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Viewing cable 08TOKYO3010, JAPANESE MORNING PRESS HIGHLIGHTS 10/29/08
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 08TOKYO3010 | 2008-10-29 01:22 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Tokyo |
VZCZCXRO7323
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3010/01 3030122
ZNR UUUUU ZZH
P 290122Z OCT 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 8347
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
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 3007
RUEHFK/AMCONSUL FUKUOKA 0649
RUEHOK/AMCONSUL OSAKA KOBE 4432
RUEHNAG/AMCONSUL NAGOYA 8718
RUEHKSO/AMCONSUL SAPPORO 1222
RUEHBJ/AMEMBASSY BEIJING 6082
RUEHUL/AMEMBASSY SEOUL 2079
RUCNDT/USMISSION USUN NEW YORK 2307
UNCLAS SECTION 01 OF 12 TOKYO 003010
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 10/29/08
Index:
1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)
4) Defense Ministry acknowledged MSDF refueling ships engaged in
both anti-terror operations in the Indian Ocean and anti-piracy
measures near Somalia (Asahi)
5) Government to focus on verification of uranium enrichment in
North Korea's report (Tokyo Shimbun)
Diet conflict:
6) Democratic Party of Japan attacking the government and ruling
parties in Diet on Defense Minister issue, delisting of North Korea
from terror-sponsor list (Tokyo Shimbun)
7) Signs of rekindling of political fire in divided Diet (Tokyo
Shimbun)
8) DPJ has seven items to pursue the Aso government on in the Diet,
including pensions, church-state separation (Nikkei)
9) Prime Minister Aso will announce tomorrow formal postponement of
Diet dissolution (Tokyo Shimbun)
10) Aso giving priority to economy over election timetable (Asahi)
11) Aso tells New Komeito, its coalition partner, of his decision to
postpone Diet dissolution (Nikkei)
12) Komeito deeply worried the extended delay in Diet dissolution
could wreck the party's political timetable (Yomiuri)
13) Ruling parties changing political strategy with only a month
left in the current Diet session (Mainichi)
Economy:
14) Government, ruling camp agree on contents of second
supplementary budget that will include tax cut (Mainichi)
15) Lower House begins deliberations on bill strengthening functions
of financial institutions; Prime minister positive toward revision
talks (Tokyo Shimbun)
16) Bank of Japan revising economic outlook and now predicts zero
growth for fiscal 2008 (Tokyo Shimbun)
Articles:
1) TOP HEADLINES
Asahi:
Prime minister plans no general election through end of year to put
top priority to economic stimulus measures
Mainichi:
Nomura Holdings posts 149.4 billion yen in midterm net loss amid
financial crisis
Yomiuri:
Over 200 million yen in taxpayer money misused for wining and
dining, slush funds at public organ for helping employment of
elderly, persons with disabilities
Nikkei:
BOJ mulling rate cut with concern over economy hit by strong yen,
stock price falls
TOKYO 00003010 002 OF 012
Sankei:
Real estate in Tsushima City being bought up by South Korea: LDP
study council holds emergency meeting; Group of lawmakers to inspect
city
Tokyo Shimbun:
Zero real growth in fiscal 2008; BOJ to substantially revise down
projection
Akahata:
Increase in civilian victims in Afghanistan: Lawmaker Inoue at Upper
House Budget Committee meeting calls on government to urge U.S. to
end air strikes
2) EDITORIALS
Asahi:
(1) Tokyo metropolitan government should close down ShinGinko Tokyo
on its own responsibility
(2) Itoham Foods: Harsh lessons on corporate ethics
Mainichi:
(1) ShinGinko Tokyo: Should it to continue to exist?
(2) Court ruling on Aegis information leak: Appropriate approach
needed in designating and controlling classified information
Yomiuri:
(1) Information on Aegis vessels: Sloppy control system condemned
(2) ShinGinko Tokyo: Tokyo metropolitan government should take
responsibility by pulling out of operations
Nikkei:
(1) Stable oil prices hoped for to ease economic setback
(2) Geopolitical risk and IMF assistance
Sankei:
(1) DPJ's approach to Diet session: It cannot fulfill its
responsibility if it goes back to previous stance in Diet
deliberations
(2) Aegis information leak: MSDF should be thoroughly aware of
importance of protecting intelligence
Tokyo Shimbun:
(1) Court ruling on Aegis information leak: Concern over excessive
control
(2) Marathon runner Takahashi retires
Akahata:
(1) Shouldering of cost for US Marine Corps' relocation to Guam:
Stop abnormal practice unprecedented in the world
3) Prime Minister's Official Residence (Kantei)
Prime Minister's schedule, October 28 & 29
NIKKEI (Page 2) (Full)
October 29, 2008
Oct. 28
07:28
Met Deputy Chief Cabinet Secretary Konoike at the Kantei.
TOKYO 00003010 003 OF 012
08:31
Attended a cabinet meeting in the Diet building. Internal Affairs
Minister Hatoyama stayed behind. Later, met Finance Minister
Nakagawa. Then met Construction and Transport Minister Kaneko.
Followed by METI Minister Nikai.
09:16
Reported to the Emperor in private.
10:00
Attended a meeting of the Upper House foreign and defense
committees.
12:09
Arrived at the Kantei.
13:00
Returned to the meeting of the Upper House foreign and defense
committees.
16:21
Met Deputy Chief Cabinet Secretary Matsumoto.
16:32
Attended a Lower House plenary session.
18:46
Attended a meeting of the Council for Gender Equality.
19:28
LDP Administrative Reform Promotion Headquarters chief Chuma.
20:04
Dined with his secretaries at the ANA inter Continental Hotel Tokyo.
Later met New Komeito Secretary General Kitagawa and others.
Oct. 29
00:11
Returned to his private residence in Kamiyama-cho.
4) Defense chief admits MSDF fuel given to antipiracy patrol ships
ASAHI (Page 4) (Full)
October 29, 2008
The Maritime Self-Defense Force, currently on a mission to refuel
foreign naval ships backing up antiterror operations in Afghanistan,
has provided fuel to those foreign naval vessels in waters near
Somalia where the U.S. Navy and other foreign naval forces have been
conducting antipiracy operations. On this issue, Defense Minister
Hamada told the press yesterday after a cabinet meeting that the
foreign naval vessels refueled by the MSDF were alert to pirates and
concurrently on patrol similar to antiterror operations as a result.
"So," Hamada said, "it's extremely difficult to take it as a task
against pirates." With this, Hamada admitted that the MSDF had
refueled foreign naval vessels on a dual mission for antiterror
operations and antipiracy activities. He also explained that the
MSDF refueling mission has been conducted under the Refueling
Assistance Special Measures Law.
TOKYO 00003010 004 OF 012
5) Uranium enrichment also subject to verification
TOKYO SHIMBUN (Page 2) (Full)
October 29, 2008
The government yesterday sent Akitaka Saiki, director general of the
Asian and Oceanian Affairs Bureau of the Foreign Ministry, to the
United States in order to request the U.S. government completely
verify North Korea's declaration of its nuclear programs, including
uranium enrichment and nuclear proliferation to such countries as
Syria, since the government is concerned that such activities are
reportedly not subject to verification and may be left behind. Saiki
will meet with Assistant Secretary of State Hill and will request
uranium enrichment and nuclear proliferation be incorporated in a
verification regime that is expected to reach an agreement at the
six-party talks.
6) DPJ on offensive
TOKYO SHIMBUN (Page 2) (Full)
October 29, 2008
The leading opposition Democratic Party of Japan (Minshuto), now
confronting the ruling parties, launched attacks against the
government in a meeting of the House of Councillors Foreign Affairs
and Defense Committee yesterday as well, putting aside a
government-introduced bill amending the new Antiterrorism Special
Measures Law to extend the Maritime Self-Defense Force's refueling
activities in the Indian Ocean.
Keiichiro Asao, the first one from the DPJ to take the floor, raised
a question about defective panels used for the Shinkansen bullet
train railroads in Kyushu. The panels were manufactured and sold by
a company managed by Prime Minister Aso's relatives. Asao pointed
out that the company had bought party tickets at a total of 3.5
million yen between 2004 and 2007. The prime minister owned up to
the facts. Asao noted that the Kyushu Shinkansen construction
project is mostly covered by taxpayers' money. "That is a reflux of
taxpayers' money, isn't it?" he asked.
Asao also pursued a scandal over the Defense Ministry's procurement.
In this case, Yamada Corporation, a trading firm dealing with
defense equipment, is suspected of having overbilled the Defense
Ministry. "Obviously," Asao said, "this is a crime." He added, "Why
do you not report the case?" In reply, Hamada stated the Defense
Ministry was still in the process of confirming the big picture.
"The Defense Ministry has been confirming ever since last year,"
Asao said. Time and again, the committee's deliberations were halted
by his questions.
The second interpellator from the DPJ, Shinkun Haku, took up the
U.S. government's recent delisting of North Korea as a state sponsor
of terrorism. "The prime minister has changed. There was an LDP
(Liberal Democratic Party) presidential election. So you were too
busy to think about delisting, weren't you?" With this, Haku
criticized the government. He pointed out the fact that the
delisting came the day after Chief Cabinet Secretary Takeo Kawamura
stated that there was no official notification about delisting.
"That's why," Haku said, "the media says Japan is left out in the
cold or defeated on the diplomatic front."
7) Prime Minister Aso's decision to postpone Lower House election
TOKYO 00003010 005 OF 012
likely to stall Diet deliberations again
TOKYO SHIMBUN (Page 2) (Excerpts)
October 29, 2008
The Diet mood completely changed yesterday, since Prime Minister
Taro Aso has decided to push back a dissolution of the House of
Representatives and snap election. The Democratic Party of Japan
(DPJ), the largest opposition party, which had accepted the ruling
coalition's management of Diet affairs, aiming at forcing an early
Lower House dissolution, has now assumed a confrontational approach
to the ruling camp. The DPJ intends to present various demands. The
divided Diet, under which the ruling and opposition parties attempt
to face each other down, will likely return.
The main focuses of attention in the ongoing Diet session are the
passage of a bill amending the new Antiterrorism Special Measures
Law designed to allow the Maritime Self-Defense Force to continue
its refueling mission in the Indian Ocean and of a bill revising the
Financial Functions Strengthening Law, which would enable the
government to inject public funds to regional financial
institutions.
DPJ Diet Affairs Committee Chairman Kenji Yamaoka yesterday told
reporters: "It will take more time if we take enough time for
important bills." He was negative about the passage of the two bills
before the end of the week. To avoid criticism that the party is
trying to delay deliberations unnecessarily, the DPJ intends to
assume a stance of holding necessary deliberations.
Regarding the refueling bill, Yamaoka asserted that persons
concerned should be called to testify as Diet witnesses in order to
ascertain the present situation in Afghanistan. The DPJ has also
called for holding five regional public hearing sessions on the
financial legislation in the two chambers of the Diet. The largest
opposition party has raised hurdles for the passage of the two
bills.
8) DPJ to pursue government on seven issues through thorough
deliberations
NIKKEI (Page 2) (Excerpts)
October 29, 2008
The Democratic Party of Japan (DPJ) decided yesterday to pursue the
government and the ruling parties by demanding thorough
deliberations if the government puts off a House of Representatives
dissolution for the time being. The main opposition party, fearing
public reaction, has no intention to try to prolong or boycott
deliberations, but the party is ready to attack the government over
seven issues, including falsified pension records and links between
politics and religion. The DPJ is expected to take a confrontational
stance against the government, even eyeing the possibility of
submitting censure motions against Prime Minister Aso and cabinet
ministers.
In a meeting yesterday of the House of Councillors' foreign and
defense committees over a bill to extend the Maritime Self-Defense
Force's refueling mission in the Indian Ocean, DPJ member Keiichiro
Asao, defense minister in the shadow cabinet, grilled the government
over the issue of Yamada Corp.'s padded billing.
TOKYO 00003010 006 OF 012
Later, Upper House Secretary General Kenji Hirata claimed in a press
conference: "The government's replies were quite ambiguous." Liberal
Democratic Party's Upper House Diet Affairs Committee Chairman Seiji
Suzuki met with his DPJ counterpart Susumu Yanase and proposed
taking a vote on the refueling bill the same day. But Yanase
rejected the request.
The DPJ had taken a stance of offering cooperation in Diet
deliberations on the premise of an early Diet dissolution. But
senior DPJ Diet Affairs Committee members in their meeting yesterday
decided to switch over to a strategy of pursuing the government and
the ruling camp by demanding thorough deliberations if the
dissolution is put off. Party executives, including President Ichiro
Ozawa and Secretary General Yukio Hatoyama, will meet today to
determine the party's Diet strategy. Diet Affairs Committee Chairman
Kenji Yamaoka told reporters: "We will not try to prolong or shorten
deliberations for the purpose of bringing about early Diet
dissolution."
9) Aso to forgo Diet dissolution
TOKYO SHIMBUN (Page 1) (Abridged)
October 29, 2008
Prime Minister Taro Aso made up his mind yesterday to forgo a snap
election for the House of Representatives in order to deal with the
financial crisis on a priority basis. The election had been
anticipated with official announcement scheduled for Oct. 18 and
voting and vote-counting set for Oct. 30. Aso conveyed his decision
to the New Komeito, his ruling Liberal Democratic Party's coalition
partner, through an LDP executive. Meanwhile, there are still calls
from within the ruling parties for an early election, so Aso will
coordinate with them and will clarify the decision tomorrow when he
meets the press to announce an additional package of economic
measures.
10) Prime minister drops plan to call general election before year's
end; Priority to be given to economic stimulus measures
ASAHI (Top play) (Full)
October 29, 2008
Prime Minister Taro Aso has decided to forgo calling a general
election in November to put priority on measures to deal with the
global financial crisis. He will hold a press conference on Oct. 30
to unveil a plan to submit a second supplementary budget bill to the
Diet to aim at its enactment to prop up the economy. The time of
calling the general election is likely to slip to January or later.
The prime minister held talks with LDP Secretary General Hiroyuki
Hosoda and Diet Affairs Committee Chairman Tadamori Oshima on the
night of Oct. 27. The prime minister conveyed to them a plan to make
utmost efforts for the enactment of important bills even if the
major opposition Democratic Party of Japan, which is calling for
early Lower House dissolution, shifts to a confrontational policy
course. LDP executives, who had been endeavoring to set the stage
for a general election in November, indicated on Oct. 28 that the
postponement of Lower House dissolution was inevitable.
The prime minister met on Oct. 26 with Representative Akihiro Ota of
the New Komeito, which had been making preparations for an election
in November. The prime minister also met with New Komeito Secretary
TOKYO 00003010 007 OF 012
General Kazuo Kitagawa on the night of 28. In those sessions, the
prime minister told them that he would prioritize policy over Lower
House dissolution so as not to cerate a political vacuum. The New
Komeito is ultimately expected to endorse Aso's plan to postpone the
dissolution, with an executive saying, "If the prime minister makes
a decision, that cannot be helped."
The prime minister initially planned to dissolve the Lower House
after his policy speech and representative interpellations at the
beginning the current extraordinary Diet session. He later gave up
that plan and searched for ways to call an election in November in
the face of the worsening U.S.-originated financial crisis. But
given the unstoppable tumble of stock markets, as seen in the Nikkei
Stock Average's fall below its post-bubble low, and the yen's
appreciation, the prime minister has decided to give priority to
measures against the financial crisis.
About the dissolution of the Lower House, the prime minister last
night told the press corps, "Policy should take precedence over the
dissolution. That's the answer." His decision to postpone the
dissolution seems to have been affected partly by an LDP election
survey that showed the difficulty for the ruling coalition to
maintain a majority.
The prime minister is now likely to search for the timing to
dissolve the Lower House after the enactment of a bill amending the
Financial Function Early Strengthening Law and the second
supplementary budget bill. Possible dates include: (1) in late
December after compiling a fiscal 2009 budget; (2) at the beginning
of the next regular Diet session in January; and (3) in April or
later after the fiscal 2009 budget clears the Diet.
Now that the prime minister has given up on the November plan, his
grip on power is bound to weaken. It would be difficult to tide over
the divided Diet in which the opposition bloc is taking an
aggressive approach. There are no prospects that the upcoming
election campaign will work to the advantage of the ruling camp.
Further, the financial crisis is expected to take a toll on the real
economy in the near future. The prime minister has indicated that he
would determine the "best timing" for the dissolution, but to do so
seems difficult. The prime minister's failure to determine an early
date has even resulted in a view in the ruling camp that he would
not be able to dissolve the lower chamber until the Lower House
members' term ends next September.
Meanwhile, the government and the ruling coalition will begin
discussing an extension of the current Diet session, due to close on
Nov. 30, with the aim of enacting the second supplementary budget
and other bills. Depending on how the DPJ moves, the ruling bloc
will have to envision the application of the 60-day rule which
regards a failure to take a vote in the opposition controlled-Upper
House as a de facto rejection under the Constitution. The Diet
session might go straight through the New Year, as was last year.
11) Ruling camp coordinating for election postponement
NIKKEI (Page 2) (Full)
October 29, 2008
Preparations are underway to delay the dissolution of the House of
Representatives for a snap election. Prime Minister Taro Aso met
with New Komeito Secretary General Kazuo Kitagawa yesterday as part
TOKYO 00003010 008 OF 012
of efforts to obtain understanding from ruling party members opposed
to his idea of postponement by tomorrow, when Aso is scheduled to
officially announce the decision. The prime minister intends to give
consideration to policy demands by the New Komeito, which has called
for an early dissolution.
Liberal Democratic Party Diet Affairs Committee Chairman Tadamori
Oshima asked his New Komeito counterpart Yoshio Urushibara yesterday
to approve the prime minister's decision, saying: "The prime
minister has no intention to dissolve the Lower House in the current
Diet session. I would like you to understand his intention."
Aso discussed with Kitagawa and others over the timing for Lower
House dissolution at a Tokyo hotel last night. Kitagawa reiterated
his view that an early dissolution is desirable. Prior to this
meeting, he said in a meeting of the New Komeito Parliamentary
Group: "The idea of dissolving the Lower House on Oct. 30 or 31 has
disappeared, but the option of an election on Dec. 7 is still
available." In the party, however, an increasing number of members
have begun to support the prime minister's decision. One member
said: "If we try to force the prime minister to change his mind, we
might come under fire from the public." Another commented: "If
discord emerges in the ruling camp, the DPJ will be in a favorable
position."
The government and the LDP have decided to carry out fixed-amount
tax cuts worth 2 trillion yen. A senior LDP member said of this
formula: "We accepted the New Komeito's assertion that benefits
should reach low-income earners." They intend to respond to requests
related to fiscal issues from the New Komeito in a flexible manner.
12) Lower House dissolution put off; New Komeito having difficult
time
YOMIURI (Page 4) (Full)
October 29, 2008
As Prime Minister Taro Aso has decided to push back a general
election for the House of Representatives, the New Komeito, which
has called for an early dissolution of the Lower House, and the
religious sect Soka Gakkai, the New Komeito's main support body, are
now having a hard time. The New Komeito plans to continue preparing
for a snap election for the time being, but some party members have
begun voicing their acceptance of the prime minister's decision.
The New Komeito, the coalition partner of the ruling Liberal
Democratic Party (LDP), held yesterday a meeting of all its Lower
House members at party headquarters. Secretary General Kitagawa
instructed said: "At this stage, we cannot make sure the timing of
Lower House dissolution. I want you to continue your efforts for the
election." Party head Akihiro Ota also said: "Let us ready to fight
in the election!"
The New Komeito's real intention is that the interval between the
upcoming snap election and the next summer's Tokyo Metropolitan
assembly election should be as much as longer possible. The party
envisaged that a Lower House election would be held on Nov. 20 and
an official campaign would be kicked off on Nov. 18. So Soka Gakkai
has been preparing for an election. A party official said: "We
cannot simply drop our plan, even though we are told that the
election will be delayed."
TOKYO 00003010 009 OF 012
With Tokyo stock prices plunging to a postbubble low, some in the
party said that the party should stop for a while preparations for
the election and start all over again. New members are concerned
that the distance between a general election and the Tokyo
Metropolitan assembly election will become close. A senior party
official said: "Not just putting off the election, we want (the
prime minister) to show a specific strategy." Some in the party also
have insisted that if the Diet is thrown into confusion by delaying
tactics by the Democratic Party of Japan (DPJ), the Lower House
should be dissolved.
Meanwhile, the Soka Gakkai adopted in an executive meeting yesterday
a policy of continuing its activities for the election until Nov.
¶10. This means that the religious sect sees that there still remains
a possibility that a Lower House election will be held on Dec. 7.
There is a view in the Soka Gakkai criticizing the New Komeito
leadership for failing to force an early dissolution of the Lower
House dissolution.
13) Ruling camp to review Diet strategy, with Aso's decision to
delay Lower House election
MAINICHI (Page 2) (Full)
October 29, 2008
The government and the ruling camp are now being pressed to
drastically review their Diet strategy as Prime Minister Taro Aso
has decided to delay a House of Representatives election to next
year. It has become difficult for them to schedule Diet
deliberations because the Democratic Party of Japan (DPJ) has been
seeking an early Lower House dissolution, but the main opposition
party has now begun to call for thorough deliberations on key bills.
This DPJ stance has made it almost impossible for the government to
push through the Diet by the end of this month a bill amending the
New Antiterrorism Special measures Law to extend Japan's refueling
mission in the Indian Ocean.
In a meeting with Liberal Democratic Party's (LDP) House of
Councillors Diet Affairs Committee Chairman Seiji Suzuki in the Diet
Building yesterday, his DPJ counterpart Susumu Yanase declined
Suzuki's proposal for a vote to be taken on the refueling bill in a
meeting of the Upper House's foreign and defense committees
yesterday. The LDP was forced to continue deliberations on the bill
today and after.
Keeping in mind the possibility of dissolving the Lower House later
this month, the LDP and the New Komeito were ready to deliberate on
the refueling bill, a bill amending the law to strengthen the
nation's financial functions, and other key bills on a priority
basis. But with the prime minister's decision on the timing for
dissolution, the session will last for another month. In a meeting
of the LDP Diet Affairs Committee yesterday, committee Chairman
Tadamori Oshima indicated his willingness to review the committee's
strategy early next week on how to handle those bills in the
session.
The government and the ruling camp intend to intensively discuss a
bill amending the gun control law, a bill amending the citizenship
law, since it was judged unconstitutional, and other bills in the
remaining session, with the aim of pushing them through the Diet at
an early date. Aso plans to hold a press conference tomorrow, the
day when the government plans to announce a package of additional
TOKYO 00003010 010 OF 012
economic measures. Following this, a second supplementary budget
bill to finance these measures will also be in focus.
Meanwhile, the DPJ will hold an executive meeting today, including
President Ichiro Ozawa, to determine what approach the party should
take in the Diet session. Its initial strategy was to prompt the
government to dissolve the Diet by agreeing to an early enactment of
key bills. But the party is now expected to take a strategy to
pursue the government by demanding thorough deliberations and in
that way bring about Diet dissolution.
Ozawa met with Diet Affairs Committee Chairman Kenji Yamaoka
yesterday. They agreed on the view that the party should force the
government to dissolve the Lower House by demanding thorough
deliberations but should not prolong the deliberations too long.
14) Government, ruling parties considering including cash stipend
system in second supplementary budget bill in implementing fixed-sum
tax break
MAINICHI (Page 2) (Excerpts)
October 29, 2008
The government and the ruling parties on October 28 started
considering additional economic stimulus measures with the
possibility of submitting to the current Diet session portions of
the package as a second supplementary budget for fiscal 2008. The
improvement of the credit guarantee framework of the Credit
Guarantee Association and the loan framework of
government-affiliated financial institutions will likely be included
in the bill as a measure to help small- and medium-size businesses
manage operating funds. The government is also undergoing final
coordination with the aim of adopting a cash stipend system of
directly paying cash to tax payers in implementing a fixed-sum tax
break, the main pillar of the additional economic stimulus package.
It is now considering incorporating the plan into the bill as well.
The government and the ruling parties want to enact related bills at
an early date, while determining the DPJ's response.
Regarding the adoption of a fixed-sum tax cut, the government and
the ruling parties first considered a 65,000 yen cut for a standard
household with a married couple and two children, based on the
fixed-sum tax cut implemented in 1998 during the then Hashimoto
administration. It had also intended to pay special cash stipend to
pensioners and people in other categories who do not pay the income
and local taxes.
15) Lower House begins deliberations on bill strengthening functions
of financial institutions; Prime minister positive toward revision
talks
NIKKEI (Page 2) (Excerpts)
October 29, 2008
A Lower House plenary session yesterday entered into deliberations
on a bill amending the Financial Function Early Strengthening Law
allowing the government to pump public funds into financial
institutions. Prime Minister Taro Aso indicated that the ruling bloc
would actively hold revision talks with the major opposition
Democratic Party of Japan. The focus would be on the DPJ's demand
TOKYO 00003010 011 OF 012
for a system to require prior Diet approval for injecting capital
into the Norinchukin Bank and to question the responsibility of the
management of financial institutions.
The Lower House Financial Affairs Committee will begin deliberations
on the revision bill. With the DPJ calling for local public hearings
and thorough deliberations, it seems difficult for the bill to pass
the Lower House before the end of the week.
In the Lower House plenary session, the prime minister explicitly
said: "In the event the opposition bloc presents concrete proposals,
we would like to discuss them actively if that can help produce
better plan swiftly through deliberations." After the plenary
meeting, the prime minister also told the press corps: "If there are
good (ideas), I think we should adopt them."
A Financial Function Early Strengthening Law revision bill and the
DPJ's views
Government plan DPJ's views
Aim To facilitate lending to small and mid-sized companies. To ease
the credit crunch, the financial inspections manual must be
revised.
Norinchukin Bank Allows the government to pump funds into the bank
and subsidiary financial institutions via the bank. Prior Diet
approval and the disclosure of the names of subsidiary financial
institutions are necessary.
Management responsibility Not required for capital infusion. The
responsibility of the management must be questioned in injecting
funds for factors separately from the financial crisis.
16) Zero growth in fiscal 2008 in real terms, BOJ to substantially
revise down projection
TOKYO SHIMBUN (Top Play) (Full)
October 29, 2008
The Bank of Japan (BOJ) on October 31 will hold a regular
policy-setting meeting. The central bank is expected to finalize The
Outlook for Economic Activity and Prices (Outlook Report)
envisioning the form of the economy through 2010. It will likely
revise down an estimate for the growth rate of real GDP this fiscal
year from 1.2 PERCENT , projected in the previous July interim
report, to the lower 0 PERCENT level. It will come up with an
effectively zero growth projection, the lowest level since fiscal
¶2001.
Behind the harsh projection is the slowing pace of an increase in
exports in the wake of the slowdown in overseas economies and
sluggish consumer spending. The BOJ will also likely revise down its
projection for growth in the fiscal 2009 GDP from 1.5 PERCENT to
the upper 0 PERCENT . Projecting economic recovery in fiscal 2010,
it will estimate growth in real GDP in fiscal 2010 at the mid-1
PERCENT level.
In the meantime, concerning the current BOJ policy interest rate of
0.5 PERCENT per annum, Deputy BOJ Governor Yamaguchi indicated his
perception that it is the extremely low accommodative level.
The central bank will likely undergo coordination, based on the
notion of maintaining the present level.
TOKYO 00003010 012 OF 012
However, central banks of six major nations -- the U.S. and European
countries, including the U.S. Federal Reserve Boards (FRB),
implemented coordinated cuts in policy interest rates by 0.5 PERCENT
. The BOJ indicated a stance of supporting their action. However, it
did not fall in line with them. Since the turmoil in the financial
market is still continuing, there has appeared a possibility of
their further cutting interest rates.
In response to a situation like this, the BOJ is being pressed to
cut the rate, with State Minister for Economic and Fiscal Policy
Kaoru Yosano noting, "Cutting the interest rate from the current 0.5
PERCENT to 0.25 PERCENT would have no economic impact. However, it
would have a symbolic meaning in terms of international
cooperation."
SCHIEFFER