JAPANESE MORNING PRESS HIGHLIGHTS 06//09

UNCLAS SECTION 01 OF 13 TOKYO 001324 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 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) North Korea problem: 4) Japan decides to prepare new domestic legislation to allow ship searches of suspicious cargo on North Korean vessels, authorized by UN sanction resolution (Sankei) 5) Government and Liberal Democratic Party working on drafting special measures law to allow ship searches (Nikkei) 6) Japan to set own sanctions by cabinet decision, including full ban on exports to DPRK (Sankei) 7) With decision to pass special measures law allowing cargo searches, Prime Minister Aso has a new card to shake policy-split Democratic Party of Japan (Asahi) 8) DPJ's response to new legislation on ship searches unclear, may balk due to additional delay in much sought Diet dissolution and snap election (Nikkei) 9) Maritime Self-Defense Force is reluctant to assume possible new duty of searching the suspicious cargo of North Korean ships (Asahi) 10) Japan carrying out ship searches could set off strong North Korean reaction and additional trouble (Tokyo Shimbun) 11) Unknown whether UNSC sanction resolution will pressure North Korea to abort its nuclear ambitions (Asahi) 12) U.S. may seek way to shift from pressure to negotiations with recalcitrant DPRK (Mainichi) Economic affairs: 13) Government's June report on the economy to remove the word "worsening" as signs of improvement begin to be seen (Mainichi) 14) G-8 finance ministers' meeting begins today with focus on reconstruction of state finances (Asahi) 15) Budget ceilings to be set on July 3, earlier than usual (Mainichi) 16) METI considering plan that would boost nuclear power to 40 PERCENT of total electrical supply (Asahi) Political agenda: 17) DPJ and Social Democratic Party are ready to form coalition if the opposition camp wins the next Lower House election (Sankei) 18) Diet passes constitutional reform procedures rules but some of DPJ lawmakers opposed to constitutional revision boycott the session (Sankei) 19) Prime Minister Aso stresses the importance politically of the upcoming Tokyo assembly election in July (Yomiuri) Articles: 1) TOP HEADLINES Asahi, Yomiuri, and Tokyo Shimbun: WHO declares Phase 6 swine flu pandemic Mainichi: Chemical sensitivity to be covered by healthcare insurance Nikkei: Mitsubishi Heavy Industries to build world's first low-emissions coal power plant in Australia TOKYO 00001324 002 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 Sankei: JAXA to conduct life science experiment in space with India in October Akahata: LDP, New Komeito ram Constitution Examination Commission rules through Lower House 2) EDITORIALS Asahi: (1) Sanctions resolution on North Korea: International community must remain united against threat (2) DPJ's ability to govern itself still questionable Mainichi: (1) North Korea sanctions resolution requires international unity (2) DPJ's Nishimatsu report does not spell an end to the chapter Yomiuri: (1) China key to new resolution on North Korea (2) Upper House must speedily set Constitution Examination Commission rules following Lower House Nikkei: (1) UN Security Council resolution on North Korea must be implemented strictly (2) DPJ expert-panel report too soft on Ozawa Sankei: (1) UNSC North Korea resolution: Effective sanctions essential (2) Northern Territories special measures law: Stir up public opinion for return of four islands Tokyo Shimbun: (1) International net encircling North Korea essential to stop the country's reckless acts (2) Constitution Examination Commission rules insufficient Akahata: (1) Constitutional amendment procedures must be abolished 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, June 11 NIKKEI (Page 2) (Full) June 12, 2009 09:43 Arrived at Kantei. 11:00 Met with Nikkei Shimbun Chairman Sugita and Executive Director Akiyama. 11:49 Met at LDP headquarters with Security Research Commission Chairman Nakatani, National Defense Division Director Nakayama, and Defense Policy Study Sub-committee Chairman Imazu. Met later with Secretary General Hosoda and Reform Implementation Headquarters leader Takebe. 12:36 Attended study session of the Kanagawa Prefecture's Women's Bureau. Visited the LDP's election headquarters for the Tokyo metropolitan election to offer words of encouragement. 13:03 Attended Lower House plenary session. 14:17 Returned to Kantei. TOKYO 00001324 003 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 15:01 Met with Deputy Chief Cabinet Secretary Asano, followed by Cabinet Public Relations Secretary Ogawa. Responded to interview by German newspaper. 16:05 Met Cabinet Intelligence Director Mitani. 17:00 Met with Science Council of Japan Chairman Kanazawa, joined by Science and Technology Minister Noda. Met later with Shimamura, special advisor to the prime minister, followed by Masuda, secretary general of the council to realize a security society and Assistant Deputy Chief Cabinet Secretary Fukuda. 18:49 Met with Deputy Chief Cabinet Secretary Uruma. 19:59 Reported to the Emperor in private. 21:40 Returned to his official residential quarters. 4) Legislation of domestic law to implement ship inspections SANKEI (Page 2) (Abridged) June 12, 2009 With the UN Security Council about to adopt a sanction resolution calling for cargo inspection on North Korean ships, the government began to consider domestic legislative measures, including a possible new law, on June 11, in order to implement cargo inspection on the open sea. Chief Cabinet Secretary Takeo Kawamura stated at a news conference on the same day that "it is fully possible" that such legislative work will be undertaken in the current Diet session. However, New Komeito has expressed reservations about legislations for cargo inspection. It is therefore uncertain whether the bills can be submitted to the current Diet session. 5) Government, LDP considering ship inspections special measures law NIKKEI (Page 2) (Abridged slightly) June 12, 2009 Following a UN Security Council agreement on a draft resolution on sanctions against North Korea, the government and the Liberal Democratic Party (LDP) began yesterday considering a special measures law on inspections of North Korean cargo. An idea has emerged to make the Japan Coast Guard (JCG) responsible for Japanese territorial waters and the Maritime Self-Defense Force for the high seas in Japan's vicinity. Inspecting ships on the high seas requires the consent of ships' captains. A clear line will be drawn with oceanic areas where the naval vessels of other countries are carrying out activities. They also plan to include "rear-area support" that would allow Japan to provide supplies to U.S. forces. The government and the LDP are aiming to formulate a draft bill next week to present legislation to the Diet in the ongoing session. Ship inspections will be conducted only when the consent is obtained from the captain of a ceased ship on the high seas. Firing warning shots to halt a ship will not be allowed and the use of arms will be limited to legitimate self-defense. An armed conflict might result from inspections of a suspicious ship by such countries as the United States. To prevent the use of force in collaboration with other countries, a clear line will be drawn so that Japan's areas of activities will not overlap with those of other countries. The provision of supplies to the naval vessels of such countries and TOKYO 00001324 004 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 the United States and South Korea and of transport assistance will be allowed. The provision of weaponry and ammunition will not be included. Areas of activities will be limited to "rear areas," in the same way as the regional contingency law now in force. In view of the risk of armed conflicts between MSDF vessels and North Korean ships, the government plans to allow the county to carry out only rear-area support without conducting cargo inspections even after the law is enacted. 6) Cabinet decision to be made June 16 on total ban on exports to DPRK as Japan's own sanction measure SANKEI (Page 2) (Slightly abridged) June 12, 2009 It was learned on June 11 that Japan will impose its own additional sanctions on North Korea for firing a long-range ballistic missile and conducting a nuclear test recently. The sanctions will include a total ban on exports to the DPRK. Coordination is underway for passing a cabinet resolution and announcing this as soon as June ¶16. Japan has already banned the export of 24 "luxury items," including beef and tuna, to the DPRK after the Taepodong-2 launch and nuclear test in fall 2006. The new measure will ban all exports to reinforce existing sanctions. This ban will be in effect until April 13, ¶2010. The travel ban will also be broadened. Foreign residents in Japan and foreign seamen who have been sentenced for violating trade sanctions against North Korea will also not be allowed to reenter or land in Japan in principle. 7) Cargo inspection special measures law a new card for Aso ASAHI (Page 4) (Abridged) June 12, 2009 There are now moves aiming to legislate special measures to allow cargo inspections on the high seas. This legislation could be a bullish factor for Prime Minister Aso, who is fretting about how to stand out against the leading opposition Democratic Party of Japan (Minshuto) should he dissolve the House of Representatives for a general election. It will also likely work to contain the growing calls for an early dissolution of the Diet. However, some government officials are cautious about the legislation that will lead to expanding the scope of Japan's activities, which have been premised on "neighboring contingencies" that could seriously affect Japan's peace. Aso's aim is to set up contested ground for the general election. His ruling Liberal Democratic Party held a training workshop yesterday at its headquarters. Aso there stressed that the LDP has been the only responsible party to protect Japan's national security and the lives of the Japanese people. Aso is trying to shake up the DPJ on security policy since he thinks the DPJ's weak point lies in that area. What if the DPJ opposes the legislation? The LDP will then call the DPJ "a friend of North Korea" in its election campaign, one of the LDP's faction leaders said. What if the DPJ comes around to support the legislation? In that case, Aso anticipates that he can drive a TOKYO 00001324 005 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 wedge between the DPJ and the Social Democratic Party, which is critical of the Self-Defense Forces' overseas activities. In fact, the DPJ held a meeting of its foreign affairs and defense policy divisions to confirm the necessity of creating a law for cargo inspections. Even so, one of the DPJ's executives seated in the House of Councillors is opposed to the legislation as "out of the question." In addition, bringing such a major bill before the Diet will likely affect Aso's strategy of dissolving the Diet. The bill is expected to be before the Diet late this month even at the earliest. If Aso is going to enact the bill into law, it will lead to containing the calls from within the LDP for dissolving the Diet at an early date before the July 12 Tokyo metropolitan assembly election. Meanwhile, the New Komeito, which is the LDP's coalition partner and sensitive to security policy, is going to accept the legislation. That is because the New Komeito expects that if the bill is submitted to the Diet, the general election can be more than a month after the metropolitan assembly election. One of the party's middle-ranking lawmakers explained: "This legislation will be the 'bullet' during the latter half of the Diet session. We can prevent the Diet from being dissolved this month after all the important bills are passed and when we have nothing to do." The Aso cabinet's support remains flat. As it stands, a former LDP secretary general noted that the legislation could be a card to move down the general election. 8) Many obstacles to early ship inspections; DPJ's move unclear; Lower House dissolution timeframe may be affected NIKKEI (Page 2) (Abridged slightly) June 12, 2009 The government and the Liberal Democratic Party (LDP) have begun seriously considering a law governing cargo inspections. This comes from the judgment that Japan, which vocally called for applying greater pressure (on North Korea) throughout the UN Security Council talks, must deal with the matter proactively. Enacting a new low in the ongoing Diet session requires the cooperation of opposition parties. Prime Minister Taro Aso is likely to be pressed for a difficult decision linked to his strategy to dissolve the House of Representatives. The government and the LDP are specifically considering a new law allowing the Maritime Self-Defense Force (MSDF) to conduct ship inspections on the high sears without the situation being designated as a contingency in areas surrounding Japan. The envisaged law is unique in that its objective is limited to the implementation of a sanctions resolution on North Korea. The legislation is intended to put a stop to the ever-expanding scope of SDF activities and to weaken the resistance of the New Komeito and other opposition parties. In reality, it is difficult for the SDF to conduct effective ship inspections on the high sea, so it is said that the envisaged legislation is mainly intended to open the way for rear-area support to such countries as the United States and South Korea. At the same time, there are many obstacles that must be cleared for the enactment of the law. TOKYO 00001324 006 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 The main opposition Democratic Party of Japan (DPJ) is also considering the new law allowing conducting ship inspections at the high seas. But in the party, cautious views are strong about expanding the SDF's scope of activities. DPJ President Yukio Hatoyama said to the press corps yesterday, "We must sort out our thinking on matters, including whether there is a need for improving legislation," while welcoming the UNSC's draft resolution. A senior DPJ lawmaker explained that the party must be careful so that envisaged new legislation will not be used as an excuse to put off Lower House dissolution. The New Komeito thinks the Japan Coast Guard must be dispatched instead of the MSDF. The envisaged ship inspection legislation is a double-edged sword for the Prime Minister. In the ruling bloc, there is a hard-line view that if opposition parties raise objections to the legislation or postpone a vote, the Prime Minister should go ahead and dissolve the lower chamber by making the matter as a campaign issue. But once a bill is submitted to the Diet, the government will have to make efforts for its enactment to meet the expectations of other countries. But that would reduce the timeframe of Lower House dissolution for the Prime Minister. 9) Cautious views voiced over expanding MSDF activities ASAHI (Page 4) (Abridged) June 12, 2009 When sending out the Self-Defense Forces Law on an overseas mission under a special measures law, there are many issues to discuss over the effectiveness of sanctions and the authorization of weapons use, for instance. The Maritime Self-Defense Force is allowed to inspect ships at sea under the Ship Inspections Law. In this case, the MSDF, when inspecting a ship, will check to see if its flag state has consented, and will inspect the ship with its captain's consent. The MSDF is not allowed to take any forcible actions like halting ships or firing warning shots. Ship inspections in this case are optional. The SDF is allowed to use weapons only when it is unavoidable to do so for self-defense. The antipiracy bill, now before the Diet, allows the SDF to fire on ships refusing orders to stop. This firing of warning shots is not allowed in the case of inspecting ships. The SDF is expected to inspect ships on the high seas, based on a United Nations resolution. If a ship to and from North Korea sails under the flag of North Korea, that country is not likely to consent to inspections. The SDF's inspections are also feared to incur North Korea's runaway action, so there are cautious arguments both in the government and in the ruling parties. 10) Legislation on ship inspection in current Diet to be stormy; fear of "flash point" between Japan, DPRK TOKYO SHIMBUN (Page 2) (Full) June 12, 2009 Koki Miura TOKYO 00001324 007 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 In light of the finalization of the UN Security Council (UNSC) sanction resolution against North Korea's nuclear test, which calls for cargo inspection on ships, among other matters, the government plans to prepare the legislation to enable ship inspection in the current Diet session. Although ship inspections under this resolution have not been made mandatory due to China's demand, this could develop into a "flash point" between Japan and North Korea in the future under certain circumstances. A senior Ministry of Foreign Affairs official stressed on June 11: "The question now is how to implement the resolution. This needs to hurt North Korea." Cargo inspection is the main component of the effort to apply pressure on North Korea. Ship inspections on the open sea, in particular, will send a strong message to the DPRK, although its implementation is uncertain. The Japanese government, which has demanded strong sanctions along with the U.S., "needs to respond to the call of the resolution." (Chief Cabinet Secretary Takeo Kawamura) It is poised to set in motion the required legislation. The only existing laws that authorize ship inspections in international waters by the Self-Defense Forces (SDF) are the maritime transport regulation law in a situation of armed attack and the ship inspection operations law under an emergency situation in areas surrounding Japan. Since a mere nuclear test is difficult to designate as an emergency situation, the government has judged that there is need for new legislation. It will study whether to amend the ship inspection law or to enact a separate new law. The Liberal Democratic Party (LDP) and New Komeito will launch a project team as soon as next week. While the UNSC resolution about to be adopted is rather weak, since ship inspection (on the open sea) will require the consent of the flag state, if the DPRK reacts fiercely to the resolution and launch more ballistic missiles, it is highly possible that a stronger UNSC resolution will be adopted. In light of this, there are calls in the LDP for broadening the authorization for the SDF to use arms under the new law -- to allow shooting at ships, for instance - in order to enable forcible inspections. The ruling parties plan to enact the new law as a main item on the agenda in the final phase of the current Diet session. However, it is uncertain whether this can be done before the Diet adjourns on July 28, since the confrontational mood between the ruling and opposition parties is intensifying with the House of Representatives election approaching. Furthermore, there is an opinion in the Ministry of Defense that: "If MSDF ships conduct ship inspections on the open sea, North Korea may regard this as a 'state of war.' We are in for trouble." Certain officials are anxious. "This is very different from anti-piracy operations. Are we really supposed to do it?" 11) International community mulling how to urge North Korea to abandon nuclear program TOKYO 00001324 008 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 ASAHI (Page 2) (Full) June 12, 2009 The five UN Security Council permanent members, Japan and South Korea agreed on a draft sanction resolution against North Korea on June 10, more than two weeks after its nuclear test. Has China made a policy changed its prudent stance? What is the U.S. aiming at? How will the international community, including Japan, persuade the North to forge ahead with the denuclearization process? Japan still exploring new approach The Japanese government has launched a discussion on how to proceed with the six-party talks, besides the effort to lay down a resolution at the UN. Foreign Ministry's Asian and Oceanian Affairs Bureau Director General Akitaka Saiki, Japan's chief delegate to the six-party talks, left for Washington on the 8th. He said: "We will discuss future policy options, including the six-party talks, and iron out differences in our positions." He exchanged views with U.S. Deputy Secretary of State Jim Steinberg, who returned from a round of visits to Japan, China and South Korea, and other U.S. government officials. Japan advocated a "new approach toward the North," as said by Administrative Vice Foreign Minister Mitoji Yabunaka, reflecting on the fact that the approach based on the principle of action for action, based on which the six-party talks were advanced, proved to be unsuccessful. Whenever the North took denuclearization measures, (the international community) offered financial assistance. But such efforts came to nothing with North Korea's recent nuclear test. A senior Foreign Ministry official grumbled: "While looking into details, we strayed off into a wood and found it difficult to see the grand picture of North Korea's denuclearization." Even so, there is no effective hand to take against the North for now. While the U.S. is shifting its weight to pressure tactics in line with Japan's stance, North Korean Ambassador to the UN Sin Son Ho showed an attitude of fiercely reacting to the UN draft resolution. Remaining unresponsive to questions by reporters on the street in New York on the 10th, he violently pushed away the microphone directed at him. The tensions are expected to extremely intensify as the international community remains unable to explore a new approach toward North Korea. 12) China's consideration to North Korea masks its anger toward that country MAINICHI (Page 2) (Excerpts) June 12, 2009 The five UN Security Council permanent members, Japan and South Korea reached a final agreement on June 10 on the text of a resolution calling for additional sanctions against North Korea for its second nuclear test. Although cargo inspection was not made mandatory due to the strong opposition of China asserting that the measure will heighten military's tensions, stronger pressure is expected to be applied to exports of goods and money to North Korea. Attention is now focused on whether these measures will press the North to change its tough stance and on what moves the U.S. and China, which holds enormous sway over North Korea, will make next. TOKYO 00001324 009 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 U.S. to launch negotiations with pressure Based on the judgment that North Korea's main purpose is to have the international community to recognize it as a nuclear power, the administration of President Barack Obama has decided to play up "pressure" instead of "rewards" in an attempt to bring the North back to the negotiating table. If North Korea has no intention to denuclearize itself, rewards will be useless. But some observers anticipate that North Korea, which has entered the leadership-transition period and is trying to demonstrate its strength through a nuclear test and other moves, may not respond to a call for talks. The contents of the draft resolution have been watered down, but it can be interpreted to mean that the resolution has left a margin in anticipation of future provocative act. A senior official of the U.S. State Department said: "I am satisfied with it." The U.S. is expected to work on China, which has influence over the North, (to persuade it to promote the denuclearization process). Senior researcher Bush of the Brookings Institution commented: "It will be an indicator to see what type of big power China will become in Northeast Asia." The tough U.S. stance has also been supported by changes in the international situation. Mansfield Foundation Chief Flake, who was an advisor about Asia strategy to Obama during the presidential election campaign, made this analysis: "When North Korea conducted the nuclear test in 2006, the previous Bush administration's hostile policy was criticized as a failure, and the administration was pressed to opt for a policy of dialogue. The Obama administration was calling for dialogue from the beginning, but North Korea carried out the nuclear test in defiance of the call. Nobody will criticize the Obama administration." North Korea will surely resort to a hostile act in reaction to the pressure, but it is uncertain where the U.S. will set a "critical point." It is also unpredicted to what extent China, which is cautious about strong pressure, will offer cooperation. The U.S. seems to have yet to chart a medium- to long-term strategy. 13) Government ups economic outlook for first time in seven months in report for June, removing "deterioration" MAINICHI (Page 1) (Excerpt) June 12, 2009 The government will revise its assessment of the nation's economy upward for two months in a row in its monthly report for June. It will remove the word "deterioration," reflecting that signs of the drop in production bottoming out are appearing. "Deterioration" will disappear for the first time in seven months. Coordination is now underway to insert the expression, "signs of recovery can be seen in some areas." Finance Minister Kaoru Yosano will present the report in a meeting of the relevant cabinet ministers on June 17. 14) G-8 finance ministerial to kick off today with focus on economic reconstruction TOKYO 00001324 010 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 ASAHI (Page 7) (Abridged slightly) June 12, 2009 A finance ministerial meeting from the Group of Eight nations (G-8) will take place in Lecce in southern Italy. Amid emerging signs of the global economy bottoming out, finance ministers from the G-8 will discuss an exit strategy after a crisis response policy stance. In view of the fact that active public spending is pushing up long-term interest rates, participants are expected to reaffirm the importance of economic reconstruction. The meeting is one of the preparatory meetings for the G-8 to be held in L'Aquila in central Italy from July 8 through 10. Food security and climate change, as well as economic stimulus measures will likely top the agenda. Participants will look into various countries' public spending and financial stabilization measures. Anticipating a post-economic recovery phase, they will discuss a path to economic reconstruction and how to end exceptional measures, such as government guarantees and the injection of public money into financial institutions, according to a senior finance ministry official/ The interest of each country has shifted from fiscal spending to fiscal reconstruction, because signs of the economy picking up have begun to appear. An agreement was reached at the financial summit (G-20) in April to press ahead with fiscal spending totaling 5 trillion dollars or roughly 490 trillion yen. In Japan, too, various indexes, such as mining and manufacturing production index, are improving due to stimulus measures. Finance Minister Yosano indicated his understanding that the Japanese economy had bottomed out between January and March. Meanwhile, there is concern over the aftereffects of various countries financing fiscal spending with massive borrowings. The U.S. fiscal deficit for fiscal 2009 is estimated to have reached the worst-ever level of about 1.8 trillion dollars or roughly 176 trillion yen. Due in part for that reason, its long-term interest rate is rising. Japan's fiscal deficit will also likely mark the largest-ever level with the issuance of new government bonds in fiscal 2009 topping 44 trillion yen. Amid growing anxieties over fiscal sustainability in various countries, it is now urgent to indicate a path to fiscal reconstruction. Finance Minister Yosano is expected to explain Japan's measures of over 15 trillion yen to deal with the economic crisis. He will also mention Japan's fiscal reconstruction goal, which is now being drafted. It will involve stabilizing the ratio of outstanding obligations held by the central and local governments to the gross domestic product (GDP) by the mid-2010s. Japan Credit Rating Agency President Makoto Utsumi, former vice financial minister for international financial affairs, said, "European countries and the U.S. have been pursuing an exit strategy from the early stage of the crisis. Such awareness is low in Japan. It was unable to pursue an exit strategy on the fiscal and financial fronts during the economic recovery phase following the so-called lost decade (1990s). If anxieties over the future remain with no proper exit arguments being pursued, it would become difficult for personal consumption to pick up." TOKYO 00001324 011 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 15) Prime minister considering adopting budget request guidelines on July 3 MAINICHI (Page 1) (Full) June 12, 2009 Prime Minister Taro Aso has started looking into fiscal 2010 budget request guidelines with the possibility of adopting them at a cabinet meeting on July 3, by extensively speeding up the annual timetable to around the end of July. It appears that he has determined that it would be necessary to do so in order to allow for the possibility of Lower House dissolution in mid July, because fiscal 2009 extra budget-related bills and the antipiracy legislation will likely be enacted before the end of June. The guidelines are the upper limit of budgetary requests. They are usually adopted at a cabinet meeting to be held between late July and early August. Each government agency estimates its budget and submits budget requests by the end of August. The Finance Ministry then examines such requests and drafts a budget at the end of the year. The prime minister is attaching importance to showing differences from the Democratic Party of Japan (DPJ) in the upcoming Lower House election. He apparently aims to demonstrate in specific terms how he is managing his administration by setting the general framework for the draft budget. It is believed that if the DPJ seizes power in the election, it would change the guidelines. 16) METI looking into raising ratio of nuclear power generation to total power generation amount to over 40 PERCENT to achieve mid-term goal to cut greenhouse gas emissions ASAHI (Page 7) (Full) June 12, 2009 The government has set a mid-term goal to cut greenhouse gas emissions by 15 PERCENT from the 2005 level by 2020. In order to achieve this end, the Ministry of Economy, Trade and Industry (METI) has started looking into raising the ratio of nuclear power generation to total power generation to over 40 PERCENT . It will incorporate the improvements of operating rates rate and capacity of existing reactors and the building of new reactors in a set of measures designed to promote nuclear power generation to be compiled soon. Raising the ratio of nuclear power generation necessitates extending the interval between regular check-ups of existing reactors and raising the operating rates of reactors from the current 50 PERCENT to 80 PERCENT on a par with industrialized countries, by increasing maintenance during operations. METI will also back a plan to build nine additional reactors by fiscal 2018. Such a ratio in fiscal 2005 was 31 PERCENT . It dropped to 25 PERCENT in fiscal 2007, when the Kariwazaki nuclear plant stopped operations due to the Chuetsu Earthquake. Over 40 PERCENT is fairly higher than those figures. 17) SDP to form coalition with DPJ, giving priority to change in government SANKEI (Page 5) (Full) June 12, 2009 The Social Democratic Party (SDP),a minor opposition party, TOKYO 00001324 012 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 yesterday decided on a policy of taking part in a coalition government led by the Democratic Party of Japan (DPJ) if the opposition camp outnumbers the ruling bloc in the next House of Representatives general election. The SDP has now launched internal coordination. Although there are gaps in views on constitutional and security issues between the SDP and DPJ, the SDP has judged that "the public's expectations for a change in government are strong" (senior SDP member). The party will give priority to implementing such policies as social security and economic measures on which the two parties can find common ground. The People's New Party (PNP), another minor opposition party, too, has adopted a similar policy. The three opposition parties, therefore, will speed up preparations for forming a coalition for making common policies. In a meeting yesterday morning, the SDP confirmed that if the DPJ asks to join a coalition government after the Lower House election, it will launch consultations. DPJ President Yukio Hatoyama expressed hopes at a meeting yesterday in Tokyo, saying: "I would like to create a new politics for Japan along with the SDP and the PNP." Shizuka Kamei, deputy chief of the PNP, who also attended the meeting, stressed: "With an eye on a change in government, the three parties should start policy consultations as soon as possible." However, there is strong concern in the SDP that if the leadership announces a policy of joining a coalition government, "the SDP could be wrapped up in a tug-of-war between the DPJ and the Liberal Democratic Party (LDP)" (senior local chapter member). Therefore, SDP Chairperson Mizuho Fukushima emphasized: "Opposition to overseas dispatch of the Self-Defense Forces and to constitutional is our condition to participate in a coalition government." She aims to ease dissatisfaction in the party's local chapters. It is expected that the SDP will put off ironing out differences of opinions in the party to until after the Lower House election. SDP Secretary General Yasumasa Shigeno yesterday told reporters: "We want to gain more than ten seats in the general election in order to have the right to speak in consultations on a coalition government," indicating that the SDP will devote its effort to increasing its Lower House seats. 18) Regulations for Lower House Constitution Examination Commission approved SANKEI (Page 5) (Abridged slightly) June 12, 2009 The House of Representatives approved yesterday in its plenary session a bill to set "examination rules" stipulating such factors as the number of members of the Lower House Constitution Examination Commission, which examines constitutional problems and draft constitutional amendments, by a majority lawmakers from the ruling parties. However, the Democratic Party of Japan (DPJ),the Japanese Communist Party, the Social Democratic Party, and the People New Party - opposition parties - opposed the bill. The constitution examination panels, permanent Diet organizations, were set up in both Diet chambers in August 2007 based on the revision of the Diet Law, following the National Referendum Law. However, enacting the regulations had been put off because of the rejection by the DPJ and other opposition parties. The panels have not functions for one year and ten months. In the opposition controlled House of Councillors, there is no TOKYO 00001324 013 OF 013 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//09 prospect for the upper chamber to hold deliberations on the establishment of regulations. Thinking that the constitution panels in the two Diet houses should be operated the same time, the ruling parties intend to put off the selection of the Lower House commission. The DPJ opposed the bill, citing "We have agreed to make regulations, but it is not necessary to do so at this time." 19) Prime Minister Aso: Outcome of Tokyo metropolitan assembly election will have great impact on his strategy for Lower House dissolution YOMIURI (Page 4) (Full) June 12, 2009 The ruling and opposition parties intend to put their all energy into the campaigning for the Tokyo metropolitan assembly election (July 12) because there is a view that the results of the Tokyo election would have an impact on Prime Minister Taro Aso's strategy for the dissolution of the House of Representatives, as well as on the next general election. Aso visited yesterday the Liberal Democratic Party's (LDP) Election Strategy Headquarters where he said: "(Tokyo assembly election) is an important election that will lead to the Lower House election. Although it is a local election, how we will put enthusiasm in it is significant." He started on June 7 visiting all the LDP-endorsed candidates, showing his eagerness for supporting the LDP candidates for the Tokyo metropolitan assembly election. Aso has been feeling out the possibility of dissolving the Lower House during the period between late June and the middle of July, and holding the general election on Aug. 2. However, many in the ruling coalition want him to reconsider the ruling camp's election strategy after seeing the results of the Tokyo election, the mayoral election of Chiba City (June 14),and the gubernatorial election of Shizuoka Prefecture (July 5). It is said that if the LDP and New Komeito, which form the ruling coalition, win a majority of the Tokyo metropolitan assembly, Aso will be able to smoothly carry out his strategy for Lower House dissolution. However, if the LDP-New Komeito ruling coalition loses its majority in the Tokyo assembly, voices calling for the responsibility of the Aso cabinet, which has suffered low support rates, for the loss will unavoidably be raised. If such happens, the date of the general election will be delayed. Therefore, it is expected that with an eye on a move to withdraw Aso from office, calls for speeding up an LDP presidential election will become stronger. Meanwhile, the main opposition Democratic Party (DPJ) aims to become gain the second-largest number of Tokyo assembly seats in order to lead it to the Lower House election. With the number of candidates being less than a majority in mind, DPJ Deputy President Ichiro Ozawa told reporters in Yodogawa Town, Kochi Prefecture: "I want to (the DPJ's Tokyo) to field at least 64 candidates" ZUMWALT