Identifier
Created
Classification
Origin
08TOKYO2442
2008-09-05 08:26:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

DAILY SUMMARY OF JAPANESE PRESS 09/05/08

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 11 TOKYO 002442 

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 09/05/08

INDEX:

(1) Poll on Fukuda's resignation, political parties, post-Fukuda
premiership (Tokyo Shimbun)

(2) Shock of Fukuda's resignation announcement (Part1): Next prime
minister should dissolve Lower House as soon as possible to end
political stalemate (Nikkei)

(3) Shock from Fukuda resignation (Part 3): Japan-U.S. alliance must
not be allowed to deteriorate (Nikkei)

(4) LDP presidential election: Where will anti-Aso votes go?
Supporters of Ishihara also supporting Koike; Yosano with personnel
network among senior government officials (Yomiuri)

(5) If Obama wins presidency, there will be no need to worry about
"Japan bashing" (Mainichi)

(6) FTC to ask BHP Billiton to submit plan for takeover bid for Rio
Tinto (Asahi)

(7) Prime Minister's schedule, September 4 (Nikkei) 10

ARTICLES:

(1) Poll on Fukuda's resignation, political parties, post-Fukuda
premiership

TOKYO SHIMBUN (Page 2) (Full)
September 4, 2008

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of the
last survey conducted Aug. 1-2. The total percentage of multiple
answer choices is over 100 PERCENT .)

Q: Prime Minister Yasuo Fukuda announced his resignation on Sept.
UNCLAS SECTION 01 OF 11 TOKYO 002442 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 09/05/08 INDEX: (1) Poll on Fukuda's resignation, political parties, post-Fukuda premiership (Tokyo Shimbun) (2) Shock of Fukuda's resignation announcement (Part1): Next prime minister should dissolve Lower House as soon as possible to end political stalemate (Nikkei) (3) Shock from Fukuda resignation (Part 3): Japan-U.S. alliance must not be allowed to deteriorate (Nikkei) (4) LDP presidential election: Where will anti-Aso votes go? Supporters of Ishihara also supporting Koike; Yosano with personnel network among senior government officials (Yomiuri) (5) If Obama wins presidency, there will be no need to worry about "Japan bashing" (Mainichi) (6) FTC to ask BHP Billiton to submit plan for takeover bid for Rio Tinto (Asahi) (7) Prime Minister's schedule, September 4 (Nikkei) 10 ARTICLES: (1) Poll on Fukuda's resignation, political parties, post-Fukuda premiership TOKYO SHIMBUN (Page 2) (Full) September 4, 2008 Questions & Answers (Figures shown in percentage. Parentheses denote the results of the last survey conducted Aug. 1-2. The total percentage of multiple answer choices is over 100 PERCENT .) Q: Prime Minister Yasuo Fukuda announced his resignation on Sept. 1. What do you think about his resignation still in office? He's irresponsible 67.8 Don't think he's irresponsible 28.0 Don't know (D/K) + no answer (N/A) 4.2 Q: What do you think the new cabinet should pursue first? Pick only one. Social security, including pension issues 36.0 Constitutional revision 2.9 Social divide 8.8 Politics and money 9.6 Economic measures, job security 22.6 Tax system 3.6 Education 6.2 Diplomacy, national security 3.1 Administrative, fiscal reforms 5.2 Other answers (O/A) 0.5 D/K+N/A 1.5 Q: What do you want the next prime minister to have? Pick up to two from among those listed below. TOKYO 00002442 002 OF 011 �
0A; Leadership 43.6 Public accountability 44.0 Experience, actual results 11.5 Public sensitivity 26.8 Sincerity, modesty 16.3 Political ethics, cleanness 23.8 O/A 1.3 D/K+N/A 3.0 Q: The Liberal Democratic Party's newly elected president is expected to become the successor to Prime Minister Fukuda. Who do you think is appropriate to be the next prime minister? Pick only one from among those listed below. Taro Aso 35.3 Nobuteru Ishihara 7.1 Yuriko Koike 9.2 Junichiro Koizumi 15.0 Masahiko Koumura 0.5 Sadakazu Tanigaki 2.8 Fukushiro Nukaga 0.4 Yoichi Masuzoe 8.5 Nobutaka Machimura 2.0 Kaoru Yosano 1.6 O/A 2.0 D/K+N/A 15.6 Q: Would you like the present LDP-led coalition government to continue, or would you otherwise like it to be replaced with a DPJ-led coalition government? LDP-led coalition government 43.3 (34.8) DPJ-led coalition government 41.7 (48.2) D/K+N/A 15.0 (17.0) Q: The House of Representatives' current term of office is up until September next year. When would you like the House of Representatives to be dissolved for a general election? Right away 30.2 Within the year 24.0 When the Diet opens its ordinary session early next year 11.9 Around next spring after the budget for next fiscal year clears the Diet at its ordinary session next year 8.8 Upon the current term's expiry in September next year 17.9 D/K+N/A 7.2 Q: Which political party are you going to vote for in the next election for the House of Representatives under the proportional representation system? Liberal Democratic Party (LDP) 38.4 Democratic Party of Japan (DPJ or Minshuto) 34.9 New Komeito (NK) 4.3 Japanese Communist Party (JCP) 2.2 Social Democratic Party (SDP or Shaminto) 2.0 People's New Party (PNP or Kokumin Shinto) 0.5 New Party Nippon (NPN or Shinto Nippon) 0.5 Other political parties 0.3 D/K+N/A 16.9 Q: The government and the ruling parties decided on a package of TOKYO 00002442 003 OF 011 economic stimulus measures totaling 11.7 trillion yen in order to boost the nation's economy and stabilize prices. In addition, the government plans to implement an across-the-board tax break for the income and individual residential taxes in fiscal 2008. Do you appreciate these measures? Yes 48.8 No 37.5 D/K+N/A 13.7 Q: Do you support the Fukuda cabinet? Yes 23.5 (31.5) No 68.7 (48.1) D/K+N/A 7.8 (20.4) Q: Which political party do you support? LDP 36.8 (28.7) DPJ 27.0 (30.2) NK 2.5 (3.4) JCP 1.7 (2.9) SDP 1.9 (1.1) PNP 0.4 (0.5) NPN 0.8 (0.7) Other political parties, groups --- (---) None 26.8 (31.2) D/K+N/A 2.1 (1.3) Polling methodology: The survey was conducted across the nation from the evening of Sept. 2 through Sept. 3 by Kyodo News Service on a computer-aided random digit dialing (RDD) basis. Among randomly generated telephone numbers, those actually for household use with one or more eligible voters totaled 1,460. Answers were obtained from 1,013 persons. (2) Shock of Fukuda's resignation announcement (Part1): Next prime minister should dissolve Lower House as soon as possible to end political stalemate NIKKEI (Page 1) (Slightly abridged) September 3, 2008 By Mutsumi Nishida, editorial writer Another cabinet has been toppled because it was unable to bear the strain of the politically divided Diet. Following former Prime Minister SHINZO Abe, who resigned from his post just one year after taking office, Prime Minister Yasuo Fukuda could not hold sway over his administration for even one year. Everything has come to a standstill since Fukuda failed to come up with a strategy to enact a bill extending the Maritime Self-Defense Force's refueling operation in the Indian Ocean. This triggered his decision to resign as prime minister. In an attempt to put an end to the divided Diet situation, Prime Minister Fukuda, who took office last September, tried to form a grand coalition with the Democratic Party of Japan (DPJ),headed by Ichiro Ozawa. However, this idea hit a roadblock because many lawmakers in the DPJ opposed it. Since then, there has been no doubt that Fukuda has found it difficult leading his government. TOKYO 00002442 004 OF 011 Opportunity for policy debate As the cabinet's approval rate gradually dropped, the Prime Minister could no longer play his sole card, dissolving the Lower House for a snap election. Fukuda, who lacks the ability to appeal directly to the public, was unwilling to risk dissolving the Lower House. The main reason that Fukuda quit his post was probably the New Komeito's estrangement from him. Because the New Komeito, as the Liberal Democratic Party's coalition partner, wanted to exert all its energy in next summer's Tokyo Metropolitan assembly election, it begun to press for dissolution of the Lower House at the end of the year or early next year. Many New Komeito members even thought that it would better if the party went into the election for the Tokyo Metropolitan Assembly without Fukuda being in office. The rift between Fukuda and the New Komeito become increasingly obvious. Following Fukuda's announcement of his intention to resign as prime minister, the LDP decided to announce on Sept. 10 that it will hold a presidential election on the 22nd. Secretary General Taro Aso already has expressed his intention to throw his hat in the ring. The focus now is whether former Defense Minister Yuriko Koike will also run in the election. There is serious discord in the LDP as to whether the Koizumi reform initiative should be maintained or modified. With an eye on the next Lower House election, the LDP presidential race will be a good opportunity for the party to display its policies, including social security and tax and fiscal policy reform, by engaging in active policy debate. The campaign promises of the next party president will become the contents of the LDP's campaign pledges for the Lower House election. With this in mind, Aso should come up with specific policy measures. In order to restore the public's battered confidence in the LDP due to the sudden resignation of two prime ministers two years in a row, the party must have a set of shiny new policies. Ichiro Ozawa, a DPJ presidential candidate, will unveil his policy platform in an extraordinary party convention on Sept. 11. The policy statement will have great significance since it will be reflected in the party's campaign pledges. Unless the DPJ can come up with policies that are feasible, it would soon reach a cul de sac. The party should consider what impact there would be on Japan-U.S. relations if it continues to oppose the MSDF's refueling mission. It should also come up with convincing measures for Japan to make its international contributions. If the party just follows its campaign pledges for last year's Upper House election, concern about its capability of assuming the political helm will not disappear. A power struggle will take place in the next Lower House election. If the DPJ takes over the reins of government, the divided Diet situation will end for while. Even if the LDP-New Komeito coalition government fails to secure two-thirds of the Lower House seats, the government will become more confident because it has received the judgment of people. After the Lower House election, the notion of forming a grand coalition, as well as other moves seeking new arrangements, would emerge again. The terms of the Lower House members will expire next September, but if the next prime minister puts off the election TOKYO 00002442 005 OF 011 until then, the political vacuum will only be prolonged. In an attempt to put an end to the current political turmoil, the next prime minister should not hesitate to dissolve the Lower House. It is time for the will of voters to bring change to politics. (3) Shock from Fukuda resignation (Part 3): Japan-U.S. alliance must not be allowed to deteriorate NIKKEI (Page 1) (Full) September 5, 2008 Prime Minister Yasuo Fukuda's abrupt resignation will unavoidably bring about a huge loss to the nation's diplomatic relations. A matter of most concern is the blow dealt to the Japan-U.S. alliance. Sharp drop in amount of oil supplied to U.S. warships On July 7, the eve of the opening day of the Hokkaido Toyako Summit, there was an undisclosed conversation between Prime Minister Fukuda and President Bush. Fukuda conveyed to Bush that it would be difficult for Japan to dispatch Self-Defense Force (SDF) troops to Afghanistan under the current situation. Bush seemed to have considered such unavoidable. After the summit, however, "Unconvinced U.S. government officials came closer to ask why the dispatch is impossible," according to a government source. In July, U.S. Deputy Assistant Secretary of Defense for Central Asia Bobby Wilkes and other officials rushed to Japan to listen to the circumstances. Not only the Bush administration but even the Democratic Party has placed emphasis on support for Afghanistan, the main battlefield in the U.S.-led war on terrorism. At such a crucial juncture, Prime Minister Fukuda suddenly announced his resignation. If diplomatic matters are made a political issue in the upcoming extraordinary Diet session and if Japan decides to shrink its international contributions, the Japan-U.S. alliance would further deteriorate. There is a dangerous sign. The amount of oil supplied to U.S. naval ships in the SDF's refueling mission in the Indian Ocean has sharply decreased recently. The total volume of oil supplied from February, when the mission was resumed, through July was only 800 kiloliters, just one-sixth of that in the same period a year ago. Japan refueled U.S. ships just twice, one-fifth of that a year ago. A source connected to Japan-U.S. relations explained why the amount decreased so significantly: "Although the U.S. military presented a huge volume of data to Japan last year, Japan continued to question the U.S. over the alleged use of supplied fuel for Iraq. The U.S. must have begun to consider that if it continued to depend largely on Japan's fuel, there might be some trouble or inconvenience at the critical moment." In the extra Diet session, the issue of extending the refueling mission in the Indian Ocean, beside a supplementary budget bill, will also be high on the agenda. This mission is the sole visible cooperation Japan has still offered in the war on terror. The ruling coalition intends to submit a bill extending the relevant law to continue the mission beyond its expiration next January. But the opposition bloc remains opposed to the bill. If the TOKYO 00002442 006 OF 011 Democratic Party of Japan (DPJ) and other opposition parties continue to oppose it, they should present an alternative feasible contribution plan in a proper way. The environment surrounding Japan is so severe that we must not allow the Japan-U.S. alliance to deteriorate further. China and India are gaining influence, and the fissure between the U.S. and Russia is becoming serious. Politics should be responsible for giving a reply to a question about how to utilize the alliance in order for Japan to secure its national interests. Confrontation between U.S., Russia It is particularly important to focus on what effect the confrontation between the U.S. and Russia is likely to have on Japan's economic and security benefits. Russia is intensifying its offensive toward Japan with a hard and a soft approach. A senior Russian Foreign Ministry official tried to shake the Japan-U.S. alliance, saying: "The U.S. and China in cooperation are set to launch a Japan bashing. In such a case, there will be no other means but for Japan and Russia to join hands." Russia has cast amorous glances toward Japan over energy and other cooperation. But a Japanese security official said: "(Russia) is continuing military buildup in the Asian region." Meanwhile, the U.S. and Britain have urged to Japan to join hands with them in dealing with Russia. British Ambassador David Warren called on Prime Minister Fukuda late last month and urged Japan to take a hard-line stance toward Russia. The showdown between the U.S. and Russia has made Japan's position difficult. The political vacuum in Japan would allow North Korea to move the six-party talks and negotiations on the abduction issue in its favor. Tokyo had asked Pyongyang to start reinvestigation of the abduction issue by the end of August. But the North has made no reply. A government source speculated: "North Korea might be surmising that even if it delays the reinvestigation, there will be no problem if the responsibility is shifted onto Japan's political confusion." Japan, which has no natural resources, has so far overcome difficulties by joining forces with super powers since the Meiji Restoration. The Japan-Britain alliance in the Japan-Russia War and the Japan-U.S. alliance in the U.S.-Soviet Union Cold War can be cited as successful cases. In World War II, Japan's attempt to become an imperial power, antagonizing the U.S., Britain, China, and Soviet Union, ended in failure. Being a blind follower of the U.S. is not a rational way to strengthen the Japan-U.S. alliance. But even Germany, France, and Canada, all of which were against the Iraq war, have dispatched their troops to Afghanistan. Will Japan continue the ongoing refueling mission or come up with an alternative plan? In the coming extra Diet session, a "zero reply" on international contributions is unacceptable. (4) LDP presidential election: Where will anti-Aso votes go? Supporters of Ishihara also supporting Koike; Yosano with personnel network among senior government officials YOMIURI (Page 3) (Abridged slightly) TOKYO 00002442 007 OF 011 September 5, 2008 With former Defense Minister Yuriko Koike, State Minister for Economic and Fiscal Policy Kaoru Yosano and former Policy Research Chairman Nobuteru Ishihara declaring their candidacies against Secretary General Taro Aso, the Liberal Democratic Party's (LDP) presidential election is showing signs of turning into a melee. Which candidates will obtain the anti-Aso votes? Who will those who advocate structural reforms support? Aim of Ishihara to make preemptive move Ishihara on the morning of September 4 expressed his intention to run in the race and played up his determination to do his utmost to secure 20 endorsement signatures. He said, "I haven't got many days left. I must make a desperate effort to collect endorsement signatures." At the time, he still thought he would have to clear some barriers before securing 20 endorsement signatures. Even so, he has decided to run, presumably because he aimed at drawing the attention of party members by making a preemptive move that would lead to securing backers. Ishihara believes that he had played a key role during the Koizumi administration as state minister for administrative reform. He endorsed Koizumi when he for the first time faced the challenged of an LDP presidential election in 1995. Looking back on that election, Ishihara said, "Mr. Koizumi had difficulty collecting endorsement signatures in that election. I was involved in that process." Reformist Ishihara's declaration of his candidacy has created a stir among other factions. In particular, Koike seems to have been inspired to join the race. Koike had been envisaging a scenario of announcing her bid for LDP presidency as a champion of the reformists against Aso, who gives priority not to structural reforms but to economic stimulus measures. There is a strong possibility of supporters of Ishihara also supporting Koike. One veteran lawmaker, who backs Koike, said, "It would be better if she draws attention by delaying an announcement of her stance, and then draw in support in one stroke." However, she now has no time to remain idle. She underscored that she was the quintessence of the reformists, saying, "Whether structural reforms can really be promoted and whether they can be surely implemented are being put to the test. That is the key point." Policy debate Yosano, who attaches importance to fiscal discipline, takes a different stance from the other three. His forte is his personnel network among senior government officials. On the 4th, he visited former Prime Minister Nakasone, whom he respects as his mentor, and former head of LDP caucus in the Upper House Mikio Aoki, with whom he has had a long-term relationship. He there conveyed his resolve to run in the presidential race. Aoki has strong influence not only over the Tsushima faction, to which he TOKYO 00002442 008 OF 011 belongs, but also over Upper House members of other factions. Chances are that if Yosano obtains Aoki's support, he would be able to gain support also from veteran and mid-ranking lawmakers. Aso keeps low profile Aso on the afternoon of the 4th continued to write letters to his acquaintances using a writing brush and rolled letter papers in a traditional manner. He has been keeping a low profile out of concern that if he makes a proactive move, while remaining in the post of secretary general, party members would react negatively. However, his camp is already on the move. Twenty-five lawmakers who belong to Taro-Kai, a support group for Aso, the same day assembled at a Tokyo hotel. Taro-kai was formed in 2006, when the general election, in which Aso lost to former Prime Minister Abe, was held. Former Justice Minister Kunio Hatoyama during the meeting raised his voice, saying: "We are fellow soldiers. We have held informal meeting 19 times since two years ago. Fifty of us should rally together." Voting by party members to be held at 46 local chapters to carry weight Local chapters aside from the Ibaraki Chapter will hold voting by party members. Chances are that voting by party members, instead of voting by lawmakers, could determine the outcome of the presidential election as a whole. The presidential election involves 304 votes from Lower House members, 83 votes from Upper House members and 141 votes given to local chapters totaling 528 votes. Voting by party members, which is not necessarily mandatory, is held in order to decide on a candidate their local chapters should vote for. The party views that holding voting by party members will lead to a public appeal that the LDP is an open party. Thirty five local chapters held voting by party members in the previous election. This time, 46 will hold such, apparently reflecting a strong sense of alarm about the abrupt resignation announcement by Prime Minister Fukuda. The voting -- both by lawmakers and local chapters -- will take place on the 22nd. However, voting by party members will be held one after another, once the official announcement to hold the presidential election is made. The party headquarters plans to notify local chapters that they should not reveal the outcome of the voting until the 22nd so that the voting behavior at local chapters will not affect voting by lawmakers. Many local chapters will likely disobey this order. If no one obtains a majority in the first election, a runoff election would be held by lawmakers alone. When there are many candidates, there is a strong possibility of a runoff election taking place. There could be a case of the camps of candidates who took second or lower places aiming at turning the table in a final vote, by joining forces. Once the campaigning moves into full scale, maneuvering will likely become active among various camps with a possible run-off taken into consideration. (5) If Obama wins presidency, there will be no need to worry about TOKYO 00002442 009 OF 011 "Japan bashing" MAINICHI (Page 2) (Excerpts) Evening, September 4, 2008 By Sumire Kunieda In the United States, Democratic and Republican national conventions took place in succession recently in the run-up to the presidential election in November. The U.S. presidential race is now in full swing. How would U.S. policy change if Democratic presidential candidate Barack Obama, 47, wins the presidency? The newspaper asked Sumitomo Shoji Research Institute senior analyst Masahiko Adachi'a for his analytical views about members on the Obama policy advisory team. The Democratic Party brings back memories of "Japan bashing" in the early days of the Clinton administration. Many people may recall the nightmare of the Japan-U.S. trade dispute that resulted from the U.S. trade deficit with Japan. Will Japan bashing flare up again if an Obama administration is launched? Adachi said with a wry smile: "Japan-U.S. relations cooled down during the Clinton administration, and many people are still dwelling on that traumatic experience. But this time around, there is no need to worry." According to Adachi, when Japan bashing occurred in 1994, the U.S. trade deficit with Japan accounted for 40 PERCENT of its total trade deficit. Today, it will be China that will be so targeted by the United States. U.S. Commerce Department statistics showed that the U.S. trade deficit was 60 billion dollars as of April 2008 and that of it, China accounted for one-third. In addition, in the Democratic Party, there is a wing called the "San Francisco Democrats" who attach importance to human rights. There is a possibility of "China bashing" arising as a result of House Speaker Nancy Pelosi and others locking horns with Beijing over Tibet and other issues by joining hands with anti-Chinese Republicans who regard China as an economic and military threat. Will an Obama administration's Asia policy center on Japan or shift weight to China? Adachi has analyzed Obama's foreign policy advisers and finds no concern that they would advocate a China-centered policy. Obama's Japan policy advisory team includes former Vice President Walter Mondale and former House Speaker Thomas Foley, both former ambassadors to Japan; Michael Schiffer, a former fellow at the National Institute for Defense Studies in Japan; and Robert Orr, a former Boeing Japan president who has lived in Japan for some 20 years with his Japanese wife. Adachi also predicted: "Obama's policy team include some pro-Japan individuals who speak fluent Japanese. There will be no decline in communication channels between Japan and the United States." Adachi also noted: "The Democratic Party's economic policy will take a middle-of-the road position. Under an Obama administration, economic policy will head for a social safety net based on the free-trade principle." The Bush administration's foreign policy has been characterized by unilateralism, a tendency to turn a deaf ear to the opinions of other countries. "If Obama takes power, the TOKYO 00002442 010 OF 011 United States would return to a dialogue and cooperation policy course with its allies," Adachi said. (6) FTC to ask BHP Billiton to submit plan for takeover bid for Rio Tinto ASAHI (Page 7) (Full) September 4, 2008 The Fair Trade Commission (FTC) has decided to order mining giant BHP Billiton to submit a plan on its bid to acquire smaller rival Rio Tinto. It is the first time that Japan will call for submission of a plan regarding a takeover bid between foreign entities, based on the Antimonopoly Law. This decision came as BHB Billiton has refused to voluntarily submit its plan. The FTC will soon send a written order to its main office in Melbourne, Australia. BHB Billiton offered a takeover bid to Rio Tinto in February. If the two mining giants are merged, the two companies will hold a 40 PERCENT share of the global iron ore market and supply about 60 PERCENT of Japan's iron ore imports. If resource prices surge as a result of their control of the global market, the prices of our daily products may also go up. Based on the judgment that a merger between the two giants could undermine competition, the FTC has decided to issue an order. If the antimonopoly watchdog judges the takeover bid will unavoidably have some negative effect on the Japanese market, the FTC will be allowed to hand out a corrective action order to BHP Billiton. BHP Billiton has already submitted the takeover plan to the antimonopoly authorities of the European Union (EU) and Australia. But the Japanese law does not require the company to submit a plan in advance. The FTC asked BHP to present a paper similar to that given to the EU antimonopoly authorities on a voluntary basis, but BHP reportedly has yet to respond. The EU authorities will decide this December or next January on whether to approve the takeover plan. The Japanese watchdog is also expected to come up with a conclusion around that time. The FTC has started screening the takeover plan. In July it set up an exclusive team of eight members, including a lawyer. It is quite unusual for the FTC to establish an exclusive team, except for a group formed in dealing with the merger between Yahata Steel Corp. and Fuji Steel Corp. in 1970. Japan's leading steel corporations agreed on a plan to raise the prices of iron ore procured from BHP Billiton and Rio Tinto by about 80 PERCENT in fiscal 2008 over the previous fiscal year. Such Japanese companies are now alarmed at the possible business integration between BHP Billiton and Rio Tinto. Five companies, including Nippon Steel Corp. and JFE Steel Corp., submitted an opinion paper expressing their concern to the FTC on Sept. 1. (7) Prime Minister's schedule, September 4 NIKKEI (Page 2) (Full) September 5, 2008 10:01 Experts meeting to discuss the proper way of managing government TOKYO 00002442 011 OF 011 documents at the Cabinet Office. 10:30 Met with Deputy Chief Cabinet Secretary Futahashi at the Kantei. 11:00 Met with Defense Ministry Defense Policy Bureau Director General Takamizawa, Defense Intelligence Headquarters chief Hokazono and Cabinet Intelligence Director Mitani. Mitani remained. 11:50 Met with State Minister for Financial and Administrative Policy Motegi and Tachibana, executive director of the National Government Employee System Reform Promotion Headquarters. 12:45 Chair Ozaki of the experts' council to discuss the proper way of managing government documents, and National Archives of Japan Director Kikuchi. 14:27 Met with Internal Affairs Minister Masuda and Miyawaki, executive director of the decentralization reform promotion committee. Masuda remained. 15:40 Met with Chief Justice of the Supreme Court Shimada. 16:10 Met with former General Council Chairman Horiuchi, followed by Vice Economy, Trade and Industry Minister Mochizuki and Industrial Science and Technology Policy and Environment Bureau Director General Suzuki. 17:47 Arrived at the official residence. 18:58 Met with Nippon Kedanren Chairman Mitarai, Hiroshi Okuda, an advisor to Toyota Motors and Takashi Imai, honorary chairman of Nippon Steel Corporation at Kensington Terrace at Hotel Okura. 21:19 Arrived at the official residence. ZUMWALT

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