JAPANESE MORNING PRESS HIGHLIGHTS 06/23/08

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/23/08


Index:

1) Top headlines
2) Editorials
Prime Minister's weekend schedule: None

North Korea problem:
3) Prime Minister Fukuda in meeting with Ambassador Schieffer calls
for U.S. caution in deciding to remove North Korea from list of
terrorist-sponsoring states (Nikkei)
4) Heated exchange between Assistant Secretary Hill, Asian and
Oceanian Affairs Bureau Director General Saiki over removing DPRK
from terror list (Yomiuri)
5) Foreign Minister Koumura willing to accept DPRK's nuclear weapons
information in a separate document from the main nuclear declaration
(Yomiuri)
6) Koumura; Need verification set up arranged with North Korea when
it carries of abductee reinvestigation (Sankei)
7) Koumura on NHK TV: Japan will participate in DPRK's
reinvestigation of abduction issue (Mainichi)
8) Japan will remove partial sanctions on DPRK conditioned on start
of actual reinvestigation of abductees (Nikkei)
9) Koumura on Fuji TV discusses U.S. move to delist North Korea as a
terrorist sponsor, gas development in E. China Sea, and China-Taiwan
relations (Sankei)

Defense affairs:
10) Due to Komeito resistance, bill establishing permanent law for
overseas SDF dispatches will not include security guarding as a duty
(Tokyo Shimbun)
11) Oversight body to be established in Prime Minister's Official
Residence (Kantei) to see that defense procurement is carried out
properly (Nikkei)

12) Asahi survey shows local economies rapidly worsening (Asahi)

Political agenda:
13) No one can read Prime Minister Fukuda's cards on whether he will
carry out a cabinet shuffle after the G-8 Summit (Nikkei)
14) Democratic Party of Japan (DPJ) planning relentless series of
consecutive battles with Fukuda administration to force the Prime
Minister to dissolve the Diet (Yomiuri)
15) Number of DPJ party members and supporters now at their peak
(Nikkei)
16) Proposal aired in DPJ to move up the election date for the party
president (Asahi)
17) Ozawa losing lawsuit against magazine accusing him of personally
owning 1 billion yen in real estate paid for by political funds
(Sankei)

Articles:

1) TOP HEADLINES

Asahi:
Drastic changes occurring in lives of Canadian Inuit over past 45
years, affected by global warming

Mainichi:
SDF quake-search operation called off in Miyagi

Yomiuri:

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Survey finds increasing number of patients using ambulances instead
of taxis across Japan

Nikkei:
Energy firms have highest market capitalizations in world,
surpassing U.S. financial institutes, IT firms

Sankei:
Logic of betrayal: U.S. move to delist North Korea as state sponsor
of terrorism; Abductee's mother believes in President Bush's
sincerity

Tokyo Shimbun:
Survey finds 27 PERCENT of local governments in metropolitan area
not preparing measures to prevent new strains of influenza

Akahata:
Incumbent Komae Mayor Yano, JCP member, reelected

2) EDITORIALS

Asahi:
(1) China must be aware of responsibility for reducing greenhouse
gas emissions as major emitter

Mainichi:
(1) We expect Mr. Masuzoe to produce results by increasing doctors
(2) The economic and fiscal policy guidelines should specify what to
do about consumption tax

Yomiuri:
(1) Local governments urged to reinforce school buildings against
earthquakes
(2) Take opportunity of first Japanese, U.S. parliamentary meeting
to deepen bilateral ties

Nikkei:
(1) Appropriately apply new rules on capital procurement
(2) Future course not set for new EU treaty

Sankei:
(1) Policy of accepting foreign nurses should be made model to
secure excellent human resources from overseas
(2) Introducing rules on fair use necessary for copyrights and
Internet

Tokyo Shimbun:
(1) Increase in number of doctors taken as first step for
reconstructing medical system
(2) Tie-up between Yahoo and Google must not undermine competition

Akahata:
(1) July 9 gathering to be held to protect distribution of
handbills

3) Prime Minister Fukuda in meeting with U.S. Ambassador Schieffer
calls for U.S. caution in deciding to remove DPRK from list of
states sponsoring terrorism

NIKKEI (Page 2) (Full)
June 21, 2008


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Prime Minister Yasuo Fukuda met with U.S. Ambassador to Japan
Schieffer at his official residence (Kantei) on June 20. The Prime
Minister requested that the United States use caution in making a
decision on removing North Korea from the list of states sponsoring
terrorism. "The abduction issue for Japan is crucial," Fukuda said.
The Ambassador responded: "We understand how important the abduction
issue is for Japan. We will do what we can to help move the
Japan-North Korea negotiations forward."

4) Heated exchange between Japanese and U.S. delegates over removal
of North Korea from terrorist-sponsoring list

YOMIURI (Page 4) (Full)
June 21, 2008

Akitaka Saiki, director general of the Foreign Ministry's Asian and
Oceanian Affairs Bureau, briefed the Liberal Democratic Party's
(LDP) Korean Peninsula Affairs Subcommittee on June 20 on the
contents of his meeting with U.S. Assistant Secretary of State Hill
on June 19. That afternoon, every newspaper in their evening
editions had reported the statement made by Secretary of State Rice
about removing North Korea from the list of states sponsoring
terrorism. When Saiki appealed to Hill, "I would like you to realize
how great the impact of that was," Hill explained, "When North Korea
takes action, we, too, have to do something in response." Saiki then
rebutted: "The content of nuclear declaration is not clear, and the
method of verifying it has not yet been discussed. If pressure is
removed from the DPRK, it will do nothing." "Trust between Japan and
the U.S. is at stake," he said.

5) Foreign Minister Koumura indicates acceptance of separate
document for DPRK's nuclear weapons information to follow North
Korea's nuclear declaration

YOMIURI (Page 2) (Full)
June 21, 2008

Foreign Minister Koumura in a press conference on June 20 hinted
that information regarding North Korea's nuclear weapons might not
be included in that country's nuclear declaration to be presented to
China, the presiding country in the Six-Party Talks. The document
would include such information as the total amount of expended
plutonium North Korea possesses.

Even in that case, Koumura suggested that the nuclear declaration
would be accepted from the viewpoint of advancing the DPRK's
denuclearization. The report is expected to be completed soon, and
the proposal has come up among Japan, the United States, and the
Republic of Korea to have the North present a document promising a
future report regarding its nuclear weapons.

The foreign minister stated: "Even if we ease (the criteria for the
nuclear declaration) there is a view that it would be better at the
next stage to achieve the goal of the DPRK's denuclearization (with
a report on its nuclear weapons)." From the standpoint of making
progress in the Six-Party Talks, the U.S., South Korea and other
participants have softened their stance, taking the position that it
would be acceptable for the nuclear weapons portion follow the
nuclear declaration.

Regarding this issue, at a meeting of the trilateral delegates on
the 19th, the proposal was made to have the DPRK later draft a

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second document containing a report of its nuclear weapons and a
promise to eliminate the nuclear programs. The next stage of the
Six-Party Talks would see the full elimination of the nuclear
programs. Koumura made it clear that Japan, the U.S., and the ROK
are now considering this option.

In the nuclear declaration, other than the volume of spent
plutonium, there apparently would be included: 1) records of
operation of the nuclear reactors; and 2) lists of materials,
facilities, and programs related to nuclear development.

6) Koumura on removing sanctions of North Korea: Need for agreement
on verification arrangement of reinvestigation of abductee victims

SANKEI (Page 5) (Excerpt)
June 23, 2008

Appearing on an NHK TV program on June 22, Foreign Minister Masahiko
Koumura made this statement about the reinvestigation of the
abductee victims that was agreed on at working-level talks between
Japan and North Korea: "I would like to create an arrangement
including a body of Japanese experts in order to verify the
reinvestigation North Korea will carry out. As long as those
negotiations make no progress, we cannot remove a portion of the
sanctions now imposed on North Korea."

7) Foreign minister indicates Japan will not take part in
reinvestigation by North Korea into abduction issue

MAINICHI (Page 2) (Full)
June 23, 2008

Foreign Minister Masahiko Koumura indicated yesterday the
possibility that Japan would not take part in the reinvestigation
into the abduction issue recently promised by Pyongyang. He said in
an NHK TV program: "Some in the nation are skeptical about Japan's
participation in the investigation. Their opinion is that it is
undesirable to allow critics to think Japan participated in
activities in an area over which Japan has no sovereignty."

Meanwhile, Koumura emphasized: "We would like to establish a
mechanism whereby we can fully verify the contents of the other
side's investigation." He implied that even if the investigation is
conducted under the lead of North Korea, Japan will thoroughly
verify its contents and that if Japan cannot judge the investigation
was conducted in good faith, Japan will not partially lift sanctions
against North Korea.

8) Government to remove part of the sanctions against North Korea
conditioned on confirming that reinvestigation of abduction issue
has really started

NIKKEI (Page 2) (Excerpt)
June 21, 2008

The government, after considering the results of the recent talks
between Japan and North Korea, plans to condition removal of part of
the sanctions imposed on the DPRK on the restarting of the
reinvestigation by North Korea of the abductee victims. Based on the
principle of action for action associated with the Six-Party Talks
on the DPRK's nuclear programs, a portion of the sanctions would be
removed once the reinvestigation actually starts.

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9) Excerpts from Fuji TV talk show on June 22

SANKEI (Page 5) (Full)
June 23, 2008

Appearing on the Fuji TV talk show, Hoodoo 2001, yesterday, Foreign
Minister Masahiko Koumura spoke of Washington's move to delist North
Korea as a terrorism-sponsoring nation, the ongoing negotiations
between Japan and China on developing gas fields in the East China
Sea, and Japan's relations with China and Taiwan over the ownership
of the Senkaku Islands.

-- U.S. Secretary of State Rice stated in a speech that President
Bush would notify Congress of his intention to take Pyongyang off
the list of terrorism-sponsoring nations.

Secretary Rice has indicated that when the U.S. decides to remove
North Korea from the list, it will take into consideration the state
of progress in Japan-North Korea relations, including the abduction
issue. It is not correct to think that (the U.S.) will no longer
take progress in Japan-North Korea relations into consideration

-- Some speculate that the agreement reached in the recent
working-level talks between Japan and North Korea was intended to
pave the way for the U.S. to delist North Korea.

Japan asked (the U.S.) to allow it to use the delisting card to move
forward Japan-North Korea relations, including the abduction issue,
and the U.S. agreed to it. The question of whether Japan can use the
card to promote Japan-North Korea relations and the abduction issue
is now at a crucial stage.

-- It has been reported that in the working-level talks, North Korea
was not positive about reaching the agreement.

Unless North Korea conducts an investigation in a way that is
expected by Japan, Japan will not remove some of its sanctions.

-- Chinese Vice Foreign Minister Wu Dawei said: "Since sovereignty
over the Shirakaba (Chunxiao) gas field resides with China, it
cannot be called joint development."

It is an exaggeration to say that sovereignty resides with China.
The note of agreement (on joint development) specifies that "both
sides' legal positions will not be violated."

--The Taiwanese government led by President Ma Ying-jeou has taken a
tough stance about the issue of the ownership of the Senkaku
Islands.

(The Senkaku Islands) are indisputably Japan's territory in view of
history and international law. Japan will continue to protect it
silently.

10) SDF legislation stalled over security

TOKYO SHIMBUN (Page 2) (Abridged)
June 23, 2008

The ruling Liberal Democratic Party and its coalition partner, New
Komeito, have now hit a snag in their work of outlining a

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legislative measure to create a permanent law that will allow Japan
to send the Self-Defense Forces on overseas missions as needed. The
LDP wants to allow the SDF to engage in security activities on their
overseas assignments. In addition, the LDP also eyes easing the
government's self-imposed restrictions on SDF personnel's use of
weapons. However, New Komeito is strongly opposed to the LDP
standpoint. The ruling coalition cannot be expected to present a
bill to the Diet, and the SDF legislation is far off.

A project team of LDP and New Komeito lawmakers discussed the SDF
legislation during the recent ordinary session of the Diet, and its
discussion heated up on whether to allow the SDF to engage in field
security activities, such as guarding or escorting personnel from
the United Nations and foreign countries, protecting their
materials, and going on patrol for relevant facilities. The project
team also discussed the advisability of having SDF personnel go to
the help of foreign troops if and when they are under attack.

The LDP strongly insisted on allowing the SDF to conduct security
activities in consideration of the fact that the SDF was actually
asked to guard or escort U.N. troops engaged in peacekeeping
operations. The SDF's overseas activities are currently subject to
an extremely large number of restrictions. The LDP wants to make the
SDF's overseas activities flexible for more opportunities to make
international contributions.

However, such security activities will be accompanied by danger.
Accordingly, the primary challenge is to review the government's
weapons use standards. SDF personnel on overseas missions are
currently allowed to use weapons in legitimate self-defense or
emergency evacuation to escort those who are under their control. In
addition, the SDF may also have to use weapons against those
standing in its way.

Meanwhile, former LDP Vice President Taku Yamasaki, who presides
over the ruling coalition's project team, has indicated that the LDP
would give up on submitting the bill to the Diet in its next
extraordinary session. The LDP is expecting to present the
legislation to the Diet in its ordinary session next year. However,
New Komeito is now in a mood to say it can no longer get along with
the LDP's standpoint. It would not be easy for the two parties to
find common ground.

11) Kantei to verify defense procurement

NIKKEI (Page 2) (Full)
June 23, 2008

The government is planning to set up a new watchdog body in the
Kantei in the aim of verifying the Defense Ministry's procurements
for the Ground, Maritime, and Air Self-Defense Forces. This is a
step to reform the Defense Ministry in the wake of former
Administrative Vice Defense Minister Takemasa Moriya's bribery case
and other scandals involving the ministry. The newly planned body
will also take part in the Defense Ministry's work of compiling
midterm defense buildup plans. The Kantei will keep tabs on
illegalities and improve the efficiency of budget allocations for
the GSDF, MSDF, and ASDF.

A government panel established at the Kantei for reform of the
Defense Ministry is expected to release a report this month, with
Tokyo Electric Power Co. Adviser Nobuya Minami presiding. The panel

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will shed light on structural problems that brought about such
scandals, and make recommendations on preventing recurrences.

The newly planned organization will be set up under the Security
Council, which is made up of the prime minister and relevant cabinet
ministers. It will also involve working-level officials from
relevant government ministries and agencies and experts to discuss
defense procurement, including how Japan's defense buildup will
affect Japan's industrial infrastructure and Japan's relations with
its neighbors.

In its report, the panel will propose setting up an intersectional
team in the Defense Ministry to study procurement transparency. The
focus is on how to reorganize the Defense Ministry into a mixed
setup of the Defense Ministry's bureaucrats and the SDF's staff
officers. Meanwhile, the Defense Ministry's reform plan includes the
option of abolishing the GSDF, MSDF, and ASDF staff offices.
However, the panel is expected to avoid going so far as to design
such a detailed organization.

12) Asahi poll: 40 PERCENT say business conditions in local area is
deteriorating

ASAHI (Page 1) (Full)
June 23, 2008

The Asahi Shimbun conducted a survey on local economies targeting
business managers in 47 prefectures, in which 33 PERCENT replied,
"The local economy is moderately declining," while 5 PERCENT said,
"The local economy is worsening." The proportion of respondents who
replied that the economy was deteriorating reached about 40 PERCENT
, up 32 points from the previous survey carried out in November last
year. The sharp rise in the prices of crude oil and raw materials is
working negatively on already troubled local economies.

The survey was carried out between May 29 and June 16, targeting the
chambers of commerce and industry and regional banks in 47
prefectures. A face-to-face survey was conducted on top executives,
in which 94 persons responded. In a survey targeting 100 leading
companies, carried out almost at the same time, about one-fourth of
the respondents replied that the economy was deteriorating. A
decline in business confidence is felt more seriously in local
areas.

Regarding the view of the present state of the local economy, 28
PERCENT replied in the previous survey, "The local economy is
recovering moderately." However, only 2 PERCENT gave such a reply
in the survey this time. To a question as to how long the current
expansion, which began in February 2002, will continue, 71 PERCENT
replied, "It is already over." As factors for contributing to the
determination of economic outlook (respondents were allowed to
choose up to two factors),53 PERCENT cited the prices of crude oil
and raw materials.

Referring to the soaring crude oil prices, President Mitsuo Hayashi
of the Aomori Chamber of Commerce and Industry pointed out, "It is a
major issue in areas where agriculture, forestry and fisheries
industries are active. The steep rise in crude oil prices is being
felt in various ways. Fishermen are suspending fishing temporarily.
There is a drop-off in demand to replace automobiles." Many stressed
the impact of the blow dealt to local companies, with Hyakugo Bank
President Hajime Maeda in Mie Prefecture saying, "Small and

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medium-size companies that deliver their products to major companies
find it difficult to raise prices due to the power relationship."
Concerning economic disparities between major cities and regional
areas, 96 PERCENT said, "The disparity is increasing."

13) Ruling parties eager for cabinet shuffle, but cannot read
Fukuda's real intention

NIKKEI (Page 2) (Excerpts)
June 21, 2008

With the closing of the regular session of the Diet, many lawmakers
in the ruling parties are greatly looking forward to a shuffle of
the cabinet. Some say that in order to improve Prime Minister Yasuo
Fukuda's policy image, a cabinet shakeup is necessary with an eye on
a political timetable for such issues as tax system reform and a
budget compilation in the upcoming extraordinary session. The
predominant view is that a cabinet shuffle should be carried out
sometime between middle to late July and early August. Although
Fukuda has not revealed his real intention, he will like make a
decision after the Group of Eight summit in Hokkaido in July

"Managing Diet affairs is extremely tough," Fukuda said on the night
of June 20, looking back on the Diet sessions, including the extra
session started last fall. He also expressed enthusiasm for a
long-term government, saying: "I would like to implement policies
that provide the public with relief and hopes." He has, however,
reiterated that he has no intention to carry out a cabinet shuffle.
A senior ruling camp member said that he had tried to find out
Fukuda's real intention but he had received only vague remarks from
the Prime Minister.

Fukuda hinted at a shuffle of his cabinet late last year, but he
never went through with it. There was a rumor in the ruling
coalition that one of the reasons for Fukuda having forgone a
shuffle was to send a message to Democratic Party of Japan (DPJ)
President Ichiro Ozawa that he was ready to form a grand alliance
with the DPJ, according to a senior member of the Liberal Democratic
Party (LDP).

However, the environment surrounding the Fukuda administration has
greatly changed in the past six months. The cabinet approval rate
has plunged to half of what it was six months ago to reach the 20
PERCENT level. Fukuda has now cut off all ties with Ozawa.

The Fukuda cabinet was inaugurated last September following the
sudden resignation of Prime Minister Shinzo Abe. Fukuda kept on 13
members of the Abe cabinet. There is a mood in the ruling camp that
it is necessary to handle such important issues as reform of the tax
revenues earmarked for road projects and a review of the social
welfare system, by strengthening the setup of controlling the
government, taking advantage of a cabinet shuffle as leverage.

14) DPJ planning relentless series of consecutive battles for force
Diet dissolution

YOMIURI (Page 4) (Excerpt)
June 21, 2008

With the de facto end of the current Diet session on June 20,
President Ichiro Ozawa of the Democratic Party of Japan (DPJ) made
this statement at a joint meeting of upper and lower house DPJ

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lawmakers at party headquarters: "There is a high probability that
Diet dissolution and a general election will take place sometime
after September and at the latest at the beginning of next year. The
extraordinary session will become an important venue to lead into
the Lower House election." Ozawa later at a round table discussion
with lawmakers from his party explained his plan to carry out a
opinion survey in late August in all the single-seat districts and
based on the results, announce in early September the first list of
party candidates for the election. He also indicated his desire to
strengthen assistance to the official candidates by such means as
financial contributions (to their campaigns). He thus set off the
first blast in activating a full-fledged campaign for the Lower
House election.

15) DPJ members, supporters reach record number of 270,000 as of end
of May

NIKKEI (Page 2) (Full)
June 23, 2008

The number of rank-and-file members and supporters of the Democratic
Party of Japan (DPJ or Minshuto) hit a record high, exceeding
270,000 as of the end of May. The party member and supporter system
was launched in 2002. Those who are registered as of the end of May
have voting rights in party presidential elections. Some party
members view that the pension contribution record errors and
criticism of the new public health care plan for elderly people have
contributed to the increase in DPJ members and supporters.

The number of DPJ members reached 244,000 in 2006, when Ichiro Ozawa
defeated Naoto Kan and was reelected unopposed as president five
months later. The number dropped to 201,000 in 2007.

Commenting on the number of party members and supporters reaching a
record high, Secretary General Yukio Hatoyama at a joint plenary
meeting of party members of both houses of the Diet held on June 20
said, "Needless to say, the public pins high hopes on the DPJ. The
increased membership also indicates expectations for the
presidential election."

16) DPJ considering holding presidential election early

ASAHI (Page 4) (Full)
June 21, 2008

A plan to implement the party presidential election earlier than
September was floated on June 20 in the main opposition Democratic
Party of Japan (DPJ). The plan came up following moves calling for
opening an extraordinary Diet session in late August. There is also
speculation that the plan will lead to paving the way for the
uncontested reelection of President Ichiro Ozawa for a third term.
The party has been split between a group favoring the uncontested
reelection of Ozawa and others wishing to develop policy debate in a
full-fledged election.

Azuma Koshiishi, chairman of the DPJ caucus in the House of
Councillors, referred in a meeting on June 20 for the first time to
the possibility of carrying out the leadership race earlier than
planned. He stated:

"I wonder whether the next regular Diet session will be convened in
late August or not. Our presidential election will be held in

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September. If possible, the election should be held earlier than the
opening of the extra Diet session."

Koshiishi was reelected in early this moth in his post, term of
which runs two years, for his third term. He is now considering the
executive lineups.

He sees that the number of executive posts that the DPJ Upper House
caucus will occupy will increase with the next House of
Representatives election in mind. Therefore, unless the DPJ starts
the selection of the executive members soon after the leadership
race before the extra session, it will be unable to make
arrangements for the extra session.

The government and ruling parties will move up the convocation of
the extra session to late August. The DPJ presidential election rule
stipulates that an election should be carried out within 30 days
before the term of the presidency expires. So, it is possible to
implement the upcoming election earlier than the planned September
date if it is approved in the meeting of the lawmakers from the two
Diet chambers.

The reason for the DPJ placing importance on the extra session is
that it considers it as the battle field prior to the next Lower
House election. In the meeting on June 20, Ozawa urged his party
members to unite, saying: "The extra Diet session in the fall will
become important for the general election." In a meeting of the
party's Lower House members later in the day, he explained that the
party would conduct an opinion poll in August on the prospective
candidates for the next Lower House election and would decide in
September the first selection of candidates. Besides Koshiishi, a
senior DPJ Upper House member said: "It is rational (to hold the
presidential race) before the Diet session starts. We should attend
the extra session after picking the leadership lineup. A senior
Lower House member, who has close ties to Ozawa, made this comment:
"Many party members think that the presidential election should be
held before the opening of the extra session."

17) Appeal court rejects claim by DPJ President Ozawa that real
estate worth 1 billion yen belongs to political support
organization, Rikuzankai

SANKEI (Page 3) (Abridged slightly)
June 21, 2008

Reacting to the weekly magazine Shukan Gendai's report that
Democratic Party of Japan (DPJ) Chairman Ichiro Ozawa has amassed
secret assets, Ozawa filed a defamation of character lawsuit against
the publisher Kodansha demanding compensation, claiming that the
real estate in question was not his personal asset but belongs to
the Rikuzankai, his fund management organization. However, he lost
the case on June 4. In this connection, the Sankei Shimbun learned
on June 20 that the adjudication handed down by the appeal court
noted that it is impossible to determine that the assets belong to
the Rikuzankai.

Regarding the Rikuzankai, too, the court ruled that it is unclear
whether there are enough details of the actual operations regarding
the organization so that it can be determined that it is an
unincorporated association. This is because third parties are not
given opportunities to know how the organization is operated.


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Touching on the Rikuzankai having purchased 13 pieces of real estate
worth 1.02 billion yen in Tokyo and other areas and that the assets
are registered in his name, Ozawa at a press conference held in
February last year had insisted, "I as an individual have no
ownership rights to those assets." As the reason that those assets
are registered in his name, Ozawa explained, "A political
organization, which is an unincorporated association, is not allowed
to register assets in its name. Such an organization must register
assets it owns in the name of an individual."

SCHIEFFER