Cablegate: Japanese Morning Press Highlights 12/28/09

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UNCLAS SECTION 01 OF 08 TOKYO 002928

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 12/28/09

INDEX:

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

Futenma issue:
4) PM says Futenma facility to be relocated within Japan; relocation
to Guam would be "difficult" (Yomiuri)
5) SDP leader Fukushima reacts strongly to PM Hatoyama's comment
that Futenma's relocation to Guam "difficult" (Asahi)
6) Hatoyama elaborates on his comment that Futenma's relocation to
Guam "difficult" (Nikkei)

Defense & security:
7) MOD to launch "cyber defense" unit (Nikkei)
8) Secret accord allowed flattop carrying nukes to make extended
port call in Japan (Tokyo Shimbun)

Economy:
9) Japan's U.S. government bond possession up 18 percent, reaching
740 billion dollars as of the end of Oct. (Nikkei)
10) Govt. offers three plans for restructuring of postal services
(Nikkei)

11) Govt.'s draft national economic growth strategy gives priority
to environment (Yomiuri)
12) Japan Post forgoes plan to set up management consultative
council (Nikkei)

Politics:
13) Drop in Japan's ODA third largest on record (Asahi)
14) Defense spending to rise for first time in 8 years (Nikkei)
15) PM calls for discussion of constitutional revision (Yomiuri)

Opinion:
16) Kyodo poll: Cabinet support plummets to 47 PERCENT (Tokyo
Shimbun)
17) Nikkei poll: Cabinet support plunges 18 points to 50 PERCENT
(Nikkei)

1) TOP HEADLINES

Asahi:
Diet member Ishikawa questioned by police on Ozawa's fund management
group's failure to report funds

Mainichi:
Myanmar military junta to release Aung San Suu Kyi before general
election next year

Yomiuri:
Ozawa's fund management group purchased land with 400 million yen in
off-the-book funds

Nikkei:
Suntory to market beverages nationwide in China

Sankei:
Fans lament Matsui's move from New York Yankees to Los Angeles
Angels

TOKYO 00002928 002 OF 008

Tokyo Shimbun:
Japan Coast Guard on alert against smuggling of stimulants from
Russia

Akahata:
Chairman Shii presents policies on economic stimulation, employment,
Futenma at party leaders' debate

2) EDITORIALS

Asahi:
(1) Revision of temporary worker law: Shift toward worker
protection
(2) Prime Minister's visit to India: Work together with the southern
giant

Mainichi:
(1) Medical fees: Will the disintegration of medical services stop?
(2) Departure of (Rakuten Eagles) manager Nomura: Manifestation of
determination to become community-oriented

Yomiuri:
(1) Revision of medical fees: Implement bold changes in distribution
of medical expenditures
(2) Instruction manual for official guidelines on course of study:
Lack of mention of Takeshima is questionable

Nikkei:
(1) Japan should develop FTA strategy that engages China and Taiwan
(2) Free high school education across the board questionable

Sankei:
(1) Harsh punishment of (Chinese pro-democracy activist) Mr. Liu
Xiaobo: International community also responsible
(2) Medical fees: Allocate more funds for hospital doctors

Tokyo Shimbun:
(1) Revision of temporary worker law: First step toward worker
protection
(2) Income subsidy for farming households: Will this raise food
self-sufficiency rate?

Akahata:
(1) World economy in 2009: Economic revival and new economic order
are inseparable

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 27

NIKKEI (Page 2) (Full)
December 28, 2009

(Japan time)
10:19 Left Haneda Airport on a special government place for
Japan-India summit.

(Local time)
Evening Arrived at Chaatrapati Shivaji International Airport in
Mumbai, India. Signed terrorist attack condolence books and offered
flowers at the Trident Hotel and Hotel Taj Mahal in the city.
Night Gave an interview to the Times of India at Hotel Taj Mahal

TOKYO 00002928 003 OF 008

Hotel. Attended a dinner party hosted by Maharashtra Gov. Jamir at
his official residence. Stayed overnight at Hotel Taj Mahal.

4) PM Hatoyama points to Futenma relocation within Japan, saying
relocation to Guam would be difficult

YOMIURI (Top play) (Excerpts)
December 27, 2009

Prime Minister Yukio Hatoyama indicated on Dec. 26 that relocating
the U.S. Marine Corps' Futenma Air Station from Okinawa to the U.S.
territory of Guam would be difficult. Guam is the only place that
has been mentioned as a possible site outside Japan that could
replace the Henoko district in Nago, Okinawa Prefecture - the site
specified in the existing plan. The Prime Minister's comment has
effectively shown a policy direction of narrowing down the possible
relocation sites to places in Japan. The Social Democratic Party
(SDP), which is pursuing relocation outside the country, has
objected to the Prime Minister's statement, while calling for the
total relocation of Futenma to Guam.

While recording a New Year's radio program on Dec. 26, the Prime
Minister ruled out the SDP's call for relocation to Guam, saying:
"There might have been a time to look into the possibility of it as
one option. But realistically speaking, relocating all (functions)
of Futenma to Guam would be difficult from the standpoint of
deterrence."

5) SDP leader Fukushima reacts strongly to PM Hatoyama's comment
that Futenma's relocation to Guam would be "difficult"

ASAHI (Page 2) (Full)
December 28, 2009

In reaction to Prime Minister Yukio Hatoyama's earlier statement
that it would be difficult to designate the U.S. territory Guam as
the relocation site of the U.S. forces' Futenma Air Station in
Okinawa, Social Democratic Party (SDP) leader Mizuho Fukushima said
on Dec. 27: "The SDP regards Guam as very promising. We will pursue
this option to the maximum extent possible." Regarding Hatoyama's
intention to decide on a relocation site by next May, Fukushima
retorted that, "What is important is not the deadline but the
solution." She made the above remarks in response to questions from
reporters in Tokyo.

Commenting on Hatoyama's mention of constitutional revision at a
recording session for a radio program on Dec. 26, Fukushima said:
"The agreement of the three coalition parties is not to revise the
constitution but to aim for the realization of the ideals of the
constitution."

6) PM Hatoyama elaborates on his comment that Futenma's relocation
to Guam would be "difficult"

NIKKEI (Page 2) (Full)
December 28, 2009

Prime Minister Yukio Hatoyama stressed on Dec. 27 that his earlier
comment in which he said it would be difficult to relocate the U.S.
forces' Futenma Air Station in Okinawa to Guam was "one idea." It is
believed that he made this comment to give consideration to the
Social Democratic Party, which advocates relocation to Guam. The

TOKYO 00002928 004 OF 008

inconsistency of his statements is likely to incur criticism.

7) Defense Ministry to set up cyber defense force in fiscal 2011 to
defend secret information

NIKKEI (Page 2) (Full)
December 27, 2009

The Defense Ministry will launch in fiscal 2011 a "cyber defense
force" tasked with defending secret information from attacks on the
Internet. There has been a rash of incidents in which hackers broke
into government agencies' information networks and stole classified
information and destroyed networks on the Internet. Such incidents
have prompted the ministry to recognize the need to improve the
defense of classified information.

A preparatory office will be set up under the control of the
Planning and Coordination Officer in fiscal 2010.

The cyber defense force will be established under the Self-Defense
Forces' command communications system unit on a scale of 60 persons.
Approximately 7 billion yen has been earmarked in the fiscal 2010
budget. The ministry will begin training personnel with specialized
knowledge capable of conducting research on ways to deal with
computer viruses.

8) Document found on secret agreement to allow nuclear arms onboard
U.S. ships anchoring for prolonged periods

TOKYO SHIMBUN (Page 2) (Abridged)
December 28, 2009

It was learned on Dec. 27 that the Japanese and U.S. governments had
a "secret agreement" to exempt the U.S. aircraft carrier Midway from
prior consultations under the bilateral security treaty when it
entered or anchored at Japanese ports with nuclear arms onboard when
the flattop was deployed at the Yokosuka base in Kanagawa Prefecture
in 1973. A document attesting to this agreement was found through
internal investigations by the Ministry of Foreign Affairs (MOFA).
This was revealed by several informed sources.

The revised Japan-U.S. security treaty of 1960 stipulates that
changes in the U.S. forces' weapons and equipment require prior
consultation. However, MOFA's investigations have already revealed
the existence of a secret agreement that exempted ships with nuclear
weapons onboard that called at Japanese ports or passed through
Japanese waters from this requirement. In 1972, before Midway's
deployment to Yokosuka, then Foreign Minister Masayoshi Ohira met
with then U.S. Under Secretary of State Alexis Johnson to reconfirm
the validity of this secret agreement at their meetings and further
agreed that this applied not only to port calls, but also to
long-term "mooring" at a home port.

9) Japan's U.S. government bond possession up 18 percent, reaching
740 billion dollars as of end of October

NIKKEI (Page 3) (Lead para.)
December 28, 2009

Japan's U.S. government bond possession is on the increase. The
amount of U.S. government bonds held by the Japanese government and
private sector as of the end of October reached 746.5 billion

TOKYO 00002928 005 OF 008

dollars (approximately 67 trillion yen), up nearly 20 percent from
the level of the same month in the preceding year. While China is
curbing its investment in U.S. government bonds in order to
diversify its foreign reserves, financial institutions in Japan are
actively purchasing them.

10) Government makes three postal services revision proposals

NIKKEI (Page 5) (Excerpts)
December 26, 2009

The government on Dec. 25 held a policy meeting to take a second
look at postal services. The government's side made three
reorganization proposals concerning the Japan Post Group's spin-off
company system. Deputy Cabinet Office Minister Kohei Otsuka noted
that a proposal for making Japan Post Bank and Japan Post Insurance
separate entities was a strong option. The government intends to
finalize its plan as early as January next year while consulting
with the ruling parties.

The Japan Post Group employs a five-company system of four companies
placed under the wing of a holding company. The government wants to
improve the group's business management efficiency through
reorganization.

Participants representing the government offered three proposals:
(1) Plan A - integrating Japan Post Service Co. and Japan Post
Network Co. into Japan Post Holdings Co. and placing Japan Post Bank
Co. and Japan Post Insurance Co. under the holding company; (2) Plan
B - establishing a financial holding company under the holding
company in the Plan A and placing Japan Post Bank Co., and Japan
Post Insurance Co. under its wing; and (3) Plan C - integrating the
four companies as a holding company. Some of the participants in the
policy meeting supported Plan A.

11) Government's draft national economic growth strategy places
priority on environment

YOMIURI (Page 1) (excerpt)
December 27, 2009

A national economic growth strategy drafted by the government's
growth strategy compilation council, chaired by Prime Minister
Hatoyama, was revealed on Dec. 26. The plan specifies six areas,
including Asia, tourism, science and technology, employment and
manpower development, with the environment, to which Japan attaches
importance, and health care (medical services and nursing care), an
area where demand is expected to expand, as key areas.

The council proposes increasing both public and private-sector
investment in R&D related to science and technology to over 4
percent of the nation's gross domestic product. The prime minister
will announce the package at a press conference to be held on Dec.
30.

Concerning the science and technology area, the package points out
that after Japan became the world's second-largest economic power,
people's expectations and respect for the nation's science and
technology declined. Consequently, the need for human resources
development and reform at research organizations to ensure further
development has been neglected. The council also says that it is
very important to invest in and develop a next-generation

TOKYO 00002928 006 OF 008

supercomputer, an issue that drew attention in the government's
screening of wasteful budgetary spending.

12) Japan Post forgoes plan to set up management consultative
council

NIKKEI (Page 5) (Excerpts)
December 26, 2009

Japan Post, which has been studying ways to consolidate the group's
governance, has decided to forgo a plan to set up a "group
management consultative council." JP had a plan to have a group of
local representatives and experts play the role of overseeing the
group's services and management. But now that the group doubled the
number of board directors in October and appointed local business
leaders, JP has apparently decided the need for the envisaged
consultative council has diminished.

13) Third largest drop in ODA

ASAHI (Page 4) (Full)
December 26, 2009

The Hatoyama cabinet on Dec. 25 adopted the fiscal 2010 budget plan.
The government's official development assistance (ODA) budget was
allocated 618.7 billion yen, down 7.9 percent from the current
fiscal year and marking an eleventh consecutive drop. The ODA budget
during the Liberal Democratic Party (LDP)-New Komeito administration
was cut 4 percent in comparison with the preceding year from fiscal
2007 through fiscal 2009. The margin of the decrease this time is
even wider, marking the third largest drop ever.

Cooperation in the form of grants and technological cooperation were
increased in the fiscal 2009 budget for the first time in nine
years. However, they again suffered cuts, securing 154.2 billion
yen, down 4.2 percent cut from the preceding year, and 148 billion
yen, a 5.0 percent cut in comparison with the previous year,
respectively. The government has budgeted 104.4 billion yen, down 18
percent from the previous year, for the Japan International
Cooperation Agency (JICA).

14) Defense spending, including U.S. force realignment cost, to be
increased for first time in eight years; Futenma relocation cost not
included

NIKKEI (Page 8) (Abridged slightly)
December 26, 2009

The nation's defense spending (for fiscal 2010), including the cost
of the realignment of U.S. forces in Japan, has been set at 4.7903
trillion yen, an increase of 0.3 percent from the initial fiscal
2009 budget. Defense spending will be increased nominally for the
first time in eight years due to the growing U.S. force realignment
cost and other factors. But in reality the nation's defense spending
for fiscal 2010 seems like a decrease based on a drop in spending
for equipment from the time of the budgetary request.

The cost connected with U.S. force realignment, including the Guam
relocation cost of 47.9 billion yen, is 90.9 billion yen (an
increase of 30.7 billion yen). The government has decided not to
earmark funds for major elements in the Futenma relocation-connected
cost other than the ongoing environmental impact assessment. The

TOKYO 00002928 007 OF 008

government plans to deal with the matter with an act incurring a
liability on the treasury by means of an undesignated resolution
once the relocation site is determined.

The defense spending includes 300 million yen for training new
personnel, although no fund was allotted for a PKO center, a project
that was slated for "abolishment" in the government's screening of
state projects. On Japan's omoiyari yosan (literally "sympathy
budget" or host nation support) for the stationing of U.S. forces in
Japan, the government has decided not to change the salary level of
Japanese people working at U.S. bases, despite the fact that it was
slated for "review" in the screening process.

On the equipment front, the cost of building a new type of destroyer
has been included in the budget, as requested. The deployment of the
ground-to-air Patriot Advanced Capability-3 (PAC-3) missile will be
limited to its radar that needs to be renewed.

15) PM Hatoyama calls for debate on constitutional revision

YOMIURI (Page 2) (Lead paragraph)
December 27, 2009

At a recording session on Dec. 26 for a Radio Nippon program for the
New Year, Prime Minister Yukio Hatoyama indicated that the debate on
constitutional revision should resume in the Democratic Party of
Japan, and this issue should be discussed across political party
lines. The Social Democratic Party is opposed to constitutional
revision. This statement of the Prime Minister is certain to become
a new source of conflict within the coalition government.

16) Poll: Cabinet support plummets to 47 PERCENT

TOKYO SHIMBUN (Top play) (Abridged)
December 27, 2009

The public approval rating for Prime Minister Yukio Hatoyama and his
cabinet was 47.2 PERCENT in a telephone-based nationwide public
opinion survey conducted by Kyodo News on Dec. 25-26, posting a
sharp drop of 16.5 percentage points from the last survey conducted
in November. The Hatoyama cabinet's support rate fell below 50
PERCENT for the first time since coming into office. The
disapproval rating was 38.1 PERCENT , up 13.0 points.

In the breakdown of public support for political parties, the ruling
Democratic Party of Japan stood at 36.1 PERCENT , down 8.9 points
from the last survey. The opposition Liberal Democratic Party was at
23.7 PERCENT , up 7.5 points. As seen from these figures, the gap
between the two parties has narrowed. Among other political parties,
the New Komeito was at 1.9 PERCENT , the Japanese Communist Party at
1.3 PERCENT , the Social Democratic Party at 1.8 PERCENT , the Your
Party at 1.7 PERCENT , the People's New Party at 1.1 PERCENT , and
the New Party Nippon at 0.6 PERCENT . "None" accounted for 30.5
PERCENT .

17) Poll: Cabinet support plunges 18 points to 50 PERCENT

NIKKEI (Page 1) (Abridged)
December 28, 2009

The public approval rating for Prime Minister Yukio Hatoyama's
cabinet dropped 18 percentage points from last month to 50 PERCENT

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in a public opinion survey jointly conducted jointly by the Nihon
Keizai Shimbun and TV Tokyo on Dec. 25-27. The disapproval rating
rose 18 points to 42 PERCENT . In the survey, respondents were asked
if they thought that Hatoyama has fully accounted for the issue of
his fund-managing body's falsification of political fund reports. In
response to this question, 75 PERCENT answered "no," with only 16
PERCENT saying "yes." The public seems to be increasingly
dissatisfied with his politics-and-money problem and leadership.

In the breakdown of public support for political parties, the ruling
Democratic Party of Japan dropped 10 points to 46 PERCENT . The
opposition Liberal Democratic Party rose 4 points to 23 PERCENT .

ROOS

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