Cablegate: Japanese Morning Press Highlights 12/03/09

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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 12/03/09

INDEX:

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

GOJ reaction to Obama speech:
4) U.S. troop augmentation certain to result in request for
additional Japanese financial aid (Mainichi)
5) Obama gives Hatoyama cold shoulder (Yomiuri)
6) Emphasis on civilian aid raises concerns about Japan's declining
presence (Nikkei)

Futenma issue:
7) Hatoyama mulling postponing Futenma decision until next year
(Asahi)
8) Argument for delaying Futenma decision growing stronger
(Yomiuri)

Defense & security:
9) Japan calls on U.S. to incorporate environmental clause in SOFA
(Mainichi)
10) Japanese and Korean ministers to hold security meeting tomorrow
(Nikkei)

Economy :
11) Prime Minister and BOJ Chairman agree to tackle deflation
(Yomiuri)
12) U.S. and Japan to conclude open skies agreement by year end
(Nikkei)
13) Manufacturing sector's greenhouse-gas-reduction target only 13.9
PERCENT (Nikkei)

Politics:
14) SDP leader Fukushima to run for reelection (Nikkei)
15) Your Party representative hints at tie-up with DPJ (Yomiuri)
16) LDP-led Diet member caucus opposes bill that would grant local
suffrage for permanent foreign residents (Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Government to give up on plan to settle Futenma Air Station
relocation plan by year's end with prime minister attaching
importance to ruling coalition

Mainichi:
Government mulling raising tobacco tax by 2-3 yen per cigarette:
Substantive tax hike to be put on hold

Yomiuri:
COP15: Chairman's draft of UN climate conference proposes aiming to
turn around global warming gas emissions to below 1990 level by
2020

Nikkei:
Peugeot in talks with Mitsubishi Motors for capital tie-up: Final
coordination underway with possibility of securing 30-50 percent of
voting rights

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Sankei:
U.S. new strategy for Afghanistan: 30,000 additional troops to be
deployed; Withdrawal to be started in July 2011; Japanese government
fearing request for additional assistance?

Tokyo Shimbun:
Cost of maintaining and managing dams totals over 100 billion yen
annually: Such costs for 45 dams now under consideration or
construction estimated to reach 25.5 billion yen

Akahata:
Supreme Court's guilty verdict against Arakawa for distributing
flyers is oppression: World is concerned about Japan's lack of
common sense

2) EDITORIALS

Asahi:
(1) New U.S. strategy for Afghanistan: The situation cannot be
stabilized just by sending more troops
(2) Lawsuit filed by local residents: Watered-down assembly
unforgivable

Mainichi:
(1) U.S. to send more troops to Afghanistan: Hard battle will
continue
(2) Supreme Court hands down guilty sentence against person who
distributed flyers: The sentence seems inappropriate

Yomiuri:
(1) New U.S. strategy for Afghanistan: Is it possible to turn the
war around?
(2) Testimony by former Foreign Ministry bureau chief: Government's
claim that there is no secret accord has collapsed

Nikkei:
(1) Danger of postal administration once again becoming the
government's "purse"
(2) Japan should support U.S. strategy for Afghanistan

Sankei:
(1) New U.S. strategy for Afghanistan: Japan should reconsider
cooperating for the alliance
(2) Talks between Prime Minister Hatoyama and Bank of Japan Governor
Shirakawa: Dispel mistrust in market

Tokyo Shimbun:
(1) Additional troops for Afghanistan: Path to contain terrorism not
yet in sight
(2) Eliminate trend of people turning blind eye to violence toward
children

Akahata:
(1) Afghanistan issue cannot be settled by sending additional
troops

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 2

NIKKEI (Page 2) (Full)
December 3, 2009

TOKYO 00002761 003 OF 010

08:00 Attended a meeting of top officers of the government and Rengo
at the Prime Minister's Official Residence (Kantei). Later, met
Deputy Chief Cabinet Secretary Matsui.
09:28 Met National Strategy Minister Kan, Cabinet Office Senior Vice
Minister Furukawa, and Vice Finance Minister Noda. Joined by Chief
Cabinet Secretary Hirano. Kan and Hirano stayed behind.
10:34 Met Deputy Chief Cabinet Secretary Matsuno.
12:16 Met Special Advisor Nakayama.
13:27 Attended a meeting of former Lower House members at the first
Lower House members' office building.
15:09 Met at the Kantei with Internal Affairs Minister Haraguchi,
and vice internal affairs ministers Watanabe and Naito. Later met
with Finance Minister Fujii, Vice Finance Minister Noda,
Parliamentary Secretary Ogushi, and Vice Minister Tango.
17:30 Met Bank of Japan Governor Shirakawa, Kan, and Hirano.
19:06 Met Toyota Motor adviser Hiroshi Okuda and others at the
Garden Court in the Hotel New Otani, with Hirano present.
21:12 Returned to his official residential quarters.

4) Afghanistan: Request for additional financial assistance certain

MAINICHI (Page 3) (Full)
December 3, 2009

The new U.S. strategy for Afghanistan attaches importance to
securing military assistance from its allies. The Japanese
government intends to implement civilian aid worth 5 billion dollars
over five years as its contribution for the stabilization of
Afghanistan. Its deviation from the U.S. way of fighting against
terrorism has apparently further widened.

Chief Cabinet Secretary Hirofumi Hirano at a press conference on
Dec. 2 welcomed the new strategy. However, he underscored that Japan
"has already announced the area in which it can make contribution."
The government wants to contribute (for the stabilization of
Afghanistan) through civilian assistance, including providing
vocational training to former Taliban militants. However, the U.S.
is bound to seek more financial assistance for the Afghan military
and police. Defense Minister Toshimi Kitazawa on the 2nd pointed out
in Yokosuka City, Kanagawa Prefecture, "There is a very strong
possibility of the U.S. seeking further assistance from Japan."

Japan is determined to withdraw the Maritime Self-Defense force from
its refueling mission in the Indian Ocean in January and not to
comply with a request for fresh military assistance. The White House
on Nov. 30 released a plan according to which President Obama will
give advance notice of the new strategy to Britain and France, which
are dispatching troops to Afghanistan, and also to China and India.
Japan would simply be notified via its foreign minister--a clear
differentiation of approach.

5) Without a call from President Obama, Prime Minister Hatoyama left
in dark

YOMIURI (Page 3) (Abridged slightly)
December 3, 2009

Hideki Kawasaki, political department

The government welcomes the Afghan strategy announced by U.S.

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President Barack Obama and intends to steadily implement its
civilian support measures worth 5 billion dollars in five years
starting this year. Shortly before announcing his new Afghan
strategy, President Obama called the top leaders of such countries
as India and Russia, in addition to the UK, France, and Germany that
are taking part in the International Security Assistance Force
(ISAF) in Afghanistan, to inform them of the plan. But Prime
Minister Hatoyama was left in the dark. As such, a Japan-U.S.
diplomatic source said: "It reflects strained ties between the two
countries over the issue of relocating the U.S. Marine Corps'
Futenma Air Station." On the United States' new strategy, Prime
Minister Hatoyama made the following comment to the press corps at
the Prime Minister's Official Residence (Kantei) last night: "Japan
has decided on its own support measures. I want to step up
cooperation by combining efforts (with the United States)." Chief
Cabinet Secretary Hirano emphasized the good communications (between
Tokyo and Washington), indicating that Foreign Minister Okada was
briefed on the new U.S. strategy by Secretary of State Hillary
Clinton on the phone.

Of its Afghan support measures, the government intends to
incorporate a highly urgent portion worth 80 billion yen in the
fiscal 2009 second supplementary budget and the fiscal 2010 budget.
The government specifically envisages support in such areas as
salaries of police officers to improve the security situation, food,
and anti-drug measures. But given the Hatoyama administration's
decisions to end the Maritime Self-Defense Force's refueling mission
in the Indian Ocean next January and not to use the SDF in
supporting Afghanistan, there is concern that Japan's presence in
the international community will decline.

6) U.S. troop buildup in Afghanistan: Japan's presence weakening

NIKKEI (Page 8) (Excerpts)
December 3, 2009

(Following his decision to send more troops to Afghanistan,)
President Obama cited "43 allies" and asked them to fall in step
with the U.S.'s troop buildup strategy. Japan, however, is not
included among the 43 allies, because Constitutional issues have
prevented it from joining the International Security Assistance
Force (ISAF). Japan has decided to halt the Maritime Self-Defense
Force's refueling mission in the Indian Ocean in January. This
policy decision was also reflected in the exclusion of Japan from
"the allies."

Chief Cabinet Secretary Hirofumi Hirano emphasized in a press
conference yesterday: "Mr. Obama (has said that) he appreciates
(Japan)." But Defense Minister Toshimi Kitazawa said that Japan will
be asked by the U.S. to offer more assistance. Many government
officials take the view that the government's civilian support
measures worth up to 5 billion dollars announced in November are not
enough. A Foreign Ministry official says that the effects the
measures, including occupational training for Taliban soldiers, will
have are unknown.

7) Hatoyama administration gives up on settling Futenma relocation
issue by year's end

ASAHI (Top play) (Full)
December 3, 2009

TOKYO 00002761 005 OF 010

The Hatoyama cabinet began coordination on Dec. 2 to defer making a
decision on the issue of the relocation of the U.S. forces' Futenma
Air Station (in Ginowan City, Okinawa) beyond 2009. In addition to
opposition from the Social Democratic Party (SDP) and the People's
New Party - the coalition partners of the Democratic Party of Japan
(DPJ) - to arriving at a solution before the end of the year, little
headway is being made in negotiations with the U.S. side on
additional measures to reduce the burden (imposed by U.S. bases on
Okinawa).

Prime Minister Yukio Hatoyama was asked by reporters on Dec. 2 if he
will make a decision even in the face of the SDP's opposition. He
said: "My desire to value the coalition government remains
unchanged," indicating the possibility that a decision will be
postponed until 2010.

In a speech on the same day, Defense Minister Toshimi Kitazawa also
stated: "If the three-party coalition cabinet collapses, there will
be political confusion. The relationship between the U.S. and Japan
will not become excessively strained even if the settlement is
carried over to next year," indicating that he would not insist on
settling the issue before year's end.

However, the government still plans to earmark expenditures related
to the relocation of the Futenma base to Henoko in Nago city in the
FY2010 budget even if a decision will not be made in 2009. This move
is intended to signal that the Japan-U.S. agreement on U.S. Forces
Japan realignment is not being scrapped. The U.S. side is demanding
the early implementation of the agreement. The postponement of a
solution on this issue is certain to have a serious impact on the
bilateral relationship.

The concerned cabinet ministers have been exchanging views with
senior DPJ officials on the Futenma issue since late November. It is
believed that during these discussions, DPJ officials expressed
concern that forcing through a decision before the end of the year
may result in a rift in the ruling coalition and this may affect the
steering of the regular Diet session early next year. A cabinet
minister observes that at that point, "a complete change of tide
occurred."

Foreign Minister Katsuya Okada and Kitazawa had long discussions
with Hatoyama and Chief Cabinet Secretary Hirofumi Hirano at the
Prime Minister's Official Residence on Dec. 1. At another meeting of
the concerned cabinet members, the unanimous opinion of all
participants, except Okada, was that it would be difficult to arrive
at a solution by the end of the year. A meeting of the Japan-U.S.
ministerial-level working group will be held in Tokyo on Dec. 4. The
outcome of negotiations with the U.S. will also be taken into
account in making the final decision.

8) GOJ increasingly leaning toward deferring Futenma relocation
decision to 2010

YOMIURI (Page 2) (Full)
December 3, 2009

A proposal emerged in the government on Dec. 2 to defer a decision
on the question of the relocation of the U.S. forces' Futenma Air
Station in Okinawa to early next year. This is because if a decision
is made before the end of the year to relocate the Futenma base to
the coastal area of Camp Schwab based on the existing relocation

TOKYO 00002761 006 OF 010

plan, the Social Democratic Party (SDP) is certain to fiercely
oppose the decision, and the government has decided to give priority
to preventing confusion inside the coalition administration.

A government source revealed on Dec. 2: "The tide changed in the
past few days. The shift became final due to the SDP's opposition,"
indicating his view that a solution in 2009 will be difficult. This
is because the SDP has toughened its stance and declared at the
meeting of the Ministerial Committee on Basic Policies on Nov. 30
its opposition to the existing plan, and the People's New Party also
fell in step with the SDP. A senior government official also stated
on the evening of Dec. 2 that "it would be meaningless if the
administration collapses. There is no need to rush."

Prime Minister Yukio Hatoyama told reporters on the evening of Dec.
2 that he wants to "value the three-party coalition" and that he
will "make efforts not to have an impact on the Japan-U.S.
relationship." Even if a decision is deferred to next year, the
government will earmark expenditures related to the relocation in
the FY2010 budget bill in consideration of the U.S., which is
demanding a decision based on the current plan before year end.
However, it is uncertain whether this will obtain the U.S.'s
understanding.

9) Government to propose adding environment clause to SOFA to U.S.
side in connection with Futenma

MAINICHI (Page 1) (Full)
December 3, 2009

The government decided yesterday to ask the United States to add an
environment conservation clause to the Japan-U.S. Status of Forces
Agreement (SOFA). The government will present the proposal at a
Japan-U.S. ministerial-level working group meeting to be held
shortly to discuss the issue of relocating the U.S. Marine Corps'
Futenma Air Station (in Ginowan, Okinawa Prefecture). The aim is to
play up the government's eagerness to reduce the burden on Okinawa
by presenting a plan to revise the SOFA even partially -- an
outstanding issue between Japan and the United States - in order to
settle the Futenma issue.

The items that Japan is proposing for inclusion in the SOFA include
the obligation for the United States to restore land to its original
state if environmental pollution has occurred and the right of the
state and municipalities to conduct on-site investigations. In the
past there have been accidents involving the outflow of hazardous
materials, such as fuel, in the vicinity of U.S. military bases. But
the U.S. side has neither allowed the Japanese side to investigate
the state of environmental pollution nor responded to Japan's calls
to restore the land to its original state when returning its bases
to Japan, citing the facilities management right and other factors
under the SOFA.

The SOFA was concluded in 1960 based on the U.S. Japan-Security
Treaty, and it has never been revised. It includes no provision on
environmental conservation. Meanwhile, when South Korea revised its
SOFA with the United States in April 2001, an environment cause was
added to the pact. The clause stipulates that United States will
respect ROK environmental legislation and when environmental
pollution occurs on a U.S. base, the United States and South Korea
will jointly conduct investigations.

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When Okinawa Gov. Hirokazu Nakaima held talks with Prime Minister
Yukio Hatoyama on Nov. 30, the governor sought the government's
support for restoring contaminated land to its original state, a
situation that is likely to occur after Futenma Air Station is
returned to Japan. This is regarded as the governor's de facto
condition in exchange for accepting the existing relocation plan.

Nevertheless, the U.S. side is reluctant to revise the SOFA. There
is a possibility that the United States will not change its
assertion of dealing with the matter through improved operations of
the pact.

10) Japan, S. Korea to hold security talks tomorrow

NIKKEI (Page 2) (Full)
December 3, 2009

Japan and South Korea are set to hold security talks tomorrow on the
South Korean island of Cheju, with senior officials attending from
their foreign and defense ministries, the Foreign Ministry announced
yesterday. This is the ninth time for the two countries to hold
security dialogue. They are expected to discuss such issues as North
Korea's nuclear development programs, China's military expansion,
and assistance to Afghanistan.

11) Prime minister, BOJ governor agree on need to tackle deflation

YOMIURI (Page 2) (Full)
December 3, 2009

Prime Minister Yukio Hatoyama and Bank of Japan (BOJ) Governor
Masaaki Shirakawa met at the Prime Minister's Official Residence
yesterday to exchange views on the current financial and economic
situations. Based on the view that the Japanese economy is in a mild
deflationary phase, they confirmed the need for the government and
the BOJ to make joint efforts to stem the recent sharp appreciation
of the yen and deflation by taking measures to underpin the economy.
They also agreed to hold talks if the financial and economic
situations deteriorate further.

In the meeting, Hatoyama spelled out the additional economic
stimulus package that the government plans to finalize by the end of
this week. Shirakawa explained the possible effect of the monetary
easing measure the central bank decided to introduce on Dec. 1 by
injecting about 10 trillion into the financial system.

After the meeting, Hatoyama praised the BOJ's additional measure,
saying: "The bank has taken swift action." He then emphasized: "The
government will share a common awareness and make joint efforts
(with the BOJ) to overcome deflation and buoy up the economy."
Shirakawa commented: "We will carry out monetary policies while
exchanging views with the government."

12) Japan, U.S. to reach consensus to sign open skies agreement with
the aim of putting it into effect next year

NIKKEI (Page 3) (Full)
December 3, 2009

The governments of Japan and the U.S. will likely reach a consensus
to conclude an open skies agreement that will allow them to set
flight routes at their own discretion. They will aim to reach the

TOKYO 00002761 008 OF 010

consensus at bilateral aviation talks to be held in Washington for
three days starting on Dec. 7 and put it into effect next year. Up
until now only a few air carriers have been allowed to set the
number of flights and flight routes at their own discretion.
However, once the agreement is put into practice, other carriers
will also be able to do so. The new system would offer hopes for
improved convenience due to an increase in the number of flights and
expanded flight networks.

At present, only three Japanese carriers, including Japan Airlines
and All Nippon Airways, and three U.S. carriers, including Delta
Airlines, are basically exempt from the rule that limits flight
routes and the number of flights. Once the agreement is reached at
the upcoming talks, other carriers will become able to operate
flights at their own discretion.

If other carriers inaugurate flights between Japan and the U.S.,
traveling between the two countries would become convenient due to
an increase in the number of flights and the opening of new routes.
Competition would become fierce, which would lead to improved
service.

Chances are that under the open skies agreement, even if Japanese
and U.S. carriers deepen cooperation in terms of flight schedules
and air fares, the U.S. government and Japan's Fair Trade Commission
would exempt those carriers from the application of their
anti-monopoly laws. This would enable members of an international
aviation alliance to adopt unified fares for duplicated routes and
produce complementary flight schedules. Flexible connections both in
the U.S. and Japan would also become possible.

Improved operation efficiency will likely create room for fare
reductions. United Airlines and All Nippon Airways have indicated
their intention to apply for antitrust immunity (AMI).

There remain questions concerning the allocation of departure and
landing slots at Narita Airport and Haneda Airport. U.S. carriers
are showing interest in securing slots at Haneda. However, few
carriers are hoping to increase flights to Narita Airport. Carriers
around the world are now facing a harsh management environment due
to the financial/economic crisis, for which reason some analysts
believe carriers can't easily open new routes.

13) Poll: Manufacturers expect fiscal 2020 greenhouse gas emissions
cuts to stay at 13.9 PERCENT

NIKKEI (Page 1) (Full)
December 3, 2009

Japan's major manufacturers expect the nation to reduce greenhouse
gas emissions by 13.9 PERCENT from 1990 levels by fiscal 2020,
according to a survey by the Nikkei. This figure falls far short of
the government's target of reducing emissions by 25 PERCENT from
1990 levels by 2020 set with an eye on the upcoming international
conference on forming a new framework to fight global warming
(beyond the timeframe set under the Kyoto Protocol). To attain the
government's goal, companies might be forced to shoulder heavier
burdens, such as purchasing emissions credits, and to move their
production overseas.

The number of companies, including non-manufacturing firms,
responding to an environmental management survey by early November

TOKYO 00002761 009 OF 010

was 835. The 13 PERCENT figure was based on a weighted average of
160 manufacturers responding to a question about how much they will
be able to cut emissions by 2020 through the installation of energy
efficient facilities and other measures. The industrial sector,
composed mainly of manufacturers, generates 37 PERCENT of domestic
carbon dioxide emissions. The weighted average of 183 companies was
14.3 PERCENT .

The previous Aso government had set a midterm target for reducing
greenhouse gas emissions by 15 PERCENT from 2005 levels, which is
equivalent to 8 PERCENT from 1990 levels. This level would be
achievable for the companies surveyed. But the current Hatoyama
government has proposed a 25 PERCENT reduction that would require
manufacturers to curb their emissions by 20 to 30 PERCENT . The
levels are viewed as out of reach by some industries. Regarding
projections for reductions by industry, automakers and auto parts
manufacturers expect to slash greenhouse gas emissions by 28.1
PERCENT , and electric machinery firms expect a 33.1 PERCENT cut
due to expected increases in demand for eco-friendly cars and solar
batteries.

14) Fukushima to run for SDP presidency

NIKKEI (Page 2) (Full)
December 3, 2009

State Minister for Consumer Affairs and Declining Birthrate Mizuho
Fukushima, who heads the Social Democratic Party, one of the ruling
Democratic Party of Japan's two coalition partners, will run for her
party's presidential election, which will be announced tomorrow.
Fukushima announced her candidacy in a meeting yesterday of her
party's members seated in the House of Councillors, and obtained
their consent. She is now expected to be elected for a fourth term
of her party's presidency. "I will give it my best in order to
rebuild people's livelihoods and promote politics that place value
on life," she said.

Fukushima met on Dec. 1 with SDP Secretary General Yasumasa Shigeno
and two SDP vice presidents, Sadao Fuchigami and Seiji Mataichi, and
the three agreed that they will stay on in their respective party
posts. Meanwhile, some SDP members, who have been distancing
themselves from Fukushima, were calling for the party leadership to
set up an acting president post. The three SDP executives, however,
shelved the proposed idea of setting up an acting president post and
confirmed their intention to place top priority on uniting the
party.

15) Your Party leader hints at possibility of cooperation with DPJ

YOMIURI (Page 4) (Full)
December 3, 2009

Yesterday in his greeting at a party hosted by Lower House member
Mito Kakizawa in Tokyo, Your Party leader Yoshimi Watanabe hinted at
the possibility his party will join hands with the ruling Democratic
Party of Japan. He talked about this in connection with Upper House
member Ryuhei Kawada's joining Your Party. Watanabe said, "(In the
coalition government) the Social Democratic Party has the casting
vote. However, there will be various issues from now on. The one
Upper House seat (of Your Party) would have great influence."

16) Parliamentary group opposes granting permanent foreign residents

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suffrage in local elections

MAINICHI (Page 5) (Full)
December 3, 2009

A group of parliamentarians mainly from the opposition Liberal
Democratic Party yesterday compiled a resolution opposing the idea
of giving permanent foreign residents in Japan the right to vote in
prefectural and municipal elections. The group, called the "Truly
Conservative Policy Study Association" with a membership of 78, is
headed by former Prime Minister Shinzo Abe. The resolution points
out that there is an extremely high possibility that granting
permanent foreign residents suffrage would violate Article 15 of the
Constitution (which stipulates that the people have the inalienable
right to choose and dismiss their public officials).

ROOS

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