JAPANESE MORNING PRESS HIGHLIGHTS 07/24/09

UNCLAS SECTION 01 OF 14 TOKYO 001673

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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)

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:

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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.

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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

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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

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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


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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)

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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

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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

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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.

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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

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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

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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

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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

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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