Cablegate: Japanese Morning Press Highlights 10/07/09

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UNCLAS SECTION 01 OF 08 TOKYO 002325

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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 10/07/09

INDEX:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Hatoyama diplomacy
4) PM to attend East Asia Summit (Tokyo Shimbun)
5) PM meets with Singapore counterpart (Nikkei)

Okada diplomacy
6) FM says U.S.-North Korean talks are within Six-Party Talks
framework (Mainichi)
7) FM welcomes Kim Jong Il 's mentioning Six -Party Talks but doubts
North will return to talks soon (Tokyo Shimbun)

MOD reform
8) Kitazawa postpones Defense Ministry reform (Asahi)
9) Kitazawa calls for complete review of plan for MOD reform (Tokyo
Shimbun)

Refueling mission
10) Government officials express divergent views on continuation of
refueling mission (Asahi)

Politics
11) Okada says Japan will not simply extend the refueling mission
(Nikkei)

Budgets
12) 2.5169 trillion yen retrieved from review of supplementary
budget; Administrative Reform Minister asks for more (Asahi)
13) Ministry of Health, Labor and Welfare requests 5 trillion yen
additional budget for FY10 to fulfill campaign pledge (Nikkei)

Politics
14) LDP Policy Research Council Chairman Ishiba calls for reform by
using junior party members (Yomiuri)

Economy
15) Keidanren chairman asks Hatoyama to promote EPAs (Asahi)

Articles:

1) TOP HEADLINES

Asahi:
2.5169 trillion yen retrieved from review of supplementary budget;
Minister Sengoku asks for more

Mainichi:
Supplementary budget cut by 2.5169 trillion yen; reductions made by
ministries only 17 PERCENT of target

Yomiuri:
2.5 trillion yen retrieved from review of supplementary budget in
first installment; Prime Minister orders further cuts

Nikkei:
Ministry of Health, Labour and Welfare requests 5 trillion yen
additional budget for FY10 to fulfill campaign pledges

TOKYO 00002325 002 OF 008

Sankei:
"Donations from dead persons" to Prime Minister: False entries also
found in unrevised 2004 records, adding to announced amount

Tokyo Shimbun:
Execution of 2.5169 trillion yen halted through review of
supplementary budget; scrutiny continues

Akahata:
Record of ASDF airlift activities in Iraq shows 63 PERCENT related
to U.S. forces

2) EDITORIALS

Asahi:
(1) Record of airlift activities in Iraq: Need for more transparency
in defense
(2) Emergency employment measures: New administration's competence
put to test

Mainichi:
(1) Donations by "dead persons": Prime minister should not evade the
question, should give explanation
(2) North Korean nuclear issue: Make a clear statement on returning
to Six-Party Talks

Yomiuri:
(1) Wen Jiabao's visit to North Korea: North Korea should return to
Six-Party Talks
(2) Sumatra earthquake: Need to step up education on disaster
prevention

Nikkei:
(1) Do not repeat discussions without North Korea's
denuclearization
(2) Send out stronger message on IT from Tokyo

Sankei:
(1) Parliamentary defense secretary's statement welcomed as solution
to issue of continuing refueling mission
(2) Emergency employment measures: Restore policymaking process

Tokyo Shimbun:
(1) Iraq airlift mission: "Lies" behind the blacked out documents
(2) North Korean nuclear issue: Six-Party Talks indispensable

Akahata:
(1) Relocation of U.S. military plan exercises: Life ruined by
noise

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, October 6

NIKKEI (Page 2) (Full)
October 7, 2009

09:50 Handed at Kantei a letter of appointment to Hideki Kato as
secretary general of the Administrative Reform Council.
10:01 Attended a cabinet meeting.
11:00 Met Internal Affairs and Communications Minister Haraguchi and
DPJ decentralization research council chief Seiji Osaka.

TOKYO 00002325 003 OF 008

11:32 Met Prime Minister Lee Hsien Loong of Singapore. Later hosted
a luncheon.
14:03 Met Japan Business Federation Chairman Fujio Mitarai, his
deputy Sadayuki Sakakibara, and Japan-China Economic Association
Chairman Fujio Cho, with Deputy Chief Cabinet Secretary Matsuno
present.
16:02 Met U.S. News Corporation Chairman Rupert Murdoch and others,
followed by National Strategy Minister Kan, Chief Cabinet Secretary
Hirano, Administrative Reform Minister Sengoku, Cabinet Office
Senior Vice Minister Furukawa, and others. Hirano stayed behind.
18:58 Attended an informal meeting of Upper House DPJ lawmakers held
at Hakone Hotel Kowakien in Hakone, Kanagawa Prefecture.
20:00 Met Fujiya Hotel President Shin Katsumata at his hotel.
21:58 Arrived at his private residence.

4) Prime Minister Hatoyama to attend East Asia Summit

TOKYO SHIMBUN (Page 2) (Full)
October 7, 2009

Prime Minister Yukio Hatoyama held talks yesterday with his
Singaporean counterpart Lee Hsien Loong at the Prime Minister's
Official Residence (Kantei). During the meeting, Hatoyama announced
his intention to attend the East Asia Summit and the summit meeting
of the Association of Southeast Asian Nations (ASEAN) Plus Three
(Japan, China and South Korea). The summit meetings will take place
in Thailand on Oct. 23-25.

5) Prime Minister Hatoyama meets with his Singaporean counterpart

NIKKEI (Page 2) (Full)
October 7, 2009

Prime Minister Yukio Hatoyama met yesterday with his Singaporean
counterpart Lee Hsien Loong at the Prime Minister's Official
Residence (Kantei). Referring to Hatoyama's idea of creating an East
Asian community, Lee said that (the Hatoyama administration) should
move ahead with the initiative while placing priority on relations
with the United States. Lee pointed out that the participation of
the United States is important in the view of regional balance.
Hatoyama told Lee, "I agree with your view. I think we should press
forward with the concept in a nonexclusive manner."

6) Foreign Minister Katsuya Okada: Even if held prior to Six-Party
Talks, U.S.-DPRK talks will be within same framework

MAINICHI (Page 5) (Full)
October 7, 2009

Takenori Noguchi

In connection with North Korea's General Secretary Kim Jong Il's
mention of returning to the Six-Party Talks, Foreign Minister
Katsuya Okada stated at a news conference on October 6 that, "This
should be welcomed because he had been negative about the Six-Party
Talks," indicating his hopes on the DPRK's early return to the
talks. On the question of U.S.-DPRK talks taking place ahead of the
Six-Party Talks, he said that, "They will still be under the
Six-Party Talks framework," expressing a basically positive view. He
added: "The important thing is to cooperate closely with the U.S.
and that the Japanese government is able to fully grasp the
situation. We will also express our opinion (to the U.S. government)

TOKYO 00002325 004 OF 008

on the progress of U.S.-DPRK talks as warranted."

7) Foreign Minister Okada doubts North Korea will return to
Six-Party Talks soon, welcomes Kim Jong Il's mention of talks

TOKYO SHIMBUN (Page 2) (Full)
October 7, 2009

Commenting on North Korea's General Secretary Kim Jong Il's
statement at his meeting with Chinese Premier Wen Jiabao on October
5 on the possibility of the DPRK returning to the Six-Party Talks
depending on progress in U.S.-DPRK talks, Foreign Minister Katsuya
Okada said at a news conference on October 6: "Since (North Korea)
had been expressing a negative view on the Six-Party Talks so far,
the fact that he mentioned the Six-Party Talks at all should be
welcomed," indicating a positive view.

Although the Hatoyama administration upholds "dialogue" as its
foreign policy, it has followed the "policy of pressure" of the
Liberal Democratic Party administration in its policy toward North
Korea. It has persisted in the strategy of prodding the DPRK to
return to the Six-Party Talks by carrying on with the UN sanctions.

Perhaps as a result of the encirclement of North Korea by the
international community, including Japan, the DPRK has now taken a
more flexible stance. It would seem that the Hatoyama administration
has found a way to break out of the impasse in diplomacy with the
DPRK soon after its inauguration.

However, even government officials are doubtful that moves toward
the resumption of the Six-Party Talks will now accelerate without a
hitch. Although Okada has voiced his expectations, a senior Ministry
of Foreign Affairs official points out: "I do not think that North
Korea's position has changed significantly. U.S.-DPRK talks will
probably not resume so easily, much less the Six-Party Talks."

Prime Minister Yukio Hatoyama will receive a briefing from Wen on
his meeting with Kim directly at the Japan-PRC-ROK summit on October
10 before deciding on what to do next. However, unless there is some
progress on the North Korean side, such as its agreement to
reinvestigate the abduction cases, Japan will not be able to take
any unilateral action.

It appears that Japan's only option will be to watch developments in
the U.S.-DPRK talks while cooperating with the U.S. and South
Korea.

8) Defense Ministry overhaul to be postponed

ASAHI (Page 4) (Full)
October 7, 2009

Defense Minister Toshimi Kitazawa, meeting the press yesterday,
indicated that the Defense Ministry would postpone its planned
restructuring, which had initially been scheduled for the next
fiscal year. "We will take another year to scrutinize (the Defense
Ministry's organization including the Self-Defense Forces) again,"
Kitazawa said. So the Defense Ministry will not earmark relevant
estimates in its budget request to be resubmitted by Oct. 15 for the
next fiscal year, Kitazawa said, adding that the Defense Ministry
would not present a relevant bill to the Diet.

TOKYO 00002325 005 OF 008

9) Kitazawa to freeze, review Defense Ministry organizational reform
plan

TOKYO SHIMBUN (Page 3) (Full)
October 7, 2009

At a news conference on Oct. 6, Defense Minister Toshimi Kitazawa
disclosed that he will freeze the implementation of the Ministry of
Defense (MOD) organizational reform plan - the main feature of which
is the appointment of uniformed Self-Defense Forces officers as
senior officials of the ministry's internal bureaus - starting in
FY2010 and conduct a comprehensive review.

Kitazawa pointed out that the reform plan was formulated under the
Liberal Democratic Party-New Komeito administration and said: "With
the change of administration, a new defense minister has been
appointed. We will spend one year to examine the plan closely.
Coordination is underway for not making budget requests relating to
this plan." He thus indicated that personnel and other expenses
relating to the plan will not be included in the budget requests for
FY2010.

The MOD will also defer the submission of bills relating to the
reform plan to the regular Diet session in 2010 as previously
envisioned.

10) Cabinet discord exposed over Japan's refueling mission

ASAHI (Page 4) (Full)
October 7, 2009

Foreign Minister Katsuya Okada has said that the government would
not "simply extend" the Maritime Self-Defense Force's refueling
mission in the Indian Ocean. Parliamentary defense secretary Akihisa
Nagashima, however, insisted on Oct.5 that Japan should continue the
refueling mission, attaching the precondition of requiring Diet
approval. In response, various views were presented by cabinet
members yesterday, underscoring that there are differences in views
among cabinet ministers.

In a press conference after a cabinet meeting yesterday, State
Minister for Consumer Affairs, Food Safety, Declining Birthrate, and
Gender Equality Mizuho Fukushima reiterated that "as the leader of
the Social Democratic Party, I am opposed to extending the special
law authorizing the refueling mission (beyond its January
expiration). We will properly discuss the issue in the coalition
government to prevent a situation in which the mission will be
extended with preconditions attached." She said this in an attempt
to prevent a view in favor of extending the mission from spreading
among members of the Democratic Party of Japan.

Defense Minister Toshimi Kitazawa said in a press conference after
the cabinet meeting: "Extending the refueling mission is not an
option." He then disclosed that he had warned Nagashima, saying, "I
told (Nagashima) to carry out coordination before making remarks so
as not to cause a misunderstanding that the minister and the
parliamentary secretary are in disagreement."

11) Okada: Government will not simply extend refueling mission

NIKKEI (Page 2) (Full)
October 7, 2009

TOKYO 00002325 006 OF 008

In a press conference yesterday, Foreign Minister Katsuya Okada
indicated that the government will simultaneously look into measures
to help Afghanistan's reconstruction and whether to extend the
Maritime Self-Defense Force's refueling mission in the Indian Ocean
beyond its January expiration, saying, "The government's message is
that it will not simply extend the mission." Defense Minister
Toshimi Kitazawa is negative about extending the mission, while
parliamentary defense secretary Akihisa Nagashima recently made
remarks indicating his willingness to approve the extension of the
mission with the precondition of requiring Diet approval. On the
disagreement between the two, Okada just said, "The defense minister
and the parliamentary secretary should fully coordinate their
views."

12) Government amasses 2.5169 trillion yen through review of extra
budget; State Minister for Administrative Reform Sengoku asks for
further squeeze

ASAHI (Top play) (Excerpts)
October 7, 2009

State Minister for Administrative Reform Yoshito Sengoku on Oct. 6
announced that in accordance with Prime Minister Yukio Hatoyama's
order to review the fiscal 2009 supplementary budget, the government
had managed to extract 2.5 trillion yen out of it, by suspending
wasteful programs or by calling on local governments to voluntarily
return funds allocated to them. Sengoku will continue to ask each
government agency to squeeze more funds to be closer to the goal of
raising 3 trillion yen. He wants to fix the final amount possibly by
mid-October.

The Aso cabinet, the predecessor of the Hatoyama cabinet, compiled
the fiscal 2009 extra budget totaling 14.663 trillion yen, of which
the government will now suspend the implementation of projects
totaling 2.5169 trillion yen, which Sengoku has determined as not
requiring immediate implementation. This is equal to about 17
percent of the total amount of the extra budget.

A breakdown of reviews made by each government agency shows that the
Ministry of Land, Infrastructure, Transport and Tourism will
redirect the largest amount of 887.5 billion yen, although it has
not yet revealed specific programs to be put on hold. The Ministry
of Agriculture, Forestry and Fisheries revealed programs subject to
the revision on the same day. It intends to halt the implementation
of programs worth 476.3 billion yen, by, for example, clawing back
the full amount - roughly 300 billion yen -- allocated for the
farming land concentration promotion fund. The proportion of
revisions reached about 46 percent of its total budget.

The Ministry of Health, Labor and Welfare (MHLW), which has the
largest extra budgetary amount of 3.4 trillion yen, announced that
it would suspend the spending of 353.4 billion yen to be implemented
next fiscal year and beyond out of the 700 billion yen worthy of the
emergency training and job placement assistance fund.

A source related to the Ministry of Education, Culture, Sports, and
Science and Technology noted that the ministry will review portions
of the state-of-the-art R&D assistance program totaling 270 billion
yen. The amount subject to the revision comes to roughly 70 billion
yen.

TOKYO 00002325 007 OF 008

The Ministry of Economy, Trade and Industry (METI) has managed to
squeeze only 87.7 billion yen or a little over 6 percent of the
total amount. No revision was made of subsides (totaling 2.4
trillion yen) for the central government to cover local governments'
share in public works, which are under the jurisdiction of the
Cabinet Office.

13) Budget requests for next fiscal year: Health Ministry to ask for
5 trillion yen budget hike

NIKKEI (Top play) (Excerpts)
October 7, 2009

The government's effort to compile the fiscal 2010 budget has hit a
stumbling block. A flurry of measures will push up expenditures. One
such measure calls for establishing a child-care-allowance system, a
plank in the Democratic Party of Japan's platform for the Lower
House election. The Ministry of Health, Labor and Welfare is
expected to ask for about 6 trillion yen above the initial budget
for fiscal 2009. This figure exceeds by 5 trillion yen the budget
request it submitted under the previous Aso administration in late
August. In the meantime, tax revenues are bound to drop because of
the ongoing economic crunch. Unless the government limits public
works to high-priority projects, the issuance of government bonds is
inevitable.

In its budget compilation guidelines adopted at a cabinet meeting on
Sept. 29 the government asked all cabinet ministers for aggressive
cuts in their budgetary requests. The government has set a target
for general expenditures at a level below the initial budget for
fiscal 2009, 51.73 trillion yen. However, it already appears as
though this target will be difficult to achieve.

14) Interview with LDP Policy Research Council Chairman Shigeru
Ishiba - We will utilize young members in order to show that the
party has changed

YOMIURI (Page 4) (Full)
October 7, 2009

We are required to demonstrate our ability to plan policies on our
own rather than to listen to the government. Things might be twice
or three times more difficult than when we were a ruling party, but
unless we demonstrate our ability, we will not be able to take over
the reins of government. Our policies were hard to understand and we
presented them poorly in the previous House of Representatives
election, and that is partly why we lost it. We want to present
policies that are not complex. We are going to give young members
opportunities to play active roles so it will be evident that the
LDP has changed.

(The Maritime Self-Defense Force's) refueling mission (in the Indian
Ocean) is an undertaking which is making the maximum use of our
country's ability. We want to establish a general law specifying the
prior Diet approval (of the overseas dispatch of the Self-Defense
Forces), but because the extra Diet session will be short, we will
aim to extend (the refueling mission) (by presenting
lawmaker-sponsored special measures legislation).

If (the government) says the fiscal 2009 supplementary budget
compiled by us is totally unacceptable (and has to be suspended),
the onus of proof is on them. The job market is deteriorating due

TOKYO 00002325 008 OF 008

partly to the yen's appreciation. We would like to hold thorough
discussions.

The false reporting of donations (by Prime Minister Hatoyama's
fund-management organization) is a serious violation of the law.
(The Prime Minister indicated that he will) abstain from offering an
explanation because the matter is "under investigation." We cannot
accept such an explanation.

15) Japan Business Federation chairman asks Hatoyama to promote EPA
talks with China, South Korea

ASAHI (Page 7) (Full)
October 7, 2009

Japan Business Federation (JBF) Chairman Fujio Mitarai held a
meeting with Prime Minister Yukio Hatoyama at the Prime Minister's
Official Residence yesterday for the first time since the
inauguration of the new cabinet. According to a JBF official,
Mitarai asked Hatoyama to take up and advance talks on the issue of
concluding economic partnership agreements (EPA) with China and
South Korea during the planned summit meeting among Japan, China and
South Korea in Beijing on Oct. 10. Hatoyama replied: "While bearing
it in mind, I will attend the meeting."

The meeting between Hatoyama and Mitarai was arranged in response to
a request by the prime minister's office willing to listen to views
of the business word before the trilateral summit meeting.

Mitarai explained that the business community has proposed creating
an Asia economic zone and that this idea has something in common
with Hatoyama's proposed concept of an East Asia Community. The JBF
chairman then requested that negotiations on EPAs should be push
forward in order to promote trade and investment and buoy up the
Asian economy.

Japan-China Economic Association Chairman Fujio Cho and Toray
Industries Inc. President Sadayuki Sakakibara also attended the
meeting with Hatoyama. They briefed on their business activities in
China and South Korea.

Business organizations of Japan, China, and South Korea, including
the JBF, will hold a business summit in Beijing on Oct. 10, in
tandem with the trilateral summit meeting, and they will report the
results of the talks to the three countries' leaders.

ZUMWALT

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