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UNCLAS SECTION 01 OF 12 TOKYO 000165 
 
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 01/26/10 
 
INDEX: 
 
(1) U.S. requested joint statement on 50th anniversary of security 
treaty be downgraded to ministerial level due to Futenma dispute 
(Sankei) 
 
(2) Chief Cabinet Secretary Hirano indicates choice of Futenma 
relocation site does not necessarily require local government's 
consent (Mainichi) 
 
(3) PM Hatoyama driven into corner over the Futenma relocation issue 
(Nikkei) 
 
(4) Futenma in turmoil; (Part 1): Okinawa distrustful of government 
due to its precautionary measures (Yomiuri) 
 
(5) Responsibility for confusion rests with Hatoyama (Yomiuri) 
 
(6) Editorial: Government must expedite efforts to find relocation 
site for Futenma base outside Okinawa (Asahi) 
 
(7) Editorial: Nago's decision is expression of opposition to 
Futenma relocation within Okinawa (Tokyo Shimbun) 
 
(8) Japan's future course -- 50th anniversary of revision of 
Japan-U.S. Security Treaty (Party 2-5, conclusion): Discussion on 
nuclear policy now necessary (Yomiuri) 
 
(9) Shockwave of President Obama's financial regulation: Japanese 
banks may have to change their comprehensive business policy line 
(Nikkei) 
 
ARTICLES: 
 
(1) U.S. requested joint statement on 50th anniversary of security 
treaty be downgraded to ministerial level due to Futenma dispute 
 
SANKEI ONLINE (Full) 
09:32, January 26, 2010 
 
Rui Sasaki in Washington 
 
It was learned that the U.S. government had asked the Japanese side 
to "downgrade" the joint statement by the two countries to mark the 
50th anniversary of the signing of the bilateral security treaty 
from a document signed by the top leaders of both countries to one 
issued by the ministers of foreign affairs and defense. This was due 
to the U.S.'s judgment that in case Prime Minister Yukio Hatoyama, 
who is looking for a relocation site outside Okinawa for the U.S. 
forces' Futenma Air Station (in Ginowan City, Okinawa), scraps the 
current plan to relocate the Futenma base to the coastal area of 
Camp Schwab (in Nago City), this might affect President Barack 
Obama's management of his administration. This episode shows that 
the U.S. government's distrust of the Hatoyama administration has 
affected the drafting of a critical document. 
 
According to sources on Japan-U.S. relations, the U.S. government 
had been preparing to draft the joint statement to be issued in 
January 2010 since spring 2009 on the assumption that it would be 
signed by the leaders of the two countries. 
 
However, since the inauguration of the Hatoyama administration, the 
 
TOKYO 00000165  002 OF 012 
 
 
Prime Minister has postponed a solution on the Futenma relocation 
issue repeatedly. Therefore, White House officials told State 
Department officials in charge of relations with Japan last December 
"not to involve the President in this," requesting that the 
statement be dealt with at the ministerial level. This message was 
conveyed to the Japanese side through the State Department. 
 
For this reason, the joint statement, originally planned to be 
issued in the name of the two top leaders, was suddenly replaced by 
a statement signed by the ministers of foreign affairs and defense, 
and all mention of the Futenma issue was dropped. 
 
A source on Japan-U.S. relations said that the U.S. request to 
"downgrade" the document "was probably meant to avoid dragging the 
row over the Futenma issue into the White House." 
 
However, the two governments decided that the two countries needed 
to underscore a strong alliance relationship both domestically and 
internationally for peace and stability in Asia and the Pacific in 
light of North Korea's development of nuclear arms and missiles and 
the acceleration of China's military expansion. Therefore, President 
Obama and Prime Minister Hatoyama both issued statements and decided 
to go forward with the talks on deepening the alliance without 
waiting for a solution to the Futenma issue. 
 
This was the background of the meeting between Secretary of State 
Hillary Clinton and Foreign Minister Katsuya Okada in Hawaii before 
the joint statement was issued. Officials of the two governments 
were unable to enter into concrete discussions on the drafting of 
the statement soon enough due to the dispute over the Futenma 
relocation issue, and so the final drafting of the document had to 
take place in a rush at the State Department all night on Jan. 14. 
 
Hatoyama hopes to meet President Obama at the G-8 Summit in Canada 
in late June, but if he scraps the existing Futenma relocation plan, 
there is concern that "a summit meeting will be out of the 
question," according to the above source on bilateral relations. 
 
(2) Chief Cabinet Secretary Hirano indicates choice of Futenma 
relocation site does not necessarily require local government's 
consent 
 
MAINICHI (Page 1) (Full) 
Evening, January 26, 2010 
 
Ai Yokota 
 
At a news conference on the morning of Jan. 26, Chief Cabinet 
Secretary Hirofumi Hirano discussed the need for the consent of the 
local government in selecting the relocation site for the U.S. 
forces' Futenma Air Station (in Ginowan City, Okinawa). He said: 
"While this is an issue on which we need to seek the local 
government's understanding, I wonder if the issue should be kept 
from moving forward if consent cannot be obtained." He thus 
indicated that it cannot be helped even if the consent of the local 
government cannot be obtained by late May, the deadline set by the 
government for a solution to the issue. 
 
Hirano said that the national government has to exercise leadership 
in deciding "this issue affecting Japan's security." He added: "I do 
think that we need to seek (the local communities') understanding, 
but seeking their understanding is only an ideal. Is this an issue 
 
TOKYO 00000165  003 OF 012 
 
 
that requires the consent of every citizen?" 
 
Regarding the local communities' strong reaction to his statement 
that "there is no reason why the result of the Nago mayoral election 
should be taken into consideration," Hirano said: "I have no 
intention to deny that (the election result) is a manifestation of 
popular will. However, this does not determine whether (the current 
relocation plan) should be eliminated as an option or not," thus 
reiterating his stance that the existing plan to relocate the 
Futenma base to the coastal area of Camp Schwab (in Henoko, Nago 
City) is not being ruled out. 
 
(3) PM Hatoyama driven into corner over the Futenma relocation 
issue 
 
NIKKEI (Page 3) (Full) 
January 26, 2010 
 
The issue of the relocation of the U.S. forces' Futenma Air Station 
(in Ginowan City, Okinawa) has been thrown into increasing 
confusion. The candidate opposed to Futenma's relocation won in the 
mayoral election in Nago City, Okinawa, on Jan. 24. While Prime 
Minister Yukio Hatoyama has pledged to reach a conclusion on this 
issue by May, it will be extremely difficult to select a relocation 
site in a short period of time. A solution is not in sight. We 
looked into the possible scenarios. 
 
Forcing through the existing relocation plan -- SDP, local 
communities will protest 
 
Hatoyama told reporters on the evening of Jan. 25: "I would like you 
to understand that every proposal is included (as an option)," 
indicating that the plan to relocate the Futenma base to the coastal 
area of Camp Schwab, as agreed upon by Japan and the U.S., will also 
be considered as an option. Earlier, he stated at the Ministerial 
Committee on Basic Policies that "if we come up with a proposal that 
Japan and the U.S. cannot agree on, we will be a laughing stock." 
 
Foreign Minister Katsuya Okada also indicated on a TBS TV program 
that the current relocation plan is not being ruled out, saying: "In 
the end, the national government is responsible for making the 
decision." 
 
If the government decides on the current plan despite the result of 
the mayoral election, it is possible that construction work cannot 
take place. Reclamation of the sea requires the permission of 
Governor Hirokazu Nakaima. If the governor pushes for the current 
plan, there is a strong possibility that the Prefectural Assembly, 
where the advocates of Futenma's relocation out of Okinawa control a 
majority of seats, may pass a motion of no confidence against him. 
 
The government's selection of the current plan would also energize 
the Social Democratic Party (SDP), which advocates relocation out of 
Okinawa. The SDP is poised to leave the ruling coalition if Hatoyama 
insists on the current plan. There is a growing opinion in the 
government that "it is pointless to grow a tree that will not bear 
fruit" (Defense Minister Toshimi Kitazawa's words), which means that 
a decision to adopt the current plan is virtually impossible. 
 
Relocation of exercises only - no relocation site can be found 
 
A proposal has come up in the government to retain the Futenma base, 
 
TOKYO 00000165  004 OF 012 
 
 
but transfer some exercises to other U.S. military bases or 
Self-Defense Forces facilities. Within Okinawa, the islands of 
Shimojishima and Iejima have been cited as possible sites, and 
outside of Okinawa, the Maritime Self-Defense Force's Omura base (in 
Nagasaki Prefecture) and the U.S. forces' Camp Fuji (in Shizuoka 
Prefecture) have been mentioned. However, the citizens of Ginowan 
City will not be satisfied with mere relocation of exercises, so the 
protest movement will heat up again. 
 
On the other hand, municipalities in Okinawa being cited as possible 
relocation sites have reacted strongly. Their local assemblies have 
adopted resolutions opposing relocation. Mayor Takashi Matsumoto of 
Omura City in Nagasaki at a news conference on Jan. 18 also stressed 
that he will "absolutely refuse to accept" the exercises. The mayors 
of Gotenba City, Susono City, and the town of Oyama in Shizuoka 
Prefecture, the site of Camp Fuji, also voiced opposition at a news 
conference in Gotenba on Jan. 12. 
 
Even the relocation of exercises alone will be very difficult, and 
the reality is that no local government is willing to accept the 
full relocation of the Futenma base along with its large number of 
U.S. Marines. 
 
Further delay - rift between Japan and the U.S. to worsen 
 
In the end, it is possible that the government may be unable to 
decide on Futenma's relocation site by May and may put off a 
conclusion once again. Since the Prime Minister keeps saying a 
solution will be reached by May, if he is unable to fulfill his 
commitment to the U.S., the Japan-U.S. relationship will deteriorate 
further. This situation may also lead to the Futenma base's 
remaining permanently. Strong criticism can be expected from 
Okinawa, which is demanding the early return of Futenma, and this is 
certain to impact the House of Councillors election in summer. 
 
Experts' views 
 
Implementation of current relocation plan nearly impossible 
 
Doshisha University Professor Koji Murata 
 
The result of the Nago mayoral election has tipped the delicate 
balance in the Nago City Assembly, so a resolution opposing 
Futenma's relocation will probably be passed. Okinawa Governor 
Hirokazu Nakaima will not be able to approve the start of 
construction work. The Hatoyama administration may have actually 
included in its calculations the further deterioration in the 
Japan-U.S. relationship. 
 
Unless Prime Minister Yukio Hatoyama determines that dissolving the 
coalition with the SDP is inevitable after the FY2010 budget is 
passed in May, when he is supposed to make his final decision, it 
will be near impossible to go back to the existing relocation plan 
in the teeth of the SDP's opposition. One would think that the Prime 
Minister has a miracle plan up his sleeve, but he actually has 
nothing of the sort. It's the same situation as when he told U.S. 
President Barack Obama "trust me." 
 
Observe the U.S. response 
 
Tetsuo Maeda, visiting professor at Okinawa University 
 
 
TOKYO 00000165  005 OF 012 
 
 
I think the U.S. government takes the outcome of the Nago mayoral 
election very seriously and is making its analysis. Assistant 
Secretary of State Kurt Campbell and others who have been advocating 
the implementation of the current plan were the ones who drew it up. 
We have not heard the opinions of President Obama and other 
officials. The Japanese government needs to watch whether the U.S.'s 
stance toward Japan remains the same or whether it is going to 
change. 
 
Under Liberal Democratic Party administrations, the bilateral 
relationship consisted of the U.S. making one-sided demands and 
Japan accepting them. With the change of administration, a dialogue 
is finally about to begin. While the relationship seems to be 
strained because both sides are not familiar with how to conduct 
this dialogue, I think the U.S. is trying to understand Japan and 
put this dialogue onto the right track. 
 
(4) Futenma in turmoil; (Part 1): Okinawa distrustful of government 
due to its precautionary measures 
 
YOMIURI (Page 4) (Abridged) 
January 26, 2010 
 
"There must be something wrong with a politician who does not 
respect popular will," Susumu Inamine said at his office in Nago 
around noon yesterday. Inamine had won the mayoral election in Nago, 
Okinawa Prefecture, the previous day. 
 
The victory of Inamine, who opposes the existing plan to relocate 
the U.S. Marine Corps' Futenma Air Station to the Henoko district in 
Nago, has now made the rejection of the existing plan the popular 
will of the city. But Prime Minister Yukio Hatoyama and Chief 
Cabinet Secretary Hirofumi Hirano have expressed a plan not to 
exclude the existing plan from the options, saying, "There is no 
reason why we have to take the election results into account." 
 
Advocating a review of the existing plan under a Japan-U.S. 
agreement, Hatoyama has referred to the possibility of moving 
Futenma out of Okinawa or even out of Japan, stirring up the 
expectations of people in Okinawa, including the residents of Nago. 
Hatoyama has also repeatedly made remarks that could be interpreted 
as leaving the decision to the Nago mayoral election, saying, "I 
will take the sentiments of the residents of Nago into 
consideration." 
 
But the government and the ruling coalition have not yet been able 
to come up with a new relocation plan that is acceptable to the 
three parties concerned: the U.S. government, the ruling parties, 
and the affected municipalities. 
 
Hatoyama and Hirano's remarks yesterday have increased Okinawa's 
distrust in the government, with one member saying, "The government 
has taken precautionary measures to keep the existing plan alive." 
 
"If the government does not recognize that relocation to Henoko is 
100 percent impossible, the matter will only get more complicated," 
Yasuhiro Aragaki, secretary general of the DPJ Okinawa prefectural 
chapter, expressed deep resentment yesterday. "If the government 
presses us again to make a difficult decision, that will be totally 
unacceptable." 
 
Kadena Air Base straddling Kadena and other municipalities, 
 
TOKYO 00000165  006 OF 012 
 
 
Shimojishima Airport in Miyakojima City, Iejima Auxiliary Air Base 
in the village of Ie, and other places have been mentioned as 
possible candidate sites. Municipalities hosting those bases and 
airports are now on high alert. "Relocation within Okinawa is not 
possible," Miyakojima Mayor Toshihiko Shimoji complained. "It is 
wrong to begin discussing sites. There is a lack of discussion on 
fundamentals, such as what is deterrence." 
 
Gov. Hirokazu Nakaima is also in deep distress. After learning of 
the results of the Nago election on the night of Jan. 24, Nakaima 
vented his anger at the people around him, saying, "What is the 
government doing? Why is the government constantly being tossed 
about by the Futenma issue?" 
 
Concluding that the existing plan is the best way to alleviate the 
dangerous situation of Futenma Air Station, which is surrounded by 
densely populated areas, Nakaima used to move in step with Yoshikazu 
Shimabukuro, who lost in the Nago race. But now that Inamine has won 
the election, Nakaima is likely to come under heavy pressure to 
shift his policy. 
 
(5) Responsibility for confusion rests with Hatoyama 
 
YOMIURI (Page 2) (Full) 
January 26, 2010 
 
By Keiko Iizuka, deputy political editor 
 
Prime Minister Yukio Hatoyama put the existing plan Japan and the 
U.S. agreed on in 2006 to relocate the U.S. Marine Corps' Futenma 
Air Station to Nago City back to square one. Our understanding is 
that this decision stemmed from his stance of respecting the will of 
Okinawa's people and the aim of lightening the excessive burden of 
bases on their prefecture. But on Jan. 25, the day after the Nago 
mayoral election in Okinawa, Chief Cabinet Secretary Hirofumi Hirano 
made a statement at a press conference that can be taken as even 
ignoring this policy stance of the prime minister. 
 
In the recent Nago mayoral election, Susumu Inamine, who is opposed 
to the current plan, was elected. Hirano referred to this election 
result and said that the study committee on Okinawa base issues of 
the government and the ruling parties is "considering (the 
relocation site) from scratch." He also said: "There is no reason 
for the assertion that (the election result) should be taken into 
account. We do not think that (the current plan to relocate the 
Futenma airfield to the Henoko district in Nago) should be 
eliminated from the list of options." 
 
Hirano also emphasized: "The government should determine the 
relocation site," citing the reason that "if we always take into 
account local governments' intentions, we will always face the 
question of where to locate the alternative facility." He might 
think it possible to decide on the relocation site even without the 
agreement of the host community. However, doing so was impossible, 
so the Futenma issue has been left unresolved for as many as 14 
years and has eventually become politicized. 
 
In his first policy speech on Oct. 26 of last year after assuming 
office, Hatoyama made the following statement. 
 
"We will thoroughly examine existing Japan-U.S. agreements and other 
matters also from the viewpoint of national security. Further, while 
 
TOKYO 00000165  007 OF 012 
 
 
taking into account the burden on the people of Okinawa, as well as 
their agony and sorrow, we will seriously address the planned 
realignment of U.S. forces in Japan." 
 
To be sure, it would be a disgrace to depend on the outcome of a 
local mayoral election in determining the future course of the issue 
of U.S. forces in Japan, which affects the very basis of the 
nation's security policy. 
 
The Futenma relocation plan was about to be implemented, but 
Hatoyama decided to put the current plan back to square one. We 
understand that he was aware of the need to live up to his words in 
the policy speech. Hatoyama, however, indicated yesterday evening 
his willingness to keep the existing plan as an option, as Hirano 
did. 
 
If he is going to leave the existing plan as an option, why didn't 
Hatoyama make an all-out effort to implement it? Since he promised 
the U.S. and Okinawa to reach a conclusion by the end of May, it is 
necessary for him to obtain understanding from the local government 
to host the relocation facility and the ruling parties. The 
responsibility for the ongoing confusion rests with Hatoyama. He 
should devote himself to resolving the Futenma issue even at the 
risk of his political life. 
 
(6) Editorial: Government must expedite efforts to find relocation 
site for Futenma base outside Okinawa 
 
ASAHI (Page 3) (Full) 
January 25, 2010 
 
Susumu Inamine, a new candidate opposed the existing plan to 
relocate the U.S. Marine Corps' Futenma Air Station to the Henoko 
district in Nago City, won yesterday's Nago mayoral election. 
 
As the relocation issue is a matter of national security, the 
government should take full responsibility for its judgment on the 
issue. However, Prime Minister Yukio Hatoyama must take the result 
of the election seriously, because he has stated that he would 
respect not only the significance of the Japan-U.S. agreement but 
also the sentiments of the people of Okinawa. 
 
As Hatoyama has pledged at home and abroad that he will resolve the 
Futenma relocation issue by the end of May, he should now do 
everything within his power to find a new relocation site. 
 
With the aim of relocating Futenma to a location other than Henoko, 
the Hatoyama administration and ruling parties have continued 
looking into new relocation sites. At the same time, there is still 
a possibility that the government will go back to the existing plan 
to relocate Futenma to Henoko. However, Inamine's victory has made 
that option extremely difficult to choose. 
 
Okinawa Gov. Hirokazu Nakaima, who has expressed his position of 
accepting the existing relocation plan, will likely find himself in 
a difficult situation. Following the result of the mayoral election, 
there are also moves within the prefectural assembly to adopt a 
unanimous resolution, with the approval of members of the Liberal 
Democratic Party (LDP) and New Komeito, to call for relocating 
Futenma outside Okinawa. 
 
In the election, Nago residents were forced to make a tough 
 
TOKYO 00000165  008 OF 012 
 
 
decision. 
 
Incumbent Yoshikazu Shimabukuro, who accepts the existing plan, took 
a strategy of avoiding making the Futenma issue from becoming a 
campaign issue, while stressing his accomplishments in promoting the 
local economy during his four-year term. Meanwhile, Inamine 
underscored his opposition to the existing plan, saying, "I will not 
allow the construction of a new base in the bay of Henoko." 
 
Considering the risk of noise and accidents, Nago residents probably 
do not want to accept the existing plan. However, the high 
unemployment rate and economic slump there are extremely serious. As 
a result, some residents pin hopes on the construction of a base 
bringing new public works projects and economic promotion measures 
in return for accepting the existing plan. The residents were faced 
with this dilemma during the election. 
 
About 10 years have passed since Nago City was floated as a possible 
relocation site for the Futenma base. In the past three mayoral 
elections, candidates favoring the relocation plan won. This was the 
first time that voters opposed to the base outnumbered those willing 
to accept the base in exchange for local economic development 
measures. 
 
The inauguration of the government led by the Democratic Party of 
Japan (DPJ), which advocated the relocation of the Futenma base out 
of Okinawa or out of Japan, might have spurred a change in the 
voters' opinions. 
 
Consequently, Hatoyama, who has to give consideration to the 
people's will, is burdened with a heavy responsibility. 
 
The ruling parties will soon present their proposals for relocation 
sites other than Henoko at the working group of the government and 
ruling coalition. The names of a Self-Defense Forces (ADF) base in 
the Kyushu region and isolated islands of Okinawa Prefecture are 
being mentioned as relocation sites. The government should also 
consider dividing up the Futenma functions instead of insisting on 
keeping them all in one place. 
 
At any rate, the Hatoyama administration must convince the U.S. 
government after persuading local governments to accept the base. 
Considerable efforts will be required. The Hatoyama government must 
find a solution to the thorny problem of sharing the base-hosting 
burden being shouldered by the residents of Okinawa among all the 
Japanese people. 
 
(7) Editorial: Nago's decision is expression of opposition to 
Futenma relocation within Okinawa 
 
TOKYO SHIMBUN (Page 5) (Full) 
January 26, 2010 
 
Susumu Inamine, a candidate opposed to the relocation of the U.S. 
Marine Corps' Futenma Air Station to the Henoko area in his city, 
has won the Nago mayoral election. Prime Minister Yukio Hatoyama 
should not hesitate to give up on relocating the Futenma base within 
Okinawa Prefecture and should start seriously looking into moving it 
out of the prefecture or out of Japan. 
 
Hatoyama said that the result of the election "is an expression of 
the will of Nago residents." Since foreign policy and national 
 
TOKYO 00000165  009 OF 012 
 
 
security are fundamental national policies, the basic principle is 
that it is the responsibility of the government to make a decision 
and the decision should not be left up to a local election. 
 
However, if the government defiantly relocates Futenma to Henoko 
amid strong opposition by local residents, the stable use of the 
base will be difficult. As a result, the Japan-U.S. alliance will be 
weakened. 
 
Hatoyama has taken the stance of both placing importance on the 
Japan-U.S. agreement to move Futenma to Henoko and respecting the 
local people's will. It makes sense for him to take the election 
result seriously. 
 
Hatoyama has pledged at home and abroad to resolve the relocation 
issue by the end of May. The government committee studying the 
relocation issue will now expedite its efforts to search for a 
specific relocation site. 
 
Hatoyama should seriously look into moving the Futenma base out of 
Okinawa and out of Japan as he pledged during the campaign for last 
year's Lower House election, and come up with an alternative plan to 
replace the Henoko plan. 
 
During the election campaign, Inamine played up his opposition to 
the relocation to the city, while Yoshikazu Shimabukuro, the 
incumbent, who is in favor of hosting the base, stressed his 
achievements in developing the local economy during his four-year 
term. 
 
In the last three mayoral elections conducted after Henoko was 
floated as a possible relocation site for the Futenma base, 
candidates that approved of the relocation plan won. 
 
Nago residents were forced to make a tough decision in the election 
to choose between measures to stimulate the local economy and 
opposition to hosting the Futenma base. The result of the election 
is an expression of their rejection of the base. The election result 
was apparently spurred by the change of government realized by the 
Democratic Party of Japan (DPJ). 
 
At a press conference, Chief Cabinet Secretary Hirofumi Hirano, 
chair of the government committee, said, "The government will start 
from scratch in looking for the best site without excluding Henoko," 
indicating that the government will not exclude the existing plan. 
 
However, if the plan to relocate to Henoko is revived as a result of 
the review, the expectations of the Okinawan people, who have 
suffered from an excessive base-hosting burden imposed on them, will 
be betrayed. 
 
The return of the Futenma base, whose dangers have long been pointed 
out, is a thorny issue that has not been resolved even though Japan 
and the United States agreed on it in 1996. 
 
If the Futenma base is moved to somewhere in Japan other than 
Okinawa, the government will have to not only persuade residents at 
the relocation site to accept the base but also win the 
understanding of the U.S., which maintains that relocation to Henoko 
is the best option. Failure to do so might result in the worst-case 
scenario of the Futenma base remaining in its current location. 
 
 
TOKYO 00000165  010 OF 012 
 
 
Since Hatoyama is the one who chose to take difficult path, it is 
his own responsibility to clear the way along that path. 
 
(8) Japan's future course -- 50th anniversary of revision of 
Japan-U.S. Security Treaty (Party 2-5, conclusion): Discussion on 
nuclear policy now necessary 
 
YOMIURI (Page 2) (Full) 
January 21, 2010 
 
Foreign Minister Katsuya Okada told U.S. Secretary of State Hillary 
Clinton during their meeting in Hawaii on Jan. 12: "I will keep in 
close contact with you so as not to produce a negative impact on the 
Japan-U.S. alliance." Okada sought understanding from Clinton for 
the ongoing investigation by the Foreign Ministry's expert panel 
into the issue of alleged secret pacts between Japan and the U.S., 
including accords allowing the U.S. to bring nuclear weapons into 
the country. But Secretary Clinton just nodded her head. 
 
On the day when he assumed his post last September, Okada said that 
the issue of secret accords has heightened public distrust in and 
weakened Japan's foreign policy." He then instructed the Foreign 
Ministry to launch a thorough investigation into the matter. A 
number of related documents have already been found, including 
documents regarding a pact allowing the U.S. military to bring 
nuclear weapons into Japan that was concluded in 1960, when the 
Japan-U.S. Security Treaty was revised; and another pact concluded 
in the same year on combat action by the U.S. military in times of 
emergency on the Korean Peninsula. The expert panel intends to 
produce a report by the end of February. 
 
Okada had not anticipated that Japan's investigation would a major 
impact on Japan-U.S. relations, focusing on the fact that "most of 
the documents have already been disclosed in the U.S," as he said. 
But U.S. officials have begun to claim that the issue might not be 
dismissed as a past event and that the current U.S. nuclear policy 
could be adversely affected as a result. Defense Secretary Robert 
Gates took up this issue when he visited Japan last October and 
said: "I want Japan to be careful in handling the issue so as not to 
produce an adverse effect on Japan-U.S. bilateral relations." 
 
To keep the U.S.'s nuclear umbrella effective while giving 
consideration to the strong aversion to nuclear weapons among 
Japanese people in the Cold-War era, the then Japanese government 
decided to conclude the secret accords as a last resort. 
 
In the Foreign Ministry's investigation, a note written by Fumihiko 
Togo, who was involved in Japan-U.S. relations after the end of the 
war as ambassador to the U.S., was found. The note said, "I had no 
perception of having concluded secret agreements." A former senior 
Foreign Ministry official took the following view: "I guess the two 
countries concluded the accords based on a tacit understanding and 
without exchanging notes as a result of taking the circumstances at 
the time into consideration." 
 
Fifty years after the revised Japan-U.S. Security Treaty was signed, 
the "vagueness" of the treaty is being spotlighted. The question is: 
what effect will revealing the truth of the secret accord issue have 
on the security strategies of the Japan-U.S. alliance today? 
 
Are the secret accords to allow the U.S. to bring nuclear weapons 
into Japan still valid? What about their compatibility with the 
 
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Japanese government's three nonnuclear principles (not to make or 
possess nuclear weapons and not to allow their entry into Japan)? Is 
there any effect on the deterrence of the U.S.'s nuclear umbrella, 
which is the most certain evidence that the U.S. has been involved 
in Japan's defense? In light of national security, a cautious and 
tough strategy is needed for the nation's nuclear policy. But the 
Hatoyama administration apparently has not properly addressed this 
issue and made preparations for discussing the issue. 
 
Last July, the Aso government and the Obama government agreed to set 
up a regular discussion forum for Japan to receive detailed 
explanations on how the U.S. nuclear umbrella will be operated in a 
contingency and for both sides to exchange views. 
 
On the 50th anniversary of the signing of the revised Japan-U.S. 
Security Treaty on Jan. 19, U.S. President Barack Obama declared: 
"The U.S.'s commitment to Japan's national security is unshakable." 
How is the Hatoyama administration going to deal with the weight of 
the bilateral alliance on the occasion of the 50th anniversary of 
the Japan-U.S. security treaty? 
 
(9) Shockwave of President Obama's financial regulation: Japanese 
banks may have to change their comprehensive business policy line 
 
NIKKEI (Page 7) (Page 7) 
January 26, 2010 
 
Details cannot be worked out 
 
U.S. President Obama on Jan. 21 announced a financial regulation 
plan, including a ban on commercial banks from making investment in 
investment funds. The Tokyo head office of Mizuho Corporate Bank 
immediately ordered its U.S. office to collect information on the 
plan. 
 
Mizuho Corporate Bank in Dec. 2006 obtained the qualification for 
operating as a financial holding company in the U.S. -- a first for 
a Japanese financial institution. Since it had promptly set up a 
system of moving ahead with investment bank business, it is becoming 
concerned about the new regulation. The person in charge at the U.S. 
office could only obtain a copy of a press release with a scant 
several lines explaining the specifics of the regulation. The 
executive complained: "There are so many unknown matters. I cannot 
work out the details." 
 
Only a few take the position that the new U.S. regulation will 
immediately have a major impact on Japan's megabanks, which have a 
high ratio of interest income. A trend for Japanese banks to 
undertake comprehensive financial operations involving both the 
banking and securities functions appeared 10 years after the U.S. 
abolished the Glass-Steagall Act in 1999. Japanese banks are now in 
a situation where they find it imperative to revise their future 
business vision. 
 
The impact of the U.S.'s strengthening its financial regulations was 
also felt by the securities industry. President Obama on the 14 
announced a special tax targeting leading financial institutions 
ahead of the adoption of a new rule regulating banks. The U.S. is 
the only country where Nomura Holdings did not take over the 
business of Lehman Brothers. When it was about to expand business on 
its own, a taxation issued surfaced. 
 
 
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The special tax targets securities houses with assets worth over 50 
billion dollars. At the moment, Nomura Holdings' assets are on the 
verge of exceeding that figure. If the company expands trading in 
U.S. stocks and securities, its assets are bound to top 50 billion 
dollars. One of its executives, puzzled by the U.S. regulation, 
said: "Will the U.S. government really impose a tax that will hamper 
the stable consumption of its bonds?" 
 
Japanese banks in advantageous position? 
 
However, some are taking the strengthened U.S. financial regulation 
as a good opportunity for Japan. A senior Financial Services Agency 
official compared the new regulation plan to a unilateral 
declaration by the U.S. to abolish its nuclear arms. 
 
U.S. banks have been enjoying high yieldability on the strength of 
know-how in derivatives and securitization. On the other hand, 
Japanese banks are earning much lower profits from margins on low 
interest rates on loans. The new regulation is in a way aimed at 
shifting U.S. banks' business style to the low-risk-low-return model 
adopted by Japanese banks. There is an observation that Japanese 
banks' relative position on the international financial market will 
surge. 
 
There is a possibility of European and U.S. financial institutions 
shifting their operation bases to Japan, where regulations are 
relatively moderate, shying away from the U.S. or Britain, where the 
financial crisis started and which are toughening financial 
regulations. This could be viewed as an opportunity for the Tokyo 
market to resurface as a financial center in Asia. However, there 
are no indications of the government and the ruling parties 
deepening discussion on this matter. 
 
ROOS