JAPANESE MORNING PRESS HIGHLIGHTS 08/28/08

UNCLAS SECTION 01 OF 10 TOKYO 002357

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08/28/08

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

War on terror:
4) Killing of Japanese NGO aid worker in Afghanistan: "Feelings
toward Japan are worsening" (Tokyo Shimbun)
5) Killing of aid worker a blow to Japanese NGOs in Afghanistan:
Nine organizations may pull out (Nikkei)
6) Afghan aid facing crisis: Government pressed to review human
contributions (Nikkei)
7) With worsening security environment in Afghanistan, hurdle may
now be too high for dispatching SDF for reconstruction assistance
(Sankei)
8) DPJ's Seiji Maehara: Afghan assistance is extremely important
(Mainichi)
9) Government still stressing contributing to war on terror by
one-year extension of MSDF's Indian Ocean refueling mission (Tokyo
Shimbun)
10) Opposition camp in the Diet refusing to even discuss with the
ruling parties the bill to extend the Indian Ocean refueling mission
(Nikkei)
11) LDP Diet Affairs Chairman Oshima hints at possibility of Japan
contributing to war on terror in Afghanistan by other means than
refueling mission (Nikkei)

Defense and security issues:
12) With ban on defensive use of space lifted, government to create
a space technology planning office to implement the new policy
(Yomiuri)
13) Six seamen on U.S.S. George Washington punished in connection
with May's fire on the carrier (Asahi)

14) Secret agreement among Japan, U.S., Europe to protect the dollar
during the March crisis (Nikkei)

15) Japan, South Korea, ASEAN delegates to meet today to discuss EPA
and other trade agenda items (Nikkei)

16) Coordination of views between government, ruling parties about
comprehensive economic stimulus package reach final stage (Nikkei)


Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei, and Tokyo Shimbun:
Body of kidnapped aid worker Ito found; May have been killed by
Taliban

Nikkei:
Japan, Europe, U.S. secretly agreed to defend plunging dollar in
March, prepared joint intervention

2) EDITORIALS

Asahi:
(1) Aid worker Ito's vision must be realized
(2) Economic stimulus package: Pork-barrel spending will not result

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in peace of mind

Mainichi:
(1) Aid worker Ito's goodwill lost to violence
(2) North Korean statement: Country must keep marching toward
denuclearization

Yomiuri:
(1) Pyongyang suspends disablement work
(2) Tochigi tragedy resulted from ignored calls to police and fire
stations

Nikkei:
(1) U.S. housing market still plummeting
(2) North Korea's intimidation tactics will not work

Sankei:
(1) Russia no longer qualifies to be G-8 member
(2) U.S. must not budge from strict North Korea nuclear verification
regime

Tokyo Shimbun:
(1) Killing of Ito a blow to Japan's international contributions
(2) EU diplomacy to be tested in new Cold War

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 27

NIKKEI (Page 2) (Full)
August 28, 2008

09:29
Met State Minister for Consumer Administration Noda at the Kantei.
Followed by former Special Assistance Yamatani.

12:12
Met Deputy Chief Cabinet Secretary Futahashi.

13:04
Met Finance Minister Ibuki, METI Minister Nikai, Economic and Fiscal
Policy Minister Yosano, and Chief Cabinet Secretary Machimura.

14:30
Met Cabinet Intelligence Director Mitani.

15:08
Met British Ambassador Warren.

16:00
Met Chairman Miyaji of the ruling camp's parliamentary group
"Council on the Iwo Jima Issue" and others. Later met with
Indonesian Foreign Minister Hassan.

16:40
Met Vice Cabinet Minister Miyazawa, Nikai, and Assistant Deputy
Chief Cabinet Secretary Saka. Miyazawa stayed behind.

17:33
Issued an official appointment to Special Assistant Tokai, with
Machimura, deputy chief cabinet secretaries Shiotani, Iwaki, and
Futahashi present. Tokai stayed behind.

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18:33
Returned to his official residence.

4) NGO head: Worsening feeling toward Japan possibly behind slaying
of Japanese NGO worker

TOKYO SHIMBUN (Page 1) (Excerpts)
August 28, 2008

(Furuta, Bangkok)

Following the discovery of the body of kidnapped aid worker Kazuya
Ito outside Jalalabad, eastern Afghanistan, Tetsu Nakamura, a doctor
who heads activities for the nongovernmental organization
Peshawar-kai, said last evening: "The security situation and
feelings toward Japan in Afghanistan have been growing worse. We had
an inaccurate understanding of it. This kind of incident was
unthinkable before." The Peshawar-kai has conducted activities in
Pakistan and Afghanistan for more than 20 years.

Nakamura replied to questions by reporters before leaving an
international airport in Bangkok, the capital of Thailand, to visit
Jalalabad. Nakamura once said: "We have continued our activities,
encouraged by the good feeling of Afghan people." Nakamura looked
shocked, because worsening feeling toward Japan is considered to be
behind the incident. Saying: "There might be some connection between
the slaying and the moves by the Self-Defense Force," Nakamura
pointed to Japan's refueling mission in the Indian Ocean and the
issue of a dispatch of the Ground Self-Defense Force to
Afghanistan.

The NGO returned about half of the 20 Japanese in Jalalabad to Japan
this April due to the worsening security situation there. The group
is planning to send the remaining Japanese members back to Japan by
the end of the year. Ito was among them.

Nakamura indicated that the organization would return all Japanese
staff as soon as by the end of this month, saying: "We must not
allow more people to become victims."

Ito was giving agricultural advice to local residents. He was
worrying about drought becoming more serious every year. Nakamura
expressed his determination to continue the aid with local staff,
remarking: "Although we return the Japanese staff for the sake of
safety, we will abide by his hopes and will never stop the project."


5) Killing of Kazuya Ito a shock to Japanese NGOs; 9 NGOs now
operating in Afghanistan may return to Japan

NIKKEI (Page 3) (Full)
August 28, 2008

According to the Foreign Ministry, nine Japanese non-governmental
organizations, including Peshawar-kai (headquartered in Fukuoka
City),have been operating in Afghanistan. Following the discovery
of the body of kidnapped aid worker Kazuya Ito yesterday, Japanese
NGOs are now starting to evacuate their aid workers to other
countries. The impact of the incident unavoidably will affect their
future operations.


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Peshawar-kai dispatched 10 aid workers, including Kazuya Ito, to
Afghanistan. The group's director, Manji Fukumoto, told the press
yesterday: "After consulting with Tetsu Nishimura, local
representative of the aid workers, there is a possibility that some
our members may return home." He stressed that the group intends to
continue its activities in Afghanistan.

The Association for Aid Relief, Japan (headquartered in Tokyo),
which is involved with de-mining efforts from its base in Kabul, the
capital of Afghanistan, immediately evacuated its two aid workers to
India and Pakistan. Chief of Secretariat Yoshiaki Horie said: "We
are deeply shocked, all the more because we have heard that
Peshawar-kai has had good relations with the local population, since
it has carried out aid activities for a long time."

The Japan International Cooperation Agency (JICA),which has
dispatched the largest number of aid workers, 39, of all Japanese
organizations in Afghanistan, announced that it would decide on
responses after collecting information from local authorities and
the Japanese embassy. According to JICA, two of its members who have
provided agricultural support for local residents in Jalalabad are
now standing by at home.

6) NGO worker's body found: Government may review personnel aid to
Afghanistan

NIKKEI (Page 3) (Excerpts)
August 28, 2008

The slaying of Kazuya Ito, a member of the nongovernmental
organization Peshawar-kai, may press the Japanese government to
review its future assistance in reconstructing Afghanistan. The
government had envisioned that it would offer "visible aid" by
Japanese aid groups, in addition to the ongoing refueling operation
in the Indian Ocean, as part of support for the U.S.-led war on
terror. The government is likely to be pressed to review this
scenario.

Learning of Ito's death, Prime Minister Yasuo Fukuda criticized the
crime last night, issuing this statement: "I feel resentment at the
slaying of Mr. Ito, who had high aspirations and was working for the
local people and with the local people." He then said: "I pray for
the repose of his soul and offer my condolences to his family."

Before Ito's death was confirmed, Fukuda told reporters: "It is very
regrettable that (Mr. Ito) was involved in an incident. But we will
continue to make international contributions," indicating that Japan
would continue to be involved in Afghan reconstruction.

Fukuda, though, said: "There must be other ways" of assistance. In a
press conference yesterday morning, Chief Cabinet Secretary Nobutaka
Machimura also suggested the possibility of reconsidering support
activities in Afghanistan by members of the Japan International
cooperation Agency (JICA) and private organizations, saying: "We
must promptly discuss with persons concerned whether the ongoing
assistance should be continued or should be scaled down."

7) High barrier to SDF dispatch

SANKEI (Page 2) (Abridged)
August 28, 2008


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Kazuya Ito, a 31-year-old Japanese volunteer from a nongovernmental
organization, has been found dead in the eastern part of
Afghanistan. This incident clearly shows the difficulty of assisting
Afghanistan, where the security situation is worsening. "Japan
remains committed to assisting with Afghanistan's reconstruction,
maintaining and strengthening public security in that country, and
contributing to the war on terror." With this, Foreign Ministry
Press Secretary Kazuo Kodama stressed the government's Afghan aid
stance. However, it is now becoming uncertain whether the Maritime
Self-Defense Force's refueling mission in the Indian Ocean will be
continued. As it stands, it seems difficult for the government to
reach a conclusion on what kind of assistance is possible and
effective.

"We will look into what is behind the incident and what caused the
incident," Kodama told a press conference yesterday. "Based on our
findings," he added, "we will work out a future course of action
(for Afghan aid)." This means that the government cannot take
countermeasures soon, because the group that killed Kodama has yet
to state its demands or purpose at this point.

The MSDF's current refueling mission in the Indian Ocean, conducted
under the Antiterrorism Special Measures Law, is set to terminate in
January next year. However, the opposition parties, which hold a
majority of the seats in the House of Councillors, are opposed to
continuing the MSDF's refueling activities there. The ruling
coalition of the Liberal Democratic Party and the New Komeito will
therefore need to take a second vote in the House of Representatives
to override the upper chamber's decision in order for Japan to
continue the MSDF's refueling activities. Yet the New Komeito is
strongly opposed to taking an override vote, so the MSDF's refueling
mission cannot be expected to continue.

However, an LDP executive noted, "Japan, which depends on oil from
the Middle East, is the largest beneficiary of the war on terror." A
senior Foreign Ministry official also said, "If Japan alone pulls
out, it means that Japan caved in to terrorism."

In June, the government sent a fact-finding survey team to
Afghanistan in order to explore the feasibility of engaging the SDF
in transportation activities in Afghanistan. This was also forgone
due to the New Komeito's opposition. However, one government
official anticipated that it could come up as a realistic option if
the MSDF's refueling mission in the Indian Ocean is called off.
However, it may safely be said that the hurdle is higher now as the
incident this time is drawing public attention to the local security
situation, which is going from bad to worse.

8) DPJ's Maehara: Support for Afghanistan extremely important

MAINICHI (Page 3) (Full)
August 28, 2008

Democratic Party of Japan Vice President Seiji Maehara delivered a
speech in Tokyo yesterday in which he said: "In view of national
interests, support for Afghanistan is extremely important." He also
indicated that the new Antiterrorism Special Measures Law
authorizing the refueling mission in the Indian Ocean must not be
extended and that the Air Self-Defense Force, now conducting
activities in Iraq, should engage in airlift activities in
Afghanistan instead.


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9) Placing high priority on war on terror, government to submit bill
extending Indian Ocean refueling mission by one year

TOKYO SHIMBUN (Page 2) (Full)
August 28, 2008

The government decided yesterday to submit to the next extraordinary
Diet session to be convened on Sept. 12 a bill to extend the new
Antiterrorism Special Measures Law (refueling law),scheduled to
expire in January, by one year so that the Maritime Self-Defense
Force will be able to continue its refueling operation in the Indian
Ocean.

Prime Minister Yasuo Fukuda, in consideration of the fact that many
countries place high priority on the war on terror in and around
Afghanistan, has concluded that the continuation of the refueling
operation since 2001 is the most effective and safest way for Japan
to contribute to the international community.

Based on the government's policy course, the ruling coalition
informed the opposition bloc on Aug. 27 of its plan to submit a bill
amending the law to the Diet. The government and ruling parties
intend to begin deliberations on the bill in early or mid-October
after taking care of a fiscal 2008 supplementary budget that
includes measures against soaring crude oil and other commodity
prices.

The opposition bloc is against the anti-terror bill. Chances are
high that the opposition bloc, which holds a majority in the Upper
House, will protract deliberations with the aim of blocking the
Lower House readopting the legislation.

With such an eventuality in mind, the government envisages extending
the session until Nov. 20 to allow the Lower House to readopt the
legislation 60 days after the legislation cleared the lower chamber
in accordance with a constitutional provision.

The New Komeito is reluctant to use the overriding-vote approach for
fear of its negative impact on the next general election.

Some LDP members share the New Komeito's view. It is unclear whether
the ruling parties can unite on extending the session that would
ensure the legislation's passage.

10) Extra Diet session: LDP, New Komeito seek consultations with
opposition camp, which refuses to reply on the Indian Ocean
refueling mission

NIKKEI (Page 2) (Full)
August 28, 2008

Liberal Democratic Party (LDP) Diet Affairs Committee Chairman
Tadamori Oshima and New Komeito Diet Affairs Committee Chairman
Yoshio Urushibara met yesterday respectively with their counterparts
of the four opposition parties in succession to discuss the upcoming
extraordinary Diet session, which will be convened on Sept. 12.
Although Oshima and Urushibara called for consultations between the
ruling and opposition camps on a bill extending Japan's refueling
mission in the Indian Ocean, as well as on a package of economic
stimulus measures, the opposition side refused to reply. In the main
opposition Democratic Party of Japan (DPJ),a view is emerging
calling for intensive deliberations on the issue of Agriculture,

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Forestry and Fisheries Minister Seiichi Ota's office expenditures. A
tug-of-war has already started between the ruling and opposition
camps.

Oshima and Urushibara cited as key Diet issues: 1) a package of
economic stimulus measures and supplementary budget, 2) extending
the refueling law, 3) establishing a consumer affairs agency, and 3)
enacting bills carried over from the previous Diet session. They
said they wanted to deliberate on these issues with the opposition
side in a serious manner. With an eye on each party's representative
interpellations in both chambers of the Diet for Sept. 16-17, they
told their opposition counterparts that the ruling camp planned to
carry them out as early as possible. The opposition side, however,
failed to give any responses.

Later in the day, DPJ Diet Affairs Committee Chairman Kenji Yamaoka
and People's New Party Diet Affairs Committee Chairman Masaaki
Itokawa agreed to call for resignation of Agriculture Minister Ota.
Regarding the timetable for the each party's representative
interpellations, Yamaoka said that the session should be held after
Sept. 21, the day for the DPJ presidential election, but Itokawa
insisted that the ruling camp's idea be accepted in order to
increase opportunities to pursue the government and ruling camp.
They failed to find common ground. The four opposition parties will
hold a meeting on Sept. 29 of their Diet affairs committee chiefs to
coordinate strategy for the extra Diet session.

11) LDP's Oshima hints of options other than simple extension of
refueling operation

NIKKEI (Page 2) (Full)
September 28, 2008

When asked by reporters about a bill extending Japan's refueling
operation in the Indian Ocean, one of the key agenda items at the
upcoming extraordinary Diet session, Liberal Democratic Party (LDP)
Diet Affairs Committee Chairman Tadamori Oshima said yesterday: "The
ruling parties will discuss it from a variety of different angles.
If we reach an agreement, there would be (no simple extension)." He
indicated in his remarks that there may be an option other than a
simple extension, which the government is now preparing to enact,
based on conditions to be agreed between the LDP and its coalition
partner New Komeito.

12) Space use eyed for defense

YOMIURI (Page 2) (Abridged)
August 28, 2008

The Space Law, which lifts Japan's self-imposed ban on its use of
space for defense and incorporates industrial development and other
purposes, came into effect yesterday. The Defense Ministry has
decided to set up a space technology planning office at the
Technical Research and Development Institute. The ministry yesterday
reported it to the ruling Liberal Democratic Party at a joint
meeting of its defense and relevant divisions in order to study
technologies usable in space for defense.

The now-enforced law stipulates that the government will set up a
space development strategy headquarters, which is to be headed by
the prime minister, and will formulate a basic plan for space
development and use.

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The government has so far limited Japan's use of space to
nonmilitary purposes in conformity with a Diet resolution. The law
redefines Japan's space use as being based on the United Nations
Outer Space Treaty's nonaggressive principle and the Constitution's
pacifism. This redefinition will now make it possible for Japan to
launch early warning satellites designed to monitor missile launches
at all times. In addition, Japan can also launch high-performance
reconnaissance satellites and communication satellites.

In July, the Defense Ministry set up a space and ocean policy
office. In addition, the Defense Ministry is also planning to create
an in-house committee, headed by its senior vice minister, to
explore space utilization. Meanwhile, the ministry will work out a
new midterm defense buildup program next year. For this new defense
program, the ministry will work out a space utilization plan in
concrete terms. Moreover, it will also earmark in its budgetary
estimate for fiscal 2009 costs for research on technologies
applicable to the defense area.

The Self-Defense Forces, according to a senior Defense Ministry
official, has so far gone no further than to use space "mainly as a
user of commercial satellites," excluding space technologies related
to missile defense and intelligence-gathering satellites. It
therefore took more than a year to lay down a network of encoded
communications for operational intelligence when the Ground
Self-Defense Force was sent to Iraq, according to ministry
officials.

Meanwhile, the LDP envisions Japan's defense and space utilization,
aiming to introduce early warning satellites, reconnaissance
satellites, and communication satellite systems by 2015.

13) Six U.S. carrier members disciplined for fire

ASAHI (Page 38) (Full)
August 28, 2008

In connection with the fire aboard the nuclear aircraft carrier USS
George Washington in May, six crewmembers have been disciplined for
safety violations and professional negligence, according to informed
sources yesterday. The carrier is slated to be deployed at the U.S.
Yokosuka Navy Base in Yokosuka, Kanagawa Prefecture, in late
September. According to the U.S. Navy, a cigarette ignited 90
gallons (about 340 liters) of oil for air conditioners that was on a
site different from the designated storage site.

14) Japan, U.S., Europe secretly agreed to defend falling dollar
during March financial crisis: Prepared concerted intervention

NIKKEI (Top Play) (Excerpts)
August 28, 2008

The Nihon Keizai Shimbun has discovered that with the dollar
plunging due to the financial crisis in the U.S. triggered by the
subprime mortgage debacle, monetary authorities of the U.S. Europe
and Japan secretly agreed to defend the dollar through concerted
currency intervention to buy dollars. Their aim was to prevent the
plunging value of the dollar from creating havoc in the global
economy. They also prepared an emergency joint statement aimed at
stabilizing the exchange market. U.S. President Bush was cautious
about currency intervention, but he apparently felt he had no choice

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but to change his policy in the face of a serious trend of investors
moving away from the dollar. It is almost unprecedented for the U.S.
to take the lead in a move to defend the dollar. The dollar crisis
is still lingering due to financial troubles for housing companies
in the U.S. Chances are that currency officials of those countries
might search for cooperation again.

Sense of crisis concerning key currency

According to several international monetary sources, currency
officials of those countries started boiling down measures to defend
the dollar in mid-March, when the financial troubles at U.S.
investment bank Bear Stearns Cos. surfaced, triggering renewed
concerns about the financial system. The dollar and stocks had
continued to plunge. In response to the wishes of the U.S., which
was increasingly alarmed about the situation, currency officials of
the U.S., Japan and Europe held telephone talks on the weekend of
March 15-16. They coordinated views on ways for concerted currency
intervention.

Gist of agreement among Japan, U.S. and Europe

? In the event of a decision being reached that there is a strong
fear of the dollar taking a nosedive, concerted intervention should
be carried out.
? Consider issuing an emergency statement through the Group of Seven
industrialized nations.
? Japan supplies yen funds to the U.S. for yen-selling and
dollar-buying.

15) Japan, China, South Korea and ASEAN to confer on EPA: Economic
ministerial today

NIKKEI (Page 5) (Full)
August 28, 2008

Japan, China, South Korea and the Association of Southeast Asian
Nations (ASEAN) will hold an economic ministerial in Singapore
today, August 28. Participants will discuss an economic partnership
agreement (EPA) covering East Asia and measures to address the steep
rise in crude oil and food prices. Economy, Trade and Industry
Minister Toshihiro Nikai, who will represent Japan, is expected to
propose holding a symposium in Tokyo in December to discuss the
impact of the surging crude oil and food prices on East Asia.

Concerning the widespread development of the Mekong region, which
straddles Thailand and Vietnam and which Japan characterizes as a
hub in the broad-based development of East Asia, Nikai will announce
a policy of holding an international conference under the auspices
of the Economic Research Institute for ASEAN and East Asia (ERIA),
an international think-tank, in Phnom Penh in October.

Automobile plants are concentrated in Bangkok, Thailand. Many
Japanese electronic manufacturers are operating in Ho Chi Minh City,
Vietnam. However, the road network linking the two cities is poor.
The Japanese government believes that the consolidation of a
distribution network and a power-supply system will greatly spur
trade and investment in the region.

Nikai will stress the need to resume the multilateral trade
liberalization talks (Doha Round) under the World Trade Organization
(WTO). He will call on participating countries to aim at reaching a

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consensus on rules for liberalization of trade in the mined and
manufactured, and agricultural areas before year's end.

The meeting will be held under three frameworks -- Japan and ASEAN,
ASEAN plus 3 (Japan, China and South Korea) and ASEAN plus 6 (Japan,
China, South Korea, India, Australia and New Zealand).

16) Coordination of views between government, ruling parties about
comprehensive economic stimulus package reach final stage: Battle
over fixed-rate tax break; Gap between LDP, New Komeito remains
wide

NIKKEI (Page 2) (Excerpts)
August 28, 2008

The government and the ruling parties on August 27 continued to
coordinate views on a comprehensive economic stimulus package to be
readied by end of the month. The New Komeito pressed for the
inclusion of a fixed-rate tax cut for low and middle income earners.
However, the government and the Liberal Democratic Party (LDP) were
cautious about the proposal. The gulf remains wide between the two
parties. Maneuvering between the two sides is likely continue until
the package is formally adopted on the evening of the 29th.

The LDP and the New Komeito on the afternoon of the 27th held a
meeting of policy chiefs in the Diet to discuss the specifics of the
package. According to one participant, State Minister for Economic
and Fiscal Policy Kaoru Yosano revealed a plan to indicate the scale
of items contained in the package and the amount of real spending -
direct spending from the budget. He did not rule out the possibility
of issuing deficit-covering government bonds.

The New Komeito repeatedly called for the inclusion of a fixed-rate
tax break, noting that the package must have a perspective of
relieving the burdens of middle and low income earners, who are
facing difficulties due to soaring prices. The LDP opposed the
proposal, noting that the matter should be discussed in the year-end
annual tax code revision. However, the New Komeito rebutted this
counterproposal, saying that it was too late. The meeting, which
lasted nearly two hours, ended without reaching a conclusion.

The New Komeito is taking an aggressive approach, because it is
aiming for dissolution of the Lower House and a snap election around
the end of the year or beginning of the next. Commenting on a
fixed-rate tax break, Policy Research Council Chairman Natsuo
Yamaguchi flatly said, "We will tackle this issue with serious
resolve." Other senior officials have also took a bullish stance
with one noting: "If we fail to realize a fixed-rate tax break, our
party will have difficulty in the next Lower House election. We
should pursue talks with the LDP, even hinting at the possibility of
our pulling out of the coalition."

ZUMWALT