Cablegate: Daily Summary of Japanese Press 11//06

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UNCLAS SECTION 01 OF 09 TOKYO 006542

SIPDIS

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;
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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 11//06

INDEX:

(1) What will become of Japan's defense with US Democratic victory?
Decisions on security affairs must not be postponed

(2) Editorial: Japanese lawmakers must continue to call for nuclear
disarmament

(3) Column Kakushin (Kernel): Will the LDP reinstate postal rebels
without following party rules or must there be just cause

(4) GDP ups for seven straight quarters; Concern about slow down in
personal consumption; No increase in income despite brisk business
performance

(5) Economic policy panel member Yashiro to call for bold review of
Worker Dispatch Law

(6) Poll on Abe cabinet, political parties, educational reform,
reinstatement of postal rebels

(7) Chart of Japan's postwar generation leaders

ARTICLES:

(1) What will become of Japan's defense with US Democratic victory?
Decisions on security affairs must not be postponed

SANKEI (Page 15) (Excerpts)
November 15, 2006

By Keishi Saeki, professor, Kyoto University

The US midterm elections ended with a major victory for the
Democrats. As was admitted by President Bush, the outcome seems to
reflect public criticism of his administration's Iraq policy. But
the Democrats do not have any effective counterproposals, either.
Given the situation, "Republican self-destruction" seems a better
description than "Democratic victory."

The Democratic victory will inevitably affect America's policy
toward North Korea, a "rogue state." The quagmire in Iraq suggests
greater confusion in the Far East following a collapse of the Kim
Jong Il regime by US military action. The US seems to want to avoid
dealing with North Korea as long as possible, while making
concessions to China.

The previous Koizumi administration totally supported America's Iraq
war on the reasoning that the North Korean issue would require
America's cooperation.

Needless to say, a nuclear North Korea is a grave concern for Japan.
At present, Japan needs to rely on the United States for its
security. But if the US turns its foreign policy inward and puts
high priority on maintaining the power balance with China and
Russia, will Japan still be able to ensure its security with an
enhanced alliance with the United States? To begin with, the
approach of solely relying on America's nuclear deterrent without
getting its hands dirty raises major ethical questions.

Chances are high that the United States will end up with a
Democratic president in 2008. It is a mistake to entrust Japan's
security to an emotional, unstable American democracy. Japan must

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 11//06

not postpone its decision forever on whether or not to possess
nuclear weapons. Although autonomous defense is a mid- to long-term
subject, Japan must begin discussions immediately.

(2) Editorial: Japanese lawmakers must continue to call for nuclear
disarmament

ASAHI (Page 3) (Full)
November 15, 2006

Some Liberal Democratic Party members are still calling for debate
on a nuclear option in reaction to the fact that a neighbor now
possesses nuclear weapons. They seem to be missing the point. They
should discuss what must be done to eliminate nuclear weapons from
the world.

Japan has been playing a leading role in presenting nuclear
disarmament resolutions to the United Nations. This year, Japan
presented another draft resolution condemning North Korea's nuclear
test that won support from 169 member countries in a UN First
Committee session. The General Assembly is expected to adopt the
resolution in early December.

Some might call nuclear disarmament a pipe dream, an idealistic
theory. Putting high priority on the disarmament process, the draft
resolution calls for pragmatic measures while spelling out the
determination to completely rid the world of nuclear weapons.

It is imperative to stop the trend of nuclear proliferation --
commonly called the "nuclear domino effect" -- and create a reverse
trend toward nuclear reduction and disarmament. The draft resolution
calling for a reverse trend carries great significance.

North Korea's nuclear test following India and Pakistan was
shocking. But that does not mean the nonproliferation system has
collapsed. Steady efforts are underway across the world to stop
nuclear proliferation.

In September this year, five countries, including Kazakhstan,
Uzbekistan, and Kyrgyzstan, signed the Central Asia Nuclear Weapon
Free Zone (NWFZ) Treaty, vowing not to produce or possess nuclear
weapons. The treaty has established the fifth NWFZ following Latin
America, the South Pacific, Southeast Asia, and Africa.

Although there still remain many impediments before the treaty takes
effect, the expression of their determination for denuclearization
should be welcomed.

The environment surrounding East Asia is extremely severe. The North
Korean nuclear test has diminished chances for the denuclearization
of the Korean Peninsula. But there is no other option but to
persistently press the North to abandon its nuclear programs.

We find it difficult to understand that the United States keeps
opposing nuclear disarmament resolutions. Ironically enough, all UN
members except for North Korea, India, and the United States
supported the resolution this year. This will prompt the world to
become more distrustful of the United States.

The United States should ratify the Comprehensive Nuclear Test Ban
Treaty and shift its policy toward disarmament.

Revamping the damaged nonproliferation setup is also an urgent task.

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First, more countries need to accept an additional protocol for
increasing the inspection capability of the International Atomic
Energy Agency. Second, in order to prevent nuclear materials from
being used for military purposes, an international system to control
uranium enrichment and plutonium extraction must be considered.

The government plans to make the reprocessing plant in Rokkasho
Village, Aomori Prefecture, fully operational. Japan should propose
an international management system to enhance nonproliferation
rather than to move forward independently.

Although the North Korean nuclear test has disrupted moves for
nuclear disarmament, the denuclearization spirit is very much alive.
We would like to see Japanese lawmakers conduct sound discussion
against all odds instead of going along with the nuclear domino
argument.

(3) Column Kakushin (Kernel): Will the LDP reinstate postal rebels
without following party rules or must there be just cause

TOKYO SHIMBUN (Page 3) (Full)
November 15, 2006

In the ruling Liberal Democratic Party (LDP), the focus is now on
the question of why the party should reinstate the so-called "postal
rebels," as well as on how to do it and who should be let it. The
postal rebels bolted the LDP after voting against the
government-sponsored postal-privatization bill at last year's
regular Diet session. Until recently, many in the LDP believed that
the party should allow them to return without principle in order to
expand the party's strength as it goes into the next summer's
election. Looking back at past cases of the LDP reinstating former
members, the newspaper posits how this issue might be resolved.

Of the 405 LDP members of the Diet, 55 lawmakers or 13.5% rejoined
the party after having left it. The largest group are lawmakers who
left the LDP to join new political parties following the major
political realignment in the early 1990s. This group includes Diet
Affairs Committee Chairman Toshihiro Nikai and Hajime Funada, who
defected from the party along with Ichiro Ozawa (who is now
president of the main opposition party, Minshuto (Democratic Party
of Japan)) to create Shinseito (Japan Renewal Party) that later
became the Shinshinto (New Frontier Party). The group also includes
Hiroyuki Sonoda, who helped establish the now defunct New Party
Sakigake.

The 55 also include lawmakers not backed by the LDP in an election,
but after winning seats on their own, were allowed to immediately
join the party. There are others who were allowed to rejoin the LDP
after a certain period of time, such as Yasutoshi Nishimura, who was
brought back in one year after winning a seat in the 2003 Lower
House election.

According to those who rejoined the LDP, they were no conditions for
their return. Under the party rules, when members bolt the party or
are kicked out, they need to first obtain approval of their local
chapters and then be examined by the Party Ethics Committee before
being reinstated. However, many of the 55 said that they did not
remember going through any procedures. It seems that the party rules
were not strictly applied.

The reason why the unconditional reinstatements went unmentioned is
that the motivation was simply to expand party strength.

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The LDP made an utmost effort to ask former members to rejoin it
during 1996 - 1997. After falling into the opposition camp in 1993,
the LDP was able to recover its ruling party status by allying with
the Japan Socialist Party (name changed in 1996 to Democratic
Socialist Party) and New Party Sakigake. In order to stabilize
further its political base, the LDP made efforts to urge each
Shinshinto member to rejoin, aiming at securing a single-party
majority in the Lower House.

Actively recruiting former party members or new party members have
helped the LDP's revitalization.

A common tactic, too, is for the LDP to tacitly back independent
candidates running in elections, then let them join the party when
they were elected.

A mid-level lawmaker who joined after winning a Diet seat as an
independent said: "The LDP president and senior party officials
apologized to me for having denied me the party's official
endorsement."

How then will the LDP deal with the issue of reinstating the postal
rebels? Takeo Hiranuma, a former trade minister, who can be said to
represents that group, has called on the LDP to allow all rebels to
rejoin without conditions, including former lawmakers who were
defeated in last year's Lower House election.

However, Prime Minister Shinzo Abe plans to reinstate some of them
before the end of this year. The reason is that Mikio Aoki, chairman
of the LDP caucus in the House of Councillors, is determined that
cooperation of postal rebels, who represent single-seat
constituencies, is absolutely necessary for the party to win next
summer's Upper House election.

But if the LDP goes along with the reinstatement without applying
party rules, voters in favor of the party's reform policy line might
reject such an idea. Secretary General Hidenao Nakagawa therefore
insists that a "rationale" is necessary. He is trying to have postal
rebels make a "loyalty" pledge to Prime Minister Abe by expressing
their approval of postal privatization.

The question is whether the postal rebels will insist on the "old
LDP's" common practice, or whether Abe, who advocates a "new LDP,"
will enforce new rules. Nakagawa and Hiranuma will engage in
negotiations after the Okinawa gubernatorial race on Nov. 19.

(4) GDP ups for seven straight quarters; Concern about slow down in
personal consumption; No increase in income despite brisk business
performance

YOMIURI (Page 9) (Almost Full)
November 15, 2006

The Cabinet Office yesterday released a report that the real growth
rate of GDP for the July-September quarter remained in the plus
territory for seven straight quarters, marking 2.0% in annual terms.
The result confirmed the solid economic climate led by the corporate
sector. In the meantime, growth of personal consumption declined for
the first time in two quarters. Economic recovery relying on foreign
demand has apparently taken over the recovery driven by domestic
demand until now. It is almost certain for the economic expansion to
continue into the 58th month in November, surpassing the Izanagi

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business boom in the high-growth period of the Japanese economy.
However, the economic outlook is not so optimistic as it looks.

Drop in remunerations for employees

Sales at all outlets of Mitsukoshi, a major department store, for
the July-Sept. quarter dropped from the previous year's level. In
particular, sales in July declined 5.0% due to a delay in sales of
summer clothing because of a long spell of rainy weather. Daimaru
Department Store Chairman Tsutomu Okuda commented: "The delay in the
end of the rainy season in the Kansai District affected sales of
seasonal commodities. In particular, sales of women's wear have been
sluggish. Department stores are all having a tough time."

Personal consumption in the July-Sep. quarter moved into the
negative column for the first time in two quarters, marking a 0.7%
decline from the preceding quarter. It is the lowest level since the
Oct.-Dec. quarter in 2004. Due to the unusually cool summer, sales
of home appliances, such as air conditioners, and domestic tourism,
were also at a low ebb. Backlash from the growth of sales of
flat-screen TVs brought about by the Soccer World Cup was also
seen.

However, the slowdown in personal consumption does not appear to be
a temporary phenomenon. The salaries of corporate employees in the
July-Sept. quarter moved into the minus territory for the first time
in seven quarters, marking a 0.1-point drop from the preceding
quarter in real terms. Their income has come to a standstill.

The government and the Bank of Japan have a scenario in which the
economic recovery in the corporate sector will spread to the
household sector. However, State Minister in charge of Economic and
Fiscal Policy Ota expressed concern during yesterday's press
conference, "I would like to find out why corporate performance is
not leading to increased wages."

Capital investment slows down

Though corporate capital spending bolstering domestic demand was
solid in the reporting period, posting a 2.9% increase over the
previous quarter, the rate of growth slowed, compared with a 3.7%
increase in the Jan.-Mar. quarter and an 3.5% increase in the
Apr.-June quarter.

An increasing number of companies are now taking a cautious stance
toward investment into plants and facilities. TDK, whose sales of
electronic parts for electronic appliances are doing well, has
decided to promote its production plan in a cool-headed manner,
while monitoring an order-intake situation, as its PR office
revealed. Its capital investment plan for this fiscal year stands at
70 billion yen or 95% of the previous year's track record.

The Cabinet Office on the 10th revealed that orders received for
machinery -- demand from the private sector for goods other than
vessels and electric power - dropped 11.1 points from the previous
quarter, showing the greatest rate of decline since April 1987. It
is said that ordered machines will be delivered in about six months'
time. Since the orders received will not be reflected in capital
investment in GDP terms until that point, this time lag will
negatively affect capital investment statistics in the Jan.-Mar.
quarter or later in 2007.

The Shinko Research Institute noted that of 4,900 companies, whose

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current profits showed black figures in their midterm report through
Sept. 30, 2006, 40% did not make an upward revision to their
full-year estimates. This is because they are unable to fathom the
future of the exchange market and high crude oil prices.

Exports booming

The 2% annual growth rate for the reporting period was brought about
by booming exports, which saw a 2.7% increase over the previous
quarter. China-bound electronic parts and automobiles for the US
were firm. Exchange gains due to the weak-yen trend also boosted
corporate performances.

With imports dropping 0.1% due to sluggish sales of summer clothes,
the extent of the contribution of foreign demand after deducting
imports from exports stood at 0.4%.

However, a number of experts take this view as a senor Cabinet
Office official noted, "If the US economy slows sharply, it will put
a dent on exports by Japanese companies, dealing a blow to their
earnings." The US economy's GDP for the July-Sept. quarter this year
posted a slight increase of 1.6% over the preceding quarter in
annual terms. This is the lowest growth since the Jan.- Mar. quarter
in 2003. Foreign demand, the last resort for the Japanese economy,
remains uncertain.

(5) Economic policy panel member Yashiro to call for bold review of
Worker Dispatch Law

ASAHI (Page 2) (Full)
November 15, 2006

In an interview with the Asahi Shimbun yesterday, International
Christian University Professor Naohiro Yashiro, a private-sector
member of the Council on Economic and Fiscal Policy, indicated his
intention to call for a sweeping review of the Worker Dispatch Law
as a key element in the labor Big Bang designed to reform the labor
market. Specifically, he stressed the need to extend the period of
contract for temporary workers and to abolish the obligation on
companies hiring temporary workers to employ them as permanent
workers. Regarding permanent workers, as well, Yashiro deemed it
necessary to relax the current regulations on dismissal in order to
increase flexibility in workforce turnover.

The labor Big Bang is one of the seven major areas of "creativity
and growth" designated by the Abe administration as needing reform
on a priority basis. Yashiro is an expert on labor economics. In
order to achieve economic growth, Yashiro said, "The key lies in
creating a cross-cutting, flexible labor market." Under the current
Worker Dispatch Law, the period of contract is limited, and
employers are urged to hire dispatched temporary workers as
permanent employees. Yashiro said that these measures have actually
worked to encourage companies to end contracts with nonpermanent
workers and to destabilize job security for them. The labor economic
expert then suggested that extending the period of contract and
other deregulatory measures would contribute to ensuring job
security for dispatched temporary workers.

Asked about the disparities between permanent and nonpermanent
workers, Yashiro cited the need to facilitate the dismissal of
permanent workers by including in the Employment Contract Law such
measures as settling dismissal-related problems with money and
relaxing the conditions for dismissal.

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(6) Poll on Abe cabinet, political parties, educational reform,
reinstatement of postal rebels

ASAHI (Page 4) (Full)
November 14, 2006

Questions & Answers
(Figures shown in%age, rounded off. Bracketed figures denote
proportions to all respondents. Parentheses denote the results of a
previous spot survey conducted Oct. 9-10 unless otherwise
specified.)

Q: Do you support the Abe cabinet?

Yes 53 (63)
No 21 (14)

Q: Why? (One reason only. Left column for those marking "yes" on
previous question, and right for those saying "no.")

The prime minister is Mr. Abe 22(11) 5 (1)
It's an LDP-led cabinet 22(12) 36 (8)
From the aspect of policies 28(15) 46(10)
No particular reason 26(14) 12 (3)

Q: Which political party do you support now?

Liberal Democratic Party (LDP) 38 (42)
Democratic Party of Japan (DPJ or Minshuto) 14 (14)
New Komeito (NK) 3 (2)
Japanese Communist Party (JCP) 2 (2)
Social Democratic Party (SDP or Shaminto) 1 (1)
People's New Party (PNP or Kokumin Shinto) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 0 (0)
None 34 (33)
No answer (N/A) + don't know (D/K) 8 (6)

Q: It's been one month and a half since Mr. Abe became prime
minister. What do you like best about Mr. Abe so far? (One choice
only)

His political stance, approach 12
His efforts for educational reform 13
His visits to China, South Korea 23
His response to North Korea's nuclear test 23
Nothing in particular 27

Q: What do you think is bad about Mr. Abe? (One choice only)

His political stance, approach 10
His efforts for educational reform 21
His visits to China, South Korea 3
His response to North Korea's nuclear test 13
Nothing in particular 47

Q: Do you think Mr. Abe has appropriately accounted for his
political beliefs and ideas? (Parentheses denote the results of a
spot survey taken Sept. 20-21.)

Yes 31 (38)
No 55 (42)

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Q: The LDP is now moving ahead to reinstate lawmakers who were
ousted from the LDP because they opposed postal privatization. Do
you support reinstating them in the party?

Yes 32
No 47

Q: There will be an election for the House of Councillors in the
summer of next year. Do you think things will turn out to the LDP's
advantage in the election if they are reinstated in the party?

Yes 23
No 24
Neither yes nor no 46

Q: The Abe cabinet is giving top priority to revising the Basic
Education Law. A government-introduced bill revising the law, which
stipulates education's objectives and ideals, such as loving the
country, is now before the Diet and is expected to pass the House of
Representatives soon. Do you support the government bill to revise
the law?

Yes 42
No 22
Not interested 18

Q: Are you interested in the current state of education from
elementary school to high school?

Yes 82
No 15

Q: What's the matter of primary concern to you about school
education? (One choice only)

Academic decline 11
Declining morals and manners 42
Bullying 19
Teachers' lack of leadership ability 23

Q: When you went to school, was anyone bullied in your school?

Yes 62
No 35

Q: Do you think bullying at schools today is more serious than in
those days?

Yes 79
No 14

Q: Some of the nation's high schools skipped compulsory subjects
students must take to graduate. On this matter, MEXT has decided to
give supplementary lessons for shorter hours to students who have
failed to take the classes of compulsory subjects. What do you think
about this? (One choice only)

Appropriate 46
Too severe 10
Too lenient 35

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Q: Internal Affairs and Communications Minister Suga has ordered NHK
to take up North Korea's abduction of Japanese nationals on a
priority basis in its international radio broadcasting. This is the
first time for the government to issue such a specific order. It is
lawful to have NHK broadcast at the government's order. However,
there is also concern about violating the freedom of broadcasting.
Do you support the order issued this time?

Yes 46
No 35

Q: (Only for those who answered "yes" to the foregoing question)
Why? (One choice only)

Because the abduction issue is important 85 (39)
Because there is no legal problem about the internal affairs and
communications minister issuing the order 12 (5)

Polling methodology: The survey was conducted Nov. 11-12 over the
telephone on a computer-aided random digit dialing (RDD) basis.
Respondents were chosen from among the nation's voting population on
a three-stage random-sampling basis. Valid answers were obtained
from 1,753 persons (51% ).

DONOVAN

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