OZAWA WITHDRAWS RESIGNATION TO CRITICAL REACTION

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 005138

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/06/2017
TAGS: PGOV PREL JA
SUBJECT: OZAWA WITHDRAWS RESIGNATION TO CRITICAL REACTION

REF: TOKYO 5114

Classified By: Ambassador J. Thomas Schieffer, reasons 1.4(b),(d).


1. (C) Summary. Ichiro Ozawa has withdrawn his resignation
letter as leader of Japan's largest opposition party,
bringing further uncertainty to an already unpredictable
political situation. DPJ executives mounted a frantic
campaign over the past several days to woo Ozawa back to the
party, but not all DPJ members are happy about his return.
The question now is whether Ozawa can hold his demoralized
party together through the remainder of the Diet session.
Longer term, the DPJ will need to regain the momentum it had
after its victory in the July Upper House elections if it is
to succeed in forcing early dissolution of the Lower House
and make gains in a general election. End summary.


2. (C) Since Ichiro Ozawa announced his intention to resign
as party leader on November 4 (reftel),Democratic Party of
Japan (DPJ) executives, including Yukio Hatoyama and Naoto
Kan, have been engaged in a frantic and highly-publicized
attempt to convince him to remain in his post. They have
also worked hard to convince party members to take him back.
Ozawa held a late-afternoon press conference on November 7 to
announce that he is acceding to the wishes of the party
leadership and withdrawing his resignation as party leader.
According to Hatoyama, Ozawa reportedly said that he would
like to "give it one more shot."

Ozawa is Back, but Support is Mixed
--------------


3. (C) Ozawa's return will likely throw the opposition party
into confusion and disarray, according to Embassy contacts.
Even in the best of times, Ozawa has been a divisive figure
for many DPJ members, who chafed at what they describe as his
dictatorial style. He didn't win any new friends when he
told the press on November 3 that his party does not have
what it takes to win the next general election. One
mid-level DPJ lawmaker told Embassy Tokyo that Ozawa is like
an "emperor" who is demanding a public display of fealty from
his subjects. Another DPJ representative was quoted in the
press as saying it would be difficult for him to trust Ozawa
again, now that "he had been deceived."


4. (C) Ozawa has also damaged relations with the National
Confederation of Trade Unions ("Rengo"),an important support
base for the DPJ and a major contributor to their July
election win. If the party stands behind him now, according
to one Embassy contact, it will only be because of the desire
to hold onto the majority in the Upper House, and because he
is still seen, by both the party and Rengo, as the best hope
for electoral success. From a practical standpoint, this
would be a bad time to redraft the party's manifesto, which
is essentially Ozawa's policy platform, and try to remake
plans for the next Lower House election, another media
contact noted.

Possibility That a Weaker DPJ Will Emerge
--------------


5. (C) The big questions now are whether Ozawa can continue
to lead the DPJ effectively, and if he has squandered the
momentum gained from his party's lopsided victory in the July
29 Upper House elections. While the opposition still
controls the Upper House, absent any sudden defections in the
wake of recent events, a fractured and demoralized DPJ is
bound to have a more difficult time using its majority to
obstruct ruling coalition offensives, not to mention mounting
their own. He will need solid support among the rank and
file to steer the party through what is expected to be a
tough battle over legislation to authorize the resumption of
Self-Defense Forces (SDF) refueling efforts in support of
Operation Enduring Freedom (OEF) in the coming weeks.


6. (C) A long list of initiatives intended for passage in the
Upper House to demonstrate to the public that the DPJ can be

TOKYO 00005138 002 OF 002


a responsible governing party is also at risk as a result of
the party's sudden shift to a defensive posture. For now,
Embassy contacts say, Ozawa's strategy will be to use the
opening created by the meetings with Prime Minister Fukuda to
adopt a more consultative stance with the ruling coalition on
policy issues.

Suspicions That Ozawa's Return is Only Temporary
-------------- ---


7. (C) There is speculation among Embassy contacts that Ozawa
is only deferring his departure from the DPJ. One DPJ
lawmaker told Embassy Tokyo that Ozawa's goal in seeking a
coalition with the ruling Liberal Democratic Party (LDP) was
to get his party on the inside, show the public that it can
govern and then, at a future date, campaign on these proven
credentials and take control of the Diet. He still has this
goal, but some believe that he will now seek to create a new
party and merge it with the LDP. According to one contact's
cynical interpretation of Ozawa's decision to return, he came
back because he did not have enough defectors, particularly
in the Upper House. The ruling coalition is 17 seats short
of a majority in the Upper House, and one newspaper report
notes that Ozawa could convince no more than 14 to bolt the
DPJ and join him in a new party.

Latest Poll Reflects Damage to Public Opinion
--------------


8. (C) A Kyodo poll conducted on November 5-6 shows 56.4
percent of respondents opposed to the idea of an expanded
coalition, with only 25.8 percent in favor. A similar
percentage approved of the DPJ's decision to reject Ozawa's
grand coalition proposal. Equally telling were responses to
the question of which party should lead the government, with
the LDP out-polling the DPJ 40.7 to 35.5 percent. Nearly
every poll since the July 29 Upper House elections has given
the edge to the DPJ. The support rate for the LDP was up 2.7
points, to 38.2 percent. Support for the DPJ was down 3.6
points, to 27.5 percent. Only 11 percent of respondents
wanted to see elections held before the end of the year.
Fukuda's Cabinet support rate in the Kyodo poll was
consistent with other recent surveys, down just a few points
over last month, but still relatively solid at 47 percent.
SCHIEFFER