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UNCLAS SECTION 01 OF 13 TOKYO 001379 
 
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 06/19/09 
 
Index: 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule  (Nikkei) 
 
Defense and security affairs: 
4) Defense Ministry has high hopes that the U.S. Congress will 
remove ban on exports of F-22s, which Japan wishes to procure 
(Yomiuri) 
5) Three important bills to pass the Diet by override vote today, 
including the antipiracy legislation  (Sankei) 
6) Text of anti-piracy bill  (Sankei) 
7) Prime Minister Aso intends to present the ship-search bill to the 
current Diet session  (Yomiuri) 
8) Outline of bill allowing cargo-searches of North Korean vessels 
includes provision on confiscating and disposing of missile parts 
(Nikkei) 
9) U.S. government seriously considering whether to relist North 
Korea as a terrorist sponsoring state as a means of applying further 
pressure on it  (Yomiuri) 
 
Political agenda: 
10) Key vote on organ transplant bill finds Democratic Party of 
Japan Hatoyama voting against the popular legislation, former party 
head Ozawa voting for it  (Nikkei) 
11) DPJ is wary that the Hatoyama brothers, no longer feuding, may 
link up politically  (Asahi) 
 
12) DPJ President Hatoyama meets the families of abductees for the 
first time  (Asahi) 
13) Japan Post President Nishikawa, after causing a ruckus, now 
offers to resign his position  (Mainichi) 
14) Liberal Democratic Party (LDP) factions all ask Aso to make an 
early decision on dissolving the Diet for a snap election, as well 
as to reshuffle the Cabinet  (Tokyo Shimbun) 
15) DPJ is going all out to campaign for its candidate in the 
Shizuoka gubernatorial race, hoping to continue its string of 
victories against the LDP  (Tokyo Shimbun) 
 
16) Japan and EU looking into reports that China is turning trade 
protectionist with a "buy Chinese" products policy  (Yomiuri) 
 
17) Has Japan's economy really bottomed out, as the government says? 
It may be premature to say so, according to experts  (Tokyo Shimbun) 
 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Transplant Law amendment passes Lower House: views divided on brain 
death definition; maneuvering eyeing general election schedule 
 
Mainichi: 
Momentous decision on 'promoting transplant': Prime Minister says 
brain death human death, Hatoyama disagrees 
 
Yomiuri: 
Plan A for Organ Transplant Law amendment goes to Upper House; time 
is running out 
 
 
TOKYO 00001379  002 OF 013 
 
 
Nikkei: 
JTB, Kinki Nippon Tourist, other major tour companies to jointly 
charter international flights 
 
Sankei: 
Lower House passes Plan A to amend Organ Transplant Law, removing 
age requirement 
 
Tokyo Shimbun: 
Plan A of Transplant Law passes Lower House; definition of brain 
death goes to Upper House 
 
Akahata: 
Social security spending cut 13 trillion yen in 10 years: people 
suffer seriously from change for the worse 
 
2) EDITORIALS 
 
Asahi: 
(1) Organ Transplant Law: Upper House should discuss thoroughly with 
its good sense 
(2) Declaration on economy bottoming out: Road to recovery still far 
off 
 
Mainichi: 
(1) Amendment to Organ Transplant Law: Discuss thoroughly in Upper 
House 
(2) Anti-piracy operations: Ultimate solution lies in diplomacy 
 
Yomiuri: 
(1) Transplant Law passes Lower House: A step taken in expanding 
supply of organs 
(2) Bottoming out of economy: Do not let up until full recovery is 
achieved 
 
Nikkei: 
(1) One step toward breaking away from reliance on organ transplant 
overseas 
(2) U.S. financial regulatory reform needs to be watched closely 
 
Sankei: 
(1) U.S.-ROK summit: A good time to consolidate unity against North 
Korea 
(2) Organ transplant: Go for passage of Plan A in Upper House 
 
Tokyo Shimbun: 
(1) Lower House passes Plan A: Change in nature of Transplant Law 
(2) Quake resistance of schools: Ensuring safety is an urgent issue 
 
Akahata: 
(1) Go into the roots of collusion among politicians, bureaucrats, 
and business 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, June 18 
 
NIKKEI (Page 2) (Full) 
June 19, 2009 
 
07:30 Met deputy chief cabinet secretaries Matsumoto and Asano at 
the Kantei. 
 
TOKYO 00001379  003 OF 013 
 
 
09:00 Attended an Upper House Foreign Affairs and Defense Committee 
meeting. 
12:04 Returned to the Kantei. 
13:02 Attended a Lower House plenary session. 
13:40 Returned to the Kantei. 
15:00 Attended an Upper House Health, Labor, and Welfare Committee 
meeting. 
17:47 Met Chief Cabinet Secretary Kawamura at the Kantei. 
18:18 Held talks with President Arroyo of the Philippines. 
19:10 Attended a signing ceremony, followed by a joint press 
conference. Afterward, hosted a dinner party. 
21:33 Met Matsumoto at his official residence 
 
4) Defense Ministry hopeful about lifting F-22 export ban 
 
YOMIURI (Page 4) (Full) 
June 19, 2009 
 
With the U.S. Congress' agreement to include in the FY09 
supplementary budget appropriations for researching the development 
of the export version of the advanced stealth fighter F-22, the 
Ministry of Defense (MOD) is closely watching if this will open the 
way for the introduction of the F-22, which is its top choice for 
the next generation fighter, codenamed FX. 
 
Vice Minister Kohei Masuda stated at a news conference on June 18 
that, "We are unsure if this latest move in the U.S. Congress will 
open the way for the export of the F-22," indicating that the 
ministry will make efforts at information gathering. Some MOD 
officials are hopeful, saying: "We now see signs leading to the 
lifting of the export ban." (senior MOD official) 
 
5) Antipiracy bill to become law today 
 
SANKEI (Page 5) (Abridged) 
June 19, 2009 
 
The Diet, which is currently in an extended stage of its 
extraordinary session, will approve a set of three key legislative 
measures today, including an antipiracy bill, after they are voted 
down in a plenary sitting of its upper chamber and revoted on in the 
lower chamber. These important bills will now clear the Diet, with 
more than a month left until the Diet closes its current session on 
July 28. As it stands, the ruling and opposition parties will likely 
intensify their political posturing with an eye on an early snap 
election. 
 
The Foreign Affairs and Defense Committee of the 
opposition-controlled House of Councillors met yesterday and took a 
vote on the antipiracy bill that will allow Japan to send out the 
Self-Defense Forces to deal with pirates in Somalia and other waters 
as needed. The bill was voted down with a majority of votes from the 
opposition bench, including the leading opposition Democratic Party 
of Japan (Minshuto). 
 
The House of Councillors will call a plenary sitting this morning, 
where the three legislative measures, including the antipiracy bill, 
are expected to be voted down with a majority of opposing votes. The 
ruling Liberal Democratic Party and its coalition partner, the New 
Komeito party, will override the House of Councillors' decision in a 
second vote with two-thirds or more of the votes for the bills 
according to constitutional provisions. 
 
TOKYO 00001379  004 OF 013 
 
 
 
In addition, the government will present a bill to the Diet next 
week for a special measures law intended to conduct cargo 
inspections for ships to and from North Korea. The ruling coalition 
is aiming for its early passage. 
 
The antipiracy bill expands the scope of the Maritime Self-Defense 
Force's maritime security operations, which are currently limited to 
Japanese ships and Japan-linked ships, in order to make it possible 
for the MSDF to escort foreign ships as well against pirates in 
waters off Somalia. After the bill is enacted into law, the 
government plans to dispatch a backup squadron of MSDF destroyers to 
Somalia waters in late July under the new law to replace those 
currently deployed there. The MSDF will then embark on international 
contributions in cooperation with foreign naval fleets. 
 
In the Gulf of Aden off Somalia, there have been 142 pirate attacks 
as of June 15, outpacing last year's 111 attacks. Under the current 
law, the MSDF is only allowed to escort Japanese ships and 
Japan-chartered ships. Its destroyers convoy 1-7 ships on each 
mission. Under the new law, they are expected to guard about 10 
ships on each mission, including foreign ships. 
 
6) Main points from antipiracy bill 
 
SANKEI (Page 5) (Abridged) 
June 19, 2009 
 
Purpose 
 
In the light of the importance of ensuring the safety of ships at 
sea for Japan's economic society and for its national life, and also 
in the light of the purport of the United Nations Convention on the 
Law of the Sea, the law stipulates matters needed to punish piracy 
and deal with piracy in an adequate and effective manner, whereby 
the law purports to maintain public safety at sea. 
 
JCG actions against piracy 
 
The Japan Coast Guard will implement necessary measures to deal with 
piracy. JCG personnel may use weapons as provided for in the Police 
Duty Execution Law's Article 7 (legitimate self-defense and 
emergency evacuation). In addition, JCG personnel may use weapons 
within the bounds of rational necessity where pirates refuse orders 
to stop and continue an act of piracy and where there are no other 
means to stop their ships. 
 
SDF actions against piracy 
 
The defense minister may order the Self-Defense Forces to conduct 
antipiracy operations with the prime minister's approval where there 
is a special need to deal with piracy. The defense minister will 
create an outline of actions, describing why antipiracy operations 
are necessary, where antipiracy operations will be conducted, on 
what scale antipiracy operations will be conducted, how long 
antipiracy operations will be conducted, and other important 
matters. The defense minister will submit it to the prime minister. 
The prime minister will approve antipiracy operations. When 
antipiracy operations are ended, the prime minister must report it 
to the Diet without delay. SDF personnel may use weapons as in the 
case of JCG personnel to deal with piracy. 
 
 
TOKYO 00001379  005 OF 013 
 
 
7) Aso plans to submit ship inspection legislation to current Diet 
 
YOMIURI (Page 2) (Abridged slightly) 
June 19, 2009 
 
Prime Minister Taro Aso presented before the Upper House Foreign 
Affairs and Defense Committee yesterday his plan to submit to the 
Diet a bill allowing the country to inspect cargo of ships to and 
from North Korea in order to have it enacted in the current session. 
The Prime Minister said: "I think the law should be enacted 
speedily. An early enactment of the law will help us send an 
extremely clear message to North Korea." 
 
Cargo inspections are based on UN Security Council Resolution 1874. 
The member countries are required to block exporting to and 
importing from North Korea materials leading to the development of 
weapons of mass destruction and to confiscate and dispose of them, 
if discovered. Because Japan has no legal grounds to conduct cargo 
inspections on occasions except for emergency situations and 
contingencies in areas surrounding Japan, the government is working 
on enacting a new law. 
 
The ruling Liberal Democratic Party and the New Komeito held the 
first meeting yesterday of their project team on North Korea cargo 
inspections, chaired by LDP Security Research Commission Chairman 
Gen Nakatani and New Komeito Security Department chief Shigeki Sato, 
to kick off their work. The team confirmed a plan to produce a bill 
in outline next week. 
 
The government intends to allow the Japan Coast Guard (JCG) to 
conduct ship inspections in Japan's territorial waters and the high 
seas near them. In yesterday's meeting, the view emerged mainly from 
the LDP that the legislation should include some room for 
inspections by the Maritime Self-Defense Force (MSDF). 
 
Some think that an inclusion of such a provision would make Diet 
deliberations difficult due to objections from the opposition bloc, 
which is dismissive of any use of the SDF. There is also concern 
that if the Prime Minister still insists on the law's enactment in 
the current Diet session, deliberations might continue until nearly 
the July 28 end of the session, thereby tying up the Prime 
Minister's right to dissolve the House of Representatives. 
 
8) North Korea ship inspections: Special measures law to allow Japan 
to confiscate and dispose of missile components even on high seas 
 
NIKKEI (Page 2) (Abridged) 
June 19, 2009 
 
The government yesterday outlined a special measures bill making it 
easier to inspect cargo on ships to and from North Korea. The aim is 
to give Japan legal grounds to conduct ship inspections that are 
included in the recent UN Security Council resolution to impose 
sanctions on North Korea. The Japan Coast Guard (JCG) is to play a 
main role in conducting inspections and is to cooperate with 
customhouses at seaports. Currently cargo inspections are allowed to 
be conducted only in Japanese territorial. The envisaged legislation 
is designed to expand the scope to include the high seas. The 
government plans to have a cabinet decision on the legislation to 
submit it to the Diet later this month. 
 
The ruling bloc's ship-inspection project team met yesterday to 
 
TOKYO 00001379  006 OF 013 
 
 
receive an explanation from the government. In the session, the 
government explained that the JCG is totally capable of dealing with 
what is specified in the UN Security Council resolution. The 
enactment of the law will allow Japan to confiscate and dispose of 
missile components and other embargoed items when such are 
discovered. The government also underlined the need for the 
legislation to deal with cargo inspections not only at sea but also 
at seaports and airports. 
 
Under existing legislation, Japan is allowed to inspect cargo only 
in its territorial waters. Further, the objects are limited to items 
that violate domestic laws, such as the Stimulant Drug Control Law 
and the Swords and Firearms Control Law. There was strong opinion 
that simply carrying missile-related parts that are subject to 
sanctions under the UN Security Council resolution did not 
constitute a violation. 
 
The special measures law is designed to expand the area of 
activities to include the high seas. The legislation also clearly 
stipulates that Japan is allowed to inspect ships carrying missile 
components and the like in waters near Japan and to confiscate and 
dispose of them. 
 
The UN resolution calls for inspections at seaports and airports. 
The legislation incorporates a provision on ground inspections. 
Japan has already completely stopped exports and imports with North 
Korea. Items that have passed through customs can be suspended under 
the Foreign Exchange and Foreign Trade Control Law. The new law will 
allow customs and the JCG to inspect and confiscate items that have 
arrived in Japan without going through customs. 
 
The focus in talks between the ruling and opposition parties would 
on who should play the main role in inspections. The government and 
ruling parties intend to allow the JCG to play the main role in 
deference to the opposition bloc which remains cautious about an 
expansion of activities by the Maritime Self-Defense Force (MSDF). 
The ruling parties are scheduled to hold a project team meeting next 
week to discuss the modalities of the involvement of the MSDF. 
 
Meanwhile, Democratic Party of Japan Upper House Caucus Chairman 
Azuma Koshiishi indicated in a press conference that if the JCG is 
to play the main role, his party would allow an early enactment of 
the special measures legislation. 
 
Comparison of current legislation and the special measures law on 
ship inspections 
 
  Existing legislation Special measures law 
Inspection High seas Not allowed Allowed 
 Territorial waters Allowed Allowed 
Confiscation of illegal items High seas Not allowed Allowed 
 Territorial waters Not allowed ( ASTERISK ) Allowed 
 
Exports and imports between Japan and North Korea can be suspended 
under the Foreign Exchange and Foreign Trade Control Law. 
 
9) Vigorous discussion on re-listing as "terror sponsor," as Obama 
administration eyes stronger pressure on North Korea 
 
YOMIURI (Page 7) (Full) 
June 19, 2009 
 
 
TOKYO 00001379  007 OF 013 
 
 
Keiichi Honma, Washington 
 
The Obama administration of the United States is seriously 
considering re-designating North Korea as a state sponsor of 
terrorism. This is meant to be the U.S.' own sanction to apply 
stronger pressure on the DPRK following the UN Security Council's 
adoption of a sanctions resolution. 
 
The countries currently on the list of state sponsors of terrorism 
are Iran, Syria, Sudan, and Cuba. North Korea went on the list in 
1988 for its involvement in the Korean Airlines bombing in the 
previous year. It was removed from the list in October 2008 as a 
reward for announcing the resumption of the disablement of its 
nuclear facilities. 
 
According to the State Department's definition, a state sponsor of 
terrorism is a "state that repeatedly gives support to international 
terrorist groups." Ballistic missile launches and nuclear tests 
cannot become the direct reason for re-listing. 
 
A State Department source says that relations with the Islamic 
Shiite group Hezbollah in Lebanon, which has been designated by the 
U.S. as a terrorist organization, may constitute a strong ground for 
re-listing. North Korea reportedly has been providing weapons and 
training and engaging in personnel exchanges since the 1980s. During 
the Lebanese conflict of 2006, North Korea provided weapons through 
Iran. There are reports that the Hezbollah's technology in digging 
underground tunnels was provided by North Korea. 
 
Meanwhile, according to a British military magazine and other 
sources, the "Liberation Tigers of Tamil Eelam (LTTE)," a group on 
the brink of collapse as a result of the Sri Lankan government's 
mopping up operations, frequently smuggled machine guns, rifles, 
anti-tank rockets, and other weapons from the DPRK in 2006-2007. The 
LTTE is also a terrorist group on the U.S. list. It is also said 
that North Korea's suspected cooperation with Iran, a listed state 
sponsor of terrorism, in missile development may also be a basis for 
the DPRK's re-listing. 
 
Crimes also constitute grounds for re-listing. The reasoning is that 
North Korea's income from printing counterfeit currencies and drug 
smuggling, both believed to be its means of earning foreign 
currency, is used for its development of nuclear and missile 
technologies, and some of these technologies are being transferred 
to Iran. 
 
The possibility remains for charging North Korea with indirect 
support of ultra-leftist terrorist groups by harboring until now the 
former Red Army hijackers of the Yodo airliner in 1970. However, 
this will be difficult to do since the presence of the former Red 
Army members had been ignored when North Korea was taken off the 
list. The State Department's Counterterrorism Coordinator's Office" 
is currently gathering evidence of supporting terrorist groups. The 
Secretary of State will make a judgment based on the evidence, and 
the President will make the final decision. 
 
10) Organ transplant bill "Plan A" secures approval from 67 PERCENT 
of LDP members, 37 PERCENT  of DPJ members 
 
NIKKEI (Page 2) (Full) 
June 19, 2009 
 
 
TOKYO 00001379  008 OF 013 
 
 
A bill amending the Organ Transport Law (Plan A) cleared the Lower 
House on June 18 and was adopted by a majority vote. All parties 
other than the Japanese Communist Party (JCP) allowed their 
lawmakers to decide whether to support or vote against the bill. 
Many LDP lawmakers supported it, accounting for about 80 PERCENT  of 
ballots in favor of the bill. Less than 20 PERCENT  of lawmakers of 
the Democratic Party of Japan, which dominates the Upper House, 
supported it. The bill obtained support from 202 or 67 PERCENT  of 
LDP lawmakers, 41 or 27 PERCENT  of DPJ members, and 12 New Komeito 
lawmakers. All Social Democratic Party members voted against it. The 
number of lawmakers who either absented themselves or abstained from 
the vote (including the Speaker), came to 48. 
 
Prime Minister Taro Aso opposed the bill, while Chief Cabinet 
Secretary Takeo Kawamura and LDP Secretary General Hiroyuki Hosoda 
approved it. Among 14 Lower House members who serve as cabinet 
ministers, nine supported it, while four opposed it. Finance 
Minister and State Minister for Financial Services, Economic and 
Fiscal Policy absented himself from the vote. In the DPJ, President 
Hatoyama voted against it, while Deputy President Ichiro Ozawa and 
Secretary General Katsuya Okada approved it. New Komeito head 
Akihiro Ota opposed it, while Secretary General Kazuo Kitagawa 
supported it. Support for Plan A appears to have spread due to many 
lawmakers taking the position that if all bills are scrapped, 
lawmakers could be called into question over their failure to act, 
as an LDP member put it. 
 
11) DPJ President Hatoyama stops sending words of encouragement to 
younger brother 
 
ASAHI (Page 4) (Full) 
June 19, 2009 
 
Democratic Party of Japan (DPJ) President Yukio Hatoyama has decided 
to stop sending words of encouragement to former internal affairs 
and communications minister Kunio Hatoyama, his younger brother. 
Focusing on Kunio standing against the Aso administration in an 
attempt to shake it, some people believe that they are taking joint 
steps even though they deny it. Even so, the relationship between 
Yukio, who eyes the premiership through the next general election, 
and Kunio, who is his elder brother's senior in the political world, 
seems to be complicated. 
 
Yukio has said recently that the responsibility for the dispute over 
the reappointment of Japan Post Holdings President Nishikawa rests 
with Prime Minister Aso for his lack of leadership, ruling out his 
brother's responsibility. In the party head debate with Aso on June 
17, too, DPJ head Hatoyama referred to the Japan Post issue and 
deliberately added: "I dare to take up the issue but it is not for 
the sake of my brother." An aide to him explained: "Once attention 
is focused on political reorganization, (the rumor of cooperation 
between the brothers) might result in putting a damper on the recent 
growing mode for a change of government." 
 
The elder brother is a candidate to become next prime minister if 
his party wins the next general election. The younger brother served 
as internal affairs minister, justice minister, labor minister, and 
education minister, but it is now highly likely that the younger 
brother could be passed up by his elder brother, who has not assumed 
any portfolio. 
 
The relationship between the two as politicians are complicated, as 
 
TOKYO 00001379  009 OF 013 
 
 
an aide to Yukio remarked: "I think he has mixed feelings of respect 
and inferiority complex toward his younger brother." 
 
The brothers call themselves an advocate of "fraternity spirit," a 
principle proposed by their grandfather, former prime minister 
Ichiro Hatoyama. But their father, former foreign minister Iichiro 
Hatoyama, designated the younger brother as his successor. Yukio 
entered the political world 10 years after his younger brother 
became a politician. Kunio serves his 10th term, while Yukio has 
been elected seven times. 
 
The younger brother aimed to become a politician from his early 
days, but the elder brother hated to go into the political world. He 
wanted to be an academic, but while studying in the U.S., he 
suddenly changed his mind and decided to enter the political 
community. At that time, his father opposed his plan. 
 
In 1996, the brothers set up the former Democratic Party of Japan 
(Minshuto), but later they were at loggerheads over such issues of 
accession by former Social Democratic Party members and treatment. 
Kunio left the party and returned to the Liberal Democratic Party. 
 
Since they opened the Hatoyama fraternity private school in April of 
last year, the brothers have rapidly approached each other. Later 
last year, Yukio said: "I was proposed by my younger brother to 
reorganize the political climate," soliciting a speculation that the 
brothers might team up. 
 
Bearing such circumstances in mind, many DPJ members have voiced 
concern that if the younger brother joins our party, confusion might 
be caused. Yukio denies such a possibility, remarking: "We will 
never call on him (to reorganize the political community)," but some 
still speculate that the idea of the brother teaming up under the 
slogan of "fraternity" could float again after the general election. 
 
 
12) DPJ Hatoyama meets abductees' families for first time 
 
ASAHI (Page 4) (Excerpt) 
June 19, 2009 
 
Democratic Party of Japan (DPJ) President Hatoyama met 
representatives of the Association of the Families of Victims 
Kidnapped by North Korea, including President Shigeo Iizuka, at 
party headquarters for the first time yesterday. Iizuka asked 
Hatoyama to include in the party's manifesto for the next House of 
Representatives election, "The abduction issue is a high priority 
issue, and the government will assume the responsibility of rescuing 
all abduction victims, based on the premise that they are all 
alive;" and "complete sanctions will be imposed on North Korea." 
Hatoyama replied: "I promise to specify the importance of the 
abduction issue in our manifesto." 
 
13) Internal affairs minister sounds out Japan Post President 
Nishikawa on resignation in exchange for chairmanship 
 
MAINICHI (Page 1) (Full) 
June 19, 2009 
 
Internal Affairs and Communications Minister Tsutomu Sato 
unofficially felt Japan Post Holdings President Yoshifumi Nishikawa 
out about the possibility of assuming the chairmanship when they met 
 
TOKYO 00001379  010 OF 013 
 
 
on June 16, according to a senior government official yesterday. 
Nishikawa agreed to Sato's suggestion, but since they remained 
divided over who should be his successor, they decided to hold 
another meeting. Prime Minister Taro Aso instructed Sato when they 
met on June 16 to handle the issue. By offering the post of chairman 
to Nishikawa, Aso hopes to see Liberal Democratic Party lawmakers 
calling for Nishikawa's staying on, including former Prime Minister 
Junichiro Koizumi, understand his settlement measure. 
 
President Nishikawa met Sato at the Internal Affairs and 
Communications Ministry to report on the company's response to a 
business improvement order issued by the ministry in connection with 
its attempt to sell Kampo no Yado inns. After Nishikawa's interim 
report, Sato and Nishikawa told the senior ministry members present 
the meeting to leave the room and held a tete-a-tete meeting. There, 
Sato said: "I want you to assume the chairmanship," in an attempt to 
have Nishikawa to resign as president. Sato then suggested he 
planned to appoint as his successor Japan Post Holdings Chairman 
Norio Kitamura, who came from Toyota Motor Co., or Japan Post Bank 
Chairman Koji Furukawa, who came from Mitsubishi Co. 
 
But President Nishikawa suggested Japan Post Holdings Vice President 
Shokichi Takagi, who once served as Financial Services Agency chief, 
be appointed to be his successor. Sato responded with this remark: 
"We cannot allow an ex-bureaucrat to assume the post. The condition 
is to choose someone from the private sector." 
 
Former internal affairs minister Kunio Hatoyama had insisted that 
President Nishikawa should resign to take responsibility for a 
series of scandals involving Japan Post." But Nishikawa declined it, 
and Aso dismissed Hatoyama on June 12. 
 
Seeing public support ratings of the Aso cabinet nosediving in 
public opinion surveys conducted following the dismissal of Hatoyama 
by press companies this past weekend, Sato judged it impossible for 
the party to win the next House of Representatives election under 
the current situation. He appears to have worked out a plan to 
persuade Nishikawa to step down in exchange for the chairmanship. 
 
14) LDP factions make special requests of Prime Minister Aso to make 
decision on timing of Diet dissolution, shuffle cabinet 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 19, 2009 
 
In general meetings of the Liberal Democratic Party's (LDP) 
factions, members made specific requests of Prime Minister Taro Aso 
regarding the timing for dissolving the House of Representatives and 
calling a general election. 
 
Sadakazu Tanigaki, a senior member of the Koga faction, urged Aso to 
ascertain the good timing of Lower House dissolution, paying less 
attention to the low support rates for his cabinet. He said: "The 
Prime Minister should not act recklessly." He then called for party 
unity, saying: "If we do not unite, we will not be respected by our 
enemy." 
 
Yuji Tsushima, chair of an LDP faction, called for a cabinet 
shuffle, with an eye on Kaoru Yosano's concurrently serving as 
finance minister, state minister for financial services, and state 
minister for economic and fiscal policy. He said: "More messages 
will be sent if there are three ministers." 
 
TOKYO 00001379  011 OF 013 
 
 
 
In the general meeting of the Machimura faction, as well, there was 
a view that the practice should be discontinued of having one person 
serve in two posts or more. Nobutaka Machimura, chair of the 
faction, reportedly asked Aso to consider shuffling the cabinet. 
 
Taku Yamasaki, who heads a faction, sought to contain moves that 
would lead to turmoil in the LDP, with former Internal Affairs and 
Communications Minister in mind. He said: "It is time for us to hold 
on. If we cause a fuss to form a new party before the Lower House 
election, our party will fail." 
 
15) DPJ vigorously engaged in campaigning for Shizuoka gubernatorial 
election, with eye on fourth-straight victory in local elections 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 19, 2009 
 
By Takayoshi Goto 
 
The official campaign for the Shizuoka gubernatorial election (July 
5) was kicked off yesterday. Four candidates are running in the 
race. The main opposition Democratic Party of Japan (DPJ) intends to 
send party leaders to Shizuoka to support a candidate it backs, 
aiming at the fourth-straight victory in local elections. DPJ 
President Yukio Hatoyama decided to back the candidate although 
Deputy President Ichiro Ozawa recommended the other candidate. 
 
Mentioning the third straight victory in the Saitama, Nagoya, and 
Chiba mayoral elections, Hatoyama emphasized at the party's 
headquarters: 
 
"We have steadily won (the elections). We are now engaged in the 
campaigning for the Shizuoka gubernatorial election. I am determined 
to secure victory at any cost this time, as well." 
 
In picking the candidate the DPJ supports, there were gaps in views 
between Hatoyama and Ozawa, who is in charge of election strategy. 
Ozawa, who tried to run Toru Unno, 60, a former House of Councillors 
member, as a unified candidate, was reluctant to back Heita 
Kawakatsu, 60, former president of Shizuoka University of Art and 
Culture, whom the DPJ Shizuoka prefectural chapter had recommended. 
However, Hatoyama made a final decision to back Kawakatsu. 
 
Hatoyama did not want to spoil his party's chance to win the 
election, following the three-straight victories in the major 
cities. If the DPJ wins the Shizuoka gubernatorial race and the 
Tokyo Metropolitan Assembly election on July 12, such will provide 
momentum for the party to win the next House of Representatives 
election. 
 
Therefore, the DPJ plans to send party leaders to Shizuoka to 
support (Kawakatsu's campaign). Deputy President Naoto Kan will 
visit there on June 21 and Secretary General Katsuya Okada, on June 
¶22. The party is arranging a schedule for Hatoyama to go there. 
 
For the reason that the DPJ is vigorously engaged in the campaign, 
there is concern that a defeat in the election will put a damper on 
growing party strength. 
 
Meanwhile, the ruling Liberal Democratic Party (LDP) gives total 
support for Yukiko Sakamoto, 60, a former Upper House member, to 
 
TOKYO 00001379  012 OF 013 
 
 
prevent the DPJ from winning the race. The Japanese Communist Party 
(JCP) endorses Sadayoshi Hirano, 59, a JCP Shizuoka prefectural 
committee member. 
 
16) China treating domestic-made products preferentially; Japan, EU 
launch survey, alarmed about protectionist move 
 
YOMIURI (Page 1) (Full) 
June 19, 2009 
 
Akira Teramura, Beijing 
 
It came to light on June 18 that the Chinese government sent 
notifications calling for preferential purchases of Chinese-made 
products for government procurement as a means to stimulate the 
economy. China has strongly accused the U.S. for its Buy American 
campaign. However, it was found that China has been treating 
domestic products preferentially, a practice that could be called a 
Buy Chinese campaign. Many countries are bound to oppose this policy 
of China. The Japanese government has immediately started a survey 
out of concern about China's protectionist move. 
 
The notification calling for preferential purchases of Chinese-made 
products was sent to local governments and the local branches of the 
central government in late May. 
 
It stipulates how bidding should be conducted when implementing the 
stimulus package worth 4 trillion yuan (approximately 56 trillion 
yen) that the Chinese government adopted last fall. It calls for the 
selection of Chinese-made products with the exception of cases in 
which Chinese-made products cannot be procured or purchased under 
reasonable conditions. 
 
Regarding this notification, the Chinese government said that its 
aim is to secure a fair competitive environment for overseas and 
domestic products, and it is strongly opposed to trade 
protectionism. 
 
However, many countries view this Chinese policy as a protectionist 
move. The European Union (EU) is increasingly alarmed about the 
situation. The European Commission (EC) has launched a survey to 
determine whether this Chinese policy infringes on the World Trade 
Organization's (WTO) rules. 
 
17) Government premature in declaring that the economy has bottomed 
out? 
 
TOKYO SHIMBUN (Page 9) (Abridged slightly) 
June 19, 2009 
 
With the Japanese economy showing some rosy signs, centered on 
industrial production and exports, the government and the Bank of 
Japan have revised their economic assessments upward. However, 
differences in their views are visible. For instance, while the 
government has effectively declared that the economy has bottomed 
out, Bank of Japan (BOJ) Governor Masaaki Shirakawa stopped short of 
making definite remarks, simply saying, "The definition of the 
situation varies among individuals." The BOJ's cautious stance 
toward the U.S. economy and domestic demand, which hold the key to 
full-fledged recovery, appears to be behind the gap. 
 
Trend of domestic demand, U.S. long-term interest rates do not 
 
TOKYO 00001379  013 OF 013 
 
 
permit any optimism 
 
"Our country's economy is beginning to stop deteriorating after 
significantly worsening." The Bank of Japan released its economic 
assessment after a policy-setting meeting on June 16. It revised 
upward the previous month's assessment that the economy is 
continuing to deteriorate. However, it adopted an unusual wording 
for "after significantly worsening" in order to refer to the past 
situation. 
 
Behind the adoption of this wording is its recognition of the 
present situation - although export and industrial production 
indexes have taken an upward turn, the levels are still low due to a 
sharp decline since last fall. The prevailing view on the pickup of 
exports and industrial output is that it is a natural consequence of 
major production cuts and inventory adjustments. Governor Shirakawa 
indicated a cautious stance at a press conference, "The point of the 
future trends of the economy is how final demand will move after 
inventory adjustments have made progress." 
 
One disturbing factor for the future of the economy is the trend of 
the U.S. economy. Chief Economist Hideo Kumano of the Dai-Ichi Life 
Research Institute pointed out, "I am worried that long-term 
interest rates are rising (while bond prices are falling) before the 
economy fully turns around." He explained: "A further increase in 
the burden of interest payment in the debt-ridden U.S. economy would 
delay a pickup in the housing market and personal consumption. As a 
result, the recovery of the Japanese economy, which relies on 
exports, will also be delayed." 
 
On the domestic front, employment-related indexes, such as the ratio 
of available jobs to job seekers and the jobless rate, are 
continuing to deteriorate. If companies cut summer bonuses 
extensively, it will put a dent in economic growth. 
 
Concerning the difference in the assessment of the economy from the 
government, which has declared that the economy has bottomed out, a 
BOJ executive revealed his real feeling: "They want to stress the 
results of the economic stimulus packages. To what extent we can 
fall in step with them is an agonizing decision to make." 
 
ZUMWALT