JAPANESE MORNING PRESS HIGHLIGHTS 07/08/09

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07/08/09

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

Defense and security affairs:
4) U.S.-Japan talks this month on the nuclear umbrella (Yomiuri)
5) Confidence building exercise to check North Korea's nuclear
ambitions (Yomiuri)
6) Former ambassador reveals Tanaka Cabinet mulled allowing
nuclear-bearing ships to make port calls (Mainichi)
7) Three non-nuclear principles built on secret agreement;
contradiction in dependence on the U.S. umbrella persists today
(Mainichi)
8) Cabinet approves bill allowing ship search for suspicious cargo
(Sankei)
9) Defense Minister tours Okinawa Prefecture (Nikkei)
10) Government wants to use MSDF ship searches only as last resort
(Mainichi)
11) Democratic Party of Japan's response to the ship-search bill
unclear (Yomiuri)

12) Prime Minister Aso meets the Pope in Rome (Sankei)

13) Russia rejecting no-visa visits to the northern islands as a
protest of recent Japanese law declaring the islands Japan's
territory (Sankei)

Political agenda:
14) Major bills before the Diet will affect the timing of
dissolution (Tokyo Shimbun)
15) DPJ President Hatoyama's political funding problem: False
records filtered through another organization (Sankei)
16) Liberal Democratic Party (LDP) to attack Hatoyama on the funding
issue in order to damage his image (Tokyo Shimbun)
17) Issue of Miyazaki governor running as LDP candidate put on hold
(Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Auto insurance premiums to be raised sharply: High rates to be
applied to drivers aged 60 and over

Mainichi:
Government studied possibility of allowing nuclear weapon-carrying
U.S. vessels into Japanese ports in 1974 during Tanaka cabinet,
according to statement by former ambassador to U.S. Okawara

Yomiuri:
Japan, U.S. eye first talks to discuss U.S. nuclear umbrella

Nikkei:
Mitsui Bussan to procure large amount of lithium from Canada for
environmentally-friendly cars

Sankei:
Thousands of Han demonstrators go on rampage and attack businesses:
156 killed, 1,434 detained


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Tokyo Shimbun:
Han protesters take to streets for demonstration in Urumqi: Some
attacked stores

Akahata:
Tokyo Metropolitan assembly election: Close race; Members of junior
supporters' association exert all-out effort to expand support
through dialogue

2) EDITORIALS

Asahi:
(1) U.S., Russia reach nuclear agreement: Involve other nuclear
nations
(2) Riot in Xinjiang region: Crackdown will not stabilize situation

Mainichi:
(1) Uprising in Xinjinag Uighur Autonomous Region: China lacks
tolerance in ethnic policy
(2) Cargo inspection special measures law: Enactment through
agreement between ruling and opposition urged

Yomiuri:
(1) Cargo inspection law designed for inspection of vessels heading
to and from North Korea: Enactment during current Diet session based
on cooperation between ruling and opposition parties urged
(2) Nuclear disarmament by U.S. and Russia: They should also play
their part in preventing proliferation

Nikkei:
(1) U.S., Russia should offer example of urging nuclear disarmament
throughout the world
(2) China should adopt ethnic policy that will end bloodshed

Sankei:
(1) Riot in Uighur: Dissolve social disparity, by ending oppression
(2) U.S., Russia agreement to cut nuclear arms: Do not impair
functions for preventing proliferation

Tokyo Shimbun:
(1) Nuclear disarmament by U.S., Russia: It is unacceptable if it is
simply a symbolic target
(2) Local tax cut: Show power of local governments

Akahata:
(1) Child-raising allowance: Why are single-father households
excluded?

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 6-7

NIKKEI (Page 2) (Full)
July 8, 2009

July 6

Late at night Arrived at Leonardo da Vinci International Airport via
special JAL airplane.

July 7


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Before dawn Stayed at Hotel De Russie in Roma.
Afternoon Met with Pope Benedict XVI and State Secretary of the
Vatican Bertoni.

4) Japan, U.S. to hold first nuclear-umbrella talks later this month
to confirm its operation in contingency

YOMIURI (Top play) (Abridged)
July 8, 2009

Keiko Iizuka, Washington

The governments of Japan and the United States reached an agreement
on July 7 to set up official talks on the U.S.' nuclear umbrella and
began scheduling the first session for later this month, a according
to sources close to both governments. The governments plan to hold
the talks at the level of deputy directors and vice ministers of the
Japanese foreign and defense ministries and the U.S. state and
defense departments. At the talks, Japan will be briefed by the U.S.
side on how nuclear arms will be used in a contingency. The two
sides will then discuss, among other matters, consistency between
U.S. President Barack Obama's large-scale nuclear arms-reduction
plan and a nuclear deterrent.

Under the U.S.-Japan Security Treaty, the U.S. nuclear umbrella is
designed to protect Japan from a nuclear attack by a third country
with nuclear weapons possessed by the United States. The United
States shares the operation of and information on nuclear weapons in
emergency situations with members of the North Atlantic Treaty
Organization (NATO) which has a similar system.

In Japan, the only country to have suffered atomic bombings, a
strong antipathy toward nuclear arms prevails among the public. If
the government holds talks on the operation of nuclear weapons,
strong reactions from the opposition parties and others are
expected. At the same time, the United States has been highly
alarmed at a possible leakage of confidential military information
from the Japanese side. As such, the matter has rarely been
discussed between Japan and the United States.

However, North Korea conducted its second nuclear test in May, while
China has been modernizing its nuclear capability, making East
Asia's security environment increasingly volatile. Given the
situation, some in the government have called for a reaffirmation of
the role of the nuclear umbrella and have said that Japan needs to
be briefed by the United States on how that will be operated
specifically.

In April, President Obama announced that his administration will aim
at a world without nuclear weapons. In their talks on July 6,
President Obama also agreed with his Russian counterpart to conclude
a new pact replacing the Strategic Arms Reduction Treaty (START 1),
which is designed to reduce the number of deployed nuclear warheads
up to 1,500.

The new agreement is expected to be reflected in the Nuclear Posture
Review (NPR),which will be compiled by the Obama administration in
December, becoming the third such review in U.S. history.

5) Japan-U.S. to hold official talks on nuclear umbrella at Japan's
call to apply pressure on North Korea


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YOMIURI (Page 2) (Abridged slightly)
July 8, 2009

Keiko Iizuka, Washington

The Japanese and U.S. governments have begun considering holding
their first official talks on the U.S. nuclear umbrella. This is
based on Japan's request for the confirmation of the dependability
of the U.S. nuclear umbrella, given progress in North Korea's
nuclear development. The planned talks are also designed to apply
pressure on North Korea and other countries by demonstrating
externally the two countries' firm relations of trust regarding
nuclear deterrence.

Given the United States' nuclear disarmament plan and its aging
nuclear warheads, Japan is concerned whether the nuclear umbrella
will really function in the event of a contingency.

With China reportedly possessing some 200 nuclear warheads, Japan's
foreign and defense ministries fear the possibility of China's
nuclear capability growing to the level of that of the United States
in the long run depending on how the U.S. proceed with its nuclear
disarmament plan. The United States has not conducted nuclear tests
as it voluntarily put a freeze on such tests in 1992. This has
resulted in growing concerns in the United States about aging
nuclear warheads and a decline in the technology handling nuclear
weapons. At the talks, Japan intends to be briefed on those points
as well.

At the same time, there is a sense of alarm in the United States
centering on conservative legislators and experts that if the U.S.
fails to present a dependable nuclear umbrella, Japan and South
Korea might arm themselves with nuclear weapons to counter North
Korea. This can explain why Washington has decided to respond
positively to Tokyo's request.

But in order to hold bilateral talks, Japan needs to overcome many
challenges. For instance, the question of nuclear capability has
rarely been discussed in the Japanese political scene due partly to
a strong public "nuclear allergy." Even after the Obama
administration announced a plan in April to aim at a nuclear-free
world, full-fledged discussions on the nuclear umbrella have been
absent from the Liberal Democratic Party subcommittee on the
National Defense Program Guidelines (NDPG) to be revised by the
government at the end of the year.

Defense secrets have often leaked out of Japan in the past. The U.S.
side is highly concerned about sharing top-secret information on
nuclear weapons with Japan. Japan needs to swiftly study ways to
wipe away such concerns.

The Japanese government and ruling and opposition lawmakers should
find a means to promote further the global move to eliminate nuclear
weapons by looking squarely at the realities of nuclear strategies
and conducting active discussions.

6) Ex-ambassador to U.S. Okawara reveals that Tanaka cabinet in 1974
mulled revising three non-nuclear principles to allow port calls by
warships carrying nuclear arms

MAINICHI (Top play) (Full)
July 8, 2009

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Takashi Sudo

It has been learned that the Japanese government had considered a
virtual revision to one of the three non-nuclear principles of "not
introducing" nuclear arms to officially allow port calls by ships
carrying nuclear arms at the time of (then) President Gerald Ford's
visit to Japan in 1974. This was revealed to Mainichi Shimbun by
former ambassador to the U.S. Yoshio Okawara, 90, who at the time
became the chief of the minister's secretariat at the Ministry of
Foreign Affairs (MOFA) from his previous position of director
general of the American Affairs Bureau. A secret agreement on port
calls by ships carrying nuclear weapons was concluded at the time of
negotiations on revisions to the Japan-U.S. Security Treaty in 1960.
It is believed that this move was contemplated in 1974 in order to
scrap the secret agreement and make the nuclear umbrella explicit,
using the occasion of the first visit to Japan by an incumbent U.S.
president.

According to Okawara, shortly before Ford's visit in the fall of
1974, a handful of top MOFA officials, including the late Foreign
Minister Toshio Kimura of the Kakuei Tanaka cabinet, the late
Parliamentary Vice Foreign Minister Fumihiko Togo, and Okawara, met.
Kimura said at the meeting that, "It is absurd for Japan, which is
protected by the U.S. nuclear umbrella, not to allow port calls (by
ships carrying nuclear arms)." He instructed the MOFA officials to
study a plan to interpret "non-introduction" in the three
non-nuclear principles as referring to introduction on land, and
port calls would not be considered "introduction."

Kimura said that, "I have asked the prime minister (about revising
the interpretation) and he said: 'Okay. Let's do it (do the
revision)," telling the group that Prime Minister Kakuei Tanaka had
given his consent. However, on November 26, right after Ford's
visit, Tanaka resigned to take responsibility for a money scandal
and other issues, and the Takeo Miki cabinet was inaugurated on
December 9. Kiichi Miyazawa took over from Kimura as foreign
minister and the plan to revise the three non-nuclear principles
fizzled out.

The government's official position is that even port calls are
included in the provision on not introducing nuclear weapons, and
"unless the U.S. side requests prior consultation, nuclear arms
cannot be brought into Japan." However, retired Rear Admiral Gene
LaRoque revealed in September 1974 that "U.S. ships carrying nuclear
weapons made port calls in Japan." Meanwhile, the U.S. AIRCRAFT
carrier Midway was based in Yokosuka at that time. If this issue
became controversial during the U.S. president's visit, it could
throw the Japan-U.S. relationship into confusion. It is believed the
meeting of the top MOFA officials was held in this context.

7) "Commentary": Three non-nuclear principles built on secret
agreement; contradiction in dependence on the U.S. persists today

MAINICHI (Page 2) (Full)
July 8, 2009

Takashi Sudo

The Japanese government's giving consideration to revising the three
non-nuclear principles in 1974 can be said to be an attempt to
eliminate as much as possible the anomaly in Japan-U.S. relations,

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symbolized by the secret agreement (on ports calls by ships carrying
nuclear arms),after the reversion of Okinawa to Japan (in 1972),
which was a major postwar bilateral issue. This was an important
juncture in the bilateral relationship, coming at the time of the
first visit by an incumbent U.S. president.

(Then) Foreign Minister Toshio Kimura probably suggested the
revision of the three non-nuclear principles to (then) Prime
Minister Kakuei Tanaka in fall 1974 and discussed this vigorously
with top Ministry of Foreign Affairs (MOFA) officials because he
took seriously the impact of the statement of retire Rear Admiral
Gene LaRoque on "bringing in nuclear arms."

Kimura revealed his serious dilemma in a statement to the Diet in
October 1974: "We need to maintain the people's position on the
three non-nuclear principles while also show understanding to the
requirement of U.S. defense secrets of not revealing the existence
or non-existence of nuclear weapons. That is where the problem is."
Thirty-five years after that, the Japanese government today still
repeats its official position that, "Inasmuch as there has not been
any request from the United States, nuclear arms have not been
brought into the country." This is nothing but a self-protection
tactic - "if nuclear arms are found, the U.S. is to blame."

On the other hand, Japan's security has depended on the U.S.
"nuclear umbrella" built on such things as port calls by ships
carrying nuclear arms. A former MOFA official who once served as the
director of the Japan-U.S. Security Treaty Division points out that,
"Japan is beholden to the U.S. with regard to the introduction of
nuclear arms." A former parliamentary vice foreign minister admits
the existence of a secret agreement and states bitterly: "The United
States has gone along with Japan's slipshod handling of this matter.
This worked only because it was the Cold War era."

The contradiction between the reality of the U.S. "nuclear umbrella"
and Japan's position as the only atomic-bombed nation, as symbolized
by the three non-nuclear principles, has led to the ambiguity of the
secret agreement, thus resulting in the lack of transparency in the
bilateral relationship. This situation has remained unchanged until
today.

U.S. President Barack Obama is calling for a "world without nuclear
weapons" and is promoting a new nuclear policy. However, Japan,
which is being threatened by North Korea's nuclear tests, is not in
a position to give up the U.S. "nuclear umbrella" right away.
Nevertheless, unless the Japanese government faces squarely the
basic contradiction in its nuclear policy, the lack of transparency
in the Japan-U.S. relationship will only be exacerbated.

8) Cargo inspection bill gets cabinet approval

SANKEI (Page 5) (Abridged)
July 8, 2009

The government, in an ad hoc cabinet meeting held yesterday evening,
adopted a special legislative measure allowing Japan to inspect the
cargo of ships heading to and from North Korea and presented the
legislation to the House of Representatives. In the wake of North
Korea's second nuclear test, the United Nations Security Council
adopted a resolution to inspect nuclear- and missile-related
materials. The Japan Coast Guard is to conduct cargo inspections at
sea. The government and the ruling parties will start Diet

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deliberations tomorrow on the cargo inspection bill in an aim to
enact it at the current Diet session.

The Self-Defense Forces' role is to be limited to such activities as
tracking ships and gathering intelligence. In addition, the SDF is
also to guard JCG patrol ships conducting cargo inspections at sea.

Concerning maritime security operations to be invoked under the
Self-Defense Forces Law, the cargo inspection bill only stipulates
that the government will take security and other necessary measures
at sea. It precludes the SDF from conducting cargo inspections.

Cargo inspections are to be conducted for vessels and planes
suspected of carrying contraband. The JCG will conduct cargo
inspections in international waters and Japan's territorial waters.
Customs will inspect cargoes at seaports and airports. If cargo
prohibited by the UNSC resolution is discovered in inspections, the
captain will be ordered to hand it over, and the cargo will be
stored. Biochemical weapons will be abandoned at once. In addition,
items that cannot be stored will be sold, and the money will be
returned.

Main points from cargo inspection bill

-- The legislation purports to remove the threat resulting from
North Korea's nuclear testing, etc. Cargo inspection authority is
invested in the JCG commandant and the customs superintendent.

-- Ships are to be inspected with their captains' consent if there
is good reason to acknowledge that they are loaded with specific
cargo bound for North Korea in violation of the U.N. resolution. If
cargo is confirmed to be in violation of the U.N. resolution, the
captain will be ordered to hand it over. This cargo will be stored.
If there is reason for ships to refuse cargo inspections, they will
be brought to a designated seaport.

-- In case Japan refuses foreign authorities' inspection of a
Japanese ship in international waters, the government will order
that ship to be brought to a Japanese or foreign port.

-- Cargo inspections in international waters and the abovementioned
orders require the flag state's consent.

-- In conformity with what is stipulated in the Defense Ministry
Establishment Law, the Self-Defense Forces Law, and other relevant
laws, the SDF will take security and other necessary actions at sea
in special cases where the JCG alone cannot handle inspections or
other measures.

9) Defense chief visits Okinawa

NIKKEI (Page 2) (Full)
July 8, 2009

Defense Minister Yasukazu Hamada yesterday departed for his first
official visit to Okinawa. Hamada will visit the island of
Yonagunijima today to exchange views with Yonaguni Town Mayor
Shukichi Hokama about basing Ground Self-Defense Force troops on the
island. Hamada will also meet with Nago City Mayor Yoshikazu
Shimabukuro. He will meet with Okinawa Gov. Hirokazu Nakaima
tomorrow to discuss the issue of relocating the U.S. military's
Futenma airfield and other issues.

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10) MSDF will be mobilized only under special circumstances in bill
presented to the Diet allowing cargo searches

MAINICHI (Page 2) (Excerpt)
July 8, 2009

The government on July 7 convened a special meeting of the National
Security Council and the Cabinet and approved a special measures
bill for cargo inspections of ships coming in and out of North
Korea. It then presented the bill to the Diet. The bill enables
Japan to implement a United Nations Security Council resolution
against North Korea for carrying out a nuclear weapons test. The
government in order to closely cooperate with the international
community, including the United States and South Korea, aims at the
bill's early passage. In order to make it easy to obtain the
cooperation of the opposition Democratic Party of Japan (DPJ),ship
searches will be the main responsibility of the Japan Coast Guard,
with the Maritime Self-Defense Force having limited involvement. The
focus now will be on the response of the DPJ, but with fierce
maneuvering now going on between the ruling and opposition camps,
going into the next Lower House election, the situation has an
aspect of fluidity.

11) Diet dissolution a barrier to cargo inspection bill

YOMIURI (Page 4) (Full)
July 8, 2009

The government yesterday submitted a bill to the Diet for a special
measures law to inspect cargo onboard ships heading to and from
North Korea. The ruling parties are going to enact the special
legislation at the current Diet session. The Diet is set to close
its current session on July 28. The question is whether the bill can
be enacted during the current Diet session. It depends on when the
prime minister will dissolve the House of Representatives. Another
key factor to its enactment is how the leading opposition Democratic
Party of Japan (Minshuto) will respond.

Chief Cabinet Secretary Kawamura, meeting the press yesterday,
played up the legislation's importance. "It has international
significance," Kawamura said.

United Nations Security Council Resolution 1874, adopted in the wake
of North Korea's nuclear test, is intended to block North Korea from
developing nuclear weapons and ballistic missiles. To that end, the
UNSC resolution embargoes relevant materials. In order to heighten
its effectiveness, the resolution calls on U.N. member nations to
implement cargo inspections. The legislation is the basis for
Japan's implementation of cargo inspections.

North Korean ships, however, cannot be expected to comply with
Japan's cargo inspections. Given this, the legislation's actual
efficacy cannot be expected. The bill does not stipulate cooperation
with U.S. forces or other foreign naval ships. This legislation is
rather meant to "clearly show that Japan is more proactive than any
other country in its efforts to carry out cargo inspections,"
according to Taku Yamasaki, chairman of the ruling Liberal
Democratic Party's Research Commission on Foreign Affairs.

The government and the ruling parties are aiming to start Diet
deliberations tomorrow on the cargo inspection bill in the House of

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Representatives. Their scenario is to pass the bill in the House of
Representatives on July 14 and enact it into law in late July. But
there is little time to deliberate on the bill. Moreover, if Prime
Minister Aso dissolves the House of Representatives right after the
July 12 Tokyo metropolitan election, the bill will die stillborn.
Given such circumstances, even ruling party lawmakers are not so
enthusiastic about enacting the legislation. One mid-ranking
lawmaker in the LDP deems it "impossible" for the bill to get
through the Diet during the current session.

Meanwhile, the DPJ's response is another key factor to the question
of whether the cargo inspection bill can be enacted into law during
the current Diet session. The bill says the Japan Coast Guard and
customs are to conduct cargo inspections. The Self-Defense Forces'
involvement is within the bounds of the current law. If that is the
case, the DPJ will likely accept the legislation. "If the Japan
Coast Guard is mainly in charge of cargo inspections, then I can
agree to the bill," one of the DPJ's lawmakers said.

DPJ President Hatoyama also said in a press conference yesterday:
"If they say the Maritime Self-Defense Force is likely (to be
mobilized) only in a special case, then I feel we should not be in a
position to oppose the legislation." With this, Hatoyama also
implied his party's intention to vote for the bill. The DPJ will
hold a meeting of its foreign affairs and defense division tomorrow
to decide on its response.

12) Prime Minister Aso meets with the Pope

SANKEI (Page 2) (Abridged slightly)
July 8, 2009

Morimichi Imahori, Rome

After arriving in Rome on a special JAL airplane before dawn on July
7 (on the morning of July 7, Japan time),Prime Minister Taro Aso
met at noon with Pope Benedict XVI, 82, at the Vatican Palace.

The meeting was realized at the request of Aso. It was the first
meeting between a Japanese prime minister and the Pope in ten years.
The previous one was held in 1999 between Prime Minister Keizo
Obuchi and Pope John Paul II.

Aso explained that his grandfather, former Prime Minister Shigeru
Yoshida, was the first Japanese prime minister to have met with the
Pope. He told the Pope:

"I'm really honored to meet you. Japan would like to cooperate with
the Vatican, which has carried out its own diplomacy backed by 1.1
billion Catholics, to stabilize international situations, as well as
to resolve problems common to all humankind."

The Pope then said that he was glad to hold a meeting with Aso, who
is a Catholic. He also said: "I'm pleased that Japan is open to all
religions." With his visit to Africa in March in mind, the Pope
expressed his hopes for Japan's support for Africa.

13) Russian Upper House adopts statement demanding suspension of
visa-free exchange program on Northern Territories

SANKEI (Page 1) (Full)
July 8, 2009

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Takao Sato, Moscow

The Russia Federation Council adopted on July 7 a statement asking
President Dmitriy Medvedev to suspend the "visa-free exchange
program" under which residents of Japan and the Northern Islands can
exchange visits without passports and visas. This is in protest to
the Japanese Diet's passage of an amendment to the special measures
law for the promotion of a solution to the Northern Territories
issue, stating that these islands are an "integral part of Japanese
territory."

Russian presidential assistant Arkady Dvorkovich also expressed
concern on the same day that "the environment is not necessarily
favorable" for the Japan-Russia summit to be held on the sidelines
of the G-8 L'Aquila Summit.

The Russian Upper House's statement criticizes the amended Japanese
law as "contradicting the direction of the dialogue between Russia
and Japan to find a mutually acceptable solution on the question of
the peace treaty."

The visa-free exchange program has been in effect from 1992 under an
agreement between the two governments. A Japanese delegation has
just left Nemuro on July 6. The Kuril district government of
Sakhalin Province, which exercises administrative control on
Etorofu, one of the four Northern Islands, announced its rejection
of the visa-free program on July 7, but according to reports from
Vladivostok in the Far East, the representative office of the
Foreign Ministry in the province says that the Japanese delegation
"will be received as planned."

14) Key bills to determine timing of Lower House dissolution

TOKYO SHIMBUN (Page 2) (Full)
July 7, 2009

The timing for Lower House dissolution still remains unclear. Key
bills that have been left for later discussions are impinging on the
specification of such timing.

Prime Minister Taro Aso at a Liberal Democratic Party (LDP)
executive meeting held before his departure to Italy to attend the
G-8 summit said, "I want you to take care of Diet deliberations on
the remaining key bills." He specifically mentioned a bill amending
the Organ Transplant Law and a cargo inspection special measures
bill on the inspection of vessels heading to and from North Korea.

Due in part to growing public interest in the matter, the prevalent
view on the bill amending the Organ Transplant Law is that
dissolving the Lower House before a vote on the bill by the Upper
House will draw criticism, as a senior LDP member put it. The Upper
House Health, Labor and Welfare Committee is now deliberating on the
bill. They are discussing Plan-A, which has cleared the Lower House,
and its counter plan. A plan revising Plan-A was submitted on July

7.

The ruling parties' stance is that the bill should be put to a vote
at an Upper House plenary session. However, the Democratic Party of
Japan (DPJ) is reluctant to do so. A roll call for the bill will
likely take place next week or later after the Tokyo Metropolitan
Assembly election.

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Concerning the cargo inspection special measures bill, submitted to
the Diet on July 7, the ruling camp aims to enter deliberations
after giving an explanation of it at a Lower House plenary session
on July 9, and pass it through the Lower House before the end of
next week. However, the prospects for its passage depend on the move
of the DPJ, which will for the first time confer on its approach to
the bill on July 9.

If these two bills secure Diet approval, the barriers for Lower
House dissolution will be removed for the time being. The prime
minister, however, did not clearly order the enactment of the two
bills. Since forces opposing Lower House dissolution at an early
date are insisting on the enactment of the bills as a reason for
their call for putting off Lower House dissolution, making the
situation complicated.

A special measures bill to provide relief for unrecognized Minamata
disease patients, another key bill, is expected to be approved and
enacted at a plenary session of the Upper House on July 8.

Explanations on the government-sponsored bills related to the reform
of the national government employee system featuring the
establishment of a cabinet personnel bureau will be given at the
Lower House Cabinet Committee on July 8. However, there are no
prospects for them securing Diet approval.

15) Hatoyama false fund entry issue: He explains that different
organization pays expenses

SANKEI (Page 5) (Abridged slightly)
July 8, 2009

The Liberal Democratic Party (LDP) has some doubts about the fact
that a political organization named the Hatoyama Yukio Kouenkai
Rengo (Federation of Hatoyama Yukio Support Organizations) of
Muroran, Hokkaido, reported "zero yen" as its operating expenses in
its financial reports for 2005-2007. Touching on this fact,
Democratic Party of Japan (DPJ) President Yukio Hatoyama reported to
party executives and executive board meetings yesterday that another
political organization called the Hokkaido Yuai Seikei Konwakai
(Hokkaido Fraternal Politics and Economics Discussion Council),
which shares the same office, pays the rent, telephone bill, and
other expenses. His reports were approved.

At a press conference yesterday, Hatoyama made the following comment
regarding his response to the question of false entries in his
political funds reports: "If the LDP is attacking me to generate a
suspicious image, I think I need a venue of some sorts (to offer a
counter argument).

At the same time, Hatoyama apparently does not intend to attend a
session of the Deliberative Council on Political Ethics. Many DPJ
executives have cautious views, with one saying, "He should not show
up at an arena prepared by the LDP."

The LDP is suspecting that funds from Hatoyama's mother have
illegally flown out in a form of evading inheritance taxes. About
such an allegation, Hatoyama said: "I have +donations. That has
nothing to do with inheritance taxes."

16) Scope column: LDP desperately trying to attack DPJ President

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Hatoyama, aiming at tarnishing his image

TOKYO SHIMBUN (Page 2) (Excerpts)
July 8, 2009

Shunsuke Shimizu

The ruling Liberal Democratic Party (LDP) yesterday came up with
measures to pursue Democratic Party of Japan (DPJ) President Yukio
Hatoyama over the illegal individual donation scandal. The LDP plans
to demand that Hatoyama be called to testify before the Diet as an
unsworn witness. With the July 12 Tokyo Metropolitan Assembly
election and a general election for the House of Representatives
approaching, the LDP has yet to find any good measures to regain
party strength. Therefore, the party is now desperate to pursue
Hatoyama, considering it the only means of attacking the DPJ.

"There are a lot of questions that we want to ask him. I would like
him to answer them at the Diet," Yoshitaka Murata, chief deputy
chairman of the LDP Diet Affairs Committee, told reporters yesterday
at the Diet building.

The LDP decided in a meeting yesterday of senior directors of the
Diet Affairs Committee that it aims to adopt a resolution calling
for Hatoyama's testimony on July 10 at a session of the Lower House
Special Committee on Political Ethics and Revision of the Public
Offices Election Law. At the same time in a meeting of the chief
directors of the ruling parties from the Lower House Budget
Committee, participants demanded that intensive deliberations on the
issue of "politics and money" be held on July 15. In addition, an
LDP director of the Upper House Committee on Basic National Policies
proposed to a DPJ committee director that a debate between Prime
Minister Taro Aso and DPJ President Hatoyama be held on July 15.

However, the DPJ is unlikely to accept both requests readily.

The New Komeito, the LDP's junior coalition partner, has taken a
positive stance toward Diet testimony by Hatoyama, but it has not
budged from following the practice of "unanimous action as a
condition." The reason is because the DPJ has hinted that it will
call for Diet testimony by former New Komeito Chairman Junya Yano,
who has filed a damages suit against the Soka Gakkai, the New
Komeito's chief supporter, if the ruling camp goes ahead with
Hatoyama's testimony. The DPJ has warned that it will call for
testimony by Finance Minister Kaoru Yosano and Economy, Trade and
Industry Minister Toshihiro Nikai, whose political donation problems
have been called to attention.

17) Higashikokubaru puts off decision on whether to run in Lower
House election

MAINICHI (Page 2) (Excerpts)
July 8, 2009

Miyazaki Gov. Hideo Higashikokubaru met yesterday with Liberal
Democratic Party (LDP) Election Strategy Council Chairman Makoto
Koga and Deputy Chairman Yoshihide Suga at party headquarters. The
three exchanged views on the possibility of Higashikokubaru running
in the next House of Representatives election. Regarding the popular
governor's two proposals as conditions for his candidacy - (1) the
LDP listing him as candidate for party president; and (2) inclusion
of the National Governors' Association's demand for decentralization

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in the party's manifesto (campaign pledges) for the Lower House
election, the LDP side said: "The party is considering them in a
positive manner." Higashikokubaru showed his appreciation of the
LDP's position, but refrained from making a decision yesterday.

Higashikokubaru told reporters after the meeting: "The LDP's policy
is that it will formulate a manifesto after the Lower House is
dissolved. I'm not in a hurry, anyway." With regard to the
decentralization issue, he said: "It is a major hurdle for the LDP.
It will be difficult to reach consensus in the party." He indicated
that he would make a final decision on whether to run or not after
seeing the contents of the LDP's manifesto after Lower House
dissolution.

ZUMWALT