Cablegate: Japanese Morning Press Highlights 02/03/10

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UNCLAS SECTION 01 OF 10 TOKYO 000211

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 02/03/10

INDEX:

1) Top headlines
2) Editorials

Assistant Secretary Campbell's visit:
3) Campbell meets with Ozawa (Nikkei)
4) Campbell: Existing plan is best option (Nikkei)
5) Excerpts of Campbell's Nikkei interview (Nikkei)
6) Campbell: I can't forecast the situation in May (Asahi)
7) Excerpts of Campbell's Asahi interview (Asahi)

Futenma:
8) Hatoyama rejects continued use of Futenma airfield (Yomiuri)
9) Government/ruling coalition team to visit Guam (Mainichi)

Defense & security:
10) Japan informs US of results of "secret accords" investigation
(Yomiuri)
11) Japan, U.S. begin preparation of joint statement on deepening
the bilateral alliance (Akahata)

Foreign relations:
12) Okada to visit South Korea from Feb. 10 (Mainichi)
13) Japan, U.S. to cooperate in space use (Asahi)

Trade & economy:
14) Deputy USTR Marantis urges Japan take steps to expand eco-car
tax reduction program (Yomiuri)
15) SDP, PNP agree on 30 million yen ceiling on deposits at JP Bank
(Yomiuri)

Politics:
16) Prosecutors considering not indicting Ozawa (Asahi)
17) Shady land deal casting shadow over "Ozawa brand" bills in Diet
(Nikkei)
18) Excerpts of Diet debate (Yomiuri)
19) Sengoku: Revision of National Civil Service Law might include
demotion of vice minister to department director (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Prosecutors considering not indicting Ozawa for failure to report
400 million yen

Mainichi:
Tokyo District Prosecutors Office considering not indicting Ozawa
due to insufficient evidence

Yomiuri:
50 sections of 37 expressways to become toll free from June

Nikkei:
Capital tie-up between Pioneer and Mitsubishi Chemical for joint
development of organic electroluminescent lighting

Sankei:
Suspect Ishikawa testifies non-reporting of 400 million yen in
political fund accounting "was approved by Ozawa"

TOKYO 00000211 002 OF 010

Tokyo Shimbun:
50 sections of 37 expressways to become toll free from June

Akahata:
Chairman Shii proposes three policy shifts to protect livelihoods at
Diet interpellation

2) EDITORIALS

Asahi:
(1) Lay judge system: Move forward based on experience of past six
months
(2) U.S. Quadrennial Defense Review: Strengthen cooperation to deal
with diverse threats

Mainichi:
(1) U.S. defense policy: Take note of changes in Asia
(2) Japan-China study of history: One step forward; move further
ahead

Yomiuri:
(1) U.S. defense program: Increasing importance of strengthening
Japan-U.S. alliance
(2) Bullet train problems more serious because they were caused by
simple mistakes

Nikkei:
(1) Improve the environment for child rearing by unifying
administration of kindergartens and day care centers
(2) Tasks for reappointed FRB chairman

Sankei:
(1) U.S. Quadrennial Defense Review: Japan should share its
perception of China
(2) Toyota: Strengthen crisis management to restore trust

Tokyo Shimbun:
(1) JAL's new management: Wishful restructuring plan will result in
downturn
(2) Sumo Association: Accept the "popular will"

Akahata:
(1) PM Hatoyama's responses in Diet: No sense of political or moral
responsibility

3) Ozawa meets with U.S. Assistant Secretary of State Campbell

NIKKEI (Page 2) (Full)
February 3, 2010

Democratic Party of Japan (DPJ) Secretary General Ichiro Ozawa met
yesterday with U.S. Assistant Secretary of State Curt Campbell in
the Diet building. They apparently exchanged views on the relocation
of the U.S. Marine Corps' Futenma Air Station in Okinawa Prefecture
and other issues. After the meeting, Campbell told reporters: "We
exchanged views on general Japan-U.S. relations." The meeting was
held at the U.S. side's request. In accordance with Ozawa's wish, a
press briefing was not held.

4) Campbell: "The current Futenma relocation plan is the best
option

TOKYO 00000211 003 OF 010

NIKKEI (Page 3) (Full)
February 3, 2010

In an interview with the Nikkei in Tokyo yesterday, visiting U.S.
Assistant Secretary of State for East Asian and Pacific Affairs Kurt
Campbell said in reference to the relocation of the U.S. Marine
Corps Futenma Air Station in Okinawa: "We believe the existing
bilateral agreement is the best approach." He also reiterated the
U.S. stance of observing developments in the Hatoyama
administration, which is studying the relocation issue from
scratch.

Campbell remarked: "The U.S. has no intention of dictating to its
ally Japan." He then indicated Washington's willingness to continue
dialogue with Japan up until the end of May, the deadline for Prime
Minister Yukio Hatoyama to make a final decision, saying: "We would
like to fully explain why the current plan is the right option."

After attending a Japan-U.S. Security Subcommittee (SSC) meeting
Campbell told reporters: "I talked with friends in the Foreign
Ministry and the Democratic Party of Japan. They explained that
internal deliberations are still going on. ... I am willing to
listen to their views." But he added: "We have the right to consider
that any other options (than the existing plan) are meaningless."

With respect to the Marine Corps in Okinawa, Assistant Secretary
Campbell emphasized: "They are playing a very important role." He
went on to say: "The U.S. will move some functions of the corps to
Guam, but it is strategically significant to leave its main part in
Okinawa. ... I expect Japanese officials responsible for this issue
will come to this conclusion.

5) Excerpts of remarks by U.S. Assistant Secretary of State
Campbell

NIKKEI (Page 8) (Full)
February 3, 2010

(Futenma and other issues)

We believe that the existing Futenma plan agreed on between the
Japanese and U.S. governments is the best approach. Even so, the
U.S. has no intention of dictating orders to its ally Japan. We are
willing to respond to the views (of the Hatoyama administration) in
a flexible manner and listen to them. Meanwhile, we also maintain
the right to consider any plans other than the current plan to be
meaningless.

The Marine Corps in Okinawa is playing a very important role in
maintaining the U.S. forces' deterrence and capability to carry out
strategic operations. Some of its functions will be moved to Guam,
but it is strategically significant to leave its key part in
Okinawa. I hope the concerned Japanese officials will come to this
conclusion.

This year marks the 50th anniversary of the signing of the revised
Japan-U.S. Security Treaty. On this occasion, the U.S. would like to
enhance cooperation with Japan in the areas of the environment,
energy, cyber security, and issues related to China.

(U.S.-North Korea, U.S.-China relations)

TOKYO 00000211 004 OF 010

I have no plan to visit North Korea or to meet (senior North Korean
officials) at this point in time. If North Korea officially promises
definitely to return to the Six-Party Talks, we might arrange a
meeting in the U.S. Close cooperation among Japan, the U.S. and
South Korea is vital. (U.S.-China relations) have become more
strained over our plan to sell weapons to Taiwan and other issues. I
do not think that China's military threat has decreased.

(Next-generation fighter (FX))

The U.S. has promised Japan that it will provide information (on the
issue of introducing the FX) as much as possible. We would like to
help Japan to be able to make the best choice. (The stealth fighter
F-22) is not subject to information disclosure. (In selecting the
FX,) I think the aspect of "production-sharing" will be taken into
consideration more than before.

6) Campbell: U.S. cannot predict what the situation will be like in
May regarding Futenma issue

ASAHI (Page 4) (Full)
February 3, 2010

Yoichi Kato, senior writer

Visiting U.S. Assistant Secretary of State Kurt Campbell gave an
interview to the Asahi Shimbun at the U.S. Embassy in Tokyo
yesterday. "We cannot predict what the situation will be like at the
final stage in May," Campbell said about the issue of relocating the
U.S. Marine Corps' Futenma Air Station, indicating the U.S.
government's inability to forecast future developments.

Campbell, who is in charge of Japan policy in the United States,
also said, "We must deal with the matter flexibly by responding to a
call for dialogue," while emphasizing that the existing agreement is
the best. He was apparently taking care not to give the impression
that the United States will unilaterally force the existing
agreement on Japan.

At the same time, Campbell simply said that he "cannot comment" on
Foreign Minister Katsuya Okada's reference to the possibility of the
continued use of Futenma. He also noted: "(The Japanese side) makes
new remarks and proposals almost daily. What we want is an orderly
consultation process in which senior Japanese officials raise
questions and proposals and we look into them jointly," expressing
discontent with the current situation in which various ideas are
being floated in the government and the ruling coalition.

7) Gist of remarks by Assistant Secretary of State Campbell

ASAHI (Page 4) (Full)
February 3, 2010

(Futenma relocation issue)

The results of the mayoral election in Nago, Okinawa Prefecture,
have made the situation more difficult. Decisions on critical issues
like this that concern the Japan-U.S. alliance must be made at the
government level. At today's Japan-U.S. talks of foreign and defense
affairs officials at the director general level, we emphasized that
the U.S. government still believes that the existing agreement is

TOKYO 00000211 005 OF 010

the right approach. At the same time, we are trying to take the
delicate approach of preserving flexibility by lending an ear to the
Japanese side's views and responding to a call for a dialogue. But
the fact is we cannot predict what the situation will be like at the
final stage in May.

(Talks for deepening the bilateral alliance)

Why will the Japan-U.S. alliance continue to be vital? It needs a
broader definition. We want to deepen discussions on problems in the
Asia-Pacific region as well as on new global issues, such as cyber
security and global warming.

(Policy toward China)

(On the Japan-U.S.-China equilateral triangle argument in the
Democratic Party of Japan), an isosceles triangle would be a better
approach. The United States and Japan are allies, and their
respective relations with China are fundamentally different. But we
support moves to promote closer ties between Japan and China for
they will serve the interests of the United States.

8) Prime Minister Hatoyama rules out possibility of Futenma base
remaining in current location

YOMIURI (Page 4) (Full)
February 3, 2010

Asked by reporters at his office (Kantei) about Foreign Minister
Katsuya Okada's comment implying the possibility of the U.S.
military continuing its current use of Marine Corps Futenma Air
Station in Okinawa, Prime Minister Yukio Hatoyama ruled out the
possibility, saying: "Moving the Futenma airfield from its current
location to elsewhere is the original purpose. If in the end the
Futenma base remained in its current location, we would have failed
to have accomplished our goal."

9) Base panel to visit Guam

MAINICHI (Page 3) (Full)
February 3, 2010

The "Okinawa Base Issues Review Committee," a panel of the
government and the ruling parties, held its fifth meeting yesterday
at the prime minister's office over the question of where to
relocate the U.S. military's Futenma airfield from its current
location in Ginowan, Okinawa Prefecture, and decided to visit U.S.
military bases on Guam in mid-February. The group of panel members
visiting Guam will be headed by Deputy Chief Cabinet Secretary
Yorihisa Matsuno and will be made up of panel members from the
Social Democratic Party and the People's New Party and senior vice
foreign and defense ministers. The panel will ask the U.S.
government to accept the planned visit.

The government has explained that the planned visit to Guam is
intended to confirm where 8,000 Okinawa-based U.S. Marines will be
transferred in accordance with an intergovernmental agreement that
was reached between Japan and the United States in 2006. However,
the SDP regards Guam as a likely candidate for the relocation of
Futenma airfield. "We'd like to see if they can accept (Futenma
relocation)," Tomoko Abe, chief of the SDP's policy board, told
reporters after the meeting, thereby indicating a difference from

TOKYO 00000211 006 OF 010

the government's explanation.

10) Government reports to U.S. on investigation into secret nuclear
accords at Security Subcommittee meeting

YOMIURI (Page 2) (Full)
February 3, 2010

The government gave a formal report to the U.S. side on the
investigation process relating to the "secret agreements" between
the two countries on the introduction of nuclear arms and other
matters on Feb. 2. Kazuyoshi Umemoto, director general of the North
American Affairs Bureau of the Ministry of Foreign Affairs, and
other officials made the report to Assistant Secretary of State Kurt
Campbell and other U.S. officials at the bilateral Security
Subcommittee meeting of bureau chief level officials in charge of
foreign affairs and defense.

The report covered the status of the investigation and prospects for
the future. It can be said that the Japanese side has begun the
process of dealing with the aftermath of the investigation to make
sure that even if the existence of past secret nuclear agreements is
confirmed, it will not have an adverse effect on Japan-U.S. security
policy, including the U.S.'s nuclear deterrence policy or the
"nuclear umbrella," in the future.

11) Japan, U.S. begin to create joint document for deepened
alliance

AKAHATA (Page 2) (Full)
February 3, 2010

The Japanese and U.S. governments held a meeting of the "Japan-U.S.
Security Subcommittee" (SSC) yesterday at the Foreign Ministry, with
working-level officials for foreign affairs and defense attending
from the two governments, and began to create a joint document to
deepen the bilateral alliance in response to the 50th anniversary of
the current bilateral security treaty. The two governments are
aiming to reach an agreement this year after settling the pending
issue of relocating the U.S. military's Futenma airfield from its
current location in Ginowan, Okinawa Prefecture. Concerning the
Futenma issue, the Japanese government explained that it would
decide by the end of May on where to relocate the Futenma airfield
facility.

However, the U.S. government reiterated its position calling for the
Japanese government to implement the current plan to build an
alternative facility in a coastal area of Camp Schwab, a U.S.
military base located in Nago, Okinawa Prefecture.

The SSC meeting was held with the participation of Foreign Ministry
North American Affairs Bureau Director General Kazuyoshi Umemoto and
Defense Ministry Defense Policy Bureau Director General Nobushige
Takamizawa from the Japanese government and Assistant Secretary of
State for East Asian and Pacific Affairs Campbell and Assistant
Secretary of Defense for Asian and Pacific Affairs Gregson from the
U.S. government.

After the meeting, Campbell told reporters on the Futenma issue: "We
clearly conveyed that the current plan is the best option. We will
consult closely with Japan."

TOKYO 00000211 007 OF 010

12) Foreign Minister Okada to visit South Korea on Feb. 10

MAINICHI (Page 5) (Full)
February 3, 2010

Foreign Minister Katsuya Okada announced yesterday at a press
conference that he will visit South Korea on Feb. 10. The purpose of
his trip to Seoul is to make advance arrangements for a visit to
Japan by President Lee Myung-bak, which is slated for the first half
of this year. Okada will stay in Seoul until Feb. 11 and exchange
views with Foreign Affairs and Trade Minister Yu Myung-hwan on such
issues as bilateral economic cooperation between the two countries
and North Korea.

13) Japan, U.S. agree to cooperate in space exploitation

ASAHI (Page 4) (Abridged)
February 3, 2010

Japan and the United States held an intergovernmental consultative
meeting of working-level officials for foreign affairs and defense
yesterday to deepen the bilateral alliance. In the meeting, the
Japanese and U.S. governments agreed to step up bilateral
cooperation in such areas as space exploitation. However, the gap
over the Futenma issue was not closed and could become an obstacle
to discussions.

In the meeting, Japanese and U.S. officials confirmed that they will
consult on deepening the alliance in four specific areas: extended
deterrence (nuclear umbrella), information security, space
exploitation, and missile defense. According to U.S. Assistant
Secretary of State Campbell, they also discussed strengthening
cooperation over China.

14) U.S. calls for expanded application of eco-car subsidy system

YOMIURI (Page 2) (Full)
February 3, 2010

Japan-U.S. working level talks to discuss Japan's
environmentally-friendly vehicle (eco-car) subsidy system were held
in Tokyo on Feb. 1. In this connection, it was learned on Feb. 2
that Deputy U.S. Trade Representative Demetrios Marantis during the
meeting strongly urged the Japanese government to adopt additional
measures, such as a review of Japan's fuel efficiency measurement
law, which will lead to an increase in the number of U.S. vehicles
eligible for the program. The Japanese side expressed its intention
not to comply with the request. However, it now appears possible
that the eco-car issue will develop into a trade issue between Japan
and the U.S.

The government on Jan. 19 announced a policy of easing the
conditions for eligibility for the eco-car subsidy program targeting
imported cars. It was previously mandatory for the U.S. to measure
the fuel efficiency of Japan-bound vehicles within Japan. However,
as a new policy, Japan approved the measurement of the fuel
efficiency of such vehicles in the U.S.

Concerning the easing of the policy, in response to the Japanese
government's decision to adopt a method of measuring fuel efficiency
based on urban-area driving, Marantis asked the Japanese side to
adopt a method of measuring fuel efficiency that combines fuel

TOKYO 00000211 008 OF 010

efficiency for urban-area driving and for highway driving. This is
because if fuel-efficiency is measured based on combined driving
conditions, the measurement will show better fuel efficiency because
highway driving accounts for 60 percent to 70 percent of the total
driving distance, which increases the number of vehicles eligible
for the subsidy. Referring to the strong intentions of the U.S.
Congress, Marantis hinted at his determination to settle the matter
as a political issue that goes beyond the working level, saying,
"This is a political issue."

15) SDP, PNP agree to raise upper limit of postal savings to 30
million yen

YOMIURI (Page 7) (Excerpt)
February 3, 2010

Social Democratic Party Secretary General Yasumasa Shigeno and
People's New Party Secretary General Shozaburo Jimi on Feb. 2 held
talks in Tokyo. During the meeting they agreed to raise the upper
limit of deposits at Japan Post Bank (10 million yen per depositor)
to 30 million yen in reviewing the postal privatization plan. They
also agreed that the Japan Post Insurance subscription limit should
be raised from the current 13 million yen to 50 million yen. The
Democratic Party of Japan is also indicating a positive stance
toward the idea of raising those limits. Chances are that
discussions to raise the limits will accelerate.

16) Prosecutors considering not indicting DPJ Secretary General
Ozawa for failure to report of 400 million yen in political fund
accounting

ASAHI (Top play) (Abridged)
February 3, 2010

It was learned that the prosecutors are considering not indicting
Democratic Party of Japan (DPJ) Secretary General Ichiro Ozawa, who
has been accused of violating the Political Funds Control Law (false
reporting) in connection with the land deal involving Rikuzan-kai,
his political fund management organization, due to insufficient
evidence.

The Special Investigation Division of the Tokyo District Prosecutors
Office will continue to interrogate his three former secretaries,
who have been arrested for violation of the Political Funds Law,
until Feb. 4, the end of their detention period, and make a final
decision on the criminal liability of the three secretaries and
Ozawa. House of Representatives member Tomohiro Ishikawa, 36,
Ozawa's former secretary who was in charge of administrative work,
and Takanori Okubo, 48, his government-paid first secretary who was
in charge of accounting, are expected to be indicted on Feb. 4. The
degree of involvement of former secretary Mitsutomo Ikeda, 32, in
this affair is apparently being studied carefully.

17) Land purchase issue stalls "Ozawa-brand" bills on local suffrage
for permanent foreign residents, political reform, etc.

NIKKEI (Page 2) (Excerpts)
February 3, 2010

The violation of the Political Funds Control Law by Rikuzan-kai,
Democratic Party of Japan Secretary General Ichiro Ozawa's fund
management organization, in connection with its purchase of land is

TOKYO 00000211 009 OF 010

beginning to cast a shadow on bills set to be discussed during the
current Diet session. Bills initiated by Ozawa to grant local
suffrage to permanent foreign residents and on political reform are
already beginning to lose momentum.

Many DPJ members are against the bill to grant local suffrage to
permanent foreign residents. However, Ozawa pledged to South Korea
President Lee Myung Bak during a meeting with him that he would make
efforts for passage of the bill, and has managed to stave off
opposition to it. In response to Ozawa's intention, Prime Minister
Yukio Hatoyama indicated his eagerness to submit the bill as a
government-sponsored bill on Jan. 12. The bill has been
characterized as a de facto "Ozawa-brand" bill.

18) Gist of PM Hatoyama's responses on Futenma, Haiti aid, other
issues at the Diet on February 2

YOMIURI (Page 9) (Excerpts)
February 3, 2010

Manifesto

We are in the process of implementing the specific policies included
in the manifesto (campaign pledges), such as child allowances,
income subsidies for farming households, and toll free expressways.
It is also necessary to review the manifesto during the four years
of the administration. We will continue to review revenues and
expenditures thoroughly in and after FY2011 and do everything
possible to secure revenue sources to realize the policies in the
manifesto one by one.

Futenma relocation

The national government will be responsible for seeking the U.S.'s
understanding and arriving at a conclusion by the end of May. I do
not think that the Japan-U.S. relationship is in flux. Factors of
uncertainty exist in Asia and the Pacific. The deterrence of U.S.
Forces Japan (USFJ), including the U.S. forces in Okinawa, is
important for Japan's security. It is unrealistic to demand the
return (of the Futenma Air Station) without a replacement facility.

Aid for Haiti

We will be dispatching the Self-Defense Forces for UN peacekeeping
operations (PKO) shortly. They will support the activities of NGOs
positively. We would like to support the relief activities
undertaken by many private companies and groups to help the victims
of the major earthquake in Haiti based on the concept of the "new
form of public sector."

19) Administrative vice ministers might be demoted to department
directors general-level posts

NIKKEI (Page 2) (Full)
February 3, 2010

Yoshito Sengoku, state minister for national strategy and
administrative reform, said at a press conference yesterday after
the cabinet meeting: "We will look into" a bill amending the
National Public Service Law, which the government is expected to
submit to the current Diet session, based on the assumption that
"there would be a possibility of "including a provision to demote

TOKYO 00000211 010 OF 010

administrative vice ministers to department directors general-level
(bucho-kyu) posts. Sengoku had explained that when senior government
officials were appointed, the government would appoint "vice
ministers (jikan) and bureau directors general (kyokucho)" and
"department directors general (bucho) and deputy directors genera
(shingikan)," and that administrative vice ministers would be
demoted to bureau directors general.

ROOS

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