DAILY SUMMARY OF JAPANESE PRESS 04/17/08

UNCLAS SECTION 01 OF 09 TOKYO 001061 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 04/17/08 INDEX: (1) Poll on Fukuda cabinet, political parties, gas tax, BOJ chief nomination, pension fiasco (Yomiuri) (2) Look at Fukuda administration ahead of G-8 Toyako Summit: Discrepancies now prominent between Japan, U.S. (Yomiuri) (3) U.S. forces in Japan in violation of Japan-U.S. agreement with two sons of U.S. military personnel suspected of shoplifting taken by U.S. military police to U.S. base (Asahi) (4) Foreign Minister Koumura: U.S. military police officers' action "considerably problematic," indicating possible protest against U.S. action (Okinawa Times) (5) I feel discomfort at U.S. consul general's remark; For what purpose is training in Okinawa carried out? (Okinawa Times) (6) Government turns down TCI's application for raising stake in J-Power, issuing first-ever advisory notice: British fund announces plan to keep company's shares (Nikkei) (7) Cabinet Office poll: More people pessimistic about prices, food (Tokyo Shimbun) (8) Gov't welcomes U.S. CO2 emission target (Asahi) ARTICLES: (1) Poll on Fukuda cabinet, political parties, gas tax, BOJ chief nomination, pension fiasco YOMIURI (Page 11) (Full) April 15, 2008 Questions & Answers (Figures shown in percentage. Parentheses denote the results of a survey taken in March.) Q: Do you support the Fukuda cabinet? Yes 30.0 (33.9) No 58.4 (54.0) Other answers (O/A) 2.9 (2.6) No answer (N/A) 8.7 (9.5) Q: (Only for those who answered "no" to the foregoing question) Give up to two reasons for your disapproval of the Fukuda cabinet. I can't appreciate its political stance 46.2 (47.8) It's unstable 34.8 (26.8) The prime minister is untrustworthy 24.9 (23.4) Nothing can be expected of its economic policy 35.6 (37.9) Nothing can be expected of its foreign policy 6.8 (8.6) Because it's a coalition of the Liberal Democratic Party and New Komeito 8.6 (8.8) Because the prime minister is from the LDP 2.7 (4.9) It's worse than its predecessors 9.8 (8.1) O/A+N/A 4.2 (3.0) TOKYO 00001061 002 OF 009 Q: Which political party do you support now? Pick only one. Liberal Democratic Party (LDP) 30.6 (33.1) Democratic Party of Japan (DPJ or Minshuto) 17.4 (17.6) New Komeito (NK) 2.6 (2.7) Japanese Communist Party (JCP) 1.7 (2.5) Social Democratic Party (SDP or Shaminto) 0.5 (1.1) People's New Party (PNP or Kokumin Shinto) 0.2 (0.3) New Party Nippon (NPN or Shinto Nippon) 0.2 (0.1) Other political parties --- (---) None 46.0 (41.9) N/A 0.9 (0.7) Q: Prime Minister Fukuda has proposed incorporating road-related tax revenues into the state's general account from next fiscal year. Democratic Party of Japan (Minshuto) President Ozawa rejected the proposal, insisting on incorporating the road tax revenues into the general account from the current fiscal year and abolishing the rate of provisional taxation on gasoline. Do you think Prime Minister Fukuda displayed leadership? Yes 6.6 Yes to a certain degree 16.5 No to a certain degree 28.1 No 44.0 N/A 4.8 What do you think about DPJ President Ozawa's response? Appreciate very much 7.1 Appreciate somewhat 26.0 Don't appreciate very much 35.8 Don't appreciate at all 26.6 Q: The government and ruling parties plan to restore the rate of provisional taxation on gasoline in late April. Do you support this plan? Yes 29.5 No 60.8 N/A 9.7 Q: Do you support the idea of incorporating road-related tax revenues into the state's general account? Yes 62.8 No 26.7 N/A 10.5 Q: What do you think should be done about the rate of provisional taxation on gasoline? Continue the rate of provisional taxation for road construction and other road-related infrastructure projects 8.7 Continue the rate of provisional taxation for wide-ranging purposes 42.0 Abolish the rate of provisional taxation 40.2 O/A 1.5 N/A 7.6 Q: The post of governor at the Bank of Japan was left vacant for a while. Which side do you think is more to blame? TOKYO 00001061 003 OF 009 Government, ruling parties 24.8 Opposition parties 25.4 Both sides are about the same 43.7 N/A 6.0 Q: In the pension fiasco, the government could not identify about 50 million pension accounts due to its record-keeping flaws. The government identified about 10 million pension accounts by the end of March. What do you think about this? Appreciate very much 5.0 Appreciate somewhat 29.9 Don't appreciate very much 31.5 Don't appreciate at all 31.2 N/A 2.3 Q: The DPJ is calling for Health, Labor and Welfare Minister Masuzoe to take responsibility for the pension fiasco. Do you think he should resign? Yes 11.8 No 84.1 N/A 4.1 Q: What kind of government would you like to see now? Pick only one. The current LDP-Komeito coalition government 19.5 A DPJ-led coalition government of opposition parties 16.4 The LDP's single-party government 6.7 The DPJ's single-party government 4.3 A coalition government centering on the LDP and the DPJ 19.2 A government under a new framework of political parties after realigning the ruling and opposition parties 18.4 O/A 0.8 N/A 14.6 Polling methodology Date of survey: Apr. 12-13. Subjects of survey: 3,000 persons chosen from among all eligible voters throughout the country (at 250 locations on a stratified two-stage random sampling basis). Method of implementation: Door-to-door visits for face-to-face interviews. Number of valid respondents: 1,753 persons (58.4 PERCENT ). (2) Look at Fukuda administration ahead of G-8 Toyako Summit: Discrepancies now prominent between Japan, U.S. YOMIURI (Page 4) (Full) April 17, 2008 Rift between Japan, U.S. over North Korea Vice Foreign Minister Mitoji Yabunaka had a one-and-a-half-hour luncheon in Washington on April 9 with United States Deputy Secretary of State John Negroponte. This visit to the U.S. was SIPDIS Yabunaka's first since taking office as vice minister. Both officials confirmed that the Japan-U.S. alliance plays a very important role not only for the bilateral relationship but also for TOKYO 00001061 004 OF 009 stability in the Asia-Pacific region. Meanwhile, in Beijing, however, the Ministry of Foreign Affairs' (MOFA) Asian and Oceanian Affairs Bureau Director-General Akitaka Saiki squabbled with U.S. Assistant Secretary of State Christopher Hill over discussions between the U.S. and North Korea. Hill, the U.S. chief delegate to the six-party talks, takes the delisting of North Korea as a state sponsor of terrorism as a strong diplomatic card for the U.S. But Japan can't allow the U.S. to move in that direction without any progress on the abduction issue. Saiki and Hill ended discussion without reaching any agreement, revealing subtle differences. Saiki told reporters, "Steps to follow before (North Korea's declaration of its nuclear programs) still remain." In contrast, Hill noted, "There are things to be done in a couple of days. Once they are completed, we will have a clear outlook for the multilateral talks," implying that the six-party talks will make headway. Two days later, the Washington Post reported that the U.S. is gearing up to remove North Korea from the list of state sponsors of terrorism. Good bilateral relationship now being eroded Similar discrepancies have recently been seen in relations between Japan and the U.S. For instance, one emerged in late February and it has kept the Japanese government skeptical about the U.S. even now. It arose when Prime Minister Fukuda met with visiting Israeli Prime Minister Olmert. In the session, Olmert touched on an Israeli air-raid against a Syrian military facility last September and revealed to Fukuda: "It was a nuclear facility that received technical assistance from North Korea." This information was supposed to be classified. Aside from whether the information was authentic, it was likely available to the U.S. at an early stage, but there was no report on it from the U.S. to Japan immediately after the facility was bombed. A senior MOFA official murmured: "Why wasn't the information given to Japan? This case is serious. The reason may be attributable to the leak of the classified data on the Aegis system." In the meantime, the U.S. side has been increasingly frustrated with the current state of Japan. Because of the divided Diet, Japan temporarily suspended its Maritime Self-Defense Force's (MSDF) refueling mission in the Indian Ocean. Japan's host nation support (the so-called sympathy budget) for Japan to contribute to the costs for U.S. forces stationed in Japan has been suspended at present. Furthermore, there has been no progress even now on the relocation of the U.S. Marine Corps Futenma Air Station, which is central to the realignment plans for the U.S. military transformation. One informed source grumbled, "Japan's internal affairs have overly affected the security arrangements. America is sick and tired of such a Japan. Another informed source complained: "The good relations between Japan and the U.S. over the past several years have now entered a phase of erosion." No strategy in sight Soon after assuming the post of prime minister last fall, Fukuda TOKYO 00001061 005 OF 009 pronounced "synergy diplomacy" as his diplomatic approach of combining Japan-U.S. ties and Japan-China ties. The idea is that Japan's good relations with both the U.S. and China could help enhance Japan's presence in those two countries. However, what is expected to occur in the months ahead is that China will gain even more power after the Beijing Olympics in August, while a change of administration will take place in the U.S. next January. Fukuda, who apparently has been snowed under with the domestic political struggles, has yet to come out with any proactive strategy to deal with the rapidly changing global situation. In preparation for a new U.S. administration that will come into being next January, an instruction related to the three major U.S. presidential candidates has been circulated in MOFA that those officials who have personal networks with the three should travel to the U.S. and broaden their networks. All Japan can do at present is perhaps simply try to read where the world is heading. (3) U.S. forces in Japan in violation of Japan-U.S. agreement with two sons of U.S. military personnel suspected of shoplifting taken by U.S. military police to U.S. base ASAHI ONLINE NEWS (Full) April 17, 2008, 11:08 a.m. Two sons of United States military personnel were captured on April 13 by a shop clerk at a clothing shop at Chatan Town, Okinawa Prefecture, for shoplifting. But the boys were later detained by a U.S. military police officer, and the military officer took them to a base, rejecting a request made by the prefectural police to question them. The U.S. military, upon admitting this act was in a violation of what has been agreed on under the Japan-U.S. Status of Forces Agreement (SOFA),conveyed its regrets to the Japanese side. The Japan-U.S. agreement under the SOFA stipulates that if both police investigators arrive at the scene of an incident, U.S. investigators should arrest and bring the suspect to the nearest Japanese police station. On April 15, the prefectural police sought an explanation from the U.S. military. A supervisor of the military police officer in question reportedly admitted to a violation of the agreement and said: "The military police officer made a mistake. It's regrettable. I'll train the staff thoroughly." The prefectural police questioned the two boys on a voluntary basis with help from U.S. forces in Japan. Reportedly, one of the two boys denied the allegation, but the other admitted he stole a pair of jeans and a T-shirt. (4) Foreign Minister Koumura: U.S. military police officers' action "considerably problematic," indicating possible protest against U.S. action OKINAWA TIMES (Page 1) (Full) April 17, 2008 On April 13, two sons of U.S. Marines were caught by a salesclerk of a clothing store in Chatan, Okinawa Prefecture, for allegedly shoplifting clothing, but U.S. military officers who arrived at the scene ahead of Okinawa police officers took them to a U.S. base. TOKYO 00001061 006 OF 009 Asked about this incident in an Upper House Foreign Affairs Committee session yesterday, Foreign Minister Masahiko Koumura said: "I believe this could be greatly problematic." He then added: "I cannot say anything definitive at this point, but I want to deal properly with the matter after I receive inquiries (from the U.S. side)." He indicated in his remark that the government would file a protest with the U.S. side in the event that contradictions in terms of legal interpretation are made clear. Komura was responding to a question by Kantoku Teruya of the Social Democratic Party. According to a Joint Japan-U.S. Committee agreement, when both Japan and the United States have the right to arrest suspects connected with the U.S. military, the U.S. side has priority. The agreement, however, stipulates that suspects shall be taken to the nearest police station. Therefore, the fact that the U.S. military police officers took them to a U.S. base may go against the agreement. Foreign Ministry North American Affairs Bureau Director General Shinichi Nishimiya took this view: "It is necessary to make a cautious decision on whether the incident this time around is applicable to the 'joint arrest' condition, confirming all the facts (from the U.S. side)." Nishimiya also commented: "(The U.S. military police officers) took the boys to a facility in an area (in the U.S. base) with no arrangements with the Okinawa police at the scene." He took the view that the U.S. military officers' action could be problematic in light of the Japan-U.S. Status of Forces Agreement, which stipulates that suspects in incidents that occur outside U.S bases shall be taken to facilities and areas in liaison with the authorities of Japan. (5) I feel discomfort at U.S. consul general's remark; For what purpose is training in Okinawa carried out? OKINAWA Times (Page 5) (Full) April 17, 2008 Kozo Kitajima, 38, teacher in Higashi-son, Okinawa Dear United States Consul General Kevin Maher: In a regular press conference on April 3, you said of U.S. military personnel living off-base: "A call for registering residency is intended to have (U.S. military personnel) pay tax. It is strange to say that a tax should be levied on U.S. military personnel, who are prepared to sacrifice their lives for the sake of Japan's national security." I feel discomfort at this remark. The point of your argument is that even if U.S. servicemen live off-base, there is no need for them to pay tax, since they are ready to lay down their lives to defend Japan. Is this argument really valid? The reason you cite for exempting U.S. servicemen from taxation is divided into two parts: "U.S. servicemen are contributing to Japan's national security," and "they are ready to sacrifice their lives for the sake of Japan." If you point out the contributions to Japan's security, you naturally should also refer to exemption from taxation for all Self-Defense Force personnel, who have contributed to ensuring Japan's security. You might be taking the view that since Americans are engaged in guarding Japan, a country that is not their own, taxation on them is unnecessary. TOKYO 00001061 007 OF 009 I think this view deviates from what is written in Article 6 of the Japan-U.S. Security Treaty. Article 6 specifies that "the United States Army, Air Force, and Navy are allowed to use facilities and areas in Japan." This could also be interpreted to mean that U.S. servicemen are not liable for taxation as long as they live in (the facilities and areas) provided as bases. I think those who live in rented houses off-base on their own wishes (I hear that many houses in bases are vacant) should be willing to pay tax. Regarding the other part of the reason "they are ready to sacrifice their lives," I wonder who will judge if you are ready to do so. If I declare that "I will sacrifice my live for the sake of Japan's security," will I be exempted from taxation starting today? Or do you want to emphasize that since Americans are prepared to sacrifice their lives for Japan, they should be free from taxation? That does not stand to reason. Because if U.S. servicemen have Japan's best interest in mind fully enough to be prepared to risk their lives, they must be willing to pay a certain amount of tax. Japan has disbursed more than 500 billion yen in tax money for the U.S. military every year, though I think that is nonsense. In Higashi-son, where I live, there is a facility for jungle training for U.S. military troops. U.S. soldiers carry out training year-round to protect Japan. But I always wonder where jungles are in Japan. I think jungle training is not necessary to protect Japan. I fear that this training may be intended not to protect Japan but to make preparations in Okinawa for launching attacks on other countries. What about this point? I want to hear an explanation from you, Mr. Maher. Sincerely yours, Kozo Kitajima (6) Government turns down TCI's application for raising stake in J-Power, issuing first-ever advisory notice: British fund announces plan to keep company's shares NIKKEI (Page 5) (Slightly abridged) April 17, 2008 The government on April 16 issued a notice telling the Children's Investment Fund (TCI),a British hedge fund, to drop plans to increase its stake in J-Power on the basis that a higher stake in the power company may have a negative impact on the nation's stable power supply and nuclear policy. TCI criticized the government's decision, noting that the government recommendation will have negative implications for the Japanese economy. However, it announced its intention to keep J-Power shares. Following the move, a battle over J-Power has entered the third stage. What approach TCI would make will likely come into focus. Holding a 9.9 PERCENT stake, TCI is the largest shareholder in the power utility. It submitted a plan to the government seeking to increase its stake in the company to 20 PERCENT in compliance with rules under the Foreign Exchange and Foreign Trade Law. In response, the Foreign Capital Subcommittee under the Council on Foreign Exchange and Foreign Trade Control compiled a view that TCI securing a higher stake in the company could disturb the maintenance of public order. The government then issued an advisory notice, based TOKYO 00001061 008 OF 009 on rules stipulated under the Foreign Exchange Law. Following the issuance of the government's advisory notice, John Ho, head of TCI's Asian operations, on April 16 told a press conference that Japan has lost an opportunity to lure long-term investment in its market. He also rebutted the panel's comment that the fund is seeking to increase profits from short-term investment. Ho said, "We have yet to decide how to respond to the government's move. We want to take our time to look into options." He also noted, "The fund will keep J-Power shares." It is expected to explore what approach the fund should take next, following the confrontation with the company at a shareholders meeting in June last year over its proposal for a dividend increase and the battle this time with the government over its plan to raise its stake in the company. TCI must reply whether it will accept the government recommendation by April 25. The first scenario is accepting the recommendation as is, determining that the possibility of its request being met would be slim, even if they continue talks with the government. In that case, TCI would shift its focus to calling on J-Power's management to improve their corporate management. With a June stockholders meeting just ahead, TCI needs to submit a stockholder's proposal to the company by the end of April. The likelihood is that it will strongly urge management to improve r corporate value, by submitting a proposal seeking an increase in dividend payments as it did last year. The second scenario would be TCI opposing the government to the end, appealing its advisory notice urging it to drop its plan to increase its share in the power utility. In this case, the government would take an administrative measure of ordering the fund to give up the plan. TCI would appeal the order to drop the plan. Then the situation would fall into a full-fledged fight between the government and the investor, with the matter developing into a lawsuit against the government. TCI, government fail to provide full accounts The government reached a conclusion that investment in J-Power by TCI could adversely affect the nation's stable power supply and nuclear policy. TCI steered clear of indicating a definite policy regarding J-Power's nuclear power station program and the repair of power lines. The government also failed to make a clear-cut response. The government made an issue over the managerial goal of J-Power proposed by TCI -- achieving 10 PERCENT in terms of return on equity (ROE) and 4 PERCENT in terms of return on assets (ROA). It determined that with TCI's proposal for the management of J-Power lacking concrete explanations of a policy course to achieve the goal, there is a strong possibility of its nuclear power station program being altered. One senior official of the Resources and Energy Agency said, "There would not have been any problem if the proposed goal could have been achieved without slashing funds for the nuclear power station program or repair expenses." This official thus noted that there had been a possibility of the government allowing TCI to increase its stake in J-Power, depending on its approach. However, the advisory notice is not open to the public. It can be hardly said that the TOKYO 00001061 009 OF 009 government has fulfilled accountability. (7) Cabinet Office poll: More people pessimistic about prices, food TOKYO SHIMBUN (Top play) (Abridged) April 13, 2008 The Cabinet Office yesterday released the results of its public opinion survey on public attitudes toward society. When asked for multiple answers about what was becoming worse in Japan, 42.3 PERCENT of respondents chose "prices," with 40.9 PERCENT picking "food." Both are about three times higher than in the last survey taken in January last year and the highest since the survey began to ask this question. "The economy" topped all other choices at 43.4 PERCENT , up 22.3 percentage points. The Cabinet Office analysis says: "That might be because rising crude oil and grain prices affected the people's lives. Food mislabeling incidents and poisoning from frozen Chinese-made dumplings have also cast a shadow." The survey results show the public's growing concern about rising food prices and food safety. When asked for multiple answers about what is becoming better, "science and technology" accounted for 21.2 PERCENT , up 1.5 points. This choice ranked first for the second year in a row, followed by the choices of "communications and transportation" and "internationalization." Meanwhile, "healthcare and welfare," which ranked top in the surveys through 2006, peaked at 27.2 PERCENT in 2005 and spiraled down in the following surveys. This choice ranked fourth at 15.1 PERCENT in the survey this time. Respondents were also asked if they have a strong love of Japan. To this question, "very strong" and "strong to a certain degree" totaled 57.0 PERCENT , up 4.9 points and the highest ever. "Very weak" and "weak to a certain degree" totaled 7.0 PERCENT , down 2.7 points. The survey was conducted across the nation this February with a total of 10,000 persons aged 20 and over. Answers were obtained from 5,494 persons. (8) Gov't welcomes U.S. CO2 emission target ASAHI (Page 2) (Full) Eve., April 17, 2008 Chief Cabinet Secretary Machimura, meeting the press today, voiced his appreciation for U.S. President Bush's announcement of a specific target for the United States to cut its greenhouse gas emissions. "The Japanese government has been saying there must be a framework with participation from major emitters," Machimura said. "This (announcement) is in line with that big move," he added, "so we welcome it." Meanwhile, when it comes to Japan's midterm emission target, Machimura did not clarify whether the Japanese government would specify a numerical target before this July's Group of Eight (G-8) summit to be held at Lake Toya in Hokkaido. "Showing figures must not prevent our consensus building (for the next framework)," Machimura said. SCHIEFFER