Cablegate: Daily Summary of Japanese Press 08/30/07

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UNCLAS SECTION 01 OF 21 TOKYO 004046

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;
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 08/30/07

Index:

(1) Ozawa again voices his opposition to antiterrorism law, this
time to German Chancellor Merkel

(2) DPJ head Ozawa to announce new executives tomorrow, maintain
tripartite system to fight battle in fall Diet session; focus on
treatment of Okada, Maehara

(3) Violation of election law by members of Ai Aoki's election
campaign camp: Chiba Prefectural Police finalizing procedures for
building case against DPJ head Ozawa's secretary

(4) Prime Minister Abe's ability as commander of CEFP be tested in
reform promotion

(5) Japan, China resume defense exchange after a lapse of four
years, agree to lay hotline

(6) Interview with Foreign Minister Nobutaka Machimura: Plans to
discuss question of extending the antiterrorism law systematically

(7) Spot poll on new Abe cabinet, political parties (Asahi)

(8) Poll on new Abe cabinet, political parties (Sankei)

(9) Poll on new Abe cabinet, political parties (Mainichi)

(10) Poll on new Abe cabinet, political parties (Nikkei)

(11) Poll on new Abe cabinet, political parties (Tokyo Shimbun)

(12) Japan, EU to set in motion negotiations on EPA by beginning
joint research possibly in September

(13) Okinawa refuses to receive Henoko assessment outline from
Defense Ministry

(14) Pension, Antiterrorism Law to be major issues at extra Diet
session; Right of Diet member to investigate state affairs to become
another tool for DPJ to attack government, ruling camp

(15) Three cabinet ministers among CEFP members replaced: Is panel
going to correct its growth policy?

ARTICLES:

(1) Ozawa again voices his opposition to antiterrorism law, this
time to German Chancellor Merkel

NIKKEI NET
13:18, August 30, 2007

Democratic Party of Japan President Ichiro Ozawa had a meeting with
visiting German Chancellor Angela Merkel at a Tokyo hotel this
morning. Ozawa there reiterated his opposition to an extension of
the Antiterrorism Special Measures Law, which is scheduled to expire
on November 1, saying, "The problem is that in-depth discussion has
not yet been conducted on it."

He added: "Japan should actively join only those activities that
were authorized by the United Nations. The operation in the Indian

TOKYO 00004046 002 OF 021

Ocean should be considered from that viewpoint." Ozawa stressed that
UN authorization should be used as the basis in making decisions for
sending Self-Defense Force troops overseas.

Merkel said: "In dealing with Afghanistan, as many countries as
possible should be involved. I am aware of the need for discussion,
but if Japan is to play a more active role in the international
community, I think your country should bear greater
responsibility."

(2) DPJ head Ozawa to announce new executives tomorrow, maintain
tripartite system to fight battle in fall Diet session; focus on
treatment of Okada, Maehara

ASAHI (Page 2) (Full)
August 30, 2007

Following the inauguration of a new cabinet of Prime Minister Shinzo
Abe, Democratic Party of Japan (DPJ) President Ichiro Ozawa in turn
will reshuffle tomorrow the lineup of his party's executive board,
with an eye on clashes with the ruling camp expected in the upcoming
extraordinary session of the Diet. Who will be picked as chairman of
the Policy Research Committee and chairman of the Diet Affairs
Committee - positions that will have to stand at the forefront in
the extra session? The DPJ now controls the House of Councillors.
The DPJ, as the main opposition party, has decided to work out
alternative legislation to the Antiterrorism Special Measures Law
(which is up for extension). The party is also preparing for
measures to deal with the pension record-keeping debacle, which
contributed to the DPJ's big win in the July House of Councillors
election. Securing such tools as the right of a Diet member to
investigate state affairs, the DPJ is now busy with preparations for
locking horns with the government and ruling coalition in the Diet.

"I want to change our executive board after seeing the lineup of the
three new executives of the Liberal Democratic Party (LDP) and the
new cabinet ministers," Ozawa told Secretary General Yukio Hatoyama
last weekend while the two were drinking sake.

Ozawa has been staying in a Tokyo hotel for several days to work out
his schedule of appointments.

Growing Ozawa's influence over the party

The triumvirate of Ozawa, Hatoyama and Deputy President Naoto Kan
will be maintained. However, Policy Research Committee Chairman
Takeaki Matsumoto and Diet Affairs Committee Chairman Yoshiaki
Takaki will likely be replaced. Ozawa will decide on the lineup of
the "Next Cabinet," which used to be picked by the Policy Research
Committee chairman. Ozawa's grip on the party has strengthened
because of the party's landslide victory in the Upper House race. No
objection will likely be raised against Ozawa's arbitrary
appointments.

Ozawa has stressed that the party needs complete unanimity. The
focus is now on how former Presidents Katsuya Okada and Seiji
Maehara will be treated.

Okada has distanced himself from the leadership since the party
suffered a loss in the 2005 House of Representatives election.
Maehara also has not served in any key post since he quit the

TOKYO 00004046 003 OF 021

presidential post last March to take responsibility for an e-mail
fiasco. Many party members hold high expectations that Okada, who
put up a good fight in Diet debates with then Prime Minister
Junichiro Koizumi, and Maehara, who is a policy specialist, will
serve in key posts.

(3) Violation of election law by members of Ai Aoki's election
campaign camp: Chiba Prefectural Police finalizing procedures for
building case against DPJ head Ozawa's secretary

ASAHI (Page 1) (Excerpts)
August 30, 2007

Democratic Party of Japan (DPJ or Minshuto) lawmaker Ai Aoki's
campaign headquarters has violated the Public Office Election Law in
the July Upper House election. Aoki was elected from the
proportional representation bloc. Regarding this case, the president
of a printing company was arrested by the Chiba Prefectural Police
for allegedly acting in the interests of Aoki by having thousands of
billboards with her election campaign posters put up by pledging to
pay remuneration to a person who agreed to do the job. In a related
development, it was learned that the president told investigators
that he did so on the orders of DPJ head Ichiro Ozawa's policy
secretary (45). The police have established the fact that the two

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suspects frequently spoke by telephone. The police are now
investigating with the possibility of building a case against the
secretary as an accomplice.

SIPDIS

The prefectural police have arrested Masahiko Nagashima (50),
president of Shusansha, a printing company, and Rentaro Washio (38),
president of Dainichi, a billboard company. Shima allegedly asked
Washio to put up thousands of billboards with Aoki's election
campaign posters around July 11 the day before the official
announcement of the Upper House election and pledged to pay him 500
yen per board.

The Public Office Election Law allows the payment of remuneration to
specific election campaign participants, such as those who do simple
labor work as drivers or campaign car attendants. However, the
police have judged that the case this time does not fall under this
category and that the job in question should have been done without
remuneration. Their perception is that the party that received the
remuneration was a corporation and the president of the printing
company took advantage of their contract relationship, which
constitutes acting in the interests of a specific candidate in an
election.

As a result of the investigation so far, Shima and Washio are now
suspected of having exchanged conversations on where to put up
billboards and the amount of remuneration from late June through
early July. When Aoki's office and Shima concluded a contract for
putting up billboards, the secretary was allegedly present.

(4) Prime Minister Abe's ability as commander of CEFP be tested in
reform promotion

NIKKEI (Page 5) (Full)
August 29, 2007

Following the inauguration of a new cabinet, the lineup of the
government's Council on Economic and Fiscal Policy (CEFP) will
change. Kaoru Yosano, former state minister in charge of economic

TOKYO 00004046 004 OF 021

and fiscal policy, will return to the CEFP as chief cabinet
secretary. Former Iwate Gov. Hiroya Masuda will join the panel as

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minister of internal affairs and communications. In order to achieve
a balance between an economic growth, including revitalizing local
economies, and fiscal soundness, the panel will be made up of
capable persons, but the leadership of the Prime Minister's Official
Residence (Kantei) alone will not be sufficient for coming up with
policy measures because the opposition camp now controls the House
of Councillors.

Chief Cabinet Secretary Yosano, Internal Affairs and Communications
Minister Masuda and Finance Minister Fukushiro Nukaga are new
members of the council. Yosano, predecessor of Economic and Fiscal
Policy Minister Hiroko Ota, who was retained in her post, once
managed the panel. Yosano is the one who advocated the need for a
program on reform of both the revenue and expenditure systems -- the
program which includes a plan to cut expenditures for five years
from fiscal 2007 as part of the 2006 "Big-boned reform policy
guidelines."

Ota, a former university professor, has taken part in the management
of the CEFP since 2002 when she joined the Cabinet Office. The
dominant view in the government is that Yosano and Ota, who know
well about the utilization of the council, will lead discussion in
the panel.

With the return of Yosano, who enjoys the deep confidence of
bureaucrats, to the CEFP, a senior economy-related ministry official
said: "Realistic policy proposals will increase." But some pointed
out a delicate gap between them.

Ota has placed priority on boosting tax revenues by enhancing
nominal growth, while Yosano insisted during his tenure as economic
and fiscal policy minister that the idea of increasing tax revenues
would not lead to achieving fiscal soundness since long-term
interest rates would hike when a growth rate increased, and as a
result, nonpayment expenses of government bonds would boost. He
argued with Heizo Takenaka, former minister of internal affairs and
communications. Regarding the Bank of Japan's hike in interest
rates, Ota reportedly is cautious about a hike in interest rates by
the Bank of Japan, while Yosano stands in neutral.

All eyes are now also on Finance Minister Fukushiro Nukaga's words
and actions. Before serving his first cabinet post, he was state
secretary of the Ministry of International Trade and Industry

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(MITI). He, a lawmaker tied to economic and commerce affairs, became
finance minister, following his predecessor, Koji Omi. In a speech
yesterday, Nukaga said to his ministry staffers: "There is no fiscal
policy that needs for fiscal policy," indicating his stance of
attaching emphasis to economic growth. Masuda, who was known well as
a reformist governor, has continued to communicate with Ota.

With the abolishment of the post of special advisor on economic and
fiscal policy in the Kantei, observers predict that the position of
the CEFP will become clear again.

However, a senior Finance Ministry official made this comment:
"Decisions on policy measures will be made in consultations between
the ruling and opposition camps." Policy measures will not be
compiled by the intentions of the Kantei and the government alone.
Ota plans to push forward with discussion on tax and social security
issues. The question will be whether the CEFP can cooperate and

TOKYO 00004046 005 OF 021

share jobs with the ruling coalition.

A senior Cabinet Office official said: "Whether the council will
function depends on the prime minister's leadership." Therefore, how
Prime Minister Abe will manage economic policy will be called into
question.

(5) Japan, China resume defense exchange after a lapse of four
years, agree to lay hotline

YOMIURI (Page 1) (Excerpts)
Eve., August 30, 2007

Defense Minister Masahiko Komura this morning met with Chinese
National Defense Minister Cao Gangchuan at his Defense Ministry, and
the two leaders agreed to establish a hotline between Japanese and
Chinese defense officials and make reciprocal port calls by vessels
from the Maritime Self-Defense Force (MSDF) and the Chinese Navy.
The defense summit between the two countries took place for the
first time since the one held in Beijing in September 2003. Japan
and China have now resumed full-scale defense exchange.

In the meeting, the defense leaders agreed to set up a working group
aimed at establishing a hotline between Japanese and Chinese defense
officials. On reciprocal port calls by vessels, the two leaders
confirmed that Chinese vessels would first make a port call at a
Japanese port in December.

Komura cited two-digit increases in China's national defense
spending for 19 years in a row and asked that China make its
national defense policy and military spending transparent. He told
Cao: "A rough breakdown of the total defense budget has been
provided, but the details have not been disclosed." Cao told
Machimura: "We are making efforts to achieve that."

Turning to the issue of the Taiwan Strait, Cao sought to check Japan
by noting, "We are paying close attention to the connection between
the Japan-US security arrangements and Taiwan." In response,
Machimura urged a peaceful resolution of the Taiwan issue, saying,
"Japan and Taiwan have working-level relations at the
nongovernmental level. Japan has been consistently opposed to
(China's use) of armed force (toward Taiwan)."

Cao invited Komura to visit China sometime next year, and Komura
accepted the invitation.

(6) Interview with Foreign Minister Nobutaka Machimura: Plans to
discuss question of extending the antiterrorism law systematically

ASAHI (Page 4) (Full)
August 30, 2007

-- Your predecessor Taro Aso used the slogan "arc of freedom and
prosperity" to describe his foreign policy. How will you bring out
your own "Machimura color"?

Machimura: I am not that familiar with the term "arc of freedom and
prosperity." You mentioned my adding my own "color," but I don't
intend to use any grandiose expression. We will host the next Group
of Eight (G-8) summit. Issues Japan faces now include sovereignty
over the Northern Territories, global warming, which requires global
efforts, energy resources, and the abductions of Japanese nationals

TOKYO 00004046 006 OF 021

by North Korea. I think it is necessary for us to move at least a
half step or one step forward toward resolving those issues.

-- Prime Minister Abe has advocated a "values-oriented diplomacy."
Someone explained that it could serve as a noose around China.

Machimura: I'm sorry for my lack of study, but I don't know the
details of it. However, because we share the same values with the
United States, Australia, India, and the European Union, it is easy
to work together with them and expand exchanges with them. I know a
number of arguments exist about what political system China might
adopt in the future, but do you really think it is possible to
contain China as was done in the Cold War period? By expanding our
engagement with that country we can develop a strategic
mutually-beneficial relationship. If we remain narrow-minded by
saying we can't associate (with China) because of the differences in
our political systems, we will never get anywhere.

-- In past Diet debates on the Anti-Terrorism Special Measures Law,
the major opposition Democratic Party of Japan (DPJ or Minshuto)
insisted that Diet approval should be obtained in advance. Is it
possible to amend the law in such fashion?

Machimura: Revising the law may be one answer, but I think the first
thing to do is to think how Japan can actively engage itself in
fighting terrorism as a responsible member of the international
community. Next, we should discuss how to position activities taken
under the Antiterrorist Special Measures Law. Lastly, we should
discuss what sort of legislation is necessary to realize that. If we
discuss matters in this order, I believe we can naturally get an
answer. (The DPJ) sticks to opposition (to revising the law) without
holding any internal party debate, but this attitude demonstrates
its failure to fulfill its responsibility as an opposition party.

-- The Japan-North Korea working group in the six-party talks is
about to open.

Machimura: I'm neither pessimistic nor optimistic about it. I'll
simply promote talks in a proper manner. The initial plan was that
Japan, the US, and South Korea would act in concert, but now South
Korea stands out, and the US is displaying its originality. Japan
has its own issue of abductions of Japanese nationals by North
Korea. That's fine. There's an argument that Japan may be left out
of the loop, but that's wrong. Saying such a thing is what North
Korea wants to see. The five countries have shared the common goal
of "denuclearizing the Korean Peninsula."

(7) Spot poll on new Abe cabinet, political parties (Asahi)

ASAHI (Page 2) (Full)
August 29, 2007

Questions & Answers
(Figures shown in percentage, rounded off. Bracketed figures denote
proportions to all respondents. Figures in parentheses denote the
results of a post-election spot survey conducted July 30-31 after
the July 29 election for the House of Councillors.)

Q: Do you support the Abe cabinet?

Yes 33 (26)
No 53 (60

TOKYO 00004046 007 OF 021

Q: Which political party do you support now?

Liberal Democratic Party (LDP) 25 (21)
Democratic Party of Japan (DPJ or Minshuto) 32 (34)
New Komeito (NK) 3 (5)
Japanese Communist Party (JCP) 3 (3)
Social Democratic Party (SDP or Shaminto) 1 (2)
People's New Party (PNP or Kokumin Shinto) 0 (1)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 1 (0)
None 29 (30)
No answer (N/A) + don't know (D/K) 6 (4)

Q: Do you think the Abe cabinet's new lineup is talented?

Yes 30
No 39

Q: Yoichi Masuzoe, an LDP lawmaker seated in the House of
Councillors, has been appointed to the post of health, labor and
welfare minister. Do you have expectations for him?

Yes 73
No 20

Q: Hiroya Masuda, a former governor of Iwate Prefecture, has been
appointed to the post of internal affairs and communications. Do you
have expectations for him?

Yes 41
No 30

Q: How is your rating of Prime Minister Abe after seeing his
cabinet's new lineup?

Improved 18
Worsened 9
Unchanged 66

Q: What would you like the new cabinet to pursue first? (One choice
only)

Pension system 39
Social divide 20
Economic growth policy 17
Fiscal reconstruction 19

Q: Prime Minister Abe's term of office as LDP president is until the
fall of next year. Would you like him to stay on until the end of
his term?

Yes 41
No 47

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

Something can be expected of his policies 12(5)
He's close to public sensitivity 11(4)
There's no other appropriate person 72(29)

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Q: (Only for those who answered "no" to the above question) Why?
(One choice only)

Nothing can be expected of his policies 24(11)
He's off public sensitivity 56(26)
I want someone else to replace him 18(9)

Q: As a result of this summer's election for the House of
Councillors, the opposition parties came to hold a majority of the
seats in the House of Councillors while the ruling parties dominate
the House of Representatives. Do you think the ruling and opposition
parties will proceed with discussions to create better laws?

Yes 44
No 43

Q: The Antiterrorism Special Measures Law is to run out on Nov. 1.
The government plans to extend the law for another year. However,
the DPJ remains committed to oppose this antiterror law's extension.
Do you support its extension?

Yes 35
No 53

Polling methodology: The survey was conducted from the evening of
Aug. 27 through the evening of Aug. 28 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 989 persons
(57 PERCENT ).

(8) Poll on new Abe cabinet, political parties (Sankei)

SANKEI (Page 5) (Full)
August 30, 2007

Questions & Answers
(Figures shown in percentage, rounded off.)

Q: Do you support the new Abe cabinet?

Yes 38.0 (22.0)
No 42.9 (64.8
Don't know (D/K) + Can't say which (CSW) 19.1 (13.2)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 28.2 (23.0)
Democratic Party of Japan (DPJ or Minshuto) 30.9 (32.8)
New Komeito (NK) 5.6 (4.5)
Japanese Communist Party (JCP) 2.3 (4.3)
Social Democratic Party (SDP or Shaminto) 1.1 (2.0)
People's New Party (PNP or Kokumin Shinto) 0.2 (0.7)
New Party Nippon (NPN or Shinto Nippon) 0.6 (1.4)
Other answers (O/A) 1.6 (1.1)
None 28.3 (28.6)
D/K + Can't say (C/S) 1.2 (1.6)

Q: How do you evaluate Prime Minister Abe and his cabinet on the
items listed below?

TOKYO 00004046 009 OF 021

His personal character
Yes 50.2 (50.7)
No 41.2 (37.7)
D/K+CSW 8.6 (11.6)

His leadership
Yes 10.3 (8.1)
No 79.1 (80.8)
D/K+CSW 10.6 (11.1)

Policy priority
Yes 22.8 (17.3)
No 27.9 (53.8)
D/K+CSW 19.3 (28.9)

Response to Defense Ministry personnel issue
Yes 19.5
No 61.8
D/K+CSW 18.7

Cabinet, LDP executive shuffles this time
Yes 41.5
No 37.7
D/K+CSW 20.8

Political stance after the LDP's defeat in this July's upper house
election
Yes 25.2
No 60.7
D/K+CSW 14.1

Q: What's your impression of the Abe cabinet's new lineup?

None the better for the change 26.7
Balance considered 26.1
Featureless 19.0
Competent 13.3
Unexpected 5.9
Fresh 3.0
D/K+CSW 6.0

Q: What would you like the new Abe cabinet to pursue first?

Pension issue 28.7
Economic disparities 21.1
Politics and money 12.4
Tax reforms, including consumption tax 8.3
Education reform 7.1
Global warming 7.1
North Korea 4.8
Constitutional revision 3.1
Better government 2.1
National security 1.6
D/K+CSW 3.7

Q: When would you like the next election to take place for the House
of Representatives?

Within the year 28.3
During next year 46.2
During the year after next 22.3
D/K+CSW 3.2

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Q: How long do you think Prime Minister Abe will stay on?

Step down within the year 23.3
Until around the next election for the House of Representatives
55.0
Until the fall of the year after next 14.2
Beyond the fall of the year after next 3.9
D/K+CSW 3.6

Q: Do you support extending the Antiterrorism Special Measures Law?

Yes 34.2
No 54.6
D/K+CSW 11.2

Q: Who do you think is most appropriate for the post-Abe
premiership?

Taro Aso 21.5
Junichiro Koizumi 12.1
Yasuo Fukuda 11.5
Sadakazu Tanigaki 4.5
Nobuteru Ishihara 3.1
Yuriko Koike 1.3
Fukushiro Nukaga 0.4
Other ruling party lawmakers 2.5
Ichiro Ozawa 12.6
Other opposition party lawmakers 4.1
No one but Prime Minister Abe 2.0
None 17.6
D/K+CSW 6.8

Q: Do you think you are a floating voter with no party in particular
to support?

Yes 52.0 (55.1)
No 44.6 (38.9)
D/K+CSW 3.4 (6.0)

(Note) Figures in parentheses denote the results of an FNN-Sankei
survey conducted in July.

Polling methodology: The survey was conducted Aug. 27-28 by the
Sankei Shimbun and Fuji News Network (FNN) over the telephone on a
computer-aided random digit dialing (RDD) basis. For the survey, a
total of 1,000 persons were sampled from among males and females,
aged 20 and over, across the nation.

(9) Poll on new Abe cabinet, political parties (Mainichi)

MAINICHI (Page 2) (Full)
August 29, 2007

Questions & Answers
(T = total; P = previous; M = male; F = female)

Q: Do you support the Abe cabinet?

T P M F
Yes 33 (32) 31 34
No 52 (65) 58 49

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Not interested 14 (12) 11 16

Q: (Only for those who answered "yes" to the above question) Why?

T P M F
Because the prime minister is from the Liberal Democratic Party 28
(21) 32 26
Because something can be expected of the prime minister's leadership
8 (13) 6 8
Because there's a young, fresh image about the prime minister 35
(32) 29 38
Because something can be expected of the prime minister's policy
measures 24 (30) 25 24

Q: (Only for those who answered "no" to the above question) Why?

T P M F
Because the prime minister is from the Liberal Democratic Party 8
(7) 9 6
Because nothing can be expected of the prime minister's leadership
55 (57) 50 58
Because the prime minister is inexperienced, weak 18 (16) 17 19
Because I'm opposed to the prime minister's policies 19 (18) 22 16

Q: Which political party do you support?

T P M F
Liberal Democratic Party (LDP) 26 (17) 26 26
Democratic Party of Japan (DPJ or Minshuto) 26 (33) 33 23
New Komeito (NK) 5 (6) 4 5
Japanese Communist Party (JCP) 3 (4) 3 3
Social Democratic Party (SDP or Shaminto) 1 (2) 1 1
People's New Party (PNP or Kokumin Shinto) 1 (1) 1 1
New Party Nippon (NPN or Shinto Nippon) 0 (1) 0 0
Other political parties 1 (1) 1 2
None 36 (35) 29 39

Q: Prime Minister Abe shuffled his cabinet and LDP executives. Do
you support the new lineups of his cabinet and LDP executives?

T P M F
Yes 43 43 43
No 47 48 46

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

T P M F
They are fresh 18 13 20
The premier displayed leadership 3 4 2
They are talented 39 43 37
The premier is willing to continue reforms 39 39 40

Q: (Only for those who answered "no" to the foregoing question)
Why?

T P M F
They are not fresh 19 16 22
The premier didn't display leadership 21 21 21
They are on a one-time balance of intraparty factions 31 37 27
The premier is unwilling to continue reforms 26 23 28

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Q: How long do you think Prime Minister Abe should remain in
office?

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

T P M F
Step down right now 23 30 18
Step down within the year 25 23 26
Step down in a year or so 23 19 26
Stay on as long as possible 25 23 26

Q: The DPJ and other opposition parties are calling for Prime
Minister Abe to dissolve the House of Representatives for a general
election. Do you think the prime minister should do so?

T P M F
Yes 53 (58) 56 51
No 43 (39) 41 44

(Note) Figures shown in percentage, rounded off. "0" indicates that
the figure was below 0.5 PERCENT . "No answer" omitted. Figures in
parentheses denote the results of the last survey conducted Aug.
4-5.

Polling methodology: The survey was conducted Aug. 27-28 over the
telephone with the aim of calling a total of 1,000 voters across the
nation on a computer-aided random digit sampling (RDS) basis.
Answers were obtained from 924 persons.

(10) Poll on new Abe cabinet, political parties (Nikkei)

NIKKEI (Page 3) (Full)
August 29, 2007

Questions & Answers
(Figures shown in percentage. Parentheses denote findings from the
last survey conducted in late July.)

Q: Do you support the Abe cabinet?

Yes 41 (28)
No 40 (63)
Can't say (C/S) + don't know (D/K) 19 (9)

Q: Which political party do you support or like now?

Liberal Democratic Party (LDP) 35 (29)
Democratic Party of Japan (DPJ or Minshuto) 36 (44)
New Komeito (NK) 4 (5)
Japanese Communist Party (JCP) 3 (4)
Social Democratic Party (SDP or Shaminto) 2 (2)
People's New Party (PNP or Kokumin Shinto) 1 (1)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 1 (0)
None 14 (9)
C/S+D/K 4 (5)

Q: Do you support Prime Minister Abe's decision to stay on?

TOKYO 00004046 013 OF 021

Yes 40 (36)
No 49 (50)
C/S+D/K 12 (14)

Q: What form of government would you like to see in the future?

LDP's single-party government 7 (8)
Coalition government centering on the LDP and New Komeito 15 (14)
Non-LDP coalition government centering on the DPJ 22 (28)
Coalition government involving the LDP and the DPJ 40 (34)
Other answers 4 (4)
C/S+D/K 13 (13)

(Note) The total percentage does not become 100 PERCENT in some
cases due to rounding.

Polling methodology: The survey was taken Aug. 27-28 by Nikkei
Research Inc. over the telephone on a random digit dialing (RDD)
basis. For the survey, samples were chosen from among men and women
aged 20 and over across the nation. A total of 1,235 households with
one or more voters were sampled, and answers were obtained from 687
persons (55.6 PERCENT ).

(11) Poll on new Abe cabinet, political parties (Tokyo Shimbun)

TOKYO SHIMBUN (Page 3) (Full)
August 29, 2007

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of the
last survey conducted July 30-31.)

Q: Do you support the new Abe cabinet?

Yes 40.5 (29.0)
No 45.5 (59.0)
Don't know (D/K) + no answer (N/A) 14.0 (12.0)

Q: (Only for those who answered "yes" to the previous question)
What's the primary reason for your approval of the Abe cabinet? Pick
only one from among those listed below.

The prime minister is trustworthy 25.0 (24.1)
Because it's a coalition cabinet of the Liberal Democratic Party and
the New Komeito 5.8 (14.2)
The prime minister has leadership ability 2.2 (1.9)
Something can be expected of its economic policies 3.0 (4.6)
Something can be expected of its foreign policies 7.2 (4.6)
Something can be expected of its political reforms 9.4 (7.1)
Something can be expected of its tax reforms 1.8 (2.0)
Something can be expected of its administrative reforms 7.6 (7.1)
There's no other appropriate person (for prime minister) 34.3
(31.4)
Other answers (O/A) 1.7 (0.4)
D/K+N/A 2.0 (2.6)

Q: (Only for those who answered "no" to the first question) What's
the primary reason for your disapproval of the Abe cabinet? Pick
only one from among those listed below.

The prime minister is untrustworthy 10.8 (10.8)

TOKYO 00004046 014 OF 021

Because it's a coalition cabinet of the Liberal Democratic Party and
the New Komeito 8.9 (5.9)
The prime minister lacks leadership ability 30.5 (31.0)
Nothing can be expected of its economic policies 18.3 (19.6)
Nothing can be expected of its foreign policies 2.3 (1.0)
Nothing can be expected of its political reforms 12.1 (11.8)
Nothing can be expected of its tax reforms 3.9 (7.1)
Nothing can be expected of its administrative reforms 3.8 (5.4)
Don't like the prime minister's personal character 2.9 (3.4)
O/A 3.5 (2.5)
D/K+N/A 3.0 (1.5)

Q: What do you think about the Abe cabinet's new lineup?

Up to my expectations 26.3
Short of my expectations 12.5
No expectations from the start 52.4
D/K+N/A 8.8

Q: What do you think the new Abe cabinet should fast-track? Pick
only one from among those listed below.

Social security, including pensions 38.1
Constitutional revision 3.0
Social divide 16.1
Politics and money 8.9
Economy, employment 11.8
Tax system 6.3
Education 6.6
Foreign, security policies 5.9
O/A 1.6
D/K+N/A 1.7

Q: The Liberal Democratic Party was utterly defeated in this
summer's election for the House of Councillors. Prime Minister Abe,
however, stays on. What do you think about this?

Stay on 44.8 (43.7)
Step down 51.3 (49.5)
D/K+N/A 3.9 (6.8)

Q: Would you like the current LDP-led coalition to remain in office,
or would you otherwise like it to be replaced with a coalition
centering on the Democratic Party of Japan (Minshuto)?

LDP-led government 44.2
DPJ-led government 41.7
D/K+N/A 14.1

Q: The current House of Representatives membership is up until
September 2009. When would you like the next election to take place
for the House of Representatives?

Within the year 30.0 (29.0)
During the first half of next year 28.7 (31.6)
During the latter half of next year 17.8 (14.8)
The year after next 16.3 (16.9)
D/K+N/A 7.2 (7.7)

Q: The Maritime Self-Defense Force has been refueling US and other
foreign naval vessels in the Indian Ocean under the Antiterrorism
Special Measures Law. This antiterror law, however, is to expire

TOKYO 00004046 015 OF 021

Nov. 1. Do you think the law should be extended?

Yes 38.6
No 48.2
D/K+N/A 13.2

Q: Which political party do you support?

Liberal Democratic Party (LDP) 38.8 (31.5)
Democratic Party of Japan (DPJ or Minshuto) 25.6 (37.6)
New Komeito (NK) 3.2 (4.5)
Japanese Communist Party (JCP) 3.5 (3.4)
Social Democratic Party (SDP or Shaminto) 1.8 (2.7)
People's New Party (PNP or Kokumin Shinto) 1.3 (0.8)
New Party Nippon (NPN or Shinto Nippon) 1.0 (1.9)
Other political parties, groups --- (---)
None 24.1 (15.9)
D/K+N/A 0.7 (1.7)

Polling methodology: The survey was conducted from the evening of
Aug. 28 through Aug. 28 by Kyodo News Service on a computer-aided
random digit dialing (RDD) basis. Among randomly generated telephone
numbers, those actually for household use with one or more eligible
voters totaled 1,451. Answers were obtained from 1,030 persons.

(12) Japan, EU to set in motion negotiations on EPA by beginning
joint research possibly in September

ASAHI (Page 1) (Abridged slightly)
August 29, 2007

Japan and the European Union (EU) will launch a joint study possibly
in September as the first step toward signing an economic
partnership agreement (EPA). This is Japan's first move toward
holding EPA negotiations with a region that is a major consumer of
goods.

The Japan-EU Business Dialogue Round Table, which consists of
business leaders from the EU and Japan, will set up a workshop,
which will be backed by the Japan Business Federation (Nippon
Keidanren) and a European economic organization. Supported also by
the Ministry of Economy, Trade and Industry (METI) and the Japan
External Trade Organization (JETRO), the workshop will set the stage
for government-level talks to make a start. The workshop will put
together a report by the time of the Group of Eight (G-8)
industrialized countries summit in Lake Toya, Hokkaido, in July 2008
and submit it to leaders from Japan and the EU member countries who
are to attend the G-8 summit in order to give impetus to EPA
negotiations between Japan and the EU.

The workshop will look into challenges Japan will face to realize
the conclusion of an EPA with the EU and the economic impact of such
an agreement. The workshop also envisions the possibility of
concluding an economic integration agreement (EIA), which will make
Japan-EU economic ties deeper than a conventional free trade
agreement (FTA) or an EPA. The workshop will deal with not only
reducing or lifting tariffs on industrial products and agricultural
products but also the standardization of government rules as well as
technology, and the expansion of cooperation in the area of climate
change.

Japan's exports to the EU in 2006 totaled 10.8 trillion yen and

TOKYO 00004046 016 OF 021

centered on autos. The EU is the second largest destination of
Japan's exports after the US. Japan's imports from the EU reached
6.9 trillion yen during the same period. The government in its
economic and fiscal reform plan for 2007 mentioned that for Japan,
concluding an EPA with the EU was a future challenge, similar to
concluding an EPA with the US.

Japan alarmed that it is falling behind South Korea in EPA
negotiations with EU

Analysis

Yusuke Murayama

Japan decided to launch a workshop, which is a premise for beginning
talks on an EPA with the EU, out of strong concern that it may be
put at a more disadvantageous position than South Korea in
negotiations concerning that huge market for leading manufactured
products, such as cars and home electric appliances. Agricultural
associations, which fear an increase in imports of agricultural
products, and those lawmakers associated with agricultural
interests, are certain to strongly oppose concluding an EPA. Japan
would need to clear high hurdles before concluding an EPA with the
EU.

The World Trade Organization (WTO) has seen its Doha round of
multilateral trade talks, which aims to have 150 WTO member
countries and regions reduce or lift tariffs in unison, have hard
going, making it hopeless to reach agreement by the target date, the
end of the year. On the other hand, countries are fervently putting
their efforts into concluding bilateral agreements like an FTA or an
EPA so as to widen their markets.

In April, South Korea agreed to conclude a free trade agreement
(FTA) with the US. In May, South Korea began negotiations with the
EU, and both sides agreed to lift tariffs imposed at present on 95
PERCENT or more in terms of trade value or items. They are likely
to cut a deal by the end of the year.

Citing the fact that the EU has now imposed a 10 PERCENT tariff on
automobiles and a 14 PERCENT on flat-screen televisions, "If the EU
lifts tariffs now imposed on products imported from South Korea,
there will be a serious impact on Japan," Nippon Keidanren said. On
Aug. 27, METI Minister Amari, who this August reached a general
agreement with ASEAN on an EPA, indicated that "it's better to
conclude" an EPA with the EU as quickly as possible.

Given the ruling Liberal Democratic Party's devastating defeat in
single-seat constituencies, particularly in farm villages, in the
July Upper House election, political pressure will be unavoidable in
order to advance trade liberalization that will give pain to farm
villages. Before starting EPA talks, the government seems likely to
be sought to work out a set of measures to boost the competitiveness
of Japanese agriculture.

(13) Okinawa refuses to receive Henoko assessment outline from
Defense Ministry

TOKYO SHIMBUN (Page 3) (Abridged slightly)
August 30, 2007

The Defense Agency has begun taking steps toward building an

TOKYO 00004046 017 OF 021

alternative facility for Futenma Air Station in the Henoko district
of Nago City, sending a notice specifying the outline of an
environmental-impact assessment to the Okinawa prefectural
government without having gained its prior consent. But Okinawa
residents still do not have access to the assessment plan. Tensions
are growing between the Defense Ministry and the Okinawa
government.

"The notice on the assessment plan came from the Naha Defense
Facilities Administration Bureau (NDFAB) by registered mail. But the
government cannot force us to set up a corner in the city office for
the public to view it." The official of the Nago City office of US
base affairs who made this comment was visibly angry with the
government's roughshod approach to the planned environmental
assessment.

The government is pushing ahead with a plan to build a V-shaped pair
of runways near Camp Schwab in the Henoko district. However, the
Okinawa prefectural and Nago municipal governments are demanding
that the replacement facility be constructed further offshore than
the government plan out consideration for local residents.

While the two sides were still wide apart, the Defense Ministry on
August 7 sent notices on the environment assessment plan to the
Okinawa prefectural government and other affected municipalities and
issued procedures for public inspection on the 14th.

In reclaiming a large body of public waters for a project, like the
one at Camp Schwab, the government is required under the
environmental impact assessment law to go through the necessary
administrative formalities, such as sending a notice specifying the
outline of an environmental impact assessment, before obtaining the
governor's approval.

A Defense Ministry source said: "The ministry will carry out the
planned assessment because it has decided to conduct it without
fail. The Defense Facilities Administration Agency has already made
a decision." In other words, the ministry has already embarked on
the project.

The outline explains the government's plan to build two 1,600-meter
runways in a V shape and reclaim some 160 hectares of public waters,
including 10 hectares of waters around Camp Schwab. The notice also
discusses spots to be reclaimed for work and methods of the planned
environmental survey.

In his regular press conference on August 17, Okinawa Governor
Hirokazu Nakaima criticized the notice that had come from the
government, saying: "This is a betrayal. To begin with, the
government's way of doing things is absurd."

In stark contrast to the infuriated Nakaima, an NDFAB official said
calmly:

"Tokyo and Washington are in agreement to relocate Futenma Air
Station by 2014. In order to meet that deadline, we have to complete
the assessment and file an application for reclamation by 2009. We
have explained things to Okinawa over twenty times and waited until
the last moment. The prefectural and concerned municipalities
expressed their desire to postpone receiving the notice. But the
assessment law requires us to send the outline, and under this law
no one is allowed to refuse accepting such a notice. It is our

TOKYO 00004046 018 OF 021

understanding that proceeding for public inspection has completed."

Environment Ministry unable to serve as mediator

An official in charge at the Environment Ministry responsible for
the assessment law noted:

"I have not heard of a government agency sending a notice to another
local government by registered mail. They must be strongly at odds.
The environment minister is a member of the Alternate Facility
Council, so he can state his views before the council. But it is
governors that have the power to authorize reclamation projects for
the use of the surface of public waters. Legally speaking, there
will be no instances when the minister can state his views."

An official of the Okinawa base reversion office complained:

"An NDFAB official came here to hand deliver the outline. We tried
to resist it, but he forced us to keep it here. The same thing came
via parcel delivery service. We successfully refused this one. It's
absurd that there exist two sets of government documents."

Asked by a reporter if he might say "no" to a government request for
the planned reclamation project, Nakaima said: "The envisioned
environment survey will take two and a half years. Although I cannot
say affirmatively about things in the future, I will say 'no' as a
matter of course."

As a result of the cabinet reshuffle, Masahiko Komura became defense
minister on August 27. A Nago official said discouragingly:

"The government will continue to pursue 'done deals' without holding
thorough discussion. No matter who becomes defense minister, that
won't change. Local residents used to play a central role in the
anti-base movement. But experiencing such arrogance of the ministry,
we have no other option but to fight with the central government in
collaboration with the prefectural government."

(14) Pension, Antiterrorism Law to be major issues at extra Diet
session; Right of Diet member to investigate state affairs to become
another tool for DPJ to attack government, ruling camp

ASAHI (Page 2) (Full)
August 30, 2007

German Chancellor Angela Merkel sent a list of questions to
Democratic Party of Japan (DPJ) President Ichiro Ozawa, with whom
she will meet on Aug. 30. Her first question was about Ozawa's plan
to grab the reins of government, followed by questions about his
policy toward the US and China. Thought there was no question about
the Antiterrorism Special Measures Law in the list of questions,
Ozawa intends to express his opposition to an extension of that
legislation.

On August 8, US Ambassador to Japan Thomas Schieffer called on Ozawa
at DPJ headquarters. The planned meeting with the German chancellor,
following the one with the US ambassador, indicates that the DPJ's
presence cannot be ignored internationally.

Lower House member Akira Nagatsuma, a key lawmaker in the uncovering
of pension record mismanagement by the Social Insurance Agency, has
been interviewing at the Diet building those who have been hurt by

TOKYO 00004046 019 OF 021

the pension record-keeping fiasco.

Nagatsuma expects that the DPJ can now exercise the right of a Diet
member to investigate state affairs, which allows the party to
request government offices to submit documents to the Upper House,
where his party holds a majority.

After the July 29 Upper House election, the DPJ called on the
government under the name of the party's Policy Research Committee
chairman to disclose examples of pension premium records that had
been identified with the submission of pay slips. But the party has
not received any reply from the government. If the DPJ is not
satisfied with the government's reply, it will invoke its right. One
of the executive said: "If we urge government offices to submit
document that show how they waste public funds, we will be able to
get new fiscal resources."

The DPJ envisions that it will submit bills first to the Upper House
and once passed, send them to the Lower House, where the opposition
will have the ruling coalition take litmus tests as to whether to
accept or vote down the bills. Therefore, the number of bills the
opposition camp will submit to the Upper House will likely
increase.

Some in the ruling camp said that the ruling parties won't be able
to oppose the bill to ban the use of pension premium payments for
other purposes than pension benefits. A debate will be conducted
between Nagatsuma and Health, Labor and Welfare Minister Yoichi
Masuzoe, a key member of the new Abe cabinet. The DPJ along with the
Social Democratic Party and the New People's Party have submitted a
bill to freeze the postal-privatization program. The party will then
re-submit the pension bill to the September extra Diet session,
aiming at undermining the postal rebels who rejoined the LDP. It is
also expected to submit other bills such as one to revise the
Political Funds Control Law and one to revise the disabled persons'
self-reliance support law.

(15) Three cabinet ministers among CEFP members replaced: Is panel
going to correct its growth policy?

YOMIURI (Page 9) (Excerpts)
August 30, 2007

Three cabinet ministers among the members of the Council on Economic
and Fiscal Policy (CEFP) were replaced as a result of the cabinet
shuffle on Aug. 27. How will the addition to the panel of Chief
Cabinet Secretary Yosano, who attaches importance to the
recapitalization of public finance, Finance Minister Nukaga, a
member of the commerce and industry policy clique in the Diet, and
Internal Affairs and Communications Minister Masuda, who is calling
for the revitalization of regional districting, change the trend of
discussion in the panel? In particular, the point has been made that
the panel could be pressed to correct its growth-focused policy that
envisages the future, premised on a high economic growth rate. In
the meantime, the main policy-making battlefield is expected to
shift from the CEFP to talks between the ruling and opposition camps
due to the opposition bloc's predominance in the Upper House. A new
challenge for the panel is how to show its presence as the key
player of structural reforms.

Chief cabinet secretary with cautious outlook; State minister for
economic and fiscal policy perplexed at his statement

TOKYO 00004046 020 OF 021

Meeting the press after a bilateral summit with the German
chancellor, Prime Minister Abe yesterday evening once again stressed
the importance of the government's growth strategy. He noted,
"Innovation and an open stance are two important factors in order
for Japan to achieve growth." Yosano basically shares the same view
with the prime minister regarding the importance of economic
growth.

However, his pet policy theme is that public finance must be managed
in a healthy manner, based on a cautious growth outlook, which makes
a clear distinction from a growth policy, which aims at fiscal
reconstruction financed from boosted tax revenues brought about by
high economic growth, as advocated by State Minister for Economic
and Fiscal Policy Ota.

Regarding the government's fiscal recapitalization goal, Yosano on
Aug. 27 told a press conference, "It is necessary to determine the
goal, based on various premises (various growth rates)." This
statement perplexed Ota. She noted in response, "I would like to
check the real meaning of his statement." Gaps in the views of
Yosano and Ota over the management of public finance could be
highlighted at CEFP meetings.

Finance Minister Nukaga in an interview yesterday noted, "It is
important to reconstruct public finance, while sustaining economic
growth." He is taking a neutral stance for the time being. What
stance he will take in future discussion on spending cuts and reform
of the tax system will be of interest.

Local governments are placing high expectations on Internal Affairs
Minister Masuda, who was an Iwate Prefectural governor until April.
They hope that he will take the initiative in a drive to revitalize
regional areas. However, in view of the fact that Masuda has also
been known as a reformist, as can be seen in that he extensively
slashed public works sponsored by the prefecture, he could serve as
a bulwark against pressure for pork-barrel spending.

Ota, whose plays a leading role in the CEFP, will likely find it
difficult to manage panel discussion not only due to the changeover
of members but also due to the trading of places between the ruling
and opposition blocs in the Upper House. One government source said
that now that the setting for policy coordination has shifted to
talks between the ruling and opposition parties, the state minister
for economic and fiscal policy would not be able to lead the
management's policy management.

As such, Ota intends to maintain her presence by shifting the role
of the CEFP from being a policy-decision-making entity to an entity
that presents policy options. She plans to present several options
for the package reform of the tax system and social reform,
including a high-contribution-and-high-benefit system and a
medium-contribution-and-medium-benefit system

She wants to take the initiative in policy debate, taking the stand
that it would easier for the CEFP to obtain support from the public
than talks between the ruling and opposition camps, because talks
between the ruling and opposition camps are not open to the public,
while the gist of the proceedings of CEFP meetings are released
three days later.

Chief Cabinet Secretary Yosano

TOKYO 00004046 021 OF 021

? "Both the prime minister's official residence (Kantei) and
Kasumigaseki (government office district) are the government itself.
There is no intrinsic confrontation between them." (at a press
conference yesterday)

? My policy is to reconstruct public finance with economic growth
and reform of the tax revenue structure as two wheels of a cart. I
believe Prime Minister Abe shares my view." (at a press conference
on Aug. 28)

? "People once said that I intended to become a policy man. However,
as a matter of fact, the management of the Diet has occupied a large
part of my political career. I understand that I was appointed chief
cabinet secretary in order to make most of my experiences and
knowledge accumulated throughout my career." (during a press
conference held after the first cabinet meeting on Aug. 27)

Finance Minister Nukaga

? "Achieving a good balance between economic growth and fiscal
reconstruction is extremely important. Fiscal reconstruction would
be impossible without economic growth. It is important to
reconstruct public finance, while sustaining economic growth.

? "The basic stance of the CEFP is to set a macro-direction for the
Japanese economy. Due to the trading of the places between the
ruling and opposition parties, it would be in reality most important
to purse discussion in the Diet. In my view, however, it would be
possible for the CEFP to make appropriate proposals regarding
ideals, guidelines and how to secure sustainability." (in an
interview on Aug. 29)

State Minister for Economic and Fiscal Policy Ota

? "There will be no change in the way the CEFP is managed. It is a
place for the prime minister to display leadership. The CEFP will
hold talks neither with the ruling camp nor with opposition bloc. It
is important for the panel to present policy options, while
indicating drawbacks and advantages of each policy so as to help the
public make decisions. The role of the CEFP, whose discussion is
open to the public through minute books, will become even more
important."

? "We will discuss the tax system reform issue in cooperation with
the government's Tax Research Commission. We will consider this
issue and social security in a package. We want to provide in the
fall a list of benefits the contributors receive in return for their
premium payments." (in an interview on Aug. 28).

DONOVAN

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