Cablegate: Japanese Morning Press Highlights 01/25/10

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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 01/25/10

INDEX:

1) Top headlines
2) Editorials

Nago mayoral election:
3) Election result further complicates relocation to Henoko (Asahi)

4) Hirano: Govt. will decide; Maehara: All options are on the table
(Tokyo Shimbun)
5) Real possibility Futenma facility will become permanent base
(Yomiuri)
6) Okinawa Gov. Nakaima takes wait-and-see attitude (Asahi)
7) Election outcome forces gov. to review policy on bases (Asahi)

Futenma relocation:
8) Okada says Henoko still a candidate site (Yomiuri)
9) Fukushima reiterates opposition to relocation of base to Henoko
(Yomiuri)

Foreign relations:
10) Okada aims for Nov. agreement on new form of bilateral alliance
(Nikkei)
11) Okada sends letter to U.S. explaining Japan's position on U.S.
nuclear policy (Nikkei)

Economy:
12) U.S. financial regulation: Japanese banks geared up to observe
future moves (Nikkei)
13) Hiromasa Yonekura tapped to head Keidanren (Nikkei)

Ozawa scandal:
14) Ozawa flatly denies allegations (Asahi)
15) Whether or not Ozawa will resign post focus of attention
(Yomiuri)

Politics:
16) Summary of LDP's new principles adopted at party convention
(Mainichi)
17) Former Lower House member Nobuhiro Omiya to quit LDP (Nikkei)

Research & development:
18) Japan, U.S. to jointly develop "smart grid" (Nikkei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei, Tokyo Shimbun, & Akahata:
Candidate calling for relocating Futenma base out of Okinawa wins
Nago mayoral election; Relocating Futenma to Henoko has become
increasingly difficult
Nikkei:
Concerns exist over expected "vacuum" in economic measures in
January-March period

2) EDITORIALS

Asahi:
(1) Nago mayoral election: Government must expedite effort to look
for relocation site outside Okinawa
(2) LDP annual convention: Need for young talented members who can

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work for reconstruction

Mainichi:
(1) Nago mayoral election: Victory of candidate opposing relocating
Futenma to Henoko carries the weight of the popular will
(2) LDP convention: President Tanigaki must take the lead

Yomiuri:
(1) Nago mayoral election: Relocation of Futenma to Henoko is the
best option
(2) LDP convention: LDP must show its efforts for "reform"

Nikkei:
(1) Turmoil over Futenma relocation issue grows worse due to Nago
mayoral election
(2) LDP must compete with DPJ in policies

Sankei:
(1) LDP convention: President Tanigaki must play up his intention to
fight for political helm
(2) Nago mayoral election: Prime Minister Hatoyama must risk his
political life to solve Futenma issue

Tokyo Shimbun:
(1) Has America changed?

Akahata:
(1) Consumption tax hike argument: "Reserve funds (profits)" of
major companies should be returned to society

3) Victory of Futenma relocation opponent in Nago mayoral election
makes Henoko relocation "extremely difficult"

ASAHI (Top play) (Lead paragraph)
Janaury 25, 2010

The mayoral election in Nago City, Okinawa, where the point of
contention was the relocation of the U.S. forces' Futenma Air
Station (in Ginowan City, Okinawa), was held on Jan. 24. Neophyte
candidate Susumu Inamine, 64, endorsed by the Democratic Party of
Japan, the Japanese Communist Party, the Social Democratic Party,
the People's New Party, and the Socialist Masses Party of Okinawa,
who is opposed to the plan agreed upon by Japan and the U.S. to
relocate the Futenma base to Henoko in Nago, defeated the incumbent
mayor who accepts the relocation plan, Yoshikazu Shimabukuro, 63,
and was elected for his first term as mayor. The Hatoyama cabinet
intends to decide on Futenma's relocation site by the end of May.
Relocation to Henoko has now become extremely difficult. The number
of eligible voters in this election was 44,896, and the voter
turnout was 76.96 percent (74.98 percent in the previous election).

4) Hirano says gov't to decide on relocation site; Maehara insists
on mulling every possible option

TOKYO SHIMBUN (Page 1) (Full)
January 25, 2010

Yesterday's mayoral election in the Okinawa prefectural city of Nago
ended in the victory of Susumu Inamine, an independent opposed to
accepting the planned relocation of the U.S. military's Futenma
airfield in the island prefecture to the city's Henoko area. In this
regard, Chief Cabinet Secretary Hirofumi Hirano stressed yesterday

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evening that the government will decide on where to relocate Futenma
airfield based on its own judgment. "The government will have to
make a decision on its own," Hirano told reporters in Tokyo.

The outcome of the mayoral election, however, is expected to make it
difficult for the government to implement the current plan to
relocate Futenma airfield to a coastal area of Camp Schwab in the
city's Henoko area. "I will accept the inauguration of a mayor who
won the election with support from local public opinion," Hirano
said, implying that the government would respect the city's public
opinion.

Also, Seiji Maehara, state minister for Okinawa and northern
territories, made a comment yesterday evening, saying: "The mayoral
election was not a poll of local residents over the propriety of
Futenma relocation alone. We will have to find an alternative
facility from among all the possible options." This indicates that
the government should consider every possible option without
precluding the current plan.

5) Result of Nago mayoral election increases possibility of Futenma
base remaining in current location permanently; significant impact
on U.S. force realignment expected

YOMIURI (Page 2) (Excerpts)
January 25, 2010

The selection of a new relocation site for the U.S. Marine Corps'
Futenma Air Station has now become extremely difficult due to the
victory of Susumu Inamine, who is opposed to accepting a plan to
relocate Futenma to Nago, in the city's mayoral election yesterday.
Inamine's victory is likely to endanger the 1996 Japan-U.S.
agreement on the total return of Futenma, increasing the possibility
of the base remaining in its current location indefinitely. The fate
of the plan to relocate U.S. Marines from Okinawa to Guam, now
underway in tandem with the Futenma plan, is certain to become
unclear as well. The result is likely to have a tremendous impact on
the entire U.S. force realignment plan.

"The Futenma relocation might fall through," a senior Defense
Ministry official said gloomily after learning of the election
results last night. "It will be difficult to decide on a relocation
site by the end of May. The United States might also decide to
maintain the status quo."

6) Okinawa governor to wait for government's response after victory
of Futenma relocation opponent in Nago mayor election

ASAHI (Page 1) (Full)
January 25, 2010

In reaction to the outcome of the Nago mayoral election, Okinawa
Governor Hirokazu Nakaima told reporters on the evening of Jan. 24:
"The base issues are 200 percent the national government's
responsibility," indicating his intention to take a wait-and-see
attitude on the government's response.

Nakaima has so far accepted the plan to relocate the Futenma Air
Station to Henoko. When asked if he will change his mind, Nakaima
would only say: "I may need to sort out my thoughts. Since a
candidate endorsed by the ruling parties who says 'no' has been
elected, (the Henoko plan) should be scrapped under normal

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circumstances. I cannot answer this question without asking the
government what it intends to do first."

7) Commentary: Victory of Futenma relocation opponent in Nago
election forces government to rethink base policy

ASAHI (Page 1) (Full)
January 25, 2010

Hirofumi Goto, Naha General Bureau chief

The plan to relocate the Futenma Air Station to Henoko in Nago City
has effectively been defeated more than 13 years after it was
proposed. Although some supporters of Susumu Inamine accept the
existing relocation plan, conflict among the citizens will be only
be stirred up once again if the government insists on the Henoko
relocation plan and attempts to make the new mayor change his mind.

Yoshikazu Shimabukuro is not the only one who was defeated in the
mayoral election. The biggest loser is none other than Japan's
policy on the military bases in the postwar period.

Inamine has criticized the economic development measures which are
de facto rewards for accepting Futenma relocation, saying: "The
number of impressive-looking buildings has increased but there is a
shortage of doctors in the hospitals. The city will not be improved
any better through one-time economic measures." A total of
approximately 77 billion yen has been spent on Nago in the past 10
years. Yet, "people feel that the economic measures have reached
their limits," according to Inamine.

In the 1950s, when U.S. military bases on the Japanese mainland were
reduced by three-fourths with the restoration of Japan's
sovereignty, the forcible expropriation of land for military bases
increased in Okinawa on the contrary. Even after Okinawa's reversion
to Japanese administration in 1972, the concentration of U.S. bases
in Okinawa increased from 65 to 75 percent. After the rape of a
schoolgirl by U.S. soldiers in 1995, the Japanese and U.S.
governments announced that they would reduce the burden imposed by
the bases, but the bases to be returned are mostly located in
densely-populated southern and central Okinawa, and the plan is to
build a new military base in Nago in the northern part of the
prefecture. Nago's rejection of this plan also amounts to a vote of
no confidence on the national government's method of imposing the
burden on outlying areas.

Prime Minister Yukio Hatoyama has zigzagged repeatedly in his
statements on this issue. There is a persistent view in Nago that
"(the Futenma replacement facility) will end up coming back to
Henoko."

Will it still be possible to implement the Henoko relocation plan?
If the answer is yes, will the existing plan be modified? If the
choice made by some 45,000 voters is to be the basis of the decision
on the most important issue between Japan and the United States,
they should have laid down all the conditions in advance.

It will not be easy to find a relocation site other than Henoko.
However, the method of keeping the bases in Okinawa by handing out
favors in the form of public works projects has reached its limit.
Unless the structure that has propped up the Japan-U.S. security
arrangements is reviewed, the base issues cannot be resolved.

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8) Okada: Henoko also a candidate for Futenma relocation site

YOMIURI (Page 4) (Abridged)
January 24, 2010

Foreign Minister Okada delivered a speech yesterday in Kuwana, Mie
Prefecture, during which he indicated that the current plan to
relocate the U.S. Marine Corps' Futenma Air Station in Okinawa
Prefecture to a coastal area of Camp Schwab, a U.S. military base in
the Henoko area of the island prefecture's northern coastal city of
Nago, is also included in the list of options. "The current plan to
relocate Futenma airfield to the coastal area of Henoko is still a
candidate since we are not ruling out any possibility," Okada said.

9) SDP's Fukushima reiterates opposition to Futenma relocation plan

YOMIURI (Page 40 (Full)
January 24, 2010

Social Democratic Party President Fukushima, currently the Hatoyama
cabinet's consumer affairs minister, delivered a speech yesterday at
a party convention, in which she reiterated her intention to oppose
the current plan based on an intergovernmental agreement between
Japan and the United States to relocate the U.S. military's Futenma
airfield in Okinawa Prefecture to a coastal area of Henoko in the
island prefecture's northern coastal city of Nago. "I would like to
work together with Prime Minister Hatoyama and People's New Party
President Kamei toward a solution to the issue so a sea-based
facility will not be built in the coastal area of Henoko," Fukushima
said.

10) Okada aims for Nov. agreement on new form of bilateral alliance

NIKKEI (Page 2) (Full)
January 24, 2010

Foreign Minister Katsuya Okada, speaking at Kuwana and Yokkaichi in
Mie Prefecture on Jan. 23, commented on talks between the Japanese
and U.S. governments for deepening the bilateral alliance, saying:
"There is a strong possibility President Obama will attend the
Asia-Pacific Economic Cooperation (APEC) Leaders' Meeting, which
will be held in Yokohama in November. It would be good if a new form
of Japan-U.S. alliance could be confirmed then," expressing the goal
of timing an agreement with the president's visit.

Additionally, he pointed out that "Japan and the U.S. must share an
understanding of
the security environment in the Asia-Pacific region and of how it
will be 20 or 30 years hence." He analyzed the situation in China
and North Korea, remarking that "it was necessary to review the role
of the Japan-U.S. alliance." He also addressed the issue of
relocation of the U.S. military's Futenma base: "Deterrence is an
important part of the Marines' presence," reiterating a negative
stance toward relocation of the base outside Japan. He stressed that
the existing plan, under which the facility would be relocated to
the coastal area of Camp Schwab, was also being considered.

11) Government sends letter to U.S. praising nuclear posture review

MAINICHI (Page 5) (Full)
January 25, 2010

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Foreign Minister Katsuya Okada revealed in a press conference on
Jan. 22 that he sent a letter on Dec. 24 to the U.S. government
conveying the Japanese government's view on the U.S. Nuclear Posture
Review that the Obama administration plans to complete by the end of
February as its new nuclear policy guidelines. In the letter, the
Japanese government praised President Obama's advocacy of a world
without nuclear weapons, while acknowledging the importance of
nuclear deterrence, writing, "Japan is fully aware of its dependence
the U.S.'s extended deterrence (nuclear umbrella)." The government
also stressed in the letter that it would not ask the U.S. not to
reduce nuclear weapons in order to maintain nuclear deterrence.

12) U.S. financial regulation: Japanese banks geared up to observe
future moves

NIKKEI (Page 7) (Excerpts)
January 23, 2010

U.S. President Obama's recently released new financial regulation
plan is aimed at limiting the expansion of the size of banks and
their engaging in excessively risky trading activities. The U.S.'s
basic stance of preventing financial institutions from pursuing
highly risky trading activities has something in common with the
international movement to reform financial regulations being pushed
forward by financial officials of leading countries. However, it is
undeniable that the U.S. stance is somewhat hasty.

Many countries are in trouble handling the two paradoxical issues of
appropriately distributing funds to growth sectors through financial
functions and preventing the occurrence of an economic bubble. There
are perhaps lingering doubts that the U.S. government's clear-cut
approach is divorced from reality.

State Minister for Financial Affairs and Postal Reform Shizuka Kamei
told the press corps on Jan. 22: "It is only natural for the U.S. to
adopt sound economic and financial policies, since the current
financial crisis originated in the U.S." He stopped short of
referring to the possibility of Japan following suit.

An executive at a megabank could only obtain several A4-size press
release copies. He said: "All we can do is to closely watch (the
U.S. government's) future moves. Since there are no details
available, we are not in a position to examine the policy." An
executive of another bank said: "Since Japanese banks have not been
positively investing in investment funds, the impact of the new
regulation would be minimal." At the moment, there is little concern
that Japanese banks would be pressed to sharply scale down their
operations.

13) Yonekura to assume post of Japan Business Federation

NIKKEI (Page 1) (Excerpts)
January 24, 2010

The Japan Business Federation (Nippon Keidanren) on Jan. 23 decided
to appoint Hiromasa Yonekura (72), chairman of Sumitomo Chemical, as
successor to the incumbent Chairman Fujio Mitarai (74). Yonekura is
currently serving as the chairman of the Nippon Keidanren Board of
Trustees, the number two post following the chairmanship. Many
business leaders highly evaluate his management capability for his
promoting globalization, such as launching a petrochemical complex

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in Saudi Arabia. Chairman Mitarai has determined that Yonekura is
the right person to lead business circles in putting the Japanese
economy on a new growth track.

Hiromasa Yonekura: Entered Sumitomo Chemical in 1960 after
graduating from the Tokyo University Law Faculty. Assumed presidency
after serving as senior managing director, etc. Serving as chairman
since 2009. Chairman of the Nippon Keidanren Board of Trustees since
2008. Born in Hyogo Prefecture.

14) Ozawa totally denies involvement in wrongdoing

ASAHI (Top play) (Excerpt)
January 24, 2010

The special investigation team of the Tokyo District Public
Prosecutors Office on the afternoon of Jan. 23 questioned Democratic
Party of Japan Secretary General Ichiro Ozawa on a voluntary basis
in connection with a possible violation of the Political Funds
Control Law by his political fund management organization,
Rikuzan-kai. After submitting to questioning as a suspect, Ozawa
released a statement explaining the situation. Ozawa also held an
unplanned press conference later on in which he again denied his
involvement in any wrongdoing. "I want to fulfill my duties," Ozawa
said in the press conference, expressing his plan to continue to
serve as secretary general. Prime Minister Yukio Hatoyama has
accepted Ozawa's explanation and intends to continue to monitor the
investigations. The investigation team is likely to conduct further
investigations based on the explanations provided by Ozawa's during
the questioning.

15) All eyes are on whether Ozawa will stay on or resign as
secretary general

YOMIURI (Page 1) (Excerpts)
January 24, 2010

The fact that Democratic Party of Japan Secretary General Ichiro
Ozawa was questioned as a suspect by the special investigation team
of the Tokyo District Public Prosecutors Office is certain to deal a
blow to the Hatoyama administration. Although the position of Prime
Minister Yukio Hatoyama and others that Ozawa is innocent remains
unchanged, there are concerns in the party over the House of
Councillors election this summer. Political maneuvering within the
party has also begun based on speculation that Ozawa will resign as
secretary general.

16) Gist of LDP's new party platform

MAINICHI (Page 2) (Full)
January 25, 2010

The gist of the Liberal Democratic Party's platform for 2010 adopted
in its annual convention yesterday is as follows.

(Recognition of present situation)

Reflecting on its defeat in the 2009 House of Representatives
election, our party would like to make a fresh start, adopting as
its political ideology a new type of conservatism suitable for a
nation that must pursue progress while maintaining order and
fulfilling its international obligations. We will squarely confront

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the national socialist administration, which ignores public opinion
that opposes its intentions under the pretext of political
leadership.

(Conservative political party in pursuit of progress)

We will speak of facts freely and actively with courage, hold
consultations, and make decisions. We will make utmost efforts to
manage the Diet fairly and make the government function in a humble
manner.

(Basic view about policies)

We aim to establish a new constitution to enable Japan to offer
contributions to the world. We are resolved to carry out our duties
in line with the realities of the international community. We will
build an autonomous and orderly market economy, and reconstruct the
national economy by improving fiscal efficiency and revising the tax
system.

(Image of Japan with pride and vitality)

The people should be independent and cooperate with one another. The
government should implement policies that are fair to all people.
The nation should fulfill its obligation to bring about global
peace.

17) Former lawmaker Omiya leaves LDP

NIKKEI (Page 2) (Full)
January 25, 2010

Former House of Representative member Nobuhiro Omiya, 60, tendered
on Jan. 24 his resignation to Liberal Democratic Party (LDP)
Secretary General Tadamori Oshima at the LDP's headquarters. He
plans to run in the House of Councillors election slated for this
summer. Omiya, a former LDP staff member, was elected for the first
time to the Lower House from the South Kanto proportional
representation bloc in the 2005 election but he lost his Diet seat
in the 2009 election.

18) Japan, U.S. to launch joint research on smart power transmission
systems

NIKKEI (Page 3) (Full)
January 25, 2010

The Japanese and U.S. governments plan to launch joint research on
smart power grids, next-generation transmission systems. With the
aim of rolling out smart grids in the Asia-Pacific region, a
taskforce composed of public and private-sector experts from the two
countries will hold its first meeting in late February.
Demonstration experiments will be started in Okinawa Prefecture and
Hawaii. Japan and the U.S. hope to achieve positive results by the
Asia-Pacific Economic Cooperation (APEC) Summit to be held in the
U.S. next year and then expand the use of smart grids to other
countries in the region.

In a meeting of APEC energy ministers in Fukui City in June, Japan
as the chair of the APEC forum for this year will propose a
demonstration project of low-carbon towns, in which the government
plans to invest about one billion yen. By joining hands with the

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U.S., which will chair the APEC forum next year, Japan is willing to
back up measures to counter global warming in the region.

Smart grids enable the monitoring of power supply and demand online
from households, offices, and power plants to make a stable supply
of electricity and energy saving possible. Smart transmission
systems are indispensable to expanding the use of renewable energy
such as solar power and wind power.

Japan and the U.S. will look into areas for improvement and measures
for disseminating the systems at the taskforce meeting through the
demonstration experiments. Taskforce members will discuss how to
make use of renewable energy mainly in island regions. Japan and the
U.S. also aim to take the initiative in setting international
standards for smart grids. If the systems can be put into practice
in island regions, the two countries will consider installing the
systems in developing countries as assistance measures.

ZUMWALT

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