DAILY SUMMARY OF JAPANESE PRESS 08/15/08

UNCLAS SECTION 01 OF 05 TOKYO 002259

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 08/15/08

INDEX:

(1) Poll: Popularity rating for premiership (Yomiuri) 2
(2) Uruma city demands halt to port calls by US nuclear submarines
(Okinawa Times) 2
(3) Most analysts predict economy to revive in second half of next
year (Nikkei) 3
(4) Numerical conversion of economic openness to be worked out by
end of this fiscal year for comparison with other countries (Nikkei)
4
(5) TOP HEADLINES 5
(6) EDITORIALS 5
(7) Prime Minister's schedule, Aug. 14 (Nikkei) 6
(8) Political Cartoons 6

ARTICLES:

(1) Poll: Popularity rating for premiership

YOMIURI (Page 2) (Full)
August 15, 2008

Questions & Answers
(Figures shown in percentage)

Q: Who do you think is most appropriate for prime minister among
those currently seated in the Diet? Pick only one from among those
listed below.

Taro Aso 24.7
Shinzo Abe 1.6
Nobuteru Ishihara 0.9
Akihiro Ota 0.3
Katsuya Okada 2.8
Ichiro Ozawa 9.6
Naoto Kan 3.4
Yuriko Koike 1.0
Junichiro Koizumi 13.0
Sadakazu Tanigaki 1.3
Shoichi Nakagawa 0.3
Hidenao Nakagawa 0.4
Fukushiro Nukaga ---
Seiko Noda 0.5
Yoshihiko Noda 0.1
Yukio Hatoyama 1.2
Yasuo Fukuda 3.4
Seiji Maehara 1.1
Yoichi Masuzoe 3.4
Nobutaka Machimura 0.7
Kaoru Yosano 0.4
Others 0.3
None 24.7
No answer 5.1

Polling methodology
Date of survey: Aug. 9-10.
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: 1,788 persons (59.6 PERCENT ).

TOKYO 00002259 002 OF 005



(2) Uruma city demands halt to port calls by US nuclear submarines

OKINAWA TIMES (Page 2)
August 15, 2008

With regard to the issue in which the US Navy's 6,082-ton Los
Angeles-class nuclear submarine USS Houston had leaked coolant water
containing radioactive substances for about two years, Tsuneo
Chinen, mayor of Uruma City, sent letters to related Japanese and US
government agencies, the Okinawa Prefectural Government (OPG),and
the Okinawa Prefectural Assembly, lodging protest and petitioning
suspension of port calls by nuclear submarines and immediate
disclosure of results of inspections of all submarines dating back
to two years in the past.

Chinen said: "Distrust of and anger against the US military have
grown stronger. (The US military's) poor safety management system
has been exposed." He protested the fact that there have been 27
port calls so far this year, already breaking the annual number of
port calls. Chinen complained, "We have lodged complaints in the
past demanding that (submarines) not call port, but the number of
port calls have sharply increased instead."

In addition, he made a strong demand, saying, "From the standpoint
of protecting the lives, property, human rights, and peaceful
livelihood of the citizens, we sternly protest the coolant leak and
continue to strongly demand suspension of future port calls."

The letters were sent to 16 addresses, with the main addressees
including the US defense secretary; the US ambassador to Japan; the
commander of the US Forces, Japan; the Japanese prime minister; the
Japanese foreign minister; the Japanese defense minister; the
speaker of the Lower House; and the president of the Upper House.
Meanwhile, the Los Angeles-class nuclear submarine USS Columbus,
which called port in Okinawa for the first time since the leakage of
coolant containing radioactive substances came to light, remains
docked at White Beach as of August 14. The OPG's Military Base
Affairs Section announced the results of a radiological
investigation conducted by a task force on Okinawa affairs under the
Ministry of Education, Culture, Sports, Science, and Technology,
saying, "The values were normal."

(3) Most analysts predict economy to revive in second half of next
year

NIKKEI (Page 3) (Full)
August 14, 2008

Preliminary data on Japan's gross domestic product (GDP) for the
April-June quarter released on August 13 by the Cabinet Office
showed that the GDP fell 0.6 PERCENT in real terms -- in which the
effects of price fluctuations are not taken into account -- from the
previous quarter. The figure amounts to an annualized decline of 2.4
PERCENT . This means that the economy shrank for the first time in
four quarters as exports weakened and consumption sank amid soaring
prices of food and other ordinary products. A view has begun to
prevail among economists that sluggish growth will continue in the
July-September quarter and that full-fledged economic recovery will
take place in the latter half of 2009.

All major economic indicators fell in the April-June quarter.

TOKYO 00002259 003 OF 005



Exports, which supported the longest postwar economic recovery that
started in 2002, fell by 2.3 PERCENT from the previous quarter, the
first negative growth since the January-March quarter of 2005. The
US economy grew 1.9 PERCENT in real terms from the previous
quarter, far below the potential growth rate. Taro Saito of NLI
Research Institute said, "European economies are also clearly
slowing down." As a result, Japanese exports to Europe and the
United States did not perform well.

Consumer spending, which has been holding steady, marked negative
growth for the first time in seven quarters, partly in reaction to
the increase in the January-March quarter due to the additional day
of this leap year. However, the fall in workers' income also had a
significant effect. Nominal employee compensation, which is
calculated by multiplying the nominal wage by the number of
employees, fell by 0.2 PERCENT from the previous quarter, the first
decrease in five quarters. In addition to the fall in compensation,
bonus payments in June also fell below last year's level, causing
consumers to withhold spending.

Sluggish growth also forecast for July-September quarter

Asked what they think will happen to growth in real terms in the
July-September quarter, 10 economists came up with forecasts
averaging an annualized 0.7 PERCENT increase over the previous
quarter, with two of them predicting that the economy will contract
for two consecutive quarters. The economists' full-year growth
forecasts averaged 0.7 PERCENT , which is lower than the 1.3 PERCENT
projected by the Cabinet Office in July. This is because the
prevailing view is that consumer confidence is expected to continue
falling in the future and a severe situation will continue with
regard to Japanese exports to industrialized nations, as the outlook
of the US economy remains uncertain.

However, exports to Asia and the Middle East still remain strong.
The IMF predicts that the growth rate of emerging economies will
remain high at 6.9 PERCENT in 2008. Although there remains the risk
of a post-Olympics slowdown in China, Japanese exports to developing
countries are expected to prop up the nation's exports in general,
helping Japan avoid a major downturn in its economic growth rate.

All 10 economists predicted that the Japanese economy will recover
after 2009. Seven of them predicted that the economy will rebound
after the second half of 2009. The government, for all practical
purposes, admitted last week in its monthly economic report for
August that the Japanese economy has entered a recession. At this
stage, the prevailing view was that the economy would "recover in
the first half of 2009."

Seven economists say pump-priming measures "unnecessary"

All 10 economists cited "stability of crude oil prices" and
"recovery of the global economy centering on the United States" as
conditions necessary for Japan's economic recovery. The rise in
crude oil prices squeezes corporate profits and weakens consumers'
purchasing power by raising commodity prices. However, Kiichi
Murashima of Nikko Citigroup Ltd. predicted that oil will remain
around 110 dollars a barrel, with many others holding a similar
view.

Seven of the economists said that the package of economic stimulus

TOKYO 00002259 004 OF 005


measures that the government plans to compile at the end of August
is "unnecessary." The prevailing view among the economists is that
the demand-creating measures strongly requested by the ruling
parties are unlikely to have a dramatic effect. Even those who
replied that the measures are "necessary," are calling for measures
that will lead to structural reform, such as corporate tax cuts and
deregulation. Takahide Kiuchi, senior economist at Nomura Securities
Financial and Economic Research Center, said, "Priority should be
given to measures that will increase Japan's potential growth rate
from a medium to long term perspective."

Seven of the economists predicted the domestic economy will rebound
in the second half of 2009. An easing of crude oil prices and a
global economic recovery led by the U.S. were cited as necessary
conditions. But Kiichi Murashima of Nikko Citigroup Ltd. predicted
oil will remain around 110 dollars a barrel, with many others
holding a similar view.

(4) Numerical conversion of economic openness to be worked out by
end of this fiscal year for comparison with other countries

NIKKEI (Page 2) (Full)
August 15, 2008

The government will introduce an economic openness index system
showing in figures to what extent the Japanese economy is keeping
pace with globalization. It will work out such an index, based on
the track records of the number of foreign students Japan has
accepted and direct foreign investment in Japan. It will also work
out such indexes for the U.S., European countries and Asian
neighbors, based on similar data to allow objective comparison with
other countries.

In order for Japan to continue economic growth in the face of the
declining birthrate and the aging society, it is absolutely
necessary for Japan to have human resources and investment from
abroad. Its aim is, therefore, supporting efforts to open the
Japanese economy, by ferreting out challenges facing Japan, whose
globalization is lagging behind Europe and the U.S.

Such an index will be worked out, based on the number of foreign
visitors to Japan, the situation as to Japanese companies doing
business overseas, and the degree of trade liberalization.

To be precise, the government is considering using such data as how
many foreign students Japan has accepted per a population of 10,000,
the number of foreign tourists to Japan, the comparison of direct
foreign investment in Japan with gross domestic product, and the
proportion of foreign companies to companies listed on stock
exchanges. It is also considering utilizing the share of trade
amounts with EPA (economic partnership agreement) partners in the
entire trade amount.

Japan is way behind the U.S. and Europe in these areas. For
instance, the per capita number of foreign tourists to Japan is
about one-ninth of that of Britain. The proportion of foreign
companies to companies listed on stock exchanges is only
one-twentieth of that of Britain.

Regarding areas that are especially lagging behind, the government
intends to urge concerned government agencies to boost efforts to
open the market, by setting numerical targets. It also plans to

TOKYO 00002259 005 OF 005


confirm whether this measure is producing results, by releasing such
an index on a regular basis.

(5) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Tokyo Shimbun: Akahata:
Japanese gymnast Uchimura takes silver medal in men's all-around

Nikkei:
European, Japanese, U.S. economies in slowdown

Sankei:
China winning more medals than anticipated

(6) EDITORIALS

Asahi:
(1) Summer marking 63rd anniversary of the war's end; Beyond
"dislike for Japan" and "dislike for China"

Mainichi:
(1) Anniversary of the end of World War II: Japan urged to engage in
international cooperation in its own way, emerging from
inward-looking stance

Yomiuri:
(1) We want to make August 15 day for quiet memorial day

Nikkei:
(1) Who will hand down the preciousness of peace to the next
generation?
(2) Implementing agreement of ceasefire indispensable

Sankei:
(1) August 15: We want to make sure ties between Japan and the U.S.

Tokyo Shimbun:
(1) August 15: Thoughts on the day of the anniversary of the end of
World War; Return to humanism

Akahata:
(1) Create era when the resolve to pursue peace holds good

(7) Prime Minister's schedule, Aug. 14

NIKKEI (Page 2) (Full)
August 15, 2008

11:58
Met with METI Minister Nikai and Vice METI Minister Mochizuki at his
official residence.

14:01
Met with Consumer Administration Minister Noda and Cabinet Office
Director General Fujita.

18:25
Met with Finance Minister Yosano.

SCHIEFFER