JAPANESE MORNING PRESS HIGHLIGHTS 07/24/09

UNCLAS SECTION 01 OF 14 TOKYO 001673 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 07/24/09 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) 4) Coordination for a mid-November visit to Japan by President Obama (Nikkei) 5) USFJ Commander Lt. Gen. Rice tells press that it would be difficult to revise the agreement to realign U.S. forces in Japan as the DPJ has proposed (Nikkei) Roos testimony: 6) In Senate confirmation hearing, Ambassador-designate Roos stresses that the U.S.-Japan relationship remains the cornerstone of America's Asia policy (Nikkei) 7) Roos sees no change in U.S.-Japan relations should the DPJ win the Lower House election and become the ruling party (Yomiuri) 8) Gist of testimony by Ambassador-designate before the Senate committee (Nikkei) 6 Opinion poll: 9) Democratic Party of Japan (DPJ) favored by 42 PERCENT of voters in Yomiuri election-series poll (Yomiuri) 10) DPJ picking up increasing support from unaffiliated (floating) voters (Yomiuri) DPJ policy switch: 11) DPJ to pull back policy stance of calling for revision of the U.S.-Japan Status of Forces Agreement (Mainichi) 12) DPJ will allow MSDF to continue Indian Ocean refueling mission to end of year, as it moves toward a pragmatic foreign and security policy line (Asahi) 13) DPJ considering two sites in Kyushu for possible relocation of Futenma Air Station from Okinawa (Sankei) 14) DPJ's new pragmatic foreign and security policy line could be a double-edged sword for the party (Tokyo Shimbun) 15) Prime Minister Aso and other LDP figures criticize the DPJ's policy switch (Mainichi) 16) Social Democratic Party wants to codify the three no-nuclear principles (Yomiuri) 17) Different campaign styles: LDP President Aso focusing on organizational vote, DPJ head Hatoyama aiming at floating voters by outdoor speechmaking (Nikkei) 18) Business leaders end summer seminar but stay clear of evaluating party policies as usual in deference to the election campaign (Mainichi) �0A; 19) Japan's trade surplus expands, reflecting rising exports to China as trade with U.S., Europe slumps (Asahi) Articles: 1) TOP HEADLINES Asahi Alico Japan customers' credit card data abused Mainichi: TOKYO 00001673 002 OF 014 DPJ retreats from plan to revise Japan-U.S. Status of Forces Agreement Yomiuri: Customers' credit card data apparently leaked from Alico Japan Nikkei: Uniqlo opens outlets at major department stores Sankei: Accountant of firm that bought former Goodwill Group suspected of evading billions of yen in taxes Tokyo Shimbun: Asian DNA detected in connection with 1995 Hachioji supermarket murder-robbery incident Akahata: Rally held for minimum wage hike ahead of general election 2) EDITORIALS Asahi: (1) Business circles must decide to stop making corporate donations (2) North Korea must heed U.S.' signal Mainichi: (1) 2009 Lower House election: Political parties must vie with each other over secure system Yomiuri: (1) Lawmakers need insights to lead bureaucracy (2) Face up to threats, boost defense capability Nikkei: (1) DPJ's policy index ambiguous (2) Questions emerge on Obama administration's achievements Sankei: (1) DPJ manifesto: Party must opt for pragmatic policy course (2) ARF ministerial: North Korea has no friends Tokyo Shimbun: (1) Bill for JAL revival plan must not be passed on to general public (2) Burma's dangerous path to isolation Akahata: (1) U.S. joins TAC: Efforts toward peaceful community must be accelerated 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, July 23 NIKKEI (Page 2) (Full) July 24, 2009 10:09 Met Japan Electrical Manufacturers' Association Chairman Nishida at the Electrical Manufacturers Hall in Ichiban-cho. 10:26 Met Japanese Shipowners Association Chairman Miyahara in the Shipping Building in Hiraga-cho. TOKYO 00001673 003 OF 014 10:42 Handled paperwork at his private office in Nagata-cho. 11:02 Met National Federation of Fisheries Cooperative Associations Chairman Hattori in the Co-op Building in Uchikanda. 11:38 Met Japan Chamber of Commerce and Industry Chairman Okamura at the Imperial Hotel. 12:36 Met Public Affairs Office head Furuya at party headquarters. 13:53 Met Central Federation of Societies of Commerce and Industry of Japan Chairman Ishizawa in the New Shinbashi Building. 14:39 Met Marine & Fire Insurance Association of Japan Chairman Masatoshi Sato at the Marine & Fire Insurance Hall in Marunouchi. 15:01 Met Federation of Bankers Associations of Japan Chairman Nagayasu at the Bankers' Hall in Marunouchi. 15:25 Met Life Insurance Association of Japan Chairman Yoshio Sato in the Shin Kokusai Building in Marunouchi. 15:57 Met Japan Automobile Manufacturers Association Chairman Aoki and others at the Japan Automobile Hall in Shibadaimon. 16:58 Met Japan Trucking Association Chairman Nakanishi at the Shinjuku L Tower in Nishi-Shinjuku. 18:00 Met at the Kantei with junior high school students who attended an exchange program. 18:52 Met Deputy Chief Cabinet Secretary Uruma. 19:38 Returned to his official residence. 4) Coordination underway for Obama visit to Japan in mid-November NIKKEI (Page 1) (Full) July 24, 2009 The Japanese and U.S. government have begun making arrangements for U.S. President Barack Obama to make his first visit to Japan in mid-November. A Japan-U.S. summit to be held during his stay in Japan is expected to serve as a venue to reconfirm the maintenance and strengthening of the Japan-U.S. alliance based on the results of the Aug. 30 House of Representatives election. With next year marking the 50th anniversary of the conclusion of the revised U.S.-Japan Security Treaty, they are also expected to discuss a new document pertaining to bilateral security. The likelihood is that the President will stop over in Japan after attending the Asia-Pacific Economic Cooperation (APEC) meeting to be held on Nov. 14-15 in Singapore. Besides Japan, the President is expected to visit several countries in Asia, including China and Indonesia where he spent his childhood. After the Obama administration was launched in January, Tokyo and Washington has agreed to realize President Obama's visit to Japan within six months. The two governments have begun making concrete adjustments to their schedules after confirming the policy direction that the President will visit Japan even if there is a political power shift as a result of the Lower House election. 5) USFJ Commander Rice: "Difficult to revise US forces realignment agreement" NIKKEI (Page 2) (Full) July 24, 2009 U.S. Forces Japan (USFJ) Commander Lt. Gen. Rice on July 29 gave a speech at the Foreign Correspondents' Club of Japan. Referring to the realignment of U.S. forces in Japan, on which the governments of Japan and the U.S. reached an agreement in 2006, he said, "It is not a menu to be implemented by choosing bits and pieces. All the TOKYO 00001673 004 OF 014 relocation plans are interdependent. Even if one part fails, it could derail the entire road map." He presumably made that statement to check the Democratic Party of Japan's proposition to take a second look at the realignment scheme. The USFJ realignment agreement features the transfer of Futenma Air Station in Okinawa and the relocation of carrier-based jet fighters deployed at Iwakuni Air Base in Yamaguchi Prefecture. Lt. Gen. Rice said, "The realignment agreement consists of contents that we spent over three years negotiating (with the Japanese side). It is important for Tokyo and Washington to continue to support the road map and implement it to the letter." Japan has positioned state-of-the-art F-22 stealth fighters as the most likely candidate for its follow-on mainstay fighter planes (FX). USFJ Commander Rice stressed that there is no change in the U.S. policy of ending production of that aircraft, noting, "The overwhelmingly dominant view among the U.S. President, the defense secretary and military commanders is that there is no need to produce that aircraft any longer." 6) U.S. Ambassador-designate to Japan Roos testifies at Senate hearing: "Japan-U.S. relationship cornerstone of Asia"; underscores closeness to center of administration NIKKEI (Page 7) (Full) July 24, 2009 Hiroshi Maruya, Washington U.S. Ambassador-designate to Japan John Roos, who will be the Obama administration's key man in policy toward Japan, expressed his views in public for the first time on July 23. He emphasized that he will work to strengthen the Japan-U.S. relationship. Democratic Party heavyweights who have close relations with Japan, including former Vice President Walter Mondale, a former ambassador to Japan, were also present at the Senate hearing when Roos testified. This demonstrated that Roos, who lacks diplomatic experience, has the support of the entire Democratic Party and highlighted his closeness to the center of the Obama administration. At the hearing of the Senate Foreign Affairs Committee, Roos took note of the "special bond" between Japan and the U.S. and declared his intention to work for strengthening the alliance as the "cornerstone" of stability in Asia and the Pacific. He avoided going into details on U.S. Forces Japan realignment, North Korea, and other issues and steered himself safely throughout the hearing. Senators present at the hearing asked him questions relating to the possibility of a change of administration in Japan after the general election in August. Roos gave his analysis that there have been policy changes in the recent pronouncements of the Democratic Party of Japan, and noted, "We will need to watch its response from now on." He added that regardless of the election results, "I am confident that there will be no fundamental change in the U.S.-Japan alliance." He seems to be closely watching the Japanese political situation. Roos, who is a lawyer in California's Silicon Valley, will be taking up the ambassadorial post without any previous experience in diplomacy and public service. He was visibly nervous at the hearing. Therefore, the ruling Democratic Party played up his closeness to TOKYO 00001673 005 OF 014 the "heavyweights" rather than going into concrete policy issues in his first public statement. Roos, who contributed to political fundraising for President Barack Obama in last year's election, is a long-time Democratic Party supporter. Senate Foreign Affairs Committee Chairman John Kerry (Democrat) said: "I thank Mr Roos for his support and friendship during the 2004 presidential election campaign (when Kerry had run as a candidate)" adding, "I am close to the Roos family outside of politics," stressing their close relationship. 7) Roos: There will be no change to U.S.-Japan relations even if DPJ administration launched YOMIURI (Page 2) (Full) July 24, 2009 John Roos, 54, who has been nominated as new U.S. Ambassador to Japan by President Barack Obama, attended a Senate confirmation hearing on the morning of July 23, late at night on July 23, Japan time. Before the Senate Foreign Affairs Committee, Roos said, "The U.S.-Japan alliance has been a cornerstone of peace and stability in the Asia-Pacific region." Further, asked about the possibility of Japan's U.S. policy shifting in the event a change of government occurs in Japan after the forthcoming House of Representatives election, Roos emphatically said: "There will be no fundamental change to U.S.-Japan relations. I believe the Democratic Party of Japan will firmly maintain the bilateral alliance." 8) Gist of U.S. Ambassador-designate to Japan John Roos' testimony at the Senate hearing: Close relationship to continue under any administration NIKKEI (Page 7) (Full) July 24, 2009 Washington Bureau Following is the gist of the testimony given by U.S. Ambassador-designate to Japan John Roos at the U.S. Senate Committee on Foreign Relations on July 23: Opening statement I am deeply honored by the nomination by President Barack Obama to become the ambassador of a wonderful country like Japan. As former Ambassadors Mondale and Foley have mentioned, there is a special bond between Japan and the United States. I believe that my background (as a lawyer in Silicon Valley) will be useful for Japan. We will continue to cooperate with the Republic of Korea, Australia, and other (neighboring countries) regarding the situation on the Korean peninsula. We will promote democratic values, human rights, and other common values (with Japan). The Japan-U.S. alliance is the cornerstone of stability in Asia and the Pacific. I will work hard to consolidate this alliance. We would like to work with Japan on Iraq, Afghanistan, climate change, and other major international issues. Economic issues TOKYO 00001673 006 OF 014 Japan and the United States are the world's two major economies which play a leading role in economic recovery. The two countries play a significant role and will have a synergic effect. It is important to promote free and fair trade. House of Representatives election No one knows what the outcome of the Lower House election in Japan will be, and I will not make predictions on the results. We will have to watch developments from now on. Close relations between Japan and the U.S. will continue no matter what government is in power. Democratic Party of Japan (DPJ) Both the Liberal Democratic Party (LDP) and the DPJ have close relations with the U.S. There have been various pronouncements about the cost of stationing U.S. forces in Japan and the refueling mission, but the DPJ's policies will probably change. I believe that the DPJ will be equally committed to strengthening the bilateral relationship like the LDP. 9) Poll: DPJ keeps pole position, scoring 42 PERCENT for proportional representation YOMIURI (Page 1) (Abridged) July 24, 2009 Ahead of the forthcoming general election for the House of Representatives, the Yomiuri Shimbun conducted a telephone-based nationwide public opinion survey on July 21-23. In the survey, respondents were asked which political party they would vote for in their proportional representation blocs. In this public preference of political parties for proportional representation, the Democratic Party of Japan (Minshuto) outdistanced the Liberal Democratic Party, with the DPJ scoring 42 PERCENT and the LDP at 23 PERCENT . In single-seat constituencies as well, the DPJ outnumbered the LDP, respectively at 39 PERCENT and 25 PERCENT . In the last survey taken July 7-9, the DPJ was at 41 PERCENT and the LDP at 24 PERCENT for proportional representation, and respectively at 41 PERCENT and 23 PERCENT for single-seat constituencies. As seen from the figures, the trend remains unchanged and the DPJ has been ahead of the LDP since the House of Representatives was dissolved. Respondents were also asked to choose whether Prime Minister Aso or DPJ President Hatoyama is more appropriate to become prime minister after the next election. In this popularity ranking for the premiership, Hatoyama dropped to 40 PERCENT (46 PERCENT in the last survey),with Aso at 22 PERCENT (21 PERCENT in the last survey). The Aso cabinet's support rate was 20.0 PERCENT (20.2 PERCENT in the last survey),and its nonsupport rate was 67.8 PERCENT (69.3 PERCENT in the last survey). In the breakdown of public support for political parties, the DPJ stood at 31.0 PERCENT (28.7 PERCENT in the last survey),with the LDP at 25.3 PERCENT (23.8 PERCENT in the last survey). The DPJ outpaced the LDP in the survey this time as well. 10) Poll: Floating voters favor DPJ YOMIURI (Page 2) (Abridged) TOKYO 00001673 007 OF 014 July 24, 2009 Findings from the Yomiuri Shimbun's pre-election poll this time clearly show that the Democratic Party of Japan (Minshuto) is in a singular position and that the Liberal Democratic Party is facing an uphill battle. Floating voters account for about 30 PERCENT of the nation's voting population and they hold the key to the election's outcome. In their preference of political parties as well, the DPJ has a big lead over the LDP. Among those floating voters with no particular party affiliation, the DPJ was at 32 PERCENT and the LDP at 10 PERCENT for proportional representation, and respectively at 24 PERCENT and 10 PERCENT for single-seat constituencies. In the last survey as well, the DPJ was above the LDP, with the DPJ scoring 32 PERCENT and the LDP at 15 PERCENT for proportional representation and the DPJ marking 31 PERCENT and the LDP at 11 PERCENT for single-seat constituencies. In the survey this time, the DPJ leveled off over 30 PERCENT for proportional representation. Meanwhile, the LDP declined. As a result, the gap has expanded. In their preference for single-seat constituencies, both the DPJ and the LDP decreased, but their gap still remains wide. However, there is also a matter of concern to the DPJ. Among the floating voters, 76 PERCENT answered "no" when asked if they thought DPJ President Hatoyama had fulfilled his accountability for his fund-managing body's false political fund reports. In the last survey as well, negative answers accounted for 77 PERCENT among them. Hatoyama has not cleared away their doubts at all. In popularity ranking for prime minister among the floating voters, Hatoyama outnumbered Prime Minister Aso, scoring 31 PERCENT . However, the figure is markedly down from 41 PERCENT in the last survey. 11) DPJ retreats from SOFA revision plan MAINICHI (Top play) (Abridged) July 24, 2009 The Democratic Party of Japan (Minshuto) yesterday released its policy index for 2009, which will be incorporated into its manifesto (campaign pledges) for the upcoming general election for the House of Representatives. The DPJ until now has insisted on its plan to revise the Japan-U.S. Status of Forces Agreement (SOFA) to create "an more equal alliance between Japan and the United States." The released platform, however, backs down from that stance, going no further than to say the DPJ will "bring up the issue of revising SOFA provisions." In its earlier platform released last October, the DPJ had announced its plan to "set about drastic revisions." The DPJ platform, setting forth its foreign and defense policies, says Japan will "establish a bilateral alliance with the United States for the new era." In this regard, the platform declares that Japan will "build diplomatic strategies on its own and clarify its standpoint" and will "hold straightforward talks and build an equal partnership." In addition, it says Japan will "bring up the issue of revising the SOFA pact" and "continue to review such issues as the realignment of U.S. forces in Japan and the presence of U.S. military bases in Japan." In April 2008, the DPJ worked out a draft revision of the SOFA with the Social Democratic Party and the People's New Party in the wake TOKYO 00001673 008 OF 014 of frequent incidents involving U.S. servicemen in Okinawa. At the time, the DPJ urged the government to translate it into action. In July that year, the DPJ released its Okinawa vision, which also specified its intention to "immediately translate drastic SOFA revisions into action." "There are various issues like SOFA, but we will not put them all on the table," DPJ Secretary General Katsuya Okada told reporters yesterday in the city of Ota, Gumma Prefecture when asked about Japan-U.S. relations. "First of all," Okada added, "we will establish a relationship of mutual trust between Prime Minister (Yukio) Hatoyama and President Obama." With this, Okada indicated that the DPJ, after taking the reins of government, would not jump-start negotiations on specific issues like the SOFA and would instead go ahead with building a relationship between the two leaders. 12) DPJ deletes "withdrawal from Indian Ocean" from policy index, shifts to pragmatic line ASAHI (Top play) (Slightly abridged) Eve., July 23, 2009 The Democratic Party of Japan (DPJ) published on July 23 its 2009 policy index, which will serve as the basis of its manifesto (campaign pledges) for the House of Representatives election. In the key area of foreign policy and defense, the withdrawal of the Maritime Self-Defense Force (MSDF) from the refueling mission in the Indian Ocean, a proposal present in the original draft of the policy index in June, has been deleted, and the MSDF's deployment until the expiration of the law is now accepted. The wording on the review of the Japan-U.S. Status of Forces Agreement (SOFA) has also been softened, and this will also be reflected in the manifesto. The DPJ has shifted to a pragmatic line in anticipation of a change of administration. The DPJ had been opposed to the SDF's overseas missions and to the refueling mission in the Indian Ocean. On the other hand, it had included in its previous policy index the legislation of a "law on eradication of terrorism," which called for humanitarian and reconstruction assistance operations in Afghanistan, including the dispatch of the SDF, because former President Ichiro Ozawa was positive about participation in the International Security Assistance Force (ISAF) in Afghanistan. However, the new policy index limits Japan's role to "playing a positive role in the eradication of poverty and in the reconstruction of the country," leaving out the passage on "Afghan aid." The "termination of the MSDF refueling mission" has also been deleted from the draft. This means that the MSDF deployment will be allowed until the expiration of the law even after the DPJ takes over the administration. The question now is what will happen after the special measures law serving as the legal basis of the mission expires in January 2010. On policy toward North Korea, a new item on the "implementation of cargo inspection based on the UN Security Council (UNSC) resolution," absent in the original draft, has been added. The DPJ had refused to deliberate the special measures law for cargo inspection in the previous Diet session. In reaction to criticism TOKYO 00001673 009 OF 014 from Prime Minister Taro Aso and others that it caused the bill to be scrapped, the DPJ has indicated its intention to legislate this law after the Lower House election. While the original draft called for "working for a drastic revision" of SOFA, the new policy index has softened the language to "suggesting the revision." By using moderate expressions, the DPJ is giving importance to confidence building with the Obama administration for the time being after taking over political power. On the Northern Territories issue, the word "collective" has been deleted from the previous "collective return at an early date," signaling a shift to a flexible stance. The DPJ is falling in step with the government's position that as long as sovereignty over the four islands is recognized, return in stages is acceptable. This policy index will serve as the DPJ's basic policies after taking over the administration. The original draft had been based on Ozawa's propositions on an equal Japan-U.S. alliance and UN-centered policy, containing passages that might give rise to friction between Japan and the U.S. However, the DPJ has clearly shifted to a pragmatic line as the change of administration is becoming a real possibility. 13) DPJ eyes two bases in Kyushu as relocation sites for Futenma Air Station: Feasibility doubtful, complications expected SANKEI (Page 3) (Slightly abridged) July 24, 2009 It was learned on July 23 that in connection with the relocation of the U.S. forces' Futenma Air Station (in Ginowan City, Okinawa) under the U.S. Forces Japan (USFJ) realignment program, the Democratic Party of Japan (DPJ) is considering the Air Self-Defense Force (ASDF) base in Nyutabaru, Miyazaki Prefecture and the ASDF Tsuiki base in Fukuoka Prefecture as possible sites for the relocation of Futenma outside Okinawa. These two bases currently play the role of supporting the Futenma base for the USFJ in an emergency. While the DPJ is thinking of discussing alternative plans for Futenma relocation, including relocation to Guam or other locations abroad, with the U.S. government if it takes over the administration, it is unclear whether the U.S. side will agree to this since it is negative about reviewing the existing plans. According to an informed source, DPJ President Yukio Hatoyama suggested the ASDF bases in Nyutabaru and Tsuiki as possible relocation sites to his aides. At a meeting in Okinawa on July 19, Hatoyama had said that, "At least, we will take positive action toward relocation outside Okinawa." Under the Japan-U.S. agreement on USFJ realignment in 2006, the Nyutabaru and Tsuiki bases will take in troops that cannot be accommodated on the new facility replacing the Futenma base in a "state of armed attack" or in an "emergency in an area around Japan," and the construction of runways and barracks has been taking place on these bases. However, they are thought to be too small in size for the relocation of the U.S. marines' helicopter units, which are the mainstay on the Futenma base. Even DPJ members doubt the feasibility of realizing this plan. TOKYO 00001673 010 OF 014 The DPJ published its "Policy Index 2009" - which will be the basis of its manifesto (campaign pledges) for the House of Representatives election - on July 23, but there was no mention of the Futenma relocation issue. The party has been criticized by the government and ruling parties for its "deviousness" in "talking about relocation outside Okinawa but not saying where" (Foreign Minister Hirofumi Nakasone). It will be interesting to see what specific plans the DPJ will include in its manifesto to be published shortly. 14) DPJ's pragmatic policy line on foreign and security affairs is double-edged sword TOKYO SHIMBUN (Page 2) (Full) July 24, 2009 The Democratic Party of Japan (DPJ) on July 23 released a set of policy proposals, which featured a pragmatic policy line regarding foreign and security affairs with an eye on the party assuming the reins of government. The set of basic policy proposals is characterized by approval of the dispatch of Self-Defense Forces (SDF) personnel for anti-terrorism and anti-piracy missions. This is the outcome of the party having given consideration to international cooperation and relations with the U.S., in particular, in the event it will become the ruling party. However, the Social Democratic Party (SDP),with which the DPJ is pursying coalition talks after the Lower House election, is fiercely opposing the party's policy switches. The DPJ's move toward a pragmatic policy line could end up being a double-edged sword. The DPJ had been moving ahead with internal coordinaiton of views aimed at supporting the ship inspection special measures bill, which was scrapped due to Lower House dissolution. Concerning the refueling operations by the SDF in the Indian Ocean, as well, President Hatoyama indicated he would determine whether to approve the continuation of the operations by the middle of January next year, when the operation period is set to end. He noted, "We will determine our stance after steadily conferring on the matter with concerned countries." On the anti-piracy measures, too, the DPJ during Diet deliberations on the anti-piracy bill, which was enacted in June, took the stance that it would approve the dispatch of SDF personnel, provided that two conditions - (1) the Japan Coast Guard should be characterized as the key player in anti-piracy activities; and (2) Diet involvement in the decision to dispatch SDF personnel - were met. The DPJ has now formally indicated the adoption of those policy stances in the set of basic policy stances. However, the SDP, on which the DPJ pins hopes as a coalition partner, was quick to oppose the DPJ's switch to a pragmatic policy line, with party head Mizuho Fukushima quipping, "SDF troops should never be dispatched abroad." Even if the DPJ secures a single majority in the Lower House election, the party's members fall short of a majority on their own in the Upper House. The party inevitably will have to seek cooperation from the SDP. Then president Ichiro Ozawa after the Upper House election in 2007 categorically said of the refueling operations by the Maritime Self-Defense Force (MSDF): "Those operations are not based on a UN resolution. They are unconstitutional." Even if the DPJ explains TOKYO 00001673 011 OF 014 that position of the then president, who is now deputy president, is not the position of the party, it is not convincing. Concerning the continuation of the refueling operations, the DPJ has yet to fully unify internal views. 15) Aso criticizes DPJ's policy switch MAINICHI (Page 5) (Full) July 24, 2009 Prime Minister Taro Aso yesterday criticized the fact that the Democratic Party of Japan (DPJ) had condoned the deployment of the Maritime Self-Defense Force for anti-piracy missions in its policy index for 2009. He told reporters at the Prime Minister's Official Residence: "Despite opposing it strongly, they changed the policy immediately before the election. I can't understand it." Aso, who has been criticized for making policy flip-flops, made an ironical comment on the DPJ, saying: "(The DPJ) becomes realistic when the election approaches. I want to say that such should be called 'fuzziness.'" At a press conference yesterday, New Komeito Secretary General Kazuo Kitagawa, too, criticized the DPJ's decision to allow the MSDF to continue its refueling mission in the Indian Ocean for the time being. He stated: "When they say they have switched to a pragmatic policy means they had taken unrealistic stances in the Diet." 16) SDP eyes legislating the three non-nuclear principles YOMIURI (Page 2) (Full) July 24, 2009 Social Democratic Party (SDP) executives decided yesterday to aim at turning into law the three non-nuclear principles of not possessing, producing or permitting the introduction of nuclear weapons into Japan. In talks with the Democratic Party of Japan (DPJ),the party is considering presenting this as a condition for forming a coalition government after the ruling and opposition blocs traded their places through the forthcoming House of Representatives election. The SDP will make the proposal to the DPJ and the People's New Party shortly. 17) Sharp contrast in election strategies of Aso and Hatoyama NIKKEI (Page 2) (Excerpts) July 24, 2009 At the initial stage of the campaigning for the House of Representatives election on Aug. 30, Prime Minister Taro Aso (president of the Liberal Democratic Party) and Democratic Party of Japan (DPJ) President Yukio Hatoyama are making contrasting moves. Aso, who is battling a headwind due to his low popularity, aims to garner votes from organizations, by visiting mainly business groups to explain his economic stimulus measures. Meanwhile, Hatoyama, who view the expansion of support of unaffiliated voters as the key to a change in government, is making efforts to dig up floating votes by giving stump speeches. Hatoyama gives priority to stump speeches focused on unaffiliated voters Hatoyama and DPJ Secretary General Katsuya Okada started their TOKYO 00001673 012 OF 014 campaign trail of speeches for the general election on July 23 soon after the dissolution of the Lower House. They aim to score with swing voters, who brought a victory to the party in the Tokyo Metropolitan election, by directly promoting the party's polices to voters through their stump speeches. In the city of Iruma, Saitama Prefecture, Hatoyama, after closing his umbrella, said in the pouring rain: "The general election will become Japan's first election with the historical mission to bring about politics for the sake of people." He also said to an audience of 600: "The LDP-New Komeito coalition government has not listened to the voice of the public, and has left politics to the bureaucrats." Prior to his speech in Iruma City, Hatoyama delivered a speech in Tokorozawa City, Saitama Prefecture, in which there was an audience of about 1,500. Okada gave two stump speeches in Ota City, Gunma Prefecture, and another location. On July 24, Hatoyama will stump in Hyogo and Osaka Prefectures, and Okada, in Saitama Prefecture. Meanwhile, Deputy President Ichiro Ozawa, who is responsible for election strategy, will remain in the background as Hatoyama and Okada lead the DPJ into the Lower House election. Aso places priority on visiting organizations to secure votes Aso met with senior officials of 12 business groups, including the Japan Automobile Manufacturers Association, Inc., on July 22 and 23, to ask them for support. Today he will visit five organizations, including the Association of General Constructors of Japan, Inc. Aso told National Federation of Fisheries Co-operative Associations Chairman Ikuhiro Hattori: "I want to strengthen relations so that the LDP will be able to continue to hold the reins of government. Every single vote from your members will help the LDP." Hattori, who has benefited from the government's measures against the issue of surging crude oil prices, promised to support the LDP, and he immediately ordered local organizations to support the campaigns of LDP candidates. Aso emphasized his administration's achievements during his meetings with officials of industrial associations. He told them that he had made efforts to revitalize businesses through such measures as eco-car tax reductions. He stressed: "The economy has just begun showing signs of picking up steam. We need to continue these policies." It is unusual for a prime minister to visit industrial associations immediately before an election. Aso is the one who came up with this idea. Aso reportedly said to his aides: "A challenge is an opportunity. I want to take advantage of this opportunity to strengthen the LDP's base." However, amid the reports focusing on the strength of the DPJ, many industrial organizations cannot see any merit in supporting the LDP. 18) Nippon Keidanren in quandary over whether it should support LDP, which has fallen into crisis, or DPJ, which seeks to end corporate donations TOKYO 00001673 013 OF 014 MAINICHI (Page 4) (Slightly abridged) July 24, 2009 The Japan Business Federation (JBF, Nippon Keidanren) is facing a critical decision with the upcoming Lower House election. For the business world that has been seeking conservative two-party system, it should be happy to see the Liberal Democratic Party (LDP) and the Democratic Party of Japan (DPJ) facing off in the election. However, the Japan Business Federation is now in a quandary because it remains unable to clarify which party it should support and also unable to decide on what approach it should take toward the LDP. The business group has persistently backed the LDP since 1955 when the party structure had the LDP in permanent political power and the Social Democratic Party was the perennial main opposition party. Big business executives' bewilderment could be detected at the Federation's annual summer forum in Karuizawa (Nagano Prefecture) that started yesterday. In another summer seminar held by the Japan Association of Corporate Executives (Keizai Doyukai) in Karuizawa on July 16, a business leader grumbled: "Even if the LDP loses political power, we probably will have to continue donations to the party." JBF resumed in 2004 lending its good offices in offering donations to political parties. Based on its policy evaluations, the group decided which parties would receive donations and how much. In the initial year, the group provided the LDP with 2.21 billion yen and the DPJ with 60 million yen. This difference became wider year by year. A senior JBF member said: "Since the level of policy attainment is taken into consideration, our evaluation of the DPJ tends to be severe," but it is true that then JBF chairman Hiroshi Okuda continued to cooperate in having the LDP remain in power, declaring his "support for the LDP." In the upcoming Lower House election campaign, however, the LDP is fighting an uphill battle. A JBF executive said that the group will make a judgment based each party's campaign promises (manifesto), but it intends not to announce the outcome of its evaluation before the election. Some business leaders have already begun to take into consideration a switch in power to the DPJ. A business leader said that how to establish ties with candidates for portfolios and influential lawmakers (in the DPJ) has been discussed at dinner tables. In the summer forum of the JBF, Chairman Fujio Mitarai only repeated this remark to reporters: "We will make evaluations based on each party's policies." Although the political situation was tense over the propriety of the controversial postal privatization bill in 2005, then prime minister Junichiro Koizumi attended the summer forum of the business organization that year, showing his closeness with then chairman Okuda. Okuda later became a private-sector member of the Council on Economic and Fiscal Policy, and progress was made on reform measures the business community was calling for, such as constraint on social-security spending. The group's support of the LDP as a result was rewarded. Mitarai also tried to establish a close relationship with the LDP, as his predecessor did with Koizumi, accompanying then prime minister Shinzo Abe on overseas trips. But Abe stepped down during his term of office, and during the three years after Mitarai assumed the chairmanship, he saw four premiers in office. The distance TOKYO 00001673 014 OF 014 between JBF and the government led by the LDP has become wider. The current situation is quite different from that of four years ago, as shown by the departure of Mitarai from the Council on Economic and Fiscal Policy. Meanwhile, the DPJ has proposed abolishing the economic policy panel and banning corporate donations. The strategy the business group adopted to maintain its influence over the LDP government will no longer work if the DPJ grabs political power. A JBF executive vented: "The DPJ is taking a stance of catering to public wishes, so the party has come up with few pragmatic measures." Even so, if a change of government actually takes place, "Our relations with the LDP will be the heaviest burden on us," said Petroleum Association of Japan Chairman Akihiko Tenbo. This view is gaining influence in the business community. Asked for his view about a DPJ government on July 21, when the Lower House was dissolved, Mitarai said: "I want you to wait for another 40 days (until the election on Aug. 30). Will the Federation be able to make its position clear about the development of a two-party system? The business world is being put to the test. 19) Trade surplus up: Future of exports uncertain ASAHI (Page 13) (Excerpts) July 13, 2009 Trade surplus is expanding. According to trade statistics (customs clearance-based preliminary figures),which the Finance Ministry released on July 23, trade surplus in June came to 508 billion yen, marking the first increase in 20 months over the preceding year. However, the major reason for the increase is a decline in the value of imports due to a continued fall in import prices of resources. There are many disturbing factors about the future of exports. A mild uptrend for exports is beginning to settle mainly in exports of steel, electronic parts, raw materials for plastic products and auto parts. Expanding trade surplus will lead up to boosting economic growth. A growing view among economists is that real GDP for the April - June quarter is bound to mark a positive figure for the first time in five quarters. However, few industrial circles are rejoicing unreservedly. China-bound exports are the main driving force for the recovery of exports. Exports to the U.S. and European countries have only recovered to 60 PERCENT of the pre-financial crisis level. Main items of exports to China are products for the building of infrastructure, in which massive amounts of money have been invested, and those included in the government's economic stimulus measures, such as home electronic appliances and automobiles. Exports to European countries and the U.S., which have been contributed to China's growth, are continuing to be sluggish. Senior research Kawaguchi at the Sojitsu Research Institute pointed out: "Demand is beginning to grow, following stimulus measures taken by various countries. However, this has not yet led to capital investment by the private sector. There is even a chance of the effects of stimulus measures coming to an end." ZUMWALT