JAPANESE MORNING PRESS HIGHLIGHTS 07/31/09

UNCLAS SECTION 01 OF 13 TOKYO 001745

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07/31/09

Index:
1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Defense and security affairs:
4) Tohoku University let Iranian exchange student carry out
sensitive nuclear research (Yomiuri)
5) University lax on security in nuclear program without strong
instructions from the central government (Yomiuri)
6) Liberal Democratic Party (LDP) uses cautious wording to refer in
manifesto to review of use of collective self-defense (Asahi)
7) Democratic Party of Japan (DPJ) wavering on extending MSDF
refueling mission in Indian Ocean, reflecting party discord and
choice of favoring U.S. or coalition (Asahi)
8) U.S. sailor gets life sentence for slaying of cabbie in Yokohama
(Asahi)
9) Six of 12 U.S. military deserters from Yokosuka and other U.S.
bases still missing since last year but locals never informed
(Tokyo Shimbun)
10) Prime Minister Aso brought up nuclear issue in Japan during ROK
summit (Asahi)

Free trade agreements (FTA):
11) Japan getting ready to join the East Asia FTA now being
negotiated (Nikkei)
12) DPJ President Hatoyama says FTA proposed with U.S. would except
rice (Nikkei)

Election campaign:
13) Nikkei Internet-based poll shows 20 PERCENT of undecided voters
have shifted in three weeks to supporting DPJ in the proportional
races (Nikkei)
14) Prime Minister Aso is now on the stumping circuit (Yomiuri)
15) Three DPJ leaders not all on the same script when they discuss
contents of the party's campaign manifesto (Sankei)
16) Three opposition parties issue joint policy statement for the
election campaign, but omit reference to foreign and security issues
(Tokyo Shimbun)
17) DPJ Secretary General Okada evaluates LDP's previous manifesto,
claims only 20 PERCENT implementation rate (Yomiuri)
18) New Komeito is backing 92 LDP candidates in the upcoming Lower
House election (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi:
Tokyo University study: Annual income of parents impacts probability
of receiving higher education

Mainichi:
Supplementary budget funding source for child allowance, abolition
of temporary tax rates in DPJ manifesto

Yomiuri:
Iranian from research institute suspected of developing nuclear arms
studied nuclear engineering at Tohoku University

Nikkei:
Aeon and Seven & i to procure materials for private brand products

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directly

Sankei:
Broadcasting ethics body issues first guidance to Nippon TV on false
reporting

Tokyo Shimbun:
Broadcasting ethics body slaps guidance on Nippon TV for false
reporting

Akahata:
Major point of contention emerges for general election: Policy
funding not relying on consumption tax or policy funding assuming
consumption tax hike as only option?

2) EDITORIALS

Asahi:
(1) Social security and cost: Clarify thinking on size of national
budget
(2) 18 years old as legal age: Make efforts to overcome obstacles
for implementation

Mainichi:
(1) 2009 Lower House election: DPJ should add policy on refueling
mission to manifesto
(2) 18 years old as legal age: Work for a consensus patiently

Yomiuri:
(1) Foreign and security policy: DPJ should present alternative
proposal for refueling mission
(2) Rejection of Teachers' Union assembly: Hotel ignoring court
order deserves to lose the case

Nikkei:
(1) Microsoft-Yahoo tie-up calls into question Japan's Internet
posture
(2) Step up review of nursing care insurance

Sankei:
(1) Declaration on withdrawal of refueling mission: Opposition
united front over national interest?
(2) 18 years old as legal age: Make efforts to form national
consensus

Tokyo Shimbun:
(1) 18 years old as legal age: Thoroughgoing discussion on each
issue
(2) Local election in Kurdistan: Make efforts at reconciliation to
avoid division

Akahata:
(1) Sharp drop in rice prices: Government should initiate emergency
procurement

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 30

NIKKEI (Page 2) (Full)
July 31, 2009


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07:35 Took a walk around the official residence.
10:38 Met at Kantei UNESCO Director-General Matsuura and Japanese
Ambassador to UNESCO Yamamoto, followed by Economic and Fiscal
Policy Minister Hayashi.
11:08 Attended a young people employment project team meeting.
Afterward met Hayashi.
11:47 Met LDP reform proportion headquarters chief Chuma.
13:05 Visited RKC Instrument Inc. in Kugahara accompanied by former
Lower House member Hirotaka Ishihara.
14:38 Visited the Musashi-koyama shopping district in Koayma,
accompanied by former Lower House members Ishihara and Junichiro
Yasui.
15:59 Met at LDP headquarters Secretary General Hosoda, Policy
Research Council Senior Deputy Chairman Sonoda, manifesto project
team leader Suga, and others.
18:31 Attended an LDP legal team regular meeting.
18:50 Returned to Kantei.
19:30 Returned to his official residential quarters.

4) Tohoku University received Iranian student from institute
suspected of nuclear development who studied nuclear fuel
reprocessing in 2002-06

YOMIURI (Top play) (Full)
July 31, 2009

It was learned on July 30 that the nuclear engineering laboratory of
Tohoku University had trained a student from an Iranian research
institute on the list of the Ministry of Economy, Trade, and
Industry (METI) of entities possibly involved with the development
of nuclear arms in the reprocessing of spent nuclear fuel. Amid
growing concerns in the international community regarding nuclear
proliferation, the flaws in Japanese laws regarding the prevention
of the transfer of advanced technology and the laxity of the
university's checks are likely to become an issue.

METI initiated a "foreign users' list" under the Foreign Exchange
and Foreign Trade Law in 2002, and there are some 250 organizations
on the list, including those in Iran and North Korea, which are
suspected of developing nuclear weapons. When accepting students
from research institutes on the list, Japanese institutions are
required to "ascertain" if there are any links to the development of
weapons of mass destruction (WMDs).

The Iranian student came to Japan in September 2002 and enrolled in
the Quantum Science and Energy Department of Tohoku University's
Graduate School in October. In March 2004, the Jaber Ibn Hayan
Research Laboratories, to which the student belonged prior to coming
to Japan, was added to METI's list.

This student studied the technology to recover useful metals, such
as silver, from nuclear waste solution generated when spent nuclear
fuel is reprocessed. While this was not directly connected to the
extraction of plutonium, such knowledge could play an important role
in developing a reprocessing system aimed at manufacturing nuclear
bombs.

However, the Foreign Exchange Law is aimed at ensuring free trade
and transfer of technology and has a provision on equal treatment of
foreign nationals and Japanese beyond six months after coming to
Japan. Therefore, this student was not legally subject to
"ascertainment" when his mother institution was put on the METI

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list. He continued his research and returned to Iran after obtaining
his doctoral degree in September 2006.

METI says that: "Since the purpose of the law is to prevent the
transfer of technology, the university should have re-examined the
propriety of giving this student training after the list was
released in 2004. We would like to talk to the Tohoku University
about this."

The United States has imposed restrictions on issuing visas to
students from countries suspected of developing WMDs since 1998.
Waseda University Professor Takehiko Yamamoto, who specializes in
national security, says: "In the U.S. it is unthinkable that
students from research institutes included in a watch list could
enter the country. Japan also needs a legal system to restrict entry
of such students."

On the other hand, Professor Akira Hasegawa of Tohoku University's
Quantum Energy Department explains: "We found no problem since the
subject the student researched did not require the use of nuclear
materials."

5) Iranian who studied nuclear technology: Tohoku University says:
"No strict order from government," showing lack of sense of
vigilance

YOMIURI (Page 36) (Slightly abridged)
July 31, 2009

In connection with Tohoku University Graduate School's Quantum
Science and Engineering Department giving research training to a
student from an Iranian institution said to be involved with the
development of nuclear arms, a university official pointed to the
government's responsibility: "There was no strict order from the
government, so there was no need to deal actively with the matter."
Iran is suspected of enriching uranium and developing nuclear
weapons. There are also concerns about the proliferation of nuclear
technology to North Korea. Yet, universities and research institutes
lack a sense of vigilance.

According to documents submitted to Tohoku University, the student
completed graduate study in petroleum chemistry at the Sharif
University of Technology in 1994. After working at three companies,
including a chemical plant firm, the Iranian worked at the Jaber Ibn
Hayan Research Laboratories from 1998. He entered Tohoku University
in October 2002, a year after the September. 11 terrorist attacks on
the United States. Shortly before the student's entry, Iranian
anti-establishment activists revealed that Iran had secretly been
building large scale nuclear facilities. However, no ONE raised any
issue at the meeting of academic advisers in the Quantum Science and
Engineering Department, which makes decisions on the admission of
graduate students, according to sources.

Although the Jaber Ibn Hayan Research Laboratories went on the list
of the Ministry of Economy, Trade, and Industry (METI) of
organizations suspected of involvement in nuclear arms development
in 2004, the Iranian student continued to do research relating to
the reprocessing of spent nuclear fuel. The professor specializing
in nuclear chemical engineering who instructed this student in his
research was at a loss. He said: "I believe that the technology of
treating nuclear waste solution which I taught him is not linked to
the development of nuclear arms. I only learned about the watch list

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recently."

Current head of the department Professor Akira Hasegawa said: "It
would have been a different story if there had been direct orders
from the Ministry of Education. There was none at that time. When
METI published the list, we took very little notice of it."

Yomiuri Shimbun asked to interview the professor of thermal
engineering who mediated for the Iranian student to study in Japan
(retired in 2003, currently professor emeritus) several times and
has also sent him written questions, but the daily has not received
a response as of July 30.

6) LDP to use toned-down expression in policy platform on
reinterpretation of Constitution on collective self-defense

ASAHI (Page 4) (Full)
July 31, 2009

Prime Minister Taro Aso discussed the final draft of the Liberal
Democratic Party's policy platform, which is to be officially
announced today, with Secretary General Hiroyuki Hosoda, Election
Strategy Council Vice Chairman Yoshihide Suga, and other party
executives yesterday. They decided to tone down the wording in the
final draft expressing the party's willingness to undertake a review
of the government's interpretation of the Constitution to enable the
Self-Defense Force's exercise of the right to collective
self-defense. This decision reflects growing calls for caution about
the review within the party.

The final draft noted: "The government will reconstruct the laws
related to security policy that should be amended, including a
review of the government's interpretation of the right to collective
self-defense in order to protect Japan from North Korea's missile
and nuclear threats." With respect to collective self-defense, the
draft specified: "The government will make adjustments so that the
use of the right will be compatible with the Constitution." The
review of the provision for collective self-defense is Aso's stock
argument, but a number of lawmakers mainly in the New Komeito have
raised objections. Under this situation, there was concern about the
schism in the ruling camp deepening ahead of the Aug. 30 general
election.

7) DPJ wavering over extension of refueling operation

ASAHI (Page 3) (Abridged)
July 31, 2009

Nao Fujita

The major opposition Democratic Party of Japan (DPJ) is agonizing
over the question of whether or not to allow the Maritime
Self-Defense Force (MSDF) to continue its refueling operation in the
Indian Ocean in the event the party takes over the reins of
government. The party has thus far opposed the operation as an
opposition party. But should the party, once it takes the helm of
government, give priority to relations with the United States? The
party has yet to finalize its position, and party executives'
opinions have been wavering.

Japan has been continuing its refueling mission as a symbol of its
cooperation with the U.S. in the war on terror that started after

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the 9/11 terrorist attacks on the United States. DPJ President Yukio
Hatoyama denied yesterday the option of immediately ending the
mission, citing the importance of diplomatic continuity. At the same
time, Hatoyama said that his party will not basically extend the
operation beyond the expiration next January of the law authorizing
the operation.

But "discontinuation of the operation" did not make the draft of the
DPJ's policy index or its manifesto (campaign pledges) for the
upcoming House of Representatives election. DPJ Secretary General
Katsuya Okada, meeting the press yesterday, simply said, "We have
yet to make a decision."

The party is not monolithic because there are gaps in views among
DPJ executives about the question of whether to give priority to the
DPJ's relationship with the Social Democratic Party (SDP) or to
relations with the United States for the sake of the stability of a
DPJ administration. The DPJ knows that it will not be able to
earnestly address such issues as a drastic review of the realignment
of U.S. forces until after it wins a working majority through the
Upper House election next summer that will allow the party to keep a
distance from the SDP.

Hatoyama, who has a good chance to become the next prime minister,
attaches importance to the stability of the foundation of a DPJ
administration. Hatoyama told SDP head Mizuho Fukushima on the phone
yesterday that his party will not extend the refueling operation.
Throughout his tenure as DPJ secretary general since 2007 when the
opposition camp won control of the Upper House, Hatoyama
persistently opposed the refueling operation. For this reason,
Hatoyama is working very hard so that he will not be criticized by
the ruling camp as having changed his stance.

Meanwhile, Okada gives consideration to his party's relationship
with the United States. Okada met visiting Assistant Secretary of
State Kurt Campbell on July 17 in which he told Campbell a plan to
build a relationship of trust between President Obama and "prime
minister" Hatoyama first. Policy Research Committee Chair Masayuki
Naoshima, too, moved in the direction of not specifying
"non-extension" in the policy index.

The difference in views can be taken as role-sharing with the aim of
avoiding confrontations in other areas.

But all sides agree on ONE point: the government has not fulfilled
its accountability regarding the refueling mission. But that means
the continuation of the mission could be an option for the DPJ once
a DPJ administration fulfills its accountability on the matter. The
confrontation may flare up again between conservative members,
including Seiji Maehara, who moved to condone the refueling
operation when he was serving as DPJ president, and the former
socialist group that cites the ambiguity of a UN resolution and the
unconstitutionality of the operation.

Ichiro Ozawa, who has maintained his influence in the party even
after resigning as president, is closer to the view held by the
former socialist group.

8) U.S. sailor gets life in prison for killing taxi driver

ASAHI (Page 35) (Full)
July 31, 2009

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In the stabbing death of 61-year-old taxi driver Masaaki Takahashi
in Yokosuka, Kanagawa Prefecture, in March last year, the Yokohama
District Court yesterday sentenced Olatunbosun Ugbogu, a 23-year-old
Yokosuka-based U.S. Navy seaman apprentice, to life imprisonment on
murder-robbery charges as demanded by the prosecutors.

Ugbogu maintained that he "did it at the order of a voice" resulting
from an auditory hallucination, and whether he was mentally
competent to be held responsible for his action was mainly in focus.
Presiding judge Masaaki Kawaguchi concluded that Ugbogu was
competent to be held responsible for his action, stating that what
he calls a "voice" does not exist when judging from such factors as
a physician's expert opinion and his actions after committing the
crime. The judge noted: "This case, as an incident brought about by
a U.S. military deserter, gave a great shock not only to Yokosuka
and other base-neighboring residents but also to the general public,
and its social impact is tremendous."

After the court ruling, U.S. Naval Forces Japan headquarters
released a comment: "We will continue to step up the education and
training of seamen and families."

9) 12 U.S. soldiers desert, 6 missing; Local residents uninformed

TOKYO SHIMBUN (Page 1) (Abridged)
July 31, 2009

U.S. Forces Japan began in July last year to inform local
governments hosting U.S. military bases through the Japanese
government about U.S. military deserters. Since then, a total of 12
U.S. servicemen have deserted from U.S. bases in the prefectures of
Kanagawa, Nagasaki, and Okinawa, and six of the 12 deserters are
still missing, the Tokyo Shimbun has found from Kanagawa and other
prefectures. This is the first time that the facts about deserters
have been unveiled.

In Kanagawa Prefecture, there were seven deserters from U.S.
military bases. Two of them have yet to be located. In their
breakdown, four of them were based at Yokosuka, and three were
crewmen on board naval ships that called at Yokosuka.

In June last year, Kanagawa prefectural police placed U.S. military
deserters on the wanted list at the U.S. military's request for
detention. The prefectural police are ready to report their
discovery of those deserters to the U.S. military. In February this
year, a defector from the Yokosuka base was found in Tokyo when
questioned by a police officer of the Tokyo Metropolitan Police
Department.

The U.S. military, however, is to provide prefectural governments or
base-hosting municipalities with information about its deserters
through the Japanese government. It therefore takes at least two
days or more than a week after the U.S. military's request to police
for search and detention, according to local officials. Yokosuka
City says it does not disclose individual information, so its
citizens were not informed of the deserters.

Masahiko Goto, a lawyer familiar with base issues, noted:
"Base-hosting local communities have great misgivings about public
security. Information about deserters should be given to local
residents as well."

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10) Aso: If North Korean nuclear issue becomes serious, calls for
nuclear armament might grow stronger

ASAHI (Page 1) (Full)
July 31, 2009

Prime Minister Taro Aso during the Japan-South Korean summit held in
Tokyo on June 28 said that if the North Korean nuclear issue becomes
serious, calls in Japan for the country to arm itself with nuclear
weapons would grow stronger, according to several sources connected
with Japan-ROK relations. The prime minister took up the issue as an
example of the need to exhort greater efforts from China, which
holds the key to the resolution of the North Korean nuclear issue,
the sources revealed.

The remarks were made at a meeting attended only by Aso, President
Lee Myung Bak, and a handful of officials, including the foreign
ministers of the two countries. There had been an agreement to
discuss North Korean issues only and not to make public what was
discussed there.

In the event China does not earnestly implement the UN Security
Council sanctions resolution, Aso and Lee agreed on the need to send
a message to China that both Japan and South Korea would have to
increase their defense capabilities to counter North Korea. Prime
Minister Aso referred to the possibility of growing calls for the
possession of nuclear weapons in that context, according to a
source.

A government source said, "The tone was not such that Japan will go
nuclear," adding that it did not invite strong objections from the
ROK side.

Nevertheless, China is reportedly alarmed about the emergence of
calls for nuclear armament in Japan and South Korea in the wake of
North Korea's nuclear test. U.S. Secretary of Defense Robert Gates,
too, has mentioned the option of strengthening its nuclear umbrella
for Japan and South Korea. (The United States) has taken steps to
prevent Japan and South Korea from discussing nuclear options. Aso's
remarks made as if to take advantage of the nuclear armament
discussion in the country is likely to be criticized as
inappropriate as prime minister.

11) Governmental preliminary talks to start on East Asian FTA

NIKKEI (Page 1) (Full)
July 31, 2009

Yoichi Iwamoto, Hanoi

Major Asian countries, including the ASEAN (Association of Southeast
Asian Nations) countries, Japan and China, will soon start talks on
a plan to create a free trade agreement (FTA) covering the entire
East Asian region. They plan to raise to the official level the
current unofficial committee of experts. The upgraded panel will
discuss how negotiations should be pursued in the future.

ASEAN has already concluded FTAs with some countries, but the plan
is aimed to sweepingly liberalize trade in the region. A reduction
in tariffs in the region will make industries in East Asia more
competitive. It will also contribute to expanding trade in the

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region and to enhancing its role as a locomotive for the global
economy.

Launching preliminary consultation for an East Asian FTA will be
discussed at an economic ministerial meeting of ASEAN and six
economies to be held in Bangkok on Aug. 13-16 and on other
occasions. The ministerial meeting will bring together ministers
from 16 countries, including the 10 ASEAN countries and six
countries, such as Japan, China, and India.

For the preliminary consultation, there are two ideas - ONE calling
for inviting 13 countries (Japan, China and South Korea in addition
to ASEAN) and another calling for bringing together 16 countries
(Japan, China, South Korea, India, Australia, and New Zealand, in
addition to ASEAN). Final coordination is now underway.

In the ministerial meeting in Bangkok, the participants are expected
to basically agree to start the preliminary consultation. The
countries will initiate governmental negotiations after the end of
the preliminary consultation. In the negotiations, they will discuss
the margin of reduction in tariffs, items that should not be covered
by the FTA, and other details. If an FTA is concluded, it might
develop into an economic partnership agreement (EPA),which also
includes services, investment and intellectual property.

Japan has already concluded a comprehensive EPA with ASEAN, and some
parts have come into effect. But it will not be easy to reach an
agreement on tariff cuts with countries exporting agricultural
products, such as Australia and China.

12) DPJ Hatoyama on proposal for FTA with U.S.: Rice will be treated
as exception

NIKKEI (Page 1) (Full)
July 31, 2009

Democratic Party of Japan (DPJ) President Yukio Hatoyama yesterday
delivered a campaign speech in Suwa City, Nagano Prefecture.
Referring to the party's proposal in its policy platform for the
upcoming House of Representatives election to conclude a free trade
agreement (FTA) with the U.S., he indicated that rice would be
treated as an exception, remarking: "We will not simply open the
door (to imports) of products that are the mainstay of our
agricultural sector, such as rice. We will emphasize that point in
negotiations, so you do not need to worry."

The ruling camp has criticized the DPJ's idea of an FTA with the
U.S., saying that domestic farmers will receive a serious blow.
Hatoyama refuted: "Domestic agriculture fell into ruins due to the
government of the Liberal Democratic Party and the New Komeito. We
will take satisfactory measures to make Japanese farmers strong
enough to counter pressure from foreign countries."

13) Poll: 20 PERCENT of "undecided" voters opt for DPJ

NIKKEI (Page 2) (Abridged)
July 31, 2009

The Nihon Keizai Shimbun conducted an online poll on July 28-30
toward the upcoming election for the House of Representatives. Among
those who answered in the last online poll that they did not know
which political party they would vote for in their proportional

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representation blocs, 20 PERCENT this time opted for the Democratic
Party of Japan, with 6 PERCENT choosing the Liberal Democratic
Party. Among those who chose the LDP in the last poll, 8 PERCENT
changed to the DPJ, with only 3 PERCENT switching from the DPJ to
the LDP.

Respondents were also asked which political party's candidate they
would vote for in their single-seat constituencies. Among those who
answered in the last poll that they "don't know," 19 PERCENT now
chose the DPJ's candidate, with 9 PERCENT preferring the LDP's. In
the last poll, 9 PERCENT of those who chose the LDP's candidate
changed to the DPJ's, with 2 PERCENT switching from the DPJ's
candidate to the LDP's.

The poll was conducted by Nikkei Research Inc. on the Internet, with
a total of 3,500 persons chosen from among male and female voters
aged 20 and over across the nation. The retrieval rate was 34.5
PERCENT in the first online poll and 34.1 PERCENT in the second
one.

The proportion of those "very interested" in the general election
rose 10 PERCENT . "Very interested" and "somewhat interested"
totaled more than 90 PERCENT . A total of nearly 80 PERCENT
answered "yes" when asked if they would like to see a change of
government. The figure neared 40 PERCENT even among LDP supporters
and was over 90 PERCENT among DPJ supporters.

Respondents were further asked if they would vote in the general
election. To this question, "yes" rose 6 points from the last poll
and already neared 80 PERCENT . Those who answered "yes" and those
thinking of going to the polls totaled more than 90 PERCENT .

14) Prime minister takes to the streets

YOMIURI (Page 4) (Full)
July 31, 2009

Prime Minister Taro Aso on July 30 inspected small- and medium-size
companies and neighborhoods. When he visited Musashi-Koyama Shopping
Mall Palm, he exchanged words with shop-keepers, shook hands with
shoppers and had taken commemorative photos with them.

The prime minister's plan was to call around industrial
organizations after the Lower House dissolution and start stumping
speeches on August 1. However, yesterday he took up a microphone,
urged by people of the Shopping Mall and made an impassioned speech:
"In order for local regions to become revitalized, shopping streets
must be revitalized. The Liberal Democratic Party (LDP) will
continue policies to turn around the economy without causing
disorder."

He visited RKC Instrument, an electric measuring equipment
manufacturer in Ota Ward, before visiting the shopping mall.

15) Lack of consistency among DPJ leaders regarding party's
manifesto

SANKEI (Page 2) (Full)
July 31, 2009

Democratic Party of Japan (DPJ) President Yukio Hatoyama on July 27
issued the party's manifesto (campaign pledges) for the upcoming

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House of Representatives election. But his comment later, "This is
not an official manifesto," has created a stir.

The ruling parties are criticizing Hatoyama, who once said about the
manifesto that it "bears political accountability." Even DPJ Deputy
President Ichiro Ozawa has complained to Hatoyama. It has now been
revealed that DPJ leaders are not fully communicating with ONE
another.

Hatoyama told reporters on July 29 in Kikuyo Town, Kumamoto
Prefecture, where he was stumping on the campaign trail: "The
manifesto released (on the 27th) is not a formal one. We are allowed
to distribute our official manifesto only after the start of
official campaigning period for the Lower House election."

The purpose of his comment was to add to the manifesto Osaka Gov.
Toru Hashimoto's call for mentioning the establishing of a
consultative panel (on decentralization reform) of the central and
local governments in the DPJ's manifesto. Hashimoto criticized the
DPJ's manifesto for not including such. DPJ Secretary General
Katsuya Okada, who took the initiative in drafting the manifesto,
said on July 30: "If necessary, it will be possible to alter (the
manifesto)."

Referring to the establishment of a consultative council, Ozawa,
however, told reporters yesterday Kako City, Gifu Prefecture:

"It is not wrong to include such, but we have asserted that we will
substantially change the present administrative system. It is
unnecessary to discuss matters premised on the present systems."

Ozawa took a position that there was no need to add it to the
manifesto.

Meanwhile, New Komeito Secretary General Kazuo Kitagawa made this
comment: "(Hatoyama) said that he would resign as DPJ president if
the manifesto is not implemented. That's really wishy-washy." A
government source also remarked: "Since Mr. Hatoyama says so, the
Liberal Democratic Party (LDP) will be able to correct after it
reveals its manifesto."

16) Three opposition parties agree to leave sales tax rate unchanged
for next four years, skirt foreign and defense policy issues

TOKYO SHIMBUN (Page 1) (Full)
July 31, 2009

The Democratic Party of Japan (DPJ),the Social Democratic Party
(SDP) and the People's New Party (PNP) are now readying a common set
of policies for the Lower House election. The draft was revealed on
July 30. It features that should the three opposition parties form a
coalition government after the Lower House election, they will leave
the sales tax rate unchanged for the next four years. It does not
incorporate foreign affairs and security policies, over which they
are at odds. The overseas dispatch of the Self-Defense Forces'
troops was not included, either. The package will be released in
mid-August before the official announcement of the Lower House
election.

Provided that they secure a majority in the Lower House election,
the three parties will proceed with talks on the launching of a
coalition government, based on this common policy package. The

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package first notes the maintaining of the sales tax rate as a
common policy, by categorically mentioning that there will be no
hike in the sales tax during their administration.

The package also incorporates: (1) a drastic review of the postal
business; (2) scrapping the medical service system for the elderly
people aged 75 or older; (3) building a safety net to protect jobs;
and (4) free high school education through the provision of
financial assistance equivalent to tuition fees to public high
school students and to households with private high school
students.

Regarding the postal services business, the draft package notes that
the current four-company system (under Japan Post Holdings Co.)
should be reviewed and the sale of stocks of three members of the
Japan Post Group should be put on ice. The draft package also
pledges that the government will assist an increased share in
national HEALTH insurance as a result of the abolition of the
medical service system for the elderly people aged 75 or older.

In order to build an employment safety network, the three parties
will aim to drastically amend the Worker Dispatch Law, which bans,
in principle, the dispatch of workers to manufacturing companies.

Referring to the common policy package of the three parties,
Secretary General Katsuya Okada at a press conference on the 30th
said: "We want to show our common perception as parties that will
fight the election battle together. It would be all right if we come
up with policy proposals in a major direction, instead of detailed
and specific policies."

Secretaries general and policy-planning officers of the three
parties will meet on the 31st and enter near final talks on the
common policy package.

17) DPJ's Okada gives LDP's manifesto for 2005 Lower House election
score of 20

YOMIURI (Page 2) (Full)
July 31, 2009

At a press conference yesterday in Shizuoka City, Democratic Party
of Japan (DPJ) Secretary General Katsuya Okada released his party's
assessments of the Liberal Democratic Party's (LDP) manifesto
(campaign pledges) for the House of Representatives election in

2000. The purpose of the DPJ is to give voters the impression of the
LDP failing to realize its campaign pledges despite a governing
party, before the LDP reveals its manifesto on July 31. The ruling
coalition has criticized the DPJ's manifesto as irresponsible for
not mentioning fiscal resources for implementing its pledges.

The DPJ verified the stages of completion of 21 areas of the LDP's
manifesto such as (1) postal privatization, (2) pension, (3) issue
of lack of doctors, (4) childcare programs, and (5) measures for
non-permanent workers.

On postal privatization, which was the major issue in the 2005 Lower
House election, the DPJ analyzes that the widening social gap has
been ignored, the social security system was destroyed, and the
fiscal condition is deteriorating, leaving many issues unresolved.

With regard to child-raising assistance, on which both the DPJ and

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LDP give priority in the election campaign, the DPJ reviews that for
the LDP, free child education is a special feature of general
elections, pointing out that the LDP had included this issue in the
previous election.

Although the LDP compiled its own assessment on its campaign pledged
for the 2005 Lower House election that there were no pledges not yet
dealt with, Okada severely criticized, saying: "The degree of
attainment of the manifesto is 20 to 30 percent. The LDP has not
fulfilled what it had pledged four years ago."

Okawa was president of the DPJ in 2005 when the previous Lower House
election was held, but he quit his post to take responsibility for
the DPJ's failure in the election. All the more because of that, he
expressed his anger, saying: "Four years ago, the LDP emphasized
that reforms must not be stopped. What did that mean?"

18) New Komeito expects "return" in proportional representation
system; Supporting 92 LDP candidates

YOMIURI (Page 4) (Full)
July 31, 2009

The New Komeito on July 30 decided to recommend 92 Liberal
Democratic Party (LDP) candidates running in single-seat
constituencies for the upcoming Lower House election. It plans to
add to this number of backed candidates before the official
announcement of the election on August 18.

The New Komeito's strategy is to support candidates running on the
Liberal Democratic Party's (LDP) ticket in single-seat
constituencies, where it does not field its own candidates and to
receive in return for that cooperation the votes of LDP supporters
for the proportional representation section of the election. This is
a so-called "barter cooperation." A certain LDP member pointed out,
"How the LDP cooperates with the New Komeito in the proportional
representation section of the elections becomes in fact the judgment
standard when endorsing our own candidates."

Replying to a question that the LDP's cooperation with the New
Komeito is seen in its standard for endorsing its own candidates,
New Komeito Secretary General Kitagawa during a press conference on
the 30th said: "To begin with, some candidates do not ask for the
party's recommendation. The issue of whether to give recommendations
to candidates or not has also to do with candidates the party gave
recommendations to in the past. The situation differs according to
individual cases."

As a matter of fact, bargaining is going on between the LDP and the
New Komeito over endorsements of election candidates. The LDP Chiba
Chapter this time applied for recommendations for candidates for all
of its 13 single-seat constituencies. However, the New Komeito Chiba
headquarters asked them, "We want the LDP to give 5,000 votes to the
New Komeito from each constituency." As a result, only three
received party recommendations.

The LDP has yet to endorse Prime Minister Aso. The New Komeito
Fukuoka headquarters said, "We have not yet received a request for
an endorsement from the prime minister."

ZUMWALT