JAPANESE MORNING PRESS HIGHLIGHTS 05/12/09

UNCLAS SECTION 01 OF 10 TOKYO 001076 SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 05/12/09 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) Visit of Ambassador Bosworth: 4) Ambassador Bosworth, MOFA Six-Party Talks delegate Saiki agree to focus cooperation on restarting the talks (Yomiuri) 5) Bosworth, Saiki admit Six-Party Talks could bog down (Yomiuri) Putin visit: 6) Japan, Russia to agree on oil rights in E. Siberia during Prime Minister Putin's visit to Tokyo (Nikkei) 7) Prime Minister Aso meets Putin today with the northern territories issue at the top of his agenda (Sankei) Ozawa shock: 8) Ichiro Ozawa suddenly quits his post as head of the Democratic Party of Japan; Okada seen as a front runner to succeed him (Asahi) 9) Ozawa criticized by every party for not providing sufficient explanation about his money scandal, but other opposition parties will continue to cooperate with DPJ (Nikkei) 10) Prime Minister Aso stresses that Ozawa's sudden resignation will have no impact on his decision regarding Diet dissolution (Yomiuri) 11) DPJ lawmakers crying unfair since LDP bigwigs also involved in Nishimatsu Construction scandal were not pursued by the prosecutors (Yomiuri) 12) Ozawa's successor could come from one of five prominent names in the party (Yomiuri) 13) Will the resignation of Ozawa as DPJ head result in even worse gridlock in the Diet? (Sankei) 14) Business leaders are concerned about the impact on the economy of the Ozawa resignation (Sankei) 15) U.S. officials carefully watching situation in Japan following Ozawa's resignation (Sankei) 10 16) Impact of Ozawa's fall on Japan's foreign policy is being watched in Washington (Yomiuri) 17) Order to send P-3C patrol planes to spot pirates in waters off Somalia will come on the 15th (Yomiuri) Articles: 1) TOP HEADLINES Asahi, Mainichi, Yomiuri, Nikkei, Sankei, Tokyo Shimbun &Akahata: DPJ President Ozawa announces intention to resign 2) EDITORIALS Asahi: (1) DPJ leader Ozawa's resignation: DPJ should make effort to give voters chance to choose an administration Mainichi: (1) Ozawa's resignation announcement: Politics finally move forward TOKYO 00001076 002 OF 010 Yomiuri: (1) Public disapproval drove Ozawa to quit Nikkei: (1) DPJ should compete on policy (2) Humanitarian problem in Sri Lanka lamentable Sankei: (1) Ozawa's decision to resign as DPJ leader too late, DPJ has lost public confidence Tokyo Shimbun: (1) DPJ must hurry to rebuild party structure Akahata: (1) DPJ head Ozawa has not established accountability 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, May 11 NIKKEI (Page 2) (Full) May 12, 2009 09"03Reception for Singaporean President Nathan and his wife at the Imperial Palace.10:00Met with Deputy Chief Cabinet Secretary Uruma at the Kantei. Then met with U.S. Cherry Blossom Queen Tatiana na Duran.10:50Met with Vice METI Minister Mochizuki and Resources and Energy Agency Director General Ishida. METI Minister Nikai was present.11:43Conducted videotaping for government public relations. Public relations officer Ogawa was present.12:17Met with Administrative Reform Promotion Headquarters Chairman Chuma.13:42Met with Nathan at the State Guest House in Moto-Akasaka.15:15Met with Foreign Ministry Deputy Foreign Minister Sasae, European Affairs Bureau Director General Tanizaki, International Legal Affairs Bureau Director General Tsuruoka and Disarmament, Non-proliferation and Science Department Director General Sano, Ambassador to Russia Kono, and Ishida.16:25Met with Japan-China Friendship Association Chairman Song Jiang. 17:00LDP executive meeting in the Diet building.17:34Met with Election Committee Vice Chairman Suga at the Kantei.18:29Arrived at the official residence.19:15Dinner to welcome Nathan at the Imperial Palace.22:31Arrived at the official residence. e official residence. 4) Saiki, Bosworth to make efforts to resume 6-party talks YOMIURI (Page 2) (Full) May 12, 2009 U.S. Government Special Representative for North Korean Affairs Bosworth and Foreign Ministry Asian and Oceanian Affairs Bureau Director General Akitaka Saiki met yesterday at the Foreign Ministry and agreed to shore up the efforts of hosting country China to restart the six-party talks on North Korea issues. The six-party talks have not been held since they broke down last December. North Korea said it would never again participate in them. Pyongyang is also poised to go ahead with nuclear and intercontinental ballistic missile tests. There are also moves to explore bilateral talks between the United States and North Korea. "I'm not in a position to oppose dialogue itself if that is within TOKYO 00001076 003 OF 010 the framework of the six-party talks," Saiki told reporters after the meeting, showing understanding for holding talks between the United States and North Korea. Meanwhile, Saiki sought to check North Korea, saying: "Our dialogue with North Korea has been held in combination with pressure. We've agreed to create a mechanism for North Korea to respond to dialogue." 5) 6-party talks likely to hit snags YOMIURI (Page 6) (Abridged) May 12, 2009 Tokyo, Keiichi Honma Stephen Bosworth, the U.S. government's special representative for North Korean affairs, met yesterday with Akitaka Saiki, director general of the Foreign Ministry's Asian and Oceanian Affairs Bureau, and concluded his tour of Japan, China, and South Korea. Bosworth stressed, "We basically agreed that it's important to resume the Six-Party talks." However, the Six-Party Talks are now highly likely to be deadlocked for the time being. There were no obvious results from the trip. However, a negotiation source said, "We will not offer anything in return to have North Korea come back." Saiki also told reporters that it would not be wise to give way to North Korea. However, if the Six-Party Talks are not held, North Korea could escalate its threatening diplomacy and go ahead with nuclear testing. The negotiation source stressed that the diplomatic channel in New York is essential for trying to avoid such a situation. This can be taken as indicating that the United States would contact Pyongyang through North Korea's mission to the United Nations and work on North Korea to return to the Six-Party Talks. 6) Japan, Russia to jointly develop oil fields in Eastern Siberia NIKKEI (Page 1) (Full)\ May 12, 2009 The government plans to obtain a mining right for underground resources in two oil fields in the central part of Irkutsk, in preparations for co-development of oil fields in Eastern Siberia. The government aims to have Japanese firms begin test drilling jointly with a local corporation next year, with the goal of starting full-scale production in 2013. Japanese officials expect that the oil fields could hold combined reserves of about several hundred million barrels, based on their proximity to a promising oil field. This is compatible with other midsize fields worldwide. Japan and Russia plan to sign possibly today an agreement on the joint development project to coincide with Prime Minister Vladimir Putin's visit to Japan. Before leaving for Japan, Putin responded to an interview with Japanese newspaper companies, including the Nikkei, and expressed expectations for turning Japan-Russia energy and other cooperation plans into reality. Developing the two fields, which cover vast areas stretching roughly 8,100 square meters, is estimated to cost about 15 billion yen for the period leading up to commercial production. Japan Oil, Gas and Metals National Corp (JOGMEC) and Irkutsk Oil Co. will establish a TOKYO 00001076 004 OF 010 joint venture. The Japanese government-owned company expects to take a 49 PERCENT stake, with the Russian company taking the remaining 51 PERCENT stake. The new company will conduct surveys and test drilling over the next five years. Once commercial production is deemed feasible, JOGMEC will transfer its stake to Japanese private-sector companies. In Eastern Siberia, JOGMEC became the first Japanese entity to obtain concession rights in an oil field in 2008. Test drilling there is due to start later this month. The corporation aims to secure concession rights in other promising oil fields in Eastern Siberia. The oil produced in the region is expected to be delivered to Japan through a pipeline now under construction. The government is also aiming to reduce Japan's dependence on the Middle East for fossil fuel supply. 7) Visiting Russian premier to discuss territorial and other issues with Aso SANKEI (Page 5) (Excerpts) May 12, 2009 Russian Prime Minister Vladimir Putin arrived at Haneda Airport by special plane last night. He will meet Prime Minister Taro Aso today to exchange views on the Northern Territories, cooperation on developing the Far East and Siberia regions, and other issues. This is the fifth time for Putin to visit Japan in the capacity of president since he visited in November 2005, and the first visit since he assumed the premiership in May of last year. Putin has devoted himself to domestic affairs while President Dmitry Medvedev has been responsible for foreign policies. It has been reported, however, that since Putin has an influence over Medvedev, the two leaders have jointly addressed key policies. In the planned meeting with Aso, Putin is expected to seek Japan's cooperation over such issues as energy development in the Far East and Siberia regions, given that the Russian economy has been seriously affected by the financial crisis that has swept the world since last fall. Aso intends to indicate a positive stance on cooperating with Russia in its efforts to develop the Far East region, with the aim of establishing a vital partnership with Russia in the Asia-Pacific region, which he emphasized in his policy speech in January. 8) DPJ leader Ozawa to resign over funding scandal involving his aide ASAHI (Top Play) (Excerpts) May 12, 2009 Democratic Party of Japan (DPJ) President Ichiro Ozawa, 66, last evening held a press conference at party headquarters to announce his intention to resign his post. Ozawa has been determined that in order to aim at a change in government, unanimous party solidarity is necessary. Calls for his resignation have continued since his public-funded secretary was indicted in March over allegedly TOKYO 00001076 005 OF 010 accepting illicit donations from Nishimatsu Construction Co. DPJ Vice President Katsuya Okada, who is favored mainly by young lawmakers, appears to be a strong candidate to succeed Ozawa. The DPJ leadership yesterday accepted Ozawa's intention to quit his post in an executive meeting and standing secretaries' meeting. The party intends to elect a new leader as early as May 16 in a general meeting of all party lawmakers from the two Diet chambers. It is predicted that a party-heads debate between Ozawa and Prime Minister Taro Aso planned for May 13 will be cancelled. The collapse of the paradigm of confrontation between Aso and Ozawa, which has continued since the inauguration of the Aso administration, will likely have an impact on the election strategies of the ruling and opposition parties. Ozawa said in the press conference that he made the decision "to strengthen party unity." He revealed that he had no intention to resign as a Diet member or leave the party. He also said: "I want to continue fighting as a member of the unified party at the frontline" even after leaving the presidential post. He underscored a stance of cooperating with the new party leadership. However, he did not refer to the fundraising scandal involving his chief secretary. Meanwhile, DPJ Secretary General Yukio Hatoyama also revealed last night his intention to step down from his post after the leadership election. The DPJ leadership plans to hold the presidential race after the fiscal 2009 supplementary budget draft clears the House of Representatives probably, which the ruling camp envisions on May 13. Hatoyama told reporters last night: "We want to carry out the election fairly and squarely so that the public can see a new DPJ." The names being floated as Ozawa's possible successor are former DPJ presidents: Okada, who fulfilled the initiative in coming up with a policy of putting regulations on the hereditary-seat system of passing down Diet seats to descendants, as well as a policy of completely prohibiting corporate and organization donations; Hatoyama and Deputy President Naoto Kan. The new DPJ leadership will be pressed to review the party's political platform, including the manifesto (set of campaign pledges) for the upcoming Lower House election. There is a rumor that Ozawa would be picked head of the election headquarters after he resigns his present post. 9) Ruling, opposition parties criticize lack of DPJ head Ozawa's explanation about why he steps down NIKKEI (Page 2) (Full) May 12, 2009 Ruling coalition wary of DPJ's strength Asked by reporters at the Prime Minister's Office yesterday about Ichiro Ozawa's announcement of his resignation as Democratic Party of Japan (DPJ) president, Prime Minister Taro Aso made this critical comment: "Hearing Mr. Ozawa's statement, I did not fully understand why he decided to step down. He said at the outset that he made the decision due to intraparty circumstances, but it was hard for me to figure out if the intraparty circumstances meant election circumstances." TOKYO 00001076 006 OF 010 Liberal Democratic Party (LDP) Secretary General Hiroyuki Hosoda said: "He did not refer to what sort of responsibility he should assume for the recent indictment of his aide in a political funds scandal and how he intends to respond." While criticism of Ozawa's resignation announcement is growing in the ruling camp, concerns are also arising about a possible recovery of the strength of the DPJ, which has seen public support falling over Ozawa's response to the scandal prior to the next House of Representatives election. Speaking before reporters in Tokyo last evening, former LDP Secretary General Hidenao Nakagawa said: "His resignation is a matter of course. Rather, the question might be why it took as long as two months." New Komeito Secretary General Kazuo Kitagawa stressed the need for Ozawa to give an explanation of the scandal over huge political donations from Nishimatsu Construction Co., remarking: "If he continues to insist that he was blameless, he should give an account of the donation problem." Former LDP Chief Cabinet Secretary Nobutaka Machimura told reporters: "The other side's misstep has undoubtedly contributed to boosting public support for our party." Opposition bloc willing to maintain cooperation with DPJ Opposition party members also criticized yesterday the lack of Ozawa's account of the arrest and indictment of his close aide over the Nishimatsu donation scandal. Japanese Communist Party (JCP) Secretary General Tadayoshi Ichida critically said in a press briefing yesterday: "It is apparent that he had to decide to resign in the face of severe criticism among the people. It was sort of a defiant press conference." Social Democratic Party (SDP) President Mizuho Fukushima said: "He gave no clear account of the scandal involving politics and money. The fact that he did not respond to the questions of the people is a serious problem." People's New Party Secretary General Hisaoki Kamei said: "I guess he judged that this timing (for his resignation) was the only choice in the run-up to the next election. Our cooperative relationship will remain unchanged." Officials of the JCP and the SDP also expressed a willingness to maintain cooperation with the DPJ. 10) Aso: Ozawa's resignation has no direct bearing on Lower House dissolution YOMIURI (Page 4) (Full) May 12, 2009 Prime Minister Taro Aso last night made the following comment in connection with Democratic Party of Japan President Ichiro Ozawa's announcement to step down: "(Lower House) dissolution for a general election is being mentioned based on the prospective passage of the (fiscal 2009) supplementary budget bill. The matter has nothing to do with Mr. Ozawa's resignation. I will make a decision after giving thought to a variety of factors." Aso indicated that Ozawa's resignation would not affect the timing of Lower House dissolution for a general election. TOKYO 00001076 007 OF 010 The prime minister was responding to a question from reporters at his office. About Ozawa's announcement to step down, the prime minister also said: "I don't know quite well why he has decided to step down. I think the public also does not understand why he will resign, what kind of responsibility he is trying to take, and why now." 11) DPJ finds prosecutors' investigations into Nishimatsu donation scandals unfair; Ozawa's resignation is matter of another political party, says Nikai YOMIURI (Page 4) (Full) May 12, 2009 A special investigation squad of the Tokyo District Public Prosecutors Office has been investigating a case in which Nishimatsu Construction Co., a second-tier general contractor, is believed to have provided a political organization connected with Economy, Trade and Industry Minister Toshihiro Nikai of the Liberal Democratic Party (LDP) with an office for free, in tandem with political donations from Nishimatsu to Democratic Party of Japan (DPJ) President Ichiro Ozawa. As a result, the prosecutors' office has built a case against (a secretary to) Ozawa for violating the Political Funds Control Law but not against Nikai. This has drawn criticism from within the DPJ as unfair. Nikai's response is likely to draw attention again depending on how the investigation turns out. Asked as he was leaving METI last night about his view on Ozawa's decision to step down, Nikai said: "It's a matter of another political party, so I am not in a position to comment." About the investigation into the political organization connected with him, Nikai also said: "That has nothing to do with the matter." 12) Ozawa becomes fifth consecutive DPJ president to step down without serving out his term, following Hatoyama, Kan, Okada, and Maehara YOMIURI (Page 3) (Full) May 12, 2009 In December 2002, then Democratic Party of Japan (DPJ) President Yukio Hatoyama stepped down from his post over the question of merging with the now-defunct Liberal Party. Since then, all DPJ presidents -- Naoto Kan, Katsuya Okada, and Seiji Maehara - have resigned from the post halfway through their tenure. (Yesterday) Ichiro Ozawa became the fifth consecutive DPJ president to step down without serving out his term, exposing the unstable management of the party. It took more than two months for Ozawa to announce his decision to step down after his state-funded secretary was arrested on March 3 on suspicion of violating the Political Funds Control Law. Ozawa's announcement conjured up memories of the resignation of Maehara in 2006 over the handling of a bogus email incident that spiraled out of control. March 24, the day Ozawa's secretary was indicted, served as a critical point for Ozawa's decision on whether to stay on or resign. But only a handful of junior members called for his resignation, with the majority simply watching Ozawa's response. In April, there was talk about formulating a "letter carrying signatures" of those calling for Ozawa's resignation. But the talk was never put into TOKYO 00001076 008 OF 010 action, with a junior member saying, "Deputy President Kan and Secretary General Hatoyama were the only persons who could put the proverbial bell around President Ozawa's neck, so to speak." One of the vice presidents expressed his discontent with Ozawa's move as a decision made too late. There is no denying that the majority's attitude of staying on the sidelines allowed Ozawa to think about his move for too long. 13) DPJ President Ozawa's resignation: Prime minister likely to find exercising his right to dissolve Diet limited SANKEI (Page 2) (Excerpts) May 12, 2009 Prime Minister Taro Aso is now pressed to take a second look at his Lower House dissolution scenario due to the sudden resignation of Democratic Party of Japan (DPJ) President Ozawa. That is because although he has been searching for timing to dissolve the Lower House, taking passage of the first fiscal 2009 extra budget and the anti-piracy bill into account, he might find exercising his right to dissolve the Diet extensively limited, if the Diet becomes stalled due to commotion in the DPJ. "To be honest, I was surprised to hear Mr. Ozawa's decision to step down, because party head talks were to be held on May 13. I would like the DPJ to deliberate on the extra budget, whether its head steps down or not." He made that comment without a smile when asked by reporters yesterday evening about his view of Ozawa's resignation. It must be a blow to the prime minister, because his calculation to give impetus to early passage of the extra budget with the party head talks as the occasion missed the mark. However, many close to the prime minister had been taking the view that Ozawa would step down as party president, while timing Diet resolution. However, even if the extra budget clears the Lower House on the 13th, if the Upper House refuses to take a vote on the extra budget, the Diet cannot be dissolved until June 14, when the budget will be adopted automatically. The Lower House can proceed with the bill as if the Upper House has rejected it and put it to a second vote for final approval on June 21. A revote on six budget-related bills will stretch into mid-July. Even if the six related bills cannot secure Diet approval, it is possible to execute 90 PERCENT of the extra budget. However, in the event that the Lower House cannot be dissolved until late June, the G-8 Summit and Tokyo Metropolitan Government Assembly elections will follow soon. This would largely reduce options for timing for Lower House dissolution. Chances are that the DPJ in the meantime might bring about a rollback. 14) Business community concerned about impact of DPJ President Ozawa's resignation on economy: Some business leaders give some praise to his decision SANKEI (Page 2) (Full) May 12, 2009 TOKYO 00001076 009 OF 010 Some business leaders paid their respect to Ozawa's announcement to step down as president of the Democratic Party of Japan (DPJ),as Japan Business Federation (Nippon Keidanren) Chairman Fujio Mitarai said, "He presumably made a heartbreaking decision." Others criticized it, with Japan Association of Corporate Executives (Keizai Doyukai) Representative Director Masamitsu Sakurai saying, "From the perspective of the people, there might have been a better timing." He insisted that his resignation should not affect Diet deliberations on the fiscal 2009 extra budget that will finance an additional economic stimulus package. Mitarai during a press conference held at 3 p.m. on the 11th called for passage of the extra budget before the Lower House is dissolved, noting, "What we want to see is the implementation of the extra budget, including related bills." He also said, "I would like the DPJ to realize policy-oriented politics, by holding constructive talks with the government and the ruling parties on key bills in the current Diet session." Sakurai, after indicating his view that Ozawa's resignation came late, made a request, "I want the DPJ as an open political party to hold a public presidential election and show to the people its governance and capability to run the government." Japan Chamber of Commerce and Industry Chairman Tadashi Okamura paid his respect to Ozawa's decision, saying, "He made the decision to prepare for Diet dissolution and a snap election with an all-party setup. This is a discerning decision." 15) U.S. paying close attention to post-Ozawa DPJ presidential candidates SANKEI (Page 2) (Full) May 12, 2009 Takashi Arimoto, Washington Though the U.S. government has not made any comment on the resignation of Democratic Party of Japan (DPJ) President Ichiro Ozawa, it has been closely watching his moves with a possible change of government in mind. Secretary of State Clinton strongly hoped to hold a meeting with Ozawa when she visited Japan in February. Her judgment is that it would be necessary to communicate with Ozawa, because he had raised an objection to Japan-U.S. cooperation, as can be seen in his opposition to the Maritime Self-Defense Force's refueling operations in the Indian Ocean. Senior U.S. government officials plan to hold talks with People's New Party Vice President Shizuka Kamei, now visiting the U.S., who is close to Ozawa. They are continuing to take interest in Japan's political situation. 16) U.S. to keep tabs on DPJ's foreign policy YOMIURI (Page 6) (Full) May 12, 2009 Satoshi Ogawa, Washington Democratic Party of Japan (Minshuto) President Ozawa has now announced his intention to resign from his party post. A U.S. diplomatic source close to the Obama administration said, "I'm very TOKYO 00001076 010 OF 010 concerned about whether it will affect the DPJ's foreign policy." In his recent remarks on the U.S. military presence in Japan, Ozawa said the U.S. military presence in the Far East is enough with the 7th Fleet. Ozawa also remarked that he was opposed to confirming in the Diet the intergovernmental agreement reached between Japan and the United States to move Okinawa-based U.S. Marines to Guam. Those remarks, which could be taken as anti-U.S., alarmed the United States. This February, Ozawa met with Secretary of State Clinton. Later in the month, Ozawa met with Wang Jiarui, head of the Chinese Communist Party's International Department. In this regard, one in Washington thought Ozawa's response to Wang was better than that to Clinton, saying Ozawa, if he comes into office, may become pro-China. DPJ Vice President Seiji Maehara, when he visited the United States last month, referred to the possibility of reviewing the plan to relocate the U.S. Marine Corps' Futenma Air Station. Maehara had been viewed to champion the Japan-U.S. alliance, so his remarks shocked people in Washington. "If the DPJ takes office, our bilateral relationship would unavoidably be shaken," one said. A U.S. Democratic Party affiliated source on Japan-U.S. relations said: "The DPJ's foreign policy will remain unclear (even after Ozawa's resignation). Whoever may become the DPJ's president, it is urgently necessary to expand a dialogue between the DPJ and the U.S. administration." 17) Government to issue order for dispatch of P-3Cs on May 15 for antipiracy mission YOMIURI (Page 4) (Full) May 12, 2009 The government decided yesterday to issue an order on May 15 to dispatch two Maritime Self-Defense Force P-3C patrol planes to join the antipiracy operation in waters off Somalia. Defense Minister Yasukazu Hamada will invoke the maritime policing provision of the Self Defense Forces Law. The P-3Cs will keep watch on pirate ships from the sky. They are scheduled to be dispatched in late May to begin activities in early June. Ground Self-Defense Force troops will also be dispatched for the security of the P-3Cs. ZUMWALT