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UNCLAS SECTION 01 OF 13 TOKYO 001324 
 
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 
 
Index: 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
North Korea problem: 
4) Japan decides to prepare new domestic legislation to allow ship 
searches of suspicious cargo on North Korean vessels, authorized by 
UN sanction resolution  (Sankei) 
5) Government and Liberal Democratic Party working on drafting 
special measures law to allow ship searches  (Nikkei) 
6) Japan to set own sanctions by cabinet decision, including full 
ban on exports to DPRK  (Sankei) 
7) With decision to pass special measures law allowing cargo 
searches, Prime Minister Aso has a new card to shake policy-split 
Democratic Party of Japan  (Asahi) 
8) DPJ's response to new legislation on ship searches unclear, may 
balk due to additional delay in much sought Diet dissolution and 
snap election  (Nikkei) 
9) Maritime Self-Defense Force is reluctant to assume possible new 
duty of searching the suspicious cargo of North Korean ships 
(Asahi) 
10) Japan carrying out ship searches could set off strong North 
Korean reaction and additional trouble  (Tokyo Shimbun) 
11) Unknown whether UNSC sanction resolution will pressure North 
Korea to abort its nuclear ambitions  (Asahi) 
12) U.S. may seek way to shift from pressure to negotiations with 
recalcitrant DPRK  (Mainichi) 
 
Economic affairs: 
13) Government's June report on the economy to remove the word 
"worsening" as signs of improvement begin to be seen  (Mainichi) 
14) G-8 finance ministers' meeting begins today with focus on 
reconstruction of state finances  (Asahi) 
15) Budget ceilings to be set on July 3, earlier than usual 
(Mainichi) 
16) METI considering plan that would boost nuclear power to 40 
PERCENT  of total electrical supply  (Asahi) 
 
Political agenda: 
17) DPJ and Social Democratic Party are ready to form coalition if 
the opposition camp wins the next Lower House election  (Sankei) 
18) Diet passes constitutional reform procedures rules but some of 
DPJ lawmakers opposed to constitutional revision boycott the session 
 (Sankei) 
19) Prime Minister Aso stresses the importance politically of the 
upcoming Tokyo assembly election in July  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Yomiuri, and Tokyo Shimbun: 
WHO declares Phase 6 swine flu pandemic 
 
Mainichi: 
Chemical sensitivity to be covered by healthcare insurance 
 
Nikkei: 
Mitsubishi Heavy Industries to build world's first low-emissions 
coal power plant in Australia 
 
 
TOKYO 00001324  002 OF 013 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
Sankei: 
JAXA to conduct life science experiment in space with India in 
October 
 
Akahata: 
LDP, New Komeito ram Constitution Examination Commission rules 
through Lower House 
 
2) EDITORIALS 
 
Asahi: 
(1) Sanctions resolution on North Korea: International community 
must remain united against threat 
(2) DPJ's ability to govern itself still questionable 
 
Mainichi: 
(1) North Korea sanctions resolution requires international unity 
(2) DPJ's Nishimatsu report does not spell an end to the chapter 
 
Yomiuri: 
(1) China key to new resolution on North Korea 
(2) Upper House must speedily set Constitution Examination 
Commission rules following Lower House 
 
Nikkei: 
(1) UN Security Council resolution on North Korea must be 
implemented strictly 
(2) DPJ expert-panel report too soft on Ozawa 
 
Sankei: 
(1) UNSC North Korea resolution: Effective sanctions essential 
(2) Northern Territories special measures law: Stir up public 
opinion for return of four islands 
 
Tokyo Shimbun: 
(1) International net encircling North Korea essential to stop the 
country's reckless acts 
(2) Constitution Examination Commission rules insufficient 
 
Akahata: 
(1) Constitutional amendment procedures must be abolished 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, June 11 
 
NIKKEI (Page 2) (Full) 
June 12, 2009 
 
09:43 Arrived at Kantei. 
11:00 Met with Nikkei Shimbun Chairman Sugita and Executive Director 
Akiyama. 
11:49 Met at LDP headquarters with Security Research Commission 
Chairman Nakatani, National Defense Division Director Nakayama, and 
Defense Policy Study Sub-committee Chairman Imazu. Met later with 
Secretary General Hosoda and Reform Implementation Headquarters 
leader Takebe. 
12:36 Attended study session of the Kanagawa Prefecture's Women's 
Bureau. Visited the LDP's election headquarters for the Tokyo 
metropolitan election to offer words of encouragement. 
13:03 Attended Lower House plenary session. 
14:17 Returned to Kantei. 
 
TOKYO 00001324  003 OF 013 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
15:01 Met with Deputy Chief Cabinet Secretary Asano, followed by 
Cabinet Public Relations Secretary Ogawa. Responded to interview by 
German newspaper. 
16:05 Met Cabinet Intelligence Director Mitani. 
17:00 Met with Science Council of Japan Chairman Kanazawa, joined by 
Science and Technology Minister Noda. Met later with Shimamura, 
special advisor to the prime minister, followed by Masuda, secretary 
general of the council to realize a security society and Assistant 
Deputy Chief Cabinet Secretary Fukuda. 
18:49 Met with Deputy Chief Cabinet Secretary Uruma. 
19:59 Reported to the Emperor in private. 
21:40 Returned to his official residential quarters. 
 
4) Legislation of domestic law to implement ship inspections 
 
SANKEI (Page 2) (Abridged) 
June 12, 2009 
 
With the UN Security Council about to adopt a sanction resolution 
calling for cargo inspection on North Korean ships, the government 
began to consider domestic legislative measures, including a 
possible new law, on June 11, in order to implement cargo inspection 
on the open sea. Chief Cabinet Secretary Takeo Kawamura stated at a 
news conference on the same day that "it is fully possible" that 
such legislative work will be undertaken in the current Diet 
session. 
 
However, New Komeito has expressed reservations about legislations 
for cargo inspection. It is therefore uncertain whether the bills 
can be submitted to the current Diet session. 
 
5) Government, LDP considering ship inspections special measures 
law 
 
NIKKEI (Page 2) (Abridged slightly) 
June 12, 2009 
 
Following a UN Security Council agreement on a draft resolution on 
sanctions against North Korea, the government and the Liberal 
Democratic Party (LDP) began yesterday considering a special 
measures law on inspections of North Korean cargo. An idea has 
emerged to make the Japan Coast Guard (JCG) responsible for Japanese 
territorial waters and the Maritime Self-Defense Force for the high 
seas in Japan's vicinity. Inspecting ships on the high seas requires 
the consent of ships' captains. A clear line will be drawn with 
oceanic areas where the naval vessels of other countries are 
carrying out activities. They also plan to include "rear-area 
support" that would allow Japan to provide supplies to U.S. forces. 
 
The government and the LDP are aiming to formulate a draft bill next 
week to present legislation to the Diet in the ongoing session. 
 
Ship inspections will be conducted only when the consent is obtained 
from the captain of a ceased ship on the high seas. Firing warning 
shots to halt a ship will not be allowed and the use of arms will be 
limited to legitimate self-defense. An armed conflict might result 
from inspections of a suspicious ship by such countries as the 
United States. To prevent the use of force in collaboration with 
other countries, a clear line will be drawn so that Japan's areas of 
activities will not overlap with those of other countries. 
 
The provision of supplies to the naval vessels of such countries and 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
the United States and South Korea and of transport assistance will 
be allowed. The provision of weaponry and ammunition will not be 
included. Areas of activities will be limited to "rear areas," in 
the same way as the regional contingency law now in force. In view 
of the risk of armed conflicts between MSDF vessels and North Korean 
ships, the government plans to allow the county to carry out only 
rear-area support without conducting cargo inspections even after 
the law is enacted. 
 
6) Cabinet decision to be made June 16 on total ban on exports to 
DPRK as Japan's own sanction measure 
 
SANKEI (Page 2) (Slightly abridged) 
June 12, 2009 
 
It was learned on June 11 that Japan will impose its own additional 
sanctions on North Korea for firing a long-range ballistic missile 
and conducting a nuclear test recently. The sanctions will include a 
total ban on exports to the DPRK. Coordination is underway for 
passing a cabinet resolution and announcing this as soon as June 
¶16. 
 
Japan has already banned the export of 24 "luxury items," including 
beef and tuna, to the DPRK after the Taepodong-2 launch and nuclear 
test in fall 2006. The new measure will ban all exports to reinforce 
existing sanctions. This ban will be in effect until April 13, 
¶2010. 
 
The travel ban will also be broadened. Foreign residents in Japan 
and foreign seamen who have been sentenced for violating trade 
sanctions against North Korea will also not be allowed to reenter or 
land in Japan in principle. 
 
7) Cargo inspection special measures law a new card for Aso 
 
ASAHI (Page 4) (Abridged) 
June 12, 2009 
 
There are now moves aiming to legislate special measures to allow 
cargo inspections on the high seas. This legislation could be a 
bullish factor for Prime Minister Aso, who is fretting about how to 
stand out against the leading opposition Democratic Party of Japan 
(Minshuto) should he dissolve the House of Representatives for a 
general election. It will also likely work to contain the growing 
calls for an early dissolution of the Diet. However, some government 
officials are cautious about the legislation that will lead to 
expanding the scope of Japan's activities, which have been premised 
on "neighboring contingencies" that could seriously affect Japan's 
peace. 
 
Aso's aim is to set up contested ground for the general election. 
His ruling Liberal Democratic Party held a training workshop 
yesterday at its headquarters. Aso there stressed that the LDP has 
been the only responsible party to protect Japan's national security 
and the lives of the Japanese people. Aso is trying to shake up the 
DPJ on security policy since he thinks the DPJ's weak point lies in 
that area. 
 
What if the DPJ opposes the legislation? The LDP will then call the 
DPJ "a friend of North Korea" in its election campaign, one of the 
LDP's faction leaders said. What if the DPJ comes around to support 
the legislation? In that case, Aso anticipates that he can drive a 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
wedge between the DPJ and the Social Democratic Party, which is 
critical of the Self-Defense Forces' overseas activities. In fact, 
the DPJ held a meeting of its foreign affairs and defense policy 
divisions to confirm the necessity of creating a law for cargo 
inspections. Even so, one of the DPJ's executives seated in the 
House of Councillors is opposed to the legislation as "out of the 
question." 
 
In addition, bringing such a major bill before the Diet will likely 
affect Aso's strategy of dissolving the Diet. 
 
The bill is expected to be before the Diet late this month even at 
the earliest. If Aso is going to enact the bill into law, it will 
lead to containing the calls from within the LDP for dissolving the 
Diet at an early date before the July 12 Tokyo metropolitan assembly 
election. 
 
Meanwhile, the New Komeito, which is the LDP's coalition partner and 
sensitive to security policy, is going to accept the legislation. 
That is because the New Komeito expects that if the bill is 
submitted to the Diet, the general election can be more than a month 
after the metropolitan assembly election. One of the party's 
middle-ranking lawmakers explained: "This legislation will be the 
'bullet' during the latter half of the Diet session. We can prevent 
the Diet from being dissolved this month after all the important 
bills are passed and when we have nothing to do." The Aso cabinet's 
support remains flat. As it stands, a former LDP secretary general 
noted that the legislation could be a card to move down the general 
election. 
 
8) Many obstacles to early ship inspections; DPJ's move unclear; 
Lower House dissolution timeframe may be affected 
 
NIKKEI (Page 2) (Abridged slightly) 
June 12, 2009 
 
The government and the Liberal Democratic Party (LDP) have begun 
seriously considering a law governing cargo inspections. This comes 
from the judgment that Japan, which vocally called for applying 
greater pressure (on North Korea) throughout the UN Security Council 
talks, must deal with the matter proactively. Enacting a new low in 
the ongoing Diet session requires the cooperation of opposition 
parties. Prime Minister Taro Aso is likely to be pressed for a 
difficult decision linked to his strategy to dissolve the House of 
Representatives. 
 
The government and the LDP are specifically considering a new law 
allowing the Maritime Self-Defense Force (MSDF) to conduct ship 
inspections on the high sears without the situation being designated 
as a contingency in areas surrounding Japan. The envisaged law is 
unique in that its objective is limited to the implementation of a 
sanctions resolution on North Korea. The legislation is intended to 
put a stop to the ever-expanding scope of SDF activities and to 
weaken the resistance of the New Komeito and other opposition 
parties. 
 
In reality, it is difficult for the SDF to conduct effective ship 
inspections on the high sea, so it is said that the envisaged 
legislation is mainly intended to open the way for rear-area support 
to such countries as the United States and South Korea. At the same 
time, there are many obstacles that must be cleared for the 
enactment of the law. 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
 
The main opposition Democratic Party of Japan (DPJ) is also 
considering the new law allowing conducting ship inspections at the 
high seas. But in the party, cautious views are strong about 
expanding the SDF's scope of activities. DPJ President Yukio 
Hatoyama said to the press corps yesterday, "We must sort out our 
thinking on matters, including whether there is a need for improving 
legislation," while welcoming the UNSC's draft resolution. 
 
A senior DPJ lawmaker explained that the party must be careful so 
that envisaged new legislation will not be used as an excuse to put 
off Lower House dissolution. The New Komeito thinks the Japan Coast 
Guard must be dispatched instead of the MSDF. 
 
The envisaged ship inspection legislation is a double-edged sword 
for the Prime Minister. In the ruling bloc, there is a hard-line 
view that if opposition parties raise objections to the legislation 
or postpone a vote, the Prime Minister should go ahead and dissolve 
the lower chamber by making the matter as a campaign issue. But once 
a bill is submitted to the Diet, the government will have to make 
efforts for its enactment to meet the expectations of other 
countries. But that would reduce the timeframe of Lower House 
dissolution for the Prime Minister. 
 
9) Cautious views voiced over expanding MSDF activities 
 
ASAHI (Page 4) (Abridged) 
June 12, 2009 
 
When sending out the Self-Defense Forces Law on an overseas mission 
under a special measures law, there are many issues to discuss over 
the effectiveness of sanctions and the authorization of weapons use, 
for instance. 
 
The Maritime Self-Defense Force is allowed to inspect ships at sea 
under the Ship Inspections Law. In this case, the MSDF, when 
inspecting a ship, will check to see if its flag state has 
consented, and will inspect the ship with its captain's consent. The 
MSDF is not allowed to take any forcible actions like halting ships 
or firing warning shots. Ship inspections in this case are 
optional. 
 
The SDF is allowed to use weapons only when it is unavoidable to do 
so for self-defense. The antipiracy bill, now before the Diet, 
allows the SDF to fire on ships refusing orders to stop. This firing 
of warning shots is not allowed in the case of inspecting ships. 
 
The SDF is expected to inspect ships on the high seas, based on a 
United Nations resolution. If a ship to and from North Korea sails 
under the flag of North Korea, that country is not likely to consent 
to inspections. The SDF's inspections are also feared to incur North 
Korea's runaway action, so there are cautious arguments both in the 
government and in the ruling parties. 
 
10) Legislation on ship inspection in current Diet to be stormy; 
fear of "flash point" between Japan, DPRK 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 12, 2009 
 
Koki Miura 
 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
In light of the finalization of the UN Security Council (UNSC) 
sanction resolution against North Korea's nuclear test, which calls 
for cargo inspection on ships, among other matters, the government 
plans to prepare the legislation to enable ship inspection in the 
current Diet session. Although ship inspections under this 
resolution have not been made mandatory due to China's demand, this 
could develop into a "flash point" between Japan and North Korea in 
the future under certain circumstances. 
 
A senior Ministry of Foreign Affairs official stressed on June 11: 
"The question now is how to implement the resolution. This needs to 
hurt North Korea." 
 
Cargo inspection is the main component of the effort to apply 
pressure on North Korea. Ship inspections on the open sea, in 
particular, will send a strong message to the DPRK, although its 
implementation is uncertain. 
 
The Japanese government, which has demanded strong sanctions along 
with the U.S., "needs to respond to the call of the resolution." 
(Chief Cabinet Secretary Takeo Kawamura) It is poised to set in 
motion the required legislation. 
 
The only existing laws that authorize ship inspections in 
international waters by the Self-Defense Forces (SDF) are the 
maritime transport regulation law in a situation of armed attack and 
the ship inspection operations law under an emergency situation in 
areas surrounding Japan. Since a mere nuclear test is difficult to 
designate as an emergency situation, the government has judged that 
there is need for new legislation. It will study whether to amend 
the ship inspection law or to enact a separate new law. 
 
The Liberal Democratic Party (LDP) and New Komeito will launch a 
project team as soon as next week. 
 
While the UNSC resolution about to be adopted is rather weak, since 
ship inspection (on the open sea) will require the consent of the 
flag state, if the DPRK reacts fiercely to the resolution and launch 
more ballistic missiles, it is highly possible that a stronger UNSC 
resolution will be adopted. 
 
In light of this, there are calls in the LDP for broadening the 
authorization for the SDF to use arms under the new law -- to allow 
shooting at ships, for instance - in order to enable forcible 
inspections. 
 
The ruling parties plan to enact the new law as a main item on the 
agenda in the final phase of the current Diet session. However, it 
is uncertain whether this can be done before the Diet adjourns on 
July 28, since the confrontational mood between the ruling and 
opposition parties is intensifying with the House of Representatives 
election approaching. 
 
Furthermore, there is an opinion in the Ministry of Defense that: 
"If MSDF ships conduct ship inspections on the open sea, North Korea 
may regard this as a 'state of war.' We are in for trouble." Certain 
officials are anxious. "This is very different from anti-piracy 
operations. Are we really supposed to do it?" 
 
11) International community mulling how to urge North Korea to 
abandon nuclear program 
 
 
TOKYO 00001324  008 OF 013 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
ASAHI (Page 2) (Full) 
June 12, 2009 
 
The five UN Security Council permanent members, Japan and South 
Korea agreed on a draft sanction resolution against North Korea on 
June 10, more than two weeks after its nuclear test. Has China made 
a policy changed its prudent stance? What is the U.S. aiming at? How 
will the international community, including Japan, persuade the 
North to forge ahead with the denuclearization process? 
 
Japan still exploring new approach 
 
The Japanese government has launched a discussion on how to proceed 
with the six-party talks, besides the effort to lay down a 
resolution at the UN. 
 
Foreign Ministry's Asian and Oceanian Affairs Bureau Director 
General Akitaka Saiki, Japan's chief delegate to the six-party 
talks, left for Washington on the 8th. He said: "We will discuss 
future policy options, including the six-party talks, and iron out 
differences in our positions." He exchanged views with U.S. Deputy 
Secretary of State Jim Steinberg, who returned from a round of 
visits to Japan, China and South Korea, and other U.S. government 
officials. 
 
Japan advocated a "new approach toward the North," as said by 
Administrative Vice Foreign Minister Mitoji Yabunaka, reflecting on 
the fact that the approach based on the principle of action for 
action, based on which the six-party talks were advanced, proved to 
be unsuccessful. Whenever the North took denuclearization measures, 
(the international community) offered financial assistance. But such 
efforts came to nothing with North Korea's recent nuclear test. A 
senior Foreign Ministry official grumbled: "While looking into 
details, we strayed off into a wood and found it difficult to see 
the grand picture of North Korea's denuclearization." 
 
Even so, there is no effective hand to take against the North for 
now. While the U.S. is shifting its weight to pressure tactics in 
line with Japan's stance, North Korean Ambassador to the UN Sin Son 
Ho showed an attitude of fiercely reacting to the UN draft 
resolution. Remaining unresponsive to questions by reporters on the 
street in New York on the 10th, he violently pushed away the 
microphone directed at him. The tensions are expected to extremely 
intensify as the international community remains unable to explore a 
new approach toward North Korea. 
 
12) China's consideration to North Korea masks its anger toward that 
country 
 
MAINICHI (Page 2) (Excerpts) 
June 12, 2009 
 
The five UN Security Council permanent members, Japan and South 
Korea reached a final agreement on June 10 on the text of a 
resolution calling for additional sanctions against North Korea for 
its second nuclear test. Although cargo inspection was not made 
mandatory due to the strong opposition of China asserting that the 
measure will heighten military's tensions, stronger pressure is 
expected to be applied to exports of goods and money to North Korea. 
Attention is now focused on whether these measures will press the 
North to change its tough stance and on what moves the U.S. and 
China, which holds enormous sway over North Korea, will make next. 
 
TOKYO 00001324  009 OF 013 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 
 
 
U.S. to launch negotiations with pressure 
 
Based on the judgment that North Korea's main purpose is to have the 
international community to recognize it as a nuclear power, the 
administration of President Barack Obama has decided to play up 
"pressure" instead of "rewards" in an attempt to bring the North 
back to the negotiating table. If North Korea has no intention to 
denuclearize itself, rewards will be useless. But some observers 
anticipate that North Korea, which has entered the 
leadership-transition period and is trying to demonstrate its 
strength through a nuclear test and other moves, may not respond to 
a call for talks. 
 
The contents of the draft resolution have been watered down, but it 
can be interpreted to mean that the resolution has left a margin in 
anticipation of future provocative act. A senior official of the 
U.S. State Department said: "I am satisfied with it." 
 
The U.S. is expected to work on China, which has influence over the 
North, (to persuade it to promote the denuclearization process). 
Senior researcher Bush of the Brookings Institution commented: "It 
will be an indicator to see what type of big power China will become 
in Northeast Asia." 
 
The tough U.S. stance has also been supported by changes in the 
international situation. 
 
Mansfield Foundation Chief Flake, who was an advisor about Asia 
strategy to Obama during the presidential election campaign, made 
this analysis: 
 
"When North Korea conducted the nuclear test in 2006, the previous 
Bush administration's hostile policy was criticized as a failure, 
and the administration was pressed to opt for a policy of dialogue. 
The Obama administration was calling for dialogue from the 
beginning, but North Korea carried out the nuclear test in defiance 
of the call. Nobody will criticize the Obama administration." 
 
North Korea will surely resort to a hostile act in reaction to the 
pressure, but it is uncertain where the U.S. will set a "critical 
point." It is also unpredicted to what extent China, which is 
cautious about strong pressure, will offer cooperation. The U.S. 
seems to have yet to chart a medium- to long-term strategy. 
 
13) Government ups economic outlook for first time in seven months 
in report for June, removing "deterioration" 
 
MAINICHI (Page 1) (Excerpt) 
June 12, 2009 
 
The government will revise its assessment of the nation's economy 
upward for two months in a row in its monthly report for June. It 
will remove the word "deterioration," reflecting that signs of the 
drop in production bottoming out are appearing. "Deterioration" will 
disappear for the first time in seven months. Coordination is now 
underway to insert the expression, "signs of recovery can be seen in 
some areas." Finance Minister Kaoru Yosano will present the report 
in a meeting of the relevant cabinet ministers on June 17. 
 
14) G-8 finance ministerial to kick off today with focus on economic 
reconstruction 
 
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ASAHI (Page 7) (Abridged slightly) 
June 12, 2009 
 
A finance ministerial meeting from the Group of Eight nations (G-8) 
will take place in Lecce in southern Italy. Amid emerging signs of 
the global economy bottoming out, finance ministers from the G-8 
will discuss an exit strategy after a crisis response policy stance. 
In view of the fact that active public spending is pushing up 
long-term interest rates, participants are expected to reaffirm the 
importance of economic reconstruction. 
 
The meeting is one of the preparatory meetings for the G-8 to be 
held in L'Aquila in central Italy from July 8 through 10. Food 
security and climate change, as well as economic stimulus measures 
will likely top the agenda. 
 
Participants will look into various countries' public spending and 
financial stabilization measures. Anticipating a post-economic 
recovery phase, they will discuss a path to economic reconstruction 
and how to end exceptional measures, such as government guarantees 
and the injection of public money into financial institutions, 
according to a senior finance ministry official/ 
 
The interest of each country has shifted from fiscal spending to 
fiscal reconstruction, because signs of the economy picking up have 
begun to appear. An agreement was reached at the financial summit 
(G-20) in April to press ahead with fiscal spending totaling 5 
trillion dollars or roughly 490 trillion yen. In Japan, too, various 
indexes, such as mining and manufacturing production index, are 
improving due to stimulus measures. Finance Minister Yosano 
indicated his understanding that the Japanese economy had bottomed 
out between January and March. 
 
Meanwhile, there is concern over the aftereffects of various 
countries financing fiscal spending with massive borrowings. The 
U.S. fiscal deficit for fiscal 2009 is estimated to have reached the 
worst-ever level of about 1.8 trillion dollars or roughly 176 
trillion yen. Due in part for that reason, its long-term interest 
rate is rising. Japan's fiscal deficit will also likely mark the 
largest-ever level with the issuance of new government bonds in 
fiscal 2009 topping 44 trillion yen. Amid growing anxieties over 
fiscal sustainability in various countries, it is now urgent to 
indicate a path to fiscal reconstruction. 
 
Finance Minister Yosano is expected to explain Japan's measures of 
over 15 trillion yen to deal with the economic crisis. He will also 
mention Japan's fiscal reconstruction goal, which is now being 
drafted.  It will involve stabilizing the ratio of outstanding 
obligations held by the central and local governments to the gross 
domestic product (GDP) by the mid-2010s. 
 
Japan Credit Rating Agency President Makoto Utsumi, former vice 
financial minister for international financial affairs, said, 
"European countries and the U.S. have been pursuing an exit strategy 
from the early stage of the crisis. Such awareness is low in Japan. 
It was unable to pursue an exit strategy on the fiscal and financial 
fronts during the economic recovery phase following the so-called 
lost decade (1990s). If anxieties over the future remain with no 
proper exit arguments being pursued, it would become difficult for 
personal consumption to pick up." 
 
 
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15) Prime minister considering adopting budget request guidelines on 
July 3 
 
MAINICHI (Page 1) (Full) 
June 12, 2009 
 
Prime Minister Taro Aso has started looking into fiscal 2010 budget 
request guidelines with the possibility of adopting them at a 
cabinet meeting on July 3, by extensively speeding up the annual 
timetable to around the end of July. It appears that he has 
determined that it would be necessary to do so in order to allow for 
the possibility of Lower House dissolution in mid July, because 
fiscal 2009 extra budget-related bills and the antipiracy 
legislation will likely be enacted before the end of June. The 
guidelines are the upper limit of budgetary requests. They are 
usually adopted at a cabinet meeting to be held between late July 
and early August. Each government agency estimates its budget and 
submits budget requests by the end of August. The Finance Ministry 
then examines such requests and drafts a budget at the end of the 
year. 
 
The prime minister is attaching importance to showing differences 
from the Democratic Party of Japan (DPJ) in the upcoming Lower House 
election. He apparently aims to demonstrate in specific terms how he 
is managing his administration by setting the general framework for 
the draft budget. It is believed that if the DPJ seizes power in the 
election, it would change the guidelines. 
 
16) METI looking into raising ratio of nuclear power generation to 
total power generation amount to over 40 PERCENT  to achieve 
mid-term goal to cut greenhouse gas emissions 
 
ASAHI (Page 7) (Full) 
June 12, 2009 
 
The government has set a mid-term goal to cut greenhouse gas 
emissions by 15 PERCENT  from the 2005 level by 2020. In order to 
achieve this end, the Ministry of Economy, Trade and Industry (METI) 
has started looking into raising the ratio of nuclear power 
generation to total power generation to over 40 PERCENT . It will 
incorporate the improvements of operating rates rate and capacity of 
existing reactors and the building of new reactors in a set of 
measures designed to promote nuclear power generation to be compiled 
soon. 
 
Raising the ratio of nuclear power generation necessitates extending 
the interval between regular check-ups of existing reactors and 
raising the operating rates of reactors from the current 50 PERCENT 
to 80 PERCENT  on a par with industrialized countries, by increasing 
maintenance during operations. METI will also back a plan to build 
nine additional reactors by fiscal 2018. Such a ratio in fiscal 2005 
was 31 PERCENT . It dropped to 25 PERCENT  in fiscal 2007, when the 
Kariwazaki nuclear plant stopped operations due to the Chuetsu 
Earthquake. Over 40 PERCENT  is fairly higher than those figures. 
 
17) SDP to form coalition with DPJ, giving priority to change in 
government 
 
SANKEI (Page 5) (Full) 
June 12, 2009 
 
The Social Democratic Party (SDP), a minor opposition party, 
 
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yesterday decided on a policy of taking part in a coalition 
government led by the Democratic Party of Japan (DPJ) if the 
opposition camp outnumbers the ruling bloc in the next House of 
Representatives general election. The SDP has now launched internal 
coordination. Although there are gaps in views on constitutional and 
security issues between the SDP and DPJ, the SDP has judged that 
"the public's expectations for a change in government are strong" 
(senior SDP member). The party will give priority to implementing 
such policies as social security and economic measures on which the 
two parties can find common ground. The People's New Party (PNP), 
another minor opposition party, too, has adopted a similar policy. 
The three opposition parties, therefore, will speed up preparations 
for forming a coalition for making common policies. 
 
In a meeting yesterday morning, the SDP confirmed that if the DPJ 
asks to join a coalition government after the Lower House election, 
it will launch consultations. DPJ President Yukio Hatoyama expressed 
hopes at a meeting yesterday in Tokyo, saying: "I would like to 
create a new politics for Japan along with the SDP and the PNP." 
Shizuka Kamei, deputy chief of the PNP, who also attended the 
meeting, stressed: "With an eye on a change in government, the three 
parties should start policy consultations as soon as possible." 
 
However, there is strong concern in the SDP that if the leadership 
announces a policy of joining a coalition government, "the SDP could 
be wrapped up in a tug-of-war between the DPJ and the Liberal 
Democratic Party (LDP)" (senior local chapter member). Therefore, 
SDP Chairperson Mizuho Fukushima emphasized: "Opposition to overseas 
dispatch of the Self-Defense Forces and to constitutional is our 
condition to participate in a coalition government." She aims to 
ease dissatisfaction in the party's local chapters. It is expected 
that the SDP will put off ironing out differences of opinions in the 
party to until after the Lower House election. SDP Secretary General 
Yasumasa Shigeno yesterday told reporters: "We want to gain more 
than ten seats in the general election in order to have the right to 
speak in consultations on a coalition government," indicating that 
the SDP will devote its effort to  increasing its Lower House 
seats. 
 
18) Regulations for Lower House Constitution Examination Commission 
approved 
 
SANKEI (Page 5) (Abridged slightly) 
June 12, 2009 
 
The House of Representatives approved yesterday in its plenary 
session a bill to set "examination rules" stipulating such factors 
as the number of members of the Lower House Constitution Examination 
Commission, which examines constitutional problems and draft 
constitutional amendments, by a majority lawmakers from the ruling 
parties. However, the Democratic Party of Japan (DPJ), the Japanese 
Communist Party, the Social Democratic Party, and the People New 
Party - opposition parties - opposed the bill. 
 
The constitution examination panels, permanent Diet organizations, 
were set up in both Diet chambers in August 2007 based on the 
revision of the Diet Law, following the National Referendum Law. 
However, enacting the regulations had been put off because of the 
rejection by the DPJ and other opposition parties. The panels have 
not functions for one year and ten months. 
 
In the opposition controlled House of Councillors, there is no 
 
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prospect for the upper chamber to hold deliberations on the 
establishment of regulations. Thinking that the constitution panels 
in the two Diet houses should be operated the same time, the ruling 
parties intend to put off the selection of the Lower House 
commission. 
 
The DPJ opposed the bill, citing "We have agreed to make 
regulations, but it is not necessary to do so at this time." 
 
19) Prime Minister Aso: Outcome of Tokyo metropolitan assembly 
election will have great impact on his strategy for Lower House 
dissolution 
 
YOMIURI (Page 4) (Full) 
June 12, 2009 
 
The ruling and opposition parties intend to put their all energy 
into the campaigning for the Tokyo metropolitan assembly election 
(July 12) because there is a view that the results of the Tokyo 
election would have an impact on Prime Minister Taro Aso's strategy 
for the dissolution of the House of Representatives, as well as on 
the next general election. 
 
Aso visited yesterday the Liberal Democratic Party's (LDP) Election 
Strategy Headquarters where he said: "(Tokyo assembly election) is 
an important election that will lead to the Lower House election. 
Although it is a local election, how we will put enthusiasm in it is 
significant." He started on June 7 visiting all the LDP-endorsed 
candidates, showing his eagerness for supporting the LDP candidates 
for the Tokyo metropolitan assembly election. 
 
Aso has been feeling out the possibility of dissolving the Lower 
House during the period between late June and the middle of July, 
and holding the general election on Aug. 2. However, many in the 
ruling coalition want him to reconsider the ruling camp's election 
strategy after seeing the results of the Tokyo election, the mayoral 
election of Chiba City (June 14), and the gubernatorial election of 
Shizuoka Prefecture (July 5). 
 
It is said that if the LDP and New Komeito, which form the ruling 
coalition, win a majority of the Tokyo metropolitan assembly, Aso 
will be able to smoothly carry out his strategy for Lower House 
dissolution. However, if the LDP-New Komeito ruling coalition loses 
its majority in the Tokyo assembly, voices calling for the 
responsibility of the Aso cabinet, which has suffered low support 
rates, for the loss will unavoidably be raised. If such happens, the 
date of the general election will be delayed. Therefore, it is 
expected that with an eye on a move to withdraw Aso from office, 
calls for speeding up an LDP presidential election will become 
stronger. 
 
Meanwhile, the main opposition Democratic Party (DPJ) aims to become 
gain the second-largest number of Tokyo assembly seats in order to 
lead it to the Lower House election. 
 
With the number of candidates being less than a majority in mind, 
DPJ Deputy President Ichiro Ozawa told reporters in Yodogawa Town, 
Kochi Prefecture: "I want to (the DPJ's Tokyo) to field at least 64 
candidates" 
 
ZUMWALT