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UNCLAS SECTION 01 OF 09 TOKYO 001843 
 
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 08/13/09 
 
Index: 
 
Election campaign: 
1) Sparks fly over financing campaign promises between two party 
leaders - LDP's Aso and DPJ's Hatoyama - in one-on-one debate 
(Asahi) 
2) Prime Minister Aso, Democratic Party of Japan (DPJ) President 
Hatoyama debate consumption tax issue, hinting at future hike in the 
rate (Tokyo Shimbun) 
3) Aso, Hatoyama spar in debate over foreign and defense policy 
issues, including MSDF refueling mission in the Indian Ocean (Tokyo 
Shimbun) 
4) Survey of candidates in the Lower House election finds clear 
split between LDP and DPJ on consumption tax issue, with LDP 
favoring hike and DPJ against (Yomiuri)   5 
5) Joint ruling camp set of campaign pledges strongly reflect LDP 
consideration to coalition partner New Komeito (Yomiuri) 
 
Diplomatic issues: 
6) DPJ's Hatoyama says he favors the creation of a national war 
memorial where the Emperor could honor the war dead (Tokyo Shimbun) 
 
7) China largely pleased with Hatoyama's pledge not to visit 
Yasukuni Shrine (Nikkei) 
8) Japan, U.S., Australia agree to cooperate on measures to deal 
with Islamic radicals (Yomiuri) 
9) Government plans to build a new embassy in Djibouti, which has 
become the base of operations for Japan's anti-piracy operations 
(Yomiuri) 
10) Rally protests proposed FTA between Japan and the United States 
(Nikkei) 
11) Climate change: Japan proposes creation of teams to assist 
developing countries in reducing greenhouse gas emissions (Yomiuri) 
 
 
Economy: 
12) Survey of major companies finds 42% believe that the economy has 
bottomed out, and most think recovery will start next fiscal year 
(Mainichi) 
13) Bank of Japan Governor Shirakawa rebuts remarks about Japan's 
economy by foreign economist (Nikkei) 
 
ELECTION CAMPAIGN 
 
1) Aso, Hatoyama clash over fiscal resources 
 
ASAHI (Top Play) (Excerpts) 
August 13, 2009 
 
Prime Minister Taro Aso and Democratic Party of Japan (DPJ) 
President Yukio Hatoyama faced off in a debate at a Tokyo hotel 
yesterday. They discussed mainly such issues as fiscal resources for 
the measures in their manifestos (policy platforms) for the upcoming 
House of Representatives election, and foreign and security 
policies. Aso rapped the DPJ's policies, saying: "It is 
irresponsible to propose pork-barrel measures without specifying 
where the necessary revenues will come from." Hatoyama claimed: 
"(The government and the ruling parties) have done nothing about the 
wasteful spending of taxpayers' money," and he emphasized that the 
necessary revenues will be squeezed out by means of juggling the 
budget allocations: 
 
 
TOKYO 00001843  002 OF 009 
 
 
The debate was hosted by the National Council for Building a New 
Japan (21st ad hoc council), composed of academics, business leaders 
and others, and lasted for about 90 minutes. The two party leaders 
engaged in a one-on-one debate for the first time after the Lower 
House was dissolved. 
 
At the outset of the discussion, Aso said: "The capability to take 
responsibility is the biggest different point between the Liberal 
Democratic Party and the DPJ." He then criticized the DPJ's pledge 
of not raising the consumption tax over the next four years, 
remarking: "We must not saddle our children and grandchildren with a 
heavier debt." Hatoyama emphasized: "The upcoming election will be 
the first election for the voters to choose a government. I want all 
the people to take part in the election." 
 
Aso questioned whether the DPJ would be able to secure the fiscal 
resources needed to finance its pledges to offer a monthly 
child-raising allowance, waive express tolls, and establish an 
income indemnity system for individual farming households. Hatoyama 
refuted him: "We can secure 9.1 trillion yen by postponing 
dam-construction and other projects, eliminating the wasteful 
spending of taxpayers' money, and cutting budgetary allocations to 
entities that offer jobs for retired bureaucrats. 
 
The DPJ has proposed using the entire consumption tax revenue to 
cover the guaranteed minimum pension benefit costs. Taking up this 
pledge, Aso pointed out that the consumption tax revenue totals 13 
trillion yen while 20 trillion yen is needed for the basic pension 
payment. Aso said: "It will be impossible to implement this measure 
unless pension payments are significantly reduced or the consumption 
tax is largely hiked." Upon recognizing the need for a consumption 
tax hike in the future, Hatoyama said: "We will raise the tax over 
the next 20 years. The tax burden will not become remarkably heavier 
each year." 
 
2) Direct debate between prime minister and Hatoyama on sales tax 
 
TOKYO SHIMBUN (Top Play) (Full) 
August 13, 2009 
 
Party head talks between Prime Minister Taro Aso (Liberal Democratic 
Party (LDP) President) and Democratic Party of Japan President Yukio 
Hatoyama were held at a Tokyo hotel on the afternoon of August 12 
prior to the official announcement of the Lower House election on 
the 18th. The DPJ's policy is to keep the sales tax rate unchanged 
for four years after it takes the reins of government. Touching on 
this policy, Hatoyama referred to a possible hike in the future, 
saying, "I am fully aware that the situation in Japan does not 
permit keeping the tax rate unchanged forever." Referring to a hike 
in the sales tax, the prime minister said, "If growth of 2 percent 
is attained, the situation will be considered appropriate for 
implementing a tax hike without delay." He thus revealed a stance of 
raising the tax if growth of 2 percent is attained in the second 
half of fiscal 2010. 
 
The prime minister fiercely criticized the DPJ's key policies, such 
as child allowance, as pork-barrel largesse that is not backed up by 
fiscal resources. Hatoyama rebutted, "Our policy measures can be 
implemented through revisions to the budget that have been already 
compiled and the elimination of wasteful administrative spending. 
 
Aso, referring to the DPJ's policy shift from opposition to 
 
TOKYO 00001843  003 OF 009 
 
 
refueling operations in the Indian Ocean to extending the operations 
until next January, attacked its security policy, noting, "We cannot 
relegate security policy to a party that lacks consistency." He thus 
expressed his determination to maintain his administration. 
 
Hatoyama criticized the prime minister, who was underscoring the 
track record of his administration, "The LDP administration cannot 
break out of bureaucracy-oriented politics. That is why a power 
transfer is needed." 
 
The debate was hosted by the national council to create a new Japan 
(21st century ad-hoc council) consisting of academics and business 
leaders. 
 
 
3) Aso, Hatoyama face off over fiscal resources, security 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
August 13, 2009 
 
In the debate between Prime Minister Taro Aso (Liberal Democratic 
Party president) and Democratic Party of Japan (DPJ) President Yukio 
Hatoyama yesterday, the two party leaders traded barbs over the 
propriety of the Maritime Self-Defense Force's refueling mission in 
the Indian Ocean. Aso criticized Hatoyama's wavering position over 
this issue, citing his recent about-face to approve the mission for 
the time being. In response, Hatoyama made an excuse, citing the 
need of "continuity of foreign policy." 
 
Listing, (1) the refueling operation; (2) antipiracy measures in 
waters off Somalia; and (3) inspection of cargo on ships traveling 
from and to North Korea, Aso stressed: "The DPJ has opposed all 
these missions. But its position has become unclear in anticipation 
of assuming power in the run-up to the election." 
 
Hatoyama reiterated his willingness to address the issue of cargo 
inspection on North Korea ships and antipiracy measures in the event 
his party sizes the reins of government, as specified in its 
manifesto (policy platform). But on the refueling mission, to which 
the manifesto makes no reference, Hatoyama remained on the 
defensive. 
 
Hatoyama said: "We do not need to think everything must be changed 
immediately after our party takes over power. Continuity is 
essential for foreign policy. We will make pragmatic responses." He 
stressed his intention again to continue the refueling mission for 
the time being. But he added: "I wonder if the refueling service 
offered only several times a month has really contributed to 
bringing about peace in Afghanistan." 
 
On the question of whether the mission would be continued after its 
expiration next January, Hatoyama said: "We have no intention to 
extend the mission in a simple way." Secretary General Katsuya Okada 
used this tactful language when he referred to the possibility of 
extending the mission upon revising the new antiterrorism special 
measures law, which endorses the mission. 
 
Aso emphasized that the refueling service is one of a few practical 
operations Japan can carry out on its own responsibility. The 
mission has won praise from many other countries. Canceling the 
mission is impossible." In conclusion, Aso said: "I and the LDP will 
protect Japan," indicating his pride about the actual achievements 
 
TOKYO 00001843  004 OF 009 
 
 
the LDP has made so far in the security area. 
 
4) Poll on candidates running in Lower House election: 85% of LDP, 
25% of DPJ candidates go along with consumption tax hike 
 
YOMIURI (Page 1) (Full) 
August 13, 2009 
 
The Yomiuri Shimbun sent a questionnaire to main candidates running 
in the Aug. 30 House of Representatives election, the official 
campaign of which will kick off on Aug. 18. The survey found that 86 
percent of candidates from the Liberal Democratic Party (LDP) 
answered that they would accept a consumption tax hike to maintain 
the social security system, including pensions, while only 25 
percent of candidates on the Democratic Party of Japan (DPJ) said 
that they would concur. 
 
The Yomiuri sent questionnaires to about 1,300 candidates (as of 
Aug. 10), and received replies from 1,223 candidates - 303 LDP 
candidates, 270 LDP candidates, 33 New Komeito candidates, 166 
Japanese Communist Party (JCP) candidates, 36 Social Democratic 
Party (SDP) candidates, 16 People New Party (PNP) candidates, 10 
Everybody's Party (Minna-no-tou), and 389 other candidates. 
 
Of the 1,223 candidates, 31 percent said that a consumption tax hike 
would be unavoidable. Of the 31 percent, 25 percent said that a 10 
percent increase would be acceptable. 
 
Regarding a question what policies (three or less items) they want 
to take up in the upcoming Lower House election, 67 percent 
preferred economic stimulus measures; 33 percent, employment steps; 
32 percent, medical system reform; and 29 percent, pension issues. 
 
Of those who said that they wanted to bring up economic measures as 
a campaign issue, the percentage of the New Komeito was 94 percent - 
the highest, followed by the LDP's 87 percentage. Among the 
opposition parties, the PNP was at 63 percent, followed by the DPJ's 
46 percent and the JCP's 43 percent. 
 
As to the pension issue, which was fourth highest priority among 
campaign issues, 70 percent of the DPJ candidates said that they 
wanted to take it up, followed by the SDP's 53 percent, the LDP's 27 
percent, and the New Komeito's 21 percent. 
 
Concerning about a question whether political realignment will take 
place, more than 80 percent of the candidates said that it was 
highly likely or somewhat likely. Thirteen percent of the LDP 
candidates said that it was highly likely political realignment 
would occur, of whom 70 percent said it would be move forward 
somewhat, and 14 percent ruled out the possibility of political 
realignment. Sixty-three percent of the DPJ candidates said that 
political realignment was highly or somewhat likely, while 34 
percent said political realignment would not occur. 
 
5) Package of common pledges of ruling camp reflect "consideration 
to New Komeito" 
 
YOMIURI (Page 4) (Abridged) 
August 13, 2009 
 
The Liberal Democratic Party (LDP) and the New Komeito released a 
package of priority policies of the ruling coalition yesterday. In 
 
TOKYO 00001843  005 OF 009 
 
 
the package, the LDP's consideration to the New Komeito, which gives 
priority to welfare and low-income earners, can be detected in many 
parts. 
 
A measure to lower the amount paid individually under the high-price 
medical care-expense system was added to the package of common 
pledges. LDP Secretary General Hosoda said in a press conference 
yesterday: "The New Komeito eagerly proposed this measure. It is 
forward-looking progress. I want to emphasize this." 
 
Such measures as shortening the necessary period of pension payments 
to receive pension benefits from the current 25 years to 10 years 
are included in the package. These measures also came from the New 
Komeito. 
 
The package also includes a measure to deprive lawmakers accused of 
violating the Political Funds Control Law of their civil rights. The 
LDP opposed this measure until yesterday morning, but the party had 
to accept it in response to the persuasion of the New Komeito, which 
wants to underscore its eagerness to address the politics-and-money 
problem. 
 
Meanwhile, on the diplomatic and national security areas, the ruling 
parties reflected Prime Minister Aso's (Liberal Democratic Party 
president) intention to underscore policy differences between the 
LDP and the Democratic Party of Japan. The draft package did not 
include any pledges in these areas. But as a result of consultations 
between the two parties' secretaries general, the package added such 
tasks as the Maritime Self-Defense Force's refueling mission in the 
Indian Ocean and antipiracy operations in waters off Somalia. The 
DPJ has indicated its opposition to or cautious view on these 
missions. A senior LDP official commented: "We can stress that if 
the DPJ assumes power, Japan's international contributions will 
decrease significantly." 
 
DIPLOMATIC ISSUES 
 
6) Hatoyama positive on building a national memorial facility, with 
Emperor's visit in mind 
 
TOKYO SHIMBUN (Page 2) (Full) 
August 13, 2009 
 
Democratic Party of Japan (DPJ) President Yukio Hatoyama discussed 
the question of paying tribute to the war dead on August 12. He 
said: "We would like to work on (building) a non-religious national 
memorial facility where everyone can pay their respects without any 
ill feelings. A facility where the Emperor can pay tribute with 
peace of mind is desirable." He thus indicated that he is positive 
about constructing a non-religious national memorial facility. 
 
Hatoyama explained: "The Emperor does not visit Yasukuni Shrine. I 
think this is really painful for him. A facility where the Emperor 
can go with peace of mind is desirable." 
 
A private advisory body to then Chief Cabinet Secretary Yasuo Fukuda 
had recommended the creation of such a facility in 2002 in light of 
the strong reaction from China and South Korea to then Prime 
Minister Junichiro Koizumi's visits to the Yasukuni Shrine. However, 
discussions on this have been at a standstill due to the opposition 
of the national association of the families of the war dead. 
 
 
TOKYO 00001843  006 OF 009 
 
 
7) China welcomes Hatoyama's statement on not visiting Yasukuni 
Shrine 
 
NIKKEI (Page 2) (Full) 
August 13, 2009 
 
Ken Sato, Beijing 
 
The Chinese Foreign Ministry issued a statement by Jiang Yu, deputy 
director general of the Information Department, on August 12 on 
Democratic Party of Japan President Yukio Hatoyama's statement that 
if his party takes over the reins of government after the House of 
Representatives election and he becomes the prime minister, he will 
not visit the Yasukuni Shrine. China's statement says: "We would 
like to develop a stable Japan-China relationship based on the four 
political documents, including the Japan-China Joint Communique." It 
also indicates appreciation for Hatoyama's remarks which were based 
on the 1972 Joint Communique and gave consideration to historical 
issues. Japan expressed "deep remorse" for the damages Japan 
inflicted on the Chinese people during the Sino-Japanese War in the 
1972 document. 
 
8) Japan, U.S., Australia agree to cooperate on measures against 
Muslim extremists 
 
YOMIURI (Page 4) (Full) 
August 13, 2009 
 
The governments of Japan, the United States, and Australia have 
agreed to set up a mechanism for cooperating on preventing the 
expansion of Muslim extremist forces in Southeast Asia through such 
measures as assigning an official in charge of exchange of 
information at the local embassies. 
 
For now, dedicated officials will be assigned in Indonesia, where 
there have been terrorist bombings, and the Philippines, where 
extremist groups are active, and they will hold regular meetings to 
share information on trends of the groups and support for the local 
governments. 
 
The three countries believe that poverty is one factor that causes 
young people to turn to extremism and have implemented official 
development aid for poverty reduction in Southeast Asia. They are 
considering conducting a joint public opinion survey on the effect 
of official development assistance (ODA). 
 
9) Japan to open embassy in Djibouti 
 
YOMIURI (Page 4) (Full) 
August 13, 2009 
 
The government has decided to open an embassy in Djibouti in East 
Africa in the next fiscal year. 
 
The Maritime Self-Defense Force (MSDF) contingent engaged in 
anti-piracy operations in waters off Somalia is based in Djibouti. 
At present, two P-3C reconnaissance planes responsible for 
monitoring the pirates and some 150 MSDF officers in charge of 
aircraft maintenance and security are deployed there. The Ministry 
of Foreign Affairs has judged that the MSDF mission is likely to 
become long-term, so an embassy will be opened to take charge of 
coordination with the Djibouti government. The embassy will also 
 
TOKYO 00001843  007 OF 009 
 
 
conduct surveys on official development assistance (ODA) to be 
provided to Djibouti in return for hosting the MSDF. 
 
10) Rally to oppose FTA with U.S. held 
 
NIKKEI (Page 5) (Full) 
August 13, 2009 
 
Agricultural, fisheries and forestry groups, including the Central 
Union of Agricultural Cooperatives (JA-Zenchu), held an emergency 
rally to oppose a free trade agreement between Japan and the U.S., 
which is included in the Democratic Party of Japan's (DPJ) manifesto 
for the Lower House election. According to JA-Zenchu, about 3,000 
people took part in the assembly. The DPJ had first said it would 
"sign an FTA" (with the U.S.) However, it later revised the wording 
to "promote talks." Many participants in the assembly, however, 
criticized the manifesto, saying that there "has been no change in 
the general direction." The meeting adopted a declaration that they 
will promote movements to prevent an FTA with the U.S. 
 
11) Government propose setting up a support team for developing 
countries to cut greenhouse gas emissions 
 
YOMIURI (Page 2) (Full) 
August 13, 2009 
 
Koya Ozaki, Bonn 
 
In order to let China, India and other countries cut their green 
house gas emissions, the Japanese government proposed on Aug. 11 at 
the session of the Conference of the Parties to the United Nations 
Framework Convention on Climate Change, which is now being held in 
Bonn, Germany, that an experts team to support developing countries' 
energy-saving strategies. The aim is to urge developing countries to 
agree to the next framework, including developing countries' 
obligation to reduce emissions and other efforts, in return for 
being provided with advanced technologies. 
 
The experts team, composed of engineers and government officials 
from developed countries, would give advice to developing countries' 
governments how to save their energy consumptions. The team would 
research how developing countries use energies, as well as the 
effectiveness of advanced technologies when they are introduced in 
developing countries. The team would also come up with action plans 
for those countries. 
 
The Ministry of Economy, Trade, and Industry (METI) will allocate 
500 million yen as related costs in its budgetary request guideline 
for fiscal 2010, with an eye on the start of dispatching experts in 
¶2010. Since the introduction of energy-saving technologies in 
developing countries is related to increase profits of their 
industries, it is very attractive to them. This also will lead to 
sales of Japanese' companies' energy-saving technologies to the 
world. 
 
Regarding the framework of reducing of global greenhouse gas 
emissions, which will replace the Kyoto Protocol after 2013, 
international negotiations have been conducted with the aim of 
reaching an agreement at the 15th session of the Conference of the 
Parties to the United Nations Framework Convention on Climate Change 
as the replacement of the Kyoto Protocol. 
 
 
TOKYO 00001843  008 OF 009 
 
 
Although Japan, the United States, and European Union (EU) aim to 
setting a goal of cutting greenhouse gas emissions by all major 
emitters, including China and India, developing countries have been 
reluctant to set such a goal, citing their economic developments 
would be undermined. Therefore, there is a wide gap between the two 
sides. In order to avoid a failure in the 15th session, the Japanese 
government intends to draw out a compromise from developing 
countries by providing them with technical assistance. 
 
ECONOMY 
 
12) Mainichi poll of 120 leading companies: 42 percent say economy 
has bottomed out; Most companies believe recovery will be next 
fiscal year 
 
MAINICHI (Page 1) (Abridged slightly) 
August 13, 2009 
 
The Mainichi Shimbun in late July surveyed 120 leading companies 
nationwide. In the survey, 42.5 percent or 51 companies said that 
the economy has bottomed out, topping those that disagreed - 23.3 
percent or 28 companies. In the poll carried out in April, the 
proportion of companies that replied the economy was worsening or 
the economy was slowly worsening totaled 75 percent. The survey 
conducted this time found that an increasing number of companies now 
feel the economy has bottomed out, mainly because there has been a 
slowing of decline in industrial output and exports, due to progress 
in stimulus measures and inventory adjustments carried out by 
various countries, noted Mitsubishi Electric. 
 
There is a view that the government's declaration in June that the 
economy has bottomed out served to turn around business sentiment. 
However, as many as 32.5 percent of respondents or 39 companies said 
that they could not tell whether the economy has bottomed out or 
not. 
 
Regarding a timeframe for full economic recovery, only 24.2 percent 
or 29 companies said either "the economy is already in the recovery 
process" or "within this fiscal year." The largest proportion of 
65.8 percent or 79 companies gave the answer of "next summer." The 
answer "fiscal 2011 or later" was given by 6.7 percent or eight 
companies, showing little difference from the April poll. 
 
To a question about their business performance in fiscal 2009, 
respondents who replied that their business performance will 
slightly worsen and those who said that their business showings will 
worsen totaled 44.2 percent or 53 companies. These replies were 
given mainly by retailers. 
 
The poll was carried out in late July, targeting presidents or 
chairman of 120 companies. Replies were sent by early August. 
 
13) BOJ governor makes sarcastic remark, "Economists have learned in 
the face of a crisis" 
 
NIKKEI (Page 5) (Full) 
August 13, 2009 
 
Bank of Japan Governor (BOJ) Masaaki Shirakawa made a sarcastic 
remark against foreign economists. According to the gist of a speech 
he gave in Shanghai, China, on August 8, which the BOJ released on 
the 12th, Shirakawa said, "Given changes in the views of economists, 
 
TOKYO 00001843  009 OF 009 
 
 
I feel that their learning process is coming along steadily." He 
referred to changes in the views of overseas economists, comparing 
the time when Japan had experienced a financial crisis in the past 
and the ongoing economic and financial crisis. 
 
Regarding the Japanese economy being unable to climb out of the 
slump for a long period of time since the second half of the 1990s, 
when the BOJ adopted a zero interest rate and monetary quantitative 
easing policies, European and U.S. economists criticized Japan's 
measures, saying, "The BOJ should set an inflation target and buy 
everything until it attains it," or "It should make up for fiscal 
deficits." Reflecting on those criticisms, Shirakawa said, "Various 
proposals, including very bold ones, were made." 
 
However, Shirakawa said that in the ongoing crisis, no bold 
proposals, such as those made when the Japanese economy was strapped 
in the long-term slump, have been made. He pointed out, "It is not 
until economists actually face a crisis that they discuss things, 
based on reality." He opined: "Actually faced with the crisis, 
European and U.S. economists have realized that it is difficult to 
overcome the crisis in a short period of time. Anything-goes-type 
money easing arguments are not being heard." Princeton University 
Professor Paul Krugman of the U.S., who criticized the BOJ in the 
past, reportedly said, "We must apologize to Japan." 
 
ZUMWALT