JAPANESE MORNING PRESS HIGHLIGHTS 06/05/09

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/05/09

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

4) President Obama's "new beginning" speech in Cairo on Middle East
policy seen as aimed at isolating extremists in the Muslim world
(Asahi)

5) Foreign Minister Nakasone, Secretary Clinton in telephone
conversation agree on need for a strong UNSC resolution on North
Korea (Asahi)

6) Japanese Communist Party Chairman Shii cites his letter to
President Obama praising his Prague speech as "a first step for the
JCP to grow into a ruling party" (Sankei)

7) Anti-piracy bill now being marked up in the Upper House (Asahi)


Political agenda:
8) Prime Minister Aso being showered with criticism from his own
party for slow policy responses (Yomiuri)
9) Important bills are being passed by the Diet despite the odds
(Tokyo Shimbun)
10) Liberal Democratic Party (LDP) to delay introduction of the
restriction on holding heredity seats in the Diet (Asahi)

11) Nikkei survey or 887 Lower House candidates finds 57 from LDP
and 6 from Democratic Party of Japan (DPJ) hold hereditary seats
(Nikkei)
12) LDP perplexed by the opposition's drive for political reform
(Nikkei)
13) One of "Koizumi's children," freshman Lower House LDP lawmaker
Sugimura, lacking party's backing, will withdraw from the election
race (Tokyo Shimbun)
14) Social Democratic Party wants to file a censure motion against
Prime Minister Aso, but the DPJ remains reluctant to do so
(Mainichi)
15) LDP, DPJ joint panel aim to bring about use of Internet for
political contributions (Mainichi)
16) Approving three of the budget-related bills part of the DPJ's
election strategy (Asahi)
17) Opposition camp comes up with five areas of policy cooperation
(Yomiuri)

18) Consumer Affairs Agency to be launched in September (Tokyo
Shimbun)

Foreign aid:
19) JICA to set up a system in China for compensation to victims of
environmental pollution (Mainichi)
20) METI to use foreign aid to support businesses in developing
countries that help the poor (Nikkei)

21) Japan and China to hold economic talks on intellectual property
violations (Sankei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei and Tokyo Shimbun:

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Man jailed for life in Ashikaga murder case freed

Nikkei:
Health ministry to abolish separate fee reimbursement in medical
care for elderly aged at 75 or older

Akahata:
JCP holds 8th central committee convention

2) EDITORIALS

Asahi:
(1) DNA test freed man jailed for life in Ashikaga murder case
(2) Prime Minister Aso has responsibility for whether to reappoint
Japan Post President Nishikawa

Mainichi:
(1) Ashikaga murder case: Gauge DNA test's merits and demerits
(2) U.S. and Muslims: Welcome "new beginning"

Yomiuri:
(1) Appointments require Diet approval: Don't ignore flaws in the
system
(2) Ashikaga murder case: Fresh DNA test results open can of legal
worms

Nikkei:
(1) Prime Minister Aso must reappoint Nishikawa as Japan Post
president
(2) What does acquittal of man jailed for life in Ashikaga murder
case tell us?

Sankei:
(1) Increase in fertility rate: Strengthen measures for stable rise
(2) Need to verity investigations into Ashikaga murder case through
retrial

Tokyo Shimbun:
(1) Man jailed for life in Ashikaga murder case must have been freed
before
(2) Carbon monoxide poisoning: Preparations needed for invisible
enemy

Akahata:
(1) Fiscal reconstruction council lacks reflection on vicious circle
of crisis

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 4

NIKKEI (Page 2) (Full)
June 5, 2009

07:49 Took a walk around the official residence.
10:06 Sorted out papers at his private office in Nagata-cho.
11:09 Arrived at the official residence.
11:16 Entered his name in the register book to celebrate the
birthday of Princess Mikasa in Motoakasaka.
11:28 Arrived at the Kantei.
13:00 Met with Finance Minister Yosano in the Diet building.
14:00 Met with Executive Director Yuji Watanabe of the Japan Finance

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Organization for Municipalities, followed by New Komeito deputy
chief Hamayotsu.
15:17 Met with El Salvador Ambassador to Japan Paredes, followed by
Internal Affairs Minister Sasagawa.
16:03 Met with Upper House member Yoriko Kawaguchi, co-chairperson
of the Nonproliferation and Disarmament International Committee,
followed by Cabinet Intelligence Director Mitani, and Defense
Ministry Defense Policy Bureau Director General Takamizawa and
Defense Intelligence Headquarters chief Shimohira. Mitani stayed
behind.
17:10 Met with outgoing chairman Yoshifumi Ishizawa and incoming
chairman Takashi Seike of the Central Federation of Societies of
Commerce and Industry, followed by Justice Minister Mori. Then met
informally with those involved in drafting bills related to the
establishment of a consumer agency.
19:08 Dined with his secretary at a French restaurant in Yurakucho.
21:24 Arrived at the official residence.

4) President Obama's speech on a "new beginning" between America and
Islam aims at isolating extremists in Muslim world

ASAHI (Page 8) (Excerpts)
June 5, 2009

By Atsuhiro (?) Hirata in Cairo

President Obama in a speech at Cairo University made called for "a
new beginning between Muslims in the world and America based on
mutual respect." His speech aimed to ease the anti-American feelings
that had spread across the Islamic world during the Bush
administration's terms in office.

Analysis: President Obama's speech proclaims an end of the policies
of the Bush administration toward the Islamic world. The Bush
administration, which launched the Iraq war based on unilateralism,
toppled the Hussein regime with American power. It also condoned in
effect Israel's expansion of its settlements (in the West Bank and
Gaza strip). It labeled Iran a part of the "axis of evil."

Such stances deepened distrust of America among Muslims. In an
opinion survey carried out in 2008 in six Arab states by the
University of Maryland and Zogby International, 64 PERCENT of
respondents said that their impression of America was "very
unfavorable."

Obama after his inauguration in January gave an interview to Al
Arabiya, a satellite TV station, in which he stressed the building
of a new relationship with Arabs and the Islamic world based on
mutual respect. In April, in Turkey, he gave a speech in which he
stated that "America is not at war with the Muslim world." The
speech this time is his third message.

Until now, President Obama's efforts to improve relations have been
used as policy measures to counter extremists. In Pakistan and
Afghanistan, regarded as the front line of Obama's battle with
extremist groups, the Taliban has been cooperating with Al Qaeda.
Khalil Al-anani, an expert on Islamic extremist groups, points out
that the reason Al Qaeda has been able to strengthen its activities
is because of the anti-American feelings harbored among ordinary
citizens.

Obama's words aim to drive a wedge in between extremist groups and

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ordinary citizens and to isolate those groups. However, there is
deep-seated caution in the views of Arabs, as one daily pointed out,
"The distrust toward America will not be removed by words and clever
arguments but only by swift action."

The U.S. as early as next week will dispatch Special Envoy Mitchell
to the Middle East to speed up diplomatic efforts. Whether the word
"change" can be made into a reality in the Muslim world remains to
be seen.

5) Nakasone, Clinton concur on "strong resolution" on N. Korea

ASAHI (Page 4) (Full)
June 5, 2009

Foreign Minister Nakasone talked with U.S. Secretary of State
Clinton over the telephone yesterday evening. Nakasone and Clinton
confirmed a course of action to aim for a "strong resolution" at the
United Nations Security Council against North Korea's recent nuclear
test. According to the Foreign Ministry, Nakasone told Clinton:
"It's important to adopt the strongest possible resolution promptly,
including additional sanctions, in order to make them feel that
provocative actions will be against their interests."

Clinton stated, "We want to cooperate with Japan so we can adopt the
strongest possible resolution." In the U.N. Security Council, Japan
and the United States are insisting on incorporating strict
sanctions in the resolution, while China and Russia are calling for
the resolution to show a degree of consideration for North Korea.

6) Letter to Obama "a step toward becoming a party that can run
government": Shii

SANKEI (Page 5) (Abridged)
June 5, 2009

Kazuo Shii, chair of the Japanese Communist Party, has recently met
with business community leaders and sent a letter to U.S. President
Obama to praise his recent Prague speech for nuclear elimination.
"This is a first but significant step in the process of growing into
a governing party," Shii said yesterday in the JCP's 8th Central
Committee Plenum. The JCP has plans to go for a democratic coalition
government at an early stage of the 21st century and is exploring
cooperation with other parties through such activities as opposing
U.S. military bases.

7) Revision talks set for antipiracy bill

ASAHI (Page 4) (Full)
June 5, 2009

The House of Councillors is now going to deliberate on a
government-introduced antipiracy bill allowing the Self-Defense
Forces to escort not only Japanese ships but also foreign ships
against pirates. The leading opposition Democratic Party of Japan
(Minshuto) yesterday presented the ruling coalition with a draft
revision of the legislation and concurred on starting substantive
deliberations next week. The DPJ's draft revision requires the
government to ask the Diet for approval before sending out the
Self-Defense Forces and to establish an antipiracy headquarters
under the Cabinet Office, as the party proposed in its draft
revision for deliberations in the House of Representatives. The DPJ

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will respond to taking a vote on the legislation by June 19.

8) LDP thrown in uproar as many members criticizing Aso, leadership

YOMIURI (Page 4) (Abridged slightly)
June 5, 2009

One after another, members of the Liberal Democratic Party (LDP)
yesterday criticized Prime Minister Taro Aso and the party leaders
because Aso and the leadership are unable to promptly deal with such
issues as whether Japan Post President Yoshibumi Nishikawa should
reappoint, as well as whether the LDP presidential election should
be moved up. Many LDP lawmakers have become irritated.

The meeting of the LDP House of Representatives members, held at
noon yesterday in the Diet building, was thrown into a state of
confusion by booing and heckling.

Yasuhiro Nakagawa, one of the so-called 'Koizumi children,' who were
elected for the first time to the Diet in the 2005 Lower House
election, spoke out loudly about the Nishikawa issue:

"If (Nishikawa) is replaced, a vote of national confidence should be
sought after the dissolution (of the Lower House). Or (the prime
minister) should ask Internal Affairs and Communications Minister
Kunio Hatoyama to resign. The prime minister should choose one
option."

Masazumi Gotoda emphasized:

"The Democratic Party of Japan (DPJ) has played up its effort to
bring about a change in government, but we have no message to
promote our party to the public. I want the party leadership not to
waver in reaction to the DPJ's policies, and stick to its own
policies."

With the next general election drawing closer, their criticism of
the leadership might damage the LDP's image and show its effects in
the election. Even though, many LDP lawmakers criticized the leaders
because they are unhappy with "the slow response of the Prime
Minister's Official Residence (Kantei) and the LDP leadership due to
the absence of strategists and coordinators in the Kantei and the
LDP" (junior LDP member).

In addition to junior LDP members, former Secretary General Hidenao
Nakagawa and former Chief Cabinet Secretary Yasuhisa Shiozaki, who
have distanced themselves from Aso, began yesterday collecting
signatures from party members on a resolution calling for a total
ban on the amakudari (golden parachute) practice, in connection with
reform of the national civil service system. Nakagawa said: "There
are 57 advocates." Aso's aide expressed concern, saying: "What they
are doing is the same thing as criticizing the government-drafted
bill amending the National Civil Service Law as insufficient."

Factions in the LDP have no influence over them. Nobutaka Machimura,
who heads a faction, met yesterday with faction member Taku
Yamamoto, who launched a plan to collect signatures on the idea of
moving up the LDP presidential race, to ask him to be cautious about
his action. Yamamoto reportedly did not take Machimura's advice,
arguing: "This is not campaign to topple the government."

There is a rumor about a shuffle of the cabinet among lawmakers

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close to Aso as a strategy to break the impasse. Their prediction is
that if Hatoyama and other ministers are replaced by mid-level and
junior lawmakers, displeasure in the party will be eased and the
cabinet support rate will increase.

However, a cabinet shuffle might give momentum to the argument to
replace the prime minister because in a reshuffle all LDP members,
excluding those who get cabinet posts, would become enemies of Aso.
A cabinet shuffle while the Diet is in session would be difficult to
justify. Therefore, Aso "is now reluctant to do so" (Aso aide). All
the more because many LDP members think that the Aso cabinet has no
leeway to shuffle as it has suffered low support rates, the idea of
Aso reshuffling his cabinet is unthinkable.

9) What will the Diet do? - Key bills to pass before end of June;
Debate on "politics and money" in Lower House

TOKYO SHIMBUN (Page 2) (Abridged)
June 5, 2009

Shunsuke Shimizu

The House of Representatives passed the bills related to the FY09
supplementary budget, including the revised Development Bank of
Japan Law, on the afternoon of June 4. With this, all the major
bills that Prime Minister Taro Aso had cited as the prerequisite for
dissolving the Diet have passed the Lower House. The political stage
will now move to the House of Councillors, and how the opposition is
going to handle these bills will be the key question. It is now
believed by some that the supplementary budget-related bills and
other key legislations may be enacted before the end of June.

In addition to the supplementary budget-related bills, Aso has also
cited the bills to amend the National Pension Law and the bill on
antipiracy measures as prerequisites for dissolving the Lower House.
Of the six budget-related bills, the ruling parties have given up on
passing the bill on ad hoc special measures to respond to the
capital market crisis. Deliberation on this has not even taken place
in the Lower House due to the opposition's resistance.

Deliberations on the revised pension law and the antipiracy bill
have started at the Upper House on June 2. While the Democratic
Party of Japan (DPJ) opposes both these bills, the pension bill and
the antipiracy bill can be enacted with a second vote in the Lower
House based on the "60-day rule" under the Constitution on or after
June 16 and 22, respectively.

Of the five supplementary budget-related bills sent to the Upper
House, the DPJ has already agreed to revisions - except for the tax
reform bill providing for limited-term reduction of gift tax, etc.
-- at the Lower House, so it will vote for the bills.

Based on the above, Azuma Koshiishi, chair of the DPJ caucus in the
Upper House, said smugly at a news conference on June 4: "It is
quite obvious that the bills on hand can be dealt with before the
end of June. Go ask Prime Minister Aso what we are supposed to do in
July."

Meanwhile, at the Lower House, which has finished handling the key
bills fought over by the ruling and opposition parties, both camps
are beginning to "attack" the other side's "weak point" on the
question of "politics and money."

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10) LDP to put off plan to restrict hereditary candidates from
running in elections

ASAHI (Page 1) (Full)
June 5, 2009

Tsutomu Takebe, chairman of the Liberal Democratic Party's (LDP)
Reform Implementation Headquarters, presented in its executive
meeting at party headquarters yesterday a plan revising its initial
proposal for restricting hereditary candidates, starting with the
next general election. The revised plan does not give a timeframe
for introducing the restrictions. With this decision, momentum for
introducing the new rules in the LDP is likely to lose steam.

Takebe presented a proposal on May 21 to ban relatives of Diet
members from running consecutively in the same electoral district as
first time candidates. With incumbent legislators excluded, only
Shinjiro Koizumi (Kanagawa No. 11 constituency) , the second son of
former prime minister Junichiro Koizumi, and Shoichi Usui (Chiba No.
1 constituency),the eldest son of former Justice Minister Hideo
Usui, would have been affected by the new rule.

However, several loopholes in the restrictions were pointed out. For
instance, it would be possible for hereditary candidates to run as
independents and then to join the LDP after they are elected. In
addition, hereditary lawmakers in the party raised strong objects to
hastily introducing the restrictions.

Takebe expects to get approval for the revised plan during a general
meeting of the reform panel today and report it to Prime Minister
Taro Aso. He intends to have the party executive decide on when to
introduce the new rule.

Following the postponement decision, Election Strategy Committee
Vice Chairman Yoshihide Suga, who has been calling for restrictions
on hereditary politics, has decided to endorse Koizumi and Usui,
both of whom have already obtained informal endorsements as the
party's official candidates. With these two as exceptions, Suga has
continued coordination on the plan to ban endorsing hereditary
candidates in the next general election.

However, the LDP has already installed its candidates in most
constituencies, so new hereditary candidates are unlikely to appear.
Although Suga intends to set forth the ban on hereditary politics in
the party's platform for the next general election, the party is
likely to include the plan in the manifesto for the election after
the next.

The DPJ has already decided not to endorse hereditary politicians in
the next election and will surely rap the LDP on this issue in the
election campaign.

11) Hereditary candidates: 57 to run from LDP, 6 from DPJ

NIKKEI (Page 2) (Full)
June 5, 2009

A total of 887 candidates (as of June 4) are going to run in the
next election for the House of Representatives. Among these
prospective candidates, 124 persons or 39 PERCENT of those expected
to run on the ruling Liberal Democratic Party's ticket have a former

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member of the Diet among their relatives within the third degree of
relationship, the Nihon Keizai Shimbun has found from its survey. In
the case of the leading opposition Democratic Party of Japan
(Minshuto),39 persons or 15 PERCENT of its prospective candidates
also have a former lawmaker.

Both the LDP and the DPJ have plans to restrict successive
hereditary candidates. The LDP has 57 persons or 18 PERCENT falling
under this category of successive heredity among its prospective
candidates. The DPJ has six persons or 2 PERCENT .

Meanwhile, there are also nonsuccessive hereditary candidates
running from one and the same electoral district like Prime Minister
Taro Aso. In this category, the LDP has 44 persons or 14 PERCENT ,
while the DPJ has 15 persons or 6 PERCENT . In the case of those
running from different constituencies like DPJ President Yukio
Hatoyama, the LDP has 17 candidates or 5 PERCENT , and the DPJ 14
persons or 5 PERCENT .

12) LDP's political reform policy following a tortuous course over
questions of hereditary seats, numbers of Diet seats, and political
funds

NIKKEI (Page 2) (Abridged slightly)
June 5, 2009

With the next Lower House election approaching, the Liberal
Democratic Party's (LDP) political reform discussion has begun
spiraling out of control. A plan to restrict "hereditary seats" is
likely to be postponed until after the next Lower House election and
the party is drawing strong protests from its coalition partner, the
New Komeito. The party's discussions on the question of politics and
money have made no progress. Ideas laid out by the LDP out of
rivalry with the major opposition Democratic Party of Japan (DPJ)
might end up as pie in the sky.

The third-generation group to reform the LDP, composed of mid-level
and junior LDP lawmakers, decided yesterday to implement the plan to
restrict "hereditary seats" beginning with the next Lower House
election. The decision came from a sense of alarm that the LDP might
not be able to vie with the DPJ, which has already decided to
introduce restrictions beginning with the next election.

Consequently, LDP Election Strategy Council Chairman Makoto Koga
accepted the group's request. The LDP's hereditary-seat ratio is
higher than that of the DPJ. Cautious views, mostly from veteran
lawmakers, are strong in the LDP. Following the third-generation
group's meeting, the LDP reform taskforce met and decided not to
apply restrictions for the next election and not to specify any
specific timeframe for restrictions in a report to Prime Minister
Taro Aso.

A study meeting held yesterday by Election Strategy Council Deputy
Chairman Yoshihide Suga and others also produced a plan prohibiting
hereditary-seat candidates from becoming electoral branch heads. The
plan does not apply to Shinjiro Koizumi and Shoichi Usui who are
already serving as branch heads. This is a desperate measure that
takes in account both public criticism of hereditary seats and party
unity.

To reduce the number of Diet seats, the LDP is also studying a plan
to fix the number at 500 based on a plan to merge the two chambers

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(a total of 722 seats) of the Diet into one. The introduction of a
unicameral system requires a constitutional amendment. Some LDP
lawmakers are skeptical about how serious their party is about such
a plan.

The presence of the New Komeito is an impediment to the plan. Of the
party's 31 Lower House members, 23 hold proportional representation
seats. The New Komeito warns that a reduction in the proportional
representation seats is a matter of life or death for the party.
"This would dampen our eagerness to cooperate with the LDP in
election campaigns," a senior New Komeito said.

The DPJ is not trouble-free, either. The party is generally in
agreement on reducing the numbers of seats both in the lower and
lower house. The Lower House has come up with a plan to reduce the
number of proportional representation seats by 80, while the Upper
House has yet to reach any conclusion. Now that the DPJ has become
the largest party in the Upper House with tremendous influence, a
cautious stance exists in the party about embarking on reducing the
number of seats. At the June 3 general meeting of the DPJ Upper
House lawmakers, Vice President Toshimi Kitazawa said: "A reduction
in the number of seats is tantamount to a reduction in the people's
rights."

In the wake of a Nishimatsu Construction Co. donation scandal, a
study group composed of LDP and DPJ lawmakers met yesterday and
produced a set of proposals on donation methods, such as the use of
Net banking services. "Under the envisaged system, lawmakers will
not have to take chances regarding corporate donations," Koichi
Kato, an organizer, explained. But in reality, the LDP heavily
relies on corporate and organizational donations, and it is lagging
behind the DPJ, which has presented to the Diet a bill totally
prohibiting corporate donations in three years' time. The Prime
Minister, who has instructed the LDP to study reducing the number of
Diet seats and reforming the Diet, is keeping silent for now.

13) Diet member Sugimura gives up on running in the next Lower House
election: "Running as independent will only benefit the DPJ"

TOKYO SHIMBUN (Page 2) (Full)
June 5, 2009

Liberal Democratic Party (LDP) House of Representatives member Taizo
Sugimura, 29, elected from the proportional representation ticket of
the Southern Kanto bloc, who had expressed his intention to run in
the first district of Hokkaido in the next Lower House election,
held a news conference at the party headquarters on June 4 and
announced that he was giving up on the plan. The reason given by
Sugimura was: "Under the present circumstances, the result will be
very negative, even if I run. Particularly if I run as an
independent, this will only benefit the Democratic Party of Japan
(DPJ)." He said that he would support Takeshi Hasegawa, who is
expected to be named the LDP's official candidate in the first
district of Hokkaido.

Sugimura won his first Diet seat as the 35th candidate on the LDP
proportional representation ticket for the Southern Kanto bloc in
the election over the issue of postal privatization in 2005. He had
indicated that he intended to run in the next Lower House election
as an independent.

Tsutomu Takebe, who was LDP secretary general during the 2005

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election, gave the following comments: "I was not consulted, so I am
really surprised. This might be a good thing for Mr Sugimura's
future."

14) SDP eager to submit a censure motion against the Prime Minister
over Japan Post president; DPJ remains cautious

MAINICHI (Page 5) (Full)
June 5, 2009

Takenori Noguchi, Kuniaki Kinoshita

A plan emerged in the opposition bloc yesterday to submit a censure
motion against Prime Minister Taro Aso to the House of Councillors
in the event he allows the reappointment of Yoshifumi Nishikawa as
president of Japan Post Holdings Co. Social Democratic Party (SDP)
Secretary General Yasumasa Shigeno requested Democratic Party of
Japan (DPJ) Secretary General Katsuya Okada to study the option.
Meanwhile, DPJ Deputy President Naoto Kan expressed cautiousness at
a press conference yesterday, saying, "We must not make a judgment
on the Aso cabinet's response with this issue alone."

The secretaries general of the three opposition parties including
the People's New Party will meet on June 8 to discuss the handling
of a censure motion against the Prime Minister. DPJ President Yukio
Hatoyama simply said to the press corps in Tokyo yesterday: "It all
depends on (the Prime Minister's) conclusion. We are not at a stage
to mention censuring him."

Meanwhile, there was a meeting of LDP Lower House members yesterday
in which some junior members voiced criticism of Internal Affairs
and Communications Minister Kunio Hatoyama, who is strongly opposed
to Nishikawa's reappointment.

At the meeting, Yasuhiro Nakagawa said: "If the Cabinet is to change
the designation committee's decision, Prime Minister Aso should
decide either to dissolve (the Lower House) to seek popular will or
to let Communications Minister (Kunio) Hatoyama step down."

Nakagawa is one of the so-called Koizumi's children who won Lower
House seats for the first time in the 2005 election. Former
Agriculture, Forestry, and Fisheries Minister Seiichi Ota rebutted
Nakagawa, "In terms of governance, the cabinet minister in charge of
the matter should make a decision."

15) LDP, DPJ likeminded group eyes Net donation system

MAINICHI (Page 5) (Abridged slightly)
June 5, 2009

Daisuke Nohara

A group of lawmakers of the ruling Liberal Democratic Party (LDP)
and the major opposition Democratic Party of Japan (DPJ) who are
aiming at an expansion of individual donations held a study meeting
in the Diet building yesterday. As a result, they decided to ask the
financial industry and other industries to study a system allowing
individuals to easily make donations by using the Internet. The
joint effort by the two political parties that are at loggerheads
over corporate and organizational donations is likely to draw
attention.


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The members include former LDP Secretary General Koichi Kato,
Election Strategy Council Deputy Chairman Yoshihide Suga, DPJ Deputy
President Naoto Kan and DPJ Vice President Seiji Maehara. The group
plans to recruit more supporters to recommend to the credit and
banking industries a donation system of five approaches, such as
using Net banking services and settling accounts with credit cards.

In the wake of a Nishimatsu Construction Co. donation scandal, the
question of politics and money has merged. The group apparently
wants to speedily spread an individual donation system. But in
Japan, individual donations are not common. Further, individual
donations are likely to result in an increase in small-amount
account settlements, which financial institutions are reportedly
reluctant to handle.

16) DPJ intends to quickly enact bills as strategy to press for
early Diet dissolution

ASAHI (Page 4) (Excerpts)
June 5, 2009

Three bills related to the fiscal 2009 supplementary budget cleared
the House of Representatives yesterday. Deliberations on these bills
will start in the opposition-controlled House of Councillors. The
Democratic Party of Japan (DPJ) intends to smoothly dispose of key
bills in seeking an early dissolution of the Lower House for a snap
election. With an eye on the next general election, the main
opposition party is considering adopting a censure motion against
Prime Minister Taro Aso in the Upper House in the final phase of the
session, aiming to demonstrate a confrontational stance.

Of the six extra budget-related bills, five have already passed the
Lower House as of yesterday. Passing the remaining capital market
crisis measures bill may be difficult due to opposition from the
DPJ.

In the current Diet session that has been extended through July 28,
the DPJ has adopted a strategy of enacting pending bills quickly and
calling for Diet dissolution at an early date. Azuma Koshiishi,
chairman of the DPJ Caucus in the Upper House, said in a press
conference: "(Deliberations) on the bills are expected to end in
June." Deputy President Naoto Kan also said: "We will strongly call
on the government to dissolve the Lower House in June and hold the
election in July."

The DPJ executive members anticipate that if the supplementary
budget-related bills and the antipiracy bills are enacted in June,
since the Diet session will be in recess in July, an increasing
number of people will call for Diet dissolution.

Even if the session is adjourned without dissolution, local
elections are scheduled after the session, including the Tokyo
metropolitan assembly election on July 12, as the preliminary
elections for the Lower House election. Senior DPJ members expect
that, with its victories in these elections, the party will gain
more opportunities to press Aso to dissolve the Lower House.

17) DPJ and PNP decide on outline of five common policies for the
opposition

YOMIURI (Page 4) (Abridged)
June 5, 2009

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The Democratic Party of Japan (DPJ) and the People's New Party (PNP)
decided on the outline of their "common policies" for the next House
of Representatives election on June 4. They plan to soon start
working level consultations that will also involve the Social
Democratic Party (SDP). But the SDP, concerned about being
overshadowed (by the DPJ and the PNP),is still cautious, so
prospects for the consultations remain uncertain.

The common policies will be about: (1) maintaining the current
consumption tax rate; (2) review of postal privatization; (3)
medical insurance system for those who are 75 years old or above;
(4) safety net for securing employment; and (5) free senior high
school education. They regard these as the priority issues for the
new coalition government if a change of administration is achieved
after the next Lower House election.

The two parties narrowed down the common policies to five to make it
easier for the SDP, which attaches great importance to its
independence, to participate.

For example, review of postal privatization is a policy on which the
PNP has already signed a separate agreement with the DPJ and the
SDP. With regard to the consumption tax rate, DPJ President Yukio
Hatoyama has stated that, "There is no need to discuss this in the
next four years." As to medical insurance for senior citizens, the
three parties, plus the Japanese Communist Party, have previously
submitted a bill to the Diet that would abolish this system.

Meanwhile, issues on which the DPJ and the SDP differ, such as
foreign and security policies, are not included among the common
policies. There is dissatisfaction in the DPJ about this. "What is
the use of common policies which do not show a blueprint of the
country and the basis for running the administration, such as
foreign and security policy?" (junior DPJ member).

18) PM Aso to launch Consumer Affairs Agency in September

TOKYO SHIMBUN (Page 2) (Full)
June 5, 2009

At an informal meeting with officials involved with the law on
creating the Consumer Affairs Agency at the Prime Minister's Office
Residence on June 4, Prime Minister Taro Aso stated that he wants to
launch the agency "in September."

Aso also said: "The job of an organization is not done merely with
its creation. It cannot claim to have accomplished its mission if it
does not produce results. It should function in a manner meeting the
people's expectations."

The Cabinet Office opened an office to prepare for the agency's
launch on June 4. State Minister for Consumer Affairs Seiko Noda
personally put up its signboard.

19) JICA to cooperate with China in setting up pollution
compensation system

MAINICHI (Page 1) (Full)
June 5, 2009

Pollution in China is becoming serious as its economy develops.

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Mainichi Shimbun learned on June 4 that in response to the
situation, the Japan International Cooperation Agency (JICA) and the
Chinese government had agreed to cooperate for the establishment of
a compensation system targeting pollution victims in China. Since
China has no system of compensating pollution victims, many victims
just have to bear it, even if their health deteriorates. This has
become a social problem. The Japanese side will provide training to
China on the know-how of setting up a compensation system, based on
its experience of adopting measures against pollution during the
high-speed economic growth period. There has been technical
cooperation on pollution between the two countries. However, this is
the first cooperation for them to cooperate for the relief of
pollution victims.

The governments of Japan and China will vow to cooperate with each
other during the Japan-China High-Level Economic Dialogue to be held
in Tokyo on the 7th. JICA and the Chinese Environmental Protection
Ministry will then formally reach an agreement on the 13th.

Cooperation is expected to continue for three years starting in
September. JICA will invite 30 Chinese officials in charge and
researchers - 10 each year, to provide training on Japan's measures
to deal with pollution, such as the Minamata disease and air
pollution along the Nishiyodo River in Osaka, a law that mandates
industrial polluters to compensate victims and the pollution dispute
settlement system. Japan will also dispatch experts to China to give
seminars on the setting up of a compensation system.

According to the World Bank, the damage caused by air and water
pollutions reportedly totaled 781 billion yuan at the most in China,
accounting for 5.8 PERCENT of its GDP. In China, there have
appeared many "cancer villages," which are presumably ascribable to
pollution. The point has also been made that oxidase smog and acid
rain in Japan are caused by pollution coming from China.

A Japanese government source explained: "The fact that the Chinese
government is considering setting up a pollution compensation system
reflects that its awareness that the environmental issue has
worsened. Promoting measures against pollution through cooperation
will also reduce its impact on Japan."

20) METI to offer financial aid with ODA funds for businesses
intended for poor people in developing countries

NIKKEI (Page 5) (Full)
June 5, 2009

The Ministry of Economy, Trade and Industry (METI) has decided to
support Japanese firms' businesses intended to serve poor people in
developing countries. It plans to conduct local surveys on
commodities and services that are low-priced but help improve their
living standards as a step to boost their sales. It also plans to
offer financial aid with official development assistance (ODA) funds
for companies. The ministry will back Japanese firms aiming at
exploring the Bottom of Pyramid (BOP) market in the world.

METI will select recipients from among the applicants to be soon
collected and sell products in great demand on a trial basis. Under
this project, the government and the private-sector will jointly the
whole process covering from market survey to sale while also making
use of technical assistance from the Japan International Cooperation
Agency (JICA). The ministry is also willing to introduce tax

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incentives.

Businesses for the group of impoverished people aim at reducing
poverty and pursuing market gain in developing countries. There is
also an advantage of exploiting markets with potential.

21) Japan-China economic dialogue: Japan to call on China to
strengthen measures to deal with infringement on intellectual
property rights

SANKEI (Page 9) (Full)
June 5, 2009

Japan and China will hold on June 7 a high-level economic dialogue
in Tokyo to confer on a wide range of matters, including easing
financial regulations in addition to trade and environment issues.
Japan is expected to ask China to withdraw its plan to implement the
China Compulsory Certification (CCC) system concerning information
technology on foreign-made products. Japan will also ask China to
step up measures to deal with infringements on intellectual property
rights involving copies of brand-name products.

Both countries are expected to reach an agreement to discuss
measures to deal with copied products and infringements on
registered trademarks targeting Japanese companies by setting up a
cross-sectional taskforce.

In the financial area, both countries will likely agree to promote
liberalization of China's financial market. In an effort to further
strengthen bilateral economic relations through enhanced financial
transactions, Japan and China will focus on such issues as listing
Japan's financial products on the Chinese market at a working-level
meeting.

The Chinese government is strengthening restrictions on exports of
domestically-produced rare metals. Japan will ask China to ease such
regulations.

Japan and China will also confirm their commitment to aim at an
early settlement of new multilateral trade talks (Doha Round) at the
World Trade Organization (WTO),which are encountering
complications. Measures to curb global warming and strengthening
cooperation in the tourism area will also be on the agenda.

ZUMWALT