Cablegate: Japanese Morning Press Highlights 09/21/07

VZCZCXRO3692
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #4400/01 2640152
ZNR UUUUU ZZH
P 210152Z SEP 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 7782
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 5686
RUEHFK/AMCONSUL FUKUOKA 3272
RUEHOK/AMCONSUL OSAKA KOBE 6924
RUEHNAG/AMCONSUL NAGOYA 2233
RUEHKSO/AMCONSUL SAPPORO 3997
RUEHBJ/AMEMBASSY BEIJING 9073
RUEHUL/AMEMBASSY SEOUL 5130
RUCNDT/USMISSION USUN NEW YORK 6027

UNCLAS SECTION 01 OF 12 TOKYO 004400

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: JAPANESE MORNING PRESS HIGHLIGHTS 09/21/07

Index:

1) Top headlines
2) Editorials
Prime Minister's daily schedule: Hospitalized

3) Cabinet Office poll: 80 PERCENT of public anxious about
terrorist threat

Antiterrorism Law:
4) In interview, Deputy Secretary Negroponte expresses hope that
Japan's refueling service in the Indian Ocean will continue
5) Japan unable to persuade Russia to go along with the UNSC
resolution praising the Indian Ocean effort
6) DPJ President Ozawa sends list of questions to US Embassy on
Afghan campaign, ignores UNSC resolution
7) DPJ's Naoto Kan in news conference demands full disclosure from
government of data on fuel supplied to multinational forces on
Indian Ocean
8) Vice defense minister again denies diversion of Japan-supplied
fuel to the Iraq conflict
9) Civic group Peace Depot gets hands on US Navy ship log that
contradicts refueling data supplied by Japanese government
10) Government continues to hope that Democratic Party of Japan
(DPJ), as well as public opinion, will be swayed by UNSC resolution
praising anti-terror effort
11) Prime Minister Abe in summit meeting with President Bush
directly asked for help on the MSDF mission as "my final job"
12) New anti-terror bill will contain reference to the new UNSC
resolution praising Japan's efforts
13) Chief Cabinet Secretary Yosano sees re-voting on the new
anti-terror bill in the Lower House as a routine procedure

14) DPJ readies bill that would force ASDF troops to return from
Iraq

15) Foreign Minister Machimura to attend UN meetings

Abe in hospital:
16) Prime Minister Abe spends his 53rd birthday in a hospital bed
17) As criticism mounts about Abe in hospital with no acting premier
appointed, government repeatedly assures that there is no problem

LDP presidential race:
18) Fukuda maintains his commanding lead as the race winds down
19) Fukuda takes cautious stand on Constitution, pledges to keep
commitment to bring national finances into black by 2011
20) Fukuda no longer talking about making only small changes to the
cabinet
21) When he was chief cabinet secretary, Fukuda took annual
donations from a North-Korea-connected pachinko company

Articles:

1) TOP HEADLINES

Asahi & Nikkei:
Sharp, Pioneer to enter into business tie-up

Mainichi:
Novartis Pharma to exempt Ritalin from medicines for depression

TOKYO 00004400 002 OF 012

Yomiuri:
Ruling coalition to freeze medical and social welfare policy leading
to increase in public burdens

Sankei:
Corrupt SIA: Tolerant of bureaucrats with no punishment imposed on
corrupt officials and retirement money given even to embezzler
bureaucrats

Tokyo Shimbun:
Environment Ministry to work together with China and Taiwan to find
out sources of air pollution

Akahata:
LDP presidential election symbolizes how the LDP is declining
politically

2) EDITORIALS

Asahi:
(1) UN resolution: Substantive debate instead of formalities
(2) Economic policy: Plans to put the public at ease necessary

Mainichi:
(1) Refueling mission: Compete on antiterrorism measures
(2) Can police regain the public's confidence?

Yomiuri:
(1) UN resolution: Strong expectations of MSDF continuing its
refueling mission
(2) Nuclear waste: Government should take the lead to look for site
for disposal

Nikkei:
(1) UNSC resolution puts Ozawa's logic at disadvantage
(2) We worry about New Komeito's lenient attitude toward fiscal
reconstruction

Sankei:
(1) UN resolution can help Japan continue refueling mission
(2) Punishment of superintendent general of MPD

Tokyo Shimbun:
(1) UN resolution a makeshift measure
(2) Publication of boy's deposition: Don't seal off information

Akahata:
(1) UNSC resolution can't justify assistance

3) Poll: Over 80 PERCENT worried about terrorism

SANKEI (Page 3) (Full)
September 21, 2007

Over 80 PERCENT are concerned about foreign armed attacks or major
terrorist attacks, the Sankei Shimbun found from a special public
opinion survey released yesterday by the Cabinet Office. North
Korea's missile launches and nuclear test last year have apparently
affected national sentiment.

The survey was conducted across the nation in August with 3,000
persons aged 20 and over. The retrieval rate was 60.2 PERCENT . In

TOKYO 00004400 003 OF 012

the survey, respondents were asked if they were concerned about
armed attacks, such as ballistic missiles and guerrilla commandos.
In response to this question, "yes" totaled 80.2 PERCENT , broken
down into "very much" at 34.0 PERCENT and "somewhat" at 46.2
PERCENT .

Respondents were also asked about terrorist attacks targeting atomic
power plants or using biochemical weapons. To this question, "yes"
totaled 81.4 PERCENT , broken down into "very much" at 38.0 PERCENT
and "somewhat" at 43.4 PERCENT .

In 2004, the government created the so-called public protection law.
This law stipulates measures for state, local, and other authorities
to deal with armed attacks and terrorist attacks. However, a total
of 70.2 PERCENT answered that they knew "little" or "nothing" about
the law.

4) Negroponte expresses hope for Japan's continued refueling
mission

NIKKEI (Page 1) (Full)
September 21, 2007

Tetsuya Jitsu

In an interview with the Nikkei on Sept. 19, Deputy Secretary of
State Negroponte expressed his strong expectations for Japan's
continued antiterrorism effort. He said: "Japan's refueling
operation in the Indian Ocean based on the Antiterrorism Special
Measures Law is a critically important contribution to the
international community. We hope Japan will decide to continue the
mission as soon as possible." On North Korea's nuclear development,
he said: "It is important to move the six-party talks forward. I
think that holding the talks is a good means to denuclearize the
Korean Peninsula." He then stressed his willingness to make utmost
efforts to make progress in the six-party talks.

After serving as the first national intelligence director,
Negroponte has managed the US government's Asia and Iraq policies
under Secretary of State Rice.

Negroponte emphasized in the interview that the maritime
interdiction operation in the Indian Ocean and assistance for
Afghanistan are activities supported not only by the US but also by
the international community, remarking: "They are an international
challenge."

Asked about the possibility of delisting North Korea as a state
sponsor of terrorism, Negroponte replied: "We pledged in February to
start preparations for delisting, but we did not set any deadline.
We are also monitoring progress on other issues." He thus indicated
that the US would not delist North Korea while ignoring the issue of
North Korea's past abductions of Japanese nationals. The deputy
secretary, however, added: "We do not want to think that there is an

SIPDIS
absolutely strict interrelationship between the two issues (progress
on the abduction issue and delisting the North)."

Some observers anticipate a delay in Japan's economic reform under a
new administration in Japan. Negroponte expressed his expectation
that the reform line promoted under the lead of the Koizumi
administration will continue into the future, saying: "We strongly
support a free and open market. I believe it will benefit other

TOKYO 00004400 004 OF 012

countries if Japan takes a similar policy stance."

Regarding a proposal floated recently for Japan and the US to
conclude a free trade agreement (FTA), the deputy secretary stated:
"If the Japanese government proposes discussing the possibility, we
will respond to it with pleasure."

On the Iranian nuclear issue, Negroponte indicated his view that new
investment by Japan in Iran is undesirable, saying: "I think that
now is not a proper time for creating a new economic axis with
Iran."

5) UNSC adoption of resolution of appreciation for MSDF mission a
favor for Japan; China, Russia unhappy with failure to produce
unanimous vote

MAINICHI (Page 2) (Abridged slightly)
September 21, 2007

Takayasu Ogura, New York

The UN Security Council adopted on Sept. 19 a resolution to extend
the activities of the International Security Assistance Force (ISAF)
in Afghanistan. But the failure to adopt it by a unanimous vote has
made some UNSC members unhappy. The UNSC adopted the resolution when
the ISAF's deadline was still three weeks away by giving priority to
the domestic circumstances of Japan and Germany. A UN diplomatic
source indicated that the UNSC now owes the international community
a favor.

It was unusual for the consensus-oriented UNSC to fail to approve an
unobjectionable resolution by a unanimous vote. Russian Ambassador
to the UN Churkin complained after the adoption that the decision
took a toll on the unity of the UNSC.

The Chinese representative, who voted for the resolution, also
warned, saying: "Every resolution should be adopted by a unanimous
vote in principle. I hope this will not create precedence."

Asked why the UNSC had to adopt the resolution so early, President
Ripert of France explained that receiving requests from member
countries that have deployed troops to Afghanistan, such as Japan
and Germany, the body had had to make concessions.

It was ironical that the resolution, which was supposed to confirm
the solidarity among member countries against terrorism, has exposed
discord due to circumstances in Japan and Germany.

A UN diplomatic source took this view: "Diplomacy is about giving
and taking. It is a fact that Japan now owes the UNSC a big favor."

6) DPJ holds line; Ozawa sends inquiry to US Embassy, ignores UNSC
resolution on appreciation for Japan's efforts

SANKEI (Page 5) (Abridged)
September 21, 2007

Ichiro Ozawa, president of the leading opposition Democratic Party
of Japan (Minshuto), has sent a letter to the US Embassy in Tokyo,
requesting the US government to provide information about military
operations conducted by US naval vessels refueled by the Maritime
Self-Defense Force in the Indian Ocean, sources revealed yesterday.

TOKYO 00004400 005 OF 012

The United Nations Security Council has now adopted a resolution
incorporating "appreciation" for Operation Enduring Freedom (OEF),
including the MSDF's refueling activities in the Indian Ocean.
Meanwhile, the DPJ has been standing firm against continuing the
MSDF's refueling mission. The government and the ruling parties want
the DPJ to soften its attitude in response to the UNSC resolution.
However, Ozawa is now calling for the United States to disclose
information.

Ozawa sent the letter of inquiry last weekend after he met with US
Ambassador to Japan Schieffer on Aug. 8. In that meeting, Schieffer
sought Ozawa's understanding on continuing the MSDF's refueling
mission. Schieffer then told Ozawa that the United States was ready
to provide classified information.

The letter, based on Ambassador Schieffer's statement, urges the US
government to answer questions about how US naval vessels in the
Indian Ocean from the US Navy's 5th Fleet and other fleets have been
using the MSDF's fuel supplies. The letter requests answers to three
different questions: 1) Afghanistan; 2) Iraq; and 3) other
purposes.

Ozawa has also called for the US government to clarify how it has
disclosed information on its websites about the MSDF's refueling
activities.

The DPJ has raised questions about the MSDF's refueling activities,
citing what the US Navy's 5th Fleet said on its website. "They're
suspected of using the fuel for the Iraq war," a DPJ executive
says.

The Japanese government has denied that US naval vessels used the
MSDF's fuel supplies for the Iraq war. The US 5th Fleet has already
deleted its website's description. However, the DPJ is poised to
pursue the government in the extraordinary Diet session.

The DPJ has now directly requested the US Embassy to provide
information. "I don't know if they will say that's a military secret
and they will cover up the information," a DPJ executive said. "That
is also intended to measure the United States' sincerity to our
party," he added.

7) DPJ calls for disclosure of the results of the MSDF's refueling
mission

NIKKEI (Page 2) (Full)
September 21, 2007

The main opposition Democratic Party of Japan's (DPJ) Deputy
President Naoto Kan mentioned the Maritime Self-Defense Force's
(MSDF) refueling mission in the Indian Ocean at a press briefing
yesterday and called for disclosure of every aspect of the mission,
telling reporters: "The government needs to reveal what results the
mission has produced over the past six years and show the results to
the public." Deputy President Azuma Koshiishi, too, indicated an
intention to exercise the right to investigate state affairs to deal
with this matter, noting: "(The government) has so far put an end to
it by insisting, 'We can't adduce such information.' But we can now
(exercise that right) in the Upper House."

8) Vice defense minister denies diversion of oil provided by Japan

TOKYO 00004400 006 OF 012

for Iraq war

NIHON KEIZAI (Page 2) (Full)
September 21, 2007

At a press briefing yesterday, Administrative Vice Defense Minister
Kohei Masuda denied the rumor that oil provided by the Maritime
Self-Defense Force (MFDF) to US vessels was converted for the Iraq
war, arguing: "Diplomatically, we have exchanged notes with the
countries that receive refueling services from the MSDF. This
matter has been also understood by personnel on the scene of the
refuelings. There shouldn't be a problem."

9) Civic group obtains US logbooks that say MSDF provided 800,000
gallons of fuel -- four times the volume claimed by government -- to
US naval vessels

MAINICHI (Page 2) (Abridged slightly)
September 21, 2007

The civic group Peace Depot announced yesterday that it has obtained
the logbooks of a US refueling ship indicating that it had received
about 800,000 gallons of fuel from the Maritime Self-Defense Force
under the Antiterrorism Special Measures Law. The amount is four
times what was announced by the government. Representative Hiromichi
Umebayashi said: "There is a huge gap. A large part of the fuel from
Japan might have been used for the operation in Iraq in violation of
the Antiterrorism Law."

The government's explanation in the Diet in May 2003 was that the
MSDF had provided about 200,000 gallons of fuel to a US supply
vessel on February 25, 2003, shortly before the opening of the Iraq
war. Peace Depot said that the logbooks belonged to a US refueling
ship that had provided fuel to an aircraft carrier and that the
group obtained them under the Information Disclosure Law. The
logbooks said the US vessels had received 18,704 barrels (about
786,000 gallons) of DFM (Diesel Fuel Marine) from the MSDF refueling
ship Tokiwa.

Under the Antiterrorism Law, the MSDF is allowed to provide fuel
only to naval vessels engaged in the antiterrorism operation in the
Indian Ocean.

10) Government expects new UNSC antiterrorism resolution to
influence public opinion, DPJ on MSDF refueling mission

YOMIURI (Page 2) (Excerpts)
September 21, 2007

The UN Security Council (UNSC) adopted on Sept. 19, local time, a
resolution expressing appreciation for the maritime intercept
operations, in which the Maritime Self-Defense Force (MSDF) has
participated on a refueling mission in the Indian Ocean. The
government and the ruling camp look upon the resolution as a "trump
card" to solicit more support from the public for the government's
plan to extend the MSDF mission. They expect the adoption of the
resolution will work to apply pressure on the Democratic Party of
Japan (DPJ), with a government source remarking: "The majority view
at home and abroad is that the Antiterrorism Special Measures Law,
which authorizes the dispatch of MSDF vessels, should be extended."

Chief Cabinet Secretary Yosano said in a press conference yesterday:

TOKYO 00004400 007 OF 012

"UNSC members have given high marks to the MSDF mission. Now we have
no doubt that we have taken action in accordance with the wishes of
the UN." He then renewed his call for the DPJ's understanding,
saying: "DPJ President Ozawa advocated an UN-centered policy in a
book he authored about 15 years ago. I wonder whether he is thinking
of the lack of consistency."

New Komeito Secretary General Kitagawa also made this comment
yesterday: "We hope DPJ members will discuss the matter in earnest
and also hold consultations with us (ruling party members)."

DPJ Deputy President Kan, though, categorically said in a press
briefing yesterday: "Our party's policy will not be directly
affected (by the adoption of the resolution)," adding: "We should
accept the UNSC's appreciation with an open mind. But this is a
separate matter from the question of whether it is proper to extend
the Antiterrorism Law or to enact a new law."

11) Abe directly asked Bush for cooperation in Sept. 8 Japan-US
summit as his "last mission"

MAINICHI (Page 2) (Full)
September 21, 2007

Prime Minister Shinzo Abe directly asked President George W. Bush
for US cooperation for an extension of the Maritime Self-Defense
Force's refueling operations in the Indian Ocean. Abe's direct
appeal was the Japanese government's trump card.

A Japan-US summit took place on Sept. 8 on the sidelines of the
Asia-Pacific Economic Cooperation forum, and the following
conversation took place between Abe and Bush, according to a Foreign
Ministry source:

Abe: "If possible, I would like to see a UN resolution authorizing
the MSDF operations."

Bush: "I will order diplomatic authorities, including Secretary of
State Rice and Foreign Minister Machimura, to make contacts at the
United Nations."

Starting in late August, the Foreign Ministry prepared a plan to
have the United Nations adopt a resolution in late September
mentioning the maritime interdiction operations. Foreign Minister
Machimura and others then presented the Foreign Ministry plan to the
Kantei (Prime Minister's Official Residence), and this led to Abe's
direct appeal to Bush.

At a press conference on the following day, Sept. 9, Abe indicated
that his cabinet would resign en masse if he failed to continue the
MSDF operations. The prime minister announced his intention to step
down three days later. The UN Security Council has adopted a
resolution including words of appreciation for the antiterrorism
operation. Thus Abe's last mission bore fruit.

12) New antiterrorism law to refer to UNSC resolution appreciating
MSDF refueling mission

YOMIURI (Page 4) (Full)
September 21, 2007

Following the UN Security Council's (UNSC) adoption of a resolution

TOKYO 00004400 008 OF 012

including a phrase expressing appreciation for the maritime
intercept operations, which the Maritime Self-Defense Force (MSDF)
has joined, the government decided yesterday to specify the new
resolution in an antiterrorism bill it plans to submit in the
current Diet session.

To enable Japan to extend the MSDF refueling and water-supply
mission in the Indian Ocean beyond the expiration of the
Antiterrorism Special Measure Law on Nov. 1, the government plans to
prepare new legislation. A government source said yesterday: "The
new UNSC resolution refers to the need for continued international
efforts, such as the maritime intercept operations, so we will
specify this resolution in the bill."

13) "Re-voting is not a special procedure"

NIKKEI (Page 2) (Full)
September 21, 2007

At a press briefing yesterday, Chief Cabinet Secretary Kaoru Yosano
spoke of re-voting in the Lower House if new legislation allowing
the Maritime Self-Defense Force (MSDF) to continue the refueling
mission in the Indian Ocean is rejected in the Upper House and he
reiterated this way of thinking: "The provision on (re-voting) is
not intended for an emergency. It is a common procedure. It is
common to apply it."

14) DPJ approves legislation for withdrawal of ASDF from Iraq

SANKEI (Page 5) (Full)
September 21, 2007

At a session yesterday of its Foreign and Defense Department, the
main opposition Democratic Party of Japan (DPJ) approved a bill for
repealing the Iraq Special Measures Law in order to withdraw Air
Self-Defense Force (ASDF) troops now deployed in Iraq for
transportation services. The DPJ plans to introduce the bill to the
current session of the Diet. The party's Deputy Defense Minister
Tsuyoshi Yamaguchi noted, "The international view is that the Iraq

SIPDIS
war is wrong." The DPJ intends to pass the bill in the Upper House,
which the opposition bloc controls, and send it to the Lower House
and pressure the ruling bloc to approve it.

15) Foreign Minister Machimura to attend UN session

SANKEI (Page 5) (Full)
September 21, 2007

Foreign Minister Nobutaka Machimura yesterday decided to attend a
high-level session of the United Nations on Iraq and Afghanistan in
New York. The session is to occur on Sept. 22-23. His itinerary is
now under coordination for him to meet with UN Secretary General Ban
Ki Moon and Afghan President Karzai. After voting by absentee ballot
for the Liberal Democratic Party presidential election, he is to
depart for New York on Sept. 22 and return home on Sept. 24.

16) Prime Minister turns 53 today: Cabinet resignation en masse
likely while Abe in hospital

NIKKEI (Page 2) (Full)
September 21, 2007

TOKYO 00004400 009 OF 012

Prime Minister Shinzo Abe turned 53 today. When he was hospitalized
on Sept. 13, it was announced that he would stay in hospital for
three to four days. However, his condition has not improved. There
is no telling when he can be discharged. The view is spreading that
the cabinet will resign en masse on Sept. 25 while the prime
minister is still in the hospital. Cabinet decisions were yesterday
made in the form of an official of the Prime Minister's Office
obtaining a signature of each minister. This is quite a change from
his birthday last year, which he spent mulling the lineup of his
cabinet following his landslide victory in the LDP presidential
election the preceding day. Chief Cabinet Secretary Kaoru Yosano
told a news conference yesterday, "I think the right thing the prime
minister should do, if he wants to continue as a politician, is to
have an opportunity to explain the situation in his own words. I
believe the prime minister thinks the same way."

September 20 was Secretary General Aso's, who is now running in the
LDP presidential race, birthday. He was happy to receive a flower
bouquet from party staffers, noting, "I am glad you remembered my
birthday."

17) Government reiterates it does not need to appoint acting prime
minister

TOKYO SHIMBUN (Page 2) (Slightly abridged)
September 21, 2007

More than one week has passed since Prime Minister Shinzo Abe was
admitted to a hospital in Tokyo on Sept. 13 after announcing his
intention to step down the day before. The government has left many
of Abe's responsibilities to Chief Cabinet Secretary Kaoru Yosano
since the hospitalization, without appointing an acting prime
minister. Although some have pointed to the crisis-management
problem, such as a response to a major disaster, the government has
reiterated that under existing rules, the present situation does not
require the appointment of an acting prime minister.

The Cabinet Law stipulates that in case the prime minister is
prevented from carrying out his duties, or the prime minister's post
is vacant, the minister of state designated by him in advance shall
perform temporarily the prime minister's responsibilities. Masayoshi
Ito, chief cabinet secretary in the Ohira government, and Mikio
Aoki, chief cabinet secretary in the Obuchi cabinet, were appointed
as acting prime ministers when prime ministers Ohira and Obuchi were
hospitalized.

Yosano, however, has repeatedly said since Abe entered the hospital
that Abe's hospitalization does not meet the requirement for
appointing an acting prime minister.

The chief cabinet secretary cited the doctor's diagnosis that Abe
needs to take rest but since he has no problem with making
decisions, appointing an acting prime minister is not necessary. In
fact, Yosano met twice in the hospital with Abe to receive
directions from him regarding such issues as personnel changes. He
obtained the prime minister's approvals.

18) Fukuda continues to maintain lead in the LDP presidential race

MAINICHI (Page 1) (Excerpt)
September 21, 2007

TOKYO 00004400 010 OF 012

With the Liberal Democratic Party (LDP) presidential election about
to take place on Sept. 23, the Mainichi Shimbun carried out news
coverage of the situation at the final phase of the race. Former
Chief Cabinet Secretary Yasuo Fukuda has firmed up approximately 70
PERCENT of the 387 LDP lawmakers' votes, and he and LDP Secretary
General Taro Aso have split the 144 regional votes. Fukuda's
position as the frontrunner has not changed. Aso has not been
successful in capturing more votes from LDP lawmakers.

19) Fukuda cautious about constitutional revision, determined to
maintain goal of balancing budget by fiscal 2011

MAINICHI (Page 1) (Full)
September 21, 2007

Former Chief Cabinet Secretary Yasuo Fukuda and Secretary General
Taro Aso, both of whom are running in the Liberal Democratic Party's
(LDP) presidential race, yesterday responded to separate interviews
by the Mainichi Shimbun. Regarding the proposal to revise the
Constitution in 2010 as incorporated in the party's manifesto for
the Upper House election, Fukuda indicated a stance of making a
decision in a cautious manner, based on the trading of places
between the ruling and opposition camps in the Upper House. He
noted, "The major premise is whether the situation permits moving on
such an issue. It's possible that I would not be able to do so even
if I wanted to."

Concerning the inclusion of gratitude for the Maritime Self-Defense
Force's refueling operation in the Indian Ocean in the resolution
adopted by the UN Security Council (UNSC), Fukuda said,
"Expectations have been expressed. I would like to make it possible
for the MSDF to continue its mission as planned."

The New Komeito has called for putting off the government goal of
bringing the primary balance of the central and local governments
into the black by 2011. Fukuda responded, "It is only natural for
the government to do its utmost to achieve the goal. I have no
intention whatsoever of postponing the target year."

To a question about a 1 PERCENT hike in the consumption tax, which
he has earlier mentioned, Aso said, "If a consumption tax hike puts
a dent in the economy once again, the public would not want it." He
thus indicated his perception that it would be premature to raise
the consumption tax in the annual tax code revision for fiscal
2008.

20) Fukuda corrects remarks that he would replace only small number
of cabinet ministers, stressing he will make decision after LDP
presidential election

SANKEI (Page 6) (Full)
September 21, 2007

Interviewed by Sankei Shimbun and other news companies last evening,
former Chief Cabinet Secretary Yasuo Fukuda, who is now running in
the Liberal Democratic Party (LDP) presidential election, indicated
that he would consider the scale of a reshuffle of the cabinet
ministers and whom he will appointment as cabinet ministers after
seeing the result of the LDP presidential race. He stated: "I will
think about it after seeing the result of the election. I may give
political consideration in view of various aspects.

TOKYO 00004400 011 OF 012

Appearing on a NHK program last night, Fukuda said: "I will make a
decision after considering the circumstances. Now is not the time to
talk about the scale of a cabinet reshuffle. I think I will fairly
busy for a day or two."

Fukuda previously indicated that a large-scale reshuffle of the
cabinet ministers would be difficult, saying: "Since the Diet is in
session, the new cabinet ministers would have to take the floor
immediately to answer questions by party representatives. So I won't
be able to make big changes."

In the ongoing presidential contest, Fukuda is backed by eight
factions in the LDP, excluding the Aso faction, as well as the
so-called "Koizumi children," who were elected for the first time to
the Diet in the 2005 House of Representatives election. The factions
of Koga, Yamasaki, and Tanigaki, which were regarded as
non-mainstream or anti-mainstream factions, are looking forward to
landing key posts.

Fukuda has now stressed that he will decide after the presidential
race on the scale of a reshuffle of the cabinet ministers,
correcting his earlier remarks that only a small number of the
cabinet ministers would be replaced. He appears to be aiming to have
his faction members steel themselves by brandishing the threat of
carrying out reward-oriented appointments.

Regarding the New Komeito's view that the government's plan of
achieving a primary balance surplus in fiscal revenue and
expenditure in fiscal 2001 is too late, Fukuda stated: "It is only
natural to make an utmost effort to achieve that goal. I will exert
every possible effort so as not to (have it delayed)."

21) LDP branch headed by Former Chief Cabinet Secretary Fukuda
receives donation from company chaired by person with North Korean
nationality

YOMIURI (Page 39) (Full)
September 21, 2007

It was learned from the political fund report of the Liberal
Democratic Party's (LDP) branch in Gunma Constituency No. 4, headed
by former Chief Cabinet Secretary Yasuo Fukuda (elected from the
same constituency) that the branch received donations totaling
200,000 yen in 1996 and 2003 from a pachinko parlor company in
Takasaki City, Gunma. The company is wholly owned by the chairman
with North Korean nationality and his relatives with South Korean
nationality. The chairman served as advisor to the Gunma chamber of
commerce and industry connected with the General Association of
Korean Residents in Japan, or Chongryon until he died in 2005. The
donation in 2003 was made right after North Korea admitted to
abducting Japanese nationals during Prime Minister Koizumi's (at the
time) visit to Pyongyang. Fukuda served as chief cabinet secretary
during the Koizumi administration.

The Political Funds Control Law bans in principle politicians from
receiving donations from foreigners and companies whose majority of
stocks are owned by foreigners. A person in charge at Fukuda's
office explained, "We did not check the nationality of the donor, as
we thought it rude to ask his nationality. We will check whether
there were similar cases. If there are, we would like to return
them." Offenders against the law are subject to such penalties as
imprisonment. However, in this case the statute of limitations (3

TOKYO 00004400 012 OF 012

years) has run out.

According to the branch fund report, it received a donation worth
100,000 yen on Nov. 5, 2003 four days before the Lower House
election day. It again received 100,000 yen in 1996, the year a
general election took place. The company replied that it was not
possible to confirm whether it made those donations.

It was found that in 2001, when the Upper House election took place,
the chairman donated 100,000 yen to the election campaign
headquarters of Giichi Tsunoda, an Upper House member of the
Democratic Party of Japan (DPJ or Minshuto) at the time. The
donation was not entered into Tsunoda's political fund report.

SCHIEFFER

© Scoop Media