Cablegate: Japanese Morning Press Highlights 01/29/10

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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 01/29/10

INDEX:

1) Top headlines
2) Editorials

Futenma facility replacement:
3) PM Hatoyama: No continued use of Futenma facility (Yomiuri)
4) Ambassador Roos says existing relocation plan best (Sankei)
5) Tokunoshima yet to undergo formal review as candidate site
(Nikkei)

Defense & security:
6) Part falls from carrier-based Super Hornet, strikes home in
Kanagawa (Mainichi)

Foreign relations:
7) What was the real reason Japan was not mentioned in President's
State of the Union Address? (Yomiuri)
8) Okada to visit ROK Feb. 10-11 (Nikkei)

Ozawa scandal:
9) Ozawa: "I'm innocent." (Nikkei)
10) Ozawa bought land near Henoko (Sankei)
11) Ozawa fund-managing body also failed to record funds in '04-'05
(Mainichi)

Politics:
12) View that Hatoyama will step down in May bruited about in DPJ
(Sankei)
13) Upper House Budget Committee (Yomiuri)

Economy:
14) JAL to make decision on tie-up next month (Nikkei)
15) Opposition to expansion of postal services (Nikkei)
16) Keidanren chief hopes successor Yonekura will accelerate
conclusion of Japan-U.S. FTA (Nikkei)

Education:
17) Number of high school students studying abroad falls to lowest
level on record (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi, Yomiuri:
Justice Ministry panel proposes scrapping statute of limitations for
murders

Mainichi:
Ozawa's funds body, Rikuzan-kai, failed to report 1.3 billion yen
from his political organization in 2004-2005

Nikkei:
Smaller manufacturers increase shares in digital consumer
electronics market with low-priced products

Sankei:
Ozawa bought land 9 kilometers away from Henoko in Okinawa in 2005
possibly for speculation purposes

Tokyo Shimbun:

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Woman arrested on robbery-murder charges over mysterious death case
in Tottori

Akahata:
Concerns increasing about government's plan to allow daycare centers
to outsource food services

2) EDITORIALS

Asahi:
(1) Decision by prosecution inquest committee agrees with citizens'
good sense
(2) President Obama's State of the Union address: Get rid of
inward-looking mentality in adversity

Mainichi:
(1) State of the Union address: Steadily overcome the economic
crisis
(2) Akihabara killing spree trial: Motive must be uncovered

Yomiuri:
(1) Can President Obama turn the tables?
(2) Prosecution inquest committee's decision: Lawyers, prosecutors,
judges have heavy responsibility

Nikkei:
(1) Frustration evident in Obama's State of the Union address
(2) Expectations on new prosecution inquest system

Sankei:
(1) Prosecution inquest committee must be operated strictly and
fairly
(2) One-year-old Obama administration: Greater cooperation necessary
between Japan, U.S., and Taiwan

Tokyo Shimbun:
(1) Decision by prosecution inquest committee: Mindset of ordinary
people opens new door
(2) Obama's State of the Union address: Credibility of statements to
be tested

Akahata:
(1) Competition on consumption tax hike offers no bright prospects

3) Hatoyama: No continued use of Futenma base

YOMIURI (Page 2) (Full)
January 29, 2010

Prime Minister Hatoyama vowed yesterday to aim for a cabinet
decision on where to relocate the U.S. military's Futenma airfield
in Okinawa Prefecture (to the Henoko area of Nago City in the
prefecture), with understanding obtained from the United States and
Okinawa Prefecture's people. "I will prepare myself to make a
decision by the end of May," Hatoyama said. However, Okinawa and the
ruling parties have a growing sense of distrust in Chief Cabinet
Secretary Hirano, who is responsible for selecting an alternative
site for Futenma airfield's relocation. Dark clouds are hanging over
Hatoyama's envisaged scenario for "a complete settlement over the
final four months."

Hatoyama, attending yesterday's House of Councillors Budget

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Committee meeting, declared that he would "come up with something
that is understandable to all those concerned" by the end of May.
That evening, Hatoyama definitely ruled out the possibility of
continuing to use Futenma airfield when he was asked by reporters at
his office about what he would do should he fail to find out a
relocation site. "We've never talked about such options as continued
use (of Futenma airfield)," he said.

Meanwhile, Hirano met yesterday at the prime minister's office with
Kantoku Teruya, chair of the Social Democratic Party's Diet Affairs
Committee, and other members of "Urunokai," a group of Diet members
elected from Okinawa Prefecture. In the meeting, Teruya protested
Hirano's remarks over Nago's recent mayoral election that ended in
the victory of a candidate opposed to accepting the relocation of
Futenma airfield. In this regard, Hirano had said, "There's no
reason to consider it." Teruya said, "It shocked the people of
Okinawa Prefecture and the residents of Nago City."

"There was a misunderstanding," Hirano explained: "I will respect
the will of the people, as a matter of course," he added. However,
Hirano did not deny that the current plan to relocate Futenma
airfield to Nago is included in the list of possible options. "We'd
like to consider, from scratch, where to relocate," he said.

4) U.S. envoy: Current plan is best

SANKEI (Page 4) (Full)
January 29, 2010

U.S. Ambassador to Japan Roos met yesterday in Tokyo with former
Finance Minister Fukushiro Nukaga, an opposition Liberal Democratic
Party lawmaker seated in the House of Representatives. In the
meeting, Roos referred to the issue of relocating Futenma airfield,
a U.S. military facility located in Ginowan, Okinawa Prefecture.
"The United States still thinks the current plan (to relocate
Futenma airfield to a coastal area of Camp Schwab) is best," Roos
said.

5) Tokunoshima not yet under consideration as possible Futenma
relocation site

NIKKEI (Page 2) (Full)
January 29, 2010

Deputy Chief Cabinet Secretary Yorihisa Matsuno clarified yesterday
at a press conference that Seishu Makino, a House of Representatives
member of the ruling Democratic Party of Japan (DPJ), had surveyed
the island of Tokunoshima in Kagoshima Prefecture as a possible
relocation site for the U.S. Marine Corps' Futenma Air Station in
Okinawa Prefecture. Matsuno said, "We greatly appreciated it as
information," admitting that the government has received a report on
the survey. He also pointed out: "The government has yet to reach
the stage of looking into the island as a possible relocation
site."

6) Component drops from U.S. military aircraft and damages house

MAINICHI (Page 27) (Full)
January 29, 2010

A U.S. Navy "Super Hornet" fighter jet that took off from a
nuclear-powered aircraft carrier dropped one of its components when

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flying over the city of Ayase, Kanagawa Prefecture, the U.S. Navy's
Atsugi base said yesterday. The dropped object was a duralumin rod,
about 57 centimeters long about 3 centimeters in diameter. The rod
fell on the house of a 55-year-old local resident living in the
city, according to the Yamato Police Station of Kanagawa prefectural
police. The fallen rod broke a windowpane and a sliding shutter on a
second-floor balcony. No injuries were reported. The house was
undergoing soundproofing work against carrier-based aircraft noise,
and windowpanes and other removed materials were placed on the
porch. The rod had a 20-centimer wire attached to it. The base is
now investigating the cause of the incident.

7) Obama in address makes no reference to Japan, although China,
South Korea, and India mentioned

YOMIURI (Page 3) (Full)
January 29, 2010

By Satoshi Ogawa, Washington

U.S. President Barack Obama delivered his State of the Union address
on Jan. 28. Japanese observers were paying attention to whether he
would mention now strained Japan-U.S. relations, but he made no
reference to Japan. From a historic viewpoint, it is not rare that
Japan is unmentioned in a State of the Union address, but President
Obama fell short of mentioning Japan in speaking of even the areas
in which Japan has been deeply involved. Meanwhile, there was
mention of such major countries in Asia as China, South Korea, and
India. The absence of reference to Japan is likely to cause
speculation over the president's real intentions.

In reference to the plan to introduce high-speed rail services in
the U.S., Obama said: "There should be no reason for Europe and
China to have the world's fastest railway systems." Japan has been
eager to market its Shinkansen technology in the U.S. This remark
can be taken to mean his interest lies in the technologies of
European companies, rivals of Japanese firms, and in China's plan to
expand its railway network.

During the summit meeting last February, then Prime Minister Taro
Aso persuaded Obama to introduce Shinkansen technology in the U.S.
Given this, the president should be fully aware of the political
importance of this matter for Japan.

In the first joint seminar of the public and private sectors held in
Washington on Jan. 21 by the Land, Infrastructure, Transport and
Tourism Ministry, Japan Railways, and other organizations, Transport
Secretary Ray LaHood pleased Japanese participants by saying: "Japan
is a leader and pioneer in the high-speed railway industry."

In his State of the Union address a year ago, President Obama said
that the U.S. "has lagged behind Germany and Japan" in the area of
photovoltaic power generation. In the address this time, however, he
cited China, Germany, and India as countries that have successfully
turned around their economies through green-tech jobs.

Touching on trade liberalization, Obama listed South Korea, with
which the U.S. is promoting negotiations on concluding a free trade
agreement (FTA), as one of its "major trade partners." The
Democratic Party of Japan stated in its campaign manifesto released
last July for the previous general election: "The party will
conclude an FTA with the U.S." But faced with a backlash from

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domestic agricultural organizations, the party revised the statement
to "the party will promote FTA negotiations," disappointing the U.S.

8) Foreign Minister Okada to visit South Korea in February

NIKKEI (Page 2) (Full)
January 29, 2010

Foreign Minister Katsuya Okada decided yesterday to visit the
Republic of Korea on Feb. 10-11. He will hold talks with ROK Foreign
Affairs and Trade Minister Yu Myung-hwan. The two ministers are
expected to make arrangements for a visit to Japan by President Lee
Myung-bak with an eye on the first half of this year. They are also
expected to discuss the resumption of talks on a Japan-ROK economic
partnership agreement (EPA), the North Korea situation, and other
issues.

9) DPJ Secretary General Ozawa reportedly says land deal scandal to
be settled "soon"

NIKKEI (Page 2) (Full)
January 29, 2010

Democratic Party of Japan (DPJ) Secretary General Ichiro Ozawa had
dinner with senior officials of the three ruling parties at a
Japanese restaurant in Tokyo on the evening of Jan. 28. According to
one participant in the gathering, Ozawa talked about the alleged
violation of the Political Funds Control Law by his fund management
group in a land deal and said, "I have an absolutely clear
conscience." He indicated his anticipation that "the prosecutors'
understanding will be obtained and the case will be settled soon."

According to another participant, Ozawa said: "I am innocent. It may
take some time but I will work hard to prove my innocence." Seiji
Mataichi, deputy leader of the Social Democratic Party, suggested
that Ozawa give an explanation to the (Diet's) Council on Political
Ethics, but Ozawa did not respond.

10) Ozawa bought land 9 kilometers away from Henoko in Okinawa in
2005, possibly for speculation purposes

SANKEI (Top play) (Excerpts)
January 29, 2010

It became clear yesterday from a register and a House of
Representatives property report that Democratic Party of Japan
Secretary General Ichiro Ozawa purchased a 5,200-square-meter plot
of land in the village of Ginoza, Okinawa Prefecture, in November
2005. The land is in a state of wilderness with no buildings on it,
and its use is unknown. It is close to the relocation site for the
U.S. Marine Corps' Futenma Air Station, and Ozawa purchased the land
shortly after Tokyo agreed to a preliminary report on the
realignment of U.S. forces in Japan that included the Futenma
relocation. As such, the land purchase might be considered to have
been made for speculation purposes. Questions are likely to be
raised about the morals of Ozawa as a politician.

According to the register, Ozawa purchased two pieces of land - one
measuring 1,593 square meters and another one 3,601 square meters,
both located in Kannamikibaru, Ginoza Village - on November 28,
2005.

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The use of the land facing the coast is specified as "wilderness."
The owner of the land is Ichiro Ozawa and the address of Ozawa's
home in Iwate Prefecture is specified in the register. Ozawa appears
to have paid for the land in cash as it does not carry a mortgage.
The land is listed in Ozawa's property report.

Although the land sits only about 9 kilometers away from Camp Schwab
(in Henoko, Nago City), the relocation site for the Futenma Air
Station under the existing plan, it is not included in the area
expected to suffer from noise under the relocation plan. Ozawa
purchased the land shortly after Tokyo agreed in October 2005 to the
preliminary U.S. force realignment report that included the Henoko
relocation plan. As such, Ozawa might have purchased the land for
speculation purposes.

11) Ozawa's fund body, Rikuzan-kai, failed to report 1.3 billion yen
from his political organization in 2004-2005

MAINICHI (Top play) (Excerpt)
January 29, 2010

It has become clear that in connection with a land purchase by
Rikuzan-kai, the fund management organization of Democratic Party of
Japan Secretary General Ichiro Ozawa, a total of 900 million yen was
withdrawn from the Rikuzan-kai's bank account between 2004 and 2005
and that the amount was not listed in the body's political fund
reports. It is believed that the money was exchanged between
Rikuzan-kai and Reform Forum 21, a political organization
effectively run by Ozawa, along with the 400 million yen that was
moved between March and May 2005. It appears that during its
questioning of Ozawa on Jan. 23, the special investigation team of
the Tokyo District Public Prosecutors Office asked about the total
amount of 1.3 billion yen and that it put his reply that he does not
know about it on the interrogation record.

12) Rumors circulating in DPJ that PM Hatoyama will step down in
May

SANKEI (Page 4) (Lead paragraph)
January 29, 2010

Hiroshi Sakai

Rumors that Prime Minister Yukio Hatoyama will step down in May are
circulating in the Democratic Party of Japan (DPJ). With the
cabinet's support rating continuing to decline due to the scandal
involving his falsified political donations and the violation of the
Political Funds Control Law by Secretary General Ichiro Ozawa's fund
management group relating to a land purchase, it is widely believed
that it will be impossible to manage a soft landing on the issue of
the relocation of the U.S. forces' Futenma Air Station (in Ginowan
City, Okinawa). It is speculated that at the time a decision on the
Futenma issue is made, moves to "topple" Hatoyama will occur, in
anticipation of the House of Councillors election this summer. At
the Upper House Budget Committee on Jan. 28, Hatoyama remained
noncommittal when asked if he plans to put his premiership on the
line over a solution to the Futenma issue.

13) Exchanges on Futenma issue at Upper House Budget Committee on
January 28

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YOMIURI (Page 11) (Abridged)
January 29, 2010

Below are the main questions and answers at the House of Councillors
Budget Committee on Jan. 28. The following Upper House members asked
questions: Ryuji Yamane (Democratic Party of Japan), Ichita
Yamamoto, Hiroshige Seko (Liberal Democratic Party), Kazuo Hirotomo
(New Komeito), Satoshi Inoue (Japanese Communist Party), and
Tokushin Yamauchi (Social Democratic Party).

Futenma relocation

Yamamoto: Are you still committed to settling the issue of the
relocation of the U.S. forces' Futenma Air Station by May?

Prime Minister Yukio Hatoyama: I will come up with a conclusion by
obtaining the understanding of the United States, the Japanese and
Okinawan people, and the ruling coalition parties. I will (make a
decision on the relocation site) before the end of May.

Yamamoto: Will you resign in case you are unable to do so?

Hatoyama: I am determined to make a decision by May. I am saying
this is the government's responsibility.

Yamamoto: Is there any possibility of realizing the proposal to
integrate (the Futenma base) with the Kadena Air Base?

Foreign Minister Katsuya Okada: An examination committee (of the
government and the ruling parties) has been created under the chief
cabinet secretary to consider (the relocation site) from scratch. I
cannot go into details.

Yamamoto: Is relocation to the islands of Iejima or Shimojishima (in
Okinawa) possible?

Chief Cabinet Secretary Hirofumi Hirano: We are considering (the
relocation site) from scratch without any preconditions. This issue
is being looked into from all angles.

Yamamoto: Do you think it is possible that Mr. Susumu Inamine, the
mayor-elect of Nago City in Okinawa, will accept the relocation?

Hatoyama: The election of Mayor Inamine is a manifestation of the
popular will of the citizens of Nago. I am still unable to determine
what the new mayor will think (by May).

Yamamoto: Is it possible that the issue will be settled by adopting
the current relocation plan (to relocate the Futenma base to Nago
City)?

Hatoyama: We are keeping all options open and considering the issue
from scratch.

Yamamoto: If the relocation site turns out to be the same as the
current plan, will the Social Democratic Party (SDP) bolt the
coalition government?

Consumer Affairs Minister Mizuho Fukushima (SDP leader): The SDP is
doing everything it can in this cabinet to prevent the construction
of an offshore base (in waters off Henoko in Nago City).

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Yamamoto: What did you mean when you said "trust me" at the
Japan-U.S. summit meeting?

Hatoyama: I meant "trust me as a person."

Yamamoto: Have you not caused any misunderstanding?

Hatoyama: I might have caused some misunderstanding. However, I
believe that understanding has been achieved through the discussion
between Foreign Minister Okada and U.S. Secretary of State Clinton.

Yamauchi: Chief Cabinet Secretary Hirano said that there is no need
to take the result (of the Nago mayoral election) into
consideration. I demand the withdrawal of this statement.

Hirano: I regard the outcome (of the mayoral election) as an
expression of popular will. The examination committee (of the
government and the ruling parties) will make a decision from
scratch.

14) JAL to decide on new business partner next month: Inamori to
meet with executives of U.S. carriers

NIKKEI (Page 11) (Full)
January 29, 2010

Japan Airlines (JAL) is now conducting business tie-up talks with
Delta Air Lines and American Airlines separately. Kazuo Inamori,
honorary chairman of Kyocera Corporation, who is set to assume the
chairmanship of JAL on Feb. 1, met with executives of both carriers
and received explanations on the advantages of forming a business
tie-up with their companies. A source connected with the Enterprise
Turnaround Initiative Corporation of Japan (ETIC) on the same day
revealed a policy of reaching a final decision, based on Inamori's
wishes, saying, "Forming a business tie-up with an American carrier
is a major decision for JAL. We give careful consideration to the
matter and decide on a business partner by the end of February."

In forming a business alliance with an American carrier, the
Transport Ministry and ETIC have been leaning toward opting for
Delta. Talks between Inamine and executives of the two carriers were
held separately. However, no decision was made. The same source said
that the selection of JAL's business partner will go into high gear
from February onward. How JAL's move to tie up with an American
carrier will unfold is yet to be seen. Tokyo and Washington agreed
to sign an open skies agreement at the end of last year.

15) Opposition to expansion of postal business

NIKKEI (Page 7) (Full)
January 29, 2010

Financial institutions are increasingly opposed to the (government)
move to revise the postal business out of concern over a resultant
expansion. Members of the Japanese Bankers Association (JBA) on Jan.
28 met with State Minister for Financial Affairs and Postal Reform
Shizuka Kamei. During the meeting, they once again took a position
of opposing moves to scrap the upper limit of postal savings and
allow (Japan Post Group) to make inroads into new businesses. Their
opposition is based on the notion that as long as government
subscription is kept intact, competitive conditions cannot be
considered fair because private financial institutions would be

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placed at a disadvantage. Kamei intends to search for ways to ensure
freedom of management while giving consideration the private sector.
Coordination of opinions, which will continue until early February
when the government plans to come up with a draft plan, will likely
encounter complications.

Chairman Yoshio Sato of the Life Insurance Association of Japan on
the 28th conveyed the sense of crisis to Kamei, saying, "If the
postal business is expanded amid the understanding among the public
that the government will extend a certain amount of assistance (to
Japan Post), a serious impact will be felt by our sales staff and
agencies." After the meeting, Sato indicated his perception that he
had obtained understanding from the postal minister on his view.

The JBA appears to have conveyed its position that in the event
government subscription is kept intact, it cannot approve the
expansion of the postal business premised on overall privatization.
The JBA is concerned that Japan Post Bank with deposits totaling
about 180 trillion yen will expand if the upper limit to savings is
eased. With the life insurance area in mind, Chairman Tommy Kullberg
of the European Business Council also called for ensuring a level
playing field.

In the meantime, a representative of the national special
postmasters association (Zenkoku Yubinkyokucho-kai) asked Kamei to
take a second look at the revision plan from the perspective of the
public. Chairman Takushoku told reporters, "If (the government) asks
us to provide universal service throughout the nation, it will be
unfair if it does not guarantee our business to some extent." His
stance is opposite that of the private financial industry. The
association intends to seek special treatment, such as tax exemption
and a monopoly on the business.

16) Keidanren Chairman Mitarai: I have high expectations of Yonekura
on a Japan-U.S. FTA

NIKKEI (Page 5) (Full)
January 29, 2010

Nippon Keidanren Chairman Fujio Mitarai, speaking at a press
conference in Osaka City, said with regard to Hiromasa Yonekura, who
will succeed him in May: "Keidanren has aimed to promote talks on a
Japan-U.S. free trade agreement. I have great expectations that Mr.
Yonekura will be able to move the talks forward because he is
well-versed in Japan-U.S. relations."

17) Fewer high school students studying abroad in 2008

YOMIURI (Page 1) (Excerpts)
January 29, 2010

The Education, Culture, Sports, Science and Technology Ministry
announced yesterday that the number of high school students who
studied abroad for more than three months in the 2008 academic year
was 3,190, which accounts for about 70 PERCENT of its peak level
and marks the second lowest number since 1986, when the survey was
started. Experts attribute the poor result to the recent trend of
young people opting to stay in Japan rather than going abroad, in
addition to the economic recession.

The survey is conducted of high school students across the nation
every other year. The number reached 4,487 in 1992 due partly to

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improvements in the nation's study-abroad system. Afterward,
however, the number has been on the decline, and the number this
year was nearly 20 PERCENT less than in the 2006 survey. The U.S.
topped the list of destinations for those studying abroad with 1,150
(down 23 PERCENT from the previous survey), accounting for 40
PERCENT of its peak level, followed by Canada with 460 (down 25
PERCENT ), and Australia with 438 (down 27 PERCENT ).

ROOS

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