JAPANESE MORNING PRESS HIGHLIGHTS 03/27/09

UNCLAS SECTION 01 OF 09 TOKYO 000691

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/27/09

Index:

Opinion polls:
1) Yomiuri: 68 PERCENT "unconvinced" by Ozawa's decision to stay as
DPJ head despite aide's indictment; Aso seen now as more appropriate
to be prime minister (Yomiuri)
2) Kyodo poll: 66 PERCENT want Ozawa to quit post as DPJ head;
Prime Minister Aso's stock rises in the public's eye (Tokyo
Shimbun)

Scandal after scandal:
3) Cries for Ozawa to resign are rising in the Democratic Party of
Japan after his aide is indicted for accepting illegal donations
(Yomiuri)
4) METI Minister Nikai received falsified donations from Nishimatsu
Construction disguised as personal contributions (Asahi)
5) Nikai's office paid for by Nishimatsu: Whenever rent was late,
Nishimatsu contacted for payment (Mainichi)
6) Senior Vice Finance Minister Koichi Hirata quits after shady
stock sales revealed (Mainichi)

Diet agenda:
7) Tug of war again in the LDP over whether to have an early Diet
dissolution (Mainichi)
8) Fiscal 2009 budget to pass the Diet today, making way for quick
action to ready the supplementary budget bill (Nikkei)
9) Extra budget to contain 2 trillion yen for solar energy (Sankei)


10) Government plans to provide 1.6 trillion yen in trade insurance
to help developing countries (Tokyo Shimbun)

North Korea problem:
11) Defense Minister Hamada says that even if North Korea-launched
missile is intercepted, Japan could suffer some damage (Asahi)
12) Deputy Chief Cabinet Secretary Konoike on the hot seat for
disparaging remark about Japan's missile defense capability to
intercept DPRK missiles (Mainichi)

Articles:

1) Poll: 68 PERCENT disagree with Ozawa's decision to stay on

YOMIURI (Top play) (Abridged)
March 27, 2009

According to a spot nationwide opinion survey conducted by the
Yomiuri Shimbun over the telephone from the afternoon of March 25
through yesterday evening, a total of 68 PERCENT of the public said
they did not agree with Democratic Party of Japan (Minshuto)
President Ozawa's decision to stay on as his party's head even after
his state-funded secretary had been indicted over political
donations from a construction company. A total of 22 PERCENT of the
respondents said they agreed with his decision. Respondents were
also asked whether they thought Prime Minister Aso or Ozawa was more
appropriate to be premier. In response, 32 PERCENT chose Aso, with
23 PERCENT preferring Ozawa. Aso also outstripped Ozawa in the last
survey taken March 6-8. In the public's preference of political
parties for proportional representation in the next election for the
House of Representatives as well, the DPJ tallied 31 PERCENT , down
3 points from the last survey, while the Liberal Democratic Party
caught up with the DPJ to also log 31 PERCENT , up 7 points.

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Ozawa has recently clarified his intention to stay on as DPJ
president. However, the poll shows the public casting a severe eye
on his decision. This will likely spur moves in the DPJ to "dump
Ozawa."

Ozawa's publicly-paid secretary has now been indicted for allegedly
violating the Political Funds Control Law over a construction
contractor's payoffs to Ozawa's fund-managing body. In the survey,
respondents were asked if they thought Ozawa has fulfilled his
accountability on this incident. To this question, a total of 84
PERCENT answered "no," with only 26 PERCENT saying "yes."

In popularity ranking for prime minister, Aso topped Ozawa (32
PERCENT to 23 PERCENT ) for the first time since the question was
first asked in November 2008. In the survey this time, respondents
were asked who they thought was appropriate to become DPJ president.
In the breakdown of their answers to this question, DPJ Vice
President Katsuya Okada topped all others, tallying 19 PERCENT .
Ozawa was at 9 PERCENT , ranking fifth. DPJ Deputy President Kan was
at 17 PERCENT , DPJ Vice President Seiji Maehara 16 PERCENT , and
DPJ Secretary General Hatoyama 13 PERCENT .

Cabinet support rebounds to 23 PERCENT

In the spot poll, the Aso cabinet's support rate increased to 23.2
PERCENT (from 17.4 PERCENT in the last survey) and its nonsupport
rate decreased to 64.5 PERCENT (from 74.8 PERCENT in the last
survey). In the breakdown of public support for political parties,
the LDP stood at 31.0 PERCENT (24.1 PERCENT in the last survey),
with the DPJ at 21.2 PERCENT (23.8 PERCENT in the last survey).
The proportion of floating voters with no particular party
affiliation was 36.9 PERCENT (42.6 PERCENT in the last survey).

2) Poll: 66 PERCENT urge Ozawa to quit party post

TOKYO SHIMBUN (Top play) (Abridged)
March 27, 2009

In a recent telephone-based Kyodo News spot poll taken across the
nation on March 25-26, a total of 66.6 PERCENT answered that
Democratic Party of Japan (Minshuto) President Ichiro Ozawa should
resign from his party post, with 28.9 PERCENT backing him. Ozawa
has clarified his intention to stay on even after his state-funded
secretary has been indicted over Nishimatsu Construction Co.'s huge
illicit payoffs to Ozawa's fund-managing body.

In the survey, respondents were also asked if Ozawa's account on the
incident was convincing. To this question, negative answers added up
to 79 PERCENT , with affirmative ones accounting for only 12.0
PERCENT .

The public approval rating for the Aso cabinet was 23.7 PERCENT , up
7.7 points from the last survey taken March 7-8. The disapproval
rating was 63.5 PERCENT , down 7.3 points.

When it comes to popularity ranking for premiership, Ozawa was above
Aso in the previous surveys from the one taken in December last year
to the last survey. In the survey this time, Ozawa was at 31.2
PERCENT , down 2.4 points from the last survey. Prime Minister Taro
Aso scored 33.1 PERCENT , up 7.5 points. Aso again outstripped
Ozawa.

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Asked about the desirable form of government, 44.2 PERCENT
preferred a "DPJ-led coalition," with 36.6 PERCENT choosing an
"LDP-led coalition." The gap has shrunken from the last survey, but
the DPJ was above the ruling Liberal Democratic Party in the
public's preference of a coalition government. In the public's
preference of political parties for proportional representation in
the next election for the House of Representatives as well, the DPJ
stood at 34.1 PERCENT , with the LDP at 30.5 PERCENT . Basically, it
may safely be said that the DPJ remains above the LDP even in the
aftermath of the incident this time.

In the breakdown of public support for political parties, the LDP
tallied 29.7 PERCENT , with the DPJ at 28.4 PERCENT . The New
Komeito, the LDP's coalition partner, was at 2.7 PERCENT . Among
other parties, the Japanese Communist Party was at 1.5 PERCENT , the
Social Democratic Party at 2.2 PERCENT , the People's New Party at
0.9 PERCENT , the Reform Club at 0.2 PERCENT , the New Party Nippon
at 0.1 PERCENT , and "none" at 32.1 PERCENT .

3) Calls for Ozawa's resignation spreading in DPJ

YOMIURI (Page 1) (Full)
March 27, 2009

Democratic Party of Japan (DPJ) President Ichiro Ozawa will attend
today a meeting of the DPJ House of Councillors members and a
meeting of the party's House of Representatives members to seek
support on his decision to continue serving as party leader.
However, since the result of a nationwide survey conducted by the
Yomiuri Shimbun indicates more than 60 percent of the respondents
are not satisfied with his decision to remain in his post, concerns
that Ozawa's continued leadership could negatively affect the party
in the next Lower House election are spreading in the main
opposition party. Calls for Ozawa to voluntarily quit his post are
growing, which could press him to reconsider his decision.

Ozawa met yesterday with DPJ Secretary General Yukio Hatoyama at
party headquarters and discussed what to do next. Ozawa told
Hatoyama: "I'm sorry; I will explain my decision again." Hatoyama
then replied: "I assume that various opinions will be raised, but I
would like you to listen to them carefully. I'll bring people around
in the end." He said that he would work on winning back the support
of party members.

The meeting of the DPJ Upper House members is expected to run for
about 30 minutes and the meeting of Lower House members, for about
40 minutes. The two meetings will take place in the Diet building
ahead of plenary sessions of both chambers of the Diet. Giving
considerations to the view that the meetings won't be concluded for
a short time, the party leadership is looking into the possibility
of extending the meetings.

In addition to lawmakers close to former President Seiji Maehara,
who has distanced himself from Ozawa, junior and mid-level DPJ
members are now calling for Ozawa's exit. Referring to the results
of the Yomiuri poll, Maehara yesterday said: "I think Mr. Ozawa will
judge based on consideration of various matters," indicating that
Ozawa's voluntarily resignation as party leader is desirable.

Among those expressing their understanding for Ozawa's bid to stay
on in his post, the view has been raised that Ozawa should fulfill

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his accountability. The outlook is that if DPJ lawmakers take that
Ozawa's explanation today is insufficient, Ozawa is certain to find
it difficult to manage the party.

4) Nishimatsu gave 6 million yen to Nikai office, disguising the
money as individual donations

ASAHI (Page 1) (Slightly abridged)
March 27, 2009

Nishimatsu Construction Co., a second-tier general contractor, made
donations worth 6 million yen to a political group represented by
Economy, Trade and Industry Minister Toshihiro Nikai in 2006 and
2007, disguising the money as individual donations, according to
sources related to Nishimatsu.

It has also been revealed that a consultant firm in Tokyo, in which
a former Nishimatsu executive serves as president, had bought a
condominium unit in Osaka for a Nikai-related political group and
later rented it to the organization. It is now suspected that
Nishimatsu had made monetary gifts in various forms to the Nikai
side in anticipation of its favor.

The Political Funds Control Law prohibits donations under other
people's names. The donations by Nishimatsu to Nikai, disguising
them as individual ones, might be in violation of the said law.

The Liberal Democratic Party's Wakayama Constituency No.3 chapter,
represented by Nikai, entered a total of 3 million yen in 2006 and
2007 in its political fund reports' individual donations section.
According to Nishimatsu-related sources, the company used about 60
employees' names and falsely recorded 50,000 yen from each employee
every year. The law does not require a political office to enter the
name of a donator if the amount is less than 50,000 yen.

The consultant firm in Tokyo purchased a condominium unit in Osaka
in 1999. Later, the firm rented the condo to the Nikai-related
organization, Kansai Shinpu-kai (Kansai New Wind Association),at an
annual rent of nearly 3 million yen up until February. Kansai
Shinpu-kai is effectively operated by Nikai's younger brother. The
unit intended for a family reportedly was remodeled to be used as an
office.

Furthermore, it has been unveiled that Nishimatsu paid 8.38 million
yen for tickets for parties held by the LDP Nikai faction (headed by
Nikai) between 2004 and 2006 through two dummy political groups
headed by an ex-Nishimatsu executive.

Nikai commented yesterday regarding the donations disguised as
individual ones and the office rental problem: "We do not have such
a perception. I recognize that each political organization has
provided political-funding records correctly in compliance with the
Political Funds Control Law."

5) Condo renter contacted Nishimatsu when Nikai office fell behind
with rent payments

MAINICHI (Page 1) (Excerpts)
March 27, 2009

Nishimatsu Construction Co., a second-tier general contractor based
in Minato-ward, Tokyo, allegedly covered rental charges for the

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political organization related to Economy, Trade and Industry
Minister Toshihiro Nikai in Osaka, Kansai Shinpu-kai. According to
informed sources, a design company in Tokyo, which was renting out a
condominium unit to the Nikai-related organization, contacted
Nishimatsu's general affairs department when the Nikai office's rent
payments fell behind. In response, Nishimatsu allegedly covered the
rent by providing the Liberal Democratic Party's Wakayama
Constituency No.3 chapter, represented by Nikai, with money
disguised as individual donations, using employees' names. It has
also been revealed through questioning persons concerned that
Nishimatsu covered the total cost of approximately 40 million paid
by the design firm for the purchase and reform of the condo unit. It
is now alleged that Nishimatsu was providing Kansai Shinpu-kai with
financial aid to cover its office expenses.

According to informed sources, when Kansai Shinpu-kai's rent
payments were in arrears in 2006, the design firm informed
Nishimatsu's then general affairs department chief of the delay in
payments. After examining the situation, the general affairs
department found that the company had not sent money to the Wakayama
Constituency No.3 chapter for two years. Upon contacting a person
concerned on the Nikai side, the department chief sent 3 million yen
each in 2007 and 2008, disguising the money as 60 employees'
donations.

6) Senior Vice Finance Minister Hirata quits over shady stock sale

MAINICHI (Top Play) (Excerpts)
March 27, 2009

Senior Vice Finance Minister Koichi Hirata on March 26 resigned,
taking the responsibility of selling his stocks in violation of an
ethics code for ministers, which bans stock trading by politically
appointed ministers. Hirata held a press conference at the Finance
Ministry the same evening. He said, "If Diet deliberations come to a
standstill, it would cause great trouble for the people." He
underscored that the reason for his resignation was to prevent Diet
deliberations on such issues as bills related to the fiscal 2009
budget from being thrown into turmoil. Concerning the ethics code
for ministers, he noted, "I have made no profits or losses in the
stock trading. In my view, it is delicate whether my action has
infringed on the ethics code."

Finance Minister Shoichi Nakagawa in mid-February resigned after the
meeting of finance ministers and central bank governors from the
Group of Seven Nations (G-7). Hirata's resignation will likely deal
a blow to the Aso administration. Prime Minister Taro Aso told
reporters on the evening of the 26th, "The stock sale took place
after the appointment of Hirata. If you ask his responsibility, I am
responsible for the matter, as it is I who appointed him."

Hirata on March 2 sold 1.12 million stocks amounting to 8.68 PERCENT
of the total outstanding shares of Chiyoda Ute (listed on the
Jasdaq stock market),based in Yokkaichi, Mie Prefecture, for 550
yen per share, a price nearly double its market value (290 yen per
share),to Zero System, an oil wholesaler, which he himself actually
owns. Chiyoda Ute was founded by Hirata's father. He himself once
served as president of the company. The sales amount is 616 million
yen. The profits are about 300 million yen larger than the amount
that would have been made by selling them on the market. This will
likely draw criticism that the trading was nontransparent.


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The government in 2001 compiled the ethics code that calls on
ministers, vice ministers and parliamentary secretaries to
self-refrain from stock trading. Hirata's case infringes on the
code.

Hirata during the press conference revealed that the Cabinet
Secretariat in November or December last year pointed out that he
had yet to entrust his stocks and stock sale could infringe on the
ethics code for ministers, but he sold his stock without making
inquiries about the specifics. He said that he does not feel guilty
about the stock sale itself.

7) Bargaining over Lower House dissolution rekindling in LDP

MAINICHI (Page 5) (Excerpts)
March 27, 2009

While the main opposition Democratic Party of Japan (DPJ) is in
disarray due to President Ichiro Ozawa's announcement that he will
remain in his post, a tug-of-war flared up again in the ruling
Liberal Democratic Party (LDP) over the timing of dissolution of the
House of Representatives and the general election that would follow.
In a meeting yesterday of his faction, LDP Election Strategy Council
Chairman Makoto Koga mentioned the possibility of an early
dissolution of the Lower House, noting: "We should feel the tension
in May." On the other hand, former Chief Cabinet Secretary Nobutaka
Machimura, who also heads a faction in the LDP, took a cautious
stance toward early dissolution. "Unless we first implement policy
measures to help support the livelihoods of the people, the Lower
House should not be dissolved."

Referring in the regular meeting yesterday to a supplementary budget
for fiscal 2009 that would include another economic stimulus
package, Koga stressed: "The timing of the submission and enactment
of the extra budget to the Diet is crucial for the political
situation." He asserted that the Lower House should be dissolved
only after the extra budget for fiscal 2009 clears the Diet.

Taku Yamasaki, former LDP vice president, appearing yesterday on a
BS11 digital news show, took the view that the Lower House should be
dissolved before the supplementary budget clears the Diet. He said:
"By showing the general framework of additional economic stimulus
measures, the extra budget should be a campaign issue for the next
Lower House election."

With the illicit donations scandal involving Nishimatsu Construction
Co. in mind, Yamasaki said: "Since (national politics) has reached
an impasse, a vote of national confidence should be sought."

Meanwhile, the illegal donations scandal has left the DPJ shocked
and shaken, and criticism of Ozawa is rising in the party. The
outlook is that the fiscal 2009 budget and related bills will clear
the Diet today as the government and ruling coalition had expected.
The largest opposition party's blunder and a sense of respite in the
Diet schedule have prompted calls for an early Lower House
dissolution in the LDP.

In a meeting yesterday of his faction, Machimura pointed out:
"Giving consideration to the present economic situation, it is not
good that the Lower House will be dissolved, just to show the public
a blueprint (the extra budget)." Asked by reporters about the
possibility of the Lower House being dissolved in May, Machimura

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took a cautious stance, saying: "(With the Tokyo Metropolitan
Assembly election coming up in July) the New Komeito will probably
not accept such an idea. It is necessary to give consideration to
our partner (in the coalition government)."

8) Fiscal 2009 budget to clear Diet today

NIKKEI (Page 2) (Full)
March 27, 2009

The fiscal 2009 budget bill and four related bills, now being
deliberated in the House of Councillors, will be enacted today.
These bills will be rejected in the opposition-controlled Upper
House the same day, but the fiscal 2009 budget bill will be enacted
into law after deliberations by a joint committee of both Houses,
based on a constitutional rule of a decision in the House of
Representatives taking precedence over an Upper House decision. The
related bills will be brought back into the Lower House and there be
enacted by an override vote.

After the bills pass the Diet, the government and the ruling parties
intend to work out additional economic measures.

The fiscal 2009 budget totals 88.548 trillion yen, which includes a
record high of 51.731 trillion yen in general expenditures. Outlays
for job-increase measures amounting to 500 are incorporated in it.
One of the four related bills is a tax reform bill-related bill,
which include a policy of raising the consumption tax in fiscal 2011
in an additional clause.

9) Additional economic stimulus package drafted by ruling camp: 2
trillion yen for solar energy generation; Subsidies for raising
salaries of caregivers

SANKEI (Top Play) (Excerpts)
March 27, 2009

A large-scale additional economic stimulus package draft, which the
government and the ruling parties will finalize in April, was
revealed on March 26. The draft includes the installation of solar
energy generation panels at public elementary, middle and high
schools and government and other public offices throughout the
nation. It also includes providing subsidies for raising salaries of
caregivers for three years with the aim of reducing out-of-pocket
medical costs and improving caregivers' working conditions. The
government and the ruling parties intend to speed up efforts to
secure Diet approval for the package, by compiling a fiscal 2009
extra budget for measures that do not require legal amendments and
therefore can be implemented immediately.

The government intends to make the envisaged package large in order
to address the worsening economy. The package will be implemented
over the next three years. The draft report notes that employment
will be secured and the economy will be shored up with investment in
the environment, strengthened social security, implementation of
public works earlier than scheduled and an expanded financial and
tax systems.

In the environment area, approximately 2 trillion yen will be
disbursed for the promotion of the installation of solar energy
generation panels at public schools and government and other public
offices. The breakdown is: 400 billion yen for the installation of

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such panels at public elementary, middle and high schools that have
completed anti-quake works; 1.1 trillion yen for government and
other public offices; and 880 billion yen for public housing.

In order to allay anxieties people are feeling about the medical
system, over-the-counter payments of medical fees will be reviewed
with a budget between 500 billion yen and 600 billion yen a year.
The government is also looking into establishing an additional basic
pension system (tentative name) in response to the New Komeito's
call for an increase in the basic pension payment as a measure to
deal with low income earners. National pension worth 66,000 yen is
currently paid to households whose annual income is less than 2
million yen. A plan to raise the amount to 80,000 yen, which is more
than welfare benefits, has been floated.

As measures related to public works, works to make elementary and
middle school buildings throughout the nation quake-resistant will
be implemented earlier than scheduled. An increase in the
installation of air conditioners and in-school LAN system will also
be incorporated.

10) Government to disburse 1.6 trillion yen for trade financing to
boost export and import insurance related to developing countries

TOKYO SHIMBUN (Page 3) (Full)
March 27, 2009

The government on March 26 decided to extend financial assistance
topping 1.6 trillion yen over the next two years with a focus on
expanding insurance underwriting by Nippon Export and Investment
Insurance. The aim is to prevent a decline in trade between Japanese
companies and emerging countries or developing countries. Prime
Minister Taro Aso will announce the plan at the G-20 financial
summit to be held in London on April 2. Developing countries, which
have suffered a serious setback from the financial crisis, are
finding it difficult to secure funds needed for exporting and
importing goods. The government intends to speed up procedures for
expanding financial assistance.

Trade financing is an arrangement under which financial institutions
lend funds necessary for foreign trade settlement to trading
companies. Vitalizing trade financing will likely be on the agenda
of the financial summit.

Nippon Export and Investment Insurance, an independent
administrative agency, underwrites insurance policies necessary for
trade transactions by private companies.

Under the envisaged assistance package, which targets Japanese
companies, insurance underwriting in readiness for failure in
payments for exported goods will be expanded. Assistance will also
be provided for the management of cash flows using liquidation of
receivables. The government along with the Japan Bank for
International Cooperation (JBIC) will also provide insurance to
Japanese banks that extended loans to financial institutions in
developing countries.

Assistance for trade financing to be provided by the Japanese
government will top 2 trillion yen over two years, when combined
with other assistance measures using the JBIC, which have already
been announced.


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The World Bank estimates that a shortage of trade-related funds
throughout the world is 200 billion dollars or approximately 20
trillion yen at the most.

11) Missile debris could cause damage

ASAHI (Page 4) (Full)
March 27, 2009

Defense Minister Hamada, sitting in yesterday on the House of
Councillors Budget Committee, indicated that if the Patriot Advanced
Capability 3 (PAC-3),a land-based ground-to-air guided missile,
intercepted a missile launched by North Korea, its debris could fall
to the ground and cause damage. He stated: "If we hit a projectile
in outer space, it will almost completely burn up and will not fall,
but I cannot tell whether we will be affected if something destroyed
in the sky over our area were to fall."

12) Difficult to hit a bullet fired by a pistol: Konoike

MAINICHI (Page 5) (Full)
March 27, 2009

Asked about Japan's missile defense (MD) shield against North Korean
long-range ballistic missiles in a House of Councillors Budget
Committee session yesterday, Deputy Chief Cabinet Secretary
Yoshitada Konoike stated: "It is extremely difficult to hit a bullet
fired by a pistol." He took a view similar to the one taken by a
high-level official on March 23. That official remarked: "If you
shoot a gun and then shoot at the bullet with another gun, you won't
hit it. Once (a missile) is shot, it is impossible to hit it."
("Teppou wo uttekita no wo, teppou de utte mo, ataranai. (Misairu
wo) uttekitara ataru wake ga nai.")

Social Democratic Party Chairperson Mizuho Fukushima asked Konoike:
"What do you think of the view that it is impossible to hit a bullet
fired by a pistol by firing at it with another pistol?" Konoike
first avoided answering the question, saying: "I'm not in a position
to answer your question here." Mizuho then pressed on, asking him
again: "Have you ever made this kind of remark?" The deputy chief
cabinet secretary finally just said: "I think it would be
difficult."

POST