DAILY SUMMARY OF JAPANESE PRESS 07/15/09

UNCLAS SECTION 01 OF 09 TOKYO 001614

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 07/15/09

INDEX:

(1) Japan becomes second G-8 country to ratify cluster bomb ban
treaty; Total abolition of munitions a tough challenge; Information
disclosure required (Mainichi)

(2) Emperor, Empress arrive in Hawaii: Governor meets them at
airport (Mainichi)

(3) Chief cabinet secretary criticizes DPJ for its response to cargo
inspection legislation (Nikkei)

(4) Lower House election in aftermath of shock of Tokyo election
(Part 2): "Dissolution under Aso" upsets LDP members; governing
system now collapsed (Nikkei)

(5) Forecast of Lower House election (Part 2 - conclusion): It is up
to junior DPJ politicians to pick up the task of reform (Tokyo
Shimbun)

(6) M&As decrease by half due to fading desire to invest (Mainichi)


(7) ConGen Maher says in interview: U.S. bases' relocation outside
Okinawa impossible since no acceptable sites on Japanese mainland
could be found (Okinawa Times)

ARTICLES:

(1) Japan becomes second G-8 country to ratify cluster bomb ban
treaty; Total abolition of munitions a tough challenge; Information
disclosure required

MAINICHI (Page 2) (Abridged)
July 15, 2009

Ken Uzuka, Yoshihiko Saito, Takayasu Ogura (New York)

The Japanese government deposited its instrument of ratification of
the Convention on Cluster Munitions (Oslo Treaty) at UN headquarters
yesterday. With this, Japan has become the 14th country in the world
and the second country in the Group of Eight major nations to ratify
the treaty. Japan was initially reluctant to ratify the pact during
the examination phase, but it has succeeded in impressing the world
with its swift ratification. Japan now intends to lead international
opinion on support for victims. The relationship with the armed
forces of the United States, which has yet to accede to the treaty,
remains unclear, however. There still remain many challenges, such
as information disclosure and ensuring transparency.

Ambassador to the UN Yukio Takasu handed the instrument of
ratification of the treaty to the UN Division for Treaties Affairs
deputy director at UN headquarters yesterday, saying, "This is a key
treaty to protect blameless civilians." The ambassador also said:
"We are going to work on countries that have yet to ratify the
treaty so that the convention will take effect at the earliest
possible time. A trend to ban cluster bombs will emerge in the
world."

The Foreign Ministry was aiming for early ratification of the Oslo
treaty because there were talks about lower House dissolution for a
snap general election and some LDP lawmakers had doubts about the

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pact.

The Oslo Treaty stipulates that the cooperation of non-signatories,
such as the United States, is essential. During Diet deliberations
on the ratification plan, criticism was mostly directed toward the
point that the Self-Defense Forces (SDF) are allowed to transport
cluster bombs in compliance with a request from U.S. forces in
Japan.

According to a Foreign Ministry source, in the process of studying
the Landmine Ban Treaty, the possibility of cooperation with U.S.
forces regarding landmines was eliminated under the initiative of
then Foreign Minister Keizo Obuchi. Because this point drew
criticism, leaving leeway for cooperation with the United States was
a prerequisite for discussion on the Oslo Treaty, the source said.

London is reportedly considering asking the United States to remove
its cluster bombs from UK territory. The total elimination of
cluster munitions is a tough challenge for Japan as well.

Ensuring transparency is also a problem. Although the government was
repeatedly asked to reveal the number of cluster bombs Japan
possesses, it refused to do so. Germany has begun disposing of its
cluster bombs after disclosing their number. This sharply contrasts
with the Japanese Defense Ministry's explanation that disclosing
information before the treaty goes into force might cause some
security problems.

Japan's quick ratification of the cluster bomb ban treaty, which the
United States has been reluctant to support, might become a chance
to achieve new developments in the "peace diplomacy" of Japan, which
has been criticized as blindly following in the footsteps of the
United States.

Japan did not initially clarify where it stood in the process of
formulating the treaty which was pushed forward by the "Oslo
Process" led by Norway and other like-minded countries excluding the
United States, Russia, China and other countries, and
nongovernmental organizations. For this reason, Japan was criticized
as "backward looking."

Japan decided to support the treaty after it included a clause
proposed by Japan and other countries to allow signatories to
conduct joint operations in which non-signatories, such as the
United States, use cluster bombs. It can be said that Japan tried to
curry favor with the United States. It is the United States, not
Japan, that is likely to find it difficult to use cluster munitions
due to the treaty. As a result (of ratifying the treaty),Japan
raised an objection to the former Bush administration that approved
the use of cluster bombs. This carries great significance.

The inhumane nature of cluster bombs is clear. After swaying between
ensuring security and humanity, Japan has eventually decided to
shift its focus toward humanity. Japan has opted for eliminating its
cluster munitions that might inflict damage on civilians rather than
keeping what an NGO expert calls "outdated weapons" envisaging
invasions by foreign forces.

Government to extend full-fledged support for victims in Cambodia
and Laos

Following the ratification of the Oslo Treaty, the government

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intends to begin offering earnest support for victims of cluster
bombs especially in Cambodia and Laos in Southeast Asia.
Specifically, the government plans to provide area-wide support
beyond medical and educational assistance centering on agrarian and
mountainous areas.

According to the Foreign Ministry, Japan has since 1998 implemented
35 billion yen worth of measures to deal with unexploded bombs in 38
countries in Asia, the Middle East, and other regions.

As this year marks the 10th anniversary of the Landmine Ban Treaty,
Japan has reviewed its measures against unexploded bombs. In
collaboration with the Japan Campaign to Ban Landmines (JCBL),the
Foreign Ministry conducted fact-finding surveys in Laos and Cambodia
from late June through early July.

Many unexploded landmines and cluster bombs have been left behind in
those countries since civil conflicts and battles with neighboring
countries. Support for the handicapped, including victims of
unexploded bombs, in those countries is reportedly lagging behind
Thailand and Vietnam, which also have many victims. The government
plans to help victims get back into society with an emphasis on
medical/rehabilitation and vocational training facilities for
victims.

At the same time, there seems to be no end to farming in areas
infested with unexploded bombs and collecting and dismantling such
munitions in the knowledge of risks associated with them. A senior
Foreign Ministry official noted, "The question of unexploded bombs
and the issue of poverty are two sides of the same coin." Concluding
that extending area-wide support is essential, the government is
considering improving infrastructure, such as hospitals and roads,
not only to help victims but also to prevent new victims.

(2) Emperor, Empress arrive in Hawaii: Governor meets them at
airport

MAINICH ON-LINE
11:00 a.m., July 15, 2009

Photo shows the arrival of the Emperor and the Empress at Hickam Air
Force Base on Oahu Island, Hawaii at 3:13 p.m. on July 14, 2009.

The Emperor and the Empress on the 14th attended a reception in
Vancouver co-hosted by the Japanese ambassador to Canada and the
consul general and talked with Japanese and Canadian guests. They
both walked several hundred meters from their hotel to the reception
hall, while being welcomed by Rising-sun and Canadian flag-waving
well-wishers.

The Emperor and the Empress then left Vancouver by government plane
and arrived at Hickam Air Force Base on Oahu Island, Hawaii, U.S.A.
They, wearing leis, were greeted by Hawaii Governor Lingle and
several others at the foot of the plane ramp. They then visited
Kapiolani Park, which is close to the reception hall, and were
greeted by Japanese-American citizens.

(3) Chief cabinet secretary criticizes DPJ for its response to cargo
inspection legislation

NIKKEI- ONLINE (Full)
13:12, July 15, 2009

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Chief Cabinet Secretary Takeo Kawamura, at a press conference this
morning, made the following comment about a special measures bill to
make it easier to inspect ships to and from North Korea: "It is an
important bill that must be pushed forward in the context of
international cooperation. The Democratic Party of Japan (DPJ),
which plays up its ability to run the government, should consider it
straight on." Kawamura urged the DPJ to respond to calls for
deliberations on the bill at the House of Councillors. At the same
time, Kawamura rejected the idea of the heads of the Liberal
Democratic Party (DPP) and the DPJ holding talks to make adjustments
that would allow enactment of the bill, saying, "Such will not
happen."

In connection with a secret pact reportedly concluded when the
U.S.-Japan Security Treaty was revised in 1960, DPJ President Yukio
Hatoyama has alluded to approving the idea of making port calls by
warships carrying nuclear weapons and their passage through Japanese
territorial waters exempt from prior consolations between and the
U.S. Touching on this fact, Kawamura expressed a cautious stance,
saying, "The three nonnuclear principles are a national policy."

(4) Lower House election in aftermath of shock of Tokyo election
(Part 2): "Dissolution under Aso" upsets LDP members; governing
system now collapsed

NIKKEI (Page 1) (Full)
July 15, 2009

Preparations have started for the Aug. 30 House of Representatives
election. But this decision made by the prime minister has upset
Liberal Democratic Party (LDP) members.

In a meeting of LDP lawmakers held yesterday afternoon in the
presence of Prime Minister Taro Aso, former secretary general
Hidenao Nakagawa indicated that he would continue to seek Aso's
voluntary resignation as prime minister. He said: "I oppose Diet
dissolution that only satisfies the Democratic Party of Japan (DPJ).
It is necessary to drastically change the voters' sentiment."

In meetings of factions held yesterday, a number of participants
called for a party presidential election to be held before the
upcoming general election. Even Minister of State for Economic and
Fiscal Policy Kaoru Yosano, who has supported Aso, expressed
dissatisfaction: "Although it is necessary to analyze why the party
was defeated in the series of local elections, the government has
done nothing."

At a plenary meeting of the Lower House held afterward, the LDP
voted down a no-confidence motion submitted by the opposition bloc
against the Aso cabinet. Even so, complaints and anxiety about Diet
dissolution under Prime Minister Aso are still smoldering.

Absence of potential candidate to succeed Aso

When a political party suffers a setback in an election, calls grow
in the party for the leader to take the responsibility. Now that the
Aso cabinet is struggling with dismal public support ratings, it is
quite natural that such calls grow louder. But "a replacement for
Aso" has not been found. That is because the prime minister has
changed every year since Junichiro Koizumi stepped down.


TOKYO 00001614 005 OF 009


Shinzo Abe, Yasuo Fukuda, and Taro Aso assumed the premiership in
succession, garnering 66%, 63% and 67% of the vote, respectively.
Veteran lawmakers are negative about replacing Aso, stemming from
such a negative idea as that if the prime minister is replaced now,
the party will come under heavy fire.

Another major reason for no replacement is that there is no
potential candidate to succeed Aso. Postwar Japan has produced 22
prime ministers in "pseudo changes of government," with the
mainstream force and the non-mainstream force having their
respective candidates for the premiership. The factional system
played a key role in producing leaders. But this system has become
less influential and has not worked properly since the single-seat
election system was introduced. Whether the candidate can be the
"face of the LDP" in election campaigning seems to be the sole
benchmark for appointing a prime minister.

Former chief cabinet secretary Nobutaka Machimura said: "A lack of
unity is a major cause for declining public support ratings of the
LDP." Senior members of factions and others have reiterated the need
for the party to be united, but party members are increasingly
concerned about the upcoming Lower House election, the outcome of
which tends to be greatly affected by the party leaders'
capabilities. Given this, the ruling parties had Aso set the period
of up to 40 days until the voting date in exchange for allowing Aso
to exercise the right to dissolve the Lower House.

Policy debate laid aside

Election Strategy Council Deputy President Yoshihide Suga said: "LDP
lawmakers find it difficult to go back to their electoral districts.
It would be better to take as long time as possible to spell out our
policies." Council Chairman Makoto Koga abruptly submitted a letter
of resignation, saying that he must take responsibility for the
party's defeats in the recent local elections. Regarding Koga's true
motives, a party member said that he might want to have time for
making stumping tours.

A DPJ member commented: "During this period, the LDP might be aiming
to conduct door-to-door election campaigning, counting on industrial
organizations, regional social groups, their relatives, and
acquaintances, while grilling President Yukio Hatoyama for his false
donation statements."

LDP executive members plan to outline a policy manifesto on July 17
for the upcoming Lower House election. But only five, including
Suga, have been involved in the work. Showdown over structural
reforms supported by Nakagawa and the Koizumi children must have
been at the root of the moves to oust Aso, but there are no signs of
probing discussion conducted on this issue.

Prime Minister Aso has reiterated: "A change of government is not a
purpose but a means." If that is so, what growth strategy is he
envisioning for Japan's survival? How is he going to reconstruct a
sustainable social security system as the nation turns into aging
society with a declining birthrate? The LDP should present such
visions. If the party set the period of 40 days to present its
visions, the unprecedentedly long period will be meaningful.

(5) Forecast of Lower House election (Part 2 - conclusion): It is up
to junior DPJ politicians to pick up the task of reform


TOKYO 00001614 006 OF 009


TOKYO SHIMBUN (Page 29) (Excerpts)
July 14, 2009

Following the outcome of the Tokyo Metropolitan Assembly election,
in which the "brand name" of the Democratic Party of Japan (DPJ)
outsold any other, even those candidates with high-profile images
and strong records of achievements, Kazuhisa Kawakami (political
psychology),vice president of Meiji Gakuin University, said:
"Voters are indeed hoping for a change in government." He predicted
(that in a general election for the House of Representatives),"If
voter turnout is high and a favorable wind blows for the DPJ, the
Liberal Democratic Party (LDP) will suffer a devastating defeat in
the election, picking up only 169 seats, while the DPJ will secure a
single-party majority, 249 seats.

If the DPJ wins a landslide victory, the number of new Diet members
will greatly increase. Kawakami said:

"It will be difficult for LDP candidates to win the general election
unless they have something that appeals to voters. The lineup of the
DPJ's freshman lawmakers will be made up of all sorts of people.
There would be some new Diet members who cannot be regarded as
politicians but as a tally of votes."

Referring to the fact that most electoral districts in the Tokyo
race are multiple-seat constituencies, Michiko Yoshinaga, a writer,
said:

"It is said that priority should be placed on a political party
rather than a candidate, but the daily lives of residents of Tokyo
have become too severe for them to give priority attention to
individual candidates. The Metropolitan government has reached an
impasse. Therefore, the result of the election is the expression of
anger by Tokyo residents, the message being that they had no other
choice but to vote for the DPJ."

Tetsu Yamazaki, a playwright, said:

"Not only the economy but also the whole of Japan has grown stagnant
for a long time. The people want to get out of such a situation, but
there are no politicians who can come up with appropriate
solutions."

He sees the key as overcoming the growing sense of impasse.

Yoshinaga reprimanded the DPJ, saying: "The DPJ is not trustworthy
because there are money scandals involving President Yukio Hatoyama
and former President Ichiro Ozawa." She added:

"It was not that there was ardent support for the DPJ in the Tokyo
race; it was more a factor of the LDP going down arbitrarily. So,
the DPJ should not get too excited. Otherwise, there is a
possibility that the people will distance themselves from it, as
well."

(6) M&As decrease by half due to fading desire to invest

MAINICHI (Page 8) (Full)
July 15, 2009

A survey conducted by Thomson Reuter Professional KK has found that
mergers and acquisitions (M&As) involving Japanese companies in the

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first half of 2009 (January - June) decreased by half from the
second half of 2008 in monetary terms. Behind the fall is the fading
desire to invest due to difficulty in procuring funds to finance
corporate acquisitions. Meanwhile, M&As involving bankrupt companies
are on the rise, reflecting sluggish corporate performance. This
trend will likely continue.

The number of M&As (including capital subscription) released in the
first half of the year was 1,422, down 6.3 percent from the previous
term, marking a sharp drop to 3.9354 trillion yen or a 51.2 percent
decline in monetary terms. The financial crisis following the
failure of Lehman Brothers, a leading U.S. securities house, in
September 2008 has led to a decline in the real economy. It appears
that companies' desire for M&As has weakened with financial
institutions becoming cautious about financing M&As. Chief
researcher Hiroshi Suzuki of the Daiwa Institute of Research
Business Innovation pointed out, "Acquisitions of companies by
investment funds have dropped drastically, because investors are
increasingly cancelling contracts with those funds."

There were a number of large M&As last year, such as capital
subscription (roughly 900 billion yen) to Morgan Stanley, a leading
U.S. financial service provider, by the Mitsubishi UFJ Financial
Group and the acquisition of Sanyo Electric Co. by Panasonic.
However, the largest acquisition (545 billion yen) in the January -
June period is the acquisition of Nikko Cordial Securities by the
Mitsui Sumitomo Financial Group. It was decided after a scramble
among major banks that the Mitsui Sumitomo Financial Group should
put the Nikko Cordial Securities under its wing. The case is part of
the restructuring of the U.S. Citigroup, which faced management
crisis due to the economic woes.

Amid M&As leveling off in Japan, those in the Asia-Pacific region by
food companies are brisk. Kirin Holdings acquired Lion Nathan, a
major Australian brewery, for 230.9 billion yen. Asahi Brewery made
capital contribution worth 59.2 billion yen to China's Tsingtao
Brewery Company. A move by Kirin Holdings and Suntory Holdings to
hold talks on a merger was motivated in search of new opportunities
abroad. Related sources view that M&As abroad by Japanese companies
will continue to increase, as an executive of a leading security
house said.

Increase in support to failed companies through M&As

M&As involving companies that have filed for court protection or
bankruptcy increased by three from the previous term to 38 due to
the economic decline. The total value of the acquisitions increased
to 120.6 billion yen, about four times the preceding term.

In the first case of its kind in Japan as a Real Estate Investment
Trust (REIT),the acquisition of failed New City Residence
Investment Corporation by U.S. Investment fund Loan Star has
contributed to pushing up the acquisition amount in the term to
108.6 billion yen. This is the largest acquisition case involving
failed companies in the January-June period. Loan Star will assist
the reconstruction of New City Residence Investment Corporation as a
sponsor for its reconstruction program. It will aim to list the
company within five years. The second largest acquisition was one in
which Prudential, a leading U.S. life insurance company, made Daiwa
Life Insurance its subsidiary for 6.9 billion yen.

Some economic indicators show that the economy has bottomed out.

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However, the number of bankruptcies is moving at a high level,
marking about a 7 percent increase in June, compared with the same
month a year ago. Director Nobuo Sayama of GCA Savvian Group, a
leading M&A consulting firm, noted, "We are getting more customers
for M&A consultation from various lines of business. They come to us
for help in surviving their management crises or to seek financial
assistance.

(7) ConGen Maher says in interview: U.S. bases' relocation outside
Okinawa impossible since no acceptable sites on Japanese mainland
could be found

OKINAWA TIMES (Page 2) (Full)
July 15, 2009

Kevin Maher, U.S. consul general in Okinawa who will assume the post
of director of the U.S. Department of State's Office of Japanese
Affairs on August 4, gave an interview to Okinawa Times recently. He
said that during the discussions on U.S. Forces Japan (USFJ)
realignment in 2002-2006, the Japanese and U.S. governments studied
the possibility of relocating U.S. military bases in Okinawa to the
Japanese mainland, but they reached the conclusion that this was not
a realistic option, since it would be impossible to find relocation
sites. Maher was one of the working level officials in charge of the
USFJ realignment talks.

Q: Why is it not possible to distribute the burden equally,
including on the Japanese mainland?

Maher: It is difficult to construct new U.S. military bases. The
Japanese government has judged that relocation outside of Okinawa
would be difficult. The two governments' thinking on USFJ
realignment was that existing facilities would have to be used for
the relocation.

Q: Didn't the two sides come up with specific sites on the mainland
for consideration?

Maher: Rather than formal proposals, various ideas came up. We
considered locations in Hokkaido, Kyushu, and elsewhere, looked at
the airfields and other facilities, and studied if relocation was
possible, but realized at an early stage (in the realignment talks)
that this was not possible. This is because ground and air units of
the Marines using Futenma right now operate in an integrated way. It
would be necessary to construct a facility on mainland Japan from
scratch, which was not realistic.

Q: The ships transporting the Marines are based in Sasebo in
Nagasaki Prefecture. Certain senior marine officers say that as long
as the Japanese side provides the facilities and training space,
relocation to Kyushu would be possible.

Maher: That is an abstract proposition. While military operation
might be possible in Kyushu; in reality, to what location can the
Marines be moved? To relocate the entire Marine facility would be an
enormous undertaking and would take a long time. This would not
solve Okinawa's problem.

Q: No place is willing to accept (U.S. bases)?

Maher: That's right. Opposition to military bases is not limited to
Okinawa. The same is true for nuclear power plants, waste disposal

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facilities, factories, and so forth.

Q: The Democratic Party of Japan, which is aiming for a change of
government, and the other opposition parties advocate the relocation
of Futenma outside Okinawa.

Maher: There was a change of administration in the U.S. in January,
but the Guam agreement was signed in February. Security policy ought
to be non-partisan. If Japan decides on relocation outside Okinawa,
that would be the end of it. If the agreement is going to be
revised, there will be the question of to what extent. Everything
will fall apart.

Q: The town of Kadena is complaining about the noise problem and
demanding an agreement on facility use.

Maher: This will affect the operations of the U.S. forces. The USFJ
conducts exercises for the defense of Japan. On the other hand,
Japan's only responsibility is to provide the military bases. While
the NATO members (with which facility use agreements have been
signed) fight alongside the U.S., Japan (due to Article 9 of the
Constitution) is different. One needs to keep in mind that the
Japan-U.S. alliance is asymmetrical.

(Interviewer: Tomohiro Yara, commentary writer and editor)

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