Identifier
Created
Classification
Origin
07TOKYO437
2007-01-31 08:20:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 01/31/07

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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ZNR UUUUU ZZH
P 310820Z JAN 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 0225
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
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RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 2186
RUEHFK/AMCONSUL FUKUOKA 9717
RUEHOK/AMCONSUL OSAKA KOBE 3185
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UNCLAS SECTION 01 OF 04 TOKYO 000437

SIPDIS

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: DAILY SUMMARY OF JAPANESE PRESS 01/31/07


INDEX:

INDEX:
(1) Gaps between New Komeito and LDP seen in Diet interpellations

(2) Editorial: National interests negatively affected by cabinet
ministers' controversial statements

(3) Behind-the-scenes tug-of-war over JBIC: Finance Ministry
resisting proposal for unifying government-affiliated financial
institutions

ARTICLES:
(1) Gaps between New Komeito and LDP seen in Diet interpellations

YOMIURI (Page 4) (Full)
January 31, 2007

A subtle rift has developed between the New Komeito and the Abe
government. At a question-and-answer session yesterday, New Komeito
Chief Representative Akihiro Ota sought to constrain and even made
special requests to Prime Minister Shinzo Abe. According to opinion
polls conducted by the Yomiuri Shimbun, the Abe cabinet's
disapproval rating among New Komeito's supporters has gradually
increased. The coalition of the LDP and New Komeito has begun to
weaken.

Ota urged Abe twice to tackle welfare and labor issues in a positive
manner. He apparently tried to call on the prime minister to work
positively to resolve immediate problems, admonishing Abe for
attaching priority to constitutional reform.

Ota fell in line with Abe on amending the Constitution by expressing
a willingness to pass a national referendum bill during the current
Diet session. But he also tried to constrain Abe, who is eager to
speed up the process of amending the Constitution by stating:
"During the three years from the passage of the referendum bill
until its implementation, full-scale research on the constitution
and calm debate should be carried out."

Regarding the "politics and money" scandals, Ota stressed the need

for an early revision of the Political Funds Control Law, saying,
"Attachment of receipts of 50,000 yen or over for office expenses
should be obligatory."

Abe has repeatedly stated: "We should draft our own constitution.
The ruling and opposition camps should have in-depth debate." On the
handling of the Political Funds Control Law, Abe said: "Debate
should occur on the issue, including the possibility of amending the
law."

Ota made his remarks because he is concerned that the political
drive of Prime Minister Abe does not match what the public wants.
Even in the religious sect Soka Gakkai, the New Komeito's backer,
the view has emerged that "we need policy measures for such
immediate issues as jobs and education; and we don't think
constitutional reform should be a priority issue."

Opinion polls reflect a similar view. The cabinet disapproval rate
among the supporters of New Komeito was about 10 percent last
October immediately after the Abe government was inaugurated. The
disapproval rate increased to 20 percent in January. Thought the
cabinet approval rate among New Komeito supporters has stayed high

TOKYO 00000437 002 OF 004


at about 70 percent, "moderates among the supporters" are gradually
distancing themselves from Prime Minister Abe.

If the "politics and money" scandals continue, the New Komeito's
distrust of the Abe government will deepen even more.

(2) Editorial: National interests negatively affected by cabinet
ministers' controversial statements

SANKEI (Page 2) (Full)
January 31, 2007

Controversial remarks by cabinet ministers have been cropping up in
succession as if the Abe cabinet has gone off the rails.

Prime Minister Shinzo Abe said in a ministers' meeting yesterday: "I
want you to be cautious in making remarks."

However, the situation is quite serious. Such remarks might damage
the national interests. The prime minister must demonstrate strong
leadership, without leaving the current situation unattended. He
should keep even the option of dismissals in mind.

A remark by Health, Labor and Welfare Minister Hakuo Yanagisawa has
also set off sparks. In reference to countermeasures to the falling
birthrate in a speech on Jan. 27, Yanagisawa said, "Since the number
of baby-making machines (women) is limited, there will be no other
means but for each to do her best." He later offered an apology,
explaining, "I tried to give an explanation by using an economic
simile." His remark is quite inappropriate and beyond common sense.

Meanwhile, a series of statements by Defense Minister Fumio Kyuma
are also creating a stir, as represented by Policy Research Council
Chairman Shoichi Nakagawa saying, "The relationship of trust between
Japan and the US might be undermined."

Kyuma criticized President Bush's decision on the Iraq war as based
on a wrong judgment. He has also made remarks critical of the
response by the US government to the issue of the relocation of the
US Marine Corps' Futenma Air Station, such as, "The US should not be
so arrogant."

The US has already expressed its displeasure at Kyuma's criticism of
President Bush. Although Japan is searching for the possibility of
holding a Japan-US Security Consultative Committee (2+2) meeting
this month, a US government official commented, "It is difficult to
hold a meeting under the present situation."

Since assuming his current post, Defense Minister Kyuma has made a
series of statements inconsistent with Prime Minister Abe's views on
security issues. On the possibility of Japan intercepting a
ballistic missile heading over Japan toward the US, too, the prime
minister indicated that Japan should study the possibility, in view
of the right to collective self-defense, but the defense minister
took a cautious view.

We do not want to take the view that the defense minister has made
light of the Japan-US alliance relationship, but his controversial
remarks have worked to weaken the Japan-US security arrangement,
which is the lifeline for peace and safety in Japan. This is really
something grave.

In an opinion survey conducted by FNN on Jan. 27-28, 61 PERCENT of

TOKYO 00000437 003 OF 004


respondents said they were "not pleased" with the prime minister's
leadership, while only 16 PERCENT said they were "pleased." If the
prime minister remains silent about the lack of unity in the
cabinet, it might be the end of the road for his administration.

(3) Behind-the-scenes tug-of-war over JBIC: Finance Ministry
resisting proposal for unifying government-affiliated financial
institutions

SANKEI (Page 11) (Full)
January 31, 2007

The government intends to submit a bill for establishing a Japan
Policy Finance Corporation, a new government-affiliated financial
institution, to the current Diet session. In this connection, a
battle is continuing over a plan to keep only the Japan Bank for
International Cooperation (JBIC) under the jurisdiction of the
Finance Ministry in place as an exception to the reorganization of
government-affiliated banks. The Council on Economic and Fiscal
Policy (CEFP) has decided to unify public lenders, including the
JBIC, into one. However, the Finance Ministry (MOF) has coordinated
views with the intention to incorporate a regulation for making the
JBIC a separate entity. However, the CEFP on Jan. 29 rejected this
proposal for making the JBIC a separate entity without amending
related laws. How this will be settled has yet to be determined.

It has already been decided that among services offered by the JBIC,
official development assistance (ODA) operations are to be
transferred to the Japan International Cooperation Agency (JICA),
and its international financing sector is to be consolidated along
with four other government-affiliated institutions, such as the
National Life Finance Corporation and the Japan Finance Corporation
for Small Business.

However, since then Finance Minister Sadakazu Tanigaki fiercely
opposed a proposal for integrating the JBIC and other public
lenders, a settlement was in the end reached with Prime Minister
Junichiro Koizumi lashing out at those who lack a desire to
implement reform as forces of resistance. For this reason,
discontent is smoldering in the MOF even now.

MOF is seemingly taking a cautious stance toward the idea of making
the JBIC a separate entity with, Vice MOF Minister Hideto Fujii
noting, "It is unthinkable to make the JBIC a separate entity
without amending relevant laws." However, since the outline of the
legislation was revealed last December, MOF is determined to bring
about a role-back. As a result, a plan to incorporate a regulation
allowing establishment of the JBIC as a separate institution into an
agreement stipulating that the MOF minister, the competent minister
in charge of the integrated institution, and others decide on the
form of the organization to be created anew has surfaced.

However, opposing such a drive pursued by MOF, State Minister in
charge of Administrative Reform Yoshimi Watanabe during a CEFP
meeting on Jan. 29 presented the outline of the legislation, which
categorically mentioned that international financing operations will
be carried out under the name of the JBIC, but it is impossible to
establish a subsidiary unless related laws are amended. State
Minister for Economic and Fiscal Policy Hiroko Ota stressed to a
news conference, "Participants highly evaluated the legislation."

The outline of the legislation adopted MOF's view that using the
name of the JBIC for the international financing section will give

TOKYO 00000437 004 OF 004


international trustworthiness to it. However, since the JBIC
governor and deputy governor are former MOF officials, a way to
essentially keep the JBIC intact has been cut off due to strong
criticism from the Prime Minister's Office (Kantei) that leaving the
JBIC intact means preserving an organization that accepts retired
MOF officials.

The Japan Policy Finance Corporation bill is expected to be
submitted before the end of February. However, since MOF is expected
to press ahead with its efforts to secure its interests, a
behind-the-scenes tug-of-war is expected.

ASTERISK The government's Experts Council on Administrative
Downsizing and Promotion of Streamlining (chaired by Yuzaburo Mogi,
chairman of Kikkoman) met yesterday at the Kantei. Participants
approved the outline of the bill privatizing the JBIC and
Shokochukin Bank in the drive to reform government affiliated
financial institutions and approved that the bill be submitted to
the Diet by Feb. 13, the deadline for the submission of
budget-related bills. The panel will again discuss the specifics of
the Japan Policy Finance Corporation bill with the aim of submitting
the bill before the end of February.

SCHIEFFER