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RUEHUL/AMEMBASSY SEOUL 9928
RUCNDT/USMISSION USUN NEW YORK 9269

UNCLAS SECTION 01 OF 06 TOKYO 000381 
 
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 02/25/10 
 
INDEX: 
 
(1) Japan-U.S. talks set to start today; reduction in "sympathy 
budget" to take center stage; a salary review certain to throw talks 
into confusion (Asahi) 
 
(2) Membership of panel on National Defense Program Guidelines 
reflects Hatoyama administration's purge of LDP color, focus on Asia 
(Asahi) 
 
(3) Full text of statement adopted by Okinawa Prefectural Assembly 
on Futenma relocation (Ryukyu Shimpo) 
 
(4) Postal services likely to be bloated: (Part 1) Offering uniform 
services nationwide and cost sharing (Nikkei) 
 
ARTICLES: 
 
(1) Japan-U.S. talks set to start today; reduction in "sympathy 
budget" to take center stage; a salary review certain to throw talks 
into confusion 
 
ASAHI (Page 3) (Full) 
February 25, 2010 
 
Masahiro Tsuruoka, Hisashi Ishimatsu 
 
Foreign and defense officials of Japan and the United States will 
begin talks today on Japan's host nation support (omoiyari yosan, 
literally "sympathy budget") for U.S. forces stationed in Japan. The 
reason is that the Japan-U.S. Special Measures Agreement connected 
to HNS will expire in March 2011. The Japanese side is expected to 
seek (U.S. understanding) of a reduction in HNS through a review of 
the salary levels of base workers, as was recommended during the 
government's screening of budgetary requests for state projects. The 
U.S. side is likely to put up resistance. 
 
HNS will be taken up in the deputy-director-level talks that will be 
attended by visiting Principal Deputy Assistant of State Joseph 
Donovan, Deputy Assistant Secretary of Defense Michael Schiffer, and 
other senior State Department officials responsible for security 
talks from the U.S. side. 
 
Foreign Minister Katsuya Okada had initially revealed a plan to 
address a review of HNS after settling the issue of relocating the 
U.S. Marine Corps' Futenma Air Station (in Ginowan, Okinawa 
Prefecture), but it has been decided to begin the bilateral talks 
without waiting for a settlement. The Japanese side intends to 
submit an agreement bill to the Diet in this fall's extraordinary 
session and have it approved there. "To do so, talks must start 
now," a person familiar with the situation said. 
 
There is concern among officials in charge that a complication of 
the Futenma issue, which the Japanese government is aiming to settle 
by the end of May, might prevent the two sides from discussing HNS 
in a level-headed manner. The bilateral agreement was last revised 
in 2008. During that period, Diet approval of a bill revising the 
bilateral agreement was delayed owing to the confrontation between 
the ruling and opposition camps over tax revenues for road projects, 
creating a period without a Japan-U.S. agreement for the first 
time. 
 
 
TOKYO 00000381  002 OF 006 
 
 
Last November the government screened the salary levels of base 
workers that are currently uniform throughout the country. During 
the screening, it was pointed out that the base pay of base workers 
in Okinawa Prefecture and elsewhere exceed the salary levels of the 
private sector. Yukio Edano, who served as the screening team 
leader, concluded (the salary levels) need a review. Edano has since 
become state minister for government revitalization. 
 
During the period when the Democratic Party of Japan (DPJ) was an 
opposition party, it raised questions about the fact that such 
occupations as pleasure-boat operators and animal caretakers that 
are for recreational purposes are included in the types of jobs 
covered by HNS. They might become subject to a review. 
 
In the DPJ administration there are strong calls for a review 
because (HNS) is regarded as symbolizing the previous LDP 
administration's effort to maintain the Japan-U.S. alliance. When 
Japan started providing HNS in 1978, its assistance covered only 
welfare and other expenses for workers. Japan's support gradually 
expanded to cover their special allowances, basic pay, and 
utilities. In fiscal 1999, HNS swelled to 275.6 billion yen. 
 
Utilities, special allowances, and other expenses have been reviewed 
in recent years owing to Japan's deteriorating fiscal situation. The 
fiscal 2010 budget includes 191.9 billion yen for HNS, which is 
about the same level as that of fiscal 1992. 
 
Nevertheless, it is difficult to fully review and deeply cut HNS. 
 
During his visit to Japan last fall, Secretary of Defense Robert 
Gates discouraged Japan from cutting back on HNS, pointing out that 
the presence of the U.S. military has helped Japan curb its defense 
spending. 
 
A review of workers' salary levels might have a negative impact on 
employment in areas near the bases. The All Japan Garrison Forces 
Labor Union, which supported the DPJ in last year's general 
election, is also opposed to a review. As such, a full-fledged 
discussion might not take place until after the House of Councillors 
election this summer. 
 
(2) Membership of panel on National Defense Program Guidelines 
reflects Hatoyama administration's purge of LDP color, focus on 
Asia 
 
ASAHI (Page 4) (Full) 
February 25, 2010 
 
Hisashi Ishimatsu 
 
The membership of the Council on Security and Defense Capabilities 
for the New Era set up by the Hatoyama cabinet to work on the 
revision of the National Defense Program Guidelines (NDPG) before 
the end of 2010 reflects the Democratic Party of Japan's focus on 
Asia and the United Nations. It appears that one purpose of the 
panel is to provide the theoretical foundation for the concepts 
advocated by Prime Minister Yukio Hatoyama, such as the East Asian 
Community and the deepening of the Japan-U.S. alliance. 
 
The theme of the panel's second meeting on Feb. 24 was the 
"international military situation in areas close to Japan." Council 
members voiced the following opinions: "China should be watched to 
 
TOKYO 00000381  003 OF 006 
 
 
see if the trends so far (such as military expansion) continue into 
the future" and "There could be new ways to cooperate with the 
Republic of Korea in security." 
 
The only council member who has been reappointed from the council 
under the previous Aso administration is Professor Hiroshi Nakanishi 
of Kyoto University's graduate school. Professors Shinichi Kitaoka 
and Akihiko Tanaka of Tokyo University, theoreticians on security 
issues whose services were frequently sought under the Liberal 
Democratic Party administrations, have not been appointed to the new 
panel. 
 
The new members of the panel reflect the focus on Asia. Their 
combined expertise nearly covers all of Asia. 
 
Takashi Shiraishi, president of the Institute of Developing 
Economies of the Japan External Trade Organization, is a well known 
scholar on Southeast Asia. His publications include the book Umi no 
Teikoku: Ajia wo Do Kangaeru ka (Martime Empire: Perspectives on 
Asia). Senshu University Professor Takako Hirose is an expert on 
South Asian politics and foreign relations and is particularly 
well-versed in the political situation in India and Pakistan. 
Associate Professor Yasuhiro Matsuda of Tokyo University specializes 
in the politics and foreign affairs of China and Taiwan. One of the 
key issues in the NDPG is how to deal with regional instability 
resulting from the rise of 
China, which has implemented a double-digit increase in its defense 
budget for 21 consecutive years. It can be said that Matsuda was 
selected in light of this issue. 
 
One other distinguishing feature of the panel is that it has a 
number of experts on international coordination and cooperation. 
President Tadashi Yamamoto of the Japan Center for International 
Exchange has long been involved with exchanges of experts and 
parliamentarians between Japan and the Western nations and Asia. He 
has consistently argued that "relations between countries are not 
built by the governments alone." 
 
Keio University Professor Yoshihide Soeya is an advocate of "middle 
power diplomacy" - the idea that Japan's new foreign policy should 
focus on multilateral diplomacy with Asia while remaining anchored 
by the Japan-U.S. security alliance. This could well become the 
theoretical underpinning of Hatoyama diplomacy. 
 
Hatoyama has advocated the concept of an "East Asian Community" 
since he became prime minister. However, he has not been able to 
obtain international understanding on this concept. The U.S. 
suspects that it is a scheme to exclude the U.S. It appears that the 
Prime Minister may be attempting to systematize his concept by 
gathering experts knowledgeable about the various regions of Asia 
and international cooperation. 
 
Members of the Council on Security and Defense Capabilities for the 
New Era 
 
Shigeo Sato, 68, CEO of Keihan Electric Railway Co., chairman 
Yoko Iwama, 45, professor at the National Graduate Institute for 
Policy Studies, specializing in European security 
Takashi Shiraishi, 60, president of Institute of Developing 
Economies, Japan External Trade Organization, specializing in 
Southeast Asian politics 
Yoshihide Soeya, 54, professor at Keio University, specializing in 
 
TOKYO 00000381  004 OF 006 
 
 
Japanese foreign policy 
Hiroshi Nakanishi, 47, professor at Kyoto University's graduate 
school, specializing in international politics 
Takako Hirose, 61, professor at Senshu University, specializing in 
South Asian politics and foreign affairs 
Yasuhiro Matsuda, 44, associate professor at Tokyo University, 
specializing in Asian diplomatic history, security affairs of China 
and Taiwan 
Tadashi Yamamoto, 73, president of Japan Center for International 
Exchange, specializing in international exchange 
Yasunari Ito, 64, former vice minister of defense 
Takashi Saito, 62, former chief of staff of SDF Joint Staff 
Ryozo Kato, 68, former ambassador to the U.S. 
 
(3) Full text of statement adopted by Okinawa Prefectural Assembly 
on Futenma relocation 
 
RYUKYU SHIMPO (Page 3) (Full) 
February 25, 2010 
 
Statement on the early closure and return of the U.S. forces' 
Futenma Air Station, opposition to relocation within Okinawa, and 
demand for relocation out of Japan or out of Okinawa 
 
The U.S. forces' Futenma Air Station is located in an urban area in 
central Okinawa. There is a high concentration of houses, schools, 
and other facilities in this area, and in case of an accident, it is 
assumed the damage would affect many residents and facilities in the 
area. This is a very dangerous location. 
 
The crash of a CH-53D, a large U.S. Marine transport helicopter, on 
the campus of the Okinawa International University on Aug. 13, 2004 
was just one step away from causing a major disaster. It 
demonstrated once again that Futenma is "the most dangerous airfield 
in the world." 
 
For this reason, the people of Okinawa have strongly demanded the 
return of this airfield. In light of this, the governments of Japan 
and the United States have agreed on the complete return of the 
Futenma base under the 1996 Special Action Committee on Okinawa 
(SACO) agreement and the U.S. Forces Japan realignment talks of 
¶2006. However, its return has not been realized even today, 13 years 
after the agreement. The danger posed by the airfield has been left 
unabated. 
 
Based on lessons learned from the tragedy of World War II, Okinawans 
aspire for a peaceful and safe Okinawa with no military bases. The 
return of the Futenma base on condition of relocating it somewhere 
else under the SACO agreement will only result in its relocation 
within the prefecture. The popular will in Okinawa has been clearly 
expressed in various referendums, rallies, and public opinion polls 
conducted hitherto. The coastal area of Henoko in Nago City, which 
has been identified as the relocation site, is a precious sea area 
that nurtures dugongs, recognized as a natural treasure by the 
Japanese government and also protected under international 
convention, and other rare species of flora and fauna. This sea area 
is recognized for its unrivalled beauty in the world, with new 
species of coral having been discovered there. 
 
The citizens of Ginowan and Okinawa demand the early complete return 
of the very dangerous Futenma Air Station. They demand that the 
government take responsibility for resolving all issues relating to 
 
TOKYO 00000381  005 OF 006 
 
 
the use of returned military base land and other matters. 
 
The mayor of Nago City is opposed to building a new military base 
both offshore and on land in Henoko. 
 
From the standpoint of protecting the life, property, and living 
environment of the people of Okinawa, the Prefectural Assembly 
strongly demands that the Japanese and U.S. governments close down 
and return the Futenma Air Station at an early date, abandon plans 
to relocate this base within Okinawa, and relocate it out of Japan 
or out of Okinawa. 
 
Feb. 24, 2010 
Okinawa Prefectural Assembly 
 
(To be presented to the prime minister, foreign minister, state 
minister for Okinawa affairs, and the chief cabinet secretary) 
 
(4) Postal services likely to be bloated: (Part 1) Offering uniform 
services nationwide and cost sharing 
 
NIKKEI (Page 5) (Full) 
February 23, 2010 
 
The work to take a second look at postal services by the government 
and the ruling parties is reaching its final stage. The postal 
reform plan drafted by the government earlier in the month states 
that postal reform is to be carried out with emphasis placed on the 
public benefits and regional characteristics of the Japan Post 
group. Thus the draft hints that postal services could revert to 
their original form -- a government enterprise. The draft mandates 
Japan Post offer uniform financial services nationwide. In the 
meantime, the government will make the company boost profits by 
expanding business areas to cover the cost of providing such 
services. A gigantic government-affiliated company is about to come 
into being. 
 
Ratio of government capital? 
 
The government intends to submit the Postal Reform Bill (tentative 
name) to the Diet as early as March. The focus is on the size of the 
government's investment ratio and on whether or not the group's 
scope of business should be expanded. 
 
Some government and ruling party officials opposed the government's 
draft. One remarked: "That's (Senior Vice Minister of Cabinet Office 
for Financial Services) Ohtsuka's (private plan)." Parliamentary 
Secretary of Internal Affairs and Communications Kensei Hasegawa of 
the People's New Party released an opinion paper stating that the 
government's share of Japan Post should exceed 50 percent. He said 
that if his opinion was rejected he would have no choice but to 
resign. 
 
The draft proposes several ratios of government capital, such as 
over one-third or over a half. However, the government was unable to 
set a definite figure. Hasegawa, a former postal bureaucrat, is 
calling for a Japan Post system providing the minimum number of 
uniform services involving government necessary for people's 
livelihood. 
 
In the meantime, the draft hints at a direction of allowing Japan 
Post in principle to enter new businesses without any restrictions. 
 
TOKYO 00000381  006 OF 006 
 
 
It indicates a policy of approving new businesses, such as housing 
loans or cancer insurance. It is estimated that maintaining 
universal services for postal savings, postal insurance, and mail 
delivery nationwide costs more than 1 trillion yen a year. Within 
the government there have been calls for raising the caps on postal 
savings and postal insurance. 
 
Since offering services costs money, Japan Post's business sphere 
must be expanded to pay for them. This argument appears coherent. 
However, it could lead to the emergence of a behemoth 
government-affiliated company that enjoys both the trust of a 
government-backed entity and the degree of freedom of private 
companies. 
 
Concern about impartiality 
 
The draft neglects the basic principle for postal privatization - 
improving services through the private sector's ingenuity and 
originality by eliminating the wasteful services endemic to 
government-backed enterprises. But the argument for expanding Japan 
Post's services is prevailing. There are indications that the 
attempt to alter the current flow of massive amounts of money from 
households to postal savings and insurance by entrusting the public 
sector with the use of such funds for investment, loan transactions, 
etc. could be reversed. Japanese Bankers Association Chairman 
Katsunori Nagayasu said, "If Japan Post becomes a government-backed 
company with government capital remaining in postal services and 
postal savings, then competitive conditions between Japan Post and 
private financial institutions would differ substantively." 
 
The government and the ruling parties held a policy meeting on the 
22nd. Some participants called for the need for the government to 
determine a ratio of government capital acceptable to private 
financial institutions. Other participants refuted this view, with 
one saying, "It is strange that the government is unable to bring 
such a matter under its control." 
 
Ohtsuka during a debate with Heizo Takenaka, who led the postal 
privatization (during the Koizumi administration), indicated a 
certain level of understanding of the direction for privatization. 
State Minister for Financial Affairs Shizuka Kamei takes the 
position of not allowing Japan Post to revert to its former self - a 
state-run public corporation. However, he advocates strengthening 
services using post offices as bases for local residents. The 
government is expected shortly to consolidate its stance regarding 
the ratio of government capital and the upper limit of postal 
savings. However, views of those concerned about the scope of 
business and other matters are at odds. 
 
ROOS