Identifier
Created
Classification
Origin
08TOKYO2179
2008-08-08 02:00:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 08/08/08

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 10 TOKYO 002179 

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: JAPANESE MORNING PRESS HIGHLIGHTS 08/08/08

Index:

Defense and security:
UNCLAS SECTION 01 OF 10 TOKYO 002179 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: JAPANESE MORNING PRESS HIGHLIGHTS 08/08/08 Index: Defense and security: 1) U.S. Navy nuclear sub leaked radiation in Yokosuka, Okinawa, as well (Asahi) 2) Leaky sub made 11 port calls in Japan over two year timeframe (Tokyo Shimbun) 3) Local communities upset that sub leaked radiation for two years (Asahi) 4) Locals charge "cover up" of sub radiation leakage (Tokyo Shimbun) 5) Yokosuka, Nagasaki citizens angry at sub leak incident charge that they were "deceived" (Mainichi) 6) On sub leak incident, charges that Japanese government was negligent in verifying, U.S. was sloppy in enforcing own regulations (Mainichi) 7) U.S. forces Japan: Small amounts of radiation difficult to detect (Mainichi) 8) Foreign and defense ministers both push for continuing MSDF's Indian Ocean refueling mission (Nikkei) 9) Democratic Party of Japan (DPJ) cooperation is the target of LDP Secretary General Aso's suggestion of MSDF escorting Japanese ships in Indian Ocean (Yomiuri) North Korea problem: 10) Abduction reinvestigation will head the agenda at talks between Japan, North Korea that start on 11th (Nikkei) 11) Foreign Minister Koumura says that Japan will be involved in determining results of DPRK's promised reinvestigation of abduction incidents (Asahi) China syndrome: 12) Koumura admits that China asked Japan to withhold information about its own poisoned dumpling incidents (Asahi) 13) DPJ Secretary General Hatoyama blasts Foreign Ministry for being "weak-kneed" toward China on poisoned dumpling issue (Mainichi) 14) DPJ drafts treaty on nuclear-weapon-free zones (Asahi) 15) Economic and Fiscal Minister Yosano acknowledges that Japan is slipping into a recession (Nikkei) 16) Prime Minister Fukuda is unhappy at reports he made a secret political deal with LDP Secretary General Aso (Asahi) Articles: 1) U.S. sub leaked radioactive water at 2 other ports in Yokosuka, Okinawa ASAHI (Page 35) (Full) August 8, 2008 The U.S. govern
ment has provided the Japanese government with additional information about findings from its probe into the earlier reported leakage of cooling water containing a trace amount of radiation from the U.S. Navy nuclear-powered Houston, the Foreign Ministry said yesterday. The radiation leak occurred for a period of two years and one month from June 2006, during which the Houston called at Sasebo in Nagasaki Prefecture, Yokosuka in Kanagawa Prefecture, and White Beach in Okinawa Prefecture's Uruma City, according to the ministry. TOKYO 00002179 002 OF 010 According to the Foreign Ministry's press release, the USS Houston leaked a trace amount of radiation from June 2006 through July 2008 when the submarine was docked at Honolulu. During that period of time, the Houston called at three ports in Japan. The Foreign Ministry also released data, including the dates of the Houston's port calls in Japan and its presumable leakage of radioactive substances during its port calls in Japan. According to findings from the U.S. Navy's investigation, the Houston was in port at Sasebo for a total of 16 days, during which the total amount of radiation leaks from the sub was less than 0.340 microcuries. The Houston stayed at Yokosuka for a total of 5 days, and the total amount of radiation leaks there was less than 0.095 microcuries. In Okinawa, where the Houston stayed for a total of 9 days, the total amount of radiation leaks was less than 0.170 microcuries. The U.S. government explains: "The total amount of radioactive substances is extremely small and does not endanger human health, sea life, or the environment. The total amount of radiation leaks during all the port calls in Japan is smaller than the amount of radioactive substances contained in a smoke detection sensor for home use." According to the Foreign Ministry's Japan-U.S. Security Division, the fact-finding report from the U.S. government does not specify anything about why the cooling water leaked, how often radiation leakage occurred, how much cooling water leaked during the port calls, and how the amount of radiation leakage was estimated. The Foreign Ministry says it will ask the United States for further accounts. Meanwhile, the Foreign Ministry inquired of the Education, Science and Technology Ministry about the amount of radiation at each of the three ports and during the port calls. According to findings from Japan's monitoring, however, there were no abnormal readouts. "We don't think the submarine leaked radiation to an extent that could affect human health or the environment," said an official of the Education, Science and Technology Ministry. 2) U.S. nuclear-powered submarine leaked radiation in Yokosuka and Okinawa; Visited 11 Japanese ports since July 2006 TOKYO SHIMBUN (Page 29) (Full) August 8, 2008 The Foreign Ministry announced yesterday that it was informed by the U.S. Embassy in Japan that the U.S. Navy's nuclear-powered submarine Houston had leaked traces of radiation during its port calls at Yokosuka Naval Base (Yokosuka City, Nakagawa Prefecture) and White Beach (Uruma City, Okinawa Prefecture) between January 2007 and March 2008, in addition to an earlier reported leak at Sasebo Naval Base (Sasebo City, Nagasaki Prefecture). From what was learned from the U.S. side, there is a possibility that the radiation leak at Sasebo began at the sub's port call there in July 2006. The U.S. Embassy said that the amount leaked was very small and that it posed no risk to public health or the environment. Abnormal levels of radiation have not been detected in radioactivity tests conducted at the sub's calling ports since June 2006 by the Education, Science and Technology Ministry. According to the U.S. TOKYO 00002179 003 OF 010 side, the Houston anchored at the Yokosuka base for five days in late January 2007. The submarine is estimated to have leaked less than 3.5 kilo Bq. of radioactivity during that period. It also stayed at White Beach for a total of nine days on five occasions between March 2007 and March 2008 and is estimated to have leaked less than 6.3 kilo Bq. of radiation. The U.S. side also informed the ministry regarding the radiation leak at Sasebo that the Houston stayed there for a total of 16 days on five occasions between July 2006 and April 2008 and that it leaked a total of less than 13 kilo Bq. of radiation. 3) Local officials concerned about U.S. sub radiation leaks ASAHI (Page 35) (Full) August 8, 2008 Concerning the leak of radiation from the U.S. Navy nuclear-powered submarine Houston at three ports in Japan, local officials are wondering why such leaks continued for more than two years. There is no knowing why this occurred, so they are feeling uneasy and dissatisfied. In late September, the USS George Washington, a nuclear-powered aircraft carrier of the U.S. Navy, is slated to arrive at Yokosuka in Kanagawa Prefecture for deployment. Kanagawa Gov. Shigefumi Matsuzawa said, "They say it does not endanger human health or the environment, but such an accident must not take place." Matsuzawa also voiced concern about repercussions on the flattop's deployment, saying, "Minor accidents, if they continue to take place, will cause the local residents to feel uneasy." "In such a situation, we cannot accept the deployment of a nuclear-powered aircraft carrier." This criticism came from Masahiko Goto, a lawyer representing a group of local citizens. In Okinawa Prefecture, Lt. Gov. Zenki Nakazato told a senior official of the Foreign Ministry: "Even if it's a small amount, a nuclear-powered submarine's leakage of cooling water containing radiation causes local residents to feel extremely uneasy. We learned that cooling water leaks had continued for two years. We're very concerned about safety control, and it's truly regrettable." Masahide Haraguchi, director general of the Base Policy Bureau at the municipal government office of Sasebo City, said: "We wonder if the accident resulted from the submarine's structural defects or if it resulted from human error. Our action depends on that. We want them to clear up the cause of the accident immediately." Masato Shinozaki, chief of the secretariat for a local group opposing nuclear-powered ship port calls, criticized the United States, saying: "They have not revealed the cause of the accident, but their submarines of the same type are still operating." 4) Yokosuka residents reacting strongly to U.S. military concealment of information, some calling for halt to deployment of nuclear-powered aircraft carrier TOKYO SHIMBUN (Page 29) (Full) August 8, 2008 It has come to light that the U.S. nuclear-powered submarine Houston leaked radiation at U.S. Yokosuka Naval Base in Kanagawa Prefecture, TOKYO 00002179 004 OF 010 as well as Sasebo Naval Base in Nagasaki Prefecture. With the nuclear-powered aircraft carrier George Washington (GW) scheduled to be deployed at Yokosuka in late September, the U.S. military's announcement of the radiation leak is drawing fire from local residents as "concealing information." Hiroshi Goto, 60, a company president living near the Yokosuka base, expressed strong displeasure toward the U.S. military's response, saying: "I don't feel good. It's not good to conceal a radiation leak. I guess that because radiation leaked at Sasebo as well following the GW's fire (in May),the U.S. military had no choice but to announce it before the GW's arrival at Yokosuka." Lawyer Masahiko Goto, a joint representative of the Yokosuka civic group to consider the home-porting of a nuclear-powered aircraft carrier, also said: "It is a serious problem that the U.S. military did not inform Japan of the radiation leak for a year and a half. The central government, Yokosuka municipal government, and its citizens have been deceived during that period. The planned deployment of the aircraft carrier must be suspended." A small amount of radiation was also detected in September 2006 in seawater at the Yokosuka base after the U.S. nuclear-powered submarine Honolulu departed. At that time, Japan was not allowed to conduct basic safety checks at the U.S. base and the military vessel to find out the cause. This has raised questions about the fact that safety measures are left to the U.S. military. During the Houston's port call at Yokosuka on January 25-29, 2007, during which the U.S. military admitted the sub's radiation leak, the Education, Science and Technology Ministry conducted radiation tests at four monitoring posts on the base and by collecting seawater. But abnormal levels of radiation were not detected. Since October 1985, the Houston visited the Yokosuka base 24 times, with the time in January 2007 in which the leak became clear being the latest. Yokosuka Mayor Ryoichi Kabaya released a verbal statement: "Dealing with a matter properly when it is still a small problem is the most effective safety measure to prevent major accidents." He also revealed a plan to ask the U.S. side for an appropriate response. 5) Yokosuka, Nagasaki angry at radiation leakage by U.S. submarine: "We were deceived" MAINICHI (Page 31) (Excerpt) August 8, 2008 Radiation-contaminated coolant water leaked from the U.S. Navy nuclear-powered submarine Houston from June 2006. In all of the sub's port calls, data showed no anomalies, but the atomic bomb survivors in Nagasaki are filled with distrust, charging that the city was "deceived." From the ports where the sub made calls -- Sasebo, Okinawa, and Yokosuka, where similar leakage has just been revealed - voices of anger and concern are rising. The port of Yokosuka in Kanagawa Prefecture received a port call in January 2007. In Yokosuka City, where the U.S. nuclear-powered carrier George Washington (GW) will be deployed at the end of Sept., lawyer Masahiko Goto, who heads a citizens' movement opposed to the deployment of the GW, made this comment, his face filled with TOKYO 00002179 005 OF 010 distrust: "The incident was not reported for over a year and a half (after the port call),deceiving the residents." In May, the GW was damaged by a fire, and with the series of accidents involving nuclear-powered vessels, "The anxieties of the residents are growing even higher," he said. In Nagasaki, Sumiteru Taniguchi (79),who is an atomic bomb survivor and heads the council of Nagasaki atomic bomb victims, stressed: "The U.S. and Japanese governments decided to deceive Nagasaki." 6) Leakage of radiation from U.S. Navy submarine: Japan has no means of verifying; Sloppy controls by U.S. forces exposed MAINICHI (Page 2) (Full) August 8, 2008 The issue of coolant water containing radioactive particles having leaked from the U.S. Navy nuclear-powered submarine Houston for over two years exposes the sloppiness of the safety-control system on U.S. subs that repeatedly make port calls in Japan, while neglecting leakage. Although there reportedly has been no impact on human bodies or the environment, the radiation leaked at the three ports having been minute in quantity, the incident raise questions about the way that information is disclosed. By Akashi Sudo and Hiroshi Nishikawa According to the Foreign Ministry, it is not clear from the data provided by the U.S. reason for the starting of the leakage of coolant in June 2006 or the estimated total amount of radiation leaked. The Japanese side has no way to verify such. When a nuclear-powered vessel makes a port call in Japan, the Ministry of Education and Science and local governments sample the seawater and seabed in order to detect whether or not there are radioactive particles. However, in the inspections when the Houston made port calls, until now there never has been any anomaly found. In ports all over Japan, for over two years, radioactive particles have been leaking into the seawater. If there had been no information from the U.S., the timeframe of the leaks and the locations would have gone undetected. On the other hand, the leakage of radioactive particles that could have been signs of an impending major accident went on undetected for a long period of time. Needless to say, this raises questions about the control system aboard U.S. Navy nuclear-powered vessels. However, the dispersion into the sea of 22.8 kilo-becquerels in released radiation, according to the Ministry of Education and Science, "has no impact on the human body or the environment." According to the ministry's disaster environment countermeasures office in the Nuclear Power Safety Division, in the case of cobalt 60, a representative radioactive particle found in coolant water in nuclear power plants, the detectable limit is 4 mili-becquerrels per liter. The same office noted: "Sea water is take immediately next to the moored nuclear vessel. The fact that nothing was detected probably means that an extremely minute amount of radiation was being leaked." 7) U.S. Navy: Amount was too small to detect TOKYO 00002179 006 OF 010 MAINICHI (Page 1) (Full) August 8, 2008 Masaya Oikawa, Washington The U.S. Navy made it clear on August 7 that it had not been able to detect the leak of cooling water containing radiation from the nuclear-powered submarine Houston for nearly two years. But the Navy stopped short of explaining what let it to conclude that the leak began in June 2006. The Navy explained that it was not able to detect the leak because the amount was too small. The Navy has designed criteria based on the nuclear promotion program, but the ratio of water leaked was far greater than the standard. 8) Continuation of refueling operation in Indian Ocean necessary, say foreign and defense ministers; Difficult for MSDF to escort private tankers NIKKEI (Page 2) (Full) August 8, 2008 Foreign Minister Masahiko Koumura and Defense Minister Yoshimasa Hayashi in interviews with the Nikkei yesterday both said that it was necessary for Japan to continue refueling operations in the Indian Ocean, the top-priority issue in the upcoming extraordinary Diet session. They took the view that it would be difficult (for the Maritime Self-Defense Force) to escort Japan's private tankers, an idea proposed by Secretary General Taro Aso of the Liberal Democratic Party (LDP) as an alternative to the refueling operation. Referring to the refueling operation, Koumura said, "There is no option for Japan to stop refueling operations, just because we are in a difficult situation." Hayashi echoed Koumura's remark, noting, "No one is arguing that there is no need for a war on terror. When viewed from the results, the refueling has contributed to securing stability in the supplying of fuel oil." 9) Aso may ask DPJ for cooperation on MSDF role in Indian Ocean YOMIURI (Page 4) (Abridged) August 8, 2008 The Maritime Self-Defense Force is currently tasked with refueling activities in the Indian Ocean to back up multinational antiterror efforts in Afghanistan under the new Antiterrorism Special Measures Law, which is set to run out in January next year. In this connection, the ruling Liberal Democratic Party's Secretary General Aso has indicated that he would consider such measures as having the MSDF escort tankers instead of carrying out refueling activities. This is creating a stir in the government and the ruling parties. The government is planning to amend the law to extend the MSDF mission there. However, Aso is believed to be exploring other measures that can obtain cooperation from the leading opposition Democratic Party of Japan (Minshuto). Chief Cabinet Secretary Machimura, Foreign Minister Koumura, and Defense Minister Hayashi met yesterday at the prime minister's office to discuss how to handle the new antiterror law. On that TOKYO 00002179 007 OF 010 occasion, they talked about Aso's proposal. Aso indicated on Aug. 5 that the government should consider dispatching the Self-Defense Forces to escort Japanese tankers in the Indian Ocean if it is difficult to extend the MSDF's refueling activities there due to opposition from the DPJ and other opposition parties. However, there is no law at present to dispatch the SDF for that purpose. The government therefore deems it infeasible to task the SDF with escorting tankers in the Indian Ocean. "It would be difficult to do so," a senior official of the Defense Ministry said, representing the government's view. Meanwhile, the United States wants Japan to send SDF troops to Afghanistan. This deployment will be accompanied by extraordinary danger, so the government would like to fulfill its contributions to the war on terror by continuing the MSDF's refueling activities in the Indian Ocean. However, the DPJ is unlikely to approve of the government's plan to continue the MSDF's refueling mission. Moreover, New Komeito, the LDP's coalition partner, is reluctant to take a second vote in the House of Representatives to get the MSDF bill through the Diet after its possible failure to clear the opposition-controlled House of Councillors. As it stands, the MSDF bill is uncertain to get the Diet's approval at its next extraordinary session. 10) Government to propose means of allowing Japan to check progress in abduction reinvestigation point by point to ensure efficacy NIKKEI (Page 2) (Excerpts) August 8, 2008 The government on August 7 revealed the approach it would take at the Japan-North Korea working level talks that start August 11. Regarding the method of reinvestigation into the abductions of Japanese nationals, the focus of highest attention at the talks, Tokyo will propose a mechanism that would allow the Japanese side to check progress in the investigation point by point, instead of adopting a joint investigation arrangement. It intends to respond to a partial lifting of the economic sanctions against North Korea once it starts the reinvestigation and extradites hijackers of the JAL airliner Yodo. It will convey this policy to Pyongyang at the upcoming meeting. Several government sources revealed these policy points. The meeting will be held on August 11-12 in Shenyang, China. North Korea in the previous talks pledged to conduct a reinvestigation into abduction cases and cooperate for the handover of hijackers. Japan indicated its stance of agreeing to lift three economic sanction items, making it a condition that North Korea carries out the reinvestigation. The focus of the upcoming meeting is on how far the method of reinvestigation and when to start such can be boiled down. The Japanese government gives top priority to ensuring that the results of the reinvestigation are effective. It will use a framework that allows it to check the progress point by point so that it can prevent a situation in which North Korea tries to close the case with an insufficient investigation. To be specific, Japan intends to call on North Korea to approve visits by Japanese officials to North Korea at every key juncture of the TOKYO 00002179 008 OF 010 reinvestigation so that they can receive explanations from North Korea. 11) Koumura: Japan should be involved in work to confirm results of North Korea's reinvestigation into abductions ASAHI (Page 4) (Full) August 8, 2008 In an interview with reporters of the Asahi Shimbun and other news companies yesterday, Foreign Minister Koumura stressed the need for Japan's involvement in confirming the results of North Korea's reinvestigation of the issue of Japanese nationals abducted by its agents. He said: "North Korea will conduct the investigation, but it is naturally possible that Japanese representatives will go there and confirm (the investigation results)." The issue of the reinvestigation will be on the agenda at the Japan-North Korea working-level talks to be held in Shenyang, China, on August 11-12. Koumura stressed the need for a mechanism to confirm the results of the investigation by North Korea so that Pyongyang will conduct an investigation that can satisfy Japan. He added that it is necessary to decide in the working-level talks how to undertake confirmation. 12) Koumura on poisoned dumplings: Ministry did not publicize it at China's request ASAHI (Page 1) (Full) August 8, 2008 Foreign Minister Koumura said yesterday that the ministry had been informed by the Chinese government in early July of a poisoning outbreak from tainted dumplings in China in June. He then disclosed in an interview with reporters from the Asahi Shimbun and other news companies that China had asked Japan to keep the information confidential. Speaking before reporters at his official residence last night, Prime Minister Fukuda said: "Although my memory is a bit hazy, it was probably around the Hokkaido Toyako Summit (on July 7-9)" when the government received the information. Fukuda added that he would discuss the issue when he meets Chinese leaders in Beijing on Aug. 8 in pursuit of an early settlement. According to Koumura, the Chinese Foreign Ministry informed the Japanese Embassy in Beijing of the poisoning cases in China in early July. He quoted a Chinese official as saying at that time: "We want you to withhold the information for now, because the ongoing investigation might be hindered. We will keep you up-to-date as new information comes in." Koumura said that the information was shared by the Prime Minister's Office, the National Police Agency, and the Foreign Ministry. Asked about the information being kept undisclosed, Koumura said: "That stands to reason." Koumura said that while keeping the information in mind, Prime Minister Fukuda and President Hu Jintao held talks on the sidelines of the Toyako Summit and that he and Foreign Minister Yan Jiechi met in Singapore in late July. They confirmed that the two countries would accelerate cooperative work by their investigative agencies, according to Koumura. Regarding the state of the ongoing investigation, Koumura indicated TOKYO 00002179 009 OF 010 that China has begun to make a response while acknowledging that it experienced poisoning cases, saying: "A higher-level Chinese official delivered (the new information). I recognize that there has been a change in China's response." 13) DPJ criticizes government as "overly weak-kneed" on dumpling poisoning cases in China ASAHI (Page 1) (Full) August 8, 2008 In a press conference in Yokohama yesterday, Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama lashed out at Foreign Minister Koumura for having kept a poisoning outbreak from tainted dumplings in China unpublicized at the request of the Chinese government. Hatoyama said: "The information is too serious to be kept undisclosed at the request of the Chinese government. The Japanese government should have asserted in a stately way that it would make the information public even if asked to hush it up. The government is overly weak-kneed, and its response was far from one taken out of consideration for the viewpoints of consumers and the people. 14) DPJ drafts treaty on nuclear-weapon-free zones ASAHI (Page 4) (Full) August 8, 2008 The Democratic Party of Japan's (DPJ) parliamentary caucus on nuclear disarmament, chaired by Katsuya Okada, compiled a draft treaty on nuclear-weapon-free zones in Northeast Asia yesterday. The draft calls for translating into action Japan's three nonnuclear principles - that the nation will neither possess, nor produce, nor allow the introduction of nuclear weapons - in Japan, South Korea, and North Korea. The draft covers military facilities in other countries, such as U.S. military bases in Japan. The DPJ plans to hold a press conference in Nagasaki today to announce it. 15) State Minister for Economic and Fiscal Policy effectively acknowledges that economy has taken downward turn; Word "recovery" dropped from August monthly report NIKKEI (Page 1) (Almost full) August 8, 2008 The government on August 7 adopted at a meeting of related ministers a monthly economic report for August that uses the term "weakening" in its overall assessment of the economy. Following a decline in industrial output and exports, which have shored up the Japanese economy, the latest report dropped the word "recovery," which had been used for four years and eight months. Meeting the press, State Minister for Economic and Fiscal Policy Kaoru Yosano effectively acknowledged that the economy had entered a recessionary phase. He said, "The monthly report dropped the word 'recession.' It indicated with the word 'weakening' that the economy is beginning to enter a phase that does not allow us to view the outlook of the economy optimistically." This is the first time since May 2001, when the economy was on the way to a recession, that the government in its monthly report assessed the current state of the economy as weakening. Following an TOKYO 00002179 010 OF 010 economic slowdown throughout the world on the backdrop of the credit uneasiness originating in the U.S., the Japanese economy, which has continued to grow, depending on external demand, is now at a turning point. Among key economic items used to determine the economic outlook, the monthly report lowered assessments of exports, industrial output and employment conditions. Exports to the U.S. and the EU are declining. Corporate production is also dropping due to a slowdown in exports. Employment, which had improved gradually, is now in a harsh situation. Concerning the future course of the economy, the monthly report noted that slight movement would continue for the time being. Yosano indicated that it would be possible for the Japanese economy to avoid a deep adjustment, noting, "I am sure that as the global economy recovers, the Japanese economy will turn around." 16) Fukuda expresses displeasure at rumored secret deal on power transfer ASAHI (Page 4) (Full) August 8, 2008 Speculation has spread that Prime Minister Fukuda promised Taro Aso that he would transfer the prime ministership to Aso prior to a general election if Aso agreed to become secretary general. Asked by reporters whether the speculation was true, Fukuda unpleasantly replied: "Is this a report?" Without referring to whether there was a secret deal, he cynically said: "Something that has been made public is not 'a secret deal'." Regarding whether he will decide to dissolve the House of Representatives for a snap election, Fukuda said: "It is not the proper time now to comment, since there is still time." SCHIEFFER

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