Chinese admiral says U.S. drill courts confrontation

By Chris Buckley
BEIJING | Fri Aug 13, 2010 1:58am EDT

BEIJING (Reuters) - A senior Chinese military strategist called planned U.S. naval exercises in the region a provocation and accused the Obama administration of seeking to encircle China and pursuing a "chaotic" approach toward Beijing.

The commentary in the top paper of the People's Liberation Army (PLA) was China's latest verbal broadside against Washington, which Beijing has accused of stirring tension in the region with a series of military drills near its borders.

Photo: Tugboats move the USS George Washington aircraft carrier to a pier in Busan July 21, 2010.

"On the one hand, it wants China to play a role in regional security issues. On the other hand, it is engaging in an increasingly tight encirclement of China and constantly challenging China's core interests," Rear Admiral Yang Yi wrote in the Liberation Army Daily.

The Pentagon plans new joint naval exercises with ally South Korea that will send a U.S. aircraft carrier into the Yellow Sea, between China and the Korean peninsula.

Those exercises are intended to provoke "enmity and confrontation in the Asia-Pacific region," Yang wrote.

Yang, who works at China's National Defense University, warned that friction over the planned U.S.-South Korea naval exercise reflected broader instability in relations with Beijing, and he placed the blame at Washington's doorstep.

"Rarely has there been such wavering and chaos in U.S. policy toward China," wrote Yang.

Yang's commentary came out a day after a similarly angry warning in the paper, suggesting expectations from the PLA for a firm response from Beijing.

"Washington will inevitably pay a costly price for its muddled decision," Yang wrote in a separate commentary on Friday in the China Daily, the country's main English-language paper.

"The risks of a collision occurring between the two countries' navies in seas off China's coast are escalating," Wang Jisi, a prominent expert on China-U.S. relations at Peking University, wrote in a recent analysis.

MILITARY TIES STALL

China appears unlikely to risk directly challenging any new U.S.-South Korea drills by sending its ships to the same waters, a step that would risk a dangerous escalation in tensions.

However, its anger with the Obama administration could hold off any upgrading of military relations, which Beijing has curtailed since friction earlier this year over U.S. weapons sales to Taiwan, the self-ruled island claimed by China.

The planned exercises leave scant chance that U.S. Defense Secretary Robert Gates will be invited to visit China any time soon, said Xu Guangyu, a former PLA officer and now a researcher at the China Arms Control and Disarmament Association.

"It's natural for the PLA to speak out first on these issues," Xu told Reuters. "It's the PLA's sacred duty to defend China's territory and interests."

The U.S. and South Korea last month held a joint naval drill in the Sea of Japan off the Korean peninsula, which brought condemnation from China. It then answered with its own heavily publicized military exercises.

The Pentagon last week said a U.S. aircraft carrier, the George Washington, which joined in the earlier exercise, would participate in a follow-up drill in the Yellow Sea.

The United States and South Korea have said their exercises are aimed at warning North Korea, which they blame for torpedoing a South Korean navy ship in March.

"Anyone clear-sighted can see that this carries something of a warning to China," wrote Yang.

(Editing by Ken Wills and Miral Fahmy)

China PLA warns U.S. over fresh military drill in region

By Chris Buckley
Thu Aug 12, 4:04 am ET

BEIJING (Reuters) – China's People Liberation Army demanded a tough response to U.S. plans to send an aircraft carrier to naval exercises near its coast, saying that "respect" was at stake.

A commentary in the Liberation Army Daily on Thursday laid bare rancor over Washington's naval exercises with ally South Korea, and over its criticism of Chinese territorial claims to swathes of the South China Sea, where Taiwan and several Southeast Asian states also have claims.

"A country needs respect, and a military also needs respect. 'If someone doesn't hurt me, I won't hurt him; but if someone hurts me, I must hurt him," wrote Major General Luo Yuan in the paper.

"For the Chinese people and the Chinese military, those are by no means idle words."

The angry commentary in the PLA's top mouthpiece, carefully vetted by censors, also underscored Chinese military pressures weighing on Beijing as it crafts policy.

The U.S. and South Korea last month held a joint naval drill in the Sea of Japan off the Korean peninsula, which brought condemnation from China, which answered with its own heavily publicized military exercises.

A Pentagon spokesman, Geoff Morrell, last week said a U.S. aircraft carrier, the nuclear-powered George Washington, which joined in the earlier exercise, would participate in a follow-up drill in the Yellow Sea, between the Korean peninsula and China.

The July drill was also initially scheduled to take place in the Yellow Sea -- closer to China's shore -- but was moved to other side of the Korean peninsula after objections from Beijing.

Morrell did not give a date for the next joint naval exercises, according a transcript on the Pentagon website. (http://www.defense.gov)

The PLA Daily commentary indicated that friction over any fresh U.S. military activities in seas near China would continue to dog relations between the two big economic powers.

The United States is "pushing its security boundary to the doorstep of others -- the Yellow Sea, South China Sea and so on," wrote Luo. "In their eyes, the security of other states and peoples is secondary, even meaningless."

Chinese newspapers have carried several harsh commentaries since maritime tensions flared between Beijing and Washington, rekindling friction that unsettled ties earlier this year.

But Luo's strong words in the Chinese military's top newspaper suggest the PLA sees its prestige at stake and wants some response from Beijing.

"We don't want make enemies of any country," wrote Luo.

"But whoever ignores our solemn stance and core interests, persisting in doing as he pleases and bullying us too far, we will never fear."

Beijing said the military exercises in nearby seas threatened its security. The United States and South Korea said they were aimed at deterring North Korea, which they blame for torpedoing a South Korean navy ship in March.

Luo is among a group of PLA officers who use blogs and newspapers as platforms to voice tough views on foreign policy issues. In February, he wrote that China could retaliate against U.S. arms sales to Taiwan by dumping its holdings of U.S. treasury bonds.

(Editing by Ken Wills and Jonathan Thatcher)

U.S. won't move Marines from Japan by 2014: media

2 hrs 12 mins ago

TOKYO (Reuters) – Washington has given up on moving 8,000 U.S. Marines to the U.S. territory of Guam from Japan by 2014, media said on Friday, a potential blow to Prime Minister Naoto Kan who is already struggling over a U.S. base dispute.

The planned transfer of Marines from the southern island of Okinawa is a part of a larger agreement between Washington and Tokyo that includes relocating functions of the U.S. Futenma airbase in Okinawa to a less crowded area on the island.

Washington's likely delay in transferring the Marines could push back the relocation of Futenma as well, Yomiuri newspaper reported. It said the likely delay was disclosed in a briefing given by the U.S. Navy to Guam's government.

Any postponement over moving the controversial base on Okinawa, host to about half the U.S. troops in the country, could be a blow to Kan's government, already reeling from a poor showing in an upper house election this month.

The dispute over where to relocate the Futenma airbase has distracted the two countries as they try to cope with an unpredictable North Korea and a rising China.

A scrapped government pledge to move the base off Okinawa had sparked anger from local residents who complain of noise, pollution and crime, and led to the resignation of Kan's predecessor in June.

U.S. Secretary of State Hillary Clinton and Japanese Foreign Minister Katsuya Okada reaffirmed in a meeting in Hanoi on Friday that experts will work out details of the Futenma relocation site by end-August as agreed in a May deal, Kyodo news agency said.

But doubts remain over whether the deal can be implemented on time. Yomiuri reported this week that Washington and Tokyo have started informal talks on postponing a decision.

An election for the Okinawa governor is due in November and the result could also affect plans to move the airbase, coming near the time when U.S. President Barack Obama is expected to visit Japan for an Asia-Pacific leaders' summit.

(Reporting by Yoko Kubota, editing by Andrew Marshall)



沖縄海兵隊、２０１４年までのグアム移転断念
特集 基地移設

　【ワシントン＝小川聡】沖縄に駐留する米海兵隊約８０００人のグアム移転について、日米両政府が「２０１４年」で合意した移転完了期限について、米政府が達成を事実上断念したことが２２日、明らかになった。

　米領グアム政府に２２日（現地時間）に説明し、日本政府にもすでに伝達した。海兵隊のグアム移転は、沖縄の米軍普天間飛行場移設と並び、日米が０６年５月に合意した「再編実施のための日米ロードマップ（行程表）」の柱の一つで、「普天間移設の実現とセット」（米国防総省）と位置づけられている。計画遅延により、普天間が現在の沖縄県宜野湾市に固定化する恐れが一段と強まりそうだ。

　移転計画の先送りは、米海軍の統合グアム計画事務所が２２日、グアム政府に行った環境影響評価の事前説明会で明らかになった。

　同事務所の説明文書によると、米政府は「日米合意では、移転の完了期限は１４年とされているが、グアムのインフラはそのような急な建設速度に対応できない」との現状認識を明記。グアムの電力・上下水道、港湾、道路などの供給能力を上回らない速度で建設を進める「適応性のある計画管理」を導入するとし、「これにより、基地建設の期限は延長され、より管理しやすいものになる」とした。

　グアムのインフラ整備は、海兵隊移転に伴う急激な人口増加に対応するには、電力供給など民間インフラの整備が不可欠だとするグアム政府の主張を踏まえたものだ。このため、米政府は海兵隊の基地建設に先立って民間のインフラ整備を優先させることにし、工期の長期化と予算の膨張が不可避となった。米政府は月内にまとめる環境影響評価最終版の中で、この方針を正式発表する。

　一方、日本政府筋は、米政府からすでに同様の説明を受けたことを明らかにした。政府筋は「インフラの追加整備には数年かかるだろう」と述べ、１４年までの基地建設は客観的に不可能だとの見方を示した。

　グアム移転の先送りは、普天間移設問題が一向に進展しない日本の現状が影響しているのでは、との見方もある。政府内では「米側で米軍再編全体を推進する機運が薄れつつある表れでは」（外務省筋）との懸念も出ている。

　海兵隊グアム移転をめぐっては、総額１０２億７０００万ドルのうち、財政支出２８億ドルを含む６０億９０００万ドル（５９％）を日本政府が負担することで日米が合意している。
（2010年7月23日14時33分 読売新聞）

http://www.yomiuri.co.jp/politics/news/20100723-OYT1T00592.htm?from=rss&ref=rssad

FACTBOX-Policies at stake after Japan govt loses election

Mon Jul 12, 2010 12:15am EDT

July 12 (Reuters) - Japanese Prime Minister Naoto Kan's government suffered a major blow in Sunday's upper house election, threatening a policy deadlock that could thwart efforts to curb massive public debt and engineer growth.

Voters dealt Kan's Democratic Party of Japan a stinging rebuke in the election, depriving the DPJ and its tiny ally of a majority less than a year after the Democrats swept to power with promises of change. [ID:nTOE66A02V]

The Democrats still have a dominant grip on the more powerful lower house. But they will need to seek new partners to control the upper chamber, which can block bills.

Below are key policies that could be affected by the outcome of the election:

FISCAL POLICY

Debt woes in the euro zone have turned the spotlight on Japan's own massive debt, which the International Monetary Fund put at 217.7 percent of gross domestic product last year, far worse than Greece's debt-to-GDP ratio of 115.1 percent.

Most of Japan's debt is held by domestic investors, who are less sensitive to credit ratings agency downgrades than foreign investors, but that is slowly changing as the population ages and household savings fall.

Kan, a former finance minister, had made fiscal reform a top priority, floating a possible doubling of the 5 percent consumption tax. The main opposition Liberal Democratic Party also favours a rise in the sales tax to 10 percent, but the poor election results could make it harder for Kan to push forward debate on the politically touchy topic.

The government last month unveiled a mid- and long-term fiscal reform strategy. But the plan lacked specific ideas on how to meet ambitious targets such as balancing the budget and reducing its debt-to-GDP ratio. [ID:nTOE65L01H]

A majority of voters agree fiscal reform is needed. But his apparent flip-flopping on a possible additional tax burden has put off many voters.

MONETARY POLICY

The Bank of Japan, which has stressed the need for a credible plan to cut back public debt, sees little need to ease monetary policy and feels it has done enough for now by outlining a loan programme aimed at supporting industries with growth potential.

Political instability after Sunday's election means it would be difficult for the government to carry out steps to support a fragile recovery in the world's No.2 economy. That could renew government pressure for a more aggressive monetary policy. While the BOJ is independent from the government by law, direct pressure from the premier might be hard to resist.

The opposition Your Party, seen by some as a potential DPJ ally after it won 10 seats in Sunday's poll, wants to revise the law governing the central bank to seek stronger government-BOJ cooperation to end deflation by making maximum employment one of the BOJ's objectives, similar to a law governing the U.S. Federal Reserve.

YEN POLICY

Investors remain reluctant to test the government's tolerance for a strong currency, although Tokyo has not intervened in the market since early 2004.

Kan caused a stir in January when he said he would work with the BOJ to weaken the yen, and that "it would be nice" if the Japanese currency slipped further.

He has subsequently toed the government line that stable exchange rates are desirable but levels should be set by the markets -- but noted after becoming prime minister that there was a general view that a weaker yen would be better for Japan's export-driven economy.

CLIMATE POLICY

Kan has stuck to a 2020 goal to cut Japan's greenhouse gas emissions by 25 percent from 1990 levels, premised on an international framework in which major emitting countries would agree on ambitious targets.

The more powerful lower house passed a climate bill including that goal and a shortlist of domestic measures to achieve it, but the upper house ran out of time to enact the legislation. But the fate of the legislation is murky after the ruling coalition suffered a major setback in the poll.

POSTAL REFORM

The parliament session ended in mid-June without passage of a bill to scale back postal privatisation. Kan has said he will resubmit the legislation, sought by his tiny coalition partner the People's New Party, in an extra session in the autumn.

But without a coalition upper house majority, it looks almost impossible for the legislation to be enacted any time soon.

Not all Democratic Party lawmakers are keen on the legislation and banks complain it would give Japan Post an unfair advantage because of an implicit government guarantee.

Japan Post, which has retail banking and insurance services, is the world's largest financial conglomerate with assets of about 300 trillion yen ($3,387 billion) and its fate could sway financial markets and industry.

The United States and Europe have said the draft legislation had not addressed their concerns about what they see as the preferential treatment that Japan Post receives compared with private-sector companies.

DIPLOMACY, SECURITY POLICY

The election defeat of the ruling coalition is unlikely to shift Japan's foreign and security policies drastically.

The Democrats took power promising to steer a diplomatic course more independent of close ally the United States, but efforts by Kan's predecessor Hatoyama to do so hit a roadblock when he failed to find an alternative to keeping a U.S. Marine airbase on the southern Japanese island of Okinawa.

Tokyo and Washington have basically agreed to implement a 2006 agreement to shift the Marines' Futenma airbase to a less crowded part of Okinawa, host to about half the U.S. troops in the country.

But local opposition clouds the outlook for implementation, and experts worry that Hatoyama opened a Pandora's box by fanning anti-base sentiment that could undermine the 50-year-old alliance.

The government will also likely keep stressing the need to deepen ties with other Asian countries including China, given Japan's increasing reliance on the region for economic growth.

($1=88.56 Yen) (Compiled by Leika Kihara, Hideyuki Sano, Charlotte Cooper, Yoko Nishikawa, Risa Maeda and Linda Sieg; Editing by Michael Watson)

Japan faces policy gridlock as ruling party reels

By Linda Sieg
1 hr 7 mins ago

TOKYO (Reuters) – Japan faced political gridlock after the ruling party's thrashing in an election on Sunday, which could thwart efforts to curb a huge public debt and get the economy in shape, and put Prime Minister Naoto Kan's job at risk.

Voters dealt Kan's Democratic Party of Japan (DPJ) a stinging rebuke, depriving it and a tiny ally of an upper house majority less than a year after the DPJ swept to power promising change.

The DPJ won just 44 seats, far short of Kan's goal of 54, and its partner the People's New Party got none, media said. The main opposition Liberal Democratic Party (LDP) won 51 seats.

The Democrats still control the more powerful lower house. But they need help from other parties to push bills through the upper house as they struggle to end decades of stagnation in the world's No.2 economy and to cut the massive public debt.

"We're likely to have lost another two years stuck in parliamentary gridlock rather than action," said Jesper Koll, director of equity research at JP Morgan Securities Japan.

Japan's economy is recovering but analysts wonder for how long. Japanese manufacturing confidence edged up in July to its best in 2- years, but the pace of gain slowed, a Reuters poll showed, in a sign companies may be wary of a slowing growth.

The election results also leave Kan vulnerable to a challenge from inside his own party, though he said he would stay in his job. Kan, in office just one month, is already the fifth prime minister in three years.

MARKETS BLASE, POTENTIAL PARTNERS COOL

Markets have taken the election outcome in their stride, for now. The Nikkei share average inched up after a weak start, the yen eased a tad against the dollar, and Japanese government bond futures edged higher.

The DPJ won power in a historic landslide only last year, ousting the long-dominant conservative Liberal Democrats with promises to cut waste and focus spending on consumers.

But public backing nosedived due to funding scandals, chaotic policymaking and mishandling of a feud over a U.S. airbase in southern Japan.

Public support for the DPJ rebounded when Kan took over last month, but it tumbled as soon as he floated a rise in the 5 percent sales tax, and then appeared to dither.

Many voters accept the need for an eventual sales tax rise given a public debt already about twice the size of the $5 trillion economy, but the Democrats failed to convince voters they had a coherent plan to cure the country's economic ills.

Kan now faces a possible challenge from party critics including powerbroker Ichiro Ozawa -- a critic of his sales tax hike proposal -- ahead of a September party leadership vote. Analysts noted, though, that Ozawa's clout had not been bolstered by the election, since many candidates he supported had lost.

The premier said early on Monday that the Democrats would ask opposition parties to cooperate on a policy-by-policy basis rather than invite them into a formal coalition right away.

Two potential partners, the Your Party - which favors small government and market-friendly reforms -- and the Buddhist-backed New Komeito, rejected the idea of joining the government anyway.

"Forming a coalition is like getting married. It has become clear that the Democrats are all talk and no action and I cannot marry a person like that," Your Party leader Yoshimi Watanabe told a morning TV talk show.

LDP leader Sadakazu Tanigaki also said his party was willing to talk about policies but ruled out any "grand coalition" -- although analysts speculated that might be the only way forward.

The government's most urgent task will be to draft budget guidelines for fiscal 2011012 from April 2011, and market players will be watching to see if they can hold the line on borrowing.

But even if they enact a budget, related bills needed to implement it would likely get stuck in the upper house.

"Voters were not trying to create political confusion, but that is the result," said independent political analyst Hirotaka Futatsuki, adding calls for a snap lower house election would likely grow. No lower house poll need be held until 2013.

Analysts have said opposition parties would drive hard policy bargains with the Democrats in return for any support, raising hopes among some experts that a deal with the Your Party would foster the deregulation many see as vital for growth.

(Additional reporting by Kiyoshi Takenaka, Yoko Nishikawa, Shinichi Saoshiro and Leika Kihara, editing by Jonathan Thatcher)

Exit poll setback for Japan PM



July 11 - Japan Prime Minister Kan's government suffers deep blow in upper house election as exit polls show it set to lose combined majority. (01:45)

Japan govt at risk of setback as voting begins

By Linda Sieg and Kiyoshi Takenaka
1 hr 17 mins ago

TOKYO (Reuters) – Japanese began voting on Sunday in an upper house election that could deliver Prime Minister Naoto Kan's government a major blow, stalling efforts to curb a huge public debt and putting the premier's job at risk.

Sagging support for the leading Democratic Party of Japan (DPJ), which surged to power for the first time last year, rebounded after Kan -- Japan's fifth leader in three years -- replaced his indecisive predecessor last month.

But ratings slipped again after Kan floated the long taboo topic of raising the sales tax to curb public debt and struggled to persuade voters he had a clear plan to fix Japan's woes.

Photo: Japan's Prime Minister Naoto Kan, left, and his wife Nobuko pose for photo as they cast their votes for the upper house election at a polling station in Tokyo, Sunday, July 11, 2010. Polls show that Prime Minister Naoto Kan's party will likely lose seats in the 242-member upper house, where half the seats are up for grabs, partly because he has suggested that Japan needs to raise its sales tax in coming years as the country's population ages and shrinks.

"The Democrats haven't been able to implement their policies well enough," said Ikuhiro Harada, a 20-year-old student voting in Yokohama city near Tokyo, who opted for the main opposition Liberal Democratic Party (LDP).

Others admitted a sales tax rise was inevitable and said they were willing to give the Democrats a second chance despite months of indecisive leadership under Kan's predecessor, Yukio Hatoyama.

"I'm going to live on a pension, and more money going out of my wallet is not something I desire," said Asako Nishikawa, 60, who works for an insurance company and voted for the DPJ. "But I've got grandchildren to think about."

In an effort to soothe sales tax fears, Kan has stressed he would not hike the levy even "one yen" without seeking a mandate in the next lower house poll, which must be held by late 2013.

But he also argued that tough decisions were vital to avoid a Greek-style debt crisis, since Japan's public debt is already close to twice the size of the nearly $5 trillion economy.

MISSING THE TARGET?

"Japan itself must make sure it avoids collapse," Kan told a crowd of voters under a blazing sun in western Tokyo as he wrapped up his campaign on Saturday. "If state finances collapse, the social security system of ordinary people would suffer most."

The DPJ, which ousted its long-dominant rival last year with pledges to cut waste, prise control of policymaking from bureaucrats and focus spending on households to boost growth, will almost certainly run the government whatever the outcome of Sunday's vote because it controls the powerful lower house.

But the party needs a majority in the upper chamber to avoid policy deadlock and begin taking steps to reduce a public debt that is the worst among advanced countries.

Media surveys last week showed the DPJ would likely win around 50 or even fewer of the 121 seats up for grabs in the 242-member chamber -- well short of Kan's target of keeping all 54 seats the Democrats have up for re-election.

That would deprive the DPJ and its tiny coalition partner, the pro-spending People's New Party, of a majority in the upper house. The Democrats would be forced to seek new allies, complicating the government's ability to forge ahead with the fiscal reform that Kan has put at the heart of his campaign.

It would also leave Kan vulnerable to a challenge from party powerbroker Ichiro Ozawa -- a critic of his sales tax proposal -- ahead of a September party leadership vote. Few, though, would expect Kan to go without a fight.

Many voters have been having trouble finding a party to their taste -- although a flurry of new, small parties has broadened their options -- making precise predictions difficult.

The DPJ's current coalition partner opposes raising the 5 percent sales tax any time soon, as do some potential allies.

Other opposition parties agree a hike is inevitable but would probably be reluctant to help out the rival DPJ.

The leaders of two potential partners, the small, pro-reform Your Party and New Komeito, which partnered with the Liberal Democratic Party until its defeat last year, have rejected the idea of an alliance with the DPJ.

Analysts say they might change their tune later, but would drive hard bargains if the Democrats fare badly.

(Editing by Alex Richardson)

U.S. asks Japan to pay more for moving Marines

Reuters
40 mins ago

TOKYO (Reuters) – The United States has asked Japan to shoulder additional costs for shifting part of the U.S. Marines based in southern Japan to Guam, Kyodo news agency said, further complicating bilateral ties already hurt by disputes over where to relocate the U.S. airbase.

Defense Secretary Robert Gates made the request last month because costs for upgrading water, electricity and other infrastructure to accommodate incoming personnel will likely exceed original estimates, Kyodo said, citing diplomatic sources.

Former Prime Minister Yukio Hatoyama had raised the hopes of people on the Japanese southern island of Okinawa last year that the U.S. Futenma airbase could be moved off the island despite a 2006 deal to shift the base to a less crowded part of Okinawa.

Photo: Coral reefs are seen along the front of the U.S. Marine base Camp Schwab, off the tiny hamlet of Henoko in Nago on the southern Japanese island of Okinawa, in this aerial photo taken March 11, 2010.

But he failed to find a replacement site, sparking public outrage and distracting Washington and Tokyo as the close allies try to cope with an unpredictable North Korea and a rising China.

The planned transfer of about 8,000 Marines to the U.S. territory of Guam from Okinawa by 2014 is part of a larger agreement that includes the relocation of Futenma functions to the less populated area of Okinawa.

Of the total estimated costs of $10.27 billion for the transfer to Guam, Japan was originally set to pay $2.8 billion and extend $3.29 billion in loans, with the remaining $4.18 billion shouldered by the U.S. side.

The additional amount the United States is asking is estimated to come at least to several hundred million dollars, Kyodo said.

The Japanese government, which is facing an urgent task of tackling bulging public debt to stave off the type of sovereign debt crisis that has roiled Greece, plans to reply to the request after an upper house election on July 11, Kyodo said.

(Reporting by Kiyoshi Takenaka; Editing by Sugita Katyal)

Japan PM seeks to quell Okinawa anger over U.S. base

Chisa Fujioka
Wed Jun 23, 2010 4:16 am EDT

TOKYO (Reuters) - Japanese Prime Minister Naoto Kan apologized to the residents of Okinawa on Wednesday for the concentration of U.S. military bases on the island, in an effort to soothe local anger that contributed to his predecessor's fall.

Kan took over earlier this month from Yukio Hatoyama, who quit after sparking public outrage for breaking a promise to move a U.S. airbase off the southern island, reluctant host to about half the 49,000 U.S. military personnel in Japan.

The dispute over where to relocate the U.S. Marines' Futenma airbase has distracted Washington and Tokyo as the close allies try to cope with an unpredictable North Korea and a rising China.

It has also hurt the popularity of the ruling Democratic Party of Japan (DPJ) with voters ahead of a July 11 upper house election, which it needs to win for smooth policymaking, including efforts to rein in huge public debt.

"I want to express my gratitude for the fact that this burden contributes to the peace and security of the Asia-Pacific region," Kan said at ceremony to mark the 65th anniversary of the Battle of Okinawa at the end of World War Two, in which about 150,000 Okinawan men, women and children were killed.

"I promise to seriously try all the more to reduce Okinawa's burden related to the U.S. bases and eliminate the associated dangers."

Kan, visiting Okinawa for the first time as prime minister, spoke at a memorial park where rows of black stones are engraved with names of those who died in the 82-day battle -- civilians and soldiers on both sides.

Kan has made fiscal reform a top priority ahead of the election, but opposition parties have used the base dispute to blast the DPJ's diplomatic policies since the party took power for the first time last year.

WRANGLING

After months of wrangling, Japan and the United States reached an agreement shortly before Hatoyama quit for the two sides to go ahead with a 2006 deal to shift the Futenma airbase to a less crowded part of Okinawa.

Kan has said he will stick to the agreement, but keeping the base on the island, strategically located close to Taiwan and the Korean peninsula, faces strong resistance from residents who complain of noise, pollution and crime associated with bases.

"I hope that in this milestone year, Okinawa's excess base burden will be alleviated in a way that the people of Okinawa can see with their own eyes," Okinawa governor Hirokazu Nakaima said at the ceremony.

Nakaima later told Kan in a meeting that it would be difficult to keep the airbase on Okinawa, Kyodo news agency reported.

Kan, who has said U.S.-Japan ties are the core of Tokyo's diplomacy, is expected to touch on the issue when he meets President Barack Obama on the sidelines of a summit of G8 and G20 leaders this weekend in Canada.

Hatoyama had raised the hopes of Okinawa residents before the DPJ's landslide election win last year that Futenma could be moved off the island, but he failed to find a replacement site elsewhere in Japan or outside the country.

Washington and Tokyo have agreed to work out by the end of August a detailed plan, including a relocation site, but Japan's defense minister has already expressed doubts over how smoothly the deal can be implemented.

An election for the governor of Okinawa is due in November and the result could also affect the airbase deal, coming near the time when Obama is expected to visit Japan for an Asia-Pacific leaders' summit.

Policies at stake in Japan's upper house election

6 hours 29 mins ago
Reuters

Japan will hold an election for parliament's upper house on July 11 that the ruling Democratic Party needs to win to implement policies smoothly as the government struggles with massive debt and sluggish growth. Skip related content

Prime Minister Naoto Kan's replacement of unpopular predecessor Yukio Hatoyama this month has boosted the Democrats' chances, but doubts remain if they can win an outright majority.

Below are key policies that could be affected by the outcome of the election.

FISCAL POLICY

Debt problems in the euro zone have turned a spotlight on Japan's indebtedness, which the International Monetary Fund put at 217.7 percent of gross domestic product last year, far worse than Greece's debt-GDP ratio of 115.1 percent.

Most of Japan's debt is held by domestic investors, who are less sensitive to credit ratings agency downgrades than foreign investors, but that is slowly changing as the population ages and household savings fall.

Kan, a former finance minister, has made fiscal reform a top priority and analysts say there is now a greater chance of bolder steps to rein in debt, including a pledge to consider raising the 5 percent sales tax after the next general election for parliament's lower house, due by 2013, in a party manifesto due out as early as this week.

A majority of voters agree fiscal reform is needed and the government is expected to soon unveil its mid- and long-term strategy for reducing reliance on borrowing. But how aggressively the government tackles the problem depends partly on the outcome of the upper house election, including the shape of any coalition.

MONETARY POLICY

The Bank of Japan (BOJ), which has stressed the need for a credible plan to rein in Japan's huge public debt, sees little need to ease monetary policy and feels it has done enough for now by outlining a loan programme aimed at supporting industries with growth potential.

But some central bankers worry that Kan, previously among the most vocal government critics of the BOJ when it was reluctant to ease monetary policy, may renew pressure for more aggressive monetary policy steps if sharp rises in the yen hurt Japan's fragile recovery.

While the BOJ is independent from the government by law, direct pressure from the premier may be hard to resist.

YEN POLICY

Investors remain reluctant to test the government's tolerance for a strong currency, although Tokyo has not intervened in the market since early 2004.

Kan caused a stir when he became finance minister in January by saying he would work with the BOJ to weaken the yen, and that "it would be nice" if the Japanese currency slipped further.

He subsequently toed the government line that stable exchange rates are desirable but levels should be set by the markets -- but noted after becoming prime minister a general view that a weaker yen would be better for Japan's export-driven economy.

The BOJ's special money market funding operations, launched in December and expanded in March, have also been seen as a means of trying to keep the yen from rising further against the dollar.

Japan is also struggling with the yen's surge against the euro as the European debt crisis has slammed the single currency.

CLIMATE POLICY

The previous administration under Hatoyama approved a 2020 goal to cut Japan's greenhouse gas emissions by 25 percent from 1990 levels, premised on an international framework in which major emitting countries agree ambitious targets.

The lower house passed a climate bill including that goal and a short-list of domestic measures to achieve it, but the upper house ran out of time to enact the legislation.

The government is expected to compile a bill with the same goal and submit it to parliament after the election.

POSTAL REFORM

The parliament session ended without passage of a bill to scale back postal privatisation.

Kan has said he will resubmit the legislation, sought by small coalition partner the People's New Party (PNP), in an extra session expected in the autumn even though its most vocal proponent, PNP leader Shizuka Kamei, has quit the cabinet.

Not all Democratic Party lawmakers are keen on the legislation, which private banks complain will give Japan Post an unfair advantage because of an implicit government guarantee.

The fate of Japan Post could sway the financial markets and industry because the entity, which has retail banking and insurance services, is the world's largest financial conglomerate with assets of about 300 trillion yen ($3.28 trillion).

The United States and Europe said last month the draft legislation had not addressed their concerns about what they see as the preferential treatment that Japan Post receives compared with private-sector companies.

DIPLOMACY, SECURITY POLICY

Regardless of the election outcome, Japan's foreign and security policies are unlikely to shift drastically.

The Democrats took power promising to steer a diplomatic course more independent of close ally the United States, but efforts by Kan's predecessor Hatoyama to do so hit a roadblock when he failed to find an alternative to keeping a U.S. Marine airbase on the southern Japan island of Okinawa.

Tokyo and Washington have basically agreed to implement a 2006 agreement to shift the Marines' Futenma airbase to a less crowded part of Okinawa, host to about half the U.S. troops in the country. But local opposition clouds the outlook for implementation, and experts worry that Hatoyama opened a Pandora's box by fanning anti-base sentiment that could undermine the 50-year-old alliance.

The government will also likely keep stressing the need to deepen ties with other Asian countries including China, given Japan's increasing reliance on the region for economic growth.

(Compiled by Leika Kihara, Hideyuki Sano, Charlotte Cooper, Yoko Nishikawa, Risa Maeda and Linda Sieg; Editing by Michael Watson)

Okinawa governor tells Japan PM U.S. base deal hard

Yoko Kubota
Tue Jun 15, 2010 12:41am EDT

TOKYO (Reuters) - The governor of Japan's Okinawa told new Prime Minister Naoto Kan on Tuesday that a U.S.-Japan deal to move a U.S. base on the southern island will be tough to implement, in a sign the issue will keep haunting the government ahead of a July election.

Voter perceptions that Kan's predecessor, Yukio Hatoyama, had mishandled a feud over the U.S. Marines Futenma airbase on Okinawa slashed government support and distracted close allies Washington and Tokyo.

Under an agreement forged shortly before Hatoyama quit earlier this month, the two nations agreed to implement a 2006 deal to shift Futenma airbase to a less crowded part of Okinawa, host to about half the U.S. forces in Japan.

"We greatly regret that statement (between the two countries on the agreement) and I said that the realization is extremely difficult," Okinawa Governor Hirokazu Nakaima told reporters after meeting Kan.

Kan, whose rise to the top job last week has boosted voter support, repeated that he would honor the bilateral deal, Deputy Chief Cabinet Secretary Motohisa Furukawa said.

But Kan, Japan's fifth premier in three years, will have trouble implementing the agreement given stiff local opposition.

Opposition parties are likely to highlight the Democratic Party-led government's handling of the base feud and relations with Washington during the campaign for an upper house election expected on July 11.

The Democrats, who took power last year pledging more equal ties with the United States, have a big majority in parliament's lower house but need to win a majority in the upper chamber to avoid policy paralysis as Japan struggles to keep a fragile economic recovery on track and rein in its bulging public debt.

Hatoyama had raised the hopes of Okinawa residents during his successful election campaign last year that a replacement for Futenma could be found off the island but he failed to find a solution acceptable to all parties by end-May as he had vowed.

U.S. Secretary of State Kurt Campbell will be visiting Tokyo on Thursday, where he is expected to discuss the details of the base relocation with Japanese officials.

Washington and Tokyo have agreed to work out by end-August a more detailed plan, including the exact location of the new base, but Japan's defense minister has expressed doubts about how smoothly the deal can proceed.

An election for the governor of Okinawa is scheduled for around November and the result could affect the airbase deal just near the time when U.S. President Barack Obama is expected to visit Japan for an Asia-Pacific leaders summit.

Kan, who has said U.S-Japan ties are the core of Tokyo's diplomacy, will visit Okinawa on June 23 to attend a ceremony commemorating the 1945 Battle of Okinawa, one of World War Two's bloodiest battles, in which some 140,000 Okinawan men, women and children were killed.

New Japan PM Kan bolsters ruling party support

Wed Jun 9, 2010 6:46am EDT

By Yoko Kubota

* Support for PM Kan's government at 61.5% in media poll

* Democrats may still fall short of outright majority-experts

* Kan sees rocky start, minister denies office fees misreport

TOKYO, June 9 (Reuters) - Support for Japan's ruling Democratic Party has jumped after the launch of new Prime Minister Naoto Kan's government, improving its chances in an election likely next month, a survey showed on Wednesday.

But the Democrats may still fall short of a majority in the upper house vote expected in July, meaning they would need help from current or new coalition partners, complicating decision-making on policies including fiscal reform.

A survey by the Kyodo news agency put support for Kan's government at 61.5 percent, more than 40 points higher than the rating at the end of May for his predecessor Yukio Hatoyama, who quit last week.

Almost 44 percent of respondents said they backed the Democrats, up nearly 8 points from just last week.

The Kyodo poll also showed that 43.8 percent planned to vote for the Democrats in the upper house poll, up 11.2 points from the last survey at the end of May.

That compared with 21.6 percent who plan to cast their ballots for the main opposition Liberal Democratic Party, ousted last year after more than a half-century of almost unbroken rule.

"If they build on the current momentum, it (an outright DPJ majority) doesn't look as impossible as it used to, but it doesn't look likely," said Koichi Nakano, a professor at Tokyo's Sophia University.

BIG SPENDING

The Democrats need to win the upper house election to break free from a tiny coalition partner that favours big spending and avoid having to find more allies to pass bills easily.

Kan has vowed to tackle a debt that is already twice the size of GDP and his government is set to unveil this month mid- and long-term plans to reduce dependence on borrowing, as well as a strategy to engineer growth in an ageing society.

The Democrats have pledged not to raise Japan's 5 percent sales tax before the next general election for the lower house, which must be held by late 2013, but party fiscal reformers want to state clearly their intention to do so before that.

The Kyodo survey showed 57.7 percent of respondents would support raising the consumption tax, a sign voters worried about creaking pension and health care systems are less sensitive to such a step than in the past.

Kan also faces problems managing ties with close ally the United States, since an agreement to keep a U.S. airbase on Okinawa island -- forged amid controversy in Hatoyama's final days -- faces stiff opposition from residents.

Kan has said that U.S-Japan ties will remain the core of Japan's diplomacy and that he would honour the bilateral deal while trying to reduce the burden on Okinawa, reluctant host to about half the U.S. forces in the country.

But Defence Minister Toshimi Kitazawa expressed doubts on how smoothly the deal would proceed.

"I do not necessarily think that we can get an agreement by the end of August from Okinawa," Kitazawa told a news conference on Wednesday.

Washington and Tokyo have agreed to work out by end-August details on the relocation of the U.S. Marines' Futenma airbase within Okinawa prefecture, such as the exact location and construction methods for the new facility.

Kan's new government got off to something of a rocky start on Wednesday, when National Strategy Minister Satoshi Arai had to deny reports that a support group had misreported office expenses.

Kan's efforts to present his government as both clean and competent while distancing himself from scandal-tainted party powerbroker Ichiro Ozawa, who quit as DPJ No.2 last week, are vital to improving the Democrats' chances at the polls.

"I think the best bet ... is that they won't have a majority of their own and they will have to look around and see what coalition partners are available to fill the gaps," said Steven Reed, a political science professor at Tokyo's Chuo University.

"The other thing that is exceedingly likely is that they win more seats than any other party," he said.

(Additional reporting by Linda Sieg and Kiyoshi Takenaka; Editing by Alex Richardson)

FACTBOX - Japan's 'revolving door' prime ministers

Wed Jun 2, 2010 9:44am IST

(Reuters) - Japanese Prime Minister Yukio Hatoyama said on Wednesday he would resign after just eight months in office after a slide in the polls threatened his party's chances in an election expected next month.

The ruling Democratic Party will choose a new leader on Friday, but analysts say a change at the top may fail to impress voters fed up with prime ministers leaving office one after another.

Hatoyama is Japan's fourth prime minister in as many years.

The following is a chronology of Hatoyama's recent predecessors:

YOSHIRO MORI (April 2000-April 2001)

Mori, a political veteran but a policy novice, was picked by four barons in the then-ruling Liberal Democratic Party (LDP) in a backroom deal to replace Keizo Obuchi, who died of a stroke.

His limp public support vanished after a string of verbal gaffes and scandals, prompting party lawmakers to call for his resignation before an upper house election. Mori brought forward a party leadership election to pick his replacement.

JUNICHIRO KOIZUMI (April 2001-Sept 2006)

Dubbed a maverick for his outspoken ways, Koizumi appealed to the public with calls for reform and won resounding support from rank-and-file party members afraid the LDP was headed for a thrashing in an upper house election.

His rock star-like popularity helped him become Japan's third-longest serving postwar leader. Koizumi served out his term after leading the LDP to a huge win in a 2005 election he called a referendum on his pet project to privatise the postal system.

SHINZO ABE (Sept 2006-Sept 2007)

Abe was initially popular with voters for his fresh image as Japan's first prime minister born after World War Two and his tough stance on North Korea, but his ratings soon crumbled on gaffes and scandals in his cabinet.

Voter anger over lost pension records and perceptions that he was out of touch with ordinary people on economic policies led to a big defeat for the LDP in an upper house election in 2007. Abe quit abruptly two months later, citing health reasons.

YASUO FUKUDA (Sept 2007-Sept 2008)

Fukuda won support from rank-and-file LDP members who sought political stability after Abe, but he struggled to make headway on policies as opposition parties used their majority in the upper house to stall legislation.

An attempt to form a "grand coalition" with the Democratic Party -- then the main opposition party -- flopped. Resisting calls from the opposition to call a snap election, Fukuda resigned suddenly after less than a year in office.

TARO ASO (Sept 2008-Sept 2009)

A conservative and a fan of manga comic books, Aso was chosen by the LDP to boost the party's election chances but he too saw his ratings evaporate as policies stalled in parliament and the economy took a hit from the global financial crisis.

LDP lawmakers called for his resignation but with no obvious successor he clung to his job. Aso stepped down after the LDP lost a general election to Hatoyama's Democratic Party, ending more than 50 years of almost unbroken rule.

(Reporting by Chisa Fujioka, editing by Miral Fahmy and Michael Watson)

Japan prime ministers haunted by ever-present media

May 26, 2010 22:34 EDT

It’s not unusual for a politician whose popularity has slumped to want to avoid the media. But for Japan’s premiers it’s not just a question of keeping critical newspaper editorials out of sight.

Prime Minister Yukio Hatoyama, just like his five predecessors, faces questioning from a posse of reporters morning and evening at least five days a week. And just like his predecessors, he seemed to find these brief “doorstep news conferences” exhilarating while voter support for his government soared around the 70 percent level after a landslide election victory last year.

Now that only about 20 percent of Japanese say they support him in the run-up to a key upper house election, Hatoyama has visibly lost enthusiasm for commenting twice a day on camera. At first known for lengthy explanations, he has become increasingly curt. He even admitted recently that he’d prefer to skip the doorsteps in favour of holding more frequent sit-down news conferences, inviting a broader range of reporters from magazines and internet outlets. ”But this is the custom,” he said forlornly.

Life was not necessarily easier for Japanese prime ministers before the doorstep idea was introduced by the popular Junichiro Koizumi, who served as premier from 2001-2006. Before his time, young reporters from Japan’s generously staffed big media companies were sent to camp out by the door of the prime minister’s office, taking note of whoever visited him and following him every time he left the room. Some leaders made it clear they found this constant attention irritating.

A move from the quaint 1920s building to a modernist new prime ministerial office in 2002 cut off reporters’ access to the premier’s office door and Koizumi sought to quell media protests by promising to speak to reporters twice a day. No matter how far their support falls, none of his successors has dared abandon the system for fear of sparking a media backlash.

But some have sought to look beyond the cub reporters sent to quiz them and speak directly to the electorate. Shinzo Abe, premier from 2006-2007, became known for staring straight into the camera lens while speaking to reporters, in an effort to give the impression he was speaking directly to television viewers.

Hatoyama tried out a similar tactic when his ratings started to nosedive, but last week denied this was due to any change in his outlook.

“If I look at everyone’s faces, people complain that my eyes flicker around,” he told reporters.

Japan PM confident ruling coalition will hold

1 hour 47 minutes ago

By Chisa Fujioka

TOKYO - Struggling Japanese Prime Minister Yukio Hatoyama said on Wednesday he was confident his coalition would stick together, despite concerns a junior partner might withdraw over a plan to keep a U.S. airbase on Okinawa.

Hatoyama's decision to abandon a pledge to try to shift the U.S. Marines' Futenma air base off the southern island has made Okinawans angry, upset the tiny leftist Social Democratic Party , and eroded support for the government due to voter perception the premier has mishandled the issue.

SDP leader Mizuho Fukushima, who is also a cabinet member, said on Tuesday she would not sign off on the U.S.-Japan deal, but stopped short of threatening to leave the coalition ahead of a mid-year upper house poll that the ruling bloc needs to win to avoid a parliamentary deadlock.

"Given the current situation on the Korean peninsula, the message that we will firmly maintain the U.S.-Japan alliance is extremely important. I want the people of Japan to understand this," Hatoyama told reporters, referring to rising tensions after Seoul accused the North of sinking a South Korean ship.

"It goes without saying that this is a coalition government, so I want to continue discussions so that we can maintain the coalition. I believe the coalition will be firmly maintained."

ILL-TIMED, NOT FATAL

An SDP executive told reporters on Wednesday he thought the government would take the party's demands into account.

"What is important now is to do what we can under the current circumstances. I don't think we should comment lightly on future hypothetical cases," SDP Secretary-general Yasumasa Shigeno said after meeting Chief Cabinet Secretary Hirofumi Hirano.

Some SDP members have said the party should leave the coalition after Hatoyama abandoned his pledge to try to move the base off of Okinawa.

Hatoyama's Democratic Party of Japan has a huge majority in parliament's lower house, which picks the prime minister, and SDP votes are no longer needed in the upper house to pass bills smoothly, since the Democrats and another small party now have a majority there.

But a rift in the coalition would be ill-timed ahead of an upper house election, expected in July, with the Democrats chances of an outright win fading as voter support slumps.

A split could see the Democrats lose SDP cooperation in the election campaign but some analysts said the Social Democrats' departure could make it easier for Hatoyama's government to make decisions by reducing policy gaps among coalition partners.

In the campaign that swept the Democrats to power last year, Hatoyama had raised hopes that Futenma could be moved off Okinawa, whose residents have long resented the heavy concentration of U.S. military bases there. But Hatoyama later backtracked, saying some marines had to stay to deter threats.

A formal agreement with the United States on the plan to move Futenma base from a crowded city to the Henoko area of the northern Okinawa city of Nago -- largely in line with a 2006 U.S-Japan agreement -- is expected to be announced on Friday and then the cabinet may adopt a resolution based on that deal.

The Yomiuri newspaper said the Social Democrats were leaning towards staying in the coalition on the premise that the cabinet resolution would not specify the exact location for the new base and that consultations on the issue would continue.

U.S., Japan defense chiefs discuss N. Korea concerns

By Phil Stewart Phil Stewart
Tue May 25, 9:59 pm ET

WASHINGTON (Reuters) – U.S. and Japanese defense chiefs discussed concerns about future actions by North Korea on Tuesday, a Japanese defense official said, as tensions ramp up following the sinking of South Korean warship.

U.S. Defense Secretary Robert Gates held a 40-minute-meeting with Japanese Defense Minister Toshimi Kitazawa at the Pentagon, where the two exchanged views on "future North Korean possible activity," the official said.

The talks also broached Chinese naval activities and controversial plans to relocate a U.S. airbase in Japan.

The Japanese official declined to be named and did not enter into specifics on the conversation on North Korea.

The Pentagon said Gates thanked Kitazawa for Japan's strong response to the March sinking of the South Korean warship, which killed 46 sailors. Seoul believes a North Korean submarine infiltrated its waters to launch a torpedo attack.

North Korea denies those accusations and announced on Tuesday it was cutting all ties with the South. Its increasingly war-like rhetoric has hit Seoul's financial markets, although analysts say the possibility of a major conflict between the two Koreas is remote.

The Pentagon said U.S., Japanese and South Korean defense chiefs would hold trilateral talks in June in Singapore on the sidelines of a security conference.

OKINAWA BASE

Japanese Prime Minister Yukio Hatoyama has said tension on the Korean peninsula underlined the importance of tight U.S.-Japan ties and was key to his decision to keep a controversial U.S. airbase on Okinawa island.

Hatoyama had originally pledged to try to move the Marines' base off Okinawa.

The Pentagon acknowledged Gates and Kitazawa "discussed the way forward" for the airbase relocation.

The Japanese official suggested an announcement of an agreement on the airbase could come this week, but said no date had been officially set.

"Secretary Gates was pleased with ... the developments so far, (on) both sides, because we are now proceeding toward some kind of agreement," the official said, without offering specifics.

Gates and Kitazawa also discussed recent Chinese military incidents, which saw Japan lodge a formal protest with Beijing. Twice last month, Chinese helicopters at sea flew close to Japanese destroyers.

A group of Chinese warships were also spotted in April in the high seas near Okinawa, prompting an investigation by Japanese authorities. China says the ships were on a training exercise and that no international law was violated.

The Japanese official described recent Chinese naval activity as "potentially dangerous."

The Pentagon said Japan and the United States "agreed to continue to cooperate and to monitor Chinese actions in the region."

The U.S. military has repeatedly called for greater transparency and communication with China's armed forces in order to avoid a potentially dangerous misunderstanding.

But China has postponed several high-level exchanges between U.S. and Chinese military leaders since Washington angered Beijing by announcing a $6.4 billion arms package for Taiwan in January.

(Reporting by Phil Stewart, editing by Anthony Boadle)

Hatoyama, Obama to talk on Futenma Air Base: report

Tue May 25, 3:25 pm ET

(Reuters) – Japanese Prime Minister Yukio Hatoyama will speak with President Barack Obama over the phone Thursday to discuss relocation of the U.S. Marine Corps' Futenma Air Station, the Kyodo news agency said.

Hatoyama and Obama's talks will revolve around relocating the air station, which is in Okinawa Prefecture, to a coastal zone of the Marines' Camp Schwab, also in the prefecture, the news agency said.

Ahead of the talks, the two governments may release a joint statement centering on agreements to build a replacement facility for the airfield in the Henoko district in Nago and reach a decision on the relocation plan by September, the news agency said it learned from Japan-U.S. diplomatic sources.

The two countries had initially planned to release the joint statement Friday but will likely bring it forward to Thursday when the top-level talks are planned, the Kyodo said.

Hatoyama will also attend a National Governors' Association meeting Thursday afternoon in an attempt to seek local support by emphasizing that part of the Futenma helicopter units will be moved to outside Okinawa, the news agency said.

On Sunday, he sought local support for the plan to keep the U.S. Marine airbase on Okinawa, but the governor of the island said accepting the plan was tough.

Hatoyama is expected to explain that a part of F-15 fighter training, currently based at the U.S. Kadena Air Base in Okinawa, will be transferred to the Air Self-Defense Force base outside of the prefecture, the Kyodo said.

But the U.S. side has accepted the Japanese request to mention considering the island as a candidate location on condition that supply and repair facilities and troop shelter will be set up, the news agency said.

Under the joint document, the two countries will also agree not to delay the procedure for a current environmental assessment being conducted under the 2006 deal, the Kyodo said.

(Reporting by Vinay Sarawagi in Bangalore; Editing by Roshni Menon)

Japan PM points to North Korea to explain U.S. base plan

By Linda Sieg
51 mins ago

TOKYO (Reuters) – Japanese Prime Minister Yukio Hatoyama said on Monday tension on the Korean peninsula underlined the importance of tight U.S.-Japan ties and was key to his decision to keep a controversial U.S. airbase on Okinawa.

Analysts said, however, that while Pyongyang had given the struggling Japanese leader a good excuse for backtracking on a pledge to try to move the Marines' base off the southern Japanese island, the plan faces huge hurdles given harsh local opposition.

Voter perception that Hatoyama has mishandled the row has frayed ties with Washington and eroded government support, threatening the ruling Democratic Party's chances in a midyear upper house election it must win to avoid policy deadlock.

Apologizing for breaking his word, a subdued Hatoyama told Okinawa's governor on Sunday he had concluded the Futenma base should be shifted to the Henoko area of the northern Okinawa city of Nago -- largely in line with a 2006 U.S.-Japan deal.

But Okinawa's governor said it would be tough to accept the plan, which also flies in the face of demands by a tiny coalition partner to shift Futenma off the island.

"I decided that it is of utmost importance that we place the Japan-U.S. relationship on a solid relationship of mutual trust, considering the current situation in the Korean peninsula and in Asia," Hatoyama told reporters on Monday.

BEARING THE BURDEN

In the campaign that swept the Democrats to power last year, Hatoyama had raised hopes the Marine base could be moved off Okinawa, host to about half the U.S. forces in Japan.

But Washington sought to stick to the 2006 deal to move the facility from the crowded central city of Ginowan to Nago.

Hatoyama later backtracked, saying some Marines had to stay to deter threats. During a visit to Beijing on Monday, U.S. Secretary of State Hillary Clinton commended Hatoyama for making "the difficult but never-the-less correct decision."

Chief Cabinet Secretary Hirofumi Hirano on Monday held out hope that Okinawans, many of whom resent bearing a big share of the burden for the U.S.-Japan alliance, could yet be persuaded to accept the deal.

Shifting Futenma's functions elsewhere is a condition for moving up to 8,000 Marines to the U.S. territory of Guam.

"There will be criticism of course. But if the actual burden is reduced, we will have achieved something for the Okinawan people," Hirano said. "If people understand this was done for the sake of Japan's security ... this will be seen as progress."

Analysts said, however, it was far from clear whether the plan could be implemented, whatever Washington and Tokyo agreed.

Anti-base activists plan a rally to oppose the plan on May 28, the same day media say the two governments will announce a bilateral deal and Hatoyama will hold a news conference to explain the deal to the public.

"The easiest part to solve is between the U.S. and Japanese governments," said Keio University professor Yasunori Sone.

"But the coalition problem remains, and most difficult of all is (persuading) the people of Okinawa," he said. "The situation is far more difficult than it was last year and it will be almost impossible to persuade the Okinawans."

(Additional reporting by Isabel Reynolds and Chisa Fujioka; Editing by Jeremy Laurence)

Okinawans angry over US base plan, PM at risk

By Yoko Nishikawa
11 mins ago

TOKYO (Reuters) – Japanese Prime Minister Yukio Hatoyama on Sunday abandoned a pledge to move a U.S. air base off Okinawa, fanning local anger, upsetting a coalition partner and risking another blow to his ratings ahead of a mid-year election.

Hatoyama said he had concluded the base should be shifted to the Henoko area of the northern Okinawa city of Nago -- largely in line with a 2006 U.S-Japan agreement. But the governor of Okinawa quickly said it would be tough to accept such a plan.

Voter perception that Hatoyama has mishandled the Futenma air base row has eroded government support, threatening the ruling Democratic Party's chances in the upper house election, which it must win to avoid policy deadlock.

Photo: Protestors hold banners which reads 'Angry' in their rally against the government's relocation plan of the U.S. Marine Corps' Futenma Air Station, near the building of Okinawa prefectural government in Naha, Okinawa, southern Japan, Sunday, May 23, 2010. Japan's embattled Prime Minister Yukio Hatoyama apologized Sunday to the people of Okinawa that he is ditching his campaign promise to get rid of a U.S. military base — a concession that is likely to further erode his grip on power.

Hatoyama has set himself an end-May deadline to resolve the problem, which has frayed ties with Tokyo's key security ally Washington just as the two countries confront security challenges such as an unpredictable North Korea and a rising China.

"Concerns and anger that people in Okinawa have are understandable," Hatoyama told Okinawa Governor Hirokazu Nakaima in a meeting at the Okinawa prefecture office, as a crowd of protesters stood outside carrying signs opposing the plan and shouting "Go home."

"But as shown in recent developments in the Korean peninsula, uncertainty remains over security in East Asia and we cannot let the deterrence of U.S. military forces in Japan decline.

"It is a heart-rending decision for me," Hatoyama added and apologized to the people of Okinawa, for failing to succeed in shifting the base off the island.

In a brief visit to Japan on Friday, Secretary of State Hillary Clinton said Pyongyang's sinking of a South Korean ship had underscored the importance of the alliance.

Photo: Japanese Prime Minister Yukio Hatoyama, left, talks with Okinawa prefectural chief Hirokazu Nakaima, right, on the government's relocation plan of the U.S. Marine Corps' Futenma Air Station, in the Okinawa prefectural government building in Naha, Okinawa, southern Japan, Sunday, May 23, 2010. Japan's embattled Prime Minister Hatoyama apologized Sunday to the people of Okinawa that he is ditching his campaign promise to get rid of a U.S. military base — a concession that is likely to further erode his grip on power.

But the governor of Okinawa, host to about half the U.S. forces in Japan, expressed disappointment.

"The idea of moving the base to Henoko is quite regrettable and (accepting it) is extremely tough," Nakaima told Hatoyama in the meeting, aired live on nationwide TV.

LOCAL ANGER

In the campaign that swept his party to power last year, Hatoyama had raised hopes the U.S. Marine base could be moved off Okinawa, but Washington has sought to stick to the 2006 deal to move the facility to Nago.

Hatoyama later shifted gears, saying some Marines had to stay to deter threats, a move that outraged many Okinawans and upset a small ruling party, the Social Democrats.

"It is the worst possible case. He has made enemies of the governor of Okinawa, the Democrats in Okinawa, his coalition partner and the opposition, and put ties with America first," said independent political analyst Hirotaka Futatsuki.

"But once he promises this to the United States, even if Okinawa objects, ultimately, they will have to move it to Henoko."

In a separate meeting, Nago City Mayor Susumu Inamine, elected in January on an anti-base platform, told Hatoyama that the plan was "absolutely unacceptable."

"I cannot help feeling angry as this betrays feelings of people in Nago and Okinawa, who have called for the base to be moved out of the prefecture," Inamine told Hatoyama.

Mizuho Fukushima, head of the Social Democratic Party, told reporters she opposed Hatoyama's plan. But she also said no decision has been made on whether her party would leave the coalition government over the issue, Kyodo news agency reported.

The tiny Social Democratic Party's votes are no longer needed to pass bills smoothly in parliament, but a rift in the coalition ahead of the upper house election would be ill-timed.

Japanese media said a formal agreement with the United States on the plan would be announced on Friday, when Hatoyama is expected to give a news conference. Japanese Defense Minister Toshimi Kitazawa said he would visit Washington on Monday to further discuss the plan with his counterpart, Robert Gates.

Details of the new deal with Washington, including the exact location of a new runway and the construction method, are to be worked out before President Barack Obama visits Japan in November for an Asia-Pacific leaders summit, Japanese media said.

Hatoyama said the government would continue to negotiate with the United States to lessen the burden on Okinawa, where residents have long resented bearing what they feel is an unfair burden for maintaining the security alliance.

"I don't consider this as the end."

(Additional reporting by Linda Sieg; Editing by Jeremy Laurence)

Q+A-Japan PM tries to solve US base feud as poll nears

Sun May 23, 2010 12:36am EDT

By Linda Sieg

TOKYO, May 23 (Reuters) - Japanese Prime Minister Yukio Hatoyama on Sunday sought local understanding for a U.S.-Japan plan to keep a controversial U.S. Marine airbase on Okinawa, but the governor of the island said accepting the plan was tough.

The feud has distracted Washington and Tokyo as the close allies try to cope with an unpredictable North Korea and a rising China, while voter perception that Prime Minister Yukio Hatoyama has mishandled the issue is eroding support before a mid-year election his party needs to win to avoid policy paralysis.

Following are some questions and answers about the issue:

WHY HAS THIS DISPUTE COME TO A HEAD NOW?

In the election that swept his Democratic Party of Japan (DPJ) to power last year, Hatoyama raised hopes on the southern island of Okinawa that the Marines' Futenma airbase could be moved elsewhere, despite a 2006 deal to shift it to a less crowded site on Okinawa, host to about half the 49,000 U.S. military personnel in Japan.

Hatoyama has set an end-of-May deadline for resolving the issue, and said he would stake his job on meeting it.

But with no viable alternative in sight, Hatoyama changed tack, saying some Marines would have to stay in Okinawa to deter threats, a shift that outraged many Okinawans and upset a small ruling coalition partner, the Social Democratic Party (SDP).

The Democrats have also pledged to take a diplomatic stance more independent of Washington, but talks on revamping the 50-year-old alliance have been snarled by the Futenma feud.

CAN HATOYAMA STAY ON AFTER DEADLINE?

Hatoyama has been trying to redefine what "resolving" the row means and appears to be putting priority on an agreement with the United States.

On Sunday, he told Okinawa Governor Hirokazu Nakaima that he had concluded the airbase should be shifted to the Henoko area of the northern Okinawan city of Nago, largely in line with the 2006 deal.

That will outrage many Okinawans, irk the DPJ's coalition partner and leave many voters wondering what the fuss was about.

The tiny Social Democratic Party's votes are no longer needed to pass bills smoothly in parliament after some upper house lawmakers switched sides, but a rift in the coalition ahead of an upper house election expected on July 11 would be ill-timed.

Analysts say Hatoyama will likely stay on despite the fuss, partly because the Democrats had criticised two predecessors from the rival Liberal Democratic Party for quitting after only a year and because time is short before the upper house poll.

The dispute seems unlikely to spill over into trade and investment ties between the world's two biggest economies. Trade between the United States and Japan amounted to 14.2 trillion yen ($157.8 billion) in 2009, while two-way flows between China and Japan totalled 21.7 trillion yen.

But damage to the alliance could create uncertainty in the region, eventually affecting investment flows.

WHY CLOSE THE FUTENMA BASE AND REPLACE IT?

Residents of Okinawa, 1,600 km (1,000 miles) south of Tokyo and the site of a bloody World War Two battle, resent what they see as an unfair burden for maintaining the security alliance.

Outrage flares periodically among residents over accidents, crime and pollution associated with the bases -- most strikingly after the 1995 rape of a schoolgirl by three U.S. servicemen.

For the U.S. military, Okinawa provides a forward logistics base strategically located in the western Pacific close to Taiwan and the Korean peninsula.

As part of a 1996 pact to reduce the U.S. military presence, the United States and Japan agreed to close Futenma Air Station, home to about 2,000 Marines and located in crowded Ginowan City, within seven years if a replacement could be found on Okinawa.

An initial plan for an offshore facility in northern Okinawa was opposed by locals and environmentalists. The 2006 plan would shift the facility to Nago, where it would be partly built within another base and on reclaimed land.

IS THIS JUST ABOUT FUTENMA?

No. The issue is much broader. Washington and Tokyo agreed in 2006 on a "road map" to transform the decades-old alliance, the pillar of Japan's post-World War Two security policies.

Part of a U.S. effort to make its military more flexible globally, the realignment fits efforts by the then-ruling Liberal Democratic Party to shed the constraints of Japan's pacifist constitution and assume a higher security profile.

Central to the pact was a plan to reorganise U.S. troops in Japan, including a shift of up to 8,000 Marines by 2014 to the U.S. territory of Guam from Okinawa. The Marines' move depends on finding a replacement site for Futenma, although some critics have questioned whether the two really need to be linked.

(Additional reporting by Isabel Reynolds and Chisa Fujioka; Editing by Jeremy Laurence)

Okinawa governor says U.S. base plan tough to accept

By Yoko Nishikawa Yoko Nishikawa
Sat May 22, 11:50 pm ET

TOKYO (Reuters) – The governor of Japan's Okinawa said on Sunday it would be tough to accept a U.S.-Japan plan to keep a controversial U.S. air base on the island, dealing a blow to the government ahead of a mid-year election.

Voter perception that Prime Minister Yukio Hatoyama has mishandled the Futenma air base row has eroded government support, threatening the ruling Democratic Party's chances in the upper house election, which it must win to avoid policy deadlock.

Hatoyama has set himself a deadline of the end of May to resolve the problem, which has also frayed ties with Tokyo's key security ally Washington as they confront security challenges such as an unpredictable North Korea and a rising China.

Photo: Prime Minister Yukio Hatoyama

"Concerns and anger that people in Okinawa have are understandable," Hatoyama told Okinawa Governor Hirokazu Nakaima in a meeting at the Okinawa prefecture office, as a crowd of protesters stood outside carrying signs opposing the plan and shouting "Go home."

"But as shown in recent developments in the Korean peninsula, uncertainty remains over security in East Asia and we cannot let the deterrence of U.S. military forces in Japan decline.

"It is a heart-rending decision for me," Hatoyama added, and apologized to the people of Okinawa.

In a brief visit on Friday, Secretary of State Hillary Clinton said North Korea's sinking of a South Korean navy ship had underscored the importance of the alliance.

But the governor of Okinawa, host to about half the U.S. forces in Japan, said it would be hard to win local support for the plan to move the base to the Henoko area of the northern city of Nago -- largely in line with a 2006 deal between Washington and Tokyo.

"The idea of moving the base to Henoko is quite regrettable and (accepting it) is extremely tough," Nakaima told Hatoyama in the meeting, aired live on nationwide TV.

LOCAL ANGER

In the campaign that swept his party to power last year, Hatoyama had raised hopes that the U.S. Marines' base could be moved off Okinawa, but Washington has sought to stick to the 2006 deal to move the facility to Nago. Hatoyama later shifted gears, saying some Marines had to stay to deter threats, a move that has outraged many Okinawans and upset a small ruling party, the Social Democrats.

"We will meet with the prime minister later, but the chapter's stance remains (that the base should be moved) outside the prefecture or the country," a representative of the ruling Democratic Party's Okinawa local chapter told TV Asahi.

Hatoyama will meet business leaders and local town leaders in Okinawa later in the day, but faces a tough road ahead.

Details of the new deal with Washington, including the exact location of a new runway and the construction method, are to be worked out before U.S. President Barack Obama visits Japan in November for an Asia-Pacific leaders summit, Japanese media said.

Hatoyama said the government would continue to negotiate with the United States to lessen the burden on Okinawa, where residents have long resented bearing what they feel is an unfair burden for maintaining the security alliance.

"I don't consider this as the end."

(Additional reporting by Linda Sieg; Editing by Jeremy Laurence)