JAPANESE MORNING PRESS HIGHLIGHTS 06/09/09

UNCLAS SECTION 01 OF 13 TOKYO 001284

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 06/09/09

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

4) Anti-piracy bill likely to be enacted on June 19 (Sankei)

North Korea problem:
5) Prime Minister Aso presses China's deputy premier for cooperation
on North Korea sanctions (Mainichi)
6) Liberal Democratic Party (LDP) planning to use its strong North
Korea stance as a campaign tactic to appeal to the public in the
Lower House election (Yomiuri)
7) Government again on alert for a North Korea missile launch,
prepared to issue destruct order if necessary (Yomiuri)
8) Government worried that its planned law to allow searches of
North Korean ships will get bogged down in the divided Diet
(Mainichi)
9) Tug of war over whether searches of North Korea cargo ships would
be carried out by the Japan Coast Guard or the Maritime Self-Defense
Force (Asahi)
10) LDP use of the "arms-expansion card" - such as preemptive strike
capability - against North Korea may be a double-edged sword if it
causes anxiety in Asia (Tokyo Shimbun)

Economy:
11) In releasing the latest set of economic "big-bone" guidelines
today, government to include pledge to cut the fiscal deficit in
half over 5 years, as percentage of GDP (Mainichi)
12) Return of foreign investors is starting to boost the sagging
stock market (Mainichi)

13) Prime Minister Aso to announce mid-term target to reduce
greenhouse-gas emissions by 14 PERCENT , compared to level in 2005
(Nikkei)

Political agenda:
14) Prime Minister Aso vows to hold sway in tiff with Internal
Affairs Minister Hatoyama over controversial appointment of head of
Japan Post (Sankei)
15) LDP project team to start drafting political campaign pledges
(manifesto) for upcoming Lower House election (Sankei)
16) Ruling parties to adopt set of constitutional deliberation rules
in order to shake up the opposition camp, reluctant about
constitutional revision (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Municipalities achieved only half of targeted increases in capacity
for nursing care facilities

Mainichi:
24 prefectures prohibit offering scholarships to high school
students receiving student loans from other groups

Yomiuri:
Primary balance deficit to be halved in five years

Nikkei:

TOKYO 00001284 002 OF 013


Government to put off goal of fiscal reconstruction until 2020

Sankei:
Business environment has deteriorated due to falling birthrate,
recession; Immediate reforms required

Tokyo Shimbun:
A-bomb disease lawsuit: Government to give up on final appeal

Akahata:
JCP to show path of 21st century and take action: Shii

2) EDITORIALS

Asahi:
(1) Japan cannot afford to postpone agricultural administration
reform
(2) Anxiety and expectations about new South African president

Mainichi:
(1) Child porn: We should listen to international criticism
(2) Tourist-oriented nation: Number of tourists alone is no
achievement

Yomiuri:
(1) Cargo inspections on North Korean ships: Fix laws to implement
UN resolution
(2) Next-generation supercomputer to determine future of
"electronics-oriented country"

Nikkei:
(1) Relisting North Korea as state sponsor of terrorism is the
obvious choice
(2) China should withdraw policy of requiring foreign companies to
disclose IT information

Sankei:
(1) U.S. government must decide to relist North Korea as state
sponsor of terrorism
(2) Japan-China economic dialogue: Avoidance of key pending issues
regrettable

Tokyo Shimbun:
(1) Japan-China economic dialogue: Consultation system between Japan
and China falls behind that of U.S. and China
(2) Biodiversity: Aim for Nagoya protocol

Akahata:
(1) Make switch to place importance on natural energy

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 8

NIKKEI (Page 2) (Full)
June 9, 2009

07:30 Took a walk around the official residence.
10:37 Met with persons affiliated with his supporters association
for his constituency.
11:01 Met with Chinese Deputy Premier Wang Qishan, followed by
Chairman Kiyoko Shimizu of the Japan Nursing Federation.

TOKYO 00001284 003 OF 013


12:03 Attended government-ruling party liaison council meeting. Then
met with Internal Affairs Minister Hatoyama, Chief Cabinet Secretary
Kawamura, Deputy Chief Cabinet Secretary Uruma, Assistant Deputy
Chief Cabinet Secretary Fukuda and Vice Internal Affairs Minister
Takino. Kawamura remained. Then met with Press Secretary Ogawa.
14:03 Met with Japanese Trade Union Confederation Chairman Takagi.
Kawamura was present. Then met with Japan Federation of Basic
Industry Workers' Unions Central Executive Committee Chairman Naito
and Federation of Electric Power Related Industry Workers Unions of
Japan Chairman Nagumo. Kawamura was present.
15:52 Met with Fukuda.
16:33 Met with Finance Minister Yosano.
17:06 Attended party executive meeting in the Diet building.
Secretary General Hosoda and Acting Secretary General Ishihara
remained.

18:01 Met with Japan Business Federation Chairman Mitarai, Japan
Chamber of Commerce and Industry Chairman Okamura, TEPCO Chairman
Katsumata and Nippon Steel Corporation Chairman Mimura at the
Kantei. Kawamura was present.
19:32 Visited the office of a person expected to run for the Tokyo
Metropolitan Assembly election in Omori-kita.
20:00 Visited the office of a person expected to run for the Tokyo
Metropolitan Assembly election in Kamata.
21:01 Dined with his secretary at a Chinese restaurant at Hotel
Okura.
22:59 Arrived at the Kantei.

4) Antipiracy bill likely to be enacted into law June 19

SANKEI (Page 1) (Abridged)
June 9, 2009

The government and the ruling parties decided yesterday to enact an
antipiracy bill into law as drafted without revising it. The bill
will allow the government to send out the Self-Defense Forces
overseas as needed to cope with pirates. The ruling Liberal
Democratic Party and its coalition partner, the New Komeito, are now
holding revision talks with the leading opposition Democratic Party
of Japan (Minshuto) in the House of Councillors. However, the ruling
coalition judged that it would be difficult to reach an agreement
with the DPJ due to a wide gap between their standpoints. The DPJ
will not draw out the deliberations. The bill will be voted down at
the House of Councillors Foreign Affairs and Defense Committee and
in a plenary sitting of the House of Councillors. After that, the
bill is expected to be enacted into law on June 19 with the House of
Representatives' override of the House of Councillors' decision in a
second vote.

The government invoked maritime security operations this March
against pirates in waters off the eastern African coast of Somalia,
and two Maritime Self-Defense FORCE destroyers have been on an
antipiracy mission there to escort Japanese ships. The antipiracy
bill allows the MSDF to escort foreign ships as well while MSDF's
maritime security operations under the Self-Defense Forces Law are
limited to Japanese ships and Japan-linked ships. The new
legislation will also allow the MSDF to fire on pirate ships in
order to halt them. The two MSDF destroyers, currently deployed to
Somalia waters, are to be replaced in July. The government will
apply the new law to their replacements to fulfill the mission.
5) Aso asks for Chinese vice-premier's cooperation for sanctions on
North Korea

TOKYO 00001284 004 OF 013



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

Prime Minister Taro Aso held talks with visiting Chinese
Vice-Premier Wang Qishan at the Prime Minister's Official Residence
(Kantei) yesterday. In the meeting, Aso asked for China's
cooperation in adopting a strong UN Security Council resolution,
saying, "We pin hopes on the role of China, which has a significant
influence over North Korea in trade as well." Wang simply said in
response, "We are firmly opposed to North Korea's nuclear tests. We
would like to continue extending cooperation."

6) Gov't, LDP eager for legislation to inspect N. Korean ships

YOMIURI (Page 4) (Abridged)
June 9, 2009

There are now growing calls from within the government and the
ruling Liberal Democratic Party insisting on the necessity of
legislative measures for Japan to participate in cargo inspections
for ships to and from North Korea. What lies behind the move is that
the United Nations Security Council is now in the final stage of
coordination on a resolution to impose sanctions on North Korea and
the resolution is expected to require cargo inspections. The LDP
apparently wants to make it a campaign issue in the forthcoming
election for the House of Representatives.

Chief Cabinet Secretary Kawamura, meeting the press yesterday,
referred to Japan's own legislation for cargo inspections, saying:
"If the U.N. Security Council resolution requires (cargo inspections
including) ship inspections, then we will have to consider our
action. We will also have to think about what the government can do
now." With this, Kawamura stressed the need to consider enacting a
new law.

Under Japan's current laws, the Self-Defense Forces and the Japan
Coast Guard are limitedly allowed to conduct cargo inspections in
such cases as criminal investigations, neighboring contingencies
that will seriously affect Japan's security, and armed attacks.

The government has been taking the position that it cannot say there
is a neighboring contingency due to North Korea's nuclear test.
Accordingly, the government will need to amend such laws as the Ship
Inspection Law or otherwise to enact a new law in order for Japan to
participate in cargo inspections.

Main legal basis for ship inspections
Law Territorial waters High seas
Territorial Waters and Foreign Ships Navigation Law The JCG inspects
suspicious ships remaining in Japan's territorial waters without
good reason. The JCG is allowed to use weapons if there is a good
reason that is recognized to be necessary in such cases as
preventing criminals from fleeing and securing legitimate
self-defense. Inapplicable.
Ship Inspections Law The SDF conducts ship inspections as trade and
economic restrictions in the event of a neighboring contingency or
in the case where there is a U.N. resolution or there is concurrence
from the flag state. The SDF is allowed to use weapons for
legitimate self-defense or in other unavoidable cases only. Possible
on the high seas around Japan.
Foreign Military Supplies Shipment Control Law In the event of an

TOKYO 00001284 005 OF 013


armed attack, the SDF inspects ships that are suspected of carrying
foreign military supplies, etc., as a measure to exercise the right
to self-defense. The SDF is allowed to use weapons within the scope
of rational necessity. Possible on the high seas around Japan.

7) Gov't on alert for N. Korea's missile launch

YOMIURI (Page 2) (Full)
June 9, 2009

The government is on the alert, anticipating that North Korea may
come out with a military action of provocation if the United Nations
Security Council adopts a resolution on sanctions against North
Korea. The government will also consider issuing orders to the
Self-Defense Forces to mobilize its missile defense system and
destroy ballistic missiles should they be launched.

Chief Cabinet Secretary Kawamura, meeting the press yesterday,
indicated that the government would make efforts to collect and
analyze intelligence regarding North Korea. Kawamura said: "We
cannot rule out the possibility of North Korea launching another
missile in its reaction to the United Nations Security Council's
moves to adopt a resolution. We will do whatever we can."

North Korea has issued a warning that prohibits sea traffic in
waters east of Wongsan on June 10-30 from 8 a.m. through 8 p.m.
"They may launch a short-range ground-to-ship as a warning to the
United Nations Security Council against its resolution," a senior
official of the Defense Ministry said.

This April, North Korea launched a long-range ballistic missile from
Musudanri in its northeastern part. North Korea is now possibly
preparing to launch an intermediate-range missile from Kitairei in
its southeastern part and a long-range ballistic missile from
Tongchangri in its northwestern part.

If the possibility that North Korea will launch another long-range
ballistic missile becomes strong, the government will issue
destruction orders to the SDF as it did this April since the missile
may pass over Japan. An intermediate-range missile also can cover
Japan entirely, so the government is strongly on the alert. However,
the government will forgo destruction orders in that case. "A
missile will land in Japan," a government source said, "only when
they intentionally launch at Japan." The source added, "North Korea
is surely not hoping to start a war, and even if they launch a
missile, they will make it land in the Sea of Japan."

8) Government having difficulty improving legislation to impose
sanctions on North Korea; Ship inspections might not be possible

MAINICHI (Page 5) (Abridged slightly)
June 9, 2009

Yasushi Sengoku, Yudai Nakazawa

The Japanese government is having trouble improving domestic
legislation to inspect ships of North Korea, which recently
conducted a nuclear test. Japan, along with the United States, is
calling for the adoption of a UN resolution on North Korea, making
cargo inspections on the high seas mandatory. But in order to allow
the Maritime Self-Defense FORCE to conduct ship inspections, a new
special measures law is necessary. Enacting a special measures law

TOKYO 00001284 006 OF 013


takes time. "Japan's call for ship inspections might end up as pie
in the sky," a senior Foreign Ministry official said.

Chief Cabinet Secretary Takeo Kawamura made the following comment
about the improvement of domestic legislation for ship inspections
on the high seas during a press conference yesterday: "Once (ship
inspections) become mandatory (in a UN Security Council resolution),
we will consider our response." Foreign Ministry Administrative
Vice-Minister Mitoji Yabunaka, too, noted in a press meeting
yesterday, "It depends on the results of a UN Security Council
resolution."

The MSDF is to conduct ship inspections on the high seas. The
application of the ship inspection activities law, the legislation
authorizing the MSDF's ship inspections, requires the government to
designate a regional contingency. Further, requirements are strict
for designating a regional contingency in, which is regarded as a
"step short of war." For this reason, a new special measures law is
necessary for the MSDF to actually conduct ship inspections.

"Enacting a new law is time consuming; it takes a couple of months,"
a senior Defense Ministry official noted. The official also
indicated that it would also be difficult to conduct ship
inspections by the Japan Coast Guard, which are allowed in Japanese
territorial waters, unless some kind of crime is confirmed. Japan is
likely to settle on a UN resolution making ship inspections
mandatory only in territorial waters due to strong objections from
China and other factors. What Japan can do after adopting the
resolution is likely to be tested.

9) Ship inspection by the Coast Guard or the MSDF?

ASAHI (Page 4) (Full)
June 9, 2009

Jun Tabuse, Hisashi Ishimatsu

If the inspection of cargo on ships going in and out of North Korea
is included in the new sanction resolution that the UN Security
Council (UNSC) will be adopting in reaction to the DPRK's nuclear
test, what should Japan do? The Japan Coast Guard (JCG) will be able
to do inspections within Japan's territorial sea under existing
laws. However, if inspections in international waters will also be
done to make the sanction more effective, it is very likely that
this will require legal amendments. The government is undecided on
what to do.

Maritime Self-Defense FORCE (MSDF): Legal amendment or new law?

Japan, the U.S., and others are strongly advocating the need for
cargo inspection because North Korea is highly suspected of
importing missile-related materials and supplies needed for its
nuclear test by ship.

At a news conference on June 8, Chief Cabinet Secretary Takeo
Kawamura said: "When international public opinion reaches a
consensus, we need to think about what can Japan do," indicating
that Japan's response will be decided based on the contents of the
UNSC resolution. One option is to amend the ship inspection
operations law enacted in 2000 as part of the response to an
"emergency situation in areas surrounding Japan" that has a serious
impact on its peace and security.

TOKYO 00001284 007 OF 013



Under this law, the MSDF is authorized to conduct cargo inspections
in international waters in such an emergency situation. However,
government officials have stated repeatedly that the DPRK's nuclear
test does not constitute a direct threat to Japanese territory and
thus cannot be regarded as an emergency situation.

For this reason, a voluntary group of Liberal Democratic Party (LDP)
members, the "association for cautious conduct of diplomacy toward
the DPRK" (headed by Ichita Yamamoto) drew up on June 2 the draft of
a bill to be submitted by Diet members to allow cargo inspection
even without the designation of an emergency situation. At a meeting
of the group, an opinion was voiced that, "Since Japan is strongly
demanding ship inspections together with the U.S., if the resolution
requiring mandatory inspections is passed, it will be ridiculous if
Japan is unable to do so."

The Prime Minister's Office Residence is also paying close attention
to moves in the Democratic Party of Japan (DPJ). The party's foreign
affairs and defense division has agreed at a meeting on May 28 to
"prepare a bill to authorize cargo inspection even without the
designation of an emergency situation" (Yoshio Hachiro, foreign
minister in the "Next Cabinet"). The prime minister's aides
calculate that: "If a legal amendment is passed with the DPJ's
support, this will be good for the government and the ruling
parties. If we fail to gain the DPJ's support, we can make this a
point of contention in the general election."

However, final coordination is taking place right now at the UNSC
for the resolution to require mandatory inspection by member states
within their territorial waters only in cases where ships going in
and out of North Korea are suspected of carrying embargoed goods,
although they will "have the right to conduct inspections with the
consent of the flag state of the ships" in the open seas.

If cargo inspection in the open seas will not be mandatory, legal
amendment to allow the deployment of the SDF may not be necessary.
However, there is an opinion in the government and the ruling
parties that it is desirable to prepare to submit the bill to the
current Diet session, which has been extended to July 28, in case
there is enough time to do so.

JCG: Limited to the territorial sea

Ministry of Defense officials are mostly negative about amending the
ship inspection operations law because this will involve the
discussion of many difficult issues, including the authorization for
the SDF to use weapons. Some even doubt the effectiveness of cargo
inspection in the open seas. A senior official of the Cabinet
Secretariat says: "The most efficient way to do cargo inspection is
for each country to inspect at the ports."

Furthermore, there are also calls for caution in the ruling parties
from the diplomatic standpoint. A former director of the Defense
Agency points out: "We should not provoke the neighboring countries
right now." One senior official of New Komeito, a party which
embraces a pacifist policy, expresses concerns and urges "caution"
in decision making. Another reason is that one wrong move may cause
the DPRK to turn violent.

Therefore, even if ship inspection is limited to Japanese
territorial waters, tasking the JCG (instead of the MSDF) under the

TOKYO 00001284 008 OF 013


JCG Law remains an option. This law authorizes cargo inspection by
the JCG if warranted by the performance of its duties. Another
advantage of this is that inspection can start right away after the
new UNSC resolution is adopted.

In a previous case that was not exactly cargo inspection, JCG patrol
boats once engaged a North Korean suspicious ship in a gun battle in
water off Amami-Oshima in December 2001. Ground-to-air missiles and
rocket guns were later found in the sunken ship.

10) "Military expansion card" against North Korea a double-edged
sword that might turn Japan into destabilizing factor in region

TOKYO SHIMBUN (Page 2) (Full)
June 9, 2009

Koki Miura

The government and the Liberal Democratic Party (LDP) are dangling a
"military expansion card" in international talks on responding to
North Korea's nuclear test. Japan is trying to give a jolt to China,
which remains cautious about imposing strong sanctions on North
Korea, by pointing to the possibility that Japan might resort to
preemptive strikes and possessing nuclear weapons in the future
unless the international community squelches North Korea. But the
"military expansion card" has the danger of turning Japan into a
destabilizing factor in the region.

Immediately after North Korea's nuclear test on May 25, a senior
Foreign Ministry official held talks with a Chinese official. In the
session, the Japanese official said: "An argument to strike enemy
bases has emerged in our country. If North Korea is left
unaddressed, this argument might turn into public opinion." The
Chinese official's expression reportedly stiffened at this comment.

The statement was designed to press China on the adoption of a
strong UN Security Council resolution on North Korea, suggesting
that if the North is left unpunished, Japan might move toward
military expansion.

The same concern exists in the United States as well. Appearing on a
television program on June 7, Secretary of State Hillary Clinton
indicated that Washington will consider relisting North Korea as a
state sponsor of terrorism. She explained the reason why a severe
response must be made toward North Korea this way, "Unless effective
steps are taken against North Korea, a military expansion race might
occur in Northeast Asia." She expressed concern that Japan and South
Korea might opt for military expansion independently to counter
North Korea, thereby raising tensions in the region.

In fact, a set of proposals on the National Defense Program
Guidelines, produced on June 3 by a Liberal Democratic Party (LDP)
National Defense Department subcommittee, stipulates the possession
of capabilities to attack enemy bases. The report has preemptive
strikes in mind, reversing the country's exclusively
defense-oriented policy. The sub-panel's report also calls for a
review of Japan's three principles banning weapons export, the
utilization of outer space, and the special treatment of personnel
and budgets.

"The question is not whether you can do it or cannot do it. It's
important to voice what you might do. That can work as a bargaining

TOKYO 00001284 009 OF 013


chip in diplomacy," an LDP foreign policy-related lawmaker said.

But such an approach has drawn objections as well. A senior Defense
Ministry official warned about dangers associated with the approach,
"The use of such an approach as a bargaining chip might draw fire
depending on who you are dealing with."

11) Deficit in primary balance to be halved within five years: Draft
basic policy guidelines to be presented today

MAINICHI (Page 1) (Full)
June 6, 2009

Draft basic policy guidelines on economic and fiscal management and
structural reforms for the fiscal 2009 national budget, which the
government will adopt on June 23 were revealed on the 8th. The draft
incorporates a new financial base recapitalization goal to raise the
ratio of outstanding obligations of the central and local
governments to the gross domestic product (GDP) by the early 2020s.
It notes that in order to achieve this end, deficit balance in the
primary balance of the central and local governments to the GDP is
to be halved within five years and be brought into the black within
10 years. The draft will be presented at a meeting of the Council on
Economic and Fiscal Policy, chaired by Prime Minister Taro Aso, to
be held on the 9th.

The ratio of outstanding obligations to the GDP indicates the level
of borrowings held by the central and local governments. Japan's
ratio is one the worst among industrialized countries. The new goal
to recapitalize the nation's financial base envisages a path to at
least stabilizing such a ratio by the middle of the 2010s and
lowering it by the early 2020s. The government stance is thus
continuing efforts to improve the nation's fiscal base, which has
become serious due to the ongoing economic crisis.

The government had previously put up a fiscal base recapitalization
plan to bring the primary balance into the black by fiscal 2011 in
the basic policy guidelines for fiscal 2006, adopted during the
Koizumi administration. However, now that it has become difficult to
attain that goal due to a decline in tax revenues and substantial
fiscal spending due to the economic crisis, it has decided to adopt
a new goal in the draft basic policy guidelines for fiscal 2009.

The draft guidelines point out that the government needs to do its
utmost to realize a peace of mind society, noting that the Japanese
society is facing a quiet crisis, such as the declining birthrate,
the widening social disparities and an increase in jobless young
people.

Concerning the basic policies adopted by the Koizumi administration,
such as "moving services from government to the private sector" and
"from a big government to a small government," the draft has
switched to wording "reforming the government into one that
functions efficiently beyond dualism." The argument has been made
that structural reforms implemented during the Koizumi
administration have caused strains, such as social disparities and
the employment issue. In response to this point, the draft basic
policy guidelines for fiscal 2009 indicate a shift from the Koizumi
policy line.

12) NIKKEI Stock Average tested 9,900 yen level on TSE: Foreign
investors return

TOKYO 00001284 010 OF 013



MAINICHI (Page 8) (Excerpts)
June 9, 2009

The NIKKEI Stock Average tested the 9,900 yen level on the Tokyo
Stock Exchange (TSE) on June 8, close to the 10,000 yen for the
first time since last October. Foreign investors had been selling
more Japan stocks than buying them since last summer. However, they
have been buying far more Japan stocks than selling them since
April, pushing up the prices of Japan stocks. Capital appears to be
returning to the market in the expectation that the economy has
climbed out of its worst phase.

The closing quotation of the NIKKEI Stock Average on the 8th reached
9,865.63 yen, up 97.62 yen from the end of the previous week,
rallying to a high for the year. In response to the observation that
the U.S. might raise the interest rate in the hope that its economy
has bottomed out, dollars have been bought, pushing down the value
of the yen to 98 against the dollar, which generated orders to buy
export-related companies' stocks.

The NIKKEI Stock Average rose from the 8,800 level to the 9,500
level in May. According to the Finance Ministry report on the
situation of internal and external securities sales contracts in
that month, released on the 8th, buying of Japan stock exceeded
selling of such by 582.5 billion yen, marking the second consecutive
month of buying on balance. The buying of Japan stocks by foreign
investors, whose stock transactions account for nearly 50 PERCENT
of transactions on the TSE, has apparently contributed to raising
the prices of Japan stocks.

The rate of the rise of the NIKKEI Stock Average since the lowest
price seen in March reached roughly 40 PERCENT , while that of the
Dow Jones Industrial Average stood at about 30 PERCENT .

13) Aso to announce a 14 PERCENT gas emissions cut tomorrow

NIKKEI (Page 1) (Full)
June 9, 2009

Prime Minister Taro Aso has started final coordination to announce
the government's target of reducing greenhouse gas emissions by 14
percent from 2005 levels by 2020, or 7 percent from 1990 levels. He
will announce the midterm target in a press conference tomorrow.

Setting a midterm target is a key point in talks on a new
international framework to fight global warming beyond the 2012 time
frame set under the Kyoto Protocol. The 14 percent cut is based on
an estimate presented by former prime minister Yasuo Fukuda last
year. The government intends to attain the target without including
the portion of gases reduced through emission quotas from overseas
and foreign absorption. Aso is expected to make a final decision
after holding a discussion with the concerned cabinet ministers
today.

The government takes the view that it is appropriate to use 2005 as
the year for comparison instead of the year 1990, which is based on
the Kyoto Protocol. This stems from the judgment that in the case of
the year 1990, which the European Union recommends to use, Japan
will be placed in a position of disadvantage.

Aso also intends to show in the press conference tomorrow what the

TOKYO 00001284 011 OF 013


cost to people and companies will be for attaining the midterm goal.
To achieve the government's long-term target of reducing greenhouse
gas emissions by 60 to 80 percent from the current levels by 2050,
Aso is also expected to announce a plan to draw up a roadmap that
will include the state of progress of emission cuts and the timing
for completing the development of energy-saving technology.

14) Aso on Japan Post dispute: I will make a final decision

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

Asked by reporters about whether Japan Post Holdings Co. President
Yoshifumi Nishikawa should be kept in his post at the Prime
Minister's Official Residence last evening, Prime Minister Taro Aso
indicated his intention to make a final decision. He said:

"I hear that some persons are complaining it is undesirable to allow
the dispute to continue to affect the public's rate of cabinet
support and the reputation of the government and of our party. I
think coordinating views is necessary. I wonder whether I should
come up with a decision right now or at a shareholders meeting on
June 29. After carefully listening to what (State Minister of
Internal Affairs and Communications Kunio Hatoyama and Chief Cabinet
Secretary Takeo Kawamura) say, I will make a final judgment."

Meanwhile, speaking before reporters in front of his private
residence in Tokyo yesterday, Hatoyama stressed that he would not
approve Nishikawa's reappointment:

"I know I should not take a superior attitude, but there is no point
of compromise. People are opposing his remaining in the post. I want
this country to be one that accepts what everybody thinks."

Upon saying, "I am not saying I have no intention to discuss the
issue," Hatoyama expressed his willingness to coordinate views with
Kawamura and others before the shareholders' meeting.

Calls for an early settlement of the dispute over Nishikawa's
reappointment are growing in the ruling camp. New Komeito Secretary
General Kazuo Kitagawa said in a liaison meeting of the government
and the ruling parties yesterday: "I hope to see the dispute settled
quickly."

Kawamura also said in a press briefing yesterday: "We should not
take time over this issue. It is necessary to hurriedly resolve the
issue."

15) LDP launches project team to formulate manifesto: Focus is on
whether point of issue can be established

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

The Liberal Democratic Party will launch a project team today to
formulate a policy manifesto for the next House of Representatives
election. The political party that is able to establish a major
point of issue can have the advantage, as shown in the Lower House
election of 2005, in which the issue of postal privatization took
center stage, and the House of Councillors election in 2007, in
which the pension mess was spotlighted. But Lower House member
Masazumi Gotoda said: "There is no message the party can deliver."

TOKYO 00001284 012 OF 013


The Democratic Party of Japan (DPJ) has already come up with a
strong slogan on "a change of government." The outcome of the
upcoming Lower House election hinges on whether the LDP team can set
forth a point of issue powerful enough to overshadow the DPJ
slogan.

During an LDP executive meeting last evening, Prime Minister Taro
Aso said: "I want you to hastily draw up a manifesto." Secretary
General Hiroyuki Hosoda replied: "The contents of the government's
annual economic and fiscal policy guidelines for 2009 will become
our pledges for the election, so we would like to reflect views of
ruling party members in the guidelines," which will soon be
announced by the government.

Prior to the executive meeting, Aso also asked participants in a
liaison meeting of the government and the ruling camp the same day
to start discussing economic stimulus measures, fiscal resources to
finance the measures, and security policy.

The LDP project team picked as its key members Election Strategy
Vice Chairman Yoshihide Suga, Deputy Secretary General Nobuteru
Ishihara, Executive Council Deputy Chairman Hajime Funada, and
Policy Research Council Deputy Chairman Hiroyuki Sonoda. But they
have yet to decide any clear-cut policy.

Regarding economic measures, a senior LDP member said that "almost
all of the measures that should be taken have been included in the
supplementary budget for fiscal 2009." Aso has placed emphasis on an
argument on fiscal resources, but views have been split over whether
the consumption tax should be raised. Although doubts have been
voiced about the security policy set forth by the DPJ, if the LDP
continues to just criticize the DPJ, the party will not be able to
send a positive message.

The LDP has also failed to form a consensus on such political reform
issues as limiting hereditary seats and reducing the fixed number of
seats. The draft report with recommendations released by the party's
Reform Implementation Headquarters stopped short of mentioning
specific timing for implementing these measures.

Sonoda stressed the need for prioritizing social security policy
during a speech in Kyoto on June 6. But if priority is given to
continuing the party's conventional policy, it will fail to attract
public attention.

Suga eagerly said: "We will present a vision for the 21st century.
We are determined to produce a bold (manifesto) under political
leadership." But DPJ Policy Research Council Deputy Chairman Tetsuro
Fukuyama said: "It's amazing that the LDP is just starting to
formulate its manifesto now."

16) Ruling camp to take vote on bill on regulations for Diet
constitutional research commissions probably on June 11

NIKKEI (Page 2) (Full)
June 9, 2009

The ruling parties intend to take a vote as early as June 11 at a
plenary session of the House of Representatives on a bill on
regulations to determine such factors as the number of members of
the constitutional research commissions at the two housed of the
Diet. The two constitutional research commissions, which deliberate

TOKYO 00001284 013 OF 013


on draft amendments to the Constitution, have yet to function
because regulations have not been laid down due to the opposition's
cautious stance. The ruling coalition appears to be motivated to
shake the opposition parties, which have different views on the
constitutional issue, as well as to break the dormant state of the
Diet constitutional research commissions. All opposition parties
intend to oppose putting the bill to a vote.

The constitutional research commissions were established in 2007 at
the two Diet chambers, following the National Referendum Law
stipulating the procedures for amending the Constitution. In order
for deliberations, the number of panel members and regulations for
the conduct of proceedings are required. The ruling coalition,
therefore, has called for an early enactment of the rules and
regulations. However, it will be possible to submit to the Diet
draft constitutional amendments after next May when the bill is
enacted. The main opposition Democratic Party of Japan (DPJ) has
criticized the ruling camp, with DPJ Diet Affairs Committee Chairman
Kenji Yamaoka saying: "The issue should not be used as a political
fight. A consensus between the ruling and opposition cams is needed
to push forward with deliberations."

A senior member of the ruling Liberal Democratic Party (LDP) Diet
affairs committee, however, emphasized: "We must put an end to the
illegal situation." The ruling bloc is determined to take a vote on
June 11 at the Steering Committee and a plenary session the Lower
House even if the opposition opposes such.

ZUMWALT