DAILY SUMMARY OF JAPANESE PRESS 05/14/09

UNCLAS SECTION 01 OF 09 TOKYO 001093 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 05/14/09 INDEX: (1) Senior U.S. official agrees to consider President's visit to Hiroshima in response to Shizuka Kamei's request, calling it "very interesting" (Jiji Press) (2) BBC report that if DPJ takes over the reins of government, Japan will not buy dollar-denominated U.S. government bonds sets off dollar selling (Asahi) (3) PNP Shizuka Kamei expresses willingness to actively purchase U.S. bonds if government change occurs (Nikkei) (4) Interview with former Prime Minister Yoshiro Mori: Ozawa's resignation signifies Aso's victory (Yomiuri) (5) With passage of extra budget at Lower House, choices lessens for timing of Lower House dissolution (Nikkei) (6) LDP banking on revival of "old bonds"; Risk of abandonment by unaffiliated voters (Nikkei) (7) Difference in eagerness evident between MSDF and GSDF on elevating Japan-U.S. alliance to global stage (Mainichi) (8) Marines, Okinawa's burden: 610 billion yen to be paid under "false" pretext (Akahata) ARTICLES: (1) Senior U.S. official agrees to consider President's visit to Hiroshima in response to Shizuka Kamei's request, calling it "very interesting" Jiji Com 10:44, May 14, 2009 Washington, Jiji Press, May 13 Shizuka Kamei, deputy leader of the People's New Party (PNP),held a meeting with Gary Samore, coordinator for nonproliferation of weapons of mass destruction of the National Security Council (NSC), at the White House on May 13. He requested a visit by President Barack Obama, who advocates a nuclear-free world, to the atomic bombing site in Hiroshima when he visits Japan. Samore responded with: "This is a very interesting proposal. We will consider it." Kamei stressed that, "I greatly appreciate President Obama's advocacy of a nuclear-free world. If the President makes his pledge for efforts toward denuclearization before the monument at the atomic bombing site as a representative of mankind, his appeal will carry even more weight." He also pointed out that the impact will be even greater if the President makes a speech at the peace memorial ceremony held on August 6. On relations with North Korea, Kamei asked that, "If the U.S. and North Korea talk directly, the U.S. should not impose the results on Japan ex post facto, but should hold close consultations with Japan simultaneously." Kamei also met assistant secretary of state-designate J.C. Bancroft Davis and Democratic Congressman Sander Levin on the same day. TOKYO 00001093 002 OF 009 (2) BBC report that if DPJ takes over the reins of government, Japan will not buy dollar-denominated U.S. government bonds sets off dollar selling ASAHI (Page 6) (Full) May 14, 2009 BBC of Britain on May 12 reported that Lower House member Masaharu Nakagawa, "Next Cabinet" finance minister, made a remark to the effect that if the Democratic Party of Japan (DPJ) takes the reins of government, Japan will not buy dollar-denominated government bonds. With the statement setting off dollar selling, the yen exchange rate on the Tokyo Foreign Exchange Market briefly rose to 95 against the dollar on the 13th after a hiatus of about two weeks. In response to an interview with Asahi Shimbun, Nakagawa said what he meant was that in order to avoid losses from exchange fluctuations, too, the government should consider buying yen-denominated U.S. government bonds instead of dollar-denominated ones. He explained that he did not mean that the Japanese government would not buy any dollar-based U.S. bonds. Since the Japanese government would face valuations losses, if the abrupt appreciation of the yen develops, DPJ lawmakers, including Nakagawa, during Diet deliberations once urged the government to ask the U.S. government to issue yen-denominated government bonds. One can say that market responses to the overseas media report on the remark of a DPJ lawmaker reflects that the possibility of a change of power is growing. According to the U.S. Treasury Department, Japan possesses as of February U.S. bonds worth 661.9 billion dollars, the second largest amount after China. (3) PNP Shizuka Kamei expresses willingness to actively purchase U.S. bonds if government change occurs NIKKEI ONLINE May 14, 2009 1:34 PM "A change of government will certainly take place in Japan." "(Japan) should help the U.S. rebuild its economy as much as possible." People's New Party (PNP) acting head Shizuka Kamei, now visiting the U.S., gave a press conference in Washington on May 13, in which he disclosed that he had conveyed Japan's willingness to actively purchase U.S. government bonds when he met with National Security Council (NSC) Asian Affairs Director General Jeffery Bader and other key members of the administration of President Barack Obama. Government bonds are issued to finance economic stimulus measures. Kamei clearly said that a coalition government will be undoubtedly established by the Democratic Party of Japan (DPJ),the Social Democratic Party, and the PNP as a result of the next House of Representatives election. (Jiji) reported a remark by DPJ "shadow cabinet" Finance Minister Masaharu Nakagawa indicating that a DPJ government would be reluctant to purchase dollar-denominated Treasury Bonds. This remark prompted massive selling of the U.S. dollar, pushing down its value. Bearing this experience in mind, Kamei said: "I will never allow (a DPJ-led government) to do so. We will extend full support to the U.S." TOKYO 00001093 003 OF 009 With respect to the DPJ presidential race (scheduled for May 15) to select a successor to Ichiro Ozawa, Kamei said: "A person who can push ahead with election cooperation and policies with us must be elected. (4) Interview with former Prime Minister Yoshiro Mori: Ozawa's resignation signifies Aso's victory YOMIURI (Page 4) (Full) May 14, 2009 -- Democratic Party of Japan (DPJ) President Ozawa announced his decision to step down. I had expected this development to some extent, but I had anticipated it would come much later. I have been paying respect to him as a politician who can do things boldly but elaborately, and he takes decisive action. However, he did not properly deal with the aftermath (of a fund-raising scandal that led to the arrest of his secretary). He shirked his duty in this case, too. -- Do you think Ozawa's resignation will affect Prime Minister Aso's strategy on Diet dissolution? I think there will be some impact. Even Mr. Ozawa said he would select his successor after prospects are in sight for the fiscal 2009 supplementary budget bill to clear the Diet. He apparently considers it is important to enact the extra budget, but it is uncertain whether he bears the passage of the related bills in mind. Assuming that the next president takes an "adult attitude" (such as approving the enactment of the extra budget and related bills),such a situation is not necessarily favorable for the Liberal Democratic Party. -- Some observers take the view that Mr. Ozawa's resignation would result in calls for ousting Aso once again. Mr. Ozawa's resignation obviously signifies the prime minister's victory. Despite calls growing for Diet dissolution from outside (the LDP) and calls for his replacement from within the party, the prime minister has stuck it out. At a time when people have begun to favorably evaluate (the prime minister),why is it necessary to replace him? If trouble occurs in the party, its image will be surely hurt. If there are members who do not notice this, they should leave the party. I heard that former Secretary General Hidenao Nakagawa had said, "We have yet to reach the point (of beginning moves to dump him)." I am depressed by his remark that could be interpreted as people waiting for a disturbance (in the LDP). He might have some ulterior motive." -- Do you think the cabinet should be reorganized before the next House of Representatives election? There is teamwork between members (in the cabinet). When the fiscal 2009 budget was enacted, I considered it would be desirable to change the cabinet lineup and hold an election, but the situation has changed since then. -- Calls are growing for restrictions on candidacy by persons who come from families of politicians. What we should think first is whether the party can pick a candidate TOKYO 00001093 004 OF 009 who can win, rather than considering whether heredity is good or bad. Even if the son or wife of a politician is elected, the winner should not be criticized because the voters made the choice. Such criticism is unreasonable in view of the Constitution (which specifies free choice of occupation). For now, I have no idea (about suggesting to any of my kin to become a politician). (5) With passage of extra budget at Lower House, choices lessens for timing of Lower House dissolution NIKKEI (Page 2) (Full) May 14, 2009 With the supplementary budget for fiscal 2009 passing through the House of Representatives, Prime Minister Taro Aso has now overcome the first hurdle for the dissolution of the Lower House and a general election. It is predicted that five bills related to the extra budget, which include measures to help support corporations facing capital shortfalls, will clear the Lower House in late May or later. The handling of those bills is directly linked to an extension of the current Diet session and to the timing of Lower House dissolution. With less than four months left for the expiration of the terms of the Lower House members, Aso's options for the timing of the dissolution of the Lower House are gradually lessening. Implementation of 90% of the extra budget possible Even if the opposition camp drags out deliberations on the extra budget at the House of Councillors, the budget will be enacted on June 12, 30 days after clearing the Lower House, based on the constitutional rule. Therefore, more than 90 percent of the budget for such measures as increasing employment adjustment subsidies and granting 'eco-points' that give discounts on the purchase of eco-friendly home electronic appliances, which are key elements of the additional economic stimulus package. For Aso, who has placed top priority on economic recovery, the enactment of the extra budget is a requirement at least in determining the date for dissolution. Of the six related bills, the tax system reform legislation, including a reduction in the gift tax, cleared the Lower House along with the extra budget. But a vote on the five other bills, including one amending the Development Bank of Japan Inc. Law (New DBJ Law), has been put off. The prime minister's aide stressed: "We will enact all bills related to the extra budget." Senior ruling camp members, including Liberal Democratic Party (LDP) Secretary General Hiroyuki Hosoda and New Komeito Secretary General Kazuo Kitagawa, confirmed yesterday morning that they would make efforts to pass the related bills as early as possible. Since the ruling coalition prioritizes deliberations on the extra budget, it is predicted that the passage of the remaining bills at the Lower House will be delayed to late May or after. If the Upper House drags out deliberations on the related bills, it will be necessary for the ruling camp to consider using the 'constitutional 60-day rule' that allows the Lower House to readopt them by the two-thirds votes of the lawmakers attending the voting session. Many in the ruling bloc think that the ongoing Diet session should be significantly extended by late July. TOKYO 00001093 005 OF 009 The Emperor and the Empress will visit Canada and the United States on July 3-17. The dominant view is that it is difficult to dissolve the Lower House and kick off an official campaign for a general election during that timeframe. The New Komeito has asked that the general election and the July 12 Tokyo Metropolitan Assembly election not be held close together. If that is the case, the Lower House will be dissolved in last July and the election will be held August 2 or 9. Possibility of Lower House dissolution in June Some LDP members have said that the Lower House should be dissolved in June after the extra budget clears the Diet. Former Prime Minister SHINZO ABE emphasized at an LDP lawmaker-hosted party yesterday noon: "Most of the budget can be executed even if the related bills are not enacted. I want (Aso) to make up his mind (to dissolve the Lower House) at an appropriate time." Abe and LDP Election Strategy Council Chairman Makoto Koga have called for dissolution in June. The reason is that in case dissolution is pushed forward as much as possible, it will turn against the ruling camp's election campaign, because the image becomes stronger that Aso was pushed into a corner. If eying on an overriding vote in the Lower House on such key bills as the antipiracy bill, a possible option would be dissolution in late June and the general election on July 12, the same day with the Tokyo election. There is a possibility that the DPJ will regain party strength under the new leader and that Aso will lose the best timing for dissolution. There is also a possibility that the snap election will be held 30 days before the terms of the Lower House members end or in mid-October. (6) LDP banking on revival of "old bonds"; Risk of abandonment by unaffiliated voters NIKKEI (Page 2) (Full) May 11, 2009 Both the Liberal Democratic Party (LDP) and the Democratic Party of Japan (DPJ) are working to deepen their "bonds" with industrial organizations in anticipation of the House of Representatives election that will come not later than this fall. Defying criticisms of "pork barrel" spending, the LDP has incorporated many of the demands of industrial groups in the FY2009 supplementary budget. On the other hand, the DPJ is also giving priority to considerations aimed at enlisting the support of groups supporting the LDP. However, reliance on industrial associations may lead to abandonment by unaffiliated voters. On the evening of May 8, senior officials of as many as 40 industrial associations, including those from the construction industry, land developers, the Japan Medical Association (JMA),and so forth, assembled at a banquet hall in a hotel near the Diet. This was a dinner party of the LDP and the senior officials of its main support groups. Prime Minister Taro Aso, who stopped by, bowed deeply and said: "We are working hard on the economic measures. We hope for your support in the next election." Budget for economic measures TOKYO 00001093 006 OF 009 This was the first time in two years that representatives of the LDP's main support groups have gathered in one place. The prime minister personally filled the cups of the participants all around, demonstrating his "desire to deepen bonds with these organizations once again" (in the words of a senior official). The LDP has been incorporating the demands of its support groups in the economic measures since last fall. It has allocated an additional 100 billion yen in de facto subsidies for rice production adjustment (gentan) as a step to woo the Japan Agricultural Cooperatives. Some 2.3 trillion yen in public work projects was also appropriated in consideration of the construction industry, thus shelving the policy of cutting back on public work implemented since the Koizumi administration. The LDP has not also forgotten the business sector. Party leaders have held meetings with business leaders of Kansai, Tohoku, Hokuriku, and elsewhere since the beginning of 2009. Mikio Aoki, former chair of the LDP caucus in the House of Councillors, has also held several meetings with senior officers of Nippon Keidanren (Japan Business Federation),playing a role in the introduction of the system of subsidies for buying environment-friendly cars. Will moves suggesting the revival of old LDP politics, termed the triangle of politicians, the bureaucracy, and business, be a quick fix for the next Lower House election? In mid-April, right after the ruling bloc compiled its additional economic measures, the president of a small construction business told a senior official of the Associated General Contractors of Japan (Zenken): "We are in a situation of life or death. We have no time to campaign." "After the organization has disintegrated" Zenken mainly consists of some 23,000 small and mid-sized construction companies. In 2008, a record 580 companies went out of business and 2009 is expected to see a continuation of this trend. Officials are voicing their resentment, with one senior Zenken officer saying, "It is too late to make budget allocations now that the organization has disintegrated." There is also a mood of "election fatigue" in organizations which had fielded their own candidates in the last Upper House election, such as the Nippon Izokukai (Association of War Bereaved Families) and the JMA. After the next Lower House election, another Upper House election is scheduled for summer 2010. A senior Nippon Izokukai official says: "Even if you ask people to campaign for the election two years in a row, the organization will not move." At a meeting with former defense minister Yuriko Koike and others in Tokyo on the evening of April 30, former prime minister Junichiro Koizumi, who is blamed by the LDP for the weakening of LDP support groups, stated emphatically that, "One cannot get elected by relying on support organizations; the unaffiliated voters will run away." (7) Difference in eagerness evident between MSDF and GSDF on elevating Japan-U.S. alliance to global stage MAINICHI (Page 2) (Abridged) May 14, 2009 TOKYO 00001093 007 OF 009 The First Tokyo Seminar on Common Security Challenges was held in March in Tokyo under the auspices of the Defense Ministry. The seminar's purpose was to constructively discuss ways to facilitate regional cooperation in the Asia Pacific region on common challenges, such as disasters and terrorist attacks. In a speech at the seminar, Administrative Vice-Defense Minister Kohei Masuda boldly proposed defense cooperation among Japan, China and South Korea by taking advantage of antipiracy missions in waters off Somalia. In late December, China sent its Navy to fight Somalia pirates. The step was followed by swift decisions by Japan and South Korea to dispatch naval vessels on antipiracy missions. What Masuda had in mind was conducting joint exercises among Japan, China, and South Korea in waters off Africa as a simulation of the envisaged East Asia security system. "The matter is being studied by a variety of channels," a senior Maritime Self-Defense Force (MSDF) official said. The MSDF's antipiracy mission has hidden strategic significances, such as being the first overseas dispatch for defending Japan's national interests in the postwar period and testing military cooperation with China and South Korea. Forming ties with the U.S. Africa Command (AFRICOM) is of greater significance, according to a high-ranking MSDF officer. The MSDF is scheduled to dispatch in late May a P-3C patrol plane unit to Djibouti, Africa. Djibouti is the operation base for AFRICOM, which was established in 2007. The U.S. media regard the establishment of AFRICOM as a response to China, which has made inroads into the continent with an eye on abundant natural resources there. One of the AFRICOM deputy commanders is a civilian female ambassador from the State Department. "Once ties are established between the MSDF and AFRICOM, they are certain to help expand Japan's diplomatic options," the senior MSDF official noted. During the Cold War era, the MSDF's only partner was the U.S. Pacific Command, which covered the area spanning from the west coast of the American continent to the Indian Ocean. Following 9/11, Japan has joined in the war on terror and the MSDF has sent senior officers to the U.S. Middle East Command in Tampa, Florida, whose area of responsibility covers the entire Middle East and part of Central Asia. MSDF fuelers have refueled the naval vessels of other countries (in the Indian Ocean). The MSDF is about to expand its ties to AFRICOM and elevate the Japan-U.S. alliance to the global stage. Meanwhile, a certain psychological distance exists between the Ground Self-Defense Force (GSDF),which has actively carried out overseas missions, and the U.S. military. GSDF Col. Ryuta Ando served as Japan's first defense attach in Afghanistan for just over one year from January 2003. During that period, he was engaged in the disarmament project in collaboration with the forces of other countries. Western logic does not work in warlord-controlled tribal societies. To collect weapons, there was no other option but to forge relations of trust with tribal chiefs through eating and drinking with them. TOKYO 00001093 008 OF 009 "Every day, I became keenly aware of the complexity and the depth of the society there. The U.S. military's highhanded approach of pushing its military might to the forefront does not work. The only thing the GSDF was able to do was to deliver fuel to the forces of other countries, and Afghans' gaze became less hostile." In January 2004, Japan sent GSDF troops to Iraq - for the first time to a "battle field" - to offer reconstruction assistance. Every dispatched GSDF member wore small Japanese flags on four spots: the right chest, the left shoulder, the back, and the helmet. Looking back on those days, then GSDF Chief of Staff Hajime Massaki (currently a Defense Ministry advisor) made this comment: "We wanted to make clear that the Japanese troops were different from the U.S. forces and that their purpose was to support the Iraqi people's reconstruction efforts rather than to occupy their land. That was most important for ensuring the safety of the GSDF troops." The GSDF's base was in the southern Iraqi city of Samawah, which is far away from the U.S. military's base in Baghdad. After withdrawing from Iraq, the GSDF has not been dispatched to overseas. A mission in Afghanistan was temporarily projected, but the U.S. Obama administration is reportedly expecting Japan to play a nonmilitary role. The GSDF appears somewhat relieved. Overseas missions will continue, and their objectives, activities, and strategic significances are certain to change. How should Japan deal with the U.S. military - the most powerful military force in the world? The difference in eagerness between the GSDF and the MSDF to deal with the U.S. military shows that the quality of the Japan-U.S. alliance must change on the military front as well. (8) Marines, Okinawa's burden: 610 billion yen to be paid under "false" pretext AKAHATA (Page 3) (Full) May 14, 2009 The agreement on the "relocation" of U.S. Marines in Okinawa to Guam, which will require the use of tax money by Japan as a sovereign country for the construction of military bases on U.S. territory, was approved by the Diet on May 13. This agreement, which imposes the legal obligation to pay $2.8 billion (approximately 280 billion yen) for the construction of U.S. military bases in Guam, was approved through extremely speedy deliberations - three days in the House of Representatives and four days in the House of Councillors - just more than a month after substantial debate began on April 3. No solution has been found for the serious harmful effects this agreement will have on the people of Okinawa and Japan. Reconfirmation The first harmful effect is that the Marines' "relocation" to Guam is tied to the promotion of the construction of a new base in Okinawa as a "package." The agreement stipulates that the Guam "relocation" will "depend on concrete progress" in the new base on the coast of Camp Schwab (in Nago City, Okinawa) and so forth (Article 3). This reconfirms the fact that all the plans for U.S. Forces Japan (USFJ) realignment are one "package." On this point, while Director General Kazuyoshi Umemoto of the TOKYO 00001093 009 OF 009 Ministry of Foreign Affairs North American Affairs Bureau stated that, "The Japanese government has indicated its intention (to build the new base) in this agreement. This does not impose any new legal obligation" at the Upper House Foreign Affairs and Defense Committee on April 23, he had told the Lower House Foreign Affairs Committee on April 8 that, "If there is no progress in one (Nago),the other (Guam) will also be affected." Possible increase of troops Second, the excuse for the Guam "relocation" is that this will "lighten the burden of the Okinawan people," but this was found to be a complete lie. The government has stated repeatedly during Diet deliberations that the "reduction of 8,000 troops" refers to the reduction of the designated troop size and that the actual number of troops to be relocated may change, which suggests that there might even be an increase of troops. Thus, the very purpose of the agreement, "reduce the burden of the local communities, including Okinawa" (in the preamble) will be compromised. Third, not only is the fiscal spending of $2.8 billion (approximately 280 billion yen) completely unjustified, the forcible implementation of this "relocation" will require unbridled further injection of tax money. The Japanese and U.S. governments agreed in the roadmap for USFJ realignment in May 2006 that under the pretext of "reducing the burden on Okinawa," Japan will foot the bill for some $6.1 billion (approximately 610 billion yen) of the total cost of $10.3 billion (approximately 1.03 trillion yen) for "relocating" 8,000 marines in Okinawa and their families. Of this amount, $2.8 billion will be direct fiscal spending, while "investment and loans" will cover $3.3 billion for the construction of housing for U.S. military families and other infrastructure. However, failure to recoup such "investment and loans" will require tax money to cover the loss. Furthermore, it was also found that Japan may possibly have to shoulder the cost for not only the relocation of the marines, but also expenditures for the construction of navy and air force facilities and the training and transport of marines. Sacrifice U.S. Marine commander General James Conway testified at a U.S. Congress hearing on May 6 that a review of the Guam "relocation" plan itself is possible. There is no guarantee that the U.S. side, which is facing a serious economic crisis, will be able to implement its share in the relocation cost without fail. The "Guam" agreement, which sacrifices the Japanese people's livelihood by imposing the supply of funds up to 2014 for such a project, is absolutely unacceptable. ZUMWALT