Cablegate: Japanese Morning Press Highlights 12/02/08

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 12/02/08

Index:

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

Political agenda:
4) Public turns cold eyes on Prime Minister Aso in Fuji-Sankei poll:
Cabinet support plunges 17 points to 27.5 PERCENT , entering "danger
zone" (Sankei)
5) Aso on poor ratings in polls: I take it humbly (Nikkei)
6) Liberal Democratic Party (LDP) support for Prime Minister Aso
also cooling down (Tokyo Shimbun)
7) LDP senior members one after the other criticize Aso (Yomiuri)
8) Democratic Party of Japan President Ozawa: Aso administration
won't last too much longer (Tokyo Shimbun)
9) LDP set to adopt bill revising postal privatization (Yomiuri)

10) ASEAN-Japan EPA goes into effect today, designed to accelerate
an international division of labor among the countries (Yomiuri)

U.S.-Japan ties:
11) President-elect Obama announces foreign-policy team, ushering in
period of review of U.S. relations with Japan (Mainichi)
12) Senator Daniel Inouye, who recently visited Japan, could serve
as a channel to the Obama administration (Yomiuri)

13) Following arrival in Yokosuka of the nuclear-powered carrier USS
George Washington, market developing quietly for
radiation-protection materials (Tokyo Shimbun)

14) G-8 ministerial meetings called off one after another; Japanese
diplomacy affected by conflict between Russia and U.S., European
countries (Nikkei)

Articles:

1) TOP HEADLINES

Asahi: Mainichi: Yomiuri:
Japanese auto sales plunge 27.3 PERCENT to hit 39-year low in
November: Margin of decline twice that of last month

Nikkei:
Domestic credit markets tighten as interbank rates soar, offsetting
effects of rate cut

Sankei:
Cabinet approval rating drops to 27.5 PERCENT , according to joint
poll by Sankei and FNN

Tokyo Shimbun:
Health Ministry to take comprehensive measures for juvenile
dementia, starting next fiscal year

Akahata:
Scrap law to help physically handicapped people become financially
independent and set up new law

2) EDITORIALS

Asahi:

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(1) Welfare annuity data manipulation: All-out effort to bail out
victims needed
(2) New strains of flue: How can pandemic outbreak be constrained?

Mainichi:
(1) UN climate talks open in Poland: Deepen discussion in run-up to
final negotiations
(2) Delay in reform of Cabinet Personnel Bureau unavoidable

Yomiuri:
(1) Participation of victims in trials: New system should help shed
light on truth
(2) It is important to manage employment system in flexible manner

Nikkei:
(1) COP14 kicks off in Poland: We hope to see progress
(2) South Korea should not change its North Korea policy

Sankei:
(1) Decline in cabinet support ratings: Reconfirm responsibility of
administration
(2) Occupation of Thai airport: Reconciliation befitting country of
smiles urged

Tokyo Shimbun:
(1) Meeting to combat global warming: Signs of turnaround in sight
(2) Employment anxiety spreading: Hurry to take measures for
nonpermanent workers

Akahata:
(1) Iraq and Afghanistan: We urge review of war on terror

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 1

NIKKEI (Page 2) (Full)
December 2, 2008

07:33
Took a walk around his private residence in Kamiyama-cho.

10:13
Attended a meeting commemorating the beginning of digital broadcasts
at Keio Plaza Hotel in Nishi-Shinjuku.

11:02
Visited the general store Shibuya Loft.

12:21
Held an informal meeting with reporters at the Kantei.

13:35
Met U.S. Senator Daniel Inouye and others.

14:39
Met UNESCO Executive Director Matsuura and Permanent Mission of
Japan Yamamoto.

15:18
Met METI Economic and Industry Policy Bureau Director General
Matsunaga. Later, met Administrative Expenditures Checkup Committee

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Chairman Motegi.

16:05
Met Nemuro Mayor Hasegawa and other members of the group calling for
return of the Northern Territories.

16:40
Met at the Imperial Hotel with Economy, Trade and Industry Minister
Nikai, Japan Business Federation Chairman Mitarai, and others.
Attended a ceremony commemorating the 150th anniversary of the
establishment of the modern steel industry.

17:09
Met Lower House member Yoshinobu Shimamura in the Diet Building.
Later, attended an LDP executive meeting.

18:01
Met at the Kantei with Mitarai, Japan Chamber of Commerce and
Industry Chairman Okamura, and others, with Health, Labor and
Welfare Minister Masuzoe, Nikai and others.

19:12
Met Secretary General Hosoda and deputy secretaries general Ishihara
and Hayashi at his official residence.

20:56
Returned to his private residence.

4) Poll: Cabinet support down to 27.5 PERCENT

SANKEI (Top play) (Abridged)
December 2, 2008

The rate of public support for Prime Minister Taro Aso's cabinet
fell below 30 PERCENT , the Sankei Shimbun found yesterday from its
joint poll with Fuji News Network (FNN). The Aso cabinet's approval
rating was 27.5 PERCENT , showing a drop of more than 17 percentage
points from its inaugural 44.6 PERCENT rating in late September.
The disapproval rating rose to 58.3 PERCENT , topping the approval
rating. The survey clearly shows the public's severe eye toward the
prime minister.

In the survey, respondents were asked if they appreciated the Aso
cabinet. To this question, 71.9 PERCENT answered "no" when they
were about leadership. When it comes to what the prime minister says
and does, 78.4 PERCENT gave negative answers. When asked about
economic measures and foreign policy, affirmative answers accounted
for only 20 PERCENT to 30 PERCENT . In addition, respondents were
also asked if they thought Aso's advocacy of cash payouts would be
appropriate as an economic stimulus. To this question, "yes"
accounted for only 18.3 PERCENT , with "no" reaching 76.9 PERCENT .

Respondents were further asked which one between Aso and Democratic
Party of Japan (Minshuto) President Ichiro Ozawa they thought was
more appropriate for prime minister. Ozawa, who was overwhelmed by
Aso in the past polls, stood at 32.5 PERCENT , 1 point higher than
Aso.

The survey was conducted across the nation on Nov. 29-30 after the
Nov. 28 Diet debate between Aso and Ozawa. Answers were obtained
from a total of 1,000 persons, who were chosen from among men and
women aged 20 and over.

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5) Prime Minister Aso on poor ratings in polls: I take it humbly

NIKKEI (Page 2) (Full)
December 2, 2008

Yesterday many in the ruling and opposition parties reacted to the
sharp plunge in the support rate for Prime Minister Taro Aso's
cabinet in a poll jointly conducted by the Nihon Keizai Shimbun and
TV Tokyo. Aso told the press corps at the Prime Minister's Official
Residence (Kantei): "I have to humbly take the public's criticism."
Hidehisa Otsuji, chairman of the Liberal Democratic Party's caucus
in the House of Councillors, said in a strong tone: "The figure is
serious. The Kantei and the ruling coalition should support the
prime minister so that he will be able to display his real value."

Meanwhile, former LDP Secretary General Hidenao Nakagawa commented:

"Conversely, 60 PERCENT to 70 PERCENT urged him to live up to
public expectations. I don't mean to drag him down, but I want him
as the representative of the people to carry out politics with
plunk, zeal and readiness."

A senior New Komeito official made a specific request of the prime
minister, saying: "Rather than going on the defensive, Mr. Aso
should show his true character."

DPJ Diet Affairs Committee Chairman Kenji Yamaoka took the view that
the Aso administration would reach a dead end. He said: "I assume
that some LDP lawmakers might leave the party at around the end of
the year."

6) Scope column: LDP support for Aso cooling down; Hidenao Nakagawa
to form parliamentary group

TOKYO SHIMBUN (Page 2) (Excerpts)
December 2, 2008

The unity of the ruling Liberal Democratic Party (LDP) has been
weakening due to dissatisfaction toward Prime Minister Taro Aso's
careless remarks and his management of economic measures. While
junior and mid-level lawmakers' pressure on Aso is growing stronger,
some senior LDP members are criticizing such a move. LDP lawmakers'
support for Aso is now cooling down although he only took office two
months ago. Conflict is intensifying in the LDP.

A group of junior and mid-level lawmakers, including former Chief
Cabinet Secretary Yasuhisa Shiozaki, who called on the government to
submit a second supplementary budget for fiscal 2008 to the current
Diet session, has been actively making its own independent move.

Shiozaki and former administrative reform ministers Yoshimi Watanabe
and Toshimitsu Motegi held a meeting also on the night of Nov. 26,
and the three agreed to continue to propose Aso policy measures for
economic and social security issues. On Nov. 21 when the group
called on the Prime Minister to submit the second extra budget to
the ongoing session, the number of the members was 24. After that,
about 10 lawmakers reportedly asked to join the group, according to
group members.

Former LDP Secretary General Hidenao Nakagawa, who draws a line with
Aso regarding economic policy, will form a parliamentarian group on

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Dec. 5. Watanabe and former Defense Minister Yuriko Koike are
expected to join the group.

On his website, Nakagawa expressed his opposition to a policy of
curbing the natural increase in social security costs by 220 billion
yen. Although he emphasizes priority on policy over politics, there
seems to be no doubt that his motives are suspicious.

However, a senior LDP official, who has close ties to Aso, has
strongly criticized anti-Aso moves, arguing: "In the presidential
election, a majority of the LDP lawmakers supported Mr. Aso, and the
Aso cabinet was inaugurated. They should be aware of what they
should or should not do." Aso's aide is alarmed by Nakagawa's move,
saying: "It's an odd parliamentary group."

7) LDP leadership alarmed at spread of criticism against Aso, seeing
lawmakers forming new groups

YOMIURI (Page 4) (Excerpts)
December 2, 2008

Aides to Prime Minister Aso and Liberal Democratic Party (LDP)
executives are now worrying about a spread of moves against Aso
within the party. Aso was expected to be a "face" of the next House
of Representatives election because of his popularity among the
general public, but an increasing number of mid-ranking and junior
party members have become critical of the prime minister due to his
series of gaffes. Meanwhile, some lawmakers have reacted to such
criticism of the administration. An awkward atmosphere is thus
sweeping across the party.

Public support for Prime Minister Aso dropped 17 percentage points
from the previous poll in late October to 31 PERCENT in an opinion
survey conducted by the Nikkei and TV Tokyo. Asked about this poor
result last night, Aso told reporters at the Prime Minister's
Office: "I think we should accept public criticism with humility."

But former State Minister in Charge of Administrative Reform Yoshimi
Watanabe, a leading critic of Aso, said before reporters in Tokyo
last night: "(The prime minister) has lost (political ground).
People are now feeling uneasy. It would be the best way for the
government to hold a general election at an early date and form a
crisis-management cabinet."

The party leadership has been alarmed at moves by "a group of
like-minded lawmakers to seek the smooth implementation of policy
measures" established last month and composed of 24 mid-ranking and
junior party members, including Watanabe and former Chief Cabinet
Secretary Yasuhisa Shiozaki. The group proposed to the prime
minister that a fiscal 2008 second supplementary budget bill be
submitted to the current Diet session, but their request was
rejected. The group intends to proactively make policy proposals.

Former Secretary General Hidenao Nakagawa, who distances himself
from Aso, also plans to launch a parliamentary league on reforming
the nation's social security system on Dec. 5. Since Watanabe and
former Defense Minister Yuriko Koike, who is close to Nakagawa, have
decided to join the new group, observers have seen it as an anti-Aso
group.

8) DPJ President Ozawa: Aso administration will not last long

TOKYO 00003279 006 OF 010

TOKYO SHIMBUN (Page 2) (Full)
December 2, 2008

Democratic Party of Japan (DPJ) President Ichiro Ozawa told
reporters yesterday in Kumagaya City, Saitama Prefecture: "I wonder
how long the Aso administration will exist as is. I don't think it
will last long." He took the view that Prime Minister Taro Aso would
be forced to carry out an early dissolution of the House of
Representatives or to resign en masse with his cabinet.

Ozawa also said:

"If the Aso cabinet resigns en masse, it will be impossible for the
Liberal Democratic Party and New Komeito to take the reins of
government again. If the next cabinet conducts a general election,
many parties (including the LDP and New Komeito) will be able to
reach an agreement."

9) LDP to vote on bill on reexamining postal privatization, aiming
at enactment of financial bill

YOMIURI (Page 4) (Excerpts)
December 2, 2008

A vote is now likely to be taken in the current Diet session on a
bill to reexamine postal privatization submitted by the Democratic
Party of Japan (DPJ), the Social Democratic Party, and the People's
New Party (PNP). The bill proposes freezing the sale of
government-held shares in Japan Post group companies. It was adopted
in the House of Councillors in December of last year, but no
conclusion has been reached in the House of Representatives.

Liberal Democratic Party Diet Affairs Committee Chairman Tadamori
Oshima met with his counterparts Kenji Yamaoka of the DPJ and
Masaaki Itokawa of the PNP in the Diet Building yesterday and
indicated that the LDP would agree to take a vote on the bill in the
ongoing Diet session. He said: "We will not take a strategy to kill
the bill by means of carrying deliberations over to the next session
or reaching no conclusion at the Diet Affairs Committee." The LDP is
aiming to pave the way for a vote on a bill amending the Law for
Strengthening Financial Functions. But Oshima stopped short of
referring to when the bill would be voted on, just saying:
"Consultation is now underway in the LDP."

Taking into consideration the PNP's insistence on a vote on the said
bill during the current session, the DPJ has asked the ruling camp
to vote on the bill prior to a vote on the financial bill.

10) EPA with ASEAN goes into effect: Pact to boost division of labor
in region; Challenge is enactment of EPA in entire region at early
date

YOMIURI (Page 9) (Full)
December 2, 2008

The Economic Partnership Agreement with the Association of Southeast
Asian Nations (ASEAN) went into effect on December 2. The pact is
expected to boost Japan's auto parts exports and make the division
of labor in the region easier. However, in the initial phase, the
agreement has been enacted only with Singapore, Vietnam, Laos and
Burma. In order for the multilateral pact to function, it is
essential for agreements with the remaining six countries, including

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Thailand and Malaysia, to be enacted at an early date.

This is the first enactment of a multilateral EPA for Japan. The EPA
with all ASEAN members will serve to complement bilateral EPAs.
Under the agreement, Japan will scrap within 10 years 93 PERCENT of
tariffs imposed on the total value of imports, such as shrimp and
tropical fruits, except for rice and dairy products. ASEAN will make
91 PERCENT of tariffs on the total value of imports, such as auto
parts, duty-free.

For instance, the duty-free system or low tariff rates will be
applied to a case in which Japan exports liquid crystal panels to
Malaysia to be assembled there and exports the finished products to
Thailand. Japanese companies would find it easier to set up a
labor-division system in the region, including building assembly
plants there.

Among 10 ASEAN members, bilateral EPAs with five countries,
including Malaysia, Thailand and Indonesia, have already been
enacted. Japan has signed an EPA with the Philippines. A basic
agreement has been reached with Vietnam.

However, apart from bilateral EPAs, it is necessary for each country
to go through procedures for the enactment of the EPA involving all
ASEAN members. All member nations have already signed the EPA.
However, procedures for enactment are way behind due to each
member's domestic situation.

The likelihood is that the EPA with all ASEAN members will be not
enacted until at least next year due to the impact of the unstable
political situation in Thailand.

Japanese companies will not be able to receive full benefits of the
pact until it goes into effect in Thailand, Malaysia and Indonesia,
where Japanese companies' auto and home electronics plants are
centered.

Given the situation in which it is already possible to distribute
some products, such as LCDs, duty free in ASEAN, where deregulation
is being promoted, what effect the EPA will bring about is unclear
under the present circumstance, as chief researcher Junici Sugawara
at the Mizuho Research Institute noted.

11) Obama's foreign policy team announced; Time for review of
Japan-U.S. relations

MAINICHI (Page 2) (Abridged slightly)
December 2, 2008

Katsumi Kawakami, Ryo Matsuo

In reaction to the announcement of the lineup of the foreign policy
team for the administration of U.S. President-elect Barack Obama,
the Japanese government intends to convey its concern for the
possible deterioration of Japan-U.S. relations to the new U.S.
administration at an early stage, according to Administrative
Vice-Foreign Minister Mitoji Yabunaka. Looming in the backdrop is
Tokyo's alarm at the assumption of the post of secretary of state by
Hillary Clinton, who seems to be placing high priority on China in
Asian diplomacy. At the same time, it is a fact that Japan-U.S.
relations which have relied heavily on the Koizumi-Bush personal
relationship require a review at this point in time. Japan's

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capability to build new cooperative relations centering on the
environment, energy and other areas will be tested.

A senior government official who recently visited the United States
said: "The United States' interest is centered on the rise of
fundamentalist Muslim forces, such as India, and Russia." East Asia,
including Japan, is faced with unstable factors, such as the North
Korean nuclear issue and China's growing defense spending. The
Japanese government is strongly alarmed that a drop in the United
States' interest in East Asia might end up destabilizing the
region.

Prime Minister Taro Aso had a telephone conversation with
President-elect Obama on Nov. 7 in which the two leaders agreed to
strengthen the Japan-U.S. alliance. Obama also expressed his
eagerness to build personal relations of trust. Democratic Senator
Daniel Inouye, who is of Japanese descent, met with Prime Minister
Aso yesterday, and noted: "Mr. Obama will continue friendly
U.S.-Japan relations."

Dealing with President Obama will not be so easy, however. Prime
Minister Aso's wish to meet with him in November did not
materialize. Compared with the Republican administration, the new
administration might be less intimate with Japan.

Moreover, Hillary Clinton, who will become the new secretary of
state, clearly places high priority on China. Japan is alarmed at a
possible repeat of the so-called Japan- passing syndrome it had
experienced during the Clinton administration (1993-2001).

Vice-Foreign Minister Yabunaka in a press conference yesterday
strongly denied the view that the next U.S. administration would
slight Japan, saying: "The United States thinks the alliance and
cooperation with Japan is important. Whoever becomes the new
secretary of state, there is no concern that (the United States)
will bypass Japan."

At the same time, the Aso administration is quickly losing momentum
in the ruling camp. It is questionable if the Aso administration can
immediately respond to pressing issues, such as the financial
crisis, in concert with the new U.S. administration due to be
launched in January. Given the likelihood that the United States
will lean toward China, a government official has begun taking a
precaution, saying: "It is desirable for Japan, as well, for the
United States to strengthen relations with China."

Further, there is a possibility that Secretary of Defense Robert
Gates, who will retain his post, will ask Japan for new cooperation
other than the refueling mission in the Indian Ocean.

12) Presence of Senator Inouye to become increasingly important as
"go-between" for Japan

YOMIURI (Page 4) (Full)
December 2, 2008

Visiting Senator Daniel Inouye of the U.S. Democratic Party met with
Prime Minister Aso at the Prime Minister's Office yesterday
afternoon. The Japanese-American senator is a Democratic heavyweight
and is known as one of the foremost pro-Japanese members in U.S.
Congress. His Japan visit is aimed to exchange views with Japanese
leading figures prior to the launch of an Obama administration.

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In meeting with Aso, Inouye emphasized: "Japan-U.S. relations will
remain firm under the Obama administration." Aso replied:
"President-elect Obama fully knows of Asian affairs. I hope my
administration and the next U.S. administration will strengthen
Japan-U.S. relations."

As a Liberal Democratic Party member said: "Japan has few
connections with U.S. Congress, in particular, with the Democratic
Party," establishing a network of personnel ties with the Obama
administration is one of Japan's top priority tasks. The presence of
Inouye, who is expected to assume in January the chairmanship of the
Appropriations Committee with enormous authority in budgetary
deliberations in the U.S. Senate, will become increasingly important
for Japan.

13) Radiation preventive drugs in Yokosuka stores

TOKYO SHIMBUN (Top play) (Abridged)
Eve., December 1, 2008

In Kanagawa Prefecture's Yokosuka City, where the USS George
Washington, a nuclear-powered aircraft carrier of the U.S. Navy, is
based, stable iodine tablets, which are said to be effective to
prevent radiation in nuclear disasters, have been sold since October
this year after the carrier's arrival. Yokosuka City stores stable
iodine tablets in preparation for nuclear disasters. However, the
Health and Welfare Ministry bans them from being advertised. As it
stands, the city remains unable to inform its residents of the
tablets in stores.

Yokosuka City, which stores about 300,000 stable iodine tablets, is
prepared to distribute them to its residents at refuges should a
disaster occur in a nuclear-powered ship's accident. However, the
Nuclear Safety Commission of the government notes that the efficacy
of stable iodine tablets will decrease six hours after taking them.
A group of local residents therefore persuaded local drugstores to
stock stable iodine tablets, emphasizing the need for local people
to keep them at their homes. Several stores agreed and began selling
the tablets.

But the Health and Welfare Ministry classifies stable iodine tablets
as medicine for hospital use. The ministry allows drugstores to sell
the tablets to a minimum necessary extent through a pharmacist over
the counter. In addition, the ministry prohibits advertisements.
"We're not allowed to advertise, so we have no choice but to wait
until people who know this to come," said a pharmacist at a
drugstore that has started selling the tablets.

Municipalities with nuclear power plants store stable iodine
tablets, based on the Nuclear Safety Commission's disaster
prevention guidelines for nuclear facilities. Some municipalities
act as go betweens for drugstores and residents.

14) G-8 ministerial meetings called off one after another; Japanese
diplomacy affected by conflict between Russia and U.S., European
countries

NIKKEI (Page 2) (Abridged slightly)
December 2, 2008

As the chair of this year's Group of Eight (G-8) Summit, Japan was

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scheduled to host many G-8 ministerial meetings before the end of
the year. But they have been effectively called off one after
another. Although the government cited the global financial crisis
and other factors, the cancellations are in fact ascribable to the
reluctance of the United States and some European countries that
have been increasingly at odds with Russia since the Georgia
conflict. The conflict between the two sides has taken a toll on
Japanese diplomacy.

Japan was scheduled to host a G-8 energy forum and a G-8
agricultural ministerial before year's end based on an agreement
reached at the Lake Toya Summit in July. But the government has
decided to postpone them for the time being. The chair of the summit
will shift to Italy in January. As such, even if the timetables are
worked out, it would be difficult for Japan to host those events.

A government official explained why it has given up hosting the
events: "Many cabinet ministers would not be able to attend them due
to the drastically changed global economy triggered by the financial
crisis and the international political situation."

According to some government sources, however, the United States and
some European countries have asked Japan to put off those events
with an eye on the conflict with Russia over Georgia and other
matters. They also indicated that France, the chair of the European
Union (EU), and UK were also reluctant to attend the events.

SCHIEFFER

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