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UNCLAS SECTION 01 OF 10 TOKYO 002749 
 
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 12/02/09 
 
INDEX: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Defense & security: 
4) Former Foreign Ministry official gives court testimony in which 
he acknowledges the existence of secret accords concerning Okinawa 
(Mainichi) 
5) Former Foreign Ministry official's testimony will spur Hatoyama 
administration's investigation of secret accords  (Yomiuri) 
6) Nuclear Security Summit preparatory meeting to be held in Tokyo 
tomorrow  (Asahi) 
7) Miyajima tapped to head Central Readiness Command  (Sankei) 
 
Foreign relations: 
8) Prime Minister calls for creation of East Asian Community 
(Yomiuri) 
9) U.S. not cooperating in handover of four service member 
dependents implicated in rope incident  (Asahi) 
 
Futenma: 
10) Okada discloses cabinet-level Japan-U.S. working group to meet 
soon  (Asahi) 
11) Adm. Willard says Futenma replacement facility will not decline 
in importance even after quadrennial defense review  (Asahi) 
12) Admiral Willard says U.S. believes Japan will soon reach 
decision on Futenma relocation  (Mainichi) 
13) Foreign Minister to begin Okinawa visit from Dec. 4  (Nikkei) 
14) LDP's Okinawa Prefectural Chapter says it will call for 
relocation of Futenma facility outside Okinawa if government doesn't 
reach a decision on an alternative site within the year  (Nikkei) 
 
Politics: 
15) Hirano says Futenma relocation issue not included in tri-party 
agreement  (Asahi) 
 
Economy: 
16) Government preparing package of pump-priming measures worth 7 
trillion yen  (Mainichi) 
17) Bank of Japan to inject 10 trillion yen into the financial 
system BOJ to provide 10 trillion yen fund  (Nikkei) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: 
Government eyes spending over 7 trillion yen for economic stimulus 
measures: Significant increase in second extra budget 
 
Yomiuri: Nikkei: 
BOJ to provide 10 trillion yen fund as additional monetary easing 
policy: To be implemented for three months with interest rate of 0.1 
percent; aim is to address deflation 
 
Sankei: 
Case against former secretary to prime minister to be built over 
entering of false political fund donations in political fund report 
 
Tokyo Shimbun: 
 
TOKYO 00002749  002 OF 010 
 
 
Mother of Prime Minister Hatoyama found to have donated 180 million 
yen per year to brother Kunio as well 
 
Akahata: 
Passage of A-bomb disease fund legislation 
 
2) EDITORIALS 
 
Asahi: 
(1) Bank of Japan's decision: Central bank should do its utmost to 
address deflation 
(2) Extraordinary Diet session: "Citadel of discourse" is lamenting 
 
Mainichi: 
(1) Make most of testimony given by former Foreign Ministry bureau 
director general to restore confidence in diplomacy 
(2) Bank of Japan has taken measure to address deflation and strong 
yen: We hope to see government and BOJ tackle mid-to long-term 
challenges facing the Japanese economy 
 
Yomiuri: 
(1) Quantitative monetary easing: The Bank of Japan has taken action 
to eliminate deflation 
(2) Putting cargo inspection legislation on hold is equivalent to 
slighting international responsibility 
 
Nikkei: 
(1) The Bank of Japan and the government must work closely together 
without delay 
(2) Abolishing the public health insurance scheme for elderly people 
aged 75 or older is irrelevant 
 
Sankei: 
(1) Additional monetary easing policy: The government is responsible 
for staving off double-dip recession 
(2) Violence at elementary, middle, and high schools: Do not neglect 
moral education 
 
Tokyo Shimbun: 
(1) Measures to deal with deflation: (The Bank of Japan) cannot 
fight deflation with optimistic perception of the situation 
(2) Testimony on secret Okinawa pact 
 
Akahata: 
(1) U.S. Marine Corps' Futenma Air Station: The government should 
not forget its public pledge to move the facilities out of the 
nation 
 
3) Prime Minister's schedule, December 1 
 
NIKKEI (Page 2) (Full) 
December 2, 2009 
 
07:55 Attended a meeting of the General Ocean Policy Headquarters in 
the Diet Building, followed by a cabinet meeting. Foreign Minister 
Okada, Transport Minister Maehara, and Chief Cabinet Secretary 
Hirano stayed behind. 
08:51 Arrived at the Prime Minister's Official Residence (Kantei). 
10:08 Attended a meeting to commemorate "digital broadcast day" at 
the Keio Plaza Hotel in Nishi-Shinjuku. 
11:02 Met Okada and Defense Minister Kitazawa at the Kantei. Joined 
by Hirano. 
 
TOKYO 00002749  003 OF 010 
 
 
11:57 Met ASEAN Secretary General Surin at the Grand Prince Hotel 
Akasaka. Later attended an international symposium of the Economic 
Research Institute for ASEAN and East Asia. 
12:24 Met at the Kantei with Okada, Kitazawa, and Hirano. 
13:02 Attended a Lower House plenary session. 
13:16 Met at the Kantei with Japan Banking and Finance Research 
Institute President Hidehiro Kikuchi and Cabinet Office Senior Vice 
Minister Otsuka. Later met Lower House member Hiroko Nakano, Nemuro 
Mayor Hasegawa and others. Later met with Internal Affairs Minister 
Haraguchi. 
14:56 Posed for photos for the next Upper House election at party 
headquarters. 
15:45 Met at the Kantei with Finance Minister Fujii, Finance 
Ministry's Senior Vice Minister Minezaki, Parliamentary Secretary 
Furumoto, and Vice Minister Tango. 
17:26 Met Czech Senator Sobotoka and others. 
18:24 Watched a preview of the movie "Otouto (younger brother) at 
Yurakucho Marion. 
19:04 Met Maehara at the Kantei. 
20:02 Dined with Deputy Chief Cabinet Secretary Matsuno and others 
at the Chinese restaurant Tokarin at the Hotel Okura. 
22:09 Arrived at his official residential quarters. 
 
4) Former MOFA bureau chief testifies in court on Japan-U.S. secret 
agreement on Okinawa's reversion to Japanese administration 
 
MAINICHI (Page 1) (Full) 
December 2, 2009 
 
The hearing on the case filed by former Mainichi Shimbun reporter 
Takichi Nishiyama, 78, and 24 other plaintiffs asking the government 
to disclose secret documents on the negotiations between Japan and 
the United States on the reversion of Okinawa to Japanese 
administration (in 1972) was held at the Tokyo District Court 
(presided over by Justice Norihiko Sugihara) on Dec. 1. Bunroku 
Yoshino, 91, former director general of the North American Affairs 
Bureau of the Ministry of Foreign Affairs (MOFA) who was involved in 
the negotiations with the U.S. and a resident of Yokohama City, 
appeared in court as a witness for the plaintiffs. He said that "a 
document (pertaining to the secret agreement) was signed with the 
U.S. side," testifying that a secret agreement exists. On the other 
hand, the national government, which has denied the existence of the 
secret agreement, changed its position, submitting to the court a 
document saying it is withholding its plea of guilty or not guilty. 
 
Yoshino had confessed to media outlets about the secret agreement, 
but this was the first time he has testified in court. Nishiyama and 
the plaintiff group seek the disclosure of three official documents 
on Japan's payment of the cost for restoring returned military base 
land to its original state, which should have been borne by the U.S. 
side (4 million dollars); expenses for the relocation of the 
premises of Voice of America, U.S. shortwave overseas radio 
broadcast (16 million dollars); and other expenditures. These 
documents have been made public at the U.S. National Archives. 
 
Yoshino testified that he "signed a document on the reversion 
negotiations prepared by (then) U.S. Embassy Minister Richard 
Sneider." He said he "signed the initials 'BY' at the director 
general's office, made a photocopy, and this document should be in 
MOFA's files." 
 
5) Ex-diplomat's testimony on secret accord to add momentum to 
 
TOKYO 00002749  004 OF 010 
 
 
administration's investigation 
 
YOMIURI (Page 4) (Full) 
December 2, 2009 
 
Bunroku Yoshino, 91, a former Foreign Ministry's American Bureau 
chief, admitted in the Tokyo District Court yesterday that Japan and 
the U.S. concluded a secret agreement on Japan's payment of fees for 
restoring the land used by the U.S. military to its original state 
on the occasion of Okinawa from U.S. control to Japanese 
sovereignty. The Hatoyama administration has eagerly worked to 
reveal the truth about whether such secret pacts existed. The former 
diplomat's testimony is expected to add momentum to the 
administration's investigation. 
 
Yoshino has so far admitted in interviews with the media that Japan 
and the U.S. concluded secret accords. On the accord concerning the 
cost burden, other former senior officials of the Foreign Ministry 
have also admitted its existence. In addition, the U.S. has 
disclosed related documents. 
 
Even so, while the Foreign Ministry's expert panel is carrying out 
an investigation and analysis under the instruction of Foreign 
Minister Katsuya Okada, the testimony in a court by a concerned 
person carries even heavier weight. Okada appreciated Yoshino's 
testimony, saying in a press conference yesterday: "It will be very 
significant if the truth can be brought to light through a trial." 
 
Prime Minister Yukio Hatoyama also told reporters yesterday: 
"Allegations that Japan and the U.S. concluded secret pacts are now 
surfacing. When the government confirms the facts, we would like to 
let the people know the truth using the appropriate method." 
 
6) International system to prevent nuclear terrorism; nuclear 
security summit preparatory meeting to be held in Tokyo tomorrow 
 
ASAHI (Page 3) (Excerpts) 
December 2, 2009 
 
Hirotsugu Mochizuki in Washington, Makoto Igarashi, Hiroyuki 
Maekawa 
 
Proxies for world leaders will assemble in Tokyo tomorrow to attend 
a preparatory meeting for a nuclear security summit to be hosted in 
Washington next spring by U.S. President Barack Obama, who advocates 
a nuclear-free world. What is the United States' aim for the summit? 
What is the significance of holding the preparatory meeting in 
Japan? 
 
Japan looks for "deepened" alliance with the U.S. 
 
Following their talks in Tokyo in November, Prime Minister Yukio 
Hatoyama and President Obama released a joint statement on a 
nuclear-free world, defining it as a new theme for Japan-U.S. 
cooperation. The Japanese side is hopeful that this will help deepen 
its alliance with the United States. 
 
Japan is an "honor student" who has not pursued a nuclear weapons 
program and has adhered to the principle of using nuclear energy 
peacefully under the Nuclear Non-proliferation Treaty (NPT) regime. 
The U.S. pins hopes on Japan, as seen in National Nuclear Security 
Administration head Thomas D'Agostino's words, "Japan will be a 
 
TOKYO 00002749  005 OF 010 
 
 
terrific host." 
 
In the upcoming preparatory meeting, members will, among other 
things, discuss ways to secure nuclear materials. There is a 
possibility that the United States, which calls for stricter rules, 
will lock horns with developing countries, which want to introduce 
nuclear-power generation plans at low cost. Japan intends to serve 
as an intermediary to build a consensus. 
 
Vietnam has decided to build nuclear plants. Expectations for 
nuclear energy are growing in Asia. Japan, which has major nuclear 
energy producers, is also exploring ways for cooperation with other 
Asian countries. But that is absolutely premised on nuclear 
technology not being used for military purposes and nuclear 
materials not falling into the hands of terrorists. That can also 
explain why Japan is eager to build an international 
nuclear-security regime. 
 
Pursuing profits is not the only motive. The United States plans to 
maintain its nuclear deterrence for the foreseeable future. A senior 
Foreign Ministry official explained that the groundwork for a 
nuclear-free world can't be laid unless the risk of nuclear 
proliferation is eliminated by building a system to control nuclear 
materials. 
 
7) Miyajima picked to head Central Readiness Command 
 
SANKEI (Page 2) (Full) 
December 2, 2009 
 
Defense Minister Toshimi Kitazawa, in yesterday's cabinet meeting, 
reported a new lineup of ranking officers in the Self-Defense 
Forces, including the appointment of Toshinobu Miyajima, commandant 
of the Joint Staff College (JSC), to the post of Central Readiness 
Command (CRC) commander in the Ground Self-Defense Force (GSDF), as 
the successor to the retiring CRC commander, Mikio Shibata. These 
appointments were approved in the cabinet meeting and will be 
officially announced under the date of Dec. 7. 
 
GSDF Lt. Gen. Toshinobu Miyajima, currently in the post of Joint 
Staff College commandant, has been appointed to the post of CRC 
commander; GSDF Lt. Gen. Takashi Watanabe, currently in the post of 
GSDF 1st Division commanding general, to the post of JSC commandant; 
and GSDF Maj. Gen. Yoshiaki Nakagawa, currently in the post of chief 
of staff at GSDF Middle District Army Headquarters and concurrently 
in the post of GSDF Itami Garrison commander, to the post of GSDF 
1st Division. 
 
GSDF Lt. Gen. Mikio Shibata, currently in the post of CRC commander, 
will retire from GSDF service. 
 
CRC commander 
 
Toshinobu Miyajima: graduated from the National Defense Academy; 
joined the GSDF in 1976, served in the post of GSDF 4th Division 
commanding general and then became JSC commandant in March 2009; 55 
years old; born in Saga Prefecture. 
 
8) Prime Minister Hatoyama calls for building East Asian community 
 
YOMIURI (Page 2) (Excerpts) 
December 2, 2009 
 
TOKYO 00002749  006 OF 010 
 
 
 
An international symposium to think of the future of the Asian 
economy was held yesterday in Tokyo. Researchers from Japan, the 
United States, China, South Korea, and the Association of Southeast 
Asian Nations (ASEAN) participated in the symposium titled "Global 
Economic Crisis and Reconstruction of East Asian Economy," sponsored 
by the Institute of Developing Economies Japan External Trade 
Organization and the Economic Research Institute for ASEAN and East 
Asia, and supported by the Yomiuri Shimbun and other organizations. 
 
In his greeting at the beginning of the symposium, Prime Minister 
Yukio Hatoyama said, "There are a variety of countries in East Asia. 
It is important for us to deepen ties at various levels such as 
trade, science and technology, and education. We should turn the 
dream or ideal of an East Asian Community into a reality." ASEAN 
Secretary General Surin Pitsuwan, pointing out the importance of 
ASEAN's role in building the community, asked for Japan's 
cooperation. 
 
9) USFJ uncooperative in handing over four suspect children of U.S. 
military personnel in rope incident in Musashi-murayama City, Tokyo 
 
ASAHI (Page 39) (Abridged) 
December 2, 2009 
 
It was learned from investigation sources that the Tokyo 
Metropolitan Police Department (MPD), which has decided to prosecute 
four children of U.S. military personnel in the incident last August 
where a woman motorcyclist, 23, fell and was seriously injured from 
running into a rope intentionally strung (across a street) in 
Musashi-murayama City, Tokyo, has been unable to obtain the 
cooperation of the U.S. Forces Japan (USFJ) for the handover of the 
four suspects. The MPD obtained warrants of arrest for the four on 
charges of attempted murder on Nov. 24, and the warrants that 
expired on Dec. 1 have been renewed. 
 
According to the MPD's second organized crime department and other 
investigation sources, the four suspects, aged 15-18, are children 
of U.S. service members stationed at the Yokota base. Since two of 
them live on the military base, the MPD requested their handover 
from the USFJ in accordance with the Japan-U.S. Status of Forces 
Agreement. The MPD will continue to request the USFJ's cooperation 
in the handover procedures. 
 
10) Japan, U.S. to hold meeting of ministerial-level working group 
soon 
 
ASAHI (Page 4) (Full) 
December 2, 2009 
 
In a press conference yesterday, Foreign Minister Katsuya Okada 
revealed that Japan and the U.S. will soon hold a meeting of their 
ministerial-level working group to find a solution to the issue of 
relocating the U.S. Marine Corps' Futenma Air Station. The meeting 
is likely to take place on Dec. 4. Both sides are expected to 
discuss new measures to lighten the base burden on Okinawa, such as 
the transfer of training activities by U.S. troops in Okinawa. The 
two countries will first hold working-level talks that Deputy 
Assistant Secretary of State Joseph Donovan and Deputy Assistant 
Secretary of Defense Michael Schiffer will participate in from the 
U.S. government. According to Okada, a ministerial meeting will also 
be held. 
 
TOKYO 00002749  007 OF 010 
 
 
 
11) PACOM commander: Necessity of Futenma replacement facility will 
remain unchanged 
 
ASAHI (Page 4) (Full) 
December 2, 2009 
 
Yoichi Kato, senior writer 
 
Navy Adm. Robert Willard, commander of the U.S. Pacific Command 
(PACOM) which takes command of U.S. Forces Japan, held a press 
conference at the U.S. Embassy in Akasaka, Tokyo, on Dec. 1. The 
commander indicated that even after work on the new Quadrennial 
Defense Review (QDR) is completed by the Department of Defense (DoD) 
next February as planned, the strategic necessity of the envisaged 
Futenma replacement facility will not diminish at all. 
 
"The United States has no intention of withdrawing from this region 
(Northeast Asia including Japan)," the commander said emphatically. 
"Such a withdrawal has never been discussed and will never be 
discussed in the future." The commander thus plainly dismissed the 
view that the U.S. military might withdraw its forward deployed 
troops to the Alaska-Hawaii-Guam line. 
 
Last month, the DoD Joint Guam Program Office released an 
environmental impact assessment report on facilities to be built due 
to the relocation of U.S. Marines from Okinawa, which includes the 
construction of a facility that can accommodate the helicopter unit 
now deployed at Futenma Air Station. The commander explained it this 
way: "There is nothing new about the idea that the unit to be 
transferred from Okinawa will possess aviation and maritime 
transport capabilities." The commander emphasized that the United 
States does not have future withdrawal from Okinawa in mind. 
 
Through its screening of budgetary requests, the Hatoyama 
administration has decided to "review" Japan's share of the cost of 
stationing U.S. forces in Japan, which is commonly called the 
omoiyari yosan (literally "sympathy budget"; i.e., host nation 
support). About this decision, Commander Willard said: "We think it 
is natural for the Japanese government to reexamine the requests, 
but we cannot accept (a reduction). Host nation support carries 
great significance for an alliance, and it is of great value to 
Japan." 
 
12) PACOM chief says he believes Futenma issue will reach early 
conclusion 
 
MAINICHI (Page 2) (Full) 
December 2, 2009 
 
Visiting U.S. Navy Admiral Robert Willard, who heads the U.S. 
Pacific Command (PACOM), headquartered in Hawaii, gave a press 
briefing for Japanese reporters yesterday in Tokyo. In the press 
briefing, PACOM Commander Willard, referring to the pending issue of 
relocating the U.S. Marine Corps' Futenma Air Station in Okinawa 
Prefecture, said: "Both Japan and the United States recognize the 
urgency of this issue. I believe we will be able to reach a 
conclusion at an early date." Willard lauded Prime Minister Yukio 
Hatoyama for his willingness to reach an early conclusion on the 
Futenma issue. 
 
Meanwhile, the Hatoyama government has set forth its intention to go 
 
TOKYO 00002749  008 OF 010 
 
 
over Japan's "sympathy budget" (omoiyari yosan, or host nation 
support) for U.S. Forces Japan. "It's only natural that the new 
government will review (its predecessor's policy)," Willard said. 
However, he indicated that it would not be desirable to cut down on 
the budget. "It (sympathy budget) constitutes an important portion 
of our bilateral alliance," he said. 
 
13) Foreign Minister Okada to revisit Okinawa on Dec. 4 
 
NIKKEI (Page 2) (Full) 
December 2, 2009 
 
Foreign Minister Katsuya Okada announced yesterday at a press 
conference that he will visit Okinawa Prefecture on a two-day 
schedule from Dec. 4 in connection with the issue of relocating the 
U.S. Marine Corps' Futenma Air Station (in Ginowan City). This will 
be his second visit to Okinawa following the one he made last month. 
Okada is expected to exchange views with local residents on the 
Futenma relocation issue, based on the results later this week of a 
review of the issue by the Japan-U.S. high-level task force working 
to resolve the issue. The foreign minister said at the press 
conference, "I want to hear the frank opinions of Okinawa's 
people." 
 
14) LDP Okinawa chapter to call for moving Futenma outside 
prefecture if decision not made before year's end 
 
NIKKEI (Page 2) (Full) 
December 2, 2009 
 
The Liberal Democratic Party's (LDP) Okinawa chapter Secretary 
General Masatoshi Onaga met yesterday with LDP Secretary General 
Tadamori Oshima at party headquarters. In the meeting, Onaga told 
Oshima that if the government fails to reach a conclusion on the 
relocation site for the U.S. Marine Corps Futenma Air Station before 
the end of this year, the Okinawa chapter will call for moving the 
Futenma facility out of Okinawa, changing its policy of allowing the 
Futenma base to be relocated within the prefecture. 
 
15) Hirano: Futenma issue not included in coalition agreement 
 
ASAHI (Page 4) (Full) 
December 2, 2009 
 
In response to questions on the issue of relocating the U.S. Marine 
Corps' Futenma Air Station during a press conference yesterday, 
Chief Cabinet Secretary Hirofumi Hirano said: "The Futenma issue is 
not specifically stipulated in the agreement reached by the three 
political parties to form a coalition, although the base issue is 
included in it." 
 
The coalition agreement reached between the Democratic Party of 
Japan, the Social Democratic Party (SDP), and the People's New Party 
includes the following item regarding the base issue: "In view of 
lightening the burden on the people of Okinawa, we will propose 
revising the Japan-U.S. Status of Forces Agreement and will also 
reconsider the existing plan to realign U.S. forces in Japan and 
future options for U.S. military bases in Japan." It is true that 
there is no description about the Futenma airfield, but the three 
ruling parties did in fact revise an expression in the agreement to 
reflect the SDP's opposition to the planned relocation of the 
facility within the prefecture. Hirano's remark yesterday was 
 
TOKYO 00002749  009 OF 010 
 
 
apparently intended to indicate that even if Prime Minister Yukio 
Hatoyama approves the relocation of the airfield within the 
prefecture, the stance does not infringe on the agreement between 
the three ruling parties. 
 
16) Government eyes spending over 7 trillion yen for economic 
stimulus measures: Significant increase in second extra budget 
 
MAINICHI (Top play) (Excerpts) 
December 2, 2009 
 
The government on Dec. 1 began making final adjustments with the 
possibility of incorporating stimulus measures worth over 7 trillion 
yen into the fiscal 2009 second extra budget. It had originally 
planned to formulate a second extra budget using 2.7 trillion yen 
squeezed from projects that were put on hold in a review of the 
first extra budget. However, coordination among the three ruling 
parties has bogged down. The government will now aim to reach a 
consensus as early as the 2nd by significantly increasing the size 
of the second extra budget. 
 
In addition to the 2.7 trillion yen, more than 1 trillion yen 
secured from unnecessary payments of interest on government bonds 
realized as a result of market interest rates lower than anticipated 
will be included in the budget. Actual fiscal spending worth about 4 
trillion yen will now likely be earmarked in the second extra 
budget. 
 
The government is expected to map out an economic pump-priming 
package by the end of the week. It will also aim to have the three 
ruling parties reach a consensus. However, the People's New Party 
appears to be seeking to increase the size of the budget even more. 
 
17) BOJ to provide 10 trillion yen fund 
 
NIKKEI (Top play) (Excerpts) 
December 2, 2009 
 
The Bank of Japan (BOJ) on Dec. 1 held an extraordinary policy 
meeting and decided to further ease monetary conditions. The central 
bank has decided to lend funds worth 10 trillion yen to financial 
institutions at a fixed interest rate of 0.1 percent per year. The 
aim is to apply pressure for a further decline in longer-term 
interest rates. The BOJ will not limit the term for the supply of 
funds, based on this method. The future of the Japanese economy is 
becoming increasingly unclear due to the deflationary trend and the 
sharp rise in the value of the yen. The central bank will clarify 
its stance of addressing the deflationary trend in concert with the 
government in order to produce the effects of a monetary 
quantitative easing policy in a broad sense, as BOJ Governor Masaaki 
Shirakawa put it -- meaning stabilizing the financial market with 
the ample supply of funds. 
 
The fund supply method (a new type of open market operation), which 
the BOJ will introduce, will continue for three months. Under the 
new approach, 10 trillion yen will be supplied. Highly fluid 
government bonds have been secured as collateral. The BOJ introduced 
a special market operation for assistance for corporate financing as 
a measure to address the financial crunch in December last year. At 
that time, corporate bonds and commercial papers (CP) were secured 
as collateral, but government bonds were not included. 
 
 
TOKYO 00002749  010 OF 010 
 
 
The fund size of 10 trillion yen is equivalent to about 20 percent 
of the total amount of funds the BOJ currently supplies (40-50 
trillion yen). The central bank said that if demand from financial 
institutions for more fund supplies grows, it will further increase 
fund supplies, based on the same operation. 
 
ROOS