JAPANESE MORNING PRESS HIGHLIGHTS 07/10/09

UNCLAS SECTION 01 OF 12 TOKYO 001572

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07/10/09

Index:

G-8 Summit and Aso diplomacy:

1) President Obama at G-8 Summit presses accelerator on nuclear
disarmament, but Japan concerned about absence of nuclear-power
China (Mainichi)
2) Expanded meeting at G-8 Summit releases statement on restarting
WTO negotiations, but for Japan the bottleneck will continue to be
agriculture (Mainichi)
3) Prime Minister Aso finds diplomacy tough going at the G-8 Summit:
He is the only leader to speak out on North Korea issue (Sankei)
4) President Medvedev brings no new proposal on the northern
territories to his G-8 summit meeting with Prime Minister Aso
(Asahi)

Defense and security issues:
5) North Korea started its missile program in the late 1970s, using
dual-use equipment obtained from Japan (Sankei)
6) U.S. and Japan will hold director-general-level talks next month
on foreign and security affairs under the 2+2 framework (Nikkei)
7) Former high-level official reveals that around 2001, senior
Foreign Ministry official ordered the U.S.-Japan secret nuclear-pact
document destroyed (Asahi)

8) METI Minister Nikai told be Iraqi official that Japan may have
the edge in obtaining rights to develop oil in Iraq (Sankei)

Opinion polls:
9) Poll on voter consciousness by Nikkei finds over 90 PERCENT of
electorate intends to go to the polls in next Lower House election;
DPJ favored 40 PERCENT to 26 PERCENT over LDP (Nikkei)
10) In Yomiuri election series poll, 41 PERCENT of electorate say
they will vote DPJ in the single district races, compared to only 23
PERCENT who plan to vote LDP (Yomiuri)

Political agenda:
11) Lower House election now likely to be held after the end of
August (Tokyo Shimbun)
12) DPJ (Democratic Party of Japan) planning vote of no confidence
in Aso Cabinet, but the real intention is to make sure the prime
minister stays on into the election (Tokyo Shimbun)
13) Aso's face is conspicuously absent from campaign posters for the
LDP (Tokyo Shimbun)
14) Lower House committee pursuing DPJ President Hatoyama for his
political organization's falsifying funding records with names of
dead people (Mainichi)

Articles:

1) Nuclear disarmament gains momentum; G-8 members support Obama
strategy

MAINICHI (Page 3) (Excerpts)
July 10, 2009

Kazuhiko Kusano, Shunji Oki, L'Aquila

The Group of Eight Summit (L'Aquila Summit) adopted on July 8 a
statement pledging to create a situation toward a world without
nuclear weapons. With all the participating countries having agreed
to the policy of U.S. President Barack Obama, who aims at a

TOKYO 00001572 002 OF 012


nuclear-free world, expectations have swollen that moves for nuclear
disarmament will pick up speed at once. Nevertheless, there still
remain many tough challenges partly because the stance of China, one
of the major nuclear powers, remains unclear and such countries as
North Korea and Iran are pursuing nuclear development. Will the
statement be able to give a boost to the effort to abolish nuclear
weapons?

Japan concerned about China's absence

Takashi Sudo

The Japanese government welcomes the G-8 statement. But China's
absence from that scene worries Tokyo, which fears that if the
United States and Russia go ahead and reduce their nuclear weapons,
the weight of China's nuclear weapons will increase and trust in the
U.S. nuclear umbrella that protects Japan might decline.

The G-8 statement urges all countries to take further nuclear
disarmament steps with greater transparency. Japan's interpretation
of this is that China is included in "all countries," according to a
senior Foreign Ministry official. But China's stance remains
unchanged, namely, that the United States and Russia should pursue
nuclear disarmament first.

Japan and the United States are scheduled to hold official
working-level talks later this month to discuss nuclear strategies,
such as the U.S. umbrella. Placed under the U.S. nuclear umbrella,
Japan finds itself on the horns of a dilemma. The planned formal
talks carry a strong aspect of the United States defusing Japan's
anxiety. The Foreign Ministry official said, "Having talks is good,
but nothing has been nailed down effectively."

Trust in U.S. main factor

Comment by Osaka Jogakuin College Professor Mitsuru Kurosawa

The statement that includes the phrase "a world without nuclear
weapons" reflect a change in times.

The United States has made a huge shift from the former Bush
administration's unilateralism to a stance of multilateralism. The
declaration of nuclear disarmament not only by the United States and
Russia but also by all major countries will give a boost to future
talks. It can be said that the major nations have acknowledged that
President Obama is "serious" about achieving nuclear disarmament.
Progress is expected to be made in the future in three areas
advocated by President Obama: nuclear disbarment, nuclear
nonproliferation, and measures against nuclear terrorism.

Nevertheless, the trends of North Korea and Iran are a concern.
Nuclear development by those two countries will not have a direct
impact on nuclear disarmament talks, but it might undermine the
atmospherics of the other good trend.

2) Leaders of G-8 member nations, emerging countries come up with
goal of reaching final agreement at WTO Doha Round

MAINICHI (Page 4) (Excerpts)
July 10, 2009

Kiyohiro Akama, Kesuke Ota

TOKYO 00001572 003 OF 012


Nozomi Saito, L'Aquila

Leaders of the Group of Eight (G-8) major nations and five emerging
countries, such as China and India, have come up with a goal of
reaching a final agreement at the World Trade Organization (WTO)
Doha Round (multi trade liberalization talks) before the end of

2010. At work behind the move is their strong determination to
revitalize trade, which has come to an impasse due to the impact of
the ongoing financial crisis, for the purpose of turning around the
economy, by establishing a free trade system. However, in actual
talks, negotiations have repeatedly been derailed with the interests
of various countries fiercely clashing with each other. As such,
there is no knowing whether an agreement can be reached.

Japan goes on defensive, suffering setback over agriculture

Export-oriented Japan is positive about an early settlement of the
Doha Round, which will lead to cuts in trade tariffs. However,
sources connected with the agricultural sector, an area that is
being urged to open its market, is still strongly opposed the Doha
Round. Adjustments of opinions on the domestic front will likely
face challenges.

Japan has constantly been forced to play defense regarding the
agriculture area at WTO talks. It has been struggling to increase
the share of key items, which are exempt from tariff cuts. As a
result, it has been unable to make its presence felt, eclipsed by
confrontations between the U.S. and emerging countries in overall
talks on mined and manufactured products.

Japan called for setting the share of key items at 8 PERCENT of all
items at the informal ministerial meeting in July last year.
However, the WTO came up with an adjudication proposal for setting
the share at 6 PERCENT . Since the overall talks fell through at the
time, Japan did not have to accept the adjudication proposal.
However, the prevailing view among government officials is that
there is a slim chance of Japan's stance on the agricultural area
being accepted, as one negotiator put it.

Japan has been protecting farmers by imposing high tariffs on many
agricultural products. However, if the WTO talks reach a settlement,
Japanese agriculture will be exposed to fierce competition with
foreign products. The time is running out with bargaining likely to
become fierce prior to the target for reaching an agreement in 2010.
Japan is urged to promptly implement reform of its agricultural
administration in preparation for opening up the market.

3) G-8 and six other participating countries to aim to reach
agreement at WTO talks

SANKEI (Top Play) (Excerpts)
July 10, 2009

Morimichi Imabori, Kazutaka Higa, Rome

The G-8 summit (L'Aquila Summit) held a meeting of the Group of
Eight countries, joined by five emerging countries, such as China
and India, plus Egypt and adopted their first joint statement. Their
aim is to set up a framework for settling international issues that
cannot be dealt with by major countries alone, involving emerging
countries.


TOKYO 00001572 004 OF 012


In the meantime, the G-8 countries on the evening of the 8th prior
to that meeting discussed political issues. Participants condemned
in the strong terms North Korea for its nuclear test and launching
of ballistic missiles and adopted a statement noting that they urge
the international community to implement UNSC Resolution 1874 in a
complete and transparent manner. Concerning non-proliferation, the
statement welcomed the nuclear arms reduction agreement reached at
the U.S.-Russia summit on the 6th, noting that they will pledge to
create a world without nuclear arms.

Concerning the North Korea issue, Prime Minister Taro Aso said that
since the North has conducted nuclear and missile tests in defiance
of the international community, the international community should
adopt a resolute stance in dealing with that nation. Many other
participants supported Aso, saying that the North Korea issue is not
the issue concerning Asia alone.

The prime minister also brought up the abduction issue. The
statement incorporated the wording noting that the G-8 urges North
Korea to immediately address concern felt by the international
community over humanitarian issue. The G-8 economic ministers'
statement has also been adopted. It incorporated a proposal for
setting up a working group to confirm the situation of the progress
on development assistance, which the G-8 has pledged.

4) No new proposals on Northern Territories from Medvedev at
Japan-Russia summit

ASAHI (Page 1) (Abridged)
July 10, 2009

Atsuko Tannai, Rome

Prime Minister Taro Aso met Russian President Dmitriy Medvedev in
L'Aquila on the morning of July 9 (afternoon of July 9, Japan time).
Medvedev said, "We continue to be willing to consider all possible
options under a unique approach," in referring to the key question
of the Northern Territories, but did not present any new proposals
to break the stalemate.

Although Aso complained, "Without willingness to make progress in
the territorial issue on the Russian side, it will not be possible
to build a partnership," he also pointed out, "It is necessary to
work simultaneously on both matters of interest (territorial issue
and economic cooperation)." The two leaders agreed on instructing
working level officials to step up negotiations and on the need to
continue summit level discussions, including telephone
conversations.

They also agreed on the early launching of a trilateral experts'
panel among Japan, the U.S., and Russia to discuss security issues
in Asia and the Pacific.

5) North Korea began developing missiles in 1975, using convertible
materials from Japan

SANKEI (Page 23) (Abridged slightly)
July 10, 2009

In connection with a Tokyo-based North Korea-connected trading
company's attempted plan to illegally export missile-development
materials, it became clear yesterday through interviews with police

TOKYO 00001572 005 OF 012


authorities that magnetic measuring instruments have been carried
into North Korea on several occasions since 1975, under a plan of
exporting such to Burma (Myanmar). Japanese-made magnetic measuring
instruments are highly precise. Police authorities are paying close
attention to the fact that North Korea started developing basic
missile technology as early as 1975. They strongly believe that the
attempted illegal export plan this time around shows North Korea's
plan to provide its missile technology, a product of its many years
of R&D, to Burma.

The equipments carried into North Korea since 1975 were devices to
measure the magnetism of metal materials and the like. They are
widely used in such fields as manufacturing industrial machinery and
basic industrial technology. Materials are indispensable for R&D of
military technologies, such as missiles, and weapons of mass
destruction (WMD). They can reportedly be used for nuclear
development as well.

Those devices were of models older than that of the one the company
tried to export to Burma this time around, but an Economy, Trade and
Industry Ministry source said, "Basically, there is no big
difference in principles, and the precision of Japanese products has
been at the world's top level since around 1975."

The attempted illegal export to Burma occurred based on an order
from the Second Economic Committee, a secret military procurement
organ in North Korea, to Tokyo-based Toko Boeki President Lee Kyoung
Ho, 41, to procure a magnetic measuring device that came via New
East International Trading Co. in Beijing. It has become clear
through investigations that Lee had placed an order to a Japanese
maker and a trading firm and attempted to export the device to
Burma's Industry 2 Ministry via Malaysia.

It has become clear from the materials confiscated from Lee's home
and other related places that materials similar to the one found
this time were exported to North Korea on several occasions in
around 1975.

Investigative authorities believe that North Korea began developing
missiles and WMD on a full scale around that time and continued its
research to establish high technology.

6) Japan, U.S. to hold working-level consultations this month on
foreign, defense policy issues

NIKKEI (Page 1) (Full)
July 10, 2001

Sachiko Deshimaru, Washington

The Japanese and U.S. governments have now entered final
coordination to hold working-level consultations in Japan in
mid-July within the framework of the Security Consultative Committee
of foreign and defense ministers from Japan and the United States
(two-plus-two). The two governments will hold wide-ranging
discussions, focusing mainly on their security policies in East Asia
in response to the situation in North Korea.

The working-level consultations are expected to be held with the
participation of Assistant Secretary of State for East Asian and
Pacific Affairs Campbell and Assistant Secretary of Defense for
Asian and Pacific Security Affairs Gregson from the U.S. government

TOKYO 00001572 006 OF 012


and the Foreign Ministry's North American Affairs Bureau Director
General Kazuyoshi Umemoto and the Defense Ministry's Defense Policy
Bureau Director General Nobushige Takamizawa from the Japanese
government. This is the first time for Japan and the United States
to hold a meeting of their senior officials for foreign affairs and
defense to discuss security issues since the Obama administration
came into office.

The agenda for discussion includes bilateral issues pending between
Japan and the United States, such as selecting Japan's follow-on
mainstay fighter (FX) and relocating the U.S. military's Futenma
airfield. The two governments are going to to take up their regional
security strategies, such as missile defense (MD) shielding. They
are also expected to exchange views about the U.S. military's
deterrence in East Asia.

The two-plus-two working-level consultations will be held at a
sensitive time when the House of Representatives could be dissolved
for a general election. The political situation in Japan is now
becoming murky. As it stands, the two governments are apparently
aiming to push for better communication at the working level. When
the Bush administration was in office, the Japanese and U.S.
governments were closely in touch with each other and occasionally
held two-plus-two ministerial meetings and working-level
consultations. Under the Obama administration as well, the two
countries are going to revamp bilateral cooperation.

The Obama administration is upholding nuclear disarmament. The U.S.
government is expected to explain its policy, anticipating U.S.
allies' concerns about the U.S. military's weakening nuclear
umbrella.

Meanwhile, Japan, the United States, and South Korea will hold
working-level consultations in Tokyo about the middle of this month
with their defense officials attending.

7) Ex-senior government officials: Senior MOFA official ordered
destruction of secret accord-related documents before Information
Disclosure Law implementation in 2001

ASAHI (Top play) (Slightly abridged)
July 10, 2009

It has been learned that in 2001, a senior Ministry of Foreign
Affairs (MOFA) official ordered the destruction of documents in the
ministry relating to a "secret nuclear agreement" concluded between
Japan and the U.S. at the time of the revision of the bilateral
Security Treaty in 1960. Under the agreement, Japan would allow U.S.
vessels carrying nuclear weapons to call on Japanese ports and pass
through its territorial waters. A number of former senior government
and MOFA officials made the above testimony on condition of
anonymity.

It is believed that this was a step taken for fear of "documents
that supposedly do not exist" being discovered when the archiving of
documents in MOFA was reviewed before the implementation of the
Information Disclosure Law in April 2001.

The existence of the secret nuclear agreement has already been
confirmed by official documents published on the U.S. side, but the
Japanese government has consistently denied it. Ryohei Murata, who
was administrative vice foreign minister during the late 1980s, told

TOKYO 00001572 007 OF 012


Asahi Shimbun that, "My predecessor gave me a one-page document
during the handover process, and I briefed the foreign minister at
that time."

The former senior government officials who made the latest testimony
admitted the existence of the secret agreement and said that
documents for vice ministers in the handover process were included
in the destroyed files. The practice of briefing the foreign
minister is believed to have been discontinued when House of
Representatives member Makiko Tanaka became the foreign minister in

2001.

One former government official explained that the decision to
destroy the documents was made because "they were documents from a
long time ago, and it was meaningless to faithfully preserve
documents that did not exist officially." Another former government
official said that: "It is believed that the relevant documents were
kept at the North American Affairs Bureau and the Treaty Bureau (now
the International Legal Affairs Bureau). I heard that they were all
destroyed right before the implementation of the Information
Disclosure Law." It is highly possible that guidelines on how the
Japanese government should handle former Ambassador to Japan Edwin
Reischauer's testimony in 1981 on the existence of the secret accord
and other historical documents that only the Japanese side possessed
were destroyed. However, neither of the former officials witnessed
the actual burning or shredding of the documents. One of them
pointed out that "the possibility remains that these documents might
have been preserved as top secret files."

One former administrative vice foreign minister stopped short of
confirming the existence of the secret agreement but said that:
"Right now, documents referring to the secret agreement do not
exist. We cannot release documents that do not exist." It is
believed that this line of reasoning is meant to be an explanation
for the failure to find any relevant documents in case the
Democratic Party of Japan, which is calling for disclosing the
secret agreement, takes over the administration.

Deprived of opportunity to investigate hidden truth

Explanatory note: It is now very likely that documents related to
the "secret nuclear agreement" in MOFA have been destroyed quietly.
This is a dual crime, in the sense that the people have been
continuously deceived about the secret accord and that present and
future Japanese citizens have been deprived of a means to
investigate this matter. A MOFA source also voices the criticism
that, "If that is indeed the case, this is an act of historical
betrayal." (former senior MOFA official)

The "secret nuclear agreement" reached during the Security Treaty
revision in 1960 provided a loophole to the three non-nuclear
principles of "not producing, possessing, and introducing" nuclear
weapons. After the end of the Cold War, the Bush administration in
the early 1990s removed all nuclear arms carried on U.S. naval
vessels, except those on strategic nuclear submarines. An incumbent
senior MOFA official says that, "Since U.S. vessels no longer carry
any nuclear weapons, the so-called secret agreement has already lost
its meaning."

However, with the rise of China and the development of nuclear arms
by North Korea and Iran, it is possible that the U.S. may resume
carrying nuclear arms on ships. In such a case, will the "secret

TOKYO 00001572 008 OF 012


nuclear agreement" be revived? A senior MOFA official says that,
"Since past prime ministers and foreign ministers have stated
repeatedly that the secret agreement did not exist, Japan will
probably have to reach a new agreement with the U.S." However, a
former MOFA official points out: "When it becomes necessary, the
United States will not hesitate to bring in nuclear weapons. Japan,
which is protected by the nuclear umbrella, does not have the option
of saying 'no,' regardless of whether there is a secret agreement or
not."

No matter what security policy Japan intends to adopt, it is
indispensable for the existence of the secret agreement to be
clarified and for the role it has played over the years to be
examined.

8) Iraqi oil minister in talks with METI minister indicates Japan
has the upper hand

SANKEI (Page 9) (Full)
July 10, 2009

Economy, Trade and Industry Minister Toshihiro Nikai on July 9 met
with visiting Iraqi Oil Minister Husayn al-Shahristani in Tokyo. He
conveyed Japan's strong desire to obtain the rights to develop Iraqi
oil fields, saying, "There are projects in which Japanese companies
hope to take part, including the Nasiriyah oil field development
(which the Iraqi government will release to foreign companies). The
government would like to extend overall assistance for those
projects." An Italian firm is also hoping to take part in the
development of the Nasiriyah oil field. The oil minister indicated
that Japan has the lead in the competition, replying, "We expect
participation by Japanese companies." A consortium consisting of
Nippon Oil Corporation (ENEOS),Inpex Corporation and JGC
Corporation is competing with Italy's Ente Nazionale Idrocarburi for
the rights to develop the Nasiriyah oil field in southern Iraq. The
oil minister told reporters that developer of the oil fields will be
decided shortly.

9) Pre-election poll: 40 PERCENT to vote for DPJ, 26 PERCENT for
LDP

NIKKEI (Page 2) (Abridged)
July 10, 2009

Ahead of the forthcoming election for the House of Representatives,
the Nihon Keizai Shimbun conducted a public opinion survey on July
7-9 to probe public awareness. In the survey, respondents were asked
which political party they would like to vote for in their
proportional representation blocs. In response to this question, 40
PERCENT opted for the leading opposition Democratic Party of Japan
(Minshuto),with 26 PERCENT choosing the ruling Liberal Democratic
Party. A total of more than 90 PERCENT answered that they would go
to the polls to cast their votes, broken down into 65 PERCENT
saying they would surely go to the polls and 28 PERCENT saying they
would go to the polls if possible.

Among other parties, the New Komeito was at 7 PERCENT for
proportional representation, with the Japanese Communist Party at 4
PERCENT and the Social Democratic Party at 3 PERCENT .

Respondents were also asked which political party's candidate they
would vote for in their single-seat constituencies. To this

TOKYO 00001572 009 OF 012


question, 39 PERCENT chose the DPJ, with the LDP at 27 PERCENT ,
showing the same trend as in the case of proportional
representation.

The approval rating for the Aso cabinet was 18 PERCENT . The
disapproval rating was 65 PERCENT . In the breakdown of public
support for political parties, the LDP stood at 30 PERCENT , with
the DPJ at 37 PERCENT . "None" or floating voters with no particular
party affiliation accounted for 13 PERCENT .

10) Poll: 39 PERCENT see Aso as LDP's face for election, 44 PERCENT
see another; 41 PERCENT favor DPJ versus LDP's 23 PERCENT in
voting for single-seat candidates

YOMIURI (Page 1) (Abridged)
July 10, 2009

Ahead of the forthcoming election for the House of Representatives,
the Yomiuri Shimbun conducted a telephone-based ad hoc nationwide
public opinion survey on July 7-9. In the survey, 39 PERCENT
answered "yes" when asked if they thought it would be better for the
ruling Liberal Democratic Party to go into the election with Prime
Minister Aso, with 44 PERCENT saying it would be better to replace
him with another person. Respondents were also asked which political
party they would vote for in their single-seat constituencies. To
this question, 41 PERCENT opted for the leading opposition
Democratic Party of Japan (Minshuto),with 23 PERCENT choosing the
LDP. In the popularity ranking of political parties for proportional
representation as well, the DPJ was above the LDP, respectively
standing at 41 PERCENT and 24 PERCENT .

Respondents were further asked who they thought would be appropriate
for prime minister, when comparing Aso and DPJ President Hatoyama.
To this question, 46 PERCENT chose Hatoyama, with 21 PERCENT
picking Aso.

The support rate for the Aso cabinet was 20.2 PERCENT . The
nonsupport rate was 69.3 PERCENT . In the breakdown of public
support for political parties, the DPJ stood at 28.7 PERCENT , with
the LDP at 23.8 PERCENT .

11) Ruling coalition favors Lower House election in late August or
later

TOKYO SHIMBUN (Top play) (Excerpts)
July 10, 2009

Chances are growing that the next House of Representatives election
will be held at the end of August or later. The Liberal Democratic
Party (LDP) is likely to face an uphill battle in the July 12 Tokyo
Metropolitan Assembly election, following its defeat in the July 5
Shizuoka gubernatorial election. With the situation of the Aso
administration and the LDP becoming increasingly severe, the view is
gaining ground in the LDP and its coalition partner, New Komeito,
that an early Lower House dissolution for a snap election is
unadvisable. If the election were to be held in late August or
later, the chances are that the Lower House will be dissolved around
the end of the current Diet session on July 28 for the election on
Aug. 30 or Sept. 6

If the dissolution were to be held off until the end of the current
Diet session, the drive to unseat Aso in the LDP might gain

TOKYO 00001572 010 OF 012


momentum. For this reason, Prime Minister Taro Aso has searched for
ways to dissolve the chamber immediately after the Tokyo poll for an
election in early August. But this plan is drawing fierce
objections, based on the opinion that given the expected uphill
battle in the Tokyo poll combined with the cabinet's dwindling
support ratings, an early election will bring a humiliating defeat
to the LDP.

Yesterday afternoon, such LDP veteran lawmakers as former Secretary
General Koichi Kato, former Foreign Minister Masahiko Komura, and
former Senior Deputy General Council Chairman Hajime Funada, held
talks near the Diet building and agreed to oppose an early
dissolution.

The secretaries general of LDP actions also met last night. The
prevalent view at the meeting was that top priority should be given
to the enactment of key bills and DPJ President Hatoyama's donation
scandal.

Furthermore, former Prime Minister Yoshiro Mori, who has a strong
influence on the management of the Aso administration, has recently
opposed an Aug. 2 election. Mori is showing a cautious stance about
the Aso side's dissolution timetable.

12) DPJ's real motivation is to keep Aso in prime minister's post

TOKYO SHIMBUN (Page 2) (Full)
July 10, 2009

The main opposition Democratic Party of Japan (DPJ) has decided to
submit next week to the House of Representatives a no-confidence
motion against the cabinet of Prime Minister Taro Aso. The DPJ,
which has reportedly taken the lead in campaigning for the Tokyo
Metropolitan Assembly election on July 12, intends to force Aso to
dissolve the Lower House for a general election.

Asked by reporters about submitting the no-confidence motion, DPJ
President Yukio Hatoyama said yesterday at party headquarters:
"Through the Tokyo assembly election, we will be able to see how
strong public criticism of the Aso administration is. After seeing
the results of the election, we will consider (submitting a
no-confidence motion) early next week," revealing that the DPJ is
considering submitting a no-confidence motion after the Tokyo race.

The DPJ is aiming for a speedy dissolution of the Lower House. A
defeat of the ruling parties in the Tokyo election would mean that
the public indicates "No" to the Aso administration. This would be
the optimal timing for the DPJ to submit a no-confidence motion and
urge Aso to dissolve the Lower House.

However, if the ruling coalition loses the Tokyo race, moves to oust
Aso as prime minister will definitely strengthen in the Liberal
Democratic Party (LDP).

The DPJ's real motivation is to fight in the Lower House election
with the LDP led by Aso, who has been suffering low support rates.
Deputy President Naoto Kan said yesterday: "The public will not
allow another replacement of a prime minister. If that happens, the
DPJ might be forced (to allow Aso to) dissolve the Lower House."

Therefore, submission of the motion of no confidence is intended to
prevent the moves of anti-Aso forces. The DPJ's ideal is that

TOKYO 00001572 011 OF 012


submission of the motion will lead to dissolution, prompting many
rebels to emerge in the LDP. However, even if the motion is voted
down, it will mean that the ruling parties give their vote of
confidence. The DPJ, therefore, hopes that submission of the motion
will produce the effect of preventing the moves of anti-Aso forces.

However, the DPJ is concerned that it will come under criticism from
the ruling party if the Diet fails to pass an organ transplant law
amendment bill and special measures legislation on cargo inspections
on ships going in and out of North Korea due to suspension of
deliberations caused by submission of the motion of no confidence.
Hatoyama, referring to the organ transplantation law amendment,
asserted: "It is necessary to enact the bills that should be passed
in the current regular Diet session."

13) Prime Minister Aso gives order not to include his photo on the
cover of LDP's manifesto

TOKYO SHIMBUN (Page 2) (Full)
July 10, 2009

It has been learned that Prime Minister Taro Aso (president of the
Liberal Democratic Party) ordered the LDP project team (PT) in
charge of drafting a manifest (set of campaign pledges for the next
House of Representatives election) not to include his photograph on
the cover of the manifest.

LDP General Council Deputy Chairman Hajime Funada, a PT member, told
reporters yesterday: "The Prime Minister wants young people to be
able to read (our manifesto) on the train without hesistation. So
the manifesto will not have Prime Minister's photograph on the
cover."

The LDP's manifesto for the 2005 Lower House election had a large
portrait of then Prime Minister Junichiro Koizumi with the slogan,
"Postal privatization is our key reform goal," on the cover. The
fact that Prime Minster Aso's photograph will not being included
will likely raise speculations that the ruling camp will lose the
Tokyo Metropolitan Assembly election and Aso will resign as prime
minister before the Lower House general election.

14) Ruling parties to turn heat on DPJ at Lower House committee

MAINICHI (Page 5) (Full)
July 10, 2009

The House of Representatives Special Committee on Political Ethics
Establishment and Revision of the Public Offices Election Law held a
meeting to discuss a bill amending the Political Fund Control Law,
which was submitted by the main opposition Democratic Party of Japan
(DPJ). The ruling parties, which are searching for clues on turning
the tables for the next Lower House election, pursued DPJ President
Yukio Hatoyama's false political funding report issue.

LDP Election Strategy Council Deputy Chairman Yoshihide Suga pointed
out that the Internal Affairs and Communications Ministry issued
documents necessary for tax exemptions for political donations by
75 persons (totaling 11,862,000 yen),which Hatoyama's political
fund management organization corrected in its reports on political
funds for fiscal 2005, 2006, and 2007. The ministry admitted it.

Base on this, Suga repeatedly pursed the Hatoyama issue, saying: "Is

TOKYO 00001572 012 OF 012


it a fraud if the donations are used for tax returns?" Hatoyama last
evening stressed to reporters at party headquarters: "I believe
firmly that there was no tax evasion. I have absolutely no idea."
The ruling camp intends to demand Hatoyama's fund management
organization to submit accounting records at a committee meeting on
July 10 based on the Diet Testimony Law. The DPJ, in protest of the
holding of committee sessions, is expected to be absent from a
meeting today.

ZUMWALT