JAPANESE MORNING PRESS HIGHLIGHTS 10/24/07

UNCLAS SECTION 01 OF 11 TOKYO 004954

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 10/24/07


Index:

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

Clash in the Diet:
4) New antiterrorism law will not exclude any country from receiving
MSDF refueling in the Indian Ocean (Asahi)
5) Prime Minister Fukuda vows to put in every effort to pass the new
antiterrorism bill (Yomiuri)
6) Fukuda: Supplying oil in the Indian Ocean operation is "out
international obligation" (Nikkei)
7) Too many "adverse winds" for the ruling camp making it difficult
for new antiterrorism bill to pass the current Diet session (Tokyo
Shimbun)
8) MSDF top brass apologies for missing refueling data and apparent
cover up of the mistake (Mainichi)
9) Dispute in the Diet over former Vice Defense Minister Moriya
giving testimony in the Diet while deliberations of new
antiterrorism bill going on (Sankei)
10) DPJ unable to come up with a counterproposal to the government's
antiterrorism bill (Nikkei)
11) Tokyo University Professor Tanaka warns against lumping together
Moriya scandal and deliberation over the new antiterrorism bill
(Nikkei)

Yamada Yoko defense-procurement scandal:
12) Defense contractor took money from special account to wine and
dine Moriya (Asahi)
13) Former Yamada Yoko Corp. executive embezzled company money
(Tokyo Shimbun)

14) Okinawa governor presents views on Futenma relocation issue
(Yomiuri)

15) Foreign ministers of Japan, Russia agree to do their best to
resolve the northern territories issue (Asahi)

16) Growth line policy of the government giving way to fiscal
reconstruction line under Fukuka cabinet (Mainichi)

17) DPJ and PNP form united group in the Upper House of 119
lawmakers (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi:
Yamada Yoko builds slush fund under guise of executive remunerations


Mainichi:
Greenhouse gases need to be reduced by 14 million tons more to
achieve target for industries

Yomiuri:
Ruling camp eyes legislation to subsidize hepatitis treatment

Nikkei:
Advisory panel estimates 5 PERCENT -7 PERCENT hike in consumption

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tax to finance pension payouts

Sankei:
Communications Ministry announces measures to open up cellular phone
market

Tokyo Shimbun:
Industries' targeted additional cut in greenhouse gas emissions at
20 million tons, with four industries' 5.15 million tons under
voluntary action plans

Akahata:
Lawmaker Akamine stresses need to pursue peace, calling for
discontinuing support for retaliatory war in Lower House

2) EDITORIALS

Asahi:
(1) New leaders of Chinese Communist Party expected to make China
more open and transparent
(2) Measures needed to prevent small villages from disappearing

Mainichi:
(1) Clearing up truth of hidden error in records of amount of
supplied oil should be precondition for start of deliberations on
antiterrorism bill
(2) Accelerating fiscal coordination necessary to revitalize local
economies

Yomiuri:
(1) DPJ must work out bill to counter government's new antiterrorism
bill
(2) "Imperial" democracy under Putin worrying

Nikkei:
(1) Quickly remove obstacles to deliberations on antiterrorism bill
(2) Bill amending postal services worrying

Sankei:
(1) Deliberations on antiterrorism bill must be started
(2) Government urged to take measures to help hepatitis patients

Tokyo Shimbun:
(1) China's new leadership shows limit to personnel decisions behind
closed doors
(2) Maintenance support system to be created to prevent accidents
caused by deteriorated goods

Akahata:
(1) Big tax hikes will destroy nation

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, October 23

NIKKEI (Page 2) (Full)
October 24, 2007

8:40
Met Chief Cabinet Secretary Machimura, Defense Minister Ishiba, and
Vice Defense Minister Masuda at his office in Diet building.


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09:01
Attended a cabinet meeting.

09:30
Met Deputy Chief Cabinet Secretary Ono at Kantei.

10:02
Taped a video message at LDP headquarters for a Gunma chapter
seminar in the presence of Gunma Gov. Osawa and others.

10:26
Returned to Kantei.

13:03
Attended a Lower House plenary session.

16:15
Met Regulatory Reform Council Chairman Kusakari and others at
Kantei, followed by tourism promotion strategic council chairman
Ushio and Economic and Fiscal Policy Minister Ota.

17:33
Attended an Education Rebuilding Council meeting.

18:42
Met former LDP Secretary General Nakagawa.

19:41
Returned to his residence in Nozawa.

4) Government not to exclude any countries' tankers from receiving
refueling service under new legislation

ASAHI (Page 4) (Full)
October 24, 2007

The Diet began deliberations at a House of Representatives plenary
session yesterday on a bill to continue the Maritime Self-Defense
Force's (MSDF) refueling operation in the Indian Ocean. The
government was studying the possibility of banning the MSDF from
refueling other countries' tankers as a measure to prevent supplied
fuel from being used in the Iraq war, but in the meeting, it
indicated the possibility of continuing the service.

New Komeito member Shigeyuki Tomita questioned: "Why didn't the
government decide to restrict (in the bill) refueling tankers though
such operations tend to cause diversion suspicions?" Chief Cabinet
Secretary Machimura replied: "(Under the bill,) specific types of

SIPDIS
naval ships will not be excluded from the MSDF's refueling
service."

Prime Minister Fukuda expressed his strong eagerness to pass the
bill in the current session, remarking: "When other countries are
offering cooperation in the fight in Afghanistan while suffering
casualties, is it acceptable that only Japan will drop out? As a
person in the position of being responsible for securing the
national interest, I cannot take such a view."

Taking up a scandal in which the Maritime Staff Office left an error
in records of refueling uncorrected and did not report it to
superiors, Democratic Party of Japan member Yoshio Hachiro called it
"a serious problem in terms of civilian control." In response, the

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prime minister apologized, saying: "Public confidence in the systems
of the Defense Ministry and the Self-Defense Force to deal with
office work was undermined." Regarding the issue of former Vice
Defense Minister Takemasa Moriya's cozy ties with a trading firm
specializing in military and aircraft equipment, the prime minister
criticized Moriya, saying: "Public servants should have a high-level
ethical viewpoint so as to be above suspicion."

5) Prime minister promises to "put in full efforts to pass"
antiterrorism bill, criticizes former Vice Defense Minister Moriya

YOMIURI (Page 1) (Abridged)
October 24, 2007

The Lower House of the Diet entered into deliberations yesterday on
the new antiterrorism special measures bill that will allow
continued refueling operations by the Maritime Self-Defense Force
(MSDF) in the Indian Ocean. Prime Minister Fukuda, commenting on the
issue of the inappropriate relationship between former Vice Defense
Minister Moriya and a defense contractor, criticized Moriya, saying,
"A public official should be highly conscious of his actions so that
suspicions of them will not be held by the public." He continued:
"The government will carefully explain what happened as best as
possible." Defense Minister Ishiba stressed: "It was truly
regrettable that the vice minister was involved in unacceptable
activities."

Regarding the issue of corrected reports about the volume of oil
supplied by an MSDF supply ship in 2003 to an American supply ship,
the prime minister stated: "It is a problem of both damage to the
trust held by the public and from the standpoint of civilian
control. It is regrettable." In addition, he indicated that he would
do his best to disclose information from now on.

Regarding the new bill, the prime minister said: "Is it acceptable
for only our country to walk away from the refueling operation? I
would like the Diet to understand the situation by all means." He
stressed that he would do his utmost to continue the operations.

6) Refueling an international obligation: Fukuda

NIKKEI (Page 1) (Abridged)
October 24, 2007

A government-introduced bill to continue the Maritime Self-Defense
Force's refueling activities in the Indian Ocean entered into
parliamentary deliberations in a plenary sitting of the House of
Representatives yesterday afternoon. Prime Minister Yasuo Fukuda
suggested the need for Japan to continue its efforts for the war on
terror in cooperation with the international community. "This will
lead to Japan's fulfillment of its international obligation and will
be also in Japan's national interests," Fukuda stated. However, the
opposition bench is strongly opposed to the legislation. It is
therefore difficult for the legislation to get through the Diet
during its current session. Meanwhile, former Administrative Vice
Defense Minister Takemasa Moriya is expected to be summoned to the
Diet on Oct. 29 as a sworn witness.

In the House of Representatives, the Special Committee on Antiterror
and Iraq Assistance Measures yesterday held a meeting of its
directors from the ruling and opposition parties and discussed how
to enter into substantive deliberations. The opposition bloc is

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concerned about Moriya's questionable ties with a defense equipment
trading firm and the MSDF's cover-up of an error in the amount of
its fuel supply to a US Navy tanker.

The ruling and opposition parties have agreed to schedule the
committee to hear the government explain why it presented the bill.
They are still coordinating on other matters, such as when to summon
Moriya as a sworn witness.

7) Passing new refueling legislation during current Diet session
difficult due to Moriya scandal and Defense Ministry's misreporting
of fueling of US warship

TOKYO SHIMBUN (Page 2) (Full)
October 24, 2007

The dominant view in the ruling camp is that it will be difficult to
pass the new antiterrorism measures bill during the current session
of the Diet. The reasons are: the strong opposition of the main
opposition Democratic Party of Japan (DPJ) to the bill itself; the
allegation that former Administrative Vice Defense Minister Takemasa
Moriya golfed with a former defense equipment trader executive; and
the revelation the government misreported the amount of fuel
Maritime Self-Defense Force (MSDF) provided to US warships in the
Indian Ocean. Instead of passing the new legislation through the
Diet, some members of the ruling coalition are now calling for an
early ending to the current session in an attempt to avoid the
Fukuda government suffering a fatal blow. A senior ruling Liberal
Democratic Party (LDP) House of Councillors member complained about
a feeling of battle-fatigue in the ruling camp yesterday when an
explanation on the new bill was made at the House of Representatives
plenary session, saying, "Everyone I met said let's close the Diet
as early as possible."

The current extraordinary session is scheduled to run until Nov. 10.
In order to secure the time for deliberations on the refueling
legislation, the government and ruling coalition have carried out
coordination on a plan to extend the session for about one month
until around mid-December in consideration of the compilation of a
budget for fiscal 2008.

Moriya's golfing scandal was brought to light on Oct. 19. The ruling
bloc has now decided to accept the opposition's demand that Moriya
be summoned to testify as a sworn witness, shifting its earlier
stance. The sworn testimony will be carried out on Oct. 29. However,
it is certain that the Moriya scandal will become a source of
trouble for the new bill since there is no guarantee that the
opposition will respond to full-scale deliberations on it
afterward.

It was revealed on Oct. 21 that the Defense Ministry had
underreported the amount of fuel supplied by the MSDF to a US supply
vessel (in 2003). Since the opposition camp has strongly reacted to
this, a senior member of the New Komeito, the LDP's coalition
partner, said, "Due to the ministry's cover up, it has now become
even more difficult to pass the new legislation this Diet session."

Following this, a mid-level LDP lawmaker asserted: "In order to
limit damage caused by the Moriya scandal, it would be better to
close (the Diet) as early as possible." The mid-level lawmaker also
said: "To play up that the legislation was not enacted due to the
DPJ's opposition, it would be good that the bill would be voted down

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in the Upper House after it clears the Lower House."

8) MSDF chief of staff offers apology

MAINICHI (Page 2) (Full)
October 24, 2007

Maritime Self-Defense Force Chief of Staff Eiji Yoshikawa in a press
conference yesterday apologized for the cover-up of the amount of
fuel provided to a US oiler by the MSDF, saying: "I take it
seriously, and I am terribly sorry." Yoshikawa also announced his
intention to report to Defense Minister Shigeru Ishiba this week on
investigative results and punishments against those members
involved.

According to Yoshikawa, an MSDF supply officer responsible for fuel
recognized the error after reading a newspaper on May 9, 2003, the
day after then Joint Staff Council Chairman Toru Ishikawa announced
that the amount was one-fourth of the actual volume on May 8. But
the information did not reach higher-ups or internal bureaus beyond
the supply division and the defense division responsible for the
Diet.

Although a dozen or so officers were interviewed, there still remain
gaps in perceptions on the need to correct the amount of fuel. The
force is closely examining communications with internal bureaus,
such as the vessel arms division, that have the correct data as the
MSDF, according to Yoshikawa. He also said: "It is extremely grave
and serious that there were no reports to the higher-ups despite the
fact that the division chief responsible for the matter was aware of
the grossly erroneous data."

9) Diet in chaos over summoning Moriya

SANKEI (Page 1) (Abridged)
October 24, 2007

New antiterror legislation for special measures to continue the
Maritime Self-Defense Force's refueling activities in the Indian
Ocean is now before the Diet. The House of Representatives, in its
plenary sitting yesterday, entered into deliberations on the new
antiterror legislation, with the government explaining the
legislation's purport. The Diet is expected to focus primarily on
the legislation during its current extraordinary session. However,
the lower chamber's debate yesterday was entirely on former
Administrative Vice Defense Minister Takemasa Moriya's golfing and
the MSDF's alleged correction of an error in the amount of its fuel
supply. Meanwhile, the ruling coalition of the Liberal Democratic
Party and New Komeito agreed to summon Moriya to the Diet on Oct. 29
as a sworn witness. Instead, the ruling parties proposed expediting
deliberations at the House of Representatives Special Committee on
Antiterror Measures. However, the opposition bench rejected the
proposal. As it stands, the ruling and opposition parties are now
being bogged down in their battle of words.

In the lower chamber's plenary session yesterday, the ruling and
opposition parties were both concerned about Moriya's golfing with a
defense contractor and other scandals involving the Defense
Ministry. Yoshio Hachiro, representing the leading opposition
Democratic Party of Japan (Minshuto),took the floor and urged the
government to withdraw the new legislation, asserting that the
government should first make public the Defense Ministry's

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cover-ups.

Meanwhile, the ruling coalition did not defend the Defense Ministry
and Moriya. The ruling parties feared that they could come under
fire if they did. Also, the debate could be trivialized, so the
ruling parties judged that they would lose an opportunity to make a
public appeal on the significance of maritime interdiction
operations and Japan's national interests.

10) Diet deliberations on new refueling legislation begin, with
government, ruling bloc clearly on defensive; DPJ having difficulty
in producing counterproposal

NIKKEI (Page 2) (Excerpts)
October 24, 2007

The Diet began full-fledged deliberations on a new refueling
operation bill at a House of Representatives plenary session
yesterday in which the government and ruling parties were clearly on
the defensive. Although the Democratic Party of Japan (Minshuto or
DPJ) is likely to gain momentum from the new legislation, the
largest opposition party is also faced with the tough challenge of
drawing up its own contribution measures replacing the refueling
mission.

The ruling bloc had initially planned to consider summoning former
Administrative Vice-Defense Minister Takemasa Moriya as a sworn
witness in the event the opposition camp continued scrutinizing the
matter even after his unsworn Diet testimony. But the plenary
session yesterday proceeded at the opposition bloc's pace, with DPJ
shadow foreign minister Yoshio Hachiro demanding Moriya's sworn
testimony as the condition for deliberations on the bill.

The current Diet session ends on Nov. 10. In view of the
government's and ruling camp's plan to compile the national budget
for the next fiscal year as usual, the session cannot be extended
beyond mid-December. Aware of the New Komeito's critical view of
using an arm-twisting approach to running the Diet, the government
and the Liberal Democratic Party remain cautious about taking a
second vote in the Lower House following a rejection of the bill by
the House of Councillors. Given the situation, enacting the new
legislation in the current Diet session seems difficult even if the
session is extended.

11) Discussing scandal and new legislation as a set is a mistake,
says University of Tokyo Prof. Akihiko Tanaka

NIKKEI (Page 2) (Full)
October 24, 2007

The government must deal extremely strictly with an irregularity
involving a big-budget government organization like the Defense
Ministry. In the wake of a scandal involving former Vice-Defense
Minister Takemasa Moriya, it is natural to discuss ways to increase
discipline of civil servants. However, deliberations on the new
legislation designed to continue the refueling operation in the
Indian Ocean must not be delayed because of it. The scandal
involving Moriya and others must be discussed separately from the
new legislation.

The logic that a country cannot make international contributions in
any way unless the office responsible for implementing new

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legislation has a solid system, is unacceptable internationally.
Even if there are systemic flaws that cause improprieties, a country
must still play a responsible role in the international community
while making efforts to correct them. Given the opposition camp's
control of the House of Councillors, the government must avoid
placing priority on domestic policy debates, for such would simply
undermine national interests.

12) Yamada Corp. found to have bank account for slush funds in name
of remuneration for company executive; Money used for wining and
dining

ASAHI (Top Play) (Excerpts)
October 24, 2007

Asahi Shimbun has learned from an informed source that Yamada Corp.
in Minato Ward, Tokyo, has a bank account to deposit slush funds in
the name of remunerations for executives, including a former
managing director (69). The credit balance reached approximately 9
million yen as of five years ago. The money was presumably used to
cover portions of the company's wining and dining expenses. Yamada
Corp. supposedly spends more than 100 million yen a year to
entertain clients. There is an allegation that the bank account was
used to conceal the fact that the company wined and dined officers
of the Self-Defense Forces. The Tokyo District Public Prosecutors
Office Special Investigation Squad is investigating the case,
listening to explanations from related sources, including former
employees of Yamada Corp.

According to a source familiar with Yamada Corp., the company has
built up slush funds in a special bank account in order to use
portions of remuneration paid to several executives, including the
former managing director, who has been found to have treated former
Administrative Vice Defense Minister Takemasa Moriya (63) to free
rounds of golf, and wining and dining, as off-the-book money.
Successive accountants have taken care of a bank book for that
account. The credit balance stood at approximately 9 million yen at
a time when there was a replacement of an accountant five years
ago.

Slush funds were presumably used to cover portions of the company's
wining and dining expenses. When a company entertains clients on an
official expense account, it needs to enter the names of
participants and the place of wining and dining into its account
book, attaching receipts. Yamada Corp. has built up slush funds to
cover wining and dining expenses. Employees of the company are
suspected of having tried to conceal their entertaining SDF officers
as part of sales activities.

One source revealed that since the company was unable to cover all
of its entertainment expenses with its own entertainment allowance,
it made about five of its affiliates shoulder its entertainment
expenses as their own expenses. Such an amount allegedly reached
several million yen a month.

The special investigation squad is now checking accounting documents
submitted by Yamada Corp. on a voluntary basis in order to determine
the situation in which the company's side entertained SDF officers,
including Moriya, over the procurement of equipment by the Defense
Ministry. It appears that prosecutors have found the existence of
the bank account for slush funds and the fact that money deposited
in that account was used as secret entertaining expenses.

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The former managing director quit the company due to a confrontation
with the company owner over management authority. He established
Nihon Mirise in September 2006 and assumed the presidency. More than
30 of his staffers joined him. The special investigation squad is
also listening detailed explanations from them, such as the way they
entertained clients.

Moriya to be summoned to Diet possibly on Oct. 29, ruling camp
proposes

It seems likely that Moriya will be summoned as a sworn witness to
the Lower House Antiterrorism Special Committee as early as Oct. 29
over the issue of his being treated to free rounds of golf, and
wining and dining by a former managing director of Yamada Corp. The
ruling camp during a meeting of the committee on the 23rd proposed
summoning Moriya. Though no agreement was reached on the proposal,
the ruling and opposition camps will confer on the matter on the
24th. The inquiry will focus on relations between Moriya and the
former managing director and whether Moriya exercised his
administrative authority over contracts awarded to Nihon Mirise
established by the former managing director. Opposition parties
intend to pursue Moriya over the refueling operation by the Maritime
Self-Defense Force in the Indian Ocean.

The ruling parties during an executive meeting held on the evening
of the 23rd proposed that Moriya be summoned as a sworn witness on
the 29th, after they explained their reasons for submitting a
refueling assistance special measures legislation on the 24th and a
questioning session was held on the 25th and the 26th. However, the
opposition camp demanded that priority be given to summoning Moriya
as a sworn witness, noting that summoning him as a sworn witness is
a precondition for starting deliberations on the bill. In the end,
both sides agreed that the ruling parties would explain their
reasons for the submission of the bill on the 24th and then both
sides would confer on a summoning schedule.

13) Yamada Corp.: Former managing director suspected of diverting 30
million yen from 100 million yen that company's US affiliate had
taken charge of; Tokyo District Public Prosecutors Office dispatches
investigators to US

TOKYO SHIMBUN (Page 1) (Excerpt)
October 24, 2007

It has been learned from an informed source that a former managing
director (69) of Yamada Corp. in Minato Ward, Tokyo, is suspected of
having withdrawn approximately 100 million yen, which the company's
US affiliate had taken charge of, and diverted at least 30 million
yen. The Tokyo District Public Prosecutors Office asked US judicial
authorities for investigative cooperation and dispatched public
prosecutors to the US early this month. They appear to be pressing
ahead with efforts to clarify the whole picture of the flow of
unclear funds.

14) Okinawa gov. to present statement on Futenma relocation

YOMIURI (Page 2) (Full)
October 24, 2007

In connection with the pending issue of relocating the US Marine
Corps' Futenma Air Station in the city of Ginowan, Okinawa

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Prefecture, to a coastal area of Camp Schwab, a US military base in
the island prefecture's northern coastal city of Nago, Okinawa Gov.
Hirokazu Nakaima formally announced in a news conference yesterday
that he would present the Defense Ministry with his 'statement' on
the government's procedural proposal to assess the possible impact
of a newly planned US military facility on its environs. The
government plans to build a V-shaped pair of airstrips across the
camp's coastal area. Nakaima has withheld his acceptance of the
government's environmental assessment plan, seeking to move the
newly planned facility's location to an offshore area.

Nakaima will consent to the government's proposal for an
environmental assessment itself. In his statement, however, Nakaima
will reiterate his request to lay down a sea-based facility in
waters off Nago.

15) Japanese, Russian foreign ministers agree on continued efforts
to resolve Northern Territories issue

ASAHI (Page 4) (Full)
October 24, 2007

Visiting Russian Foreign Minister Lavrov met his Japanese
counterpart Komura at the Foreign Ministry's Iikura Guest House for
about one hour yesterday. The two agreed that the two countries
should continue efforts to find common ground to resolve the
Northern Territories issue and conclude a peace treaty. Komura will
also discuss these issues with Russian Deputy Prime Minister Sergei
Naryshkin, who is scheduled to visit Japan on Nov. 5.

After the meeting, Komura lauded the Russian government's positive
stance about resolving the territory issue, saying: "Continued
talks, as well as both sides' desire to reach an agreement, are
essential."

Meanwhile, Lavrov stressed the need to promote a comprehensive
bilateral relationship, including economic cooperation and personnel
exchanges. He said: "The key point is that settlement measures
should be acceptable ones. It is also crucial that they will be
accepted by the public and the parliament (in Russia) in the
future."

16) Growth-policy line may be rolled back; Junior LDP members invite
Heizo Takenaka to their study group

MAINICHI (Page 5) (Excerpt)
October 24, 2007

Nine junior to mid-level Liberal Democratic Party (LDP) lawmakers
who were close to both former prime ministers Koizumi and Abe have
formed a study group in the Diet titled, "Project Japan Revival."
They have invited former Internal Affairs Minister Heizo Takenaka to
be their adviser, and are stressing the need for a growth policy
aimed at raising taxes as the economy grows, as well as fiscal
reconstruction, which were advocated by under the Koizumi and Abe
administrations. Under the Fukuda administration, the argument for
raising the consumption tax has appeared, and with the resignation
of Abe as prime minister, the old-guard forces who formerly had
little clout are bringing about a noticeable rollback of the former
policy line.

17) DPJ, PNP forms parliamentary group in Upper House

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YOMIURI (Page 4) (Excerpts)
October 24, 2007

The largest opposition Democratic Party of Japan (DPJ or Minshuto)
and the small opposition People's New Party (PNP) finally formed a
parliamentary group yesterday in the House of Councillors. The DPJ,
which holds a near majority of the Upper House seats, and the PNP,
which has submitted a bill reviewing the government's
postal-privatization program, have agreed to unite anticipating a
possible early dissolution of the House of Representatives and a
snap election. The parliamentary group will have a membership of 119
-- 115 from the DPJ and four from the PNO -- just three seats short
of the 122 needed for a majority in the Upper House.

In a party-head meeting at noon yesterday, DPJ President Ichiro
Ozawa said: "I would like to make efforts in cooperation with the
PNP." PNP leader Tamisuke Watanuki then responded: "Reviewing the
postal-privatization initiative is our party's principle. I want to
create a new trend by cooperating in elections, of course on the
postal-privatization revision bill."

The two parties started a discussion on the tie-up plan in August,
after Ozawa had proposed it. But they discontinued the discussion in
September because there were cautious views in the DPJ that if the
party cooperated with the PNP on its postal-privatization review,
the public would see the DPJ as an old guard conservative Liberal
Democratic Party, while the PNP was concerned that it would lose its
political identity.

The DPJ, however, has determined that stable cooperation with the
PNP is indispensable to pursue its basic Diet strategy. That
strategy involves first submitting its own bills, following the list
of party pledges in the July Upper House election campaign, and then
sending them to the Lower House, which the ruling camp controls.

On the other hand, a review of postal-privatization is a matter of
life and death for the PNP. A senior PNP predicts:

"If sending the postal bill to the Lower House after passing it
through the Upper House, former international trade minister Takeo
Hiranuma and other postal rebels will vote for it and the result of
the vote would shake the ruling coalition."

SCHIEFFER