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Domestic Politics Constitutional Reform Prime Minister Koizumi Junichiro announced that he wanted to fulfill what he claimed was the historic purpose of the Liberal Democratic Party by revising the nations so-called Peace Constitution. The Prime Minister said that he had told the LDP Secretary-General Yamasaki Taku to draw up plans to draft amendments to several of the constitutions articles by 2005. That year marks the fiftieth anniversary of the founding of the LDP. Koizumi said that the reason for the creation of the party was to amend the 1947 document that had been drafted by officials of the US occupation. Several top ranking officials of the LDP came out in support of the plan. In addition to Yamasaki, senior LDP policymakers Horiuchi Mitsuo and Aso Taro also approved. The Prime Minister stressed looking at the constitution as a whole rather than just focusing on the war-renouncing ninth article. However he also clearly indicated that some aspects of that article were ripe for amendment. In comments to the press Mr. Koizumi said that it was wrong not to describe the SDF as a military and that it clearly had war-fighting potential. Despite the call for advance planning on amending the constitution the Prime Minister said the actual placing of a bill before the diet and the subsequent referendum required by law would probably be the work of a government other than his. Mr. Koizumi said that the even if he won the upcoming LDP presidential election he would be more likely to focus on 'pending issues', meaning his package of structural reforms. Opponents of the coalition government accused the Prime Minister of playing politics with the constitution by using the possibility of amendment as a means of gaining the support of those who favour such a move in the forthcoming election to decide the party leader. Other Issues AUGUST 1 Police confirmed that they would not be indicting former Saitama Governor Tsuchiya Yoshihiko on charges of misuse of political funds. Officials have accepted Tsuchiya's claims that he knew nothing about the diversion of funds from his campaign office to bank accounts of a firm run by his daughter Ichikawa Momoko. Ichikawa was arrested in July. AUGUST 4 The Mayor of Zushi, Nagashima Kazuyoshi, resigned in protest at a plan to construct housing for up to eight hundred US military families in the Kanagawa prefecture town. Nagashima said he would run for re-election on a platform of opposing the building work to test public opinion on the matter. AUGUST 5 The annual Defense Agency White Paper, citing regional tensions and the threat of terrorism, made the case for Japan's adoption of an anti ballistic missile defense system. The report also recommended cutting the number of artillery pieces and tanks the SDF deploys in the light of the reduced likelihood of a major land war in North East Asia. AUGUST 8 Former Social Democratic Party policy chief Tsujimoto Kiyomi and Goto Masako, a former political adviser to SDP leader Doi Takako, were both indicted on charges of violating the Political Funds Control Law. Tsujimoto and Goto have admitted claiming salaries from the state for staff who did not actually perform any work for them. The money, used to finance the office operations of Tsujimoto, has since been re-paid with interest. AUGUST 14 Eight candidates filed papers to run for governor of Saitama prefecture to replace Tsuchiya Yoshihiko who resigned to take responsibility for a financial scandal that involved his daughter. AUGUST 20 Government officials said that it is unlikely that the SDF will be sent to Iraq before next year if they go at all. The security environment in the country has been a serious consideration for the Japanese government given the limitations that the constitution and other laws place on the use of force by the SDF. The bombing of the United Nations HQ in Baghdad seems to have convinced policymakers that no safe zones exist and that every international presence in Iraq is considered a target by those militantly opposed to the post-Saddam regime. Okamoto Yukio, a Special Adviser to Prime Minister Koizumi cancelled a fact-finding trip to Iraq in the light of the attack on the UN. AUGUST 23 LDP Executive Council Chairman Horiuchi Mitsuo announced he would not challenge Koizumi Junichiro for the party presidency. Horiuchi has opposed Koizumi's economic reforms plans and had been urged to run by other LDP members. AUGUST 23 The Defense Agency announced that it would upgrade all four of its Kongo class ships equipped with the Aegis battle management system. The upgrades are part of a plan to eventually use the craft as a platform for a sea based anti ballistic missile system. The estimated cost of the plan has been put at ¥500bn over four years. The agency has requested ¥140bn for FY2004 to begin the upgrades.. AUGUST 25 The LDP decided on September 20 as the date for its Presidential Election. Campaigning will begin on September 8. AUGUST 28 The Air Self-Defense Force said that it would request ¥1.2bn to purchase a precision guidance system from the US for air-launched munitions. The Joint Direct Attack Munition, a guidance and stabilization system would be fitted to 500lbs bombs carried by the F-2 fighter-bomber and would be deployed from 2007. Sources at the Defense Agency said the JDAM would be used to avoid damaging surrounding property and limiting innocent casualties when making an attack in a densely populated area. Sources also stressed that it would be purely defensive in purpose and not deployed abroad. AUGUST 28 The government announced that it would spend up to ¥550m compensating inhabitants of a town in Ibaraki prefecture for health problems that may have been caused by poison gas from a facility that was used during the war by the Imperial Army. AUGUST 31 Ueda Kiyoshi, 55, won the Saitama Prefecture gubernatorial election. Ueda was a former vice Secretary-General of the Democratic Party of Japan. He resigned his lower house seat to run for governor. Turnout for the election was 35.8%. JULY 28 A former aide to the arrested Lower House member Suzuki Muneo was given a sixteen-month suspended sentence for violating the Political Funds Control law. Miyano Akira was convicted of conspiring to conceal over ¥100m in donations. He was also found guilty of charges that he had leaked confidential information to a Hokkaido firm on some of its competitors in a bidding contest for a government funded construction project on one of the disputed Northern Territories. Business and Finance Other Issues AUGUST 1 Nomura Holdings Inc. one of Japan's largest brokerages announced that first quarter net profits had fallen almost 67% to ¥39bn. Revenue rose 29% to ¥279.8bn. AUGUST 1 The nation's leading electronics firms announced first quarter results for FY03: AUGUST 6 Japan Tobacco Inc. announced that it would shut up to six of its seventeen domestic plants and concentrate production in its overseas factories. Overseas sales provide the majority of JT's. profits. Domestically the company is planning to concentrate more resources in its beverage and pharmaceutical divisions. Company officials have also noted that the lapsing of licensing agreements with Phillip Morris is likely to cost JT up to ¥50bn in the coming year. AUGUST 7 Mitsui, one of Japan's largest trading firms, released first quarter figures showing a 3.4% decline in revenue but a rise in net profit to¥2.82tr. Mitsui cited a decline in stock valuation losses as a reason for the rise in profit. AUGUST 14 Japan and Thailand signed an agreement to allow Bangkok to issue bath denominated government debt in the Tokyo market. Analysts forecast that the equivalent of ¥10bn worth of debt could be issued each year by Thailand. AUGUST 20 Kimura Takashi, a former advisor to Financial Services Minister Takanaka Heizo and head of a financial consulting firm, announced plans to create a new bank. Kimura said that his Nippon Industrial Bank would target small and mid-sized firms that are finding it difficult to obtain loans from regular commercial banks and would not require guarantors. The new bank hopes to eventually accumulate ¥53bn in deposits from the public. AUGUST 25 Canon Inc. announced that it would invest $851m dollars in its chip making division over the next three years. Sources at the firm said they expected to increase staff numbers by 15%. JAUGUST 28 Mitsui Mining said that it was considering approaching the Industrial Revitalization Corporation of Japan as part of its restructuring plan. The IRCJ, a government body, was set up in May to assist troubled but still viable companies to restructure and return to profitability. Shares in Mitsui Mining fell ¥28 to ¥98 on receipt of the news. The IRCJ previously announced that it had approved three firms for assistance: Dia Kensetsu, a Tokyo based developer, will receive ¥132.7bn in support and debt relief. As part of the company's restructuring four senior executives will be replaced and the company will focus on its core business of the development and management of condominiums. Kyushu Industrial Transport, a bus company that invested heavily in real estate during the bubble era, will receive ¥27.4bn worth of debt forgiveness. In exchange it too will re-focus on its transport interests. Usui Department Store, a Fukushima based company, will receive the equivalent of ¥12bn in debt waivers and assistance. International Politics Six-Party Talks Japan, China, The United States, South and North Korea and Russia met for two days of talks in Beijing aimed at solving the nuclear crisis on the Korean Peninsula. No major progress was made towards that ambitious goal, although all the parties agreed that they would seek a peaceful solution to the issue. The US, Japan and South Korea repeated their demand that the North dismantle it's nuclear weapons program in a manner that can be verified by international inspections. In return they offered the possibility of increased aid and an improvement in relations. The US stopped short of offering a non-aggression pact however, an agreement sort by the North Korean representatives. AUGUST 1 Ten North Korean nationals entered the Japanese embassy compound in Bangkok, Thailand. AUGUST 1 Peru submitted a seven hundred-page extradition request to the Foreign Ministry seeking the extradition of former President Alberto Fujimori. Fujimori, who also holds Japanese citizenship, has been in Japan since 2001 when he declined to return to Peru following a summit in South East Asia. The documents handed over by the Peruvian government contain evidence relating to Mr. Fujimori's alleged abuse of human rights and other crimes. The extradition request was passed on to the Justice Department. Chief Cabinet Secretary Fukuda Yasuo said that it was unlikely that Mr. Fujimori would be extradited because of his Japanese citizenship. Fujimori himself denounced the extradition request as politically motivated and hinted that he might return to Peru to found a political party. AUGUST 1 Japan and the US broke off talks on revising the Status of Forces Agreement without achieving a compromise on one of the key issues. US negotiators had been seeking permission for legal representatives to be present with service personnel during questioning by Japanese police in criminal investigations. The Japanese side had refused to accept the US position and insisted the existing system, where investigators can conduct questioning without legal representation being present, was sufficient to protect the rights of the accused. AUGUST 4 Komura Masahiko, head of an LDP fact finding mission to Iraq, met with Lt-General Ricardo Sanchez in Baghdad to discuss possible deployment of the SDF there. AUGUST 9 Chief Cabinet Secretary Fukuda Yasuo visited China to commemorate the twenty-fifth anniversary of the signing of the Japan-China Friendship Treaty. He also discussed the nuclear issue on the Korean peninsula with his hosts. AUGUST 9 Foreign Minister Kawaguchi met her Thai counterpart Surakiart Sathirathai. The two agreed to maintain pressure on the military dictatorship in Myanmar to release imprisoned politician Aung San Suu Kyi. AUGUST 11 Tokyo dispatched experts to north east China to investigate reports that drums of mustard gas abandoned by the Imperial Army during the war have ruptured causing inhabitants of nearby buildings to fall sick. The corroded drums were apparently discovered during construction work. AUGUST 17-23 Prime Minister Koizumi visited the Czech Republic, Germany and Poland to discuss issues such as North Korea, the reconstruction of Iraq and ties between the EU and Japan. AUGUST 23 A delegation from Japan left for Qatar and Kuwait to discuss the drafting of a Status of Forces Agreement for Japanese SDF personnel that might be deployed to those nations as part of the government's plans to participate in the reconstruction of Iraq.. AUGUST 23 The ten North Koreans who had entered the Japanese Embassy compound in Bangkok, Thailand earlier in the month were flown to South Korea. AUGUST 26 Israeli Foreign Minister Silvan Shalom visited Japan and called for Tokyo to use its influence with the Palestinian Authority to persuade it to crack down on militants and fulfill its obligations under the US peace plan known as the road map. AUGUST 28 Iranian Foreign Minister Kamal Kharrazi held talks with Trade and Industry Minister Hiranuma Takeo regarding the proposed development of the Azadegan oilfield. Kharrazi urged Japan to press ahead with signing a concrete agreement with the Iranian government despite US pressure to abandon the deal. The US government has repeatedly said that it does not believe Japan should invest in Iran while the Iranians refuse to allow stringent IAEA inspections of their nuclear power facilities. Iran is suspected of secretly developing nuclear weapons. Kharrazi said that Iran intended to sign the IAEA Additional Protocol that allows for intrusive inspections but added that some opposition existed within Iran to doing this. In separate talks with Prime Minister Koizumi, Foreign Minister Kharrazi said he would like to see the UN take a more leading role in the reconstruction of Iraq.
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