JAPANESE MORNING PRESS HIGHLIGHTS 03/30/09

UNCLAS SECTION 01 OF 08 TOKYO 000703

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/30/09

Index:

Ozawa in deep trouble:
1) Asahi poll: 63 PERCENT of public say Ozawa should resign as DPJ
head; Aso Cabinet support rate rises to 22 PERCENT (Asahi)
2) Nikkei poll: 64 PERCENT want Ozawa to quit his DPJ post; Aso
Cabinet support jumps 10 points to 25 PERCENT (Nikkei)
3) DPJ backed candidate in Chiba gubernatorial race loses badly to
LDP's choice, as voters react negatively to Ozawa's money scandal
(Tokyo Shimbun)
4) Chiba election loss triggers new wave of "oust Ozawa" cries in
the DPJ (Tokyo Shimbun)

5) Investigators targeting METI Minister Nikai's political
organization for illegal donations from Nishimatsu construction
readying arrest papers (Yomiuri)

North Korea missiles:
6) U.S., Japan, South Korean delegates to six-party talks agree that
a missile launch by North Korea should by handled by the UN Security
Council (Yomiuri)
7) Japanese, British premiers agree that a North Korea missile
launch would be a violation of a UN resolution (Sankei)
8) Defense Ministry and the Prime Minister's office at odds over the
issuing of the destruct order related to North Korea's missile
launch (Tokyo Shimbun)

9) U.S., Japan agree to joint research in eight environmental and
energy areas (Yomiuri)

Foreign aid:
10) Official development assistance (ODA) outlays to rise for the
first time in three years (Nikkei)
11) Japan at the G-20 summit to announce 2 trillion yen program of
ODA for Asia (Nikkei)

Articles:

1) Poll: 63 PERCENT urge Ozawa to quit; Cabinet support rebounds to
22 PERCENT

ASAHI (Top play) (Abridged)
March 30, 2009

Democratic Party of Japan (Minshuto) President Ozawa's state-funded
secretary has been indicted over illicit donations from a
construction company to Ozawa's fund-managing body. In the wake of
this incident, the Asahi Shimbun conducted a telephone-based spot
nationwide public opinion survey on March 28-29. According to
findings from the survey, 63 PERCENT of the respondents answered
"yes" when they were asked if they thought it would be better for
Ozawa to resign from his party post, up from 57 PERCENT in the last
survey taken March 7-8. "No" accounted for 24 PERCENT . The DPJ was
substantially above the ruling Liberal Democratic Party in the
public's preference of political parties for proportional
representation in the next election for the House of
Representatives. In the survey this time, however, the gap between
the two parties narrowed, with the DPJ at 31 PERCENT and the LDP at
27 PERCENT .

Even among DPJ supporters, the "better to resign" opinion accounted
for 51 PERCENT , and "better to stay on" at 44 PERCENT . In the last

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survey, the figures were 40 PERCENT versus 49 PERCENT , and those
in support of Ozawa's decision to stay on outnumbered those
negative. In the survey this time, however, "better to resign"
topped "better to stay on."

In the survey, respondents were also asked which political party
they would vote for in their proportional representation blocs if
they were to vote now. In an earlier survey taken in mid-February
before the last survey and before the arrest of Ozawa's secretary,
the DPJ was substantially above the LDP, with the DPJ at 42 PERCENT
and the LDP at 22 PERCENT . In the last survey, however, the gap
narrowed to 36 PERCENT versus 24 PERCENT .

In the breakdown of public support for political parties as well,
the LDP and the DPJ were on a par at 22 PERCENT in the last survey.
In the spot survey this time, however, the LDP outstripped the DPJ,
with the LDP at 27 PERCENT and the DPJ at 20 PERCENT .

In the meantime, the rate of public support for Prime Minister Aso's
cabinet was 22 PERCENT , rising from the 14 PERCENT rating in the
last survey. Among LDP supporters, the Aso cabinet's approval rating
was only 40 PERCENT in the survey before last but picked up to 48
PERCENT in the last survey and to 56 PERCENT in the survey this
time.

Respondents were further asked which one between Aso and Ozawa they
thought would be more appropriate as premier. In this preference of
leadership for the nation, Aso scored 30 PERCENT , with Ozawa at 26
PERCENT . The figures were 22 PERCENT versus 32 PERCENT in the
last survey. In the latest survey, however, Aso outstripped Ozawa.

2) Poll: 64 PERCENT urge Ozawa to quit; Cabinet support rises to 25
PERCENT

NIKKEI (Page 1) (Abridged)
March 30, 2009

In the latest opinion poll jointly conducted by the Nihon Keizai
Shimbun and TV Tokyo on March 27-29, respondents were asked if they
thought Ichiro Ozawa, president of the leading opposition Democratic
Party of Japan (Minshuto),should resign his party post over the
indictment of his state-funded secretary in connection with
Nishimatsu Construction Co.'s huge illicit payoffs to Ozawa's
fund-managing body. In response to this question, 64 PERCENT
answered "yes," with 22 PERCENT saying his decision to stay on is
appropriate. The Aso cabinet's support rate was 25 PERCENT , up 10
points from the last survey taken in February. It rebounded to top
20 PERCENT for the first time since December last year. The
nonsupport rate decreased 13 points to 67 PERCENT .

In the breakdown of public support for political parties, the ruling
Liberal Democratic Party dropped 1 point to 33 PERCENT , with the
DPJ likewise falling 5 points to 30 PERCENT . The LDP outstripped
the DPJ for the first time since December last year. This seems to
reflect the indictment of Ozawa's secretary. In the public's
preference of political parties for proportional representation in
the next election for the House of Representatives, the DPJ was
above the LDP, with the DPJ tallying 31 PERCENT and the LDP at 28
PERCENT . However, the gap has shrunken 13 points.

The survey was taken by Nikkei Research Inc. by telephone on a
random digit dialing (RDD) basis. For the survey, samples were

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chosen from among men and women aged 20 and over across the nation.
A total of 1,557 households with one or more eligible voters were
sampled, and answers were obtained from 922 persons (59.2 PERCENT
).

3) Morita newly elected as Chiba governor, defeating DPJ's candidate
and others

TOKYO SHIMBUN (Top Play) (Excerpts)
March 30, 2009

Independent Kensaku Morita, 59, was elected governor of Chiba
Prefecture in Sunday's election, defeating four other candidates
including Taira Yoshida, 49, former railroad company president,
supported by the main opposition Democratic Party of Japan (DPJ).
Morita ran in the gubernatorial race as an independent, but he was
backed by about half of the Liberal Democratic Party (LDP) members
in the Chiba Prefectural Assembly. He succeeded in winning support
from unaffiliated voters because his name is well known.

The large-scale election was the first one to be held since DPJ
President Ichiro Ozawa's first state-paid secretary was indicted for
receiving huge amounts of illegal donations from Nishimatsu
Construction Co. In the wake of Yoshida's defeat, calls for Ozawa to
resign as party leader are bound to rekindle in the DPJ, although
Ozawa has expressed his intention to remain in his post. The largest
opposition party fielded Yoshida as candidate, after giving up on
its decision to recommend Kansai University Prof. Masumi Shiraishi.
Ozawa on the 28th called on Yoshida's election office in Chiba City
to give him words of encouragement. However, Yoshida appears to have
failed to gain votes due to the indictment of Ozawa's secretary.

Commentary

Kensaku Morita has wiped away the stain of defeat in the election of
four years ago. He won by gaining support of the unaffiliated
voters, advocating a policy of giving priority to prefectural
residents rather than party affiliation. Carrying out a high profile
campaign, he grabbed the lead early on in the campaign. Voters
apparently expect him to publicize the image of Chiba across the
nation, as being done now by Miyazaki Gov. Hideo Higashikokubaru and
Osaka Gov. Toru Hashimoto.

During the election campaign, no Chiba Prefectural Assembly members
belonging to the LDP delivered speeches to support Morita, content
to back him from behind the scenes. Morita did not ask any
influential Diet members and celebrities to support his campaign. He
was able to project a bright image of himself during his campaign,
although there is the growing sense of impasse among the public due
to the economic recession. He appealed to voters with such short
phrases as "Let's take advantage of Chiba's potential," rather than
playing up specific policies.

Meanwhile, Yoshida, who was named by incumbent Gov. Akiko Domoto as
her successor, was defeated. He was unable to clarify his
differences with Morita, although he ran openly as being recommended
by the DPJ. Due to his low profile, he could not gain the attention
of floating votes. The donation scandal involving Nishimatsu appears
to have spoiled Yoshida's chances.

Morita avoided specific policies, except for promising to
drastically cut the toll on the Tokyo Bay Aqua-Line bridge-tunnel to

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800 yen, as well as the introduction of a linear-car high-speed
transport system between Narita and Haneda airports. His election
strategy was effective. For the new Chiba governor, however, there
are many issues to address, including the reconstruction of Chiba's
financial condition, the creation of a new medical service system,
and measures to boost jobs. Morita's administrative skills will be
tested immediately upon assuming office.

4) Drive to unseat Ozawa from DPJ president's post likely to
rekindle

TOKYO SHIMBUN (Page 2) (Excerpts)
March 30, 2009

With the defeat in Sunday's Chiba prefectural gubernatorial election
of the candidate recommended by the Democratic Party of Japan (DPJ),
calls for DPJ President Ichiro Ozawa's resignation from his post are
certain to flare up again. Since it is unavoidable that concern over
the next House of Representatives election will gradually spread in
the main opposition party, the headwind again building up against
Ozawa will not likely weaken.

DPJ Secretary General Yukio Hatoyama released a comment on the
result of the Chiba election that says: "The DPJ will do its best in
order to achieve a change in government, by becoming a party that is
trusted by the public."

It had been reported that the DPJ candidate would have an uphill
battle in the election, regardless of disarray in choosing its
candidate.

Given an additional blow by the donation scandal involving
Nishimatsu Construction Co., Ozawa, who had refrained from going on
a stumping, visited Chiba on March 28. The dominant view in the DPJ
is that the defeat of its candidate resulted mainly in the
fundraising scandal.

Yesterday noon before the defeat recommended by the DPJ was
reported, asked by reporters whether the result of the gubernatorial
race would become material to judge Ozawa's fate, Hatoyama said:
"Since this is a local election, there is no possibility to do so.
With Lower House dissolution approaching, how each candidate is
doing in the election is everything." He appears to have taken a
precaution to prevent the result of the Chiba gubernatorial race and
calls for Ozawa's resignation as party leader from being linked.

However, important local elections -- the Akita gubernatorial
election on April 12 and the mayoral election of Nagoya City on
April 16 -- will be held.

5) METI Minister Nikai's office to be prosecuted on charge of
receiving political donations from Nishimatsu

YOMIURI (Top Play) (Excerpts)
March 30, 2009

There have been charges emerging that Nishimatsu Construction Co., a
second-tier general contractor, had paid in its entirety the rent of
a condominium unit used as an office by a political organization of
Economy, Trade and Industry Minister Toshihiro Nikai. The Tokyo
District Public Prosecutors Office's special investigation squad has
decided to establish a case against the organization on charges of

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violating the Political Funds Control Law. Prosecutors apparently
suspect the company's payments for the annual rent of about 2.8
million yen violate the said law, which prohibits politicians from
receiving corporate donations. In a case of illegal political
donations from Nishimatsu to an office linked to Democratic Party of
Japan President Ichiro Ozawa, his first state-funded secretary has
already been indicted. The investigation in this case is expected to
spread to political organizations connected to other Liberal
Democratic Party lawmakers.

According to Nishimatsu sources, its Kansai branch office was asked
by Nikai's younger brother around 1999 to provide an office to
Kansai Shinpu-kai (Kansai New Wind Association),a political
organization that is operated by the brother. In response to the
request, Mikio Kunisawa, who was then president of Nishimatsu and
has been prosecuted on charges of violating the said law, decided to
provide the organization with an office free of charge and
instructed his subordinates to have OA Engineering Co., a
Nishimatsu-connected design company, buy a condominium. The design
company purchased a condo unit in Osaka for approximately 40 million
yen, but the money was paid by Nishimatsu. Nishimatsu had the unit
refurbished for use as an office. OA Engineering and Kansai
Shinpu-kai later concluded a lease on the condo at an annual rent of
about 2.8 million yen. The political organization had been using the
property until late February.

To cover the rent, Nishimatsu began in 2006 to send 3 million yen
annually to the LDP's Wakayama Constituency No. 3 chapter,
represented by Nikai, under the names of its 60 employees and their
families. The chapter then transferred the money to Kansai
Shinpu-kai through a Nikai-related organization, Nikai Toshihiro
Shinpu-kai in Wakayama Prefecture. Kansai Shinpu-kai has been paying
about 2.8 million yen as the annual rent to OA Engineering.

6) Delegates from Japan, U.S., South Korea agree to have UNSC handle
issue if North Korea launches missile

YOMIURI (Page 1) (Full)
Evening, March 28, 2009

Jun Kato, Washington

The chief negotiators from Japan, the United States, and South Korea
of the six-party talks on North Korea's nuclear programs met in
Washington on the evening of March 27, local time. The
representatives discussed the issue of Pyongyang preparing to launch
what it calls a satellite but other countries believe may be a
ballistic missile. The delegates agreed that if the North launches a
projectile, while calling it a satellite, the launch would
constitute a violation of a UN Security Council resolution and that
the issue should be discussed at the UNSC. They also agreed to urge
North Korea to refrain from launching any projectile.

Participating in the meeting were Foreign Ministry's Asian and
Oceanian Affairs Bureau Director General Akitaka Saiki, U.S. Special
Envoy to the Six-Party Talks Sung Kim, and South Korean chief
delegate Wi Sung Lac. They also exchanged views on the impact of the
North Korean missile problem on the nuclear issue.

After the trilateral meeting, Saiki told reporters: "A launch would
violate a UNSC resolution, no matter how the North describes it. We
reconfirmed that if the North fires a projectile, we will

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immediately have the matter discusses at the UNSC." Saiki then
indicated that it would become difficult for the six-party talks to
be resumed for the time being, remarking: "The missile issue is
linked to the six-party talks."

Prior to the meeting, Saiki also held talks with U.S. Special
Representative for North Korea Policy Bosworth and others.

Pyongyang has claimed that if the UNSC discusses any document or
resolution criticizing North Korea, the six-party talks would come
to an end.

7) Japanese, British leaders define North Korea's expected missile
launch as violation of UN resolutions

SANKEI (Page 5) (Full)
March 30, 2009

Prime Minister Taro Aso held a telephone conversation with British
Prime Minister Gordon Brown at his official residence last night, in
which the two leaders shared the view that North Korea's expected
launch of a long-range ballistic missile would violate a United
Nations Security Council's (UNSC) resolutions.

Aso and Brown agreed that North Korea should refrain from any
conduct that would "impair the peace and security of the region."
The leaders then confirmed that if the North launches a missile, the
matter should be taken to the UNSC.

8) Defense Ministry, Kantei at odds over security policy

TOKYO SHIMBUN (Page 2) (Full)
March 29, 2009

There are inconsistencies within the government over its security
policy measures, such as how to deal with the long-range ballistic
missile North Korea is about to launch, calling it an "artificial
satellite."

The defense minister issued a destruct order to the Self-Defense
Forces on March 27 allowing them to use the missile defense (MD)
system. The policy process found the Defense Ministry and the prime
minister's office or Kantei at odds with each other. A senior
official of the Defense Ministry admitted that there was a "gap"
with the Kantei.

The Defense Ministry wanted to have the destruct order adopted in a
cabinet meeting since it did not want to be blamed should the SDF
fail to intercept the missile. Meanwhile, the Kantei was concerned
it might irritate North Korea by having the cabinet adopt the
destruct order. In addition, the Kantei was cautious because the
making of a cabinet decision could conclude that the projectile
would be headed for Japan.

In the end, the government called a meeting of the Security Council
of Japan to go through the process of making a decision with the
participation of cabinet ministers, including the foreign, defense,
and finance ministers. This was done out of consideration to the
Defense Ministry's standpoint of seeking to share responsibility.

A government source recently said it would be impossible for the MD
system to intercept a ballistic missile. Chief Cabinet Secretary

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Takeo Kawamura and Defense Minister Yasukazu Hamada totally denied
that remark. However, there is still a perception gap within the
government. Foreign Minister Hirofumi Nakasone said, "It's probably
true that it would difficult (to intercept one)." A Foreign Ministry
official said, "It would be better for the Defense Ministry to say
little about intercepting."

9) Japan, U.S. to carry out joint research in eight state-of-the-art
areas, including environment and energy fields

YOMIURI (Top Play) (Excerpts)
March 29, 2009

The Yomiuri Shimbun has learned that the governments of Japan and
the U.S. will form a comprehensive tie-up to promote joint research
in eight cutting-edge areas, including solar-energy generation and
biofuels. Responsible organizations of the two countries will sign a
memorandum to that effect possibly in April. The two governments are
also looking into setting up a government-private sector joint
taskforce. The aim of the initiative is to take the global lead in
such high-growth potential areas as the environment and energy by
strengthening cooperative ties.

Prime Minister Aso and President Obama, during their summit meeting
in February, agreed to bilateral technical cooperation to promote
new energies and expand use of next-generation automobiles. The
envisaged tie-up is the first tangible step in that effort.

Five national research centers, such as Japan's National Institute
of Advanced Industrial Science and Technology (AIST) located in
Tsukuba City, Ibaraki Prefecture, and the Los Alamos National
Laboratory of the U.S. Energy Department, will take part in the
joint research.

The following eight areas will be covered by the project: solar
energy generation; the manufacturing of biofuels using vegetable
cellulose; and the carbon dioxide capture and storage (CCS)
technology to contain carbon dioxide emitted at thermal power
plants.

10) Net ODA outlays last year rise for first time in three years,
but Japan's performance remained in fifth place among major donors

NIKKEI (Page 2) (Full)
March 28, 2009

The Organization for Economic Cooperation and Development (OECD)
revealed on March 27 its provisional calculations of official
development assistance (ODA) performances in 2008. Japan's net
outlays determined by deducting repaid loans from actual
disbursements stood at $9.36 billion or 969 billion yen, up 21.9
PERCENT over the preceding year, and the first rise in three years.
However, Japan's ranking among major donors remained in the fifth
spot, as it was last year.

The OECD's Development and Assistance Committee (DAC) will release
the figures on the 30th. The amounts of ODA extended by the 12 DAC
member nations reached $119.6 billion, up 15.6 PERCENT , resetting a
record high reached in 2005. Japan was the top ODA donor during the
1990s until 2000.

11) Prime minister to announce pledge of ODA worth 2 trillion yen to

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Asia at financial summit

NIKKEI (Page 1) (Full)
March 28, 2009

Prime Minister Taro Aso on March 27 decided to announce at the Group
of 20 financial summit in London on April 2 a plan to extend 2
trillion yen or roughly 20 billion dollars in official development
assistance (ODA) to Asia. The aim is to assist with ODA funds those
Asian countries whose economies have been affected by the
international financial crisis by a shortage of capital. The ODA
will be used for farm-village development and for infrastructure
that would lead to expanded domestic demand and strengthening growth
potential.

The prime minister in a speech at the World Economic Forum Annual
Meeting (Davos Conference) in January announced a plan to disburse
1.5 trillion yen in ODA to Asia. However, with the global economic
recession becoming even more serious, the government has determined
that it has become necessary to boost that assistance. Japan will
underscore its stance of tackling Asian assistance by adding 500
billion yen to the original plan.

The ODA will be extended in principle as yen loans. Although no
specific timeframe will be set, assistance will probably be extended
over a three-year period, starting this year. The government will
speed up a process of determining recipient countries with a focus
on India, Indonesia and other Asian countries. It will also look
into expanding program loans aimed at having the recipients improve
their policies. The aid will have a strong aspect of being fiscal
assistance.

POST