Philippine remains 'sold as Japan war dead' (AFP)

MANILA (AFP) – Grave robbers have dug up the remains of Philippine tribesmen and passed them off as the bodies of Japanese soldiers for return to Japan, tribal leaders said Wednesday.
The skeletons of hundreds of Mangyan and Ifugao tribesmen have been shipped to Japan since 2008 after being unearthed by looters paid by a Japanese group called Kuentai that purports to find remains of the country's World War II dead, they claimed.
Aniw Lubag, a Mangyan leader, told a news conference his tribe briefly detained three people in 2008 as they stole bones from a burial cave on the central island of Mindoro.
"They said they were hired by non-Mangyans. We heard other Filipinos ordered (the digging up of bones) and then gave them to Kuentai," said Lubag.
Caesar Dulnuan, a head of the Ifugao tribal group, said skeletons had vanished from the northern mountain community after the Japanese group began searching for the remains of war dead in the area.
"We don't know who received the bones. There were a lot of people and they paid them 500 pesos (11.40 dollars)" per skeleton, he said.
The looters said they were paid by others to bring bones to Kuentai, whose website says it is a "non-profit organisation" seeking to repatriate the remains of half a million Japanese soldiers killed during the occupation of the Philippines.
In Tokyo, a senior Kuentai official denied allegations that his group and its local staff had been involved in stealing any bones or had paid money for remains.
"We have heard some people were arrested for trying to bring stolen bones to us," Kuentai secretary general Usan Kurata told AFP in a telephone interview.
"As far as we know, we have not received any stolen bones. We have already reported this to the welfare and labour ministry," he said, adding that the government is expected to announce soon the outcome of its enquiries into the issue.
Japan's Kyodo news agency said Kuentai was officially tasked by the Japanese government in 2008 with collecting the remains of Japan's war dead in the Philippines.
It said around 500,000 Japanese soldiers died in the country during WWII, with the bodies of around 380,000 yet to be recovered.
Koji Nakamura, a spokesman for a group of Japanese war veterans and their relatives, urged the Philippine government to investigate.
"If this is true, it is unscrupulous and profane," Nakamura told the news conference.
He said Kuentai had not checked whether the remains were those of Japanese soldiers, emboldening impoverished residents to dig up and sell Philippine bones.
"All they need is an affidavit from some Filipino people, saying 'We found these Japanese bones here and there,' and have it signed by a village official so the Japanese government has no reason to doubt them," he said.
The bones were later cremated and sent to Japanese national cemeteries for burial, making it impossible to bring them back, Nakamura added.
Nakamura said Philippine National Museum staff had taken part in Kuentai's retrieval programme but told him they had no way of checking if the bones were Japanese.
Officials from the National Museum's cultural properties section told AFP that staff members who took part in the Kuentai project were unavailable for comment on Wednesday.
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Moody's warns of Japan ratings cut if no reforms (Reuters)

TOKYO (Reuters)- Moody's Investors Service warned Tuesday that it may cut Japan's sovereign credit rating if government policies fall short of comprehensive tax reform needed to bring ballooning public debt under control.

The ratings agency said Japan, where the fifth prime minister since 2006 is facing mounting pressure to quit after less than a year in office, needed stability at the top if it was to enact effective fiscal reform.

Japan's struggle to put a lid on the ever-rising public debt, which at double the size of the $5 trillion economy is the biggest among leading nations, has triggered a Standard & Poor's rating cut and a slew of warnings from other rating agencies.

"Effective fiscal reform most likely requires stability at the top levels of government," said Tom Byrne, Moody's senior vice president and regional credit officer.

He told a news conference that Japan has seen regular changes of leadership since Junichiro Koizumi left office in 2006 after more than five years as prime minister.

"Since Koizumi, there have been three Liberal Democratic Party prime ministers and one Democratic Party prime minister who have served for a year or less," Byrne said.

The dollar blipped up against the yen after Moody's changed the outlook on Japan's Aa2 rating to negative from stable, although government bond futures showed little reaction and maintained earlier gains.

Prime Minister Naoto Kan, who took office last June, has staked his career on fiscal reforms, including a rise in the 5 percent sales tax to fund bulging social security costs, and urged the opposition to join talks on the topic.

But the opposition has refused to come to the table and is instead piling pressure on the unpopular Kan to call a snap election by threatening to block budget-related bills, including one allowing the government to issue new bonds.

Kan also faces rebellion in his own party but said on Tuesday that Japan needed to press ahead.

"To firmly carry out the unified reform of tax and social security systems is the most important thing in gaining market confidence," he told reporters after Moody's announcement.

SOVEREIGN DEBT

Japan is not the only country with debt problems. The 2007/08 financial crisis prompted a dramatic rise in developed world sovereign debt, as governments spent billions on economic stimulus packages and bank rescues.

In Europe, Greece and Ireland have been driven by the bond markets to take bailouts, frightening many other governments into adopting austerity measures.

But Japan and the United States have faced criticism from the IMF and ratings agencies for lacking credible plans to bring their deficits under control.

Analysts point out that Japan's reliance on domestic investors, who hold about 95 percent of its debt, shields it from the sort of turmoil that has rattled high-debt euro zone economies and explains the subdued market response to rating agencies' stern messages.

But mounting welfare costs and shrinking savings as a result of a rapidly aging population raise questions about the longer term sustainability of Japan's debt burden.

Moody's acknowledged that a funding crisis was unlikely in the medium-run, but warned that without urgent government action debt pressures would pile up over time to reach a dangerous tipping point.

"Although a JGB funding crisis is unlikely in the near to medium term, pressures could build up over the longer term which should be taken into account in the rating, even at this high end of the scale," it said in a statement.

Echoing the point, Byrne said a fall in household savings could create a risk premium on Japanese government bonds in the longer term.

Neither Japan's Economics Minister Kaoru Yosano nor Finance Minister Yoshihiko Noda would comment on Moody's action.

Some analysts say that Moody's outlook cut and last month's rating downgrade by S&P's may play into the hands of Kan and his allies by highlighting the dire state of Japan's finances.

"Credit downgrades by international rating agencies will raise awareness among the Japanese population on the seriousness of the Japanese public sector finance. Such perception by the Japanese population may help Japanese politicians get their act together in fixing fiscal problem," said Takuji Okubo, chief Japan economist at Societe Generale.

One concern of rating agencies and economists alike is that a political deadlock in the divided parliament may stump Kan's efforts to get public finances in order. Another worry is that even if the government manages to overcome the impasse its action may prove not ambitious enough.

"The markets may take a body blow from the downgrade in the mid-term if not in the short term," said Koichi Haji, chief economist at NLI Research Institute in Tokyo.

"If there is uncertainty over the passage of the next fiscal year's budget and related bills, there may be some repercussions such as domestic investors' reluctance to buy Japanese government bonds by the end of the fiscal year."

POLITICAL SQUABBLES

Moody's said the rating action was prompted by heightened concern that the government's economic and fiscal policies may get bogged down in political squabbles and prove not strong enough to achieve its deficit reduction targets.

Under long-term fiscal plans announced last June, the government aimed to return the primary budget, which excludes bond sales and debt servicing costs, to the black by 2020.

As if to underline the point, a tiny party that was formerly in the ruling coalition confirmed it would oppose key bills to enact a workable budget.

Standard & Poor's downgraded its rating on Japanese debt last month, its first cut in nine years, citing similar reasons. That brought S&P's rating for Japan one notch below Moody's but to the same level as Fitch, another ratings agency.

Moody's said that if the government managed to present comprehensive tax reform proposals in June as promised it would monitor its effectiveness in stabilizing public finances.

It also said that while the sheer size of the world's third-largest economy and the depth of its financial markets allowed it to absorb economic shocks, the rise in government debt could not continue unchecked.

It listed a lack of tax reform, a possible decline in household savings and the shift to a current account deficit from a surplus as possible tipping points that could put severe downward pressure on ratings.

(Writing by Tomasz Janowski and Alex Richardson; Editing by Neil Fullick)

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Japan PM's approval rating sinks to new low (AP)

By TOMOKO A. HOSAKA, Associated Press Tomoko A. Hosaka, Associated Press – 12 mins ago

TOKYO – Support for Japan's prime minister fell sharply in a public opinion poll released Saturday, as a growing number of voters question his government's ability to lead the country through numerous pressing problems.

Only 19.9 percent of respondents to the poll by Kyodo News agency said they approved of Naoto Kan's administration, a plunge of about 12 percentage points from a month ago, when Kan reshuffled his Cabinet.

Almost two-thirds said they disapproved of the government. Many cited a lack of leadership by Kan, who also heads the ruling Democratic Party of Japan, Kyodo said.

The results raise renewed questions about Kan's political longevity. A sharp erosion of voter confidence has been fatal for a series of recent prime ministers. Kan is Japan's fifth leader in less than four years.

Kyodo said the last time support for an administration fell under 20 percent was shortly before former Prime Minister Yukio Hatoyama resigned last June.

The rapid turnover has made it harder for the country to formulate and implement policies to tackle its many problems, including a lackluster economy, a rapidly aging population and a ballooning public debt.

The poll results also reflect a recent scandal within the ruling party.

The Democrats have been deeply divided over what to do about veteran lawmaker Ichiro Ozawa, who was indicted last week in a funding scandal. He rejected calls by Kan to resign from the party.

Party executives are expected to impose a punishment next week. But that could further deepen the intraparty rift as the government tries to pass a national budget and implement economic reforms against strong opposition.

Voters appear to be conflicted as well. Some 53 percent of respondents in the Kyodo survey said they wanted Ozawa to resign from parliament, but only about a quarter wanted him to leave the Democratic Party.

Ozawa remains a powerful political figure. He is credited with engineering the Democrats' rise to power two years ago and challenged Kan for the leadership post last year. He has denied he violated political funding laws by falsifying records relating to a 2004 Tokyo land deal.

Overall support for the Democrats in the poll slipped to 20.9 percent from 22.7 percent last month, Kyodo said. Approval for their main opposition, the Liberal Democrats, was slightly higher at 23.7 percent.

Kyodo said it surveyed 1,013 randomly selected eligible voters by telephone on Friday and Saturday. It did not give a margin of error. Polls of that size would generally have a margin of error of about 4 percentage points.

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