DAILY SUMMARY OF JAPANESE PRESS 03/06/09

UNCLAS SECTION 01 OF 10 TOKYO 000511

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 03/06/09

INDEX:
(1) North Korea steadily preparing missile launch (Part 1): Newly
constructed structure seems designed to inject fuel confirmed
(Asahi)

(2) North Korea steadily preparing missile launch (Part 2):
Pyongyang aiming to break impasse in relations with U.S. (Asahi)

(3) DPJ coordinating vote against Guam pact (Okinawa Times) 3
(4) Ozawa's statement contradicts the facts, such as agreement and
use of good offices (Sankei)

(5) Asahi survey of local governments on cash handout scheme:
Majority of municipalities will start distribution in April or
later: 36 PERCENT reply they are looking forward effects of measure
(Asahi)

(6) Employment reconstruction - labor, management in anguish - part
1: Banks suddenly change attitude in face of possible March crisis:
Company resorting to "repayment crunch" at risk of corporate life
(Tokyo Shimbun)

(7) TOP HEADLINES

(8) EDITORIALS

(9) Prime Minister's schedule, March 5 (Nikkei)

(Corrected copy): North Korean missile: Japan, U.S. confirm close
collaboration (Nikkei)

(Corrected copy): Premier plans to visit Europe during early May
Golden Week holidays: Coordination under way for Japan-EU summit in
Czech (Nikkei)

ARTICLES:

(1) North Korea steadily preparing missile launch (Part 1): Newly
constructed structure seems designed to inject fuel confirmed

ASAHI (Page 2) (Abridged)
March 6, 2009

North Korea is steadily preparing to launch possibly a long-range
ballistic missile, Taepodong-2. Although a missile has yet to be
installed on the launch pad, the assembly work may have been almost
completed.

Present state of missile base

There is a missile base in Musudan, North Hamgyong province, which
is located very close to the Sea of Japan. Based on information on
mobilization of goods obtained through spy satellites, authorities
of the U.S. and South Korea governments have said that North Korea
has almost completed the assembly work as of March 5, leaving only
such works as installing what is to lift off on the launch pad and
injecting fuel.

The two governments detected a new structure that seems designed to
send out fuel into a rocket. The injection of liquid fuel through an
underground pipeline is expected to be completed in a day or so,
though it took four or five days by tanker at the time of the last

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missile test-firing in July 2006. According to experts of Japan, the
U.S. and South Korea expect three days, at the earliest, to be taken
until the missile lifts off after it is taken out.

A freight car that took on containers left a munitions plant in
North Pyongan in late January and the containers were transported
into an assembly building in the military base. Seeing North Korea's
ongoing moves are very similar to the scenes observed when it fired
the Taepodong-2 in 2006, the South Korean Defense Ministry believes
the North is preparing the same type of missile. But there is no
sign of an actual missile on the base yet.

Since Feb. 24, North Korea has repeatedly announced it is preparing
to launch a satellite. It has also said that it is planning to
launch within several years working satellites needed for national
economic development, such as telecommunications, resource
exploration, and weather forecasting.

A South Korean government source said: "North Korea would most like
to have its own satellites." In its past test fires, North Korea
fired a missile in the direction of the east. But some analysts
anticipate that this time, a missile might be fired in the direction
of the north - the direction of Russia and China - or the south -
the Kyushu part of Japan, in order to put the satellite on the polar
orbit that connects the North Pole and the South Pole.

(2) North Korea steadily preparing missile launch (Part 2):
Pyongyang aiming to break impasse in relations with U.S.

ASAHI (Page 2) (Full)
March 6, 2009

Why at this time

Seeing North Korea's moves to launch a missile, many analysts
speculate that Pyongyang is aiming at increasing tensions to draw
attention from the Obama administration and carry out negotiations
in its favor. They also see the North's desire to solidify unity in
the nation and enhance national prestige.

North Korea has invited U.S. experts on peninsula affairs to visit
the nation, as represented by its invitation to Special
Representative for Policy on North Korea Stephen Bosworth last
month, even before he assumed his post. The North is undoubtedly
hoping to break the impasse in its relations with the U.S., taking
advantage of the inauguration of a new Democrat administration.
Meanwhile, the U.S. government is willing to continue the policy of
dialogue, even while taking a tough stance, as Secretary of State
Hillary Clinton said: "A missile launch is provocative and would be
unhelpful (to moving forward its relationship with the U.S.)

Ambassador Bosworth, who arrived in Japan as part of an Asian tour
yesterday, set Seoul as the last destination of the tour in
preparation for visiting Pyongyang if there is a call from that
nation. A researcher at the Korea Institute for Defense Analyses
said: "There is a 70 PERCENT possibility of the North launching a
missile, but a drastic compromise (between the U.S. and North Korea)
is also 70 PERCENT possible."

North Korean leader Kim Jong Il's health problems have been reported
since last summer. Since early this year, Kim has provided more
"field guidance" than in past years. A number of measures have been

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taken to strengthen the regime, such as steps to tighten market
regulations. The North Korean media have also reported on
"preparations to launch a satellite," encouraging the people with
these words: "The nation will take a major step toward becoming an
major economic power."

When will the North actually fire a missile? North Korea has
fiercely reacted to the planned joint military drill by the U.S. and
South Korea from March 9 - 20, but an observer said: "During this
period, machinery will freeze up, it will be difficult to conduct
precise work."

The Supreme People's Congress will be held in April, in which Kim is
expected to be reelected as National Defense Committee chairman. In
1998, the North fired a Taepodong-2 several days before the Supreme
People's Congress opened. April 15, is the birthday of the late Kim
Il Sung. April 25 is the day of commemoration of the establishment
of the Korean People's Army. On these days, the launch of a missile
could be effectively stage-managed.

(3) DPJ coordinating vote against Guam pact

OKINAWA TIMES (Page 1) (Abridged)
March 6, 2009

The Japanese and U.S. governments have now signed an agreement
relating to the planned relocation of U.S. Marines in Okinawa to
Guam, and the Guam relocation pact is now before the Diet for its
approval. In response, the leading opposition Democratic Party of
Japan (Minshuto) has entered into final coordination to vote against
the pact. The Japanese Communist Party, the Social Democratic Party,
the People's New Party, and other opposition parties have also
decided to vote against it. The ruling and opposition parties are
clearly at odds with the government over the Guam agreement.

The Guam relocation pact, a treaty up for Diet ratification, is
expected to enter into parliamentary deliberations at the House of
Representatives Foreign Affairs Committee on March 25 or later. The
ruling coalition of the Liberal Democratic Party and the New Komeito
wants to have the Guam relocation pact passed through the House of
Representatives in early April and send it to the House of
Councillors. The Guam pact, even if it is voted down in the House of
Councillors, will likely come into effect in late April or in early
May with the House of Representatives' constitutional precedence
over the House of Councillors.

When the Diet was in its ordinary session last year, the House of
Representatives Foreign Affairs Committee deliberated for two days
on a new special agreement regarding Japan's burden of sharing costs
for the stationing of U.S. forces in Japan (omoiyari yosan or
literally "sympathy budget"). A similar schedule is expected for the
Guam relocation pact as well.

The DPJ is aiming for a change of government in the next election
for the House of Representatives, so the party is expected to avoid
raising an explicit objection to the realignment of U.S. forces in
Japan from its stance of attaching importance to relations with the
United States. However, the DPJ will oppose the Guam relocation pact
while pointing to the Japanese government's murky spending on the
Guam relocation and its lack of explanations.

A DPJ executive told the Okinawa Times: "We have said the government

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has been failing to fulfill its accountability on what is related to
the U.S. force realignment. We will continue to pursue this."

The opposition bench is therefore expected to oppose the Guam
relocation pact, asserting that the Diet has not fully deliberated
on it. The ruling coalition, which holds a majority of the seats in
the House of Representatives, is highly likely to ram the pact
through the Diet.

(4) Ozawa's statement contradicts the facts, such as agreement and
use of good offices

SANKEI (Page 1) (Abridged slightly)
March 6, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa held a news
conference (on March 4) in connection with the case of his
fund-management organization having received de facto corporation
donations from Nishimatsu Construction Co. in violation of the
Political Funds Control Law. Although Ozawa flatly denied during his
press conference any wrongdoing, the investigation by the special
unit of the Tokyo District Public Prosecutors Office has exposed
several areas that conflict with Ozawa's explanation. The special
investigation unit is likely to question Ozawa. It is inevitable
that calls will grow for Ozawa to offer additional explanations to
the public regarding those contradictions.

Awareness

In the March 4 news conference, Ozawa indicated that he did not
think there was a problem, saying, "My view was that the money was
donations from political organizations and that is why my
fund-management body received them."

According to the investigation, Ozawa's first state-paid secretary
and Rikuzan-kai's chief accountant Takanori Okubo, 47, is believed
to have decided with the Nishimatsu side to set the total amount of
annual donations at about 25 million yen. The investigation team
believes this shows Ozawa's deep involvement in the donation
scandal.

As a general rule, in the past, a person who violated the Political
Funds Control Law was indicted without arrest or detention. This
time around, it seems that the investigation squad arrested (Okubo
and others) after the raid, taking seriously Nishimatsu's cunning
practice of returning its employees' payments to the Ozawa side in
the form of adding those amounts to their bonuses.

Ozawa expressed his anger with the "unprecedented investigation,"
saying, "I don't think there have been any examples of arrests and
compulsory investigations over this sort of problem in the past." If
an agreement had existed between the Ozawa side and Nishimatsu on
donations, that would make Ozawa's
donations-from-political-organizations explanation false.

Discrepancies

Although Ozawa remained calm throughout the new conference, he
raised his voice when answering a reporter's question asking whether
or not his side had given favors to any parties in return for
receiving donations.


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Ozawa replied: "If I or my secretary had provided favors to the
donating party, we would readily accept the investigation. But
neither of us has done such a thing."

But discrepancies have emerged from the investigation. For instance,
Okubo allegedly used his good offices in connection with the
construction of facilities linked to the Isawa Dam project in Iwate
Prefecture that was ordered in March 2006 by the Land and
Infrastructure Ministry's Tohoku Regional Development Bureau. Former
Nishimatsu President Mikio Kunisawa, 70, and others allegedly
admitted that they had asked Okubo to maneuver to award some
construction works to Nishimatsu and that they won some works
because of large donations.

Checking

In the press conference, Ozawa offered the explanation by using the
words "common sense," saying: "It is common sense not to pry into
where the money comes from. We simply trust people's goodwill. The
income and expenditures of my political organization have been fully
disclosed."

A reporter posed a question asking about his responsibility to check
matters as the head of Rikuzan-kai. Ozawa replied: "It is impossible
for me to check where every single donation comes from." Asked if he
intended to offer an apology, Ozawa said: "I do not see any reason
to do so."

Ozawa also declared, "There is no problem," despite the fact that he
had neither checked the donations nor knew about the details. That,
too, can be said to be contradictory. Investigators are expected to
question Ozawa about such a view, as well. The DPJ president is
likely to be pressed for additional explanation at a news conference
and other venues.

(5) Asahi survey of local governments on cash handout scheme:
Majority of municipalities will start distribution in April or
later: 36 PERCENT reply they are looking forward effects of
measure

ASAHI (Page 1) (Excerpts)
March 5, 2009

Bills related to the fiscal 2008 second extra budget designed to
secure fiscal resources to finance the government's cash handout
scheme were enacted on March 4. However, according to a poll the
Asahi Shimbun conducted on municipalities throughout the nation, a
majority of them will not be able to distribute benefits until April
or later. The Aso administration has pledged to distribute benefits
within the current fiscal year. However, the pledge has now been
effectively broken. Nearly half the respondents replied that they
are trying to take various measures to encourage recipients to use
the money locally. The poll also found that they it will be
difficult to find ways to distribute the benefits to homeless
people, as well.

Questionnaires were sent to all 1,804 municipalities by mail,
eliciting responses from 1,691 municipalities or 94 PERCENT .
Nishi-Okoppe Village in Hokkaido and Nishimeya Village in Aomori
Prefecture will start distribution from the 5th.

Only 16 PERCENT replied that they would be able to start

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distribution before the end of the current fiscal year. Others
replied, "do not know." The number of municipalities that will not
be able to distribute until the new fiscal year starts will likely
increase.

Since application forms will be sent, based on the basic resident
registers, it is impossible to give the handouts to those whose
names are not listed in the registers, such as homeless people. The
reply "looking into ways to distribute the money to such people as
well" was chosen by 32 PERCENT of the respondents. However, almost
no municipalities gave specific measures, noting that they are
waiting for an instruction from the state.

Many municipalities gave a number of specific measures to promote
local consumption, such as issuing coupons attached with premiums to
have them purchased by recipients. Under this method, the premiums
will be financed by the municipalities that issued those coupons.
The premiums will like be between 10 PERCENT -20 PERCENT of the
cash handout. Nishi-Okkope Village will subsidize 67 PERCENT -- the
largest among respondents. Municipalities that are considering
methods to urge local consumption reached 47 PERCENT .

To a question on the effects of cash handouts in terms of helping
people's livelihood and stimulating the economy, 36 PERCENT
replied, "Such effects can be expected," while 11 PERCENT replied,
"Such effects cannot be expected." To a question on whether pollees
think the policy satisfies citizens, the reply "do not think so" was
given by 20 PERCENT of respondents, while 13 PERCENT answered
otherwise. As reasons why they are not satisfied, the replies
"pork-barrel largesse" and "passing the buck to the future" were
cited. Some replied that the distribution of handouts will boost
public approval ratings (for the cabinet). However, it appears
difficult to expect such an effect under the present circumstances.

The cash handout scheme is characterized as an administrative duty
to be carried out by local governments, based on their own
judgments. However, the overwhelming portions of respondents -- 77
PERCENT -- replied that the scheme should have been characterized
as an administrative duty legally entrusted by the government to
local governments. It appears that local governments feel
implementing the government-led policy, which allows them little
discretion, can hardly be called autonomy.

(6) Employment reconstruction - labor, management in anguish - part
1: Banks suddenly change attitude in face of possible March crisis:
Company resorting to "repayment crunch" at risk of corporate life

TOKYO SHIMBUN (Top Play) (Abridged slightly)
March 6, 2009

Labor-management negotiations in annual spring wage-increase
offensive are going on under the banner of a demand for unified wage
hikes for the first time in eight years. However, the employment
situation has critically deteriorated due to the global recession.
Serious anxieties are enveloping the Japanese society. Tokyo Shimbun
has probed into corporate efforts to find the end of the tunnel,
while delving into the present state of the crisis and its
background.

The president of a certain construction-materials manufacturer,
which has an office in Tokyo, earlier this month received a reminder
from a major bank, its line bank asking for payments of borrowings.

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That is because the company has been falling behind its debt
repayment.

It has been more than 70 years since the father of the president
established the company. It has about 30 employees. Its annual
business has expanded to 800 million yen. The company achieved a
surplus in the previous account settlement.

The situation changed late last year. A bank officer in charge of
his company's acounts said, "We are afraid that we will not be able
to meet your request for fresh loans."

The president borrowed money from that bank, putting up his own home
and factory as collateral six years ago. Since then, he has repaid
several million yen a month without delay. He has continued to
receive loans worth about 30 million yen at the end of each year,
putting that creditworthiness as collateral. The president said,
"All small and medium-sized businesses are doing business this way.
It is like an annual event." Bank borrowings are the working capital
for small and medium-sized companies, which operate with only small
amounts. They are the companies' lifeline.

The bank officer in charge did not reveal the reason. The president
felt he was talking with a stranger from some other bank. He thought
that the bank's notice is tantamount to a death sentence to small
and medium-sized businesses.

After much anguish, he chose to protect the employees and their
families, instead of allowing his company to go down, by giving
priority to debt payments. He decided to counter the banks' credit
crunch with a "repayment crunch," meaning delaying debt repayments
until the very last moment. He said, "This is a situation that can
occur once in a century. Our lives are at stake."

The financial crisis that started in the U.S. and a sharp decline in
demand throughout the world have hit corporate cash management,
which is a lifeline for companies.

Major companies are procuring capital by issuing commercial papers
(CP). As turbulence spread in the market spreads, the market has
come to accept only CPs issued by companies with high
creditworthiness.

Tension among market participants rose to the utmost extent late
last year because of the rumor that Japan's blue-ribbon companies
would go bankrupt. The targets of the rumor included leading auto
and electronic-appliance manufacturers. It is fair to say that the
auto and electronic-appliance industries are Japan's key
industries.

Facing a decline in business performances and cash management,
financial managers of many listed companies resorted to bank loans.
As a result, small and medium-sized businesses have been ousted and
made the targets of credit crunch.

Giving heed to the situation, the government and the Bank of Japan
extended assistance in an unprecedented manner, including the
purchases of CPs. However, according to Tokyo Shoko Research, 994
companies went bankrupt in 2008 due to a shortage of operating
capital, topping the 678 companies that collapsed in 1998, a year
when domestic banks went under successively. Tension is once again
mounting in the run-up to the end of March, when many companies

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close their books.

(7) TOP HEADLINES

Asahi:
Nishimatsu holds disguised fund-raising parties

Mainichi:
Donations from Nishimatsu-linked group mostly go to Ozawa side

Yomiuri:
Ozawa's ex-secretary sought donations from Nishimatsu

Nikkei:
Government to spend up to 3 trillion yen to help cash-strapped
firms

Sankei:
Tokyo prosecutors to question Nikai, his faction members

Tokyo Shimbun:
Nishimatsu-linked groups' donations aimed at construction orders in
Tohoku region

Akahata:
Action for spring wage offensive: Need for domestic demand expansion
for raising wages and for increasing jobs

(8) EDITORIALS

Asahi:
(1) China's National People's Congress: China aims at 8 PERCENT
growth in 2009
(2) We look forward to seeing expect good games in World Baseball
Classic

Mainichi:
(1) We expect China's expanding domestic demand
(2) Historical towns also should be preserved

Yomiuri:
(1) Strengthen cooperation to prevent North Korea from firing
Taepodong missile
(2) We want to enjoy the heart of baseball through World Baseball
Classic

Nikkei:
(1) Hope for China's expansion of domestic demand, transparency of
military spending
(2) Strategy of next generation cell phones to be questioned

Sankei:
(1) DPJ, don't escape from clearing up doubts
(2) China, explain huge national defense expenditures

Tokyo Shimbun:
(1) China should expand domestic demand to support global economy
(2) Flood hazard map for protecting residents

Akahata:
(1) Cash-handout plan: Government, ruling parties are "base"


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(9) Prime Minister's schedule, March 5

NIKKEI (Page 2) (Full)
March 6, 2009

07:25
Met with Deputy Chief Cabinet Secretaries Matsumoto and Konoike at
the Kantei.

09:00
Upper House Budget Committee meeting. Then met with METI Minister
Nikai.

12:02
Arrived at the Kantei.

13:00
Upper House Budget Committee meeting.

17:35
Overseas economic cooperation conference at the Kantei. Nikai
remained.

18:15
Met with Chief Cabinet Secretary Kawamura, followed by Lower House
member Seishiro Eto, chairman of the Dietmen's League to Promote
Maritime Nation.

19:07
Dined with Chugai Pharmaceutical Co. President Osamu Nagayama, his
younger brother Yutaka and others.

21:55
Arrived at the official residence.

(Corrected copy): North Korean missile: Japan, U.S. confirm close
collaboration

NIKKEI (Page 2) (Full)
March 6, 2009

Special Representative for North Korea Policy Stephen Bosworth on
March 5 met with Akitaka Saiki, director general of the Foreign
Ministry Asian and Oceanian Affairs Bureau, at the Foreign Ministry.
Concerning North Korea showing signs of test-launching a ballistic
missile, both agreed to ask that nation to restrain itself. They
confirmed their stance of closely cooperating with each other,
including filing a complaint with the UN Security Council, in the
event the DPRK went ahead with the launch.

This is the first meeting between Japanese and U.S. working-level
officials in charge of the North Korea issue since the inauguration
of the Obama administration.

They confirmed the understanding that the launching of a missile by
North Korea is in breach of a UNSC resolution adopted, following its
launch of ballistic missiles and nuclear test in 2006.

(Corrected copy): Premier plans to visit Europe during early May
Golden Week holidays: Coordination under way for Japan-EU summit in
Czech


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NIKKEI (Page 2) (Full)
March 6, 2009

The Nihon Keizai Shimbun learned on March 5 that Prime Minister Taro
Aso is considering visiting Europe during Golden Week holidays in
early May. Coordination is now under way for visiting the Czech
Republic, the host country of the EU, to hold a Japan-EU summit with
Prime Minister Topolanek. He also wants to visit various east
European countries, where economic woes are continuing due to the
global recession.

Economic cooperation with the Czech Republic, Hungary, Poland and
Slovakia (V4) is one of the pillars of the Arc of Freedom and
Prosperity, a diplomatic strategy the prime minister advocated when
he was foreign minister.

ZUMWALT