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UNCLAS SECTION 01 OF 09 TOKYO 000079 
 
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 01/14/10 
 
INDEX: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Okada-Clinton summit: 
4) Differences on Futenma, China  (Yomiuri) 
5) No clear path to Futenma resolution  (Nikkei) 
6) Clinton criticizes Japan's subsidy system for eco car  (Sankei) 
7) Summary of Japan-U.S foreign ministers' meeting and press 
conference  (Yomiuri) 
 
Foreign relations: 
8) Communist Party leader Shii hopes for friendship with U.S. 
(Yomiuri) 
 
Defense & security: 
9) Indian Ocean refueling mission ends tomorrow  (Yomiuri) 
 
Economy: 
10) Bankruptcies reach record high since 2001  (Yomiuri) 
11) Preparatory meeting for trilateral FTA scheduled for 26th 
(Nikkei) 
12) Inamori agrees to head JAL  (Nikkei) 
 
Politics: 
13) Prosecutors search Ozawa fund organization office  (Yomiuri) 
14) PNP proposes two plans for postal business management  (Yomiuri) 
 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: Yomiuri: Nikkei: Sankei: Tokyo Shimbun 
Prosecutors search Democratic Party of Japan Secretary General 
Ozawa's office and other locations to determine flow of money for 
land purchase by his fund management organization 
 
Akahata: 
Search together with the people for a new politics: 25th Congress of 
Japan Communist Party starts amid tumultuous political situation 
 
2) EDITORIALS 
 
Asahi: 
(1) Japan-U.S. alliance talks: Hold discussions to strengthen 
foundation 
(2) Gender identity disorder: Justice Minister Chiba makes 
reasonable decision 
 
Mainichi: 
(1) Japan-U.S. foreign ministerial talks: Settling Futenma 
relocation issue is now public pledge 
(2) Turning political leadership into legislation: Promptly make up 
for the delay 
 
Yomiuri: 
(1) Public prosecutors launch investigation into Ozawa's office: 
Speed up efforts to get to the bottom of the land deal involving 
him 
 
TOKYO 00000079  002 OF 009 
 
 
(2) Japan-U.S. foreign ministerial: Futenma issue must first be 
settled to deepen alliance 
 
Nikkei: 
(1) When will Mr. Ozawa give an explanation of the land deal? 
(2) At a minimum Japanese, U.S. foreign ministers sought to 
stabilize relationship 
 
Sankei: 
(1) Investigation into Rikuzan-kai, DPJ Secretary General Ozawa's 
fund management body: Ozawa's political responsibility is clear; we 
want a thorough investigation into dubious land transaction 
 
Tokyo Shimbun: 
(1) Japan-U.S. alliance talks: Aim at deepening alliance beyond 
military front 
(2) Investors increasingly abandoning JAL: Speed up efforts to 
eradicate anxieties felt at home and abroad 
 
Akahata: 
(1) Land purchase fund scandal: Ozawa owes the people an 
explanation 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, January 13 
 
NIKKEI (Page 2) (Full) 
January 14, 2010 
 
10:01 Received a salute from an honor guard at the Defense Ministry. 
Met with Defense Minister Kitazawa and others. Attended a meeting of 
the association of senior SDF members. 
11:08 Met Deputy Chief Cabinet Secretary Matsuno at the Prime 
Minister's Official Residence. 
14:00 Met participants in the "World Youth Ship" project and others. 
Later met incoming and outgoing superintendent general of the 
Metropolitan Police Department Ikeda and Yonemura. 
15:02 Met National Strategy Minister Sengoku and Cabinet Office 
Senior Vice Minister Furukawa. Joined by Deputy Chief Cabinet 
Secretary Matsui. 
16:14 Met Transport Minister Maehara. Followed by Finance Minister 
Kan. Joined by Kyocera Honorary Chairman Kazuo Inamori and Maehara; 
Chief Cabinet Secretary Hirano also present. Kan and Maehara stayed 
behind. 
18:35 Attended a gathering of the association of senior SDF 
officials. 
19:31 Arrived at his official residential quarters. 
 
4) Okada, Clinton remain far apart over Futenma and China; future of 
talks to deepen bilateral alliance remains unclear 
 
YOMIURI (Page 2) (Full) 
January 14, 2010 
 
Satoshi Ogawa, Chikara Shima, Honolulu 
 
At a foreign ministerial meeting held on Jan. 12 (Jan. 13, Japan 
time), the governments of Japan and the United States agreed to 
begin talks on deepening the bilateral alliance on the occasion of 
the 50th anniversary of the revision of the Japan-U.S. Security 
Treaty. Nevertheless, the gap in perceptions of China's economic 
 
TOKYO 00000079  003 OF 009 
 
 
growth and military buildup, in addition to the rift over the issue 
of relocating the U.S. Marine Corps' Futenma Air Station in Okinawa, 
is often mentioned. The future course of the envisaged talks remains 
to be seen. 
 
"Unless Japan and the United States share common perceptions, we 
will not be able to come up with what must be done next," Foreign 
Minister Katsuya Okada said about the security situation in China at 
a press conference after the meeting on Jan. 12. 
 
Security officials in Japan and the United States share the view 
that the threat of China is growing stronger in East Asia. The 
United States is concerned about that common perception even though 
it was rarely concerned about it during the period when the Liberal 
Democratic Party was in power. This concern comes from the Hatoyama 
administration's tilt toward China. Last December when Japan-U.S. 
relations were tense, some 140 Democratic Party of Japan lawmakers 
visited China. 
 
In the talks on deepening the bilateral alliance, Japan and the 
United States are likely to focus on sharing the same perceptions of 
the situation on a political level. 
 
The Hatoyama administration is expected to propose a review of the 
Japan-U.S. Status of Forces Agreement and other matters, but chances 
appear slim for Washington to respond positively unless the Futenma 
is settled. The two countries might end up working toward different 
objectives. 
 
The Obama administration is also struggling with how to deal with 
Japan. At the meeting, Secretary of State Hillary Clinton strongly 
urged Okada to settle the Futenma issue at an early date by 
implementing the existing relocation plan. In a press conference 
that followed the meeting, an American journalist indicated that the 
U.S. side might have failed to obtain a promise from Japan to abide 
by the bilateral agreement on Futenma. In response, the Secretary 
simply said: "We are aware of the problems (the Hatoyama 
administration) is facing." 
 
The fact that the meeting took place in Hawaii, not in Washington, 
seems to show Washington's puzzlement as well. "The American media 
are becoming increasingly interested in deteriorating U.S.-Japan 
relations," a U.S. government source explained. "We chose Hawaii 
because it is far away from Washington where the media outlets are 
concentrated." 
 
5) Prospects for Futenma issue remain unclear after Okada-Clinton 
talks; conflict avoided by agreeing to start talks on deepening 
alliance 
 
NIKKEI (Page 2) (Full) 
January 14, 2010 
 
Nahoko Yamauchi in Honolulu 
 
The Japan-U.S. foreign ministerial talks held on the morning of Jan. 
12 (before dawn on Jan. 13, Japan time) made no progress on the 
issue of the relocation of the Futenma Air Station in Okinawa. On 
the other hand, the two sides agreed on starting talks on deepening 
the alliance on the occasion of the 50th anniversary of the revision 
of the Japan-U.S. security treaty. The alliance talks are meant to 
be a "clamp" (to hold the alliance together) in order to avoid 
 
TOKYO 00000079  004 OF 009 
 
 
conflict, but the scenario for the Japanese side's reaching a 
solution to the Futenma issue by May remains unclear. 
 
Secretary Hillary Clinton pressed again for Futenma's relocation to 
the coastal area of Camp Schwab at her talks with Foreign Minister 
Katsuya Okada, saying: "The conclusion reached in the current U.S. 
Forces Japan (USFJ) realignment road map is the result of a long 
process." While the Obama administration had agreed to holding the 
foreign ministerial meeting, its position remains unchanged. 
 
Various relocation proposals have come up on the Japanese side in 
the past but they were rejected. They included a plan to integrate 
the Futenma base with the Kadena Air Base and relocation to Ie 
Island. A U.S. government source asserted that "the reexamination of 
these proposals would not take more than two weeks," indicating that 
the U.S. side will continue to demand an early solution before May. 
 
The White House is also concerned about criticism of Japan in 
Congress. The chairpersons of the House of Representatives Foreign 
Affairs and Armed Services Committees sent a letter to Prime 
Minister Yukio Hatoyama in early January, asking for the early 
implementation of the USFJ realignment plans. In case of a setback 
in the relocation of 8,000 U.S. Marines in Okinawa to Guam, this 
will also affect base construction work in Guam. 
 
A gap also exists on the talks to deepen the alliance. The U.S. side 
has its eyes on the volatile U.S.-China relationship, including such 
issues as arms sales to Taiwan. On her way to Hawaii, Clinton talked 
about the importance of China to reporters on the plane, saying: "We 
hope for a mature U.S.-China relationship that does not become 
derailed even when there are differences." Without China, the top 
buyer of U.S. government bonds, America cannot rehabilitate its 
economy. 
 
However, adopting too weak a stance will tip the balance in 
relations with China, which is expanding militarily. The Obama 
administration looks to Japan and Australia to serve as a restraint 
on China. It appears that the advice of Harvard University's 
Professor Joseph Nye that "ignoring Japan is undesirable 
strategically" led to the policy shift this time. 
 
The U.S.'s goal in the alliance talks is to expand the scope of the 
Japan-U.S. security treaty to the whole world, in order to contain 
international terrorism, while the Hatoyama administration's image 
of the alliance is unclear. In the end, there can be no progress in 
the alliance talks without building a relationship of trust in the 
Futenma relocation issue. 
 
Timetable of forthcoming events relating to Japan-U.S. relations 
 
Jan. 19 Joint statement on 50th anniversary of security treaty 
revision 
Jan. 24 Nago mayoral election 
January Three ruling coalition parties to submit new proposals on 
Futenma relocation site 
May Decision on new relocation plan 
First half of 2010 Meeting of Japanese, U.S. cabinet ministers in 
charge of foreign affairs, defense (two-plus-two) 
July House of Councillors election 
November Okinawa gubernatorial election 
 President Obama visits Japan for APEC Summit 
 
 
TOKYO 00000079  005 OF 009 
 
 
6) Secretary of State Clinton: Japan's eco-car promotion program 
"exclusive" 
 
SANKEI (Page 1) (Excerpts) 
January 14, 2010 
 
Hiroyuki Kano, Honolulu 
 
During her talks with Foreign Minister Katsuya Okada on the morning 
of Jan. 12 (early morning of Jan. 13, Japan time), U.S. Secretary of 
State Hillary Rodham Clinton stated on the Japanese government's 
program of offering tax breaks on purchase of eco-friendly cars: 
"There is growing concern in U.S. Congress that the program is 
exclusive," expressing the U.S. side's displeasure that the program 
excludes American automobiles. She called on Okada to give 
consideration to the dissatisfaction with the program in the United 
States. The two top Japanese and U.S. diplomats agreed to maintain 
close contact in the future. Last December U.S. Trade Representative 
(USTR) made a request to the Ministry of Economy, Trade, and 
Industry (METI) that the system be changed. In addition, U.S. 
Congressman Betty Sutton (Democrat) submitted a resolution to 
Congress on Jan. 6 saying Japan's eco-car program is unfair to 
American automobile manufacturers. 
 
Japan-U.S. economic relations might become strained, auto companies 
concerned about possible foreign pressure 
 
Kosei Watanabe, Hirohiko Yamaguchi, Detroit 
 
Secretary Clinton expressed concern about Japan's eco-car program, 
saying "It is exclusive." This fact implies the possibility that the 
strain in the bilateral alliance caused by Tokyo's handling of the 
relocation of U.S. Marine Corps Air Station Futenma is gradually 
spreading to the trade area. While building momentum, U.S. Congress 
is certain to demand that Japan change the program. As a result, the 
Japanese government will likely be forced to respond in some way. 
However, if the program is applied to import cars, it will have an 
impact on the sales of Japanese auto makers, which are beginning to 
recover by taking advantage of the eco-car promotion program. 
 
A Japanese auto-manufacturing industry official commented on the 
U.S. side's concern: "The system was not made to discriminate on the 
basis of auto companies' nationalities." However, it is certain that 
the eco-car promotion program has become a driving force for the new 
car sales of Japanese automakers. 
 
The sales of new Japanese cars for 2009 dropped 10 percent, compared 
with those of 2008, gradually recovering the reduction percentage. 
However, the sales of import cars declined 20 percent. The eco-car 
program does not apply to most import cars. Import car companies 
pointed out that the program is puts foreign automakers at a 
disadvantage, because they give priority to high-speed operation 
whereas Japan's fuel gasoline consumption standards attach 
importance to low-speed operation. 
 
Some have contended that it is difficult to compare between the 
sales of Japanese cars and American cars, because most of the 
Japanese cars sold in the United States are produced in the U.S. and 
the number of those cars that are exported is small.  However, 
Clinton's remarks were apparently aimed at using the eco-car program 
to exert "foreign pressure or gaiatsu" on the Hatoyama 
administration, or as a sort of tool for "Japan-bashing" (diplomatic 
 
TOKYO 00000079  006 OF 009 
 
 
source). 
 
However, if the eco-car program is applied to import cars due to 
"foreign pressure," it will have a negative impact on the rising 
tide of Japanese companies, which have been revising their 
performance upward. 
 
7) Gist of Okada-Clinton talks and their joint news conference 
 
YOMIURI (Page 4) (Full) 
January 14, 2010 
 
Following is the gist of the Japan-U.S. foreign ministerial talks 
and the joint news conference held after the meeting: 
 
Foreign ministerial talks 
 
Japan-U.S. alliance 
 
Okada: This year marks the 50th anniversary of the revision of the 
Japan-U.S. security treaty. We will cooperate to further deepen the 
Japan-U.S. alliance in a manner appropriate for the 21st century. 
 
(The two sides agreed to issue a joint statement by the Japanese and 
U.S. cabinet ministers in charge of foreign affairs and defense on 
Jan. 19, the 50th anniversary, and to hold a meeting of the 
Japan-U.S. Security Consultative Committee in the first half of this 
year.) 
 
Okada: I would like to suggest the issuing of a new document to 
replace the 1996 Japan-U.S. Joint Declaration on Security, in which 
the leaders of the two countries redefined the security alliance. 
 
Futenma relocation 
 
Okada: The ruling coalition parties have begun the examination 
process. Both Prime Minister Hatoyama and I are saying that we will 
reach a conclusion by May. 
 
Clinton: The conclusion reached (in the current relocation plan) is 
the result of a very long process. It is the best option. 
 
Investigation of secret agreements 
 
Okada: (The investigation) must not have an adverse effect on the 
operation of the Japan-U.S. security arrangements. We will keep in 
close contact. 
 
North Korea 
 
Clinton: It is important to push for the resumption of the Six-Party 
Talks. 
 
Okada: North Korea is saying that negotiations on a peace treaty 
should take place. We are concerned that this may just be a delaying 
tactic. 
 
Joint news conference 
 
Futenma relocation 
 
Clinton: We hope that (Japan) will keep its promises (on U.S. Forces 
 
TOKYO 00000079  007 OF 009 
 
 
Japan realignment,) including Futenma relocation. We respect the 
procedures the Japanese government is undertaking to reach a 
solution, but our position remains unchanged. 
 
Okada: We will come up with a proper conclusion by May and minimize 
the impact on the Japan-U.S. alliance. It is not true that other 
discussions cannot take place just because there is the Futenma 
issue. 
 
Talks to deepen the alliance 
 
Okada: We will start talks to ensure that Japan and the U.S. share a 
common understanding of the security environment in Asia and the 
Pacific. One issue is how to view China. 
 
8) Shii: JCP hopes for friendship with U.S. 
 
YOMIURI (Page 4) (Abridged) 
January 14, 2010 
 
The Japanese Communist Party kicked off its 25th congress yesterday 
in Atami, Shizuoka Prefecture. JCP Presidium Chairman Shii, in his 
Central Committee report, referred to relations with the United 
States and expressed his hope for a better relationship with the 
United States. "We hope for a genuine friendship with the United 
States," Shii said. It is unusual for the JCP leader to show a 
positive stance of trying to move the party's relations with the 
United States forward. The JCP has changed its usual out-and-out 
stance of criticizing the United States since U.S. President Obama, 
who has advocated eliminating nuclear weapons, was sworn in. The JCP 
is aiming to give shape to its policy switchover to a "realistic, 
flexible policy line." Given this, Shii apparently intends to 
realize this changeover. 
 
In his keynote speech at the party congress, Shii gave high marks to 
Obama's advocacy of nuclear elimination in his Prague speech 
delivered in April last year. "It's a welcome, forward-looking 
change," Shii said. 
 
On the other hand, Shii also emphasized the necessity of revising 
the Japan-U.S. Status of Forces Agreement and ensuring the safety of 
U.S. military bases in Japan in order for the JCP to build a 
friendship with the United States. "The U.S. government does not 
appear to be changing its hegemonic control of Japan," Shii said, 
adding: "This is a far cry from what the president calls an 'equal 
partner,' and the fact is that Japan remains subservient (to the 
U.S.)." 
 
9) MSDF mission in Indian Ocean to end tomorrow 
 
YOMIURI (Page 2) (Full) 
January 14, 2010 
 
The Maritime Self-Defense Force is currently operating in the Indian 
Ocean, where its ships have been engaged in refueling activities 
under a newly enacted law for special antiterror measures. This 
special measures law, however, will expire tomorrow. The MSDF will 
wind up its refueling mission in the Indian Ocean and recall its 
vessels there. 
 
In the wake of the simultaneous terror attacks against the United 
States in September 2001, Japan began in the Indian Ocean refueling 
 
TOKYO 00000079  008 OF 009 
 
 
activities in support of foreign naval vessels engaged in antiterror 
operations. The MSDF refueling mission, though once temporarily 
suspended, has continued for about eight years 
 
10) Bankruptcies reach highest number ever recorded since 2001: 
Cases ascribable to recession top 80 percent in 2009 
 
YOMIURI (Page 4) (Full) 
January 14, 2010 
 
Teikoku Databank, a private research company, on Jan. 13 reported 
that the number of corporate bankruptcies (with liabilities worth 
over 10 million yen) in 2009 reached 13,306, up 4.9 percent from the 
previous year, marking the third consecutive increase. This figure 
is the largest since 2001, when comparable data became available. 
Total debt came to 6.8101 trillion yen, down 42.8 percent from the 
preceding year. 
 
Large-scale bankruptcies, which occurred in succession right after 
the financial crisis in the fall of 2008, decreased last year, while 
small-size bankruptcies increased. Recession-type bankruptcies 
marked the highest-ever level, commanding 81.4 percent of all 
bankruptcies. Breaking down the bankruptcies according to business 
types, those in the manufacturing sector jumped to 2,084, up 21.9 
percent from the previous year. 
 
Meanwhile, the number of bankruptcies in 2009 as reported by Tokyo 
Shoko Research on the 13th stood at 15,480, down 1.06 percent from 
the previous year, falling below the preceding year's level for the 
first time in four years. The figure is the 19th highest since 1952, 
when the company started tallying the number of bankruptcies. 
Teikoku Databank counts cases that underwent legal liquidation, 
while Tokyo Shoko Research counts cases including discretionary 
liquidation, such as suspension of bank transactions. 
 
11) FTA preparatory meeting on the 26th 
 
NIKKEI (Page 5) (Full) 
January 14, 2010 
 
The Ministry of Foreign Affairs and Trade of South Korea on Jan. 13 
revealed that it will hold a bureau-director-general-level 
preparatory meeting of Japan, China and South Korea in Seoul on the 
26th to pave the way for a free trade agreement among the three 
countries. The three countries had earlier agreed at such settings 
as summit talks in October last year, etc. that their governments 
take part in FTA studies promoted at the private sector-level and 
get down to preparations in the first half of this year. 
 
12) Kyocera Chairman Inamori to become new JAL CEO 
 
NIKKEI (Page 1) (Excerpt) 
January 14, 2010 
 
It was decided yesterday that Kyocera Corp. Honorary Chairman Kazuo 
Inamori will head struggling Japan Airlines Corp. as chief executive 
officer (CEO). He accepted the offer presented by the Enterprise 
Turnaround Initiative Corporation of Japan and the government. He 
will work for three or four days a week because of his advanced age 
and receive no pay. Although he has never worked in the transport 
industry, the turnaround body and the government pin hopes on the 
business skills of Inamori, focusing on the fact that he built 
 
TOKYO 00000079  009 OF 009 
 
 
Kyocera Corp. into a world-class company. 
 
13) Prosecutors search Ozawa-linked organizations 
 
YOMIURI (Top play) (Excerpt) 
January 14, 2010 
 
The Tokyo District Public Prosecutors Office's special investigation 
team searched yesterday afternoon several offices in connection with 
a case in which Rikuzan-kai, the political fund management 
organization of Democratic Party of Japan (DPJ) Secretary General 
Ichiro Ozawa, failed to enter in its political funding report the 
money paid for the purchase of land in 2004. The places searched 
included the office of DPJ House of Representatives member Tomohiro 
Ishikawa, 36, who handled clerical work at Rikuzan-kai, the Diet 
members office building (in Chiyoda Ward, Tokyo), and the 
headquarters of the major general contractor Kajima (in Minato Ward, 
Tokyo). The prosecutors deemed it necessary to search the offices 
for evidence after Ozawa failed to adequately respond to a request 
by the investigation unit to submit to voluntary questioning over 
the case to find out how the money, 400 million yen, was raised for 
the purchase of the land. 
 
14) PNP presents two ideas about management structure of postal 
group 
 
YOMIURI (Page 4) (Excerpts) 
January 14, 2010 
 
The People's New Party (PNP) yesterday revealed its plan for 
reforming the Japan Post Group, including its management structure, 
prior to the start of work to draft a postal reform basic bill 
(tentative name) the government plans to submit to the upcoming 
ordinary Diet session. The PNP plan includes two ideas about the 
structure of the business management of the group: One is a 
one-company system that would integrate Japan Post Service Co., 
Japan Post Network Co., Japan Post Bank Co., Japan Post Insurance 
Co., and their holding company, Japan Post Holdings Co. Another is a 
three-company system in which Japan Post Bank and Japan Post 
Insurance would be placed under a holding company to be formed by 
integrating Japan Post Holdings, Japan Post Service, and Japan Post 
Network. 
 
In either case, the government intends to hold more than two thirds 
of the shares in the integrated companies and the holding company in 
order to place their management under its control. It also plans to 
sell the remaining shares to local governments on a priority basis. 
 
ZUMWALT