VZCZCXRO7536
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1424/01 1750707
ZNR UUUUU ZZH
P 240707Z JUN 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 4014
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 7147
RUEHFK/AMCONSUL FUKUOKA 4816
RUEHOK/AMCONSUL OSAKA KOBE 8619
RUEHNAG/AMCONSUL NAGOYA 2368
RUEHKSO/AMCONSUL SAPPORO 5342
RUEHBJ/AMEMBASSY BEIJING 0058
RUEHUL/AMEMBASSY SEOUL 6089
RUCNDT/USMISSION USUN NEW YORK 5782

UNCLAS SECTION 01 OF 09 TOKYO 001424 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 06/24/09 
 
INDEX: 
 
(1) Japan, China hold strategic dialogue, discuss North Korea's 
nuclear issue (Jiji) 
 
(2) North Korea on verge of carrying out provocative act: What move 
will the Japan-U.S. alliance make? (Sunday Mainichi) 
 
(3) Report on U.S. military hospital in Afghanistan; endless fight 
for life; children caught in the fighting, traumatized soldiers 
(Mainichi) 
 
(4) Basic fiscal policy guidelines: Prime minister's identity 
oveshadowed (Mainichi) 
 
(5) Examining the Aso administration (Part 2): Response to 
once-in-a-century economic crisis; low support rating despite pork 
barrels (Tokyo Shimbun) 
 
(6) Report on back-door political donations involving Yosano (Asahi) 
 
 
(7) Prime Minister's schedule, June 23 (Nikkei) 
 
ARTICLES: 
 
(1) Japan, China hold strategic dialogue, discuss North Korea's 
nuclear issue 
 
JIJI.COM (Full) 
11:20, June 24, 2009 
 
Beijing, Jiji Press, June 24 
 
Vice Foreign Minister Mitoji Yabunaka and his Chinese counterpart 
Wang Guangya held a Japan-China strategic dialogue at the Diaoyutai 
Guest House in Beijing on June 24, where they exchanged views on 
North Korea's development of nuclear arms and other issues. 
 
At the beginning of the meeting, Wang stated: "We would like to hold 
an in-depth exchange of views on China-Japan relations as well as 
international and regional issues." Yabunaka pointed out that "the 
North Korean issue is approaching a very critical stage in East 
Asia," indicating his expectations for productive discussions 
between the two countries on the North Korean situation. 
 
Yabunaka asked China to implement the UN Security Council sanction 
resolution against North Korea. He is also expected to request the 
start of negotiations to conclude an agreement on joint development 
of gas fields in the East China Sea at an early date. 
 
(2) North Korea on verge of carrying out provocative act: What move 
will the Japan-U.S. alliance make? 
 
SUNDAY MAINICHI July 5, 2009 issue 
(Pages 130 and 131) (Abridged slightly) 
 
The North Korean regime is wavering due to the deteriorating illness 
of the General. Hardening its stance in the wake of the UN Security 
Council's adoption of a resolution in response to its underground 
nuclear test, the North has even signaled the launch of a long-range 
missile. The country is on the verge of taking another provocative 
 
TOKYO 00001424  002 OF 009 
 
 
action. How will the Japan-U.S. alliance, which has kept Japan away 
from war for over 60 years, react? 
 
On June 9, a Liberal Democratic Party (LDP) national defense joint 
meeting decided to propose that the country should possess 
capabilities to strike enemy bases ahead of the planned revision of 
the National Defense Program Guidelines (NDPG) with an eye on the 
increasingly tense situation in North Korea. 
 
In the meeting, former Prime Minster Ichiro Hatoyama's 1956 Diet 
reply "We should not sit and wait for our own destruction" was 
cited, according to a political journalist. 
 
Hatoyama went on to say (before the Diet in 1956), "If there is no 
other means, (attacking enemy bases) could be within the bounds of 
self-defense." 
 
Although Japan has left its offensive capability to U.S. forces 
under its pacifist constitution, Hatoyama's reply was intended to 
allow Japan to possess an offensive capability though under limited 
conditions. 
 
LDP National Defense Division chief and Lower House member Yasuhide 
Nakayama explained it this way: 
 
"North Korea is believed to have 200 - 300 Nodong missiles. This 
specifically means that when it has become clear that the North has 
begun preparing to turn and launch those missiles at Japan, our 
country will possess Tomahawk cruise missile and the like to attack 
its missile bases." 
 
Nakayama's explanation, given after the North's nuclear test that 
could lead to the miniaturization of its nuclear warheads, seems to 
have had deterrence against North Korean missile attacks in mind. 
 
Meanwhile, Selig Harrison, director of the Asia Program of the 
Center for International Policy, testified before the House Foreign 
Relations Committee on June 17, expressing this worrisome view: 
 
"In the event of another war with North Korea, in my view, it is 
Japan, not South Korea, that North Korea would attack, because 
nationalist younger generals with strong anti-Japanese sentiments 
now hold strong positions in the North Korean leadership following 
the deterioration of Kim Jong Il's illness." 
 
A foreign affairs journalist takes this view: 
 
"The accuracy of North Korean missiles is still low. It will take 
time for the North to downsize its nuclear warheads. Chances are 
slim for the North to attack Japan, which would involve North 
Koreans living in Japan." 
 
 
In the sense of underpinning the threat from North Korea, 
(Harrison's view) is likely to give momentum to the Aso cabinet 
which is playing up its ability to run the government regarding 
foreign and security affairs. 
 
Ukeru Magosaki, a former Foreign Ministry Intelligence and Analysis 
Bureau chief, a former National Defense Academy professor, and the 
author of Nichibeidoumei no Shoutai (True Picture of the Japan-U.S. 
Alliance), has this view: 
 
TOKYO 00001424  003 OF 009 
 
 
 
"Since President Bush's second administration, the United States has 
reduced its own burden, calling its allies in East Asia for 
role-sharing. The recent argument on possessing strike capabilities 
can be said to be an extension of the pro-U.S. policy course in line 
with the United States' wishes to a certain extent rather than a 
call for nuclear armament and autonomous defense that might deviate 
from the Japan-U.S. security alliance. The basic stance will not 
change under the Obama administration." 
 
True, the United States, worn out by the two antiterrorism wars and 
also hit by the financial crisis, is giving up its sole superpower 
status. Is it safe to follow the wishes of such a country? A defense 
journalist, for instance, warned: 
 
"Striking an enemy base is basically tantamount to a preemptive 
strike. Most Nodong missiles, which have Japan in their range, are 
stored underground, so grasping everything in advance is difficult. 
The time required for preparing to launch Nodongs, such as fueling, 
is much shorter than that for the Taepodong missile that was 
launched in April. A preemptive strike can destroy only a small 
number of Nodong missiles. Following Japan's attack, the North would 
launch massive counterattacks by using remaining Nodongs." 
 
In other words, in the event Japan-U.S. alliance attacks began with 
Japan's preemptive strike, Japan alone would be exposed to the 
North's retaliatory attacks. 
 
Magosaki cited the following case: 
 
"During the 1970s, the United States tried to deploy Pershing II 
missiles in Europe to counter the Soviet Union's SS-20 mid-range 
nuclear missiles. But the public in West Germany reacted strongly to 
the plan at first. In short, they were alarmed at the risk of their 
country turning into a battlefield." 
 
The enemy-base strike argument has the risk of victimizing many 
Japanese people once the preemptive strike button is pressed. 
 
U.S. prefers a soft landing 
 
There is another problem, which is unique to Japan. Younger North 
Korean officers harbor anti-Japanese sentiment because they are 
angry with the fact that their country admitted to the abduction of 
Japanese nationals and apologized for it in the 2002 Japan-DPRK 
Pyongyang Declaration, according to Harrison. 
 
An LDP defense policy specialist also noted: 
 
"Needless to say, resolving the abduction issue is important. It can 
be said that of all the Six-Party members, Japan is the only country 
that is strongly hoping for the collapse of the North Korea regime 
for resolving the abduction issue. This might be used as the reason 
to expel (Japan) from the six-party framework." 
 
Japan needs to carefully observe other countries' orientation toward 
a soft landing. 
 
Magosaki added: 
 
"The Obama administration has sent both soft and hard messages that 
it will support the continuance of the (North Korean) regime if it 
 
TOKYO 00001424  004 OF 009 
 
 
comes over to the U.S. side, while making it clear that the United 
States does not allow the North to possess nuclear weapons. The 
trend is common among the Six-Party member countries excluding 
Japan, and there is no denying that Japan's hard-line stance will 
stand out." 
 
There are indications, according to Magosaki, that the United States 
and other members are dealing with the North as a quasi nuclear 
state in order to prevent the country from carrying out another 
provocative act. 
 
Magosaki continued: 
 
"The United States occasionally shifts its diplomatic strategy 
significantly, so cautiousness is necessary. The hard-line argument 
in Japan followed the foreign policy of the first Bush 
administration that labeled North Korea a part of an 'axis of evil.' 
Falling behind changes, it has now lost touch with (the policies of 
other countries)." 
 
Although the Japan-U.S. alliance is dependable, the motives of the 
two countries do not always meet. 
 
The United States' intelligence-gathering capability defies 
conjecture. 
 
The aforementioned defense journalist explained: 
 
"It is said that a U.S. special force has a handle on General 
Secretary Kim Jong Il's dozen or so houses and that it is always 
keeping a watchful eye on them. (The United States) has the 
sufficient ability to implement an assassination operation. The 
North Korean leadership must be in a considerably tense situation. 
They must carefully watch for any signs of a provocative act." 
 
The series of provocative acts by North Korea has exposed the 
pitiful reality that Japan has to obtain information even on missile 
launches and nuclear tests from U.S. forces. 
 
A former diplomat noted: 
 
"Efforts must be made to have independent means to collect 
information. A country that solely relies on its ally cannot 
negotiate anything with other countries on equal footing." 
 
Is it the true meaning of not sitting and waiting for our own 
destruction? 
 
(3) Report on U.S. military hospital in Afghanistan; endless fight 
for life; children caught in the fighting, traumatized soldiers 
 
MAINICHI (Page 16) (Full) 
June 24, 2009 
 
Tomoko Oji, Bagram Air Base, Afghanistan 
 
I visited the Bagram Hospital, the largest medical facility of the 
U.S. forces in Afghanistan. Children caught up in the fighting are 
brought here, and traumatized American soldiers also come here for 
counseling. The medical staff appeared to be exhausted. It looked to 
me that people were trying to find an "exit" from the endless 
fighting. 
 
TOKYO 00001424  005 OF 009 
 
 
 
A tiny body was lying on a bed in the intensive care unit. He had 
numerous tubes attached to him. This boy had been hit by a bomb of 
the armed insurgents and had numerous metal fragments in his 
abdomen. But he had managed to survive. The nurse said: "We don't 
even know his name." 
 
Another boy was working hard on his rehabilitation, maneuvering his 
own wheelchair. He is Aziz Laha (as transliterated), 10. He was 
caught in the fighting between the Taliban armed insurgents and the 
Afghan army in front of his house east of the Bagram Air Base and 
suffered bullet wounds in his hands and feet. He smiled and told me: 
"The Americans are nice." However, his big brother, 22, said: "They 
treated him, but I still don't like America. I also hate the Taliban 
for planting mines in children's playgrounds." 
 
Most of the beds in the hospital (32) are used by the locals. An 
average of 7-10 patients come for treatment each day. Eighty percent 
are Afghans and half of them are children below 12 years old. A 
nurse, Ms. Codington, 49, said tearfully: "Medical facilities are 
inadequate in Afghanistan. I think children are unable to receive 
rehabilitation treatment after they are discharged." 
 
I was told by one hospital official that: "Treatment of the locals 
cultivates pro-American sentiments. This also contributes to 
gathering information on the armed insurgents." 
 
American soldiers make up 20 percent of the hospitalized patients. 
There was no confined American soldier on the day I visited. A few 
injured armed insurgents a month are also brought here for 
treatment. 
 
Some 10 soldiers were seated in the waiting room that had a sign 
reading: "Combat Stress and Control." About 300 American soldiers 
suffering from post-traumatic stress disorder (PTSD) and other 
illnesses come here for counseling each month. With the protracted 
war against terrorism, nearly 40 percent of the soldiers have been 
on combat duty twice. Lt. Col. Smith, 48, a female military doctor 
pointed out that, "Multiple assignments increase the soldiers' 
stress level." 
 
(4) Basic fiscal policy guidelines: Prime minister's identity 
oveshadowed 
 
MAINICHI (Page 5) (Full) 
June 24, 2009 
 
The government on June 23 adopted at a special cabinet meeting the 
2009 basic fiscal policy guidelines. The Aso-led Kantei failed to 
make a visible move in the face of the Liberal Democratic Party's 
(LDP)'s last-hour effort to water down the fiscal policy guidelines. 
Failing to curb the ruling parties' call for greater spending, the 
prime minister, whose cabinet is suffering from sluggish support 
ratings, ended up giving the impression that he lacks leadership. 
 
Noting that the government effort to curb the increase in social 
security and welfare expenditures by 220 billion yen a year has just 
about reached its limit, the prime minister did not include curbing 
the natural increase in social security spending in the fiscal 2009 
budget. It is urgent for the prime minister, whose pet slogans are 
"medium welfare and medium burden" and "secure society," to 
reconstruct the social security system. From the beginning, his 
 
TOKYO 00001424  006 OF 009 
 
 
stance has been that given the present state of social security, 
virtually abandoning the government policy of constraining social 
security expenditures by 220 billion yen cannot be helped. 
 
Meanwhile, he was concerned that abandoning that policy could 
trigger pressure for spending for public works. If discipline to cut 
back on spending is relaxed, fiscal reconstruction will become 
further off. Constraining expenditures is a precondition for a 
future hike in consumption tax, which the prime minister will not 
yield on. It is also an aspect that differentiates the ruling 
parties from the Democratic Party of Japan (DPJ). In the LDP, there 
are those who are in favor of reforming expenditures, attaching 
importance to maintaining fiscal discipline. These people include 
former Secretary General Hidenao Nakagawa. As such, it was necessary 
for the prime minister to take into account that if he makes a 
drastic policy change, he will come under fire as having 
backpedalled on reform, as an aide to the prime minister put it. 
 
The Kantei appeared to have been unable to take action on its own 
initiative under such a situation. 
 
The prime minister told reporters on the 23rd: "(The constraint on 
an increase in social security spending by 220 billion yen) must be 
revised properly. Otherwise, its negative impact could spread." In 
the meantime, the government is responsible for fiscal 
reconstruction over the mid-term. As such, we will implement these 
two policies properly. I have told this to Mr. Yosano, who is has 
been in charge of economic and fiscal policy as well as financial 
services for a long time. Social security or fiscal reconstruction - 
the prime minister's message remained equivocal all the way. 
 
DPJ President Hatoyama says: "The basic fiscal policy guidelines 
(so-called big-boned guidelines) are full of holes." 
 
Democratic Party of Japan (DPJ) President Yukio Hatoyama during a 
press conference on the 23rd criticized the government's 2009 basic 
fiscal policy guidelines, noting, "They call the guidelines 
big-boned, but their bones are full of holes. I do not understand 
what leaving in documents but deleting verbally means." He stressed, 
"We will come up with our policies without regard to the public 
pledge made by the government, which is not functioning properly." 
 
(5) Examining the Aso administration (Part 2): Response to 
once-in-a-century economic crisis; low support rating despite pork 
barrels 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 23, 2009 
 
On September 29, five days after the inauguration of the Aso 
cabinet, the New York Dow Jones Industrial Average suffered its 
worst drop in history. On October 7, the Nikkei average of the Tokyo 
Stock Exchange went below 10,000 yen for a while for the first time 
in 4 years and 10 months. 
 
Prime Minister Taro Aso, who appeared to lack a sense of urgency 
when he first took office, finally went into a serious mode. He 
shelved his plan to dissolve the House of Representatives, which was 
once set for early October, and scrambled to take steps to boost the 
economy. 
 
What made the prime minister decide to give top priority to the 
 
TOKYO 00001424  007 OF 009 
 
 
economy? For sure, the worsening of the economic indicators, such as 
the stock prices, was the main reason, but there were also political 
calculations. 
 
At that time, a survey conducted by the Liberal Democratic Party on 
the situation in the Lower House election showed that the ruling 
parties were uncertain of maintaining their majority control. It 
seems that the party had judged that if the prime minister "did not 
work seriously on economic measures, (the ruling bloc) could not 
win, once the Diet was dissolved." 
 
The government announced additional economic measures on October 30 
and additional emergency economic measures on December 12. These 
were incorporated into the second FY08 supplementary budget and the 
FY09 budget, and they were characterized by bold steps to stimulate 
consumption. Fixed-amount cash handouts and drastic cuts in 
expressway tolls, worth a total of 2 trillion yen, were included in 
the second supplementary budget. 
 
Tax grants to the local governments were increased by 1 trillion yen 
in the FY09 budget, reflecting Aso's pet theory that "the local 
governments only need 1 trillion yen that they can use freely." In 
addition, another trillion yen was allocated as reserves for 
emergency economic measures. 
 
Although massive fiscal spending is supposed to bring about a rise 
in long-term interest rates and other harmful effects, Aso did not 
mind, thinking "one needs to respond in an unusual way in an 
emergency." The prime minister did have his own convictions about 
the fiscal spending. While the economic measures announced between 
late 2008 and this spring have been criticized as pork barrel 
largesse, there is no denying that they were put forth very 
quickly. 
 
The Nikkei stock average, which went down to 7,054 yen on March 10, 
has recently recovered to around 10,000 yen. In terms of the 
economic indicators, the coincidence index, which moves in parallel 
with economic trends, rose for the first time in 11 months in April. 
There have been signs of improvement in the economy. 
 
Even though the cynical view of some private sector economists is 
that, "The improvement in the economic indices is due to corporate 
efforts to adjust inventories" and has nothing to do with the Aso 
administration's economic policies, the pump-priming indeed helped 
resuscitate the economy. 
 
Chief Cabinet Secretary Takeo Kawamura stresses that, "This is 
founded on the Aso cabinet's strong emphasis on the importance of 
economic measures and its unprecedented policy action of formulating 
four budgets in a row (first and second FY08 supplementary budgets, 
FY09 budget, and FY09 supplementary budget)." 
 
However, the support ratings of the Aso cabinet have again been 
following a downward trend in the polls, in inverse proportion to 
the improvement in economic indicators. Support has dropped to 17.5 
percent in a poll conducted by Kyodo News on June 13-14, which is, 
no doubt, in the danger zone. 
 
The Aso administration has proceeded at full speed, thinking that 
the improvement of the economic indices is the only way to buoy the 
administration. Perhaps the rise in economic indices and the drop in 
the cabinet support rating are two ironical lines in the graph 
 
TOKYO 00001424  008 OF 009 
 
 
showing that the people are rejecting the Aso administration's pork 
barrel economic measures instinctively. 
 
(6) Report on back-door political donations involving Yosano 
 
Asahi.com (Full) 
13:00, July 24, 2009 
 
Commenting on Mainichi Shimbun's report that Finance Minister Yosano 
and former state minister for administrative reform Yoshimi Watanabe 
had received back-door political donations from a commodity futures 
company through a political organization, Yosano told reporters in 
Tokyo: "I have not received any petitions concerning commodity 
transactions from that company on legal or administrative terms. I 
believe there is in essence no problem either in accordance with the 
Political Funds Control Law or in formality terms." 
 
Watanabe on June 24 told reporters in Tokyo, "I have not heard about 
how that company collected the money. I have had a connection with 
it since my father was alive. My perception of that company is it is 
a political organization that collects donations from individuals." 
He also said that if it is found that the company had illegally 
collected the money, he would return it. 
 
Their accountability for the matter will likely be pursued amid a 
time when the way political funds are received has been brought into 
question, triggered by the illegal political funds donations made by 
Nishimatsu Construction to Ichiro Ozawa. 
 
Chief Cabinet Secretary Kawamura during a press conference the same 
day revealed that Yosano told him on the phone that he would take 
responsibility for explaining the matter on his own. Kawamura then 
said, "It is important to secure the transparency of political funds 
and manage it in strict fairness." Liberal Democratic Party (LDP) 
Secretary General Hiroyuki Hosoda said the same day, "We must 
investigate what really happened." 
 
According to their political funds reports, the political 
organization reported on by the daily is headed by the owner of a 
commodity futures trading company in Tokyo. The political 
organization's office was at one time located inside that company. 
It donated a total of 55.3 million yen to Shunzan-kai, Yosano's fund 
management organization, between 1992 and 2005 in the form of 
purchasing tickets for Yosano's fund-raising parties. Yosano served 
as minister of international trade and industry between 1998 and 
¶1999. He was supervising commodity futures transaction. 
 
The political organization had also donated a total of 35.4 million 
yen to Onkochishin-no-Kai, Watanabe's fund management organization. 
 
(7) Prime Minister's schedule, June 23 
 
NIKKEI (Page 2) (Full) 
June 24, 2009 
 
08:25 Departed from Haneda Airport on JAL 903. 
10:31 Arrived at Naha Airport. Received by Okinawa Vice Governor 
Katsuyo Asato and others. 
11:17 Offered flowers at the National Okinawa Cemetery on the Peace 
Memorial Park in Itoman. Afterward attended the annual memorial 
ceremony for the war dead. 
13:27 Met at Naha Airport Lower House Speaker Kono and Okinawa and 
 
TOKYO 00001424  009 OF 009 
 
 
Northern Territories Issue Minister Sato. 
14:09 Departed from the airport on JAL 910 seen off by Governor 
Hirokazu Nakaima and others. 
16:10 Arrived at Haneda Airport. 
17:20 Attended a Council on Economic and Fiscal Policy meeting held 
at the Kantei, followed by a special cabinet meeting. Education 
Minister Shionoya stayed on. 
18:20 Filed away documents at his private office in Nagatacho. 
18:43 Attended a pep rally for candidates running in the Tokyo 
assembly election, held at the Japan Education Center in 
Hitotsubashi. 
19:17 Arrived at his official residence. 
20:25 Met LDP Public Relations Headquarters chief Furuya. 
 
ZUMWALT