a UN resolution on North Korea, making 
cargo inspections on the high seas mandatory. But in order to allow 
the Maritime Self-Defense Force to conduct ship inspections, a new 
special measures law is necessary. Enacting a special measures law 
 
TOKYO 00001284  006 OF 013 
 
 
takes time. "Japan's call for ship inspections might end up as pie 
in the sky," a senior Foreign Ministry official said. 
 
Chief Cabinet Secretary Takeo Kawamura made the following comment 
about the improvement of domestic legislation for ship inspections 
on the high seas during a press conference yesterday: "Once (ship 
inspections) become mandatory (in a UN Security Council resolution), 
we will consider our response." Foreign Ministry Administrative 
Vice-Minister Mitoji Yabunaka, too, noted in a press meeting 
yesterday, "It depends on the results of a UN Security Council 
resolution." 
 
The MSDF is to conduct ship inspections on the high seas. The 
application of the ship inspection activities law, the legislation 
authorizing the MSDF's ship inspections, requires the government to 
designate a regional contingency. Further, requirements are strict 
for designating a regional contingency in, which is regarded as a 
"step short of war." For this reason, a new special measures law is 
necessary for the MSDF to actually conduct ship inspections. 
 
"Enacting a new law is time consuming; it takes a couple of months," 
a senior Defense Ministry official noted. The official also 
indicated that it would also be difficult to conduct ship 
inspections by the Japan Coast Guard, which are allowed in Japanese 
territorial waters, unless some kind of crime is confirmed. Japan is 
likely to settle on a UN resolution making ship inspections 
mandatory only in territorial waters due to strong objections from 
China and other factors. What Japan can do after adopting the 
resolution is likely to be tested. 
 
9) Ship inspection by the Coast Guard or the MSDF? 
 
ASAHI (Page 4) (Full) 
June 9, 2009 
 
Jun Tabuse, Hisashi Ishimatsu 
 
If the inspection of cargo on ships going in and out of North Korea 
is included in the new sanction resolution that the UN Security 
Council (UNSC) will be adopting in reaction to the DPRK's nuclear 
test, what should Japan do? The Japan Coast Guard (JCG) will be able 
to do inspections within Japan's territorial sea under existing 
laws. However, if inspections in international waters will also be 
done to make the sanction more effective, it is very likely that 
this will require legal amendments. The government is undecided on 
what to do. 
 
Maritime Self-Defense Force (MSDF): Legal amendment or new law? 
 
Japan, the U.S., and others are strongly advocating the need for 
cargo inspection because North Korea is highly suspected of 
importing missile-related materials and supplies needed for its 
nuclear test by ship. 
 
At a news conference on June 8, Chief Cabinet Secretary Takeo 
Kawamura said: "When international public opinion reaches a 
consensus, we need to think about what can Japan do," indicating 
that Japan's response will be decided based on the contents of the 
UNSC resolution. One option is to amend the ship inspection 
operations law enacted in 2000 as part of the response to an 
"emergency situation in areas surrounding Japan" that has a serious 
impact on its peace and security. 
 
TOKYO 00001284  007 OF 013 
 
 
 
Under this law, the MSDF is authorized to conduct cargo inspections 
in international waters in such an emergency situation. However, 
government officials have stated repeatedly that the DPRK's nuclear 
test does not constitute a direct threat to Japanese territory and 
thus cannot be regarded as an emergency situation. 
 
For this reason, a voluntary group of Liberal Democratic Party (LDP) 
members, the "association for cautious conduct of diplomacy toward 
the DPRK" (headed by Ichita Yamamoto) drew up on June 2 the draft of 
a bill to be submitted by Diet members to allow cargo inspection 
even without the designation of an emergency situation. At a meeting 
of the group, an opinion was voiced that, "Since Japan is strongly 
demanding ship inspections together with the U.S., if the resolution 
requiring mandatory inspections is passed, it will be ridiculous if 
Japan is unable to do so." 
 
The Prime Minister's Office Residence is also paying close attention 
to moves in the Democratic Party of Japan (DPJ). The party's foreign 
affairs and defense division has agreed at a meeting on May 28 to 
"prepare a bill to authorize cargo inspection even without the 
designation of an emergency situation" (Yoshio Hachiro, foreign 
minister in the "Next Cabinet"). The prime minister's aides 
calculate that: "If a legal amendment is passed with the DPJ's 
support, this will be good for the government and the ruling 
parties. If we fail to gain the DPJ's support, we can make this a 
point of contention in the general election." 
 
However, final coordination is taking place right now at the UNSC 
for the resolution to require mandatory inspection by member states 
within their territorial waters only in cases where ships going in 
and out of North Korea are suspected of carrying embargoed goods, 
although they will "have the right to conduct inspections with the 
consent of the flag state of the ships" in the open seas. 
 
If cargo inspection in the open seas will not be mandatory, legal 
amendment to allow the deployment of the SDF may not be necessary. 
However, there is an opinion in the government and the ruling 
parties that it is desirable to prepare to submit the bill to the 
current Diet session, which has been extended to July 28, in case 
there is enough time to do so. 
 
JCG: Limited to the territorial sea 
 
Ministry of Defense officials are mostly negative about amending the 
ship inspection operations law because this will involve the 
discussion of many difficult issues, including the authorization for 
the SDF to use weapons. Some even doubt the effectiveness of cargo 
inspection in the open seas. A senior official of the Cabinet 
Secretariat says: "The most efficient way to do cargo inspection is 
for each country to inspect at the ports." 
 
Furthermore, there are also calls for caution in the ruling parties 
from the diplomatic standpoint. A former director of the Defense 
Agency points out: "We should not provoke the neighboring countries 
right now." One senior official of New Komeito, a party which 
embraces a pacifist policy, expresses concerns and urges "caution" 
in decision making. Another reason is that one wrong move may cause 
the DPRK to turn violent. 
 
Therefore, even if ship inspection is limited to Japanese 
territorial waters, tasking the JCG (instead of the MSDF) under the 
 
TOKYO 00001284  008 OF 013 
 
 
JCG Law remains an option. This law authorizes cargo inspection by 
the JCG if warranted by the performance of its duties. Another 
advantage of this is that inspection can start right away after the 
new UNSC resolution is adopted. 
 
In a previous case that was not exactly cargo inspection, JCG patrol 
boats once engaged a North Korean suspicious ship in a gun battle in 
water off Amami-Oshima in December 2001. Ground-to-air missiles and 
rocket guns were later found in the sunken ship. 
 
10) "Military expansion card" against North Korea a double-edged 
sword that might turn Japan into destabilizing factor in region 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 9, 2009 
 
Koki Miura 
 
The government and the Liberal Democratic Party (LDP) are dangling a 
"military expansion card" in international talks on responding to 
North Korea's nuclear test. Japan is trying to give a jolt to China, 
which remains cautious about imposing strong sanctions on North 
Korea, by pointing to the possibility that Japan might resort to 
preemptive strikes and possessing nuclear weapons in the future 
unless the international community squelches North Korea. But the 
"military expansion card" has the danger of turning Japan into a 
destabilizing factor in the region. 
 
Immediately after North Korea's nuclear test on May 25, a senior 
Foreign Ministry official held talks with a Chinese official. In the 
session, the Japanese official said: "An argument to strike enemy 
bases has emerged in our country. If North Korea is left 
unaddressed, this argument might turn into public opinion." The 
Chinese official's expression reportedly stiffened at this comment. 
 
The statement was designed to press China on the adoption of a 
strong UN Security Council resolution on North Korea, suggesting 
that if the North is left unpunished, Japan might move toward 
military expansion. 
 
The same concern exists in the United States as well. Appearing on a 
television program on June 7, Secretary of State Hillary Clinton 
indicated that Washington will consider relisting North Korea as a 
state sponsor of terrorism. She explained the reason why a severe 
response must be made toward North Korea this way, "Unless effective 
steps are taken against North Korea, a military expansion race might 
occur in Northeast Asia." She expressed concern that Japan and South 
Korea might opt for military expansion independently to counter 
North Korea, thereby raising tensions in the region. 
 
In fact, a set of proposals on the National Defense Program 
Guidelines, produced on June 3 by a Liberal Democratic Party (LDP) 
National Defense Department subcommittee, stipulates the possession 
of capabilities to attack enemy bases. The report has preemptive 
strikes in mind, reversing the country's exclusively 
defense-oriented policy. The sub-panel's report also calls for a 
review of Japan's three principles banning weapons export, the 
utilization of outer space, and the special treatment of personnel 
and budgets. 
 
"The question is not whether you can do it or cannot do it. It's 
important to voice what you might do. That can work as a bargaining 
 
TOKYO 00001284  009 OF 013 
 
 
chip in diplomacy," an LDP foreign policy-related lawmaker said. 
 
But such an approach has drawn objections as well. A senior Defense 
Ministry official warned about dangers associated with the approach, 
"The use of such an approach as a bargaining chip might draw fire 
depending on who you are dealing with." 
 
11) Deficit in primary balance to be halved within five years: Draft 
basic policy guidelines to be presented today 
 
MAINICHI (Page 1) (Full) 
June 6, 2009 
 
Draft basic policy guidelines on economic and fiscal management and 
structural reforms for the fiscal 2009 national budget, which the 
government will adopt on June 23 were revealed on the 8th. The draft 
incorporates a new financial base recapitalization goal to raise the 
ratio of outstanding obligations of the central and local 
governments to the gross domestic product (GDP) by the early 2020s. 
It notes that in order to achieve this end, deficit balance in the 
primary balance of the central and local governments to the GDP is 
to be halved within five years and be brought into the black within 
10 years. The draft will be presented at a meeting of the Council on 
Economic and Fiscal Policy, chaired by Prime Minister Taro Aso, to 
be held on the 9th. 
 
The ratio of outstanding obligations to the GDP indicates the level 
of borrowings held by the central and local governments. Japan's 
ratio is one the worst among industrialized countries. The new goal 
to recapitalize the nation's financial base envisages a path to at 
least stabilizing such a ratio by the middle of the 2010s and 
lowering it by the early 2020s. The government stance is thus 
continuing efforts to improve the nation's fiscal base, which has 
become serious due to the ongoing economic crisis. 
 
The government had previously put up a fiscal base recapitalization 
plan to bring the primary balance into the black by fiscal 2011 in 
the basic policy guidelines for fiscal 2006, adopted during the 
Koizumi administration. However, now that it has become difficult to 
attain that goal due to a decline in tax revenues and substantial 
fiscal spending due to the economic crisis, it has decided to adopt 
a new goal in the draft basic policy guidelines for fiscal 2009. 
 
The draft guidelines point out that the government needs to do its 
utmost to realize a peace of mind society, noting that the Japanese 
society is facing a quiet crisis, such as the declining birthrate, 
the widening social disparities and an increase in jobless young 
people. 
 
Concerning the basic policies adopted by the Koizumi administration, 
such as "moving services from government to the private sector" and 
"from a big government to a small government," the draft has 
switched to wording "reforming the government into one that 
functions efficiently beyond dualism." The argument has been made 
that structural reforms implemented during the Koizumi 
administration have caused strains, such as social disparities and 
the employment issue. In response to this point, the draft basic 
policy guidelines for fiscal 2009 indicate a shift from the Koizumi 
policy line. 
 
12) NIKKEI Stock Average tested 9,900 yen level on TSE: Foreign 
investors return 
 
TOKYO 00001284  010 OF 013 
 
 
 
MAINICHI (Page 8) (Excerpts) 
June 9, 2009 
 
The NIKKEI Stock Average tested the 9,900 yen level on the Tokyo 
Stock Exchange (TSE) on June 8, close to the 10,000 yen for the 
first time since last October. Foreign investors had been selling 
more Japan stocks than buying them since last summer. However, they 
have been buying far more Japan stocks than selling them since 
April, pushing up the prices of Japan stocks. Capital appears to be 
returning to the market in the expectation that the economy has 
climbed out of its worst phase. 
 
The closing quotation of the NIKKEI Stock Average on the 8th reached 
9,865.63 yen, up 97.62 yen from the end of the previous week, 
rallying to a high for the year. In response to the observation that 
the U.S. might raise the interest rate in the hope that its economy 
has bottomed out, dollars have been bought, pushing down the value 
of the yen to 98 against the dollar, which generated orders to buy 
export-related companies' stocks. 
 
The NIKKEI Stock Average rose from the 8,800 level to the 9,500 
level in May. According to the Finance Ministry report on the 
situation of internal and external securities sales contracts in 
that month, released on the 8th, buying of Japan stock exceeded 
selling of such by 582.5 billion yen, marking the second consecutive 
month of buying on balance. The buying of Japan stocks by foreign 
investors, whose stock transactions account for nearly 50 PERCENT 
of transactions on the TSE, has apparently contributed to raising 
the prices of Japan stocks. 
 
The rate of the rise of the NIKKEI Stock Average since the lowest 
price seen in March reached roughly 40 PERCENT , while that of the 
Dow Jones Industrial Average stood at about 30 PERCENT . 
 
13) Aso to announce a 14 PERCENT  gas emissions cut tomorrow 
 
NIKKEI (Page 1) (Full) 
June 9, 2009 
 
Prime Minister Taro Aso has started final coordination to announce 
the government's target of reducing greenhouse gas emissions by 14 
percent from 2005 levels by 2020, or 7 percent from 1990 levels. He 
will announce the midterm target in a press conference tomorrow. 
 
Setting a midterm target is a key point in talks on a new 
international framework to fight global warming beyond the 2012 time 
frame set under the Kyoto Protocol. The 14 percent cut is based on 
an estimate presented by former prime minister Yasuo Fukuda last 
year. The government intends to attain the target without including 
the portion of gases reduced through emission quotas from overseas 
and foreign absorption. Aso is expected to make a final decision 
after holding a discussion with the concerned cabinet ministers 
today. 
 
The government takes the view that it is appropriate to use 2005 as 
the year for comparison instead of the year 1990, which is based on 
the Kyoto Protocol. This stems from the judgment that in the case of 
the year 1990, which the European Union recommends to use, Japan 
will be placed in a position of disadvantage. 
 
Aso also intends to show in the press conference tomorrow what the 
 
TOKYO 00001284  011 OF 013 
 
 
cost to people and companies will be for attaining the midterm goal. 
To achieve the government's long-term target of reducing greenhouse 
gas emissions by 60 to 80 percent from the current levels by 2050, 
Aso is also expected to announce a plan to draw up a roadmap that 
will include the state of progress of emission cuts and the timing 
for completing the development of energy-saving technology. 
 
14) Aso on Japan Post dispute: I will make a final decision 
 
SANKEI (Page 5) (Full) 
June 9, 2009 
 
Asked by reporters about whether Japan Post Holdings Co. President 
Yoshifumi Nishikawa should be kept in his post at the Prime 
Minister's Official Residence last evening, Prime Minister Taro Aso 
indicated his intention to make a final decision. He said: 
 
"I hear that some persons are complaining it is undesirable to allow 
the dispute to continue to affect the public's rate of cabinet 
support and the reputation of the government and of our party. I 
think coordinating views is necessary. I wonder whether I should 
come up with a decision right now or at a shareholders meeting on 
June 29. After carefully listening to what (State Minister of 
Internal Affairs and Communications Kunio Hatoyama and Chief Cabinet 
Secretary Takeo Kawamura) say, I will make a final judgment." 
 
Meanwhile, speaking before reporters in front of his private 
residence in Tokyo yesterday, Hatoyama stressed that he would not 
approve Nishikawa's reappointment: 
 
"I know I should not take a superior attitude, but there is no point 
of compromise. People are opposing his remaining in the post. I want 
this country to be one that accepts what everybody thinks." 
 
Upon saying, "I am not saying I have no intention to discuss the 
issue," Hatoyama expressed his willingness to coordinate views with 
Kawamura and others before the shareholders' meeting. 
 
Calls for an early settlement of the dispute over Nishikawa's 
reappointment are growing in the ruling camp. New Komeito Secretary 
General Kazuo Kitagawa said in a liaison meeting of the government 
and the ruling parties yesterday: "I hope to see the dispute settled 
quickly." 
 
Kawamura also said in a press briefing yesterday: "We should not 
take time over this issue. It is necessary to hurriedly resolve the 
issue." 
 
15) LDP launches project team to formulate manifesto: Focus is on 
whether point of issue can be established 
 
SANKEI (Page 5) (Full) 
June 9, 2009 
 
The Liberal Democratic Party will launch a project team today to 
formulate a policy manifesto for the next House of Representatives 
election. The political party that is able to establish a major 
point of issue can have the advantage, as shown in the Lower House 
election of 2005, in which the issue of postal privatization took 
center stage, and the House of Councillors election in 2007, in 
which the pension mess was spotlighted. But Lower House member 
Masazumi Gotoda said: "There is no message the party can deliver." 
 
TOKYO 00001284  012 OF 013 
 
 
The Democratic Party of Japan (DPJ) has already come up with a 
strong slogan on "a change of government." The outcome of the 
upcoming Lower House election hinges on whether the LDP team can set 
forth a point of issue powerful enough to overshadow the DPJ 
slogan. 
 
During an LDP executive meeting last evening, Prime Minister Taro 
Aso said: "I want you to hastily draw up a manifesto." Secretary 
General Hiroyuki Hosoda replied: "The contents of the government's 
annual economic and fiscal policy guidelines for 2009 will become 
our pledges for the election, so we would like to reflect views of 
ruling party members in the guidelines," which will soon be 
announced by the government. 
 
Prior to the executive meeting, Aso also asked participants in a 
liaison meeting of the government and the ruling camp the same day 
to start discussing economic stimulus measures, fiscal resources to 
finance the measures, and security policy. 
 
The LDP project team picked as its key members Election Strategy 
Vice Chairman Yoshihide Suga, Deputy Secretary General Nobuteru 
Ishihara, Executive Council Deputy Chairman Hajime Funada, and 
Policy Research Council Deputy Chairman Hiroyuki Sonoda. But they 
have yet to decide any clear-cut policy. 
 
Regarding economic measures, a senior LDP member said that "almost 
all of the measures that should be taken have been included in the 
supplementary budget for fiscal 2009." Aso has placed emphasis on an 
argument on fiscal resources, but views have been split over whether 
the consumption tax should be raised. Although doubts have been 
voiced about the security policy set forth by the DPJ, if the LDP 
continues to just criticize the DPJ, the party will not be able to 
send a positive message. 
 
The LDP has also failed to form a consensus on such political reform 
issues as limiting hereditary seats and reducing the fixed number of 
seats. The draft report with recommendations released by the party's 
Reform Implementation Headquarters stopped short of mentioning 
specific timing for implementing these measures. 
 
Sonoda stressed the need for prioritizing social security policy 
during a speech in Kyoto on June 6. But if priority is given to 
continuing the party's conventional policy, it will fail to attract 
public attention. 
 
Suga eagerly said: "We will present a vision for the 21st century. 
We are determined to produce a bold (manifesto) under political 
leadership." But DPJ Policy Research Council Deputy Chairman Tetsuro 
Fukuyama said: "It's amazing that the LDP is just starting to 
formulate its manifesto now." 
 
16) Ruling camp to take vote on bill on regulations for Diet 
constitutional research commissions probably on June 11 
 
NIKKEI (Page 2) (Full) 
June 9, 2009 
 
The ruling parties intend to take a vote as early as June 11 at a 
plenary session of the House of Representatives on a bill on 
regulations to determine such factors as the number of members of 
the constitutional research commissions at the two housed of the 
Diet. The two constitutional research commissions, which deliberate 
 
TOKYO 00001284  013 OF 013 
 
 
on draft amendments to the Constitution, have yet to function 
because regulations have not been laid down due to the opposition's 
cautious stance. The ruling coalition appears to be motivated to 
shake the opposition parties, which have different views on the 
constitutional issue, as well as to break the dormant state of the 
Diet constitutional research commissions. All opposition parties 
intend to oppose putting the bill to a vote. 
 
The constitutional research commissions were established in 2007 at 
the two Diet chambers, following the National Referendum Law 
stipulating the procedures for amending the Constitution. In order 
for deliberations, the number of panel members and regulations for 
the conduct of proceedings are required. The ruling coalition, 
therefore, has called for an early enactment of the rules and 
regulations. However, it will be possible to submit to the Diet 
draft constitutional amendments after next May when the bill is 
enacted. The main opposition Democratic Party of Japan (DPJ) has 
criticized the ruling camp, with DPJ Diet Affairs Committee Chairman 
Kenji Yamaoka saying: "The issue should not be used as a political 
fight. A consensus between the ruling and opposition cams is needed 
to push forward with deliberations." 
 
A senior member of the ruling Liberal Democratic Party (LDP) Diet 
affairs committee, however, emphasized: "We must put an end to the 
illegal situation." The ruling bloc is determined to take a vote on 
June 11 at the Steering Committee and a plenary session the Lower 
House even if the opposition opposes such. 
 
ZUMWALT