DAILY SUMMARY OF JAPANESE PRESS 01/22/09

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 01/22/09

INDEX:

(1) Economy under Obama administration: Japan, U.S. searching for
new dialogue on trade; Beef imports an outstanding issue (Mainichi)


(2) Prime Minister Aso struggling for building honeymoon-like ties
with new U.S. President Obama; Prime Minister's Office to increase
staff members (Asahi)

(3) Obama's AMERICA -- hopes and trials: Shift to multilateralism;
Time for Japanese diplomacy to stop following in U.S. footsteps
(Mainichi)

(4) METI ready to take joint steps with Obama administration, but
remains cautious about protectionist pressure (Asahi)

(5) "Japan's political circles should be united," complains Nippon
Keidanren chairman (Nikkei)

(6) Government to propose at UN working group method for
standardizing CO2 emissions measurement with aim of taking
initiative in talks on sector-specific cuts (Nikkei)

(7) TOP HEADLINES

(8) EDITORIALS

(9) Prime Minister's schedule, January 21 (Nikkei)

(Corrected copy) Obama administration: Government wary of U.S.
softening its stance toward North Korea; Hopes to hold summit
meeting at early date (Yomiuri)

ARTICLES:

(1) Economy under Obama administration: Japan, U.S. searching for
new dialogue on trade; Beef imports an outstanding issue

MAINICHI (Page 11) (Excerpts)
January 22, 2009

With the launching of the administration of President Barack Obama,
Japan-U.S. economic relations are likely to be pressed to change, as
well. In his inaugural address on January 20, President Obama played
up his stance to place high priority on international cooperation.
How much Japan's trade policy can contribute to the structural
reform of the global economy to, for instance, strike a balance
between the environment and economic growth, will now be tested.
Japan might also be pressed for greater efforts to expand domestic
demand and to carry out policy coordination to bring stability to
markets.

A study is underway between the Japanese government and the Obama
administration to set up the framework of a new Japan-U.S. economic
dialogue to discuss trade issues. That is because how well the two
countries can cooperate is considered to be key to pursuing economic
growth and the environment at the same time, addressing energy
issues, and liberalizing trade and investment. The government
intends to quickly establish a close cooperative system with the
Obama administration, with the framework of the new dialogue as the
leverage.

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In markets, there is concern that the Obama administration might
resort to protectionism. Even so, a senior Foreign Ministry official
predicted: "There will be no change to (the Obama adminsitration's)
cooperation-oriented basic stance." The government is watching
closely how the new U.S. administration is going to rebuild the
World Trade Organization (WTO) multilateral trade talks (Doha
Round),which collapsed last year.

There is one outstanding issue between Japan and the United States:
the question of easing requirements for U.S. beef imports, triggered
by the discovery of a case of BSE. At present, only U.S. beef from
cattle aged 20 months or younger is allowed into Japan. The Bush
administration urged Japan to abolish the age limit on the strength
of a decision by the World Organization for Animal Health (OIE).
President Obama also made a statement supporting this policy in May
2008 (when he was a senator).

(2) Prime Minister Aso struggling for building honeymoon-like ties
with new U.S. President Obama; Prime Minister's Office to increase
staff members

ASAHI (Page 4) (Full)
January 21, 2009

Following the inauguration of the new U.S. administration of
President Barack Obama backed by strong public support, Prime
Minister Taro Aso aims to hold a meeting with President Obama in
order to build a relationship of trust with him, prior to the
upcoming G-20 financial summit. The Aso administration, which has
suffered from its plummeting support rates in the polls, intends to
boost its popularity by contributing to the global economy with its
economic stimulus measures. However, assistance Japan can provide to
Afghanistan is limited. We cannot help feeling that Japan's measures
to prevent global warming have fallen behind those of European
countries.

Unable to come up with idea of overcoming financial crisis

Referring to Hillary Clinton's testimony during a hearing at the
Senate Foreign Relations Committee on Jan. 13, Aso stated
yesterday:

"Secretary of State-designate Hillary Clinton clearly said: 'The
alliance with Japan is a cornerstone of U.S. policy toward Asia. I
am looking forward to the (Obama) administration. I will make
efforts to strengthen Japan-U.S. relations further."

Aso was confident in enhancing the alliance.

As if to match the inauguration of the Obama administration, the
government appointed on Jan. 20 Shotaro Yachi as its representative
(to engage in negotiations with other countries on important
diplomatic issues). Yachi served as administrative vice foreign
minister when Aso was foreign minister. "The appointment was aimed
to increase reciprocal visits between the top leaders of the two
countries," said a government official. Aso, who has communication
channels to the Republican Party, is believed to have few personal
connections to the Democratic Party. Aso's aides pin hopes on
Yachi's diplomatic caliber.

In his policy speech delivered last September, Aso set the policy of

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attaching importance to relations with the United States, stressing
differences with Democratic Party of Japan's (DPJ) President Ichiro
Ozawa, who has advocated UN-centered diplomacy. Aso stated in his
policy speech: "The DPJ has accountability for clarifying to the
Japanese public and the world to which -- the U.S.-Japan alliance or
the United Nations -- it gives priority.

The Obama administration has installed persons who have a detailed
knowledge of Japan in key posts responsible for U.S. policy toward
Japan, for example former Deputy Assistant Secretary of Defense
Campbell, a Japan expert, as assistant secretary of state for East
Asian and Pacific affairs. Aso has high expectations of the new U.S.
government. He said:

"In Japan there are many people who have known Mr. Timothy Geithner
(who is expected to assume the post of secretary of the treasury)
since he worked at the U.S. Embassy in Tokyo. I think he is capable
of financial management."

Yet, it is difficult for Aso to build honeymoon-like ties similar to
the ones formed by then Prime Minister Koizumi and President Bush.
Revitalizing the economy that Obama will immediately deal with is a
pressing issue comparable to the war on terror the former Bush
administration engaged in. Aso has focused on economic recovery, but
there is no ideas for turning around the world economy.

Japan announced last year its policy of financing the International
Monetary Fund (IMF) up to 10 trillion yen for emerging and
developing countries from its foreign-currency reserves. Although
Tokyo expressed its eagerness to become a driving force, it is now
busy with coming up with measures to increase domestic jobs due to
the sharp deterioration of the economy.

In the Prime Minister's Official Residence (Kantei),an aide to the
prime minister said: "The financial crisis is no longer the biggest
one for the United States; it is the possible collapse of the Big
Three."

In an attempt to support Obama, some in the Kantei are talking about
dreams such as that: "Is it possible for Toyota Motor to buy out
General Motors?" "How about splitting the cost between Japan and the
United States?" However, the possibility is uncertain.

Concerned about gaps in polity toward North Korea

"It is important for Japan to present what it can do before it is
asked by the United States," said a senior Foreign Ministry
official. Therefore, the Japanese government is hurriedly working on
preparations for a first summit between the top leaders of Japan and
the United States. The government intends to come up with
comprehensive measures to stabilize Afghanistan, which Obama sees as
important in the war on terror.

Nevertheless, it does not appear likely that the Self-Defense Forces
(SDF) will be dispatched to Afghanistan, which needs a new law, due
to the divided Diet. Since the government's budget for official
development assistance (ODA) has been on the decrease, it is
difficult to come up with new financial aid.

The government, therefore, will wisely use for the time being the
5.5 billion dollars (approximately 50 billion yen) in aid that it
has already announced. The second supplementary budget for fiscal

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2008 includes a total of 30.1 billion yen to be used as expenditures
for the presidential election slated for the fall, nurturing police
officers and anti-drug measures, as well as food aid, including
support for agriculture. From next fiscal year, a total of 10
billion yen will be allocated for building infrastructure, such as
schools and hospitals. The Japan International Cooperation Agency
(JICA) has launched drafting a plan to rehabilitate Cable, the
capital of Afghanistan.

For Japan, however, the North Korea issue is a top concern its
security. There is a view that under the Obama administration, the
pressure on the North to abandon its nuclear programs might be
lightened. A senior Foreign Ministry official is concerned about
Clinton's remarks during the hearing at the Senate, in which she
revealed the intention of placing importance on nuclear
nonproliferation of North Korea and Iran. The ministry official
said: "Her remarks can be taken as that (North Korea) already is a
nuclear power."

It is also unclear that to what extent Obama's interest in the
abduction issue will rise.

In order to move head with the North Korea issue, the government
gives weight to cooperation with the United States and South Korea.
In his meeting on Jan. 12 with South Korean President Lee Myung Bak,
Aso said:

"Following the inauguration of the new U.S. government, North Korea
could try to divide the solidarity of Japan, South Korea and the
United States. It is important for the three countries to closely
cooperate."

Aso and Lee affirmed cooperation between Tokyo and Seoul.

The Japanese government expects to cooperate with the United States
in promoting measures to prevent global warming. With the United
Nations Climate Change Conference (COP15) in December in mind, the
government is enthusiastic about playing a role in unison with the
United States to press ahead with negotiations with China, a major
emitter.

However, Obama, who favors creating an emission trading market in
the U.S., has already come up with medium- and long-term goals to
cut greenhouse gas emissions. His method is similar to those of
European countries, which have implemented measures under the lead
of their governments. There is a growing concern that the
possibility of rapprochement between the United States and Europe is
stronger than that between Japan and the United States.

(3) Obama's AMERICA -- hopes and trials: Shift to multilateralism;
Time for Japanese diplomacy to stop following in U.S. footsteps

MAINICHI (Page 2) (Slightly abridged)
January 22, 2009

Katsumi Kawakami

In his inaugural address, President Barack Obama stated: "We will
begin to responsibly leave Iraq to its people, and forge a
hard-earned peace in Afghanistan." About six hours later, shortly
before 9 o'clock on the morning of January 21, a senior Ministry of
Foreign Affairs (MOFA) official grumbled: "Japan's assistance

TOKYO 00000135 005 OF 011


measures for Afghanistan must be clearly conveyed (to the United
States)."

The ministry regards Japan's response to Afghanistan as a test for
the alliance with the United States, so officials are rushing to
come up with contribution measures centering on official development
assistance (ODA) and civilian dispatch. As if to echo America's
excitement for the new administration, Administrative Vice-Foreign
Minister Mitoji Yabunaka, too, energetically said on the morning of
Jan. 21: "The question is not how Japan responds to U.S. requests.
Japan must pursue diplomacy in a way that allows it to make
independent proposals and address (issues) jointly (with the United
States)."

President Obama has shifted away from President Bush's unilateralism
toward multilateralism. This provides a golden opportunity for Japan
to stop blindly following in America's footsteps and rebuild the
alliance with the United States to make it suitable for the new era.
The view gaining ground in Tokyo is that is exactly what the United
States wants of Japan.

Breaking out of the long practice of following in America's
footsteps will not be easy, however.

Late last year, Deputy Chief Cabinet Secretary Jun Matsumoto
received a message from the Obama transition team noting that the
United States would join the International Renewable Energy Agency
(IRENA) as an observer. IRENA is a new organization aiming to
promote the use of wind power and other alternative energy sources.
Led by Germany, some 40 countries are expected to join the body.
Attended by approximately 100 countries, the founding conference for
IRENA is scheduled to take place on Jan. 26 in Bonn.

Japan initially intended to forgo attending the conference partly
because the former Bush administration had ignored IRENA.

Matsumoto asked the Foreign Ministry and the Economy, Trade and
Industry Ministry: "The incoming U.S. administration will join
(IRENA). Shouldn't Japan do so as well?" This led to the
government's decision to dispatch MOFA Economic Affairs Bureau
Deputy Director General Yasuo Tanabe and others, although Japan has
opted to put off becoming a member of IRENA.

Japan has stressed its official development assistance program and
other means to help Afghanistan because the chances are extremely
slim at this point for the government to establish a new law sending
SDF troops to that country. A government official indicated that the
Aso administration's weak political base resulting from dwindling
support ratings has reduced the scope of its diplomatic efforts.

In a press conference on Jan. 14, before his departure from post,
U.S. Ambassador to Japan J. Thomas Schieffer offered this candid
advice to Japan: "There has been a lot of negative debate about the
role Japan can play in the world because of the domestic political
situation that exists in Japan, but I am confident that Japan will
figure out a way to overcome the political gridlock it now faces. I
hope that Japan will not be shunted off into a corner in the
international community in the meantime."

President Obama declared that the United States would face "a new
era of responsibility." How will Japan fulfill its responsibility?
Sending messages on its own could reshape Japan's alliance with the

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United States in the new era.

(4) METI ready to take joint steps with Obama administration, but
remains cautious about protectionist pressure

ASAHI (Page 6) (Full)
January 22, 2009

How will economic relations between Japan and the U.S. change under
the new administration of President Barack Obama, the first
Democratic government in eight years? The two countries were at
loggerheads over auto imports and other issues during the Clinton
administration years in the 1990s, but there are no signs of such
trade friction at present. Even so, concern about a possible growth
of protectionism in the U.S. will not go away, as the worldwide
economic recession becomes more serious.

In a press conference on Jan. 19, Vice Minister Harufumi Mochizuki
of the Ministry of Economy, Trade and Industry (METI) was optimistic
about the future of Japan-U.S. relations, saying: "I do not think
(conflict) will take place over trade issues between the two
countries."

The U.S. Democratic Party, backed by labor unions, tends to adopt a
trade policy that gives priority to protecting domestic industries.
The Clinton administration, hinting that it would impose sanctions
against goods imported from Japan, pressed Japan to open up its
auto, insurance and other markets. As a result, bilateral trade
conflict grew intense at the time.

But the economic environment for Japan and U.S. has significantly
changed since then. Japanese automakers, including Toyota and Honda,
have expanded production in the U.S., contributing to creating jobs
there. The main cause of trade friction is now China, driven by its
remarkable economic growth.

With no major pending economic issues between Japan and the U.S.,
the challenges facing President Obama, such as reviving the global
economy by increased fiscal disbursements and strengthening the
banking system, are also Japan's challenges. The government wishes
to underscore a stance of cooperation between Japan and the U.S.,
using such occasions as meetings of the Group of Seven (G-7) finance
ministers and central bank governors and the financial summit. A
senior Finance Ministry official noted: "Japan and the U.S. share
the view that unless the alliance is strengthened, they will not be
able to overcome the economic crisis."

But President Obama made protectionist remarks during the election
campaign, like one criticizing the North American Free Trade
Agreement (NAFTA),which is aimed to promote trade liberalization
between the U.S. and its neighbors. A senior METI official said: "If
the job market gets worse, the administration might make
protectionist moves."

Beef imports as source of trouble

Countries must work together to contain the ongoing global economic
crisis.

According to an estimate by Nomura Financial and Economic Research
Center, the economic stimulus package worth 775 billion dollars
(about 70 trillion yen) set in motion by Obama will serve to push up

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Japan's gross domestic production (GDP) by about 2.2 PERCENT over
the next two years. Chief Economist Kiuchi commented: "The outcome
of the U.S. economic package will have a major impact on the
Japanese economy."

Nippon Keidanren (the Japan Business Federation) Chairman Fujio
Mitarai said in a press conference yesterday: "A recovery of the
U.S. economy will give a chance for the global economy to get
through the current critical situation. I expect the new
administration to quickly take bold policy measures."

The new round of World Trade Organization (WTO) global trade talks
(Doha Round) has been at a standstill since the U.S. and emerging
countries failed to find common ground last year. A senior Foreign
Ministry official said: "Various countries are carefully observing
an approach to be taken by the U.S."

It is not true to say, though, that there is no source of trouble
between Japan and the U.S. Japan has set a requirement of exporting
only beef from cattle 20 months of age or younger as a
BSE-prevention measure, and the U.S. has called on Japan to remove
the requirement. There is a possibility that the Obama
administration may ratchet up pressure on Japan in response to calls
from livestock farmers.

(5) "Japan's political circles should be united," complains Nippon
Keidanren chairman

NIKKEI (Page 3) (Full)
January 22, 2009

"Japan should also become united." Meeting the press in Nagoya after
hearing U.S. President Obama's inauguration address, Nippon
Keidanren (Japan Business Federation) Chairman Fujio Mitarai on
January 21 made that comment.

He pointed out that what impressed him is that after acknowledging a
variety of values, President Obama called for solidarity, saying
that AMERICA is one. He said with a wry smile, "I thought that the
ruling and opposition parties should cooperate at times, instead of
always confronting each other."

Concerning the Obama administration's economic policy, Mitarai first
said, "It is most important for it to create jobs." Underscoring
that in order for the global economy to climb out of the crisis,
there must be an economic turnaround in the U.S., he called on the
Obama administration to implement large-scale policy measures in a
speedy manner.

(6) Government to propose at UN working group method for
standardizing CO2 emissions measurement with aim of taking
initiative in talks on sector-specific cuts

NIKKEI (Page 3) (Full)
January 22, 2009

The government plans to propose at a UN taskforce meeting to be held
in Bonn starting late March methods for standardizing measurement of
carbon dioxide (CO2) emissions and energy consumption by main
industries. The common methods would be adopted by all countries.
Japan deems it impossible to now make a fair comparison of CO2
emissions measured in various countries, since they adopt different

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methods, impeding discussions of CO2 emissions cuts.

Talks on an international framework (post Kyoto Protocol) for
curbing greenhouse gas emissions to be adopted in fiscal 2013 will
soon move into high gear. The government hopes to take the
initiative at the talks by proposing specific measurement
guidelines, which are essential in comparing the amount of CO2
emitted by each country. If a CO2 emissions measurement method is
set in detail for each industry so that emissions by various
countries can be compared fairly, it would become easier to tackle a
sector-specific approach of expediting emissions cuts by industrial
sector.

At present, the International Energy Agency (IEA) and other
international industrial organizations have their own guidelines.
However, their guidelines have not yet reached some developing
countries. Data-collecting methods thus vary widely among countries.
In order to make a fair comparison of country-specific CO2 emissions
and energy consumption, it is essential to specify operation
processes subject to measurement. The government has determined that
it would be necessary to set up internationally acknowledged
standards. Before making the proposal, the government will launch
discussion at the International Organization for Standardization
(ISO) possibly this spring. The outlook is that it will take about
two years for the proposal to be acknowledged as international
standards.

The government will first propose in cooperation with the Japan Iron
and Steel Federation, guidelines for the steel sector, which
estimatedly emits about 10 PERCENT of total CO2 emissions in the
world. To be precise, a proposal most likely to be adopted is
targeting the industry's manufacturing process from the blast
furnace-related work of extracting pig iron from iron ore to the
rolling work of processing iron into plates. Since some foreign
countries are ahead in the division of labor, the government will
propose a method of measuring energy consumption and CO2 emissions
in each process. It intends to increase target areas to cover
aluminum, cement and power industries -- all heavy CO2. emitters.

Japan takes the position that it is indispensable for emerging
countries, such as China and India, which are currently not
obligated to cut carbon emissions, to make a certain level of
efforts for emissions cut under the post-Kyoto Protocol. If emerging
countries are obliged to make such an effort, it would become easier
to urge them to set goals for energy-saving, etc. However, whether
Japan's proposal for CO2 emissions measurement system can be widely
adopted by various countries is unclear. Some countries may stick to
a measurement method that assesses their CO2 emissions at a level
lower than the actual amount.

(7) TOP HEADLINES

Asahi:
Female students prone to avoiding exercise

Mainichi:
Government to specify eradication of amakudari practice in roadmap
for reforming national public servant system

Yomiuri & Tokyo Shimbun:
Obama to instruct Defense Department to work out plan to withdraw
troops from Iraq

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Nikkei:
SONY to consolidate domestic TV production to one factory, cutting
over 2,000 regular workers

Sankei:
Obama speech underscores pragmatic policy approach more than
"change"

Akahata:
Obama in speech vows to remake AMERICA

(8) EDITORIALS

Asahi:
(1) World paying attention to Obama's diplomatic skills
(2) China's Defense White Paper: Transparency needed

Mainichi:
(1) U.S. sets out on journey to change world under President Obama

Yomiuri:
(1) Obama's capability to be tested in reviving U.S.

Nikkei:
(1) Obama should try to revitalize U.S. economy from broad
perspective

Sankei:
(1) Obama expected to revive strong AMERICA

Tokyo Shimbun:
(1) Obama ushers in era of dialogue, emerging from era of division

Akahata:
(1) How will Obama change America?

(9) Prime Minister's schedule, January 21

NIKKEI (Page 2) (Full)
January 22, 2009

07:34
Took a walk around his official residence.

10:17
Attended the ceremony commemorating the 45th anniversary of the
establishment of the law to protect the war injured and the 55th
anniversary of the establishment of the Japanese Disabled Veterans
Association, held at the Nippon Budokan on Kitanomaru Park.

11:05
Returned to his official residence.

12:49
Met at the Kantei LDP Policy Research Council Chairman Hori, his
deputy Sonoda, Tax Commission sub-panel head Yanagisawa, mid-term
program ruling bloc project team chair Nukaga, Chief Cabinet
Secretary Kawamura, Finance Minister Nakagawa, and Economic and
Fiscal Policy Minister Yosano. Hori, Yanagisawa, Nukaga and Yosano
stayed on.


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14:50
Met LDP president special assistant Shimamura, joined in by public
relations department chief Furuya.

15:54
Met National Public Safety Commission Chairman Sato.

16:25
Met Chuma, standing advisers Eto and Ota, and civic servant system
reform committee deputy chairman Hayashi, followed by special envoy
for Middle East peace Arima and Middle Eastern and African Affairs
Bureau Director General Suzuki.

17:38
Met public relations officer Ogawa. Afterward, had a message
recorded for a Japan International Broadcasting program, in the
presence of JIB President Takashima and Ogawa.

19:18
Met at his official residence advisor Yamaguchi, Upper House member
Asano and Lower House ember Inoue.

(Corrected copy) Obama administration: Government wary of U.S.
softening its stance toward North Korea; Hopes to hold summit
meeting at early date

YOMIURI (Page 4) (Full)
January 22, 2009

The Obama administration was inaugurated on January 20 (21st Japan
time). Both Japan and the U.S. are geared up to continue to maintain
the present solid state of the alliance. However, there are a number
of challenges facing the bilateral relationship.

Commenting on the inauguration ceremony of Barack Obama as the
president of the United States, Foreign Minister Nakasone on the
21st told reporters: "An awesome number of people turned out. I
would like both of our countries to tackle the many challenges to
peace and stability of the world that we face."

President Obama has stressed that he will shift to multilateral
cooperation, moving away from the Bush administration's
unilateralism. However, some take the view that his basic approach
to America's long-standing alliance ties with such countries as
Japan would not change but basically continue, according to one
Foreign Ministry official.

The Japanese government is paying close attention to the Obama
administration's approach to problems that created friction and
gulfs between the two countries during the Bush administration,
despite its having been termed a "honeymoon-like relationship."

Regarding the issue of Japanese abducted by North Korea, according
to a Japan specialist in the U.S. Democratic Party, "The new
administration does not intend to repeat the mistake (the previous
administration) made when it delisted North Korea as a state sponsor
of terrorism, causing discord with Japan." There is a growing sense
of alarm in Japan that President Obama, who attaches importance to
dialogue, will soften Washington's stance toward Pyongyang.

The President plans to call on European countries and other U.S.
allies to boost their troop presence in Afghanistan. If Japan

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continues to avoid a dispatch of the Self-Defense Forces (SDF),
Obama might ask Japan to assume a large financial burden, including
funding troop presence in Afghanistan.

The prevailing view regarding the plan to realign U.S. forces in
Japan that includes the relocation of the Futenma Air Station and
the issue of reform of the UN Security Council that includes Japan's
bid for a permanent seat is that the Obama administration will
continue the previous administration's stances. In such cases,
Japan's actions and ideas for finding a breakthrough would be
needed.

Commenting on how Japan could make a good start in relations with
the Obama administration, one U.S. government source pointed out:
"Japan is expected to come up with specific proposals in such areas
as dealing with climate change, which is Japan's strong point. In
that case, the first bilateral summit meeting would be important."

Prime Minister Aso has expressed a desire for an early visit to the
U.S. But with Diet deliberations on the second fiscal 2008 extra
budget and the fiscal 2009 budget going on, a government source
predicted that Aso's visit to the U.S. would likely be delayed until
just prior to the financial summit on April 2.

ZUMWALT