DAILY SUMMARY OF JAPANESE PRESS 07/22/09

UNCLAS SECTION 01 OF 20 TOKYO 001659 SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 07/22/09 INDEX: (1) Simulation of post-election scenarios: Who will have the majority of seats in the Lower House? (Tokyo Shimbun) (3) Government framework in limbo: Independents hold the key; major realignment possible (Nikkei) (2) Business leaders unofficially contacting DPJ members (Tokyo Shimbun) (3) Unusually long 40-day election campaign effectively kicks off (Nikkei) (4) DPJ's aim to break away from bureaucratic control, while moving to Kantei-led budget compilation system could be source of trouble (Nikkei) (5) Interview with former prime minister Nakasone: DPJ getting boost with people becoming tired of LDP (Yomiuri) (6) "Seiron" column: The price of a rare "success story" in the world (Sankei) (7) Okinawa government has no point of contact with DPJ, worried about going back to square one on USFJ realignment (Ryukyu Shimpo) (8) DPJ "retreating" to pragmatic line on USFJ realignment? Need to watch its manifesto (Ryukyu Shimpo) (9) Interview with five economists on post-election economic policy: Clarification of fiscal resources essential (Tokyo Shimbun) (10) Poll on Aso cabinet, political parties (Mainichi) (11) Poll: Aso cabinet, political parties, election for House of Representatives (Asahi) (Corrected copy): Tearful prime minister expresses "remorse" at meeting of LDP Diet members; Humble attitude suppresses discontent (Tokyo Shimbun) (12) Political Cartoon (Sankei) ARTICLES: (1) Simulation of post-election scenarios: Who will have the majority of seats in the Lower House? TOKYO SHIMBUN (page 3) (Full) July 22, 2009 House of Representatives Election Reporting Team, Political News Section Will the ruling parties, the Liberal Democratic Party (LDP) and New Komeito retain control of the administration, or will the opposition parties led by the Democratic Party of Japan (DPJ) achieve a change of government? The battle for the House of Representatives election, through which voters will choose the next administration, has begun. What will the political framework look like after the election results come out on August 30, after the 40-day campaign period? We TOKYO 00001659 002 OF 020 made a simulation. (1) Continuation of the LDP-New Komeito government: Continuation of "twisted Diet," turmoil in the legislature The Lower House has 480 seats, and the parties that end up with at least 241 seats will have the support of the popular will and preside over the administration. If the LDP and New Komeito win a majority of seats, the current government framework will be sustained. However, it is definitely impossible for these two parties to retain over two-thirds of the Lower House seats, which they had won in the last election. The "twisted Diet," where the opposition controls the House of Councillors, will continue but the ruling parties will no longer have the option of passing bills with a second vote in the Lower House, their trump card in the legislation process. Therefore, they will have a tougher time steering the government. Above all, a turbulent Diet will continue. (2) DPJ-led administration: Policy differences source of trouble in coalition government If the opposition forces led by the DPJ win a majority of seats, this will mean the birth of the first non-LDP administration since ¶1993. At present, the DPJ has won successive victories in major local elections. It also enjoys a comfortable lead over the LDP in political party support ratings. A change of administration is fast becoming a real possibility. A change of government will be possible, of course, if the DPJ wins a majority single-handedly. Even if it fails to do so, if the DPJ, along with the Social Democratic Party (SDP) and the People's New Party (PNP),manages to control a majority, a changeover will be highly possible. If a coalition government is formed by the DPJ with the SDP and the PNP, there will no longer be a "twisted Diet," since they also control the Upper House. These parties will have the initiative in steering the Diet. However, there is a big gap between the SDP and the DPJ on such issues as the Constitution and security policy. SDP leader Mizuho Fukushima is taking a wait-and-see attitude on the DPJ, saying, "We will give positive consideration to joining a coalition but have not yet decided." The two parties are expected to clash on policies. However, in this case, Diet members of the LDP, which is now an opposition party, may leave the party and become a "supplementary force" joining the non-LDP coalition. A realignment of political forces with the DPJ at the core on a small or medium scale may take place continuously. (3) Government framework in limbo: Independents hold the key; major realignment possible The most troublesome scenario after the Lower House election is that both the LDP-New Komeito camp and the DPJ-led forces fail to control a majority, each winning 220-230 seats, resulting in failure to determine the framework of the administration. TOKYO 00001659 003 OF 020 In such a case, with the exception of the Japanese Communist Party, which opts for a unique line, the moves of independent groups, such as those led by former Minister of Economy, Trade, and Industry Takeo Hiranuma and former Administrative Reform Minister Yoshimi Watanabe, will hold the key. Both the LDP-New Komeito camp, which wants to hold on to power, and the DPJ, which wants to gain power, will undoubtedly compete fiercely to recruit defectors. If they still fail to control a majority, the LDP and the DPJ will even work vigorously to win over defectors from the other side. The LDP, in particular, has shown signs of internal division since last week, pointing to the potential for disintegrating after the election. However, in such a case, the number one party is still likely to have the initiative in the realignment of political forces. On the other hand, there is also the possibility of moves toward a grand coalition between the LDP and the DPJ. This idea had emerged once during the Fukuda administration. Then DPJ President Ichiro Ozawa was positive about it, but Ozawa has resigned as president. Current President Yukio Hatoyama is said to be negative about such a coalition, so the probability is not high. Additionally, the election of the prime minister may take place with both the LDP-New Komeito camp and the DPJ-led forces failing to control a majority. In this case, the candidate winning the most number of votes will take over the administration. This will be a minority government from the beginning and is bound to face serious difficulties in steering the government. (2) Business leaders unofficially contacting DPJ members TOKYO SHIMBUN (Page 8) (Full) July 22, 2009 Nippon Keidanren (Japan Business Federation) Chairman Fujio Mitarai yesterday indicated his expectations for lively debates to be conducted during election campaigning, remarking: "Since this is an important election that will determine the fate of Japan, I expect political parties to engage in animated policy debate and then have the people make a judgment." Asked for his view about the possibility of a change of government, Mitarai only replied: "I want you to wait until 40 days from now (the voting day)." Japan Association of Corporate Executives President Masamitsu Sakurai emphasized: "Our nation is in austere fiscal conditions. It (the general election) will be a historic election to choose a government to build a new nation." Japan Chamber of Commerce and Industry (JCCI) Chairman Tadashi Okamura issued this statement: "The major point of issue is what scenario will be laid out for the future." Business leaders are taking a wait-and-see attitude for the upcoming election. But Keidanren and JCCI have reportedly made contact with Democratic Party (DPJ) members behind the scenes for such reasons as asking the party to reflect their requests in its policy manifesto. (3) Unusually long 40-day election campaign effectively kicks off NIKKEI (Page 2) (Abridged slightly) TOKYO 00001659 004 OF 020 July 22, 2009 A campaign lasting 40 days and culminating on Aug. 30 -- the longest under the current Constitution -- has effectively kicked off, in the run-up to the Aug. 30 House of Representatives election. Although the Liberal Democratic Party (LDP) has set the victory-or-defeat line at a majority, uncertainties remain in the party about Prime Minister Taro Aso's ability as head of the party. The LDP is likely to face an uphill battle. Meanwhile, the major opposition Democratic Party of Japan (DPJ),which regards the upcoming election as a once-in-a-million chance to take over the reins of government, is hurriedly making adjustments to field candidates in all constituencies while urging its members to remain vigilant throughout the campaign despite the momentum the party is gaining. LDP plays up party unity at eleventh hour & Handshake with Nakagawa "We have no other option but to come together during the election campaign," Prime Minister Aso said at an informal meeting of LDP lawmakers of both houses of the Diet that was held around yesterday noon. The Prime Minister also acknowledged and apologized that his inconsistent remarks and a lack of leadership have contributed to dwindling support ratings. A sense of relief descended upon the conference room as tears welled up in Aso's eyes in the end. One member said, "It was surprising that the Prime Minister, who takes great pride in himself, offered an apology." The informal meeting was immediately followed by a meeting of LDP Lower House lawmakers in which former Secretary General Hidenao Nakagawa, a major member of the anti-Aso wing of the party, said: "(Hearing Prime Minister Aso's remarks),I am now totally willing to accept his decision." Nakagawa then exchanged a firm handshake with Aso, drawing a round of applause from the others in the room. The anti-Aso group's effort to play up party unity is also attributable to its resignation of the unseat Aso drive and supporters' discontent with the mess in the party. Former Prime Minister Yoshiro Mori complained during the Machimura faction's campaign kick-off ceremony yesterday afternoon, saying, "Some are still bad-mouthing the Prime Minister and the party on television." Nakagawa, who attended the faction's meeting for the first time in about five months, left the room after saying only a few words. & Little demand for Aso's stump The Prime Minister handed the party's official endorsement certificates to the first group of 309 prospective candidates (including proxies) at LDP headquarters yesterday afternoon. But questions are still hanging over the Prime Minister's qualifications as the "face of the party" for the upcoming election. Many LDP members take sober views of Aso, with one junior LDP lawmaker saying, "His stump would be counterproductive." The faction led by former Secretary General Taku Yamasaki held a meeting around yesterday noon in which Yamasaki called for steady efforts to win votes, saying: "If we joint efforts with the New Komeito, we can win the upcoming election. You must win seats at all costs." DPJ warns its members about being complacent TOKYO 00001659 005 OF 020 & Person connected with Gunma 4th district may challenge former Prime Minister Fukuda At a press conference yesterday, DPJ President Yukio Hatoyama revealed a plan to reach conclusions before the end of the week on the constituencies the DPJ has yet to determine its candidates. Deputy President Ichiro Ozawa plans to run in Iwate Constituency No. 4 as before instead of the Tokyo 12th district, which is New Komeito Representative Akihiro Ota's home constituency. Meanwhile, the New Party Nippon officially decided yesterday to field its head, Yasuo Tanaka who is an Upper House member, for the Hyogo 8th district. The DPJ is likely to endorse him. The DPJ has yet to determine its candidates in nine constituencies. The party has postponed determining a candidate for the Gunma 4th district, the home turn for former Prime Minister Yasuo Fukuda. A group of people connected with the 4th district, including one eager to announce his candidacy, met with Ozawa yesterday. The DPJ is also looking for its own candidate for Kanagawa Constituency No. 8 where Kenji Eda, an independent, will run in. The largest opposition party also intends to significantly increase the number of candidates running only in the proportional representation segment. In the past, the DPJ had only one candidate for each block. In the upcoming election, the party is considering fielding several candidates for the blocks from Hokkaido to Kinki. DPJ executives, including Hatoyama and Ozawa, dined with Kyocera Honorary Chairman Kazuo Inamori in Tokyo last night. They are believed to have exchanged views on the Lower House election situation and other matters. & Moves to change hats Some DPJ lawmakers are considering changing their hats. Shadow cabinet defense minister Keiichiro Asao, an Upper House member, informed Ozawa yesterday of his plan to run in the Kanagawa 4th district. Asao is considering all possibilities, including running in the race as an independent. The 40-day marathon campaigning is associated with many concerns. DPJ President Hatoyama is saddle with the question of false political fund reports. Hatoyama has indicated at a press conference that there is no need to hold another news conference to offer additional explanations, saying: "There may be people who do not think I have fulfilled my accountability, but there are far more people who want to see the DPJ bring change to politics." (4) DPJ's aim to break away from bureaucratic control, while moving to Kantei-led budget compilation system could be source of trouble NIKKEI (Page 5) (Abridged) July 22, 2009 One issue in the House of Representatives election is how fiscal policy, including the national budget, will be affected. The Democratic Party of Japan (DPJ) advocates breaking away from a "bureaucracy-led budget compilation" process, and the party is contemplating the creation of a new "national strategy bureau" reporting directly to the prime minister. This bureau would take charge of drafting the budget outline. Since this will represent a major shift from the current modus operandi, the Liberal Democratic TOKYO 00001659 006 OF 020 Party (LDP) and officials of the central government at Kasumigaseki see it as unrealistic. If a change of administration occurs, the process of compiling the budget that will start immediately is certain to run into trouble. The government and the ruling parties have approved the budget request ceilings, which serve as the outline of the fiscal 2010 budget, on July 1, setting the upper limit of general appropriations for policy expenditures at a record 52.7 trillion yen. Each ministry will now submit their budget requests based on these ceilings to the Ministry of Finance (MOF) by August 31. If the framework of the administration does not change drastically after the Lower House election, MOF will start examining the ministries' budget requests from September as it usually does. After negotiations with the ruling parties on such key issues as revisions to medical fees, the government's version of the budget will be compiled by late December, the aim being to have it pass the Diet by the end of March 2010. However, if the DPJ takes over the reins of government, the timetable inevitably would undergo a major change. The DPJ is even calling for a drastic reform of the ceilings, calling them the symbol of "MOF-led budget compilation." Until now, budget compilation consisted mainly of adding up the various budget requests submitted by the ministries to MOF and deciding on the final budget for the entire government through ruling-party negotiations. However, the DPJ has proposed a reform that would have the Prime Minister's Official Residence (Kantei) take the lead in setting the budget outline. This outline would determine the budget allocation for each ministry. Since the Kantei will lead the process of deciding the outline of the budget, the creation of a national strategy directly under the prime minister is also being considered. However, it will not be easy to change the schedule for budget compilation overnight. There is growing concern in Kasumigaseki, with one senior economic official noting, "If they push for this arbitrarily, trouble will inevitably come." One senior MOF official also expressed concern, "It is absolutely impossible to predict what would happen to the budget process after a change of administration." (5) Interview with former prime minister Nakasone: DPJ getting boost with people becoming tired of LDP YOMIURI (Page 4) (Full) July 18, 2009 -- How do you see the present situation of the Liberal Democratic Party (LDP)? "I have the impression they are squabbling while the ship is sinking. Issues connected with a presidential election have an aspect of being a kind of power struggle, but there needs to be some kind of objective or order as to what the fight is all about. The forces that are trying to oust Prime Minister Aso do not have the next card (a presidential candidate). They are fighting for the sake of fighting. The LDP exists for the sake of the state and the people. If politicians engage in a scramble in pursuit of intraparty rivalry, the LDP will be diminished. They should see a bigger TOKYO 00001659 007 OF 020 picture with an eye on public sentiment and the eyes of the people. Replacing the prime minister at this point of time will not appeal to the people. The LDP's loss in the Tokyo Metropolitan Assembly election indicates that people are fed up with the long-term administration of the LDP, that a new wind is blowing, and that the Democratic Party of Japan (DPJ) is riding on that wind. This wind will continue to blow for some time to come. I cannot but think that the LDP will have an uphill battle in the forthcoming Lower House election. The LDP must come up with something that will ease the public's discontent." -- Public support ratings for Prime Minister Aso are low. "He acts in a way that makes people think he is frivolous in his remarks and lacks consideration. He is viewed as a political lightweight. He must show them that he is a political heavyweight, overcoming the fact that he is still serving in his first term (past 10 months) in the run-up to the Lower House selection." -- Prime Minister Aso has continued to delay Lower House dissolution. "A situation like that was unprecedented. This is an issue of a politician's ability to make a decision. There have been many precedents in which the Lower House was dissolved under a disadvantageous situation in order to break a deadlock. Diet dissolution unites public sentiments, as well as moves in the party and among fellow party members. As such, all Diet dissolutions involve strains. There are few Diet dissolutions free of strains. Politicians need guts and insight to carry out dissolutions. Past prime ministers were elected with the solid backing of fellow party members and aides. When they made political decisions, they tapped that solidarity. I carried out the so-called "feigned-death" Diet dissolution in 1986. My fellow party members knew about it. However, they gladly pretended to be unaware of my intention. Politicians now do not make such an approach. Human bonds have now become very thin and weak." -- How do you view DPJ President Hatoyama? "He has gained in breadth and taken on an added significance. Since he now knows the path to taking over the reins of government to some extent, he has room to breathe. However, his approach to the issue of the false statement of individual political fund donations in his political fund report was insufficient. He needs to deal with the matter promptly. It is also imperative for him to have foreign affairs experts near him. He must bear in mind the need to pursue a mature diplomacy. The DPJ has yet to give full accounts on public finances, education and agricultural administration on the domestic front, and foreign affairs and security policies as well. He should solidify relations with China, South Korea and Association of Southeast Asian Nations (ASEAN),as well as to reveal policies toward the U.S., European countries and Russia. -- What about the possibility of a political realignment after the Lower House election? "There is a great possibility of such realignment. Moves to create a stable axis, based on public opinions during election campaigns and TOKYO 00001659 008 OF 020 public responses to election results, will presumably appear when a new administration is established. Minority forces from both the LDP and the DPJ might bolt their parties. Such could occur if political circles undergo realignment." (6) "Seiron" column: The price of a rare "success story" in the world SANKEI (Page 7) (Full) July 22, 2009 Ryozo Kato, former ambassador to the U.S., Nippon Professional Baseball commissioner Threat facing democracies The late Dr. Herman Kahn once noted, "Democracies are susceptible to two dangers; one is aggression from outside, the other is erosion from inside." After returning home from the United States last year, I realized that one of the dangers, "erosion from inside" is permeating Japan. First, a sense of community and caring for each other has weakened among Japanese. And in inverse proportion to this, there are too many individuals who intimidate others with their complaints and criticisms. I think the mass media, particularly television, are largely responsible for this. To borrow the words of one American, the mission of the media is no longer to provide "information"; the media have turned into a world of "infortainment." Just like "junk food," both the providers and the consumers are unable to stop themselves, even though they know it is bad for the health. Even in news broadcasting, there is an excess of half-baked "live reports" for everything. These reports are made in bad Japanese, often with unclear context. While claiming to be "factual reports," the person talking on the screen throws in his subjective views, trying to "guide" public opinion and deriving pleasure from doing this. While I am not surprised by this situation in the media, I think this tendency is very childish. Japan insensitive to the outside world Another problem is the sloppiness of information management in Japan. With regard to information, the United States probably thinks that China makes more sense than Japan. Overall, Japan does not realize that everything it does is being watched by the outside world. It is too used to "following the crowd" and is insensitive to people looking from outside the country. Perhaps for this reason, or as a result, Japan worries too much about the wishes of the concerned countries when it comes to security and defense policy. I think this weak sense of community and sloppiness in information management is related to Japan's isolating itself from war, even though 64 years have passed since World War II. The United States is in stark contrast to Japan. TOKYO 00001659 009 OF 020 I believe that the election of President Barack Obama is not unrelated to the fact that the U.S. has been involved with all the major wars since World War I. War is the harshest experience. The American people have had to share such experience for a prolonged period of time. I will not go into the right or wrong or good or bad of war. However, sharing the war experience unmistakably lowers the racial or gender barrier. There is something common in the rise of Tiger Woods and Barack Obama, albeit in very different fields. On the other hand, Japan became a rare "success story" through its "insulation from war" after World War II. However, the price for this has come to take the form of lack of sense of community and insensitivity to information. Since there is a weak sense of caring for each other even among the Japanese people, it is natural that Japan also has a weak sense of community with its allies and the outside world and is insensitive to information that needs to be shared with them. During my tour in the U.S., visitors often asked me which is more important for the U.S., Japan or China. I think this is more a question of "Japan's choice" than a question of "the United States' choice." While Japan and the U.S. are allies, such is not the case between the U.S. and China. Therefore, it boils down to the simple matter of since Japan is an ally of the United States, it should behave like one. Mutual defense is the essence of an alliance There have been some discussions about whether Japan can intercept a missile fired by North Korea heading for the U.S. The essence of an alliance is "mutual defense," and a response disregarding this is certain to have an impact on mutual trust, which is the bedrock of the alliance. The concepts of "soft power" and "smart power" were discussed enthusiastically at a seminar on Japan-U.S. relations that I attended recently. The Americans on the panel emphasized that whether it is "soft," "hard," or "smart" power, the common essence is "power." Without "power," "soft" or "smart" is meaningless. At the end of the day, they are all means to achieve a specific goal. Japan likes "soft power." Essentially, the wish or belief behind this is that the risk of loss of Japanese life as a result of the implementation of Japanese policy should be avoided by all means. To protect one's own safety, one always needs to share a sense of community and share information and risks with others. The same is also completely true for the international community. Even today, Japan still aspires to be more important than China and to be regarded as an indispensable ally of the United States, having a "no risk, high return" mindset. There is a serious contradiction in this. Japan is barely aware that there has to be a meeting point between these two aspects. I think that therein lies the inevitable "choice" that Japan will have to make. (7) Okinawa government has no point of contact with DPJ, worried about going back to square one on USFJ realignment TOKYO 00001659 010 OF 020 RYUKYU SHIMPO (Page 2) (Full) July 22, 2009 In light of the possibility that a Democratic Party of Japan (DPJ) administration might be launched, officials of the Okinawa Prefectural Government (OPG) are beginning to be worried about the lack of points of contact with the party. One senior OPG official is visibly anxious that, "We do not know whom to talk to," since the debate on security policy in the DPJ has been inconclusive. He also gives the following analysis: "One of the points of contention in this general election is which party will promote decentralization of power more," and with the examination of Okinawa's economic development program taking place, "the question is not what the national government will do for us, but our vision of what we want to do and what sort of assistance we can obtain." He emphasizes that he is closely watching the decentralization policy. On the impact of the election on USFJ realignment, the senior OPG official stated: "The environmental assessment procedures are underway" for the relocation of Futenma Air Station. He said that he would be watching how the current relocation plan proceeds, adding, "We are indeed anxious about what will happen to the political situation and whether there will be an alternative plan to replace the existing agreement. Even if such a plan is presented, it will be a problem because the plan to complete the replacement facility by 2014 will come to nothing." He appears to be alarmed that while the DPJ advocates relocation outside Okinawa, there is no guarantee such a proposal would ever be pursued. Regarding the fiscal 2010 budget requests due by the end of August, another senior OPG official said: "The budget request guidelines have already come out. There will probably be no significant change in the allocations for Okinawa's development." (8) DPJ "retreating" to pragmatic line on USFJ realignment? Need to watch its manifesto RYUKYU SHIMPO (page 2) (Full) July 22, 2009 Tokyo - Choosing a new administration is the main theme in the forthcoming House of Representatives election. With regard to U.S. Forces Japan (USFJ) realignment, senior officials of the Democratic Party of Japan (DPJ),which is aiming to become the ruling party, have often talked about the relocation of Futenma Air Station outside Okinawa in their news conferences and speeches to highlight the party's difference with the current administration. However, when it comes to specific plans, such as the choice of a relocation site, the party has remained vague. On the other hand, the ruling Liberal Democratic Party (LDP) maintains its position of promoting the realignment plans, asserting that the steady implementation of the project to relocate the Futenma base to waters off Henoko in Nago City will contribute to lightening the burden imposed by U.S. bases on Okinawa. When DPJ President Yukio Hatoyama was in Okinawa on July 19, he reiterated his party's goal of relocating the Futenma base out of Okinawa. He said: "If the Okinawan people are united in their wish for relocation outside the prefecture, we will also have to take positive action to at least move this facility outside Okinawa TOKYO 00001659 011 OF 020 (short of moving it outside Japan)." However, a senior Ministry of Defense official regards this as the DPJ's shift to a pragmatic line. He points out: "The statement about 'if the Okinawan people are united in their wish' was made with full awareness of the current situation in which Okinawans are divided between relocation outside Okinawa and relocation within Okinawa (to Nago). He knew that it is impossible for the Okinawans to reach a consensus." The agreement on the relocation of U.S. Marines in Okinawa to Guam was approved in May. On July 11, the first installment of relocation funds since the agreement took effect was provided by Japan to the United States. With the USFJ realignment road map agreed upon by the two governments being executed steadily, what sort of review of the realignment plans does the DPJ have in mind? The party's manifesto (campaign pledges) to be issued by the end of July will be carefully watched. (9) Interview with five economists on post-election economic policy: Clarification of fiscal resources essential TOKYO SHIMBUN (Page 8) (Full) July 22, 2009 The next general election has been set for August 30, opening a battle between the Liberal Democratic Party (LDP) and the Democratic Party of Japan (DPJ) to capture the reins of government. Market players are eager to figure out what economic and fiscal policies might be taken after the election. The Tokyo Shimbun asked five economists about what economic issues are expected to take center stage in the campaign and prospects for the stock market. The upcoming election will take place in the aftermath of the financial crisis that was set in across the world last fall and the subsequent economic deterioration. Nikko Cordial Securities Inc. senior economist Jun Tsukasa made a sarcastic comment about Prime Minister Taro Aso, who was pressed to dissolve the House of Representatives under severe circumstances although no prospects are in sight for economic recovery, dubbing the dissolution as "KY (Keizai = economy, Yokuwakaranai = incomprehensive) dissolution." Dai-Ichi Life Research Institute Inc. chief economist Yoshikiyo Shimamine called it "a once-in-a-century dissolution." They take the view that economic stimulus measures are likely to take center stage in the election campaign, given the current unprecedentedly serious depression. The five economists share the view that a certain level of fiscal disbursements are necessary in order to turn around the economy, but Credit Suisse Securities chief market strategist Shinichi Ichikawa commented: "It is essential to clarify where the necessary revenues will come from." Paying attention to depopulation getting more serious and increasing welfare spending, JP Morgan Securities chief economist Masaaki Sugano says: "It is necessary to consider how tax hikes, economic growth, and dependence on debts (issuance of government bonds) should be balanced out" (to cover social security spending). Regarding the possibility of the election producing a change of government, the five economists all gave it more than a 50 PERCENT chance. Mizuho Research Institute senior economist Koji Takeuchi TOKYO 00001659 012 OF 020 said: "At the present point of time, it is highly likely that with the dissatisfaction at the LDP and the Aso cabinet alone, a switch in power between the ruling and opposition camps could occur." He stressed the need for all political parties to engage in policy-oriented election campaigning. Asked about the future of the stock market, the five economists predicted that the 225-issue Nikkei Stock Average would exceed the 10,000 line by the end of this fiscal year. As factors to bring up stock prices, Tsukasa cited: "Earnings of domestic firms should hit bottom," and Ichikawa listed "the need of economic recovery in the U.S. and other foreign countries." Sugano said: "Unless Japan presents its medium- to long-term vision, foreign investors will not buy Japanese stocks." Naming of the dissolution; key economic issues Possibility of change of government Jun Tsukasa "KY dissolution;" tax hikes or elimination of waste spending to squeeze out financial resources. 95 PERCENT Shinichi Ichikawa "Economic structure-selection election"; propriety of the DPJ's policies that require enormous funds and specific financial sources. More than 90 PERCENT Koji Takeuchi "Election for the people's livelihoods;" to what extend fiscal disbursements should be approved. 70 PERCENT Masaaki Sugano "Election to propose pork-barrel measures;" which should be chosen to finance social security spending, tax hikes, economic growth or dependence on debts. 70 PERCENT Yoshikiyo Shimamine "Once-in-a-century dissolution;" when the effect of the current economic stimulus measures disappear, what additional measures should be taken. 50 PERCENT (09072205ys) Back to Top (10) Poll on Aso cabinet, political parties MAINICHI (Page 2) (Abridged) July 20, 2009 Questions & Answers (T = total; P = previous; M = male; F = female) Q: Do you support the Aso cabinet? T P M F Yes 17 (19) 16 17 No 67 (60) 70 64 Not interested 16 (20) 13 19 Q: (Only for those who answered "yes" to the above question) Why? T P M F Because the prime minister is from the Liberal Democratic Party 34 (42) 30 39 Because something can be expected of the prime minister's leadership 12 (11) 14 10 Because there's something familiar about the prime minister 24 (22) 22 25 Because something can be expected of the prime minister's policy measures 25 (19) 31 19 Q: (Only for those who answered "no" to the above question) Why? TOKYO 00001659 013 OF 020 T P M F Because the prime minister is from the Liberal Democratic Party 8 (8) 10 7 Because nothing can be expected of the prime minister's leadership 39 (39) 36 41 Because there's something imprudent about the prime minister 15 (17) 13 17 Because nothing can be expected of the prime minister's policy measures 36 (35) 37 35 Q: Which political party do you support? T P M F Liberal Democratic Party (LDP) 18 (20) 19 17 Democratic Party of Japan (DPJ or Minshuto) 36 (34) 43 30 New Komeito (NK) 5 (4) 3 6 Japanese Communist Party (JCP) 4 (4) 4 3 Social Democratic Party (SDP or Shaminto) 1 (1) 0 1 People's New Party (PNP or Kokumin Shinto) 1 (0) 0 1 Reform Club (RC or Kaikaku Kurabu) -- (--) -- -- New Party Nippon (NPN or Shinto Nippon) 0 (--) 1 -- Other political parties 2 (1) 3 2 None 32 (32) 26 38 Q: Who do you think is more appropriate for prime minister, Prime Minister Aso or DPJ President Hatoyama? T P M F Prime Minister Aso 11 (15) 12 10 DPJ President Hatoyama 28 (32) 34 22 Neither 57 (46) 53 62 Q: Which party, the LDP or the DPJ, would you like to see win in the next election for the House of Representatives? T P M F LDP 23 (27) 22 24 DPJ 56 (53) 63 51 Other political parties 16 (12) 13 19 Q: If an election were to be held now for the House of Representatives, which political party will you vote for in your proportional representation bloc? T P M F LDP 18 19 17 DPJ 45 54 36 NK 6 5 7 JCP 4 5 3 SDP 1 1 1 PNP 0 0 1 RC 0 0 -- NPN 0 1 0 Other political parties 2 1 3 Don't know 21 12 29 (Note) Figures shown in percentage, rounded off. "0" indicates that the figure was below 0.5 PERCENT . "--" denotes that no respondents answered. "No answer" omitted. Figures in parentheses denote the results of the last survey conducted June 13-14. TOKYO 00001659 014 OF 020 Polling methodology: The survey was conducted July 18-19 over the telephone across the nation on a computer-aided random digit sampling (RDS) basis. A total of 1,579 households with one or more eligible voters were sampled. Answers were obtained from 1,045 persons (66 PERCENT ). (11) Poll: Aso cabinet, political parties, election for House of Representatives ASAHI (Page 8) (Full) July 19, 2009 Questions & Answers (Figures shown in percentage) Q: Do you support the Aso cabinet? Yes 20 No 74 Q: Which political party do you support now? Liberal Democratic Party (LDP) 27 Democratic Party of Japan (DPJ or Minshuto) 32 New Komeito (NK) 4 Japanese Communist Party (JCP) 2 Social Democratic Party (SDP or Shaminto) 1 People's New Party (PNP or Kokumin Shinto) 0 Reform Club (RC or Kaikaku Kurabu) 0 New Party Nippon (NPN or Shinto Nippon) 0 Other political parties 0 None 32 Q: There will be a general election before long for the House of Representatives. To what extent are you interested in the forthcoming general election? Very interested 42 Somewhat interested 39 Not very interested 16 Not interested at all 3 Q: If you were to vote now in a general election for the House of Representatives, which political party would you vote for in your proportional representation bloc? LDP 28 DPJ 52 NK 5 JCP 3 SDP 2 PNP 1 RC 0 NPN 0 Other political parties 6 Q: Which political party's candidate would you like to vote for in your single-seat constituency? LDP 29 DPJ 47 TOKYO 00001659 015 OF 020 NK 4 JCP 3 SDP 1 PNP 1 RC 0 NPN 0 Other political parties 2 Independent candidate 10 Q: Who do you think is more appropriate for prime minister, Prime Minister Aso or DPJ President Hatoyama? Prime Minister Aso 21 DPJ President Aso 50 Q: What's your image of a political party's head? A person leading a party's policy 53 A person symbolizing a party's nature 11 A person elected as the face of a party for election campaigning 12 A person elected in an intraparty power game 21 Q: When you make a judgment about whether a political party's head is good and bad, to what extent do you attach importance to (1) political ideal, (2) policy-planning ability, (3) leadership ability, (4) public accountability, and (5) cleanness? (1) (2) (3) (4) (5) Very much 37 42 58 65 49 Somewhat 50 46 33 27 35 Not very much 9 9 6 5 12 Not at all 1 1 1 1 2 Q: When you choose a political party or a candidate to vote for, to what extent do you attach importance to who the party's head is? Very much 22 Somewhat 46 Not very much 27 Not at all 4 Q: When you make a judgment about whether a political party's actual results in the past are good and bad, to what extent do you attach importance to (1) policies or standpoints translated into action, (2) how it debated in Diet deliberations or how it responded to legislative measures, (3) what its lawmakers have said and done or whether its lawmakers were involved in scandals or not, and (4) what its lawmakers are doing in their respective communities? (1) (2) (3) (4) Very much 41 31 38 25 Somewhat 49 50 38 44 Not very much 7 15 19 25 Not at all 1 2 3 3 Q: When you choose a political party or a candidate to vote for, to what extent do you attach importance to the party's actual results in the past? Very much 29 Somewhat 56 TOKYO 00001659 016 OF 020 Not very much 12 Not at all 1 Q: When you make a judgment about a political party's actual results, do you weigh its actual results in the past year or two or its actual results over a long period of 5 or 10 years? Actual results in the past year or two 49 Actual results over a long period of 5-10 years 46 Q: If a political party you voted for in the forthcoming election comes into office and find it falling short of expectations in its actual results, then what do you think you will do in the next election? Vote for another political party 59 Vote for the same political party 24 Abstain from voting 8 Q: To what extent do you appreciate the LDP's actual results in the past? Very much 3 Somewhat 47 Not very much 36 Not at all 11 Q: To what extent do you appreciate the DPJ's actual results in the past? Very much 4 Somewhat 42 Not very much 41 Not at all 9 Q: Do you think there is a big difference between the LDP's policy measures and the DPJ's? Yes 36 No 59 Q: Then, do you think there is a big difference between the LDP and the DPJ when it comes to their specific polices for (1) social security, including pensions, (2) fiscal reconstruction, (3) foreign relations and national security, (4) politics and money, and (5) bureaucracy? (1) (2) (3) (4) (5) Yes 43 44 28 25 41 No 51 48 62 69 50 Q: When you choose a political party or a candidate to vote for in the forthcoming election for the House of Representatives, do you attach importance to the party's head or the party itself? The party's head 15 The party itself 81 Q: When you choose a political party or a candidate to vote for in the forthcoming election for the House of Representatives, to what extent do you attach importance to the party's campaign pledges? TOKYO 00001659 017 OF 020 Very much 35 Somewhat 52 Not very much 11 Not at all 1 Q: When you choose a political party or a candidate, to what extent do you attach importance to expectations for the party? Very much 42 Somewhat 46 Not very much 9 Not at all 1 Q: When you choose a political party or a candidate, do you attach importance to the party's actual results in the past or your expectations for the party in the future? Actual results in the past 20 Expectations in the future 76 Q: When you choose a candidate to vote for in your single-seat constituency of the House of Representatives, do you attach importance to the candidate's qualifications or that candidate's political party? Mainly the candidate's qualifications 26 The candidate's qualifications to a certain degree 28 About the same 20 The candidate's political party to a certain degree 18 Mainly the candidate's political party 6 Q: When you choose a candidate to vote for in your single-seat constituency of the House of Representatives, do you have a positive image or a negative image about (1) a hereditary candidate, (2) a candidate who was a central government bureaucrat, (3) a candidate who was a mayor, governor, or local assembly member, (4) a candidate who was a private business employee, and (5) a candidate who was a civic activist? (1) (2) (3) (4) (5) Positive image 8 7 33 30 29 Neither 68 62 61 65 59 Negative image 21 28 3 3 9 Q: What do you think is the most important factor for you to choose a political party and a candidate in the forthcoming election for the House of Representatives? The party's head 3 The party's actual results in the past 12 Expectations for the party in the future 47 The Party's campaign pledges 19 The candidate's self 16 Q: Would you like the current LDP-led coalition government to continue, or would you otherwise like it to be replaced with a DPJ-led coalition government? LDP-led coalition 28 DPJ-led coalition 52 Q: Do you look forward to a change of government or feel uneasy TOKYO 00001659 018 OF 020 about it? Look forward 60 Feel uneasy 32 Q: If there is a change of government, how do you think Japanese politics will? Change greatly 10 Change somewhat 54 Not change very much 32 Q: When you make a judgment about whether a political party is competent to run the government, to what extent do you attach importance to (1) governing experience in the past, (2) policy-planning ability, (3) its head's ability, and (4) its human resources? (1) (2) (3) (4) Very much 9 31 36 33 Somewhat 43 54 49 30 Not very much 39 11 12 13 Not at all 5 1 2 2 Q: To what extent do you think the LDP is competent now to run the government? Very much 5 Somewhat 39 Not very much 41 Not at all 12 Q: To what extent do you think the DPJ is competent now to run the government? Very much 6 Somewhat 53 Not very much 31 Not at all 6 Q: When you choose a political party or a candidate in the forthcoming election for the House of Representatives, to what extent do you think about the choice of government? Very much 34 Somewhat 49 Not very much 14 Not at all 2 Q: When you vote in the forthcoming election for the House of Representatives, what do you think you will do? Pick only one that is closest to your mindset from among those listed below. Choose a political party that is closest to my thinking 32 Choose a person appropriate to become a lawmaker 24 Choose a political party competent to run the government 30 Choose a person who will become prime minister 2 Express dissatisfaction with politics 9 Q: Did you vote in the past elections for the House of Representatives and for the House of Councillors? TOKYO 00001659 019 OF 020 Almost every time 63 Many times 20 Not very often 10 Almost no 4 Q: What was your voting behavior in the past elections for the House of Representatives and for the House of Councillors? Voted for almost the same party or the same party's candidate 79 Voted for a different party and a different party's candidate each time 16 Q: Do you think your voting behavior will remain the same in future elections for the House of Representatives and for the House of Councillors? Yes 55 No 37 Polling methodology: The survey was conducted by mailing the questionnaire form to a total of 3,000 voters chosen across the nation on a stratified two-stage random sampling basis. A total of 339 voting blocs were selected so as to epitomize the nation's electorates at large, and nine persons were picked on average from each voting bloc's register. The questionnaire form was sent June 17 and was sent back from a total of 2,263 persons before July 13. Valid answers were from 2,227 persons, excluding answer sheets left blank or filled out by those not subject to the survey. The retrieval rate was 74 PERCENT . In the breakdown of respondents, males accounted for 46 PERCENT , with females at 53 PERCENT and unknown at 1 PERCENT . In the breakdown of age brackets, persons in their 20s accounted for 11 PERCENT , 30s-16 PERCENT , 40s-16 PERCENT , 50s-18 PERCENT , 60s-19 PERCENT , 70-14 PERCENT , 80 and over-6 PERCENT . (Corrected copy): Tearful prime minister expresses "remorse" at meeting of LDP Diet members; Humble attitude suppresses discontent TOKYO SHIMBUN (Page 2) (Full) July 22, 2009 Akihiro Ikushima At the meeting of Liberal Democratic Party members of both houses of the Diet held before the plenary session of the House of Representatives where its dissolution would be declared, Prime Minister Taro Aso said: "My only wish is that all of you who plan to run in the election will (get elected and) return to this place." Aso's tearful words suppressed the discontent going into the election campaign amid a raging adverse wind. The prime minister, who abhors showing his weakness or being criticized for "wavering," admitted his responsibility for the successive defeats in the recent major local elections and expressed his "remorse and apology." He took a humble attitude to show the party's unity at the time of Diet dissolution. Aso takes pride in the fact that he was able to prevent the economy from sinking deeper and deeper since he took office. Even after the cabinet support rating dropped to a crisis level, his determination to "seek the people's verdict for this administration's achievements" remained unshaken, and he insisted on exercising his TOKYO 00001659 020 OF 020 power to dissolve the Diet. However, the prime minister also understands that this election campaign will be an uphill battle. His aides say that: "He is anxious that his policies have not been conveyed properly to the people and is not so self-assured about winning the election." In his news conference announcing the dissolution of the Diet, Aso did not define his criterion for victory in the general election. He bristled at reporters' persistent questions on this and said: "Do you think I can answer a question premised on losing the election just like that? The election campaign has just begun." Will the prime minister be able to fight off the adverse wind? Toward the end of the news conference, he could only fall back on his fighting spirit. He stated: "An election is where one does everything in his power, works as hard as possible, and puts forth all his strength." ZUMWALT