Boeing says Japan could produce F-18 under license (Reuters)

By Mariko Katsumura and Kiyoshi Takenaka Mariko Katsumura And Kiyoshi Takenaka – Mon Sep 26, 8:13 am ET

TOKYO (Reuters) – U.S. planemaker Boeing (BA.N) said local defense contractors might build F/A 18 Super Hornets under license if Japan chose to buy the next-generation fighter jet.

The comment came after the U.S. aerospace giant, along with Lockheed Martin (LMT.N) and a consortium of European countries, submitted bids to produce Japan's next mainstay combat aircraft in a deal that could be worth up to $8 billion.

Japan, which is facing a resurgent China and its growing military as well as threats from North Korea, plans to decide this year how it will replace its current fleet of aging F-4 Phantom fighters with about 40 new combat airplanes.

Phillip Mills, Director of Boeing's Japan FX Capture Team, said Japanese makers could supply about three quarters of Super Hornet components if Japan opted for the fighter jet.

There has been great interest in how much of next-generation fighter jet-related jobs will be outsourced to the Japanese industry, which has been battered by gradual but consistent shrinkage of the defense budget.

"If you came to the Boeing production line, everything you saw Boeing doing in St Louis would be available or is available for Japan industry to do," Mills told Reuters in an interview.

"It's clear that we are going to be somewhere in the 75 percent area," Mills added, referring the percentage of F-18 component production that the company could outsource to Japanese makers.

Japanese fighter jet and aeroplane components makers include top defense contractor Mitsubishi Heavy Industries (7011.T), Kawasaki Heavy Industries (7012.T) and IHI (7013.T).

Boeing's F/A 18 Super Hornet is set to compete against Lockheed Martin's F-35 Joint Strike Fighter and the Eurofighter Typhoon made by a consortium of European countries for the contract.

Mills said the high rate of planned outsourcing to Japanese companies, competitive pricing and ability to deliver on time give Boeing a competitive edge against the competition.

"The lower risk and affordability and licensed production we are offering is, I think, as good as they are going to get . so all and all we are feeling pretty good about it," he said.

"We've offered an extremely fair and competitive price for not only initial aircraft but also for licensed production aircraft." said Mills.

He declined to specify the offer price.

Kazuya Sakamoto, professor at Japan's Osaka University, said the Lockheed Martin F-35's stealth, or radar-evading, capability gives it an advantage over the competition, although its cost overruns and schedule slips have cast doubts over its prospects.

Fighter jets' stealth capability has drawn heavy attention in Japan since China, which has a long-running territorial dispute with Japan, in January confirmed it had held its first test flight of the J-20 stealth fighter jet.

Mills said Boeing's multi-role Super Hornet comes with a stealth capability, but the rival F-35 is "stealthier."

Lockheed Martin, the world's biggest defense contractor, which also submitted its proposal to Japan earlier on Monday said the F-35 stealth jets would deliver "unmatched cost-effective capability for Japan's defense, now and well into the future."

"We are committed to an enduring F-35 partnership with Japanese industry to deliver F-35's transformational 5th generation capability for Japan's long-term national security," John Balderston, Director of the Japan F-35 Campaign, said in a statement.

Meanwhile, a consortium of European companies that makes the Eurofighter Tyhpoon said that fighter jet could be manufactured, maintained or integrated in Japan under license and that the aircraft's crucial data and software source code could also be handed out to Japan.

Some media reports have said U.S. makers have a better chance of winning the deal since Japan may shy away from picking European fighter jets out of fear that doing so could further ruffle its U.S. ties, already hurt by disputes over the relocation of the U.S. Marines' airbase in southern Japan.

Meanwhile, the head of U.S. military forces in Asia and the Pacific predicted that Japan's choice of a new multibillion-dollar fighter fleet would reflect plans to stay "very complementary" with U.S. air forces.

(Additional reporting by Tim Kelly in Tokyo, and Jim Wolf in Washington D.C.; Editing by Matt Driskill, Lincoln Feast and Hans-Juergen Peters)

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Citigroup Under Scrutiny in Japan - Wall Street Journal

TOKYO—Japan's Financial Services Agency is nearing the completion of an investigation into the local arm of U.S. financial giant Citigroup Inc. on suspicion of lax compliance in a number of areas and will likely issue sanctions as early as October, people familiar with the matter said Friday.

In what could trigger the third major sanction of Citi in seven years, the banking watchdog has found that the bank didn't provide sufficient disclosure about financial products such as investment trusts when selling them to customers and failed to adequately screen customers for product suitability, the people said.

Additionally, the FSA is ...

TOKYO—Japan's Financial Services Agency is nearing the completion of an investigation into the local arm of U.S. financial giant Citigroup Inc. on suspicion of lax compliance in a number of areas and will likely issue sanctions as early as October, people familiar with the matter said Friday.

In what could trigger the third major sanction of Citi in seven years, the banking watchdog has found that the bank didn't provide sufficient disclosure about financial products such as investment trusts when selling them to customers and failed to adequately screen customers for product suitability, the people said.

Additionally, the FSA is ...

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Japan FM: China should play fair under world rules (AP)

TOKYO – Japan's new foreign minister said Monday that the international community should encourage China to observe global rules and play fair rather than become a threat.

Koichiro Genba said the Asia-Pacific region is a center of growth but also a source of instability. Tokyo has expressed caution over China's increased military spending and more assertive stance in territorial disputes.

Ties between the two Asian rivals deteriorated to their worst level in years last September when a Chinese fishing trawler collided with Japanese patrol vessels near islands controlled by Japan but claimed by both countries in the East China Sea. Genba acknowledged that Japan's southwestern waters have grown unstable.

"China has overtaken Japan in terms of GDP and is now boosting its self-confidence. In order not to allow China to become a threat, Japan and the rest of the world must make sure China plays fair as part of our common rules and principles," Genba said in an interview with a small group of journalists including The Associated Press.

While growing in military strength and assertiveness, Beijing denies threatening or aspiring to dominate the region, calling such speculation a sign of "Cold War thinking."

Genba, Japan's youngest foreign minister at age 47, took office last Friday as part of new Prime Minister Yoshihiko Noda's Cabinet.

He said relations between Japan and China are extremely important and they should be good neighbors. He vowed to achieve "a win-win situation" through a mutually beneficial strategic partnership.

Japan should develop business-centered relations with China, while maintaining its security alliance with the U.S. as the "cornerstone" of its diplomacy, he said.

Genba said Japan should seek to export technology in areas such as high-speed trains, conservation and the environment as a way to continue to grow economically despite its shrinking population and low birthrate.

He said Japan should not abandon its nuclear technology or exports of nuclear plants despite the crisis at the tsunami-devastated Fukushima Dai-ichi power plant and subsequent calls to reduce Japan's reliance on nuclear energy. But he said pending nuclear deals with countries including Vietnam, Turkey and Jordan should be reviewed carefully as the investigation into the accident continues.

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Asian Shares End Mostly Lower; Japan Exporters Remain Under Pressure - Wall Street Journal

By V. Phani Kumar in Hong Kong and Virginia Harrison in Sydney

HONG KONG (MarketWatch)--Most Asian markets surrendered gains to end lower Monday as worries about the European debt crisis and global economic outlook kept investors on edge.

"Weak growth outlook remains the headwind for risky assets. We expect no lasting respite from the ongoing risk aversion until a clear direction on additional [U.S. Federal Reserve] stimulus emerges and until [there's a] significant reduction in euro-zone debt anxiety," said Prakash Sakpal, an economist at ING Financial Markets Research.

Japan's Nikkei Stock Average ended 1.0% lower, as hopes that authorities would ...

By V. Phani Kumar in Hong Kong and Virginia Harrison in Sydney

HONG KONG (MarketWatch)--Most Asian markets surrendered gains to end lower Monday as worries about the European debt crisis and global economic outlook kept investors on edge.

"Weak growth outlook remains the headwind for risky assets. We expect no lasting respite from the ongoing risk aversion until a clear direction on additional [U.S. Federal Reserve] stimulus emerges and until [there's a] significant reduction in euro-zone debt anxiety," said Prakash Sakpal, an economist at ING Financial Markets Research.

Japan's Nikkei Stock Average ended 1.0% lower, as hopes that authorities would ...

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Japan Premier, Under Pressure to Quit, Drops Plan to Meet With Obama - New York Times

The top government spokesman said Friday that Japan had stopped trying to organize the trip, which was to have taken place in early September. The spokesman, Chief Cabinet Secretary Yukio Edano, said that the trip was impossible given “Japan’s current political situation.”

This seemed to be a reference to growing speculation in political circles that Mr. Kan could soon step down — as early as the end of next week, according to some local press reports. That would open the way for an election within his governing Democratic Party to choose a successor.

Some politicians say that this internal party election could happen on Aug. 28 or Aug. 29, though others are calling for the party to hold a longer American-style primary in order to foster a healthy policy debate. Jockeying has begun to succeed Mr. Kan, with a half dozen Democratic lawmakers already putting up their hands.

Mr. Kan has faced growing criticism for what many here see as his ad hoc and inconsistent response to the earthquake, tsunami and nuclear accident in March. Mr. Kan, who took office just over a year ago, is also blamed for his perceived inability to point a new direction for a nation that was already gripped by economic and political stagnation before the triple disaster.

In the face of such criticism, Mr. Kan promised in June to step down once he wins passage in Parliament of a series of key bills, which political analysts say he hopes to be the legacy of his short-lived administration. These include a bill to foster use of green energy, and another to fund the costly reconstruction of the tsunami-ravaged northeast, where 20,000 people are dead or missing.

Mr. Kan has tried to make a late comeback by calling for a phasing out of nuclear energy in Japan, hoping to tap the deep misgivings toward atomic power here after the accident at the Fukushima Daiichi plant. But he has run into resistance from within his own party, where the nuclear industry holds strong political influence, and skepticism among the Japanese public, who view him as unable to fulfill his promises.

In recent days, Tokyo has been filled with talk of who might replace Mr. Kan. A front-runner is Banri Kaieda, the minister of trade and industry, whose ministry had direct authority over the nuclear power industry. In June, Mr. Kaieda also vowed to resign in a dispute with Mr. Kan over nuclear policy.

But most of the candidates have been younger, untested and relatively unknown lawmakers who seem to lack a strong base of support within the party or the public. This has raised the specter of yet another weak, short-lived prime minister, which could only prolong Japan’s stagnation.

Mr. Kan’s successor would be the sixth new prime minister in five years.

Some candidates have begun calling for a “grand alliance” with the largest opposition party, the Liberal Democrats, in hopes of ending the current stalemate in Parliament, where the opposition controls the upper house. But the formation of such a large and unwieldy coalition could also add to paralysis by yielding watered-down compromises instead of the bolder action many Japanese voters seem to want.

On Friday, Mr. Edano, the spokesman, said that Japan’s foreign minister had conveyed news of Mr. Kan’s cancellation to the U.S. ambassador, John V. Roos. Mr. Edano told reporters that Mr. Roos “showed understanding.”

Japanese news reports said Tokyo was now trying to arrange a meeting between Mr. Kan’s successor, whoever that may be, and the American president on the sidelines of a United Nations general assembly in New York in late September.

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