Cablegate: Daily Summary of Japanese Press 10/21/09

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FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
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RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 9365
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RUEHNAG/AMCONSUL NAGOYA 4277
RUEHKSO/AMCONSUL SAPPORO 7522
RUEHBJ/AMEMBASSY BEIJING 1492
RUEHUL/AMEMBASSY SEOUL 8150
RUCNDT/USMISSION USUN NEW YORK 7680

UNCLAS SECTION 01 OF 08 TOKYO 002426

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: DAILY SUMMARY OF JAPANESE PRESS 10/21/09

INDEX:

(1) Concerned about possible derailment of U.S. force realignment,
U.S. Defense Secretary Gates throws cold water on Tokyo's intention
to postpone Futenma issue (Mainichi)

(2) Residents near U.S. bases in areas other than Okinawa also call
for base realignment (Asahi)

(3) Editorial: It is wrong for the U.S. to insist on relocating the
Futenma base within Okinawa (Okinawa Times)

(4) U.S. Ambassador to visit Okinawa in November; SDP head Fukushima
calls for his visit (Okinawa Times)

(5) Hatoyama administration's "backsliding" on postal privatization
questioned (Nikkei)

(6) Editorial: New basic policy of postal reform; isn't this the
withdrawal of postal reform? (Nikkei)

(7) New flu infections estimated at 640,000 (Yomiuri)

ARTICLES:

(1) Concerned about possible derailment of U.S. force realignment,
U.S. Defense Secretary Gates throws cold water on Tokyo's intention
to postpone Futenma issue

MAINICHI (Page 2) (Full)
October 21, 2009

Yoso Furumoto

U.S. Secretary of Defense Robert Gates, who is the first U.S.
cabinet minister to visit Japan since the Hatoyama administration
was launched, held talks with Foreign Minister Katsuya Okada (on
Oct. 20). The talks revealed a wide gap between the views of Japan
and the United States on the planned relocation of the U.S. Marine
Corps' Futenma Air Station, throwing cold water on Tokyo's intention
to postpone its decision. If Tokyo takes a wrong step, it could
adversely affect the entire Japan-U.S. relationship. With President
Barack Obama's visit to Japan coming up in November, Tokyo is faced
with a tough task.

"I especially want to discuss the relocation of Futenma Air
Station," Secretary Gates said before taking questions about the
matter from the traveling press corps including a Mainichi Shimbun
reporter onboard a special government plane (traveling to Japan). He
made it clear that the major purpose of his trip to Japan is to
discuss the Futenma relocation issue.

Afghan policy is the biggest challenge facing U.S. foreign and
security policies. As such, seeking cooperation on aid for
Afghanistan had been regarded as the main purpose of Gates's current
tour that will also take him to Slovakia where the defense ministers
of Japan, South Korea, and the North Atlantic Treaty Organization
(NATO) will meet.

Contrary to such speculation, Gates has decided to focus on the
Futenma relocation issue during his stay in Japan. He has apparently
recognized the need to press the Japanese government to implement

TOKYO 00002426 002 OF 008

the relocation plan, as was agreed upon, by setting Nov. 12, the day
President Obama is to arrive in Japan, as the de facto "deadline"
for the issue.

In the wake of the launch of the Hatoyama administration, there were
moves in the United States to wait and see for several months, as
seen in Assistant Secretary of State Kurt Campbell's statement
calling for patience, thinking applying foreign pressure would draw
backlash from Tokyo. These moves prompted the Hatoyama
administration to postpone its conclusion on the Futenma issue.

A package deal between Japan and the United States is designed to
complete the realignment of U.S. forces in Japan, including the
transfer of a carrier-based air wing from U.S. Naval Air Facility
Atsugi in Kanagawa Prefecture to the U.S. Martine Corps' Iwakuni Air
Station in Yamaguchi Prefecture, by 2014. The plan is already
slightly behind schedule. Washington thinks that if it allows Tokyo
to put off a decision, it is possible that the U.S. force
realignment plan will be stalled and that the discussion will go
back to square one.

Asked about the possible impact of the Japanese government's failure
to implement the agreement, Gates said clearly: "I don't want to
speculate. It is a government-to-government agreement, and I am
certain that the two sides will keep their promises." The defense
secretary was not only applying pressure on the Japanese government
but also implying that a failure to abide by the agreement would
have a serious impact on the bilateral alliance.

(2) Residents near U.S. bases in areas other than Okinawa also call
for base realignment

ASAHI (Kanagawa edition) (Page 31) (Full)
October 20, 2009

Sagami Depot, a U.S. Army facility, is located north of JR
Sagamihara Station and covers a vast expanse of land. Hisao Kishi,
76, who was an employee of Sagamihara City's municipal government
and lives near the facility, has been wondering if this huge base
should be there. The base has constituted a major hindrance to the
daily lives of local residents and urban development. In the roadmap
adopted in May 2006 for realigning U.S. forces in Japan, the U.S.
agreed to return 17 hectares west of the land covering a total area
of about 214 hectares to Japan and to allow the municipal government
to use 35 hectares with the U.S. military. All the more because he
was engaged in a campaign for returning the site of the base as a
leader of local residents, he was especially pleased with this
decision.

Kishi participated in working out a local development plan in
cooperation with the municipal government. More than three years
have already passed since then, but little progress has been made.
Kishi angrily said: "I wonder how the central government has taken
the citizens' strong desire to see the plan smoothly implemented."

The government led by the Democratic Party of Japan has advocated
reviewing the existing plan to realign U.S. forces in Japan. But the
focus of attention is always on U.S. military bases in Okinawa. In
the campaign for the upcoming by-election (in Kanagawa) for an Upper
House seat, as well, attention is being paid to Okinawa. Kishi
emphasized: "The prefecture hosts the nation's second largest number
of U.S. bases. I want the government to properly pay attention to

TOKYO 00002426 003 OF 008

the realignment of U.S. forces in areas other than Okinawa."

(3) Editorial: It is wrong for the U.S. to insist on relocating the
Futenma base within Okinawa

OKINAWA TIMES (Page 5) (Full)
October 21, 2009

We hope that Prime Minister Yukio Hatoyama firmly conveys to the
U.S. his pledge to the voters to relocate the Futenma out of Okinawa
or out of Japan. U.S. Secretary of Defense Robert Gates, who is on a
visit to Japan, met Foreign Minister Katsuya Okada. He indicated his
desire to implement the plan to relocate the U.S. forces' Futenma
Air Station to Henoko in Nago City based on the agreement reached
between Japan and the U.S. Mr. Okada explained that the political
situation has changed with the change of administration and sought
his understanding of the delay in reaching a conclusion.

The Obama administration in the United States has also reviewed an
agreement to deploy a missile defense system in Europe after the
change of administration. It is absurd that the U.S. is fixated with
an agreement reached with Japan's previous administration. Prime
Minister Hatoyama remarked that "the flexibility of deciding after
discussing with the U.S. government with an open mind is necessary."
This is right on the mark.

Mr. Gates will meet with Prime Minister Hatoyama and Defense
Minister Toshimi Kitazawa today. Inasmuch as the wavering of Prime
Minister Hatoyama and the concerned cabinet ministers on the
relocation issue has become pronounced recently, we hope that they
will firmly assert the principle of relocation out of Okinawa or out
of Japan pledged during the House of Representatives election
campaign. That, we think, will contribute to a "close and equal
relationship" with the U.S., as stated in the (Democratic Party of
Japan's) manifesto (campaign pledges).

However, it appears that Prime Minister Hatoyama is postponing his
conclusion until after the Nago mayoral election in January. If the
security of the country is left to the judgment of one local public
entity, this will be an indication of the vulnerability of the
Japan-U.S. security alliance. We think this is unacceptable. It
would be outrageous if the intention is, actually, to find a way to
carry out the existing plan depending on the outcome of the
election. The will of the citizens of Nago has already been
expressed through the referendum held in 1997. The local community
should not be plunged into further division and confusion.

On the other hand, Mr. Gates did not object to Japan's proposal to
withdraw the Maritime Self-Defense Force from the refueling mission
in the Indian Ocean by January and to cooperate with vocational
training of former Taliban soldiers and other forms of civilian
aid.

We ask Governor Hirokazu Nakaima to give some thought to how his
messages are being received outside of Okinawa. While he is saying
that the best option is relocation out of the prefecture and the
second best option is to relocate within the prefecture to a new
offshore facility, the first half of his message has mostly been
lost on the Japanese mainland, and only the second half is being
emphasized. His real intent is not coming across clearly. If
Governor Nakaima thinks that relocation outside of Okinawa is the
best option, he should try to persuade the DPJ administration

TOKYO 00002426 004 OF 008

proactively, and now is the time to do so.

The superiority of Okinawa's geographic location no longer holds
water. Since the Marines are being deployed to Iraq and Afghanistan,
which are far away from Okinawa, there is no necessity of stationing
them in the prefecture. Experts also see no role for them with
regard to North Korea's missile issue, which is a cause of concern
in East Asia. As to the possibility of an armed conflict between
China and Taiwan, this has become hard to imagine with their
increasingly close economic ties.

The DPJ's position on relocating the Marines out of Okinawa or out
of Japan since its days in the opposition is rational. The
construction of Futenma's replacement facility in the coastal area
of Henoko in Nago City is being planned for these Marines.

The DPJ has taken over the administration from the Liberal
Democratic Party. Candidates opposed to relocating the Futenma base
to Henoko won in all four electoral districts in Okinawa in the
recent Lower House election.

At his meeting with Mr. Gates, we hope that Prime Minister Hatoyama
will explain in detail that the political situation has changed
completely, stand firm on the principle of relocation out of Okinawa
or out of Japan, and show his guts in winning the United States'
understanding.

(4) U.S. Ambassador to visit Okinawa in November; SDP head Fukushima
calls for his visit

OKINAWA TIMES (Page 3) (Full)
October 21, 2009

U.S. Ambassador to Japan John Roos will visit Okinawa in November in
connection with the relocation of the U.S. Marine Corps' Futenma Air
Station. This was revealed by State Minister for Consumer Affairs
Mizuho Fukushima (who heads the Social Democratic Party) at a news
conference on the morning of Oct. 20. According to Fukushima, she
learned of the news from Ambassador Roos during his courtesy call on
her. Meanwhile, the Democratic Party of Japan (DPJ) has announced
that DPJ Secretary General Ichiro Ozawa will hold talks with Roos at
DPJ headquarters on the evening of Oct. 21. The event -- Ozawa's
first meeting with Roos since becoming DPJ secretary general -- will
take place at the request of Roos, according to the DPJ.

Fukushima indicated that during her meeting with Roos on Oct. 19,
she said: "You visited Hiroshima (on Oct. 4). This time around, I
want to see you visit Okinawa." Fukushima quoted Roos as replying,
"I will go there next month."

Fukushima also asked not to build a base in the Henoko district in
the city of Nago, the relocation site for Futenma Air Station, where
(the ocean) is especially beautiful in Okinawa. There was no
clear-cut answer.

(5) Hatoyama administration's "backsliding" on postal privatization
questioned

NIKKEI (Page 1) (Full)
October 21, 2009

Mikio Kanno, editorial staff member

TOKYO 00002426 005 OF 008

The Hatoyama administration's backsliding on postal privatization
will accelerate with Japan Post President Yoshifumi Nishikawa's
announcement of his resignation. The administration's talk of
reviewing postal privatization for improving services in the
localities and rectifying disparities is music to the ear, but
reforms to move from the government operations to the private
sector, aimed at sustaining Japan's economic vitality in an age of
global competition, declining birth rate, and aging society, may be
seriously set back.

Private sector vitality to be jeopardized

Nishikawa looked back on his four years in office at his news
conference announcing his resignation, saying: "I have made efforts
to transform a government business backed by the government's
credibility into a private business that works to win the trust of
customers and the market through its own efforts."

The job of Nishikawa, who was asked by former Prime Minister
Junichiro Koizumi to head Japan Post, was to use his management
skills from his experience working for a private bank to reform the
enormous postal businesses.

Postal savings and insurance had sucked financial assets amounting
to several hundred trillion yen from Japanese households, serving as
a government-run financial institution used to fund unprofitable
projects. Drastic measures had to be taken to change the economy
into one where funds and resources were mainly channeled to the
private sector. The reform of moving government operations to the
private sector was indispensable for Japan to sustain its capacity
for economic growth.

The Liberal Democratic Party (LDP) won a landslide victory in the
2005 House of Representatives election, where Koizumi reduced the
points of contention to just one -- postal privatization -- and won
the voters' support. There was also strong criticism of the
excessive expansion of the government-run postal businesses.

The Democratic Party of Japan (DPJ), which used to compete with the
LDP in promoting structural reforms, subsequently used opposition to
the Koizumi reforms as a means of expanding its support. Its policy
of reviewing postal privatization also clearly arose from the desire
to promote election cooperation with the People's New Party (PNP),
which is opposed to postal privatization. After the DPJ won an
impressive victory in the recent Lower House election, its
abandonment of the privatization policy became obvious when PNP
leader Shizuka Kamei was appointed state minister for postal reform
and financial affairs.

The policy now is to integrate the postal savings, insurance, and
delivery services and use the network of post offices as hubs for
the protection of the rights of the weak and the rectification of
social disparities. For sure, it is important to improve services to
the users. However, the new administration's policy turns its back
on the policy direction of entrusting the postal businesses to the
private sector, and this amounts to the "re-nationalization" of the
postal businesses.

Yet, the revival of government-run financial operations will not be
able to open new horizons for Japan's economy. Government will
remain involved in management of postal savings and insurance, while

TOKYO 00002426 006 OF 008

financial operations backed by the government's credibility will be
preserved. Under this set-up, private sector financial services
cannot hope to develop, although the private financial institutions'
lack of creativity in their management is partly to blame for this.

The same is true for the postal delivery business, which is
suffering from declining profits like elsewhere in the world because
of the spread of the Internet. Efforts to find ways to survive
through collaboration with private companies both in Japan and
overseas have been made since privatization. Can such private sector
business sense be sustained after the policy change?

Nishikawa's management did have its shortcomings. Investing 80
percent of funds from postal savings and insurance in government
bonds can hardly be considered normal. Prime Minister Yukio Hatoyama
should explain what were the problems with postal reforms.

Take responsibility for the future

The government will have to issue over 50 trillion yen in bonds in
FY09, giving rise to the abnormal situation of bond issuance
exceeding revenue income for the first time in postwar history. The
formulation of the FY2010 budget has also seen the inflation of
budget requests, particularly appropriations for social security,
under the slogan of a "welfare economy."

Breaking away from the bureaucracy and political leadership is well
and good, but has this not resulted only in greater reliance on the
government? It will not be surprising for people who hope for change
under the new administration to come to have doubts.

Voters who are concerned about the future will certainly see through
this backsliding aimed at winning support in the immediate future.

(6) Editorial: New basic policy of postal reform; isn't this the
withdrawal of postal reform?

NIKKEI (Page 2) (Full)
October 21, 2009

The governments has adopted at a cabinet meeting a basic policy of
postal reform designed to drastically revise postal privatization.
Following the move, Japan Post Holdings Co. president Yoshifumi
Nishikawa announced his intention to step down before serving out
his term. The postal privatization was aimed to turn around the
economy through the switch of the direction of the flow of funds
from the public sector to the private sector. A major change to the
privatization plan, even though it has some problems, including that
the plan will cause a decline in services for residents in some
areas, would substantively increase costs to be shouldered by the
Japanese economy.

According to the basic postal reform policy, the present
four-company system under Japan Post Holdings Co. will be
reorganized into a system in which mail delivery, postal savings,
and postal insurance are available at every post office. Regulations
that are different from those applied to the Banking Law and the
Insurance Law will be introduced. This system will be used for
administrative service with the use of the network of post offices
as bases for correcting regional disparities. Following the
decision, the government will submit to the Diet session to be
convened on Oct. 26 a bill freezing the sale of stocks of the Japan

TOKYO 00002426 007 OF 008

Post Group.

Many questions remain. Providing courteous service nationwide would
inflate business costs. Who would shoulder those costs? It can be
assumed that the government intends to have Japan Post Bank Co. and
Japan Post Insurance Co. give up becoming independent as privatized
companies. If that is the case, we are afraid that the basic policy
could cause the emerging efficiency at both companies to decline.

The stocks of Japan Post Bank Co. and Japan Post Insurance Co. were
to be put up for sale on the market as early as next year. If the
plan is suspended for a long period of time, the two companies with
the backing of public trust in the government (the government still
wholly owns their stocks) will likely squeeze the operations of
private financial institutions.

What is more, if the Japan Post Group, the government's wholly owned
company, has sole jurisdiction over funds coming from postal savings
and postal insurance, the postal business would return to the
previous state. As a matter of fact, State Minister for Postal
Reform has suggested a plan to invest such funds as postal savings
into the development of local regions (as was the case during
previous administrations).

An enormous amount of postal savings funds and postal insurance
funds had been funneled into special corporations and the central
and local governments under the fiscal investment and loan system
and used in an inefficient manner. The principle of postal reform
was supposed to use those funds effectively in the private sector
for the revitalization of the economy by correcting such a system.

The process leading to President Nishikawa's decision to step down
casts a shadow on the future of the postal reform. President
Nishikawa, who once served as the president of Sumitomo Mitsui
Banking Corporation, assumed the post at the request of former prime
minister Junichiro Koizumi. Even some in the Liberal Democratic
Party (LDP) during the previous administration took a view that the
sale of Kampo no Yado (a Japan Post-owned resort hotel chain)
involved questionable procedures. However, an investigation by the
Internal Affairs Ministry did not find clear irregularities. Neither
the Democratic Party of Japan (DPJ) nor the People's New Party (PNP)
has come up with new revelations.

The government relegated the management of Japan Post Holdings Co.
to a private citizen, and yet it treated him in a manner close to
bullying. On top of that, if it had pressed him to resign, giving
the policy switch as the reason, it is questionable whether a
private citizen would to accept an offer for the presidency of such
a company. Considering such a situation, we cannot but regard the
government plan to review postal privatization as synonymous with
withdrawing from postal reform.

(7) New flu infections estimated at 640,000

YOMIURI CHUBU EDITION (Page 32) (Full)
October 17, 2009

The number of people who visited medical institutions across Japan
for flu treatment during the period from Oct. 5 to 11 was estimated
to be about 640,000, the National Institute of Infectious Diseases
announced on Oct. 16 based on its fixed-point survey of about 5,000
medical institutions nationwide. The number of flu patients

TOKYO 00002426 008 OF 008

increased rapidly from about 330,000 recorded the previous week. The
number of people infected with influenza since July totaled about
2.34 million. It appears that most of the 2.34 million were infected
with the new flu.

More than 80 PERCENT of the 640,000 flu patients were minors. About
40,000 patients were aged four and younger, 160,000 were aged 5 to
9, 230,000 were aged 10 to 14, and 100,000 were aged 15 to 19. The
figures indicated an increase in flu infections, particularly among
elementary and junior high school students.

By prefecture, Hokkaido had the highest ratio at 38.96 patients per
institution, easily exceeding the prefectural warning level of 30,
followed by Aichi with 23.52, Fukuoka with 23.48, Kanagawa with
21.63, Okinawa with 19.48, Tokyo with 18.98 and Osaka with 16.96.

The number of flu cases treated per institution in Aichi increased
by more than double from 10.39 patients recorded the previous week.
In both Mie and Gifu prefectures, the number of flu cases treated
per institution doubled to 11.07 and 7.45 patients, respectively.
The 11.07 patients in Mie exceeded the prefectural alert criteria of
10.

ROOS

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