DAILY SUMMARY OF JAPANESE PRESS 06/15/09-2

UNCLAS SECTION 01 OF 10 TOKYO 001347

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 06/15/09-2

INDEX:

(12) Aso administration enters turbulence; Ne effective means to
buoy up his administration, with Lower House dissolution just around
corner (Tokyo Shimbun)

(13) Minister Hatoyama's resignation: PM's decision came too late,
questioned even by ruling parties for inability to control his ally
(Asahi)

(14) DPJ President Hatoyama tolerates "Ozawa-style UN-based policy"
(Asahi)

(15) Yosano says: "Countries have seen economies hit bottom," but
regards exit strategies as mid-term task (Nikkei)

(16) Japan, U.S. finance chiefs agree to take joint steps over
strategy toward China (Nikkei)

(17) Interview with New Komeito Deputy Representative Junji Higashi
on tasks regarding Okinawa - SOFA must be reviewed (Okinawa Times)

(18) The reality of the fears for the first time in 50 years
(Nikkei)

ARTICLES:

(12) Aso administration enters turbulence; Ne effective means to
buoy up his administration, with Lower House dissolution just around
corner

TOKYO SHIMBUN (Page 2) (Abridged)
June 13, 2009

Shohei Yoshida

Internal Affairs and Communications Minister Kunio Hatoyama's
resignation is certain to deal a serious blow to Prime Minister Taro
Aso, who is looking for the right timing for dissolving the House of
Representatives. The Aso administration has barely been able to
maintain its unity by containing a move to pull down Aso. The
departure of his close ally from the Aso cabinet means that this
structure has begun to collapse. The Aso administration has now
entered a period of "turbulence," in which people are whispering
about the possibility of replacing the prime minister before the
next Lower House election.

Liberal Democratic Party (LDP) Election Strategy Council Vice
Chairman Yoshihide Suga, who is close to the Prime Minister, made
the following comment about the possible impact on the Aso
administration by Hatoyama's resignation: "I would be lying if I
said there will be no impact. But the trouble has passed, so there
will be no serious impact."

But this is only an optimistic view on the prime minister's side.

A ruling party executive candidly indicated that the Prime
Minister's failure to put a speedy end to the row over the
reappointment of Japan Post Holding Co. President Yoshifumi
Nishikawa has raised a question about the Prime Minister's
leadership.


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Former LDP Secretary General Hidenao Nakagawa, who had been critical
of Hatoyama for his persistent call for Nishikawa's resignation,
noted: "Those opposed to the postal privatization program might make
moves to leave the party. We must keep a close eye on them." His
view is that Hatoyama, who has left the Aso cabinet, might bolt the
LDP and revolt against the party in the next Lower House election.

Following in the footsteps of Hatoyama, Health, Labor and Welfare
Parliamentary Secretary Toru Toida also resigned from his post,
exposing the loss of momentum of Prime Minister Aso. The Aso
administration is clearly on the verge of collapse.

Hatoyama is the third minister to leave the Aso cabinet. Fiscal
Services and Economic and Fiscal Policy Minister Kaoru Yosano has
concurrently been serving as finance minister since Shoichi
Nakagawa's resignation. This time around, National Public Safety
Commission Chairman Tsutomu Sato has been picked to double as
internal affairs and communications minister. The Aso cabinet
contains many "patches."

Some in the government and the ruling parties are calling for a
cabinet reshuffle before the next general election with the aim of
revamping the administration. But the prevailing view in the ruling
bloc is that a halfhearted reshuffle before the election would be
meaningless. There are no effective means in sight that are
available for the Prime Minister to boost his administration before
the election.

Former Secretary General Koichi Kato and other LDP members who are
keeping their distance from the Prime Minister have not made any
conspicuous moves to unseat Aso.

If the ruling bloc suffers successive defeats in the June 14 Chiba
mayoral election, the July 5 Shizuoka gubernatorial race, and the
July 12 Tokyo assembly election, many LDP lawmakers might refuse to
go into the next Lower House election under Prime Minister Aso.

Are the ruling parties going to fight the next general election
under Aso or dump him before it?

The series of local elections are now turning into a watershed,
rather than a simple prelude to the next general election, that can
determine the fate of Prime Minister Aso.

Watanabe alarmed at possible Hatoyama party

Former Administrative Reform Minister Yoshimi Watanabe gave a speech
in Tokyo on June 12 in which he expressed alarm abut the possibility
of Kunio Hatoyama forming a new party. Watanabe revealed a plan to
expedite efforts for forming his own party so as not to be
overshadowed by a Hatoyama party.

Watanabe, who left the LDP in January, is aiming to launch a new
party in collaboration with House of Representatives member Kenji
Eda.

Opposition parties criticize Prime Minister Aso for lack of
leadership

Opposition parties harshly criticized Prime Minister Aso on June 12
for his inability to settle the postal row speedily. At the same
time, rumors have it that Kunio Hatoyama will launch a new party or

TOKYO 00001347 003 OF 010


will join hands with his brother, Democratic Party of Japan (DPJ)
President Yukio Hatoyama. The DPJ president also urged the Prime
Minister to dissolve the Lower House swiftly to seek a mandate from
the public. Furthermore, Hatoyama expressed a positive view about
the option of submitting a censure motion against Abe to the House
of Councillors.

Other opposition parties, such as the Japanese Communist Party and
the Social Democratic Party, also slammed the Prime Minister.

(13) Minister Hatoyama's resignation: PM's decision came too late,
questioned even by ruling parties for inability to control his ally

ASAHI (Page 2) (Excerpts)
June 13, 2009

Jun Tabuse, Hisanori Imamura

Prime Minister Taro Aso has finally taken action on the battle
between Minister of Internal Affairs and Communications Kunio
Hatoyama and Japan Post President Yoshifumi Nishikawa and ended the
episode by "replacing" Hatoyama. However, this is certain to
undermine Aso's leadership since his decision took too long and he
was unable even to persuade an "ally." Depending on the reaction of
public opinion, which has applauded Hatoyama so far, this problem
could drag down the steering of the administration even further.

When Hatoyama came to the Prime Minister's Office Residence on June
12 with his resignation letter in hand, Aso told him: "Since you are
unable to change your conviction, I am sorry but this will be
inevitable."

While some people in the ruling parties had claimed that, "It is
best to punish both parties in a fight," (former secretary general)
the prime minister's aides, particularly Chief Cabinet Secretary
Takeo Kawamura, had been trying to find a way for both Hatoyama and
Nishikawa to keep their jobs until the last minute.

The compromise plan was for Hatoyama to accept Nishikawa's
continuing in office on condition that Japan Post would implement
thoroughly its business improvement plan based on the order of the
Ministry of Internal Affairs and Communications. However, the
coordination was unsuccessful. According to Hatoyama, at his first
meeting with Aso on the morning of June 12, Aso had proposed that
Nishikawa apologize to Hatoyama. However, Hatoyama said that, "Mr
Nishikawa should not be apologizing to me but should apologize to
the people."

It was undesirable to postpone the matter to the following week to
avoid damaging the administration, so the prime minister had been
prepared for the worst. "Sacking Mr Hatoyama will have a negative
effect, but it will be even worse if the matter drags on." (prime
minister's aide). So the "replacement" decision was made.

From the beginning, the replacement of Nishikawa had not been a
viable option on the part of the prime minister because Nishikawa's
continuation in office had been decided by the nomination committee
consisting of Japan Post's non-executive directors. The reasoning
was that even though the government holds 100 percent of Japan
Post's shares, it should not intervene in the appointment of the
president of a private company. In addition, the dismissal of
Nishikawa would rouse a strong reaction from former Prime Minister

TOKYO 00001347 004 OF 010


Junichiro Koizumi and other advocates of postal privatization, and
this might cause a political upheaval within the Liberal Democratic
Party (LDP).

Ruling party members are also divided in their view of Aso's
decision. Former LDP secretary general Hidenao Nakagawa, a proponent
of postal privatization who keeps his distance from Aso, welcomes
the decision: "This is a correct judgment by the Aso cabinet, which
is based on the people's mandate to thoroughly implement
privatization." On the other hand, a senior New Komeito official
claims that, "From the people's standpoint, it is hard to understand
why Mr Hatoyama should resign." New Komeito Diet Affairs Committee
Chairman Yoshio Urushibara also notes that, "There is no denying
that questions will be raised about the prime minister's leadership.
People will say that 'he is indecisive and his leadership is weak'."
This is certain to have a negative impact on Aso's strategy for
dissolving the Diet.

The reason why Hatoyama had not backed off at all in his all-out
confrontation with Nishikawa is that he was confident about support
from public opinion. Some ruling party members also said that, "The
popular sentiment is that Mr Hatoyama's position is more
convincing." (former secretary general Bunmei Ibuki).

Hatoyama's current constituency for his seat in the House of
Representatives is the sixth district of Fukuoka. Although he has
high name recognition, he has been moving from one district to
another, so his political support base is actually not strong. With
the cabinet support rating sagging, it appears that he judged that
he has better chances campaigning as "Kunio Hatoyama" rather than as
an "LDP member" in the next election.

After his first meeting with the prime minister on June 12, Hatoyama
told three Diet members close to him at his personal office in Tokyo
about his intention to resign. Right after he submitted his
resignation, parliamentary secretary of health, labor and welfare
Toru Toida also submitted his resignation to Minister of Health,
Labor and Welfare Yoichi Masuzoe. Hatoyama is a self-proclaimed
"perpetual advocate of political realignment" and has been mumbling
recently that, "It is possible that I might form a new party,
although not right away." What happened must have been according to
his planned scenario.

However, the situation is not such that other politicians will
follow in Hatoyama's footsteps. Parliamentary secretary of the
environment Yoshihisa Furukawa, a former secretary to Hatoyama, had
conveyed his intention to resign to senior Environment Ministry
officials at first but later withdrew his resignation after being
dissuaded by his aides.

(14) DPJ President Hatoyama tolerates "Ozawa-style UN-based policy"

ASAHI (Page 4) (Full)
June 13, 2009

By Kyohei Matsuda

Democratic Party of Japan (DPJ) President Yukio Hatoyama has yet to
dip into the DPJ's guidelines concerning the overseas dispatch of
the Self-Defense Forces, which were decided while Ichiro Ozawa
assumed the presidency. At around the time of the presidential
election in May, he criticized the party's policy of allowing the

TOKYO 00001347 005 OF 010


SDF personnel's use of force under the request of the United
Nations, but he has not shown any signs of reviewing the
guidelines.

At a panel discussion held immediately before the leadership race,
Hatoyama said: "Although President Ozawa puts his faith in the
supremacy of the United Nations, I take a UN-centered policy." He
declared that he would not follow the idea of abiding by whatever
decisions the UN made.

Ozawa's assertions were included in the "Policy Magna Carta," which
the DPJ compiled in December 2006. The DPJ's policy of allowing the
SDF to use armed force goes against the government's interpretation
of the Constitution that the SDF is allowed to use arms for only
self-defense. In the DPJ, Hatoyama's remark was taken to mean that
he was aiming at more realistic security policies with an eye on a
change in government.

However, the meeting of the DPJ's foreign affairs and defense
divisions in charge of issues related to SDF dispatch overseas
failed to present "new guidelines" to the party's preparatory
committee studying a manifesto for the next Lower House election,
which stopped accepting applications for priority policies on June

10. There are no signs that Hatoyama consulted the committee for
reviewing the Policy Magna Carta.

A senior DPJ member pointed out that, "Because reviewing
(guidelines) means a Pandora's box will be opened."

It can be said that the formation of the Policy Magna Carta is an
extra effort to win members coming from the former Japan Socialist
Party, who are reluctant to dispatch the SDF overseas. However,
since the wording "democratic control" in the Policy Magna Carta
means Article 9 of the Constitution, the SDF cannot use force
abroad. This is a contradicting interpretation of the Constitution.

This issue could become a source of trouble for the Hatoyama
leadership, which was inaugurated under a unified party arrangement.
In order to prevent such trouble from occurring, the view is now
gaining ground among the LDP executives that there are no relations
between the Policy Magna Carta and the manifesto for the next
general election.

On the other hand, since the position of the Policy Magna Carta is
murky, there is fresh turmoil in the DPJ.

The DPJ's shadow defense minister, Keiichiro Asao, who takes a
positive stance toward the overseas deployment of the SDF, presented
a tentative plan to a meeting on June 9 of the foreign affairs and
defense divisions. With sanctions against North Korea in mind, the
tentative plan stipulates that the SDF would be allowed to use arms
in carrying out ship inspections in international waters under a UN
resolution. This is more specific than a bill the government is now
drafting.

Toward the view that allowing the SDF to use force is a violation of
the Constitution, Asano explained: "We considered the overseas
deployment of the SDF based on the Policy Magna Carta. In the
meeting, such views were raised: "Is the Policy Magna Carta still
effective?" and "With the resignation of Ozawa, it is invalid." As
Ozawa's has lost his influence, internal discussion appears to have
dispersed.

TOKYO 00001347 006 OF 010



Hatoyama told reporters on June 12: "There was a rumor that since I
have close ties to Mr. Ozawa, Mr. Ozawa has the same UN-centered
policy as me. I don't think there is a big difference in our
views."

(15) Yosano says: "Countries have seen economies hit bottom," but
regards exit strategies as mid-term task

NIKKEI (Page 3) (Full)
June 14, 2009

(Tsuyoshi Fujita, Lecce)

In a press conference at the conclusion of a meeting of finance
ministers from the Group of Eight countries on June 13, Finance
Minister Kaoru Yosano said: "I got the impression that countries
have seen their economies hit the bottom," indicating the global
economy is gradually recovering.

Yosano recognized the need for a discussion on "exit strategies," as
specified in a joint statement, saying: "We must consider
appropriate strategies for winding down extraordinary policy
measures taken so far." But he added: "It is not proper to consider
it now," defining it as a mid-term task.

Yosano did not make any comment on the recent rise in long-term
interest rates, just saying: "The government cannot manipulate
rates." But regarding a review of the international accounting
standard now under deliberation, he reportedly expressed his concern
in the G-8 meeting about a possible negative effect on the
possession of government bonds and stressed the need to classify
them appropriately.

According to officials accompanying Yosano, discussion is underway
on a review of the current system to enable value changes of
government bonds held for long periods of time by financial
institutions as salable assets to be reflected in each term's
profit-and-loss account, in the same way as bonds aimed for
transactions.

(16) Japan, U.S. finance chiefs agree to take joint steps over
strategy toward China

NIKKEI (Page 3) (Excerpts)
Evening, June 13, 2009

(Yusuke Yoneyama, Lecce)

Japanese Finance Minister Kaoru Yosano and U.S. Treasury Secretary
Timothy Geithner in their meeting on June 12 discussed the Chinese
economy, in addition to the two countries' economic conditions and
North Korean issues. An expansion of domestic demand in China is
imperative for the global economy to be put onto a recovery and
growth track. China is increasing its influence as the world's
largest buyer of U.S. government bonds. As a result, it is becoming
more important for Japan and the U.S. to take joint steps toward
policy coordination with China.

Yosano took up the importance of the Chinese economy first.
According to officials accompanying Yosano, Geithner responding by
talking about the results produced during his visit to China in

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early July. They shared the view that strengthening U.S.-China
relations will benefit both Japan and the U.S. Also based on the
view that since Japan-U.S. relations remain solid, the U.S. can
focus its efforts on China, they affirmed the need for the U.S. to
promote a strategy toward China on the premise of cooperation with
Japan.

While in China, Geithner indicated his determination to address the
task of restoring fiscal health, besides economic recovery efforts.
He obtained understanding from the Chinese government, which has
purchased U.S. government bonds.

China's sustainable economic growth is the key for Japan to boost
exports and turn around its economy. The Japanese and U.S. finance
chiefs discussed China even though it did not participate in the
meeting of finance ministers from the Group of Eight (G-8)
countries. This shows China's growing influence over the global
economy.

During the brief 15-minute bilateral meeting, Yosano and Geithner
also discussed the issue of the Chinese currency, yuan. They
apparently agreed on the need to continue to urge China to adopt a
more flexible exchange rate system.

It is imperative to draw China into the framework of G-8
coordination also on issues of preventing protectionism and global
warming. Japan and the U.S. will take the initiative in forming a
framework for policy coordination.

(17) Interview with New Komeito Deputy Representative Junji Higashi
on tasks regarding Okinawa - SOFA must be reviewed

OKINAWA TIMES (Page 2) (Full)
June 14, 2009

-- What is the significance of the (next) general election and what
is your party's strategy for the four constituencies in Okinawa?

"The New Komeito and the Liberal Democratic Party will work closely
in conducting election campaigns. The significance is that the
administrative power and the ability to run the government will be
called into question. A change of government is often discussed as
if it is a purpose rather than a means. The absence of the ability
to run the government will only create disorder."

-- How are you going to deal with the plan to relocate Futenma Air
Station to waters off Henoko in Nago? What is your evaluation of the
realignment of U.S. forces in Japan?

"We want to closely watch Governor Hirokazu Nakaima's views on the
environmental assessment. There is much room to consider the noise
factor, and there are all sorts of opinions about specifics, such as
the option of making minor changes to the offshore plan. How to
convince local residents and how to settle the matter are important.
Efforts to eliminate dangerous aspects in Okinawa must be expedited.
Reducing bases in Okinawa is a long-held dream of our party, as
well. The return and redevelopment of facilities south of Kadena Air
Base are vital for building an independent economy."

-- What about the question of a fundamental revision of the
Japan-U.S. Status of Forces Agreement (SOFA)?


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"The government has been dealing with the situation concerning the
operation of SOFA. Our party has yet to unify views in the party. I
personally wonder if the operation of SOFA is all it takes. The time
has come for us to consider the matter while keeping a review of
SOFA in mind."

-- The Okinawa Promotional Special Measures Law will expire in March

2012. What factors are involved in the promotion of Okinawa?

"(Legal measures) are necessary as long as there are gaps with
mainland Japan. But Okinawa has to break away from its dependence on
bases and to build a self-supporting economy, so measures must be
taken in the form of supporting Okinawa's independence. Necessary
public works projects must be implemented. The start of the use of a
new runway at Naha Airport is too late. It will lead to the
promotion of tourism, so it must be rushed. In view of the prospect
of (Okinawa) becoming an independent bloc as a result of a shift to
a doshu (regional bloc) system, it is important to make the fiscal
foundation firm. We would like to see Okinawa turn its eye to Asia
and carry out exchanges actively."

-- The unemployment rate in Okinawa is high. What are your views on
the economy, employment policy, and the correction of disparities?

"Okinawa must climb out of the recession. The government has
implemented many policies, and it is important for them to produce
positive effects early. In order for Okinawa to achieve an
independent economy, there is no other option but to create jobs
centering on public works projects, tourism and so on."

-- Do you think Japan and the United States concluded a secret pact
when returning Okinawa to Japan?

"The government has denied it. The government's position is that
because the notes exchanged between Japan and the United States do
not specify an advance notice on 'nuclear introduction' into Japan,
the two countries did not conclude a secret pact. Our view is the
same as the government's."

Interviewed by Ikue Nakaima

(18) The reality of the fears for the first time in 50 years

NIKKEI (Page 2) (Full)
June 14, 2009

Katsuji Nakazawa, deputy political editor

"Can the Self-Defense Forces engage in retaliatory bombing in Korea?
Quite apart from the question of whether it will actually do so or
not, is this possible theoretically?" "How do we defend Japan from a
large long-range guided missile?" Such were the heated exchanges
that took place at the House of Representatives Cabinet Committee in
February, 1956, which could have been mistaken for the current Diet
session, where North Korea's nuclear and missile tests have been a
key issue.

Former Prime Minister Ichiro Hatoyama's response in the Diet half a
century ago in 1956 that the capability to attack enemy bases was
"constitutional," which Prime Minister Taro Aso has mentioned in
relation to the present debate on this capability, was read out on
his behalf by Defense Agency Director General Naka Funada. It went:

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"It is unthinkable that the spirit of the constitution is for us to
just do nothing and wait for our own destruction. Legally, it is
within the scope of self-defense to attack bases of guided missiles
and other weapons if no other means are available."

At that time, although an armistice had been concluded for the
Korean War, the situation was still unstable and battles had been
fought in the Taiwan Strait. Only four years had passed since the
San Francisco Peace Treaty came into effect on April 28, 1952, and
Japan was not yet a member of the United Nations.

Like today, nuclear tests also became an issue at the 1956 Diet
session, where alarmist statements like "a third world war will
break out" were sometimes made. A Diet resolution asking the U.S.,
the Soviet Union, and other nations to ban testing of atomic and
hydrogen bombs had just been passed before Hatoyama made his
response. Entertainment movies at that time also roused fears about
nuclear weapons. The movie "The Great Aerial Monster Radon" released
in 1956 was about the resurrection of dinosaurs as a result of
nuclear and other experiments.

It was evident from Hatoyama's response that since Japan did not
possess nuclear weapons, he wanted to leave some theoretical leeway
for Japan to retaliate as a way to deal with the unstable
international environment.

Subsequently, talk about the capability to attack enemy bases
disappeared from the surface until the 1990s. During the Cold War
era, the Japan-U.S. security alliance functioned effectively and
there had been few occasions where Japan felt any direct threat. It
was also a period in which the economy came before anything else.
North Korea's recent nuclear tests and ballistic missile launches
have awakened the sense of crisis again for the first time in half a
century.

The enemy base attack capability recommended by a joint meeting of
the Liberal Democratic Party (LDP) defense-related divisions to
Prime Minister Taro Aso on June 11 consists of long-range cruise
missiles or long-range ballistic-type solid rockets. This was in
anticipation of the government's revision of the "National Defense
Program Guidelines (NDPG)" in late 2009.

The unfamiliar term "ballistic-type solid rocket" is another way to
say "ballistic missile." This reflects the idea of taking one step
further from passive missile defense to possessing offensive
missiles for deterrence. Although this was a recommendation by LDP
divisions which take a deliberately radical view, it does symbolize
the depth of Japan's anxiety.

The Six-Party Talks have not been effective even though the whole of
Japan is within the range of missiles carrying nuclear warheads,
while the United States, which Japan relies on, has removed the DRPK
from the list of state sponsors of terrorism, shelving the abduction
issue.

The mid-ranking and junior Diet members who cry out for enemy base
strike capability are disturbed by the fact that Japan has no
alternative defense capability of its own in a situation where the
weakening of America's power has made it difficult to fully rely on
for security. The shakiness of Japan's position as the number two
economic power, which used to be source of its confidence, has also
made Japan anxious.

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The current debate on the enemy base attack capability also includes
a tactical diplomatic message for the U.S. and China. To the U.S.,
Japan is testing the proposition of reviewing the division of labor
in security that has persisted in the post-World War II period -
that "Japan will serve purely as a shield." On the other hand, for
China, which is sensitive to Japan's "military expansion," Japan
reckons that it will now think seriously about applying pressure on
North Korea after the latest UN resolution. There seems to be a
notion that although nuclear armament is not an option for Japan,
"making other countries think about 'what if' could serve as a
deterrent."

Even though Japan will not embark on preemptive strikes under its
exclusively defensive policy, if it goes beyond the realm of legal
theory and comes to possess offensive weapons such as "Tomahawk"
missiles, this will mean a critical change in the character of Japan
in the postwar era. There can be an infinite number of debatable
points in the interpretation of the phrase "if no other means are
available" in Hatoyama's response.

Advocates of the enemy base strike capability are also present in
the Democratic Party of Japan, which is headed by Ichiro Hatoyama's
grandson. Policy toward North Korea and security issues brought to
light by the DPRK should be discussed intensively in the House of
Representatives election that will come before the NDPG review later
in the year.

ZUMWALT