DAILY SUMMARY OF JAPANESE PRESS 07/07/09

UNCLAS SECTION 01 OF 14 TOKYO 001543

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: DAILY SUMMARY OF JAPANESE PRESS 07/07/09

INDEX:

(1) Drive to unseat Aso with prime minister paralyzed in LDP (Asahi)


(2) Poll on Aso cabinet, political parties (Yomiuri)

(3) Poll on Aso cabinet, political parties (Tokyo Shimbun)

(4) Chief Cabinet Secretary Kawamura welcomes U.S.-Russia nuclear
reduction agreement (Sankei)

(5) USTR issues statement on regulatory reform, expresses "concerns
on Japan's beef import restrictions and Kanpo insurance" (Nikkei)

(6) Interview with Michael Green, former presidential assistant:
Diversified tools necessary for decision-making (Nikkei)

(7) "Seiron" column: Do not let Murata's good intentions go to waste
(Sankei)

(8) Redefining Japan's policy stance (part 1): Aim to achieve wise
government (Nikkei)

(9) Profile of New IAEA Director General Yukiya Amano (Asahi)

(10) Simulation of DPJ administration's foreign and security
policies after three months in power (Shukan Post)

ARTICLES:

(1) Drive to unseat Aso with prime minister paralyzed in LDP

ASAHI (Page 4) (Excerpts)
July 4, 2009

The ruling Liberal Democratic Party (LDP) is now being faced with
ultimate choices --whether to unseat Taro Aso as prime minister or
to dissolve the House of Representatives in desperation. With the
loss of the Shizuoka gubernatorial election, many in the LDP are
convinced that the party cannot contest the next Lower House
election under Aso's leadership, but that replacing the prime
minister for the third time in a row would not be tolerated. The LDP
has been unable to find a successor to Aso. As it stands, the party
is now caught in a dilemma.

LDP Election Strategy Council Deputy Chairman Yoshihide Suga told
reporters yesterday: "This election was not a vote of confidence on
the Aso administration. A gubernatorial election does not affect a
national election."

However, junior lawmakers, whose political bases are weak, have
objected. Lower House member Koichiro Shimizu said: "Some say that a
local election has nothing to do with a national election. That's
not true. It is a problem that we think that we cannot fight in the
election under Mr. Aso's leadership." A former LDP secretary general
expressed his outlook that moves to find ways to oust Aso as prime
minister will move into full swing.

Former Secretary General Hidenao Nakagawa has already said: "(Aso)
can make an honorable decision," suggesting that Aso resign. In the
New Komeito, the LDP's junior coalition partner, one member said: "I

TOKYO 00001543 002 OF 014


think we will lose the general election even if the prime minister
is replaced. But replacing Aso is better than keeping him in
office." Attention has begun shifting to who will succeed Aso.
However, it is difficult to predict whether Aso will be removed from
office if the ruling camp fails to secure a majority of the Tokyo
Metropolitan Assembly seats.

In a LDP executive meeting yesterday evening, General Affairs
Committee Chairman Takashi Sasagawa criticized the drive to unseat
Aso as prime minister, saying: "We formed the Aso cabinet with the
consensus of all members last September. Before that, we were
criticized by the public for the two previous cabinets lasting only
one year. The public cannot understand the idea of moving up the LDP
presidential race."

Shinzo Abe and Yasuo Fukuda, LDP members, both stepped down from
their posts as prime minister out of the blue. Some LDP leaders are
concerned that if Aso is replaced, the LDP will unavoidably be
subjected to severe criticism from the public.

In a spot nationwide public opinion poll conducted by the Asahi
Shimbun, 65 percent of respondents said that they "cannot understand
the move to remove Aso from office" and 67 percent of LDP supporters
said that they "cannot understand." Asked about the LDP's image
after the party asked Miyazaki Gov. Hideo Higashikokubaru to run in
the snap election on the LDP ticket, only 10 percent said that the
image was improved, while 44 percent answered that the image became
worse. These figures indicate that that the public is watching the
LDP's "useless resistance" coldly.

(2) Poll on Aso cabinet, political parties

YOMIURI (Page 11) (Abridged)
July 4, 2009

Questions & Answers
(Figures shown in percentage)

Q: Do you support the Aso cabinet?

Yes 19.7
No 66.4
Other answers (O/A) 2.1
No answer (N/A) 11.8

Q: (Only for those who answered "yes" to the foregoing question)
Pick only one from among the following reasons for your approval of
the Aso cabinet.

Something can be expected of its policy measures 16.4
The prime minister has leadership ability 5.3
There's something stable about the prime minister 8.5
His cabinet's lineup is good 7.6
Because it's a coalition of the Liberal Democratic Party and the New
Komeito 45.8
O/A 3.9
N/A 12.6

Q: (Only for those who answered "no" to the foregoing question) Pick
only one from among the following reasons for your disapproval of
the Aso cabinet.


TOKYO 00001543 003 OF 014


Nothing can be expected of its policy measures 29.1
The prime minister lacks leadership ability 34.8
There's nothing stable about the prime minister 20.2
His cabinet's lineup is not good 2.7
Because it's a coalition of the Liberal Democratic Party and the New
Komeito 10.2
O/A 0.3
N/A 2.7

Q: Which political party do you support now? Pick only one.

Liberal Democratic Party (LDP) 25.5
Democratic Party of Japan (DPJ or Minshuto) 28.6
New Komeito (NK) 3.7
Japanese Communist Party (JCP) 1.7
Social Democratic Party (SDP or Shaminto) 1.1
People's New Party (PNP or Kokumin Shinto) 0.2
Reform Club (RC or Kaikaku Kurabu) ---
New Party Nippon (NPN or Shinto Nippon) ---
Other political parties 0.0
None 35.6
N/A 3.5

Q: When comparing Prime Minister Aso and DPJ President Hatoyama, who
do you think is more appropriate to be prime minister?

Prime Minister Aso 23.9
DPJ President Hatoyama 40.6
N/A 35.5

Q: Do you think the DPJ will be able to take the reins of government
in the next election for the House of Representatives?

Yes 47.1
No 39.0
N/A 13.9


Q: Prime Minister Aso has appointed Yoshimasa Hayashi to the post of
State Minister for Economic and Fiscal policy, which Finance
Minister Yosano had held concurrently, and he has also appointed
Motoo Hayashi to the post of National Public Safety Commission
chairman, which Internal Affairs and Communications Minister Sato
had held concurrently. Do you appreciate these cabinet ministerial
appointments this time?

Yes 15.7
No 56.4
N/A 27.9

Q: Prime Minister Aso has forgone his plan to change the LDP's
executive lineup along with the cabinet ministerial appointments
this time. Do you think Prime Minister Aso displayed his leadership
in the series of personnel appointments?

Yes 8.9
No 83.2
N/A 7.9

Q: DPJ President Hatoyama's fund management body submitted political
fund reports that contained false information about individual
political donations. DPJ President Hatoyama explained that it was

TOKYO 00001543 004 OF 014


done at his secretary's discretion. Do you think he has fulfilled
his accountability?

Yes 10.3
No 79.7
N/A 10.0

Q: Do you think DPJ President Hatoyama should resign from his party
post to take responsibility for this problem?

Yes 29.5
No 56.7
N/A 13.9

Q: If an election were to be held now for the House of
Representatives, which political party would you like to vote for in
your proportional representation bloc?

LDP 25.4
DPJ 35.2
NK 3.8
JCP 3.1
SDP 1.2
PNP 0.3
RC ---
NPN ---
Other political parties 0.1
Undecided 25.2
N/A 5.7

Polling methodology: The survey was conducted July 2-3 across the
nation on a computer-aided random digit dialing (RDD) basis.
Households with one or more eligible voters totaled 1,732. Valid
answers were obtained from 1,021 persons (58.9 PERCENT ).

(Note) In some cases, the total percentage does not add up to 100
PERCENT due to rounding.

(3) Poll on Aso cabinet, political parties

TOKYO SHIMBUN (Page 2) (Abridged)
July 6, 2009

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of the
last survey conducted June 13-14.)

Q: Do you support the Aso cabinet?

Yes 23.4 (17.5)
No 60.9 (70.5)
Don't know (D/K) + no answer (N/A) 15.7 (11.9)

Q: (Only for those who answered "yes" to the previous question)
What's the primary reason for your approval of the Aso cabinet? Pick
only one from among those listed below.

The prime minister is trustworthy 13.6 (20.4)
Because it's a coalition cabinet of the Liberal Democratic Party and
the New Komeito 10.9 (9.5)
The prime minister has leadership ability 1.4 (3.6)
Something can be expected of its economic policies 10.6 (11.3)

TOKYO 00001543 005 OF 014


Something can be expected of its foreign policies 7.1 (6.4)
Something can be expected of its political reforms 5.7 (0.4)
Something can be expected of its tax reforms 0.7 (0.5)
Something can be expected of its administrative reforms 5.3 (0.9)
There's no other appropriate person (for prime minister) 42.7
(44.3)
Other answers (O/A) 0.6 (0.6)
D/K+N/A 1.4 (2.1)

Q: (Only for those who answered "no" to the first question) What's
the primary reason for your disapproval of the Aso cabinet? Pick
only one from among those listed below.

The prime minister is untrustworthy 17.2 (13.9)
Because it's a coalition cabinet of the Liberal Democratic Party and
the New Komeito 8.1 (7.8)
The prime minister lacks leadership ability 25.9 (23.0)
Nothing can be expected of its economic policies 19.7 (18.8)
Nothing can be expected of its foreign policies 1.2 (0.7)
Nothing can be expected of its political reforms 11.6 (10.8)
Nothing can be expected of its tax reforms 4.7 (5.6)
Nothing can be expected of its administrative reforms 5.9 (5.9)
Don't like the prime minister's personal character 4.7 (12.0)
O/A --- (0.4)
D/K+N/A 1.0 (1.1)

Q: Prime Minister Aso has appointed former Defense Minister
Yoshimasa Hayashi to the post of state minister for economic and
fiscal policy and LDP Deputy Secretary General Motoo Hayashi to the
post of National Public Safety Commission chairman. Do you
appreciate these appointments?

Yes 8.9
No 38.7
Can't say which 47.2
D/K+N/A 5.2

Q: Prime Minister Aso did not replace the LDP's executive lineup,
including the secretary general, due to opposition from within the
LDP. Instead, he only appointed a few cabinet ministers. What do you
think about this?

He should have shuffled the LDP's executive lineup 19.6
He had no alternative to making only those personnel changes 25.1
He should not have made any personnel changes in his cabinet 43.3
D/K+N/A 12.0

Q: DPJ President Yukio Hatoyama admitted that his fund management
body's political fund reports contained false information about
individual donations. He explained that his own personal funds were
used for the reported donations. Is this account convincing?

Yes 12.4
No 78.3
D/K+N/A 9.3


Q: Would you like the present LDP-led coalition government to
continue, would you like it to be replaced with a DPJ-led coalition
government, or would you otherwise like a new framework of political
parties to form a coalition government?


TOKYO 00001543 006 OF 014


LDP-led coalition government 19.6 (14.9)
DPJ-led coalition government 26.6 (35.9)
LDP-DPJ grand coalition 13.9 (14.7)
New framework under political realignment 32.6 (28.0)
D/K+N/A 7.3 (6.5)

Q: Which political party are you going to vote for in the next House
of Representatives election in your proportional representation
bloc?

Liberal Democratic Party (LDP) 26.3 (18.7)
Democratic Party of Japan (DPJ or Minshuto) 34.3 (47.8)
New Komeito (NK) 5.9 (2.7)
Japanese Communist Party (JCP) 4.5 (3.2)
Social Democratic Party (SDP or Shaminto) 1.2 (1.8)
People's New Party (PNP or Kokumin Shinto) 0.7 (1.6)
Reform Club (RC or Kaikaku Kurabu) --- (---)
New Party Nippon (NPN or Shinto Nippon) 0.4 (0.2)
Other political parties, groups --- (0.2)
D/K+N/A 26.7 (23.8)

Q: When comparing Prime Minister Aso and DPJ President Hatoyama,
which one do you think is more appropriate for prime minister?

Taro Aso 28.3 (21.5)
Yukio Hatoyama 42.0 (50.4)
D/K+N/A 29.7 (28.1)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 27.2 (19.8)
Democratic Party of Japan (DPJ or Minshuto) 26.5 (38.5)
New Komeito (NK) 4.1 (2.1)
Japanese Communist Party (JCP) 4.5 (2.0)
Social Democratic Party (SDP or Shaminto) 1.0 (1.8)
People's New Party (PNP or Kokumin Shinto) 0.3 (0.5)
Reform Club (RC or Kaikaku Kurabu) --- (0.1)
New Party Nippon (NPN or Shinto Nippon) 0.1 (0.1)
Other political parties, groups 0.1 (0.3)
None 32.5 (33.4)
D/K+N/A 3.7 (1.4)

Polling methodology: This survey was conducted across the nation on
July 3-4 by Kyodo News Service on a computer-aided random digit
dialing (RDD) basis. Among randomly generated telephone numbers,
those actually for household use with one or more eligible voters
totaled 1,462. Answers were obtained from 1,022 persons.

(4) Chief Cabinet Secretary Kawamura welcomes U.S.-Russia nuclear
reduction agreement

SANKEI (Online) (Full)
12:07, July 7, 2009

In the U.S.-Russia summit meeting (held on July 6),the two leaders
agreed on the framework of an agreement replacing the Strategic Arms
Reduction Treaty I (START I). Touching on this fact, Chief Cabinet
Secretary Takeo Kawamura stated at a press conference this morning:
"We highly evaluate this as definite progress in the treaty talks.
The government of Japan welcomes it."

Kawamura also said, "We expect the conclusion of a meaningful treaty

TOKYO 00001543 007 OF 014


that will contribute to progress on global nuclear disarmament and
to success in the 2010 Review Conference of the Nuclear
Nonproliferation Treaty (NPT)." He expressed his hopes for the
conclusion of the negotiation before the treaty's expiration in
December.

(5) USTR issues statement on regulatory reform, expresses "concerns
on Japan's beef import restrictions and Kanpo insurance"

NIKKEI (Online) (Full)
13:30, July 7, 2009

Yusuke Yoneyama, Washington

U.S. Trade Representative Ron Kirk issued a statement on July 6 to
coincide with the publication of a report on the Japan-U.S.
"Regulatory Reform Initiative." He said that he "continues to have
serious concerns about restrictions on U.S. beef imports and the
competition conditions with regard to Kanpo (Japan Post Insurance
Company)," and that he "looks to the Japanese government to address
these concerns quickly," indicating his hopes for the early removal
of the restrictions on beef imports.

Due to the BSE problem, the Japanese government limits the import of
U.S. beef to meat obtained from cattle "aged 20 months or younger."
However, the World Organization for Animal Health (OIE) has
recognized the safety of U.S. beef, and Japanese beef is also
recognized as having a similar safety level as U.S. beef, leading
the U.S. side to feel strongly that the import restrictions are
inappropriate.

(6) Interview with Michael Green, former presidential assistant:
Diversified tools necessary for decision-making

NIKKEI (Page 5) (Full)

-- With the world marching toward multi-polarization, which way
should the United States go?

"The United States' physical strength may be on the decline, but
American values have kept winning. Such values as democracy, the
rule of law, and human rights are supported in Latin America, Asia,
and Eastern Europe, and as a result, the United States' hegemony
appears to be expanding."

"Like China and Iran, countries with power surpassing that of the
United States have risen in their respective regions. But there are
rival countries near such regional powers to strike a balance. In
Asia, Japan and South Korea are such countries, and Egypt and Saudi
Arabia in the Middle East. The United States should team up with
those countries."

Countries not powerless

-- The influences of non-state organizations, such as armed
insurgents and nongovernmental organizations (NGO),are growing.

"According to Council on Foreign Relations President Richard Haass
and Newsweek International Editor Fareed Zakaria, the world will
become non-polar and states no longer will hold power. I think
states will remain as main players in international relations.
Alliances must be strengthened in order to maintain the power

TOKYO 00001543 008 OF 014


balance between states."

-- Do you think the modalities of the international decision-making
mechanism will significantly change as well?

"Some people say that the United Nations must be strengthened, while
some others say that high priority should be put on the coalition of
the willing of democracies. I would like to say, 'Mobilize them
all.' It is important to have a toolbox containing many tools."

-- The Iranian government has suspended the development of natural
gas with a French firm and concluded a contract with a Chinese
corporation instead.

"China may have won a contract, but the country has become isolated
because of it. During the era of President Chirac, France tried to
counter the United States by teaming up with Germany and China. The
situation today is quite different. France has consulted with the
United States about addressing the question of China."

China does not desire a zero-sum game

-- China is the world's largest holder of U.S. Treasury bonds. The
United States seems to have some reserve toward China.

"In the bipolar world during the Cold War, the zero-sum game in
which one participant's gains result only from another's equivalent
losses reigned supreme. China today does not desire a zero-sum game
with the United States. A decline in the prices of U.S. Treasury
bonds from their sales will cause trouble for China. I don't think
the Chinese leadership has that much political power."

"But China's military buildup worries me. The reason is because the
country has significantly increased its capabilities in such fields
as satellites, cyberspace, and submarines. The aim is to demonstrate
China's presence in the South China Sea, the Taiwan Strait, and the
East China Sea. The United States should sell F-22 fighter jets to
Japan and F-16s to Taiwan to maintain the power balance. It would be
better for Japan, the United States, Australia, and India to conduct
maritime exercises. There is a need to give the impression that the
more China pursues its unclear military buildup, the tighter the
solidarity among its neighboring countries will become."

-- What is your view of North Korea's nuclear development?

"What the United States fears is that the Kim Jong Il regime will
collapse and North Korean nuclear weapons will fall in the hands of
al-Qaeda and other international terrorist groups. The nuclear
deterrent seems to work with the Kim regime which wants to maintain
the current system but not with al-Qaeda which does not hesitate to
resort to suicide bombings. In such a case, chances are that nuclear
weapons will be used on New York, Washington, or Jerusalem rather
than on Tokyo or Seoul. That is why the United States places an
emphasis on nuclear nonproliferation."

(7) "Seiron" column: Do not let Murata's good intentions go to
waste

SANKEI (Page 7) (Full)
July 7, 2009

Hisahiko Okazaki, former ambassador to Thailand

TOKYO 00001543 009 OF 014



Disappointing follow-up response

When I read former Vice Foreign Minister Ryohei Murata's remarks on
the nuclear issue in the newspaper, I was excited and hopeful that
there would be new developments on this issue.

Although I have not contacted Mr. Murata, it is obvious that he
sacrificed his own interest in making those remarks. Civil servants
are obliged to maintain the secrecy of information they obtain in
the course of performing their duties, and this rule applies even
after retirement. Penalties of up to one year imprisonment can be
imposed for violating this rule. It is evident that he chose to take
the risk and tell the truth.

While such self-sacrifice is perhaps needed to change the
government's rigid position over the years, I am disappointed that
nothing has happened after the remarks were made.

Certainly the government is taking a "safe" position to make sure
that nobody gets hurt. If the secret agreement (on the U.S. forces
bringing nuclear weapons into Japan) does not really exist, there is
no secret to keep, so no one has the obligation to keep the secret.
Everything will be vanished into oblivion once again. However, such
oblivion is only on the part of Japan. This does not hold water at
all in the international community because the whole affair is like
an ostrich hiding its head in the bush to flee from a hunter.

When I met the late Dr Edwin Reischauer (former U.S. ambassador to
Japan),he was not indignant about "Foreign Minister Ohira's
explicit promise" but was exasperated by the absurdity of the
situation. Furthermore, the meeting (between Reischauer and Ohira in
April 1963) has been confirmed by U.S. diplomatic documents
subsequently. What I am worried about is that if Japan continues to
carry on like this, it will be unable to engage in strategic
dialogue with the United States to reinforce the bilateral
alliance.

Statement does not breach the confidentiality obligation

In another article I wrote previously for this column, I mentioned
that the Japan-U.S. strategic dialogue proposed by Deputy Secretary
of State Richard Armitage came to nothing while the U.S.-China
strategic dialogue conducted under his successor Robert Zoellick was
very successful. The U.S. side showed great enthusiasm for both
dialogues, so it is not to blame for the failure of the Japan-U.S.
talks.

Many people say that China is now more important for the U.S., so
Japan will be abandoned. Such worries are completely unnecessary
under the present situation as far as the U.S. side is concerned.
Kurt Campbell has said that: "The best way to deal with China is to
strengthen U.S. partnership with Japan as much as possible. That is
the only option. Without such a foundation, nothing can be
accomplished in Asia."

Here, what I am worried about is that Japan, due to its incompetence
in strategic dialogue, may not be in a position to respond to the
United States' good intentions.

In light of North Korea's nuclear armament, there have been noisy
discussions about the effectiveness of the U.S. nuclear umbrella, or

TOKYO 00001543 010 OF 014


the so-called extended deterrence, for Japan. A discussion on
nuclear strategy is inevitable between allies when they discuss
military strategy. As a matter of fact, NATO's Nuclear Planning
Group (NPG) regularly discusses nuclear strategy.

Needless to say, it is also desirable to have a similar venue for
consultation and planning between Japan and the U.S. But how can
common strategy be discussed when Japan continues to deny even
something it once promised?

Whether Mr. Murata's remarks constitute a violation of his
confidentiality obligation may be a trivial matter to him, but I
think this is not a violation. If this case is brought to court, the
substance of the secret - whether it is indeed a matter that needs
to be kept confidential - will be examined. Blowing the whistle on
anomalies in the bureaucracy does not violate the confidentiality
obligation. In this case, the secret agreement has already been
disclosed in U.S. diplomatic documents, so unless there are very
special or overriding reasons, it does not need to be kept
confidential.

Policies that will not tie hands in the future

What I had hoped after the Murata remarks was that the government
would stop its temporizing statements soon and revert to
intellectual integrity.

With the subsequent advancement in military technology, the impact
of this issue on reality has diminished. The issue here is
intellectual integrity that forms the foundation of the relationship
of trust and strategic dialogue between allies. If Japan engages in
honest strategic dialogue now, the conclusion may well be that
unless there is a major change in the situation, port calls by U.S.
ships carrying nuclear weapons will be unnecessary.

I look forward to a change in the Liberal Democratic Party (LDP)
government's position in the future.

In the case of a Democratic Party of Japan (DPJ) administration, I
pray that it will break away from the inertia of the LDP era,
acknowledge the existence of the international commitment between
Ohira and Reischauer, and show its intellectual integrity in
creating a new venue for Japan-U.S. strategic consultations.

Soon after the inauguration of the new administration, the mass
media will probably try to reconfirm the government positions upheld
until now, including the interpretation of the three non-nuclear
principles. I hope the DPJ will only say that it will not be bound
by the prejudices of the LDP era and will make a comprehensive
review as the need arises and not commit itself prematurely. Unless
it is able to do so, having a system of two major political parties
will be meaningless; and if it succeeds, the DPJ's victory will have
historical significance.

Having been liberated from past positions, I hope that people of
intellectual integrity, regardless of whether they are rightist or
leftist in ideology, will no longer say things like "Japan has the
right to collective self-defense but is unable to exercise it."

(8) Redefining Japan's policy stance (part 1): Aim to achieve wise
government


TOKYO 00001543 011 OF 014


NIKKEI (Page 1) (Excerpts)
July 7, 2009

By Naoaki Okabe, editor in chief at the head office

The Japanese economy has climbed out of its worst phase, but there
is no light to be seen at the end of the tunnel. The global economic
crisis has dealt a most serious blow to an export-oriented Japan.
Furthermore, second-rate politics is working as a drag on economic
recovery. Populism is making the government's policy stance
inconsistent. A breakthrough can be found in efforts to recall
Japan's policy stance and reconstruct it.

Consistent policies urged

The fatal error the Aso administration has committed is that it has
deleted the words "structural reforms" from its policy menu. Fiscal
spending and structural reforms do not contradict each other. In
order to emerge from the ongoing recession, it is important to
implement policies that are the combination of fiscal spending and
structural reforms. Demand creation-type innovation can be achieved
by three elements -- fiscal spending, structural reforms and
entrepreneurship, according to Tokyo University Professor Hiroshi
Yoshikawa.

The Aso administration has aimed at shrugging off the Koizumi reform
drive. The negative legacy of the Koizumi reform drive is not that
his reforms were excessive but that both regulatory reform and
decentralization were insufficient, with too much importance
attached to postal privatization. The Koizumi administration did not
embark on an effort to hike the sales tax. It left reform of social
security unattended. Japan lagged behind in major completion after
the Cold War. Behind the so-called lost era are those blunders.

The Aso administration was greatly buffeted by populism, unable to
contain moves to go against political trends for reform to the time
when postal privatization was carried out. This is the reason that
Aso as the prime minister of a mature state has lost the confidence
of Japan and other countries.

An exit strategy and a growth strategy, which will set the future
course of Japan, will be called into question in the upcoming
general election. Japan will go into a rapidly aging society with
the worst accumulated public debt among industrialized countries. It
is impossible for it to flee from this grim reality. Voters should
opt not for inconsistent policies, even if they sound pleasant to
the ear, but for policies with vision, even if they are bitter
tasting.

In order to achieve a wise government, social security systems, such
as public pension schemes, should be drastically reformed in
preparation for the upcoming rapid aging of the society. It would
be easier to obtain public understanding, if the sales tax is hiked
for the purpose of financing social security expenses. It is the
responsibility of politics to build a secure society in a bipartisan
way.

It is also necessary to tackle tax code reform as well as social
security reform. What is necessary is to lower the corporate tax,
the highest in the world, to revitalize the Japanese economy.

Population and human resources hold the key

TOKYO 00001543 012 OF 014



Population and human resources hold the key to a growth strategy.
What is needed is a comprehensive strategy to tackle the declining
birthrate, by putting up a birthrate goal, and build a society in
which people can rear children with peace of mind. Japan should also
aim to open the country to human resources. Boosting investment in
education is indispensable in nurturing entrepreneurship.

A low carbon society revolution for the prevention of global warming
is the 21st version of the Industrial Revolution. Technical
innovation, such as the developments of new energies and electric
vehicles, is burgeoning here and there. Higher barriers are
advantageous to Japan, as it has accumulated environmental
technologies.

It is also important to adopt bring in the energy of East Asia,
which is strong even at a time of a crisis. Now is the time to
present a roadmap for integrating East Asian economies.

Once the major recession is over, the political pendulum, which has
gone far in one direction, is bound to swing back. When it returns
to the previous position, what will be sought is neither a small
government nor a big government but a wise government. It is
unavoidable for the government to intervene, when the market makes
mistakes. However, if the government bails out management failures,
the logic of capitalism will collapse. Market mechanisms will
continue to be the core of capitalism. Wise regulations that move
the market are needed.

The cascade of economic and political crises has caused the loss of
confidence in Japan. As Japanese prime ministers change so often,
they are not referred to by name at G8s or G20s. It is now time for
voters to revamp politics so as to rebuild Japan's policy stance,
looking 20 years or 30 years ahead.

(9) Profile of New IAEA Director General Yukiya Amano

ASAHI (Page 2) (Full)
July 3, 2009

Toru Kaneko, Vienna Bureau

Yuki Amano, 62, after being elected director general of the
International Atomic Energy Agency (IAEA) expressed his
determination to the press corps: "Japan is considered a model
country in terms of the peaceful use of nuclear energy and promotion
of nuclear nonproliferation. I would like to tell that to the
world." Nine months have passed since he first ran in the election
held late last September to choose the new IAEA head. He has finally
landed the post in his second attempt.

He is the first Japanese to head the IAEA, an international
organization of 2,300 experts that seeks to promote the peaceful use
of nuclear energy.

Amano entered the Ministry of Foreign Affairs (MOFA) in 1972. He has
served in the nuclear energy and nonproliferation area for about 15
years. As a representative of the industrialized countries, he
worked on completely shutting down the Chernobyl nuclear power
plant. His coordination ability is highly valued. He will aim at
saying what he has to say.


TOKYO 00001543 013 OF 014


When he was young, he was fond of astronomical observation. Dreaming
to win a Nobel Prize, he entered the department of science at the
University of Tokyo, but he only lasted one year there. He then
reentered the same university (graduating from the law faculty.)
This part of career is well-known in the ministry.

He recalls the words, "Please don't let the tragedy of atomic
bombings be repeated," which atomic-bomb victims said every time he
had visited Hiroshima and Nagasaki for the memorial service for the
dead. He will now have to deal with the Iranian and North Korean
nuclear issues.

(10) Simulation of DPJ administration's foreign and security
policies after three months in power

SHUKAN POST (Pages 34-35) (Excerpts)
July 17, 2009

Foreign and security policy: Greatest vulnerability of coalition
government of strange bedfellows; Cabinet disintegrates due to
disagreement after North Korea fires Taepodong missile

The U.S. electronic reconnaissance aircraft Cobra Ball detected the
launching of a ballistic missile from North Korea. Prime Minister
Yukio Hatoyama was notified immediately at the Prime Minister's
Official Residence (Kantei). He was about to order the Aegis ships
in the Sea of Japan to intercept the missile.

"Mr Prime Minister! It is unacceptable to wage war!!" cried Mizuho
Fukushima, state minister for the declining birth rate, rushing into
the prime minister's office at the Kantei. As Fukushima and Hatoyama
were engaged in fierce debate, the Taepodong missile flew over Akita
Prefecture. Fortunately, Japan did not suffer any damage. However,
the Social Democratic Party (SDP) declared its withdrawal from the
coalition government that very day, and the Hatoyama administration
was now forced to steer the government as a minority ruling party.

The most obvious "structural problem" of a coalition government led
by the Democratic Party of Japan (DPJ) is said to be in the areas of
foreign and security policy affairs.

Professor Satoshi Morimoto of the Institute of Global Studies,
Takushoku University, made the following comment: "While the
assumption is to form a coalition government with the SDP, the DPJ
has within its folds conservatives like Vice President Seiji
Maehara. In other words, it is an alliance of strange bedfellows.
For this reason, the DPJ is still not actively revealing its foreign
policy even now, when a change of government is fast approaching."

Its vague stance is also reflected in the criticisms voiced in the
party after former President Ichiro Ozawa made his statement that
"the Seventh Fleet will be sufficient for U.S. presence in the Far
East."

Security policy is regarded as the DPJ coalition government's
greatest vulnerability. That is the reason why Prime Minister Taro
Aso suddenly brought up the question of the Seventh Fleet toward the
end of the second round of party leaders' debate, when time was
running out.

Morimoto observes that: "The Seventh Fleet operates in the entire
West Pacific; it is not in the vicinity of Japan all the time. This

TOKYO 00001543 014 OF 014


is a unit that is only effective with collaboration with U.S. Forces
Japan (USFJ). If the USFJ withdraws from Japan, leaving only the
Seventh Fleet behind, will Japan reinforce the Self-Defense Forces?
It is irresponsible to evade this issue, and there is no doubt that
the DPJ's thinking is putting the country at risk."

For sure, passages such as "establishing an independent foreign
policy" and "a genuinely equal alliance with the United States" can
be found in the DPJ's policy index, but concrete policies are
absent.

However, from its record in the Diet, the party has opposed both the
extension of the special antiterrorism measures law and the
anti-piracy law. A senior DPJ official claims that, "Once we assume
power, we will withdraw from the Indian Ocean and from waters off
Somalia."

However, one needs to take a hard look at this policy.

Morimoto explains that: "The Indian Ocean mission is part of the
operations in Afghanistan, which is a top priority to U.S. President
Barack Obama. (The DPJ) has not provided a vision of how it intends
to rebuild the Japan-U.S. alliance after the withdrawal.
Furthermore, the advanced countries are engaged in joint support
operations in the Indian Ocean. Japan's unilateral withdrawal will
have an impact on aspects other than the Japan-U.S. relationship.
This will undermine national interest."

Around 2,000 Japanese tankers pass through the Indian Ocean each
year. If a detour becomes necessary because of the absence of
escorting by the Maritime Self-Defense Force, this will jack up fuel
costs. It has been pointed out that in such a case, oil prices will
rise, and this will affect the people's livelihood. Yet, the DPJ has
not come up with a solution.

In the first place, some even say that this withdrawal policy is
just an "expedient" to co-opt the SDP. It will be too pathetic if
after taking over power, the cabinet "disintegrates in midair due to
internal disagreement" once a problem arises.

A "hit-or-miss gamble" is simply unacceptable when it comes to the
question of how to protect the people's life.

ZUMWALT