DAILY SUMMARY OF JAPANESE PRESS 05/11/09

UNCLAS SECTION 01 OF 08 TOKYO 001069

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E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/11/09

INDEX:

(1) Ozawa intends to resign as DPJ president; Press conference to
start at 5 o'clock this evening (Yomiuri)

(2) Ozawa decides to resign as DPJ president (Yomiuri)

(3) Interview with Russian Prime Minister Putin - The economy is top
priority in relations with Japan; Hopes pinned on construction of
auto-assembly plants in the Far East (Nikkei)

(4) Japan, South Korea to pave way for resuming EPA talks by
upgrading consultations to deputy director general-level (Sankei)

(5) Putin to arrive in Japan tomorrow; Opportunity slim for progress
of territorial issue; Government wants to find lead to bridge gap
with Russia over "creative approach" (Nikkei)

(6) Poll on Constitution (Asahi)

(7) Poll: 54 PERCENT feel their financial situations have declined
(Yomiuri)

(8) Japanese companies raising hopes for taking part in development
of Iraqi oil fields with 115 billion barrels of reserves (Yomiuri)

ARTICLES:

(1) Ozawa intends to resign as DPJ president; Press conference to
start at 5 o'clock this evening

YOMIURI ONLINE

14:12, May 11, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa decided
earlier today to step down from the post and conveyed his decision
to some party executives. Even after his first state-funded
secretary was indicted on charges of violating the Political Funds
Control Law in connection with illegal donations from Nishimatsu
Construction Co., Ozawa has announced his intention to stay on. But
calls for his resignation have been growing within the party. Ozawa
is expected to hold a news conference at 5 o'clock this evening to
formally announce his intention to resign as DPJ president.
(2) Ozawa decides to resign as DPJ president

YOMIURI ONLINE (Excerpts)
15:18, May 11, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa decided
earlier today to step down from the post to take responsibility for
a violation of the Political Funds Control Law over his political
funds management body, Rikuzankai.

Ozawa will hold a press conference this evening. Such persons as
Secretary General Yukio Hatoyama and Vice President Katsuya Okada
are being mentioned as his successor.

In the party, there were views tolerant of Ozawa continuing to
service as party president. But in view of strong public criticism,
Ozawa is believed to have concluded that his resignation would be
inevitable in order to minimize the scandal's negative impact on the

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next House of Representatives election. The DPJ is expected to
immediately select his successor. Ozawa's resignation will be a
serious blow to the party that is seeking to take over the reins of
government.

Ozawa in the past has insisted that he saw no illegality in
political donations from the dummy political organizations of
Nishimatsu Construction Co., a second-tier general contractor
headquartered in Minato Ward, Tokyo, saying that he did not have the
perception that the donations came from Nishimatsu.

There were growing calls within the DPJ for an early resignation of
Ozawa as party head in order to bring the scandal to a close.

In the DPJ, there are those calling for producing a unified view
through talks and those who think an election should be held by some
candidates.

Some are eager to push Okada, with one saying, "Although he lacks
glitz, he is a policy specialist with a sense of stability and has a
clean image, as well." At the same time, there is a move to rally
around Hatoyama who has supported Ozawa as secretary general.

(3) Interview with Russian Prime Minister Putin - The economy is top
priority in relations with Japan; Hopes pinned on construction of
auto-assembly plants in the Far East

NIKKEI (Top play) (Excerpts)
May 10, 2009

Hikaru Sakai, Moscow

Russian Prime Minister Vladimir Putin gave an interview to Nikkei,
Kyodo News Service, and NHK ahead of his visit to Japan that will
start on May 11. In the interview, the prime minister expressed hope
that Japanese companies would build car-assembly plants in the Far
East, indicating that he would present the Japanese side with a list
of economic cooperation projects. Putin also indicated Russia's
readiness to hold talks on the issue of the long-standing
territorial dispute over four Russian-held islands off Hokkaido, but
he stopped short of referring to taking a "creative and
unconventional approach," a matter agreed upon in a summit in
February between Prime Minister Taro Aso and Russian President
Dmitry Medvedev. Putin demonstrated his determination to handle the
territorial issue cautiously during his upcoming visit to Japan,
while prioritizing economic relations.

Putin made it clear that, during his stay in Japan, a number of
intergovernmental pacts will be signed and agreements at the private
level are also expected to be inked. He also presented the outlook
that the two countries will be able to sign a bilateral nuclear
agreement now in the final phase of coordination, to promote the use
of nuclear power, including nuclear power plants, in the civilian
sector.

The Russian prime minister also said that his country would present
Japan, via its Foreign Ministry, with a list of economic cooperation
projects that cover such areas as energy, lumber, space, machinery,
communications, chemistry, and steel. He defined Japan as an
important partner for developing exchanges based on advanced
technologies.


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In particular, Putin highly assessed Nissan Motor Co.'s plan to open
a plant in St. Petersburg in June despite the financial crisis,
following the example of Toyota Motor Corp. He expressed hope,
saying: "A Russian corporation plans to build an auto-assembly plant
in the Far East. We will support the construction of similar plants
by Japanese firms." Although the prime minister did not refer to the
exact number of projects, sources say that there are some 200
projects on the list.

Regarding the territorial issue, he simply said that the development
of bilateral relations on all fronts was prerequisite, playing up
the stance of prioritizing results in economic cooperation through
his Japan visit starting May 11. He did not answer a question about
what kind of "creative approach" Russia would specifically take. The
prime minister is unlikely to make any concrete proposals on the
matter.

An outline of views expressed by Prime Minister Putin

Q Russia is prepared to settle the territorial dispute. To do so,
the development of bilateral relations is essential on all fronts.
Q It is premature to respond to an argument to return 3.5 of the
four Northern islands to Japan.
Q During his stay in Japan, the prime minister will pay maximum
attention to the development of economic and trade relations.
Q Intergovernmental agreements, including a nuclear agreement, will
be signed.
Q A list of projects calling for investment from Japan will be
presented.
Q The new nuclear arms reduction treaty to be concluded with the
United States will be linked with the missile defense (MD) program.

(4) Japan, South Korea to pave way for resuming EPA talks by
upgrading consultations to deputy director general-level

NIKKEI (Page 3) (Full)
May 10, 2009

The governments of Japan and South Korea have decided to hold
consultations of deputy director general-level officials soon in
order to resume negotiations to conclude an economic partnership
agreement (EPA). These negotiations have been suspended since
November 2004. In order to prepare an environment for the
consultations, the two governments will upgrade the division
director-level talks that were held twice last year to deputy
director general-level ones. However, due to the global economic
slowdown, many South Korean business leaders remain cautious about
concluding an EPA with Japan. Therefore, it is uncertain whether
Tokyo and Seoul will be able to conclude an EPA.

The consultations of the deputy director general-level officials
will be held before the end of March by an Asian and Oceanian
Affairs Bureau deputy director general of Japan's Ministry of
Foreign Affairs and deputy director general of the FTA Policy Bureau
of South Korea's Foreign Affairs and Trade Ministry. The two
governments plan to hold such talks several times within the year.
The Japanese government considers deputy director general-level
consultations to be the final step toward full-scale negotiations,
according to a senior Foreign Ministry official.

There is strong concern in South Korea that if it concludes an EPA
with Japan, the inflow of Japanese products to its markets will be

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accelerated. South Korea has a chronic trade deficit with Japan.
Tokyo has sought Seoul's understanding through industrial
cooperation by holding forums for CEOs of small- and medium-size
companies.

It is predicted that whether Japan increases its investment in South
Korea will become a key point in the deputy director general-level
consultations. How the Japanese government responds to the
liberalization of its agricultural market that the South Korean
government has called for will become a major issue.

The Japanese and South Korean governments agreed in a summit meeting
in October 2003 to wrap up negotiations, including the start of
consultations on a free trade agreement (FTA) within 2003, before
the end of 2005. The two governments have held such negotiations six
times since December 2003. However, the negotiations were suspended
when the South Korean government objected because it felt Tokyo was
negative about opening up its agricultural market.

After that, the leaders of the two countries agreed in their meeting
in February 2008 on a policy of resuming the negotiations. A meeting
of division director-level officials was held June 2008. When Prime
Minister Taro Aso visited Seoul in January this year, it was agreed
that the consultations should be speeded up.

(5) Putin to arrive in Japan tomorrow; Opportunity slim for progress
of territorial issue; Government wants to find lead to bridge gap
with Russia over "creative approach"

NIKKEI (Page 2) (Excerpts)
May 10, 2009

Russian Prime Minister Vladimir Putin is scheduled to visit Japan on
May 11 and to hold talks with Prime Minister Taro Aso on the12th.
Japan wants to elicit a positive statement from Prime Minister Putin
about a "new creative approach" for the settlement of the disputed
Russian-held islands off Hokkaido, as was agreed upon in a summit in
February between Prime Minister Aso and Russian President Dmitry
Medvedev. In an interview ahead of his visit to Japan, Prime
Minister Putin remained cautious about the territorial issue.
Whether Japan can find a clue to resolving the Northern territories
issue is unclear.

Putin will be the first Russian prime minister to officially visit
Japan in three and a half years since 2005. Putin, along with
Medvedev, is responsible for economic policy. In the interview,
Putin indicated that the promotion of trade and economic exchanges
would be the top priority in his upcoming visit to Japan, suggesting
that the territorial issue is under the jurisdiction of the
president.

Nevertheless, having held talks with Japan between 2000 and 2008,
Putin is well-versed in the territorial issue. He has been wielding
significant influence over the president even after stepping down
from the post. A senior Foreign Ministry official thinks Prime
Minister Putin's push is essential for moving the territorial issue
forward.

In February, Aso and Medvedev agreed in Sakhalin to accelerate
efforts to solve the territorial issue by pursuing a "creative and
unconventional approach." Russia is expected to present its reply
regarding the territorial issue in a Japan-Russia summit to be held

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on the sidelines of this year's G-8 summit to be held in Italy in
July.

Japan wants to feel out Russia's response through the upcoming
Aso-Putin meeting ahead of the July summit. Although Putin did not
refer to the question of a creative approach, Japan believes he has
discussed Russia's response with Medvedev.

During his tenure as president, Putin suggested a settlement in line
with the 1956 Japan-Soviet Joint Declaration that stipulates the
return of the Habomai islet group and Shikotan after concluding a
peace treaty.

Possible ways to break the deadlock in the Northern Territories
issue are being mentioned. One of them is a call by special envoy
Shotaro Yachi for the return of 3.5 of the four Russian-controlled
islands, namely the Habomai islet group, Shikotan, Kunashiri and
part of Etorofu. But there still remains a huge gulf with Japan,
which aims at settling the question of sovereignty over the four
islands as a package.

(6) Poll on Constitution

ASAHI (Page 3) (Full)
May 2, 2009

Questions & Answers
(Figures shown in percentage, rounded off. Bracketed figures denote
proportions to all respondents. Figures in parentheses denote the
results of a survey conducted April 19-20, 2008.)

Q: Looking at the Constitution as a whole, do you think it needs to
be revised?

Yes 53 (56)
No 33 (31)

Q: (Only for those who answered "yes") Why? (One choice only)

Because we want to create a new constitution by ourselves 9(5)
Because there is a problem with Article 9 15(8)
Because new rights and systems should be incorporated 74(39)

Q: (Only for those who answered "no") Why? (One choice only)

Because the Constitution has taken root in the nation and there's no
problem that requires revising 36(12)
Because Article 9 could be changed 44(15)
Because it helps guarantee freedom and rights 14(5)

Q: Constitution Article 9 stipulates that Japan renounces war and
maintains no war capabilities. Do you think it would be better to
change this provision?

Yes 26 (23)
No 64 (66)


Q: (Only for those who answered "yes") How would you like
Constitution Article 9 to be changed? (One choice only)

Only describe the existence of the Self-Defense Forces 50(13)

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Define the SDF as a military entity as in other countries 44(11)

Q: What do you think about future SDF activities overseas? How far
do you think the SDF should be allowed to act overseas? Pick only
one that is closest to your opinion. (One choice only)

The SDF should not be allowed to act overseas at all 9 (15)
The SDF should be allowed to act overseas without using force 56
(64)
The SDF should be allowed to use force if necessary 32 (17)

Q: The Constitution stipulates that all people shall have the right
to maintain the minimum standards of wholesome and cultured living.
How much do you think this has been realized?

Almost realized 6
Somewhat realized 45
Not realized very much 41
Hardly realized at all 6

Polling methodology: The survey was conducted April 18-19 over the
telephone on a computer-aided random digit dialing (RDD) basis.
Respondents were chosen from among the nation's voting population on
a three-stage random-sampling basis. Valid answers were obtained
from 2,094 persons (55 PERCENT ).

(7) Poll: 54 PERCENT feel their financial situations have declined

YOMIURI (Page 1) (Abridged)
May 4, 2009

The Yomiuri Shimbun conducted a face-to-face nationwide public
opinion survey on April 25-26, in which a total of 54 PERCENT
answered "yes" when respondents were asked if they felt their
financial situations had declined compared to this time last year.
The figure was dramatically worse than the result of the last survey
conducted in December 2006 in which 25 PERCENT answered "yes" to
the same question. This is the second highest figure next to 59
PERCENT from a survey taken in February 1980 in the aftermath of
the second oil shock. It indicates that the public is actually
feeling the effects of the current severe economic slump.

When asked about daily life, "no change" decreased to 43 PERCENT
(69 PERCENT in the last survey). "Better off" accounted for only 3
PERCENT (6 PERCENT in the last survey). However, when asked about
prospects for the Japanese economy, "no change" accounted for 51
PERCENT , with "worsen" for 26 PERCENT and "improve" for 19 PERCENT
.

Respondents were also asked if they felt uneasy about their own or
their families' jobs. In response to this question, a total of 78
PERCENT answered "yes," with 21 PERCENT saying "no." Those who
answered "yes" were further asked to select to multiple answers for
their concerns. To this question, "decreased income" accounted for
76 PERCENT , exceeding all other answers. Among other answers, "life
after retirement" accounted for 49 PERCENT , with "health, such as
overwork" for 35 PERCENT .

The survey covered a total of 3,000 persons chosen from among the
nation's voting population, and answers were obtained from 1,810
persons (60.3 PERCENT ).


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(8) Japanese companies raising hopes for taking part in development
of Iraqi oil fields with 115 billion barrels of reserves

YOMIURI (Page 9) (Full)
May 11, 2009

Japanese companies are now off and running to secure interests in
oil fields in Iraq. Calling the effort a "Rising Sun Project," they
are geared up to generate momentum for independent development of
oil fields overseas, by achieving results in Iraq, which has the
third highest amount of confirmed crude oil reserves in the world,
where European and U.S. capital have a smaller influence than in
other resource-rich countries. However, since public security risks
and a lack of transparency in the nation's energy policy still
remain, there is a strong feeling that their expectations are
getting ahead of reality.

Iraq has come up with a policy of opening interests in its oil
fields to foreign companies since the collapse of the Hussein regime
in 2003 with the aim of achieving post-war reconstruction. Bidding
for the development of the Rumaila oil field with confirmed reserves
of 16.5 billion barrels are now in the planning stages. Successful
bidders will be decided as early as this summer.

The bidding is expected to be participated in by 44 companies from
Europe and the U.S. Nippon Oil Corporation (ENEOS),INPEX
Corporation, Japan Petroleum Exploration (JAPEX),Japan Oil, Gas and
Metals National Corporation (JOGMEC),and Mitsubishi Corporation
have placed bids from Japan.

Nippon Oil Corporation, INPEX, and JGC Corporation will compete
against Italian and Spanish natural resources companies for the
right to develop oil fields in southern Iraq. The decision will be
reached as early as May.

Iraqi oil fields are attracting Japanese companies for their
reserves - 115 billion barrels, the world's third largest after
Saudi Arabia and Iran. In addition, only 15 oil fields out of 73
discovered oil fields have been fully developed due to sanctions
imposed by the UN after the Gulf War. Iraqi oil fields are
"undeveloped land," for which Japanese companies can compete with
European and U.S. primary sellers, depending on their strategies.
All the more for that reason, Japanese companies are showing
eagerness with an ENEOS executive saying, "Our talks will not be
just business negotiations but national interests will be at stake
in them." A government source is also closely watching the outcome
of the bidding, noting that it is the first step toward expanding
the development of overseas oil fields, which Japan has been working
toward.

Advance into Iraq also means meeting the nation's energy policy
challenge of diversifying oil-supplying countries. The Middle East
accounted for 87 PERCENT of Japan's crude oil imports in 2008. In
particular, Saudi Arabia and the United Arab Emirates alone
commanded more than 50 PERCENT . Imports from Iraq only accounted
for 1 PERCENT . If Japan's advance into Iraq deepens bilateral ties,
it would lead to Japan securing a new crude oil supplier.

Since the Iraqi government has highly praised Japan's technical
capability, there could be room for the companies to cut into crude
oil interests in that nation. Oil Minister Husayn al-Shahristani
said, "Iraq expects Japanese companies to take part in the

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bidding."

However, once the companies actually advance into Iraq, they would
have to be prepared for considerable risks. Public security problems
still remain in Iraq, as can be seen in frequent suicide terrorist
attacks. The lack of transparency in policy management has yet to be
solved.

The Iraqi government in April raised ten-fold advance payments to be
made after bidding, citing declining state finances due to a sharp
drop in crude oil prices as the reason. Laws that will become the
premises for contract methods and projects for oilfield development
have yet to be consolidated. One related source said, "Whether
successful bidders can actually take part in development projects is
unclear.

ZUMWALT