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Cablegate: Japanese Morning Press Highlights 03/16/07

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UNCLAS SECTION 01 OF 10 TOKYO 001158

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/16/07


1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Iraq assistance:
4) Top Iraqi officials coming to Japan in separate visits
5) Government firms up plan to extend Iraq special measures law for
two years, allowing SDF to continue transport services

North Korea talks:
6) US may also assist North Korea with power generators
7) Prime Minister Abe: US removal of financial sanctions on North
Korea was assumed
8) Japan alarmed by US flexibility toward North Korea, with pending
removal of partial financial sanctions on account at Macao bank
9) Foreign Minister Aso: Abduction issue will be the last to be
resolved in six-party talks with North Korea
10) Influential Republican members of Congress in letter to White
House oppose removing North Korea from terrorist list without
resolving abduction issue

11) Lower House Speaker Yohei Kono defends his 1993 statement as
chief cabinet secretary on comfort women, "issued based on my
convictions"

Political scene:
12) Major bills with Abe policy imprint face uphill battle in
clearing the Diet
13) Government plans to have Lower House approve national
constitution referendum bill in mid-April
14) Minshuto head Ozawa calls of Agricultural Minister Matsuoka to
"take responsibility" (i.e., resign) for misreporting expenses at
political office

15) Ministry of Land, Infrastructure and Transport plans to restrict
foreign capital from becoming major stockholders in main airports
like Narita

Articles:

1) TOP HEADLINES

Asahi:
MIC found to have outsourced work to staffing agency Pasona in
return for amakudari

Mainichi:
Tokyo gubernatorial election: Ishihara vows, "I'll realize the doshu
(region) system"; Asano pledges, "I'll disclose information"

Yomiuri & Tokyo Shimbun:
Ruling parties to come up with a bill allowing divorced woman to
register child as "child of current husband" if she gives birth
within 300 days of divorce

Nihon Keizai:
Matsushita Electric likely to give preferential negotiating right to
US TPG over the sale of its subsidiary Victor Co.; Agreement likely
to come by end of month

Sankei:
Hokuriku Electric Power found to have hidden criticality accident

TOKYO 00001158 002 OF 010


caused by double errors in operation, procedures

Akahata:
LDP, New Komeito force decision to hold a hearing on the national
referendum bill on March 22, despite protests from JCP, other
parties

2) EDITORIALS

Asahi:
(1) Criticality accident: Criminal concealment
(2) Lifting of financial sanctions: DPRK must not miss the forest

Mainichi:
(1) Criticality accident: Every effort required to find the cause
and take measures
(2) Financial sanctions: We must not allow DPRK to get more by its
taking a hard line

Yomiuri:
(1) How will removal of financial sanctions affect DPRK's nuclear
disposal?
(2) Concealment of criticality accident: Engineer's lack of
awareness

Nihon Keizai:
(1) US must not change its DPRK policy
(2) Concealment of criticality accident betrays the public's
confidence

Sankei:
(1) Too early for DPRK to smile with removal of financial sanctions

(2) Landing failure: No flights for strict examination

Tokyo Shimbun:
(1) Removal of financial sanctions: Next step is to suspend nuclear
facilities
(2) ANA plane accident: Was the problem limited to the detached
"bolt"?

Akahata:
Utility costs scandal: Protecting agriculture minister only spread a
sense of distrust

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 15

NIHON KEIZAI (Page 2) (Full)
March 16, 2007

09:33
Met at Kantei with LDP Secretary General Nakagawa, New Komeito
Secretary General Kitagawa and others.

SIPDIS

09:56
Made an informal representation at the Imperial Palace.

11:18
Met at Kantei with former Foreign Minister Machimura, followed by
Kansai Economic Federation Chairman Akiyama and Kansai Association

TOKYO 00001158 003 OF 010


of Corporate Executives President Morishita. Afterward met physical
exercise instructor Hiromichi Sato.

14:10
Met former Home Affairs Minister Suita and Lower House member
Nishimura, followed by ROK-Japan Cooperation Committee Chairman Nam
and others in the presence of Japan-ROK Cooperation Committee
Chairman Yasuhiro Nakasome, former Prime Minister.

15:30
Met Prince Willem-Alexander of the Netherlands.

16:00
Met Economic and Fiscal Policy Minister Ota, followed by Advisor
Nemoto and others. Afterward met Deputy Chief Cabinet Secretary
Matoba.

16:58
Attended a regular Japan Chamber of Commerce and Industry general
meeting at the Imperial Hotel.

17:33
Attended a monthly economic report-related cabinet meeting at
Kantei.

18:10
Met Administrative Reform Minister Watanabe.

19:20
Dined at a Nishi-Azabu Chinese restaurant with members of the
parliamentary group to build schools for children in Asia, including
Senior Vice Education Minister Endo.

21:01
Returned to his official residence.

4) Iraqi leaders to visit Japan

YOMIURI (Page 4) (Full)
March 16, 2007

Iraqi Vice President Hashimi and Prime Minister Maliki are scheduled
to visit Japan soon in succession at the invitation of Japan.
Coordination is underway for Hashimi's visit in late March and
Maliki's visit in April.

5) Gov't to extend Iraq law for 2 years, ASDF to stay on

MAINICHI (Page 2) (Full)
March 16, 2007

The government decided yesterday to adopt a plan in a cabinet
meeting within the month to extend the Iraq Special Measures Law for
two years. The government is now coordinating with the ruling
parties to make a cabinet decision on March 27.

The Iraq Special Measures Law, enacted in July 2003, is a
time-limited law that is valid for four years and is due to expire
at the end of July this year. The Air Self-Defense Force, currently
basing some troops in Kuwait, has been continuing an airlift mission
in Iraq based on the law, so the government needed to extend the law
in order to continue the ASDF's Iraq mission.

TOKYO 00001158 004 OF 010

In July last year, the Ground Self-Defense Force withdrew troops
deployed in Iraq's southern district, so the government considered
extending the law for two years, half the period of time for
deployment under the current law. Meanwhile, the United States held
off-year elections in November last year, and the ruling Republican
Party was defeated in the midterm elections. As a result, there were
calls in the United States for pulling US troops out of Iraq. The
government seemed likely then to extend the law for one year.

However, President Bush strongly rejected an early pullout, and Vice
President Cheney also ruled such out when he visited Japan in
February. As it stands, the government deemed it would be easier to
assess the Iraq situation if the ASDF's Iraq mission were extended
for a longer period of time, according to government officials. If
there were just a one-year extension, the law would have to be
extended next year again, in addition to extending the Antiterror
Special Measures Law, which is to expire in a year. "This would
greatly affect Diet deliberations," a senior Defense Ministry
official said. The government therefore decided to extend the law
for two years. The ruling Liberal Democratic Party and its coalition
partner, the New Komeito, both approved the two-year extension.

6) US offers to provide N. Korea with generators

ASAHI (Page 2) (Slightly abridged)
March 16, 2007

BEIJING-An economic and energy cooperation working group of the
six-party talks held its first meeting yesterday at the South Korean
Embassy in Beijing to discuss economic aid to North Korea in return
for that country's abandonment of its nuclear programs. According to
informed sources, the South Korean government formally clarified its
course of action to provide North Korea with fuel oil amounting to
50,000 tons as an initial step. The United States indicated that it
was ready to provide small power generators to be used at hospitals
and other facilities.

According to a high-ranking US government official, the United
States will provide generators to North Korea as the first step in
aid. This step is considered as aid that is equivalent to fuel oil
totaling 50,000 tons and is estimated at several million dollars,
the official said.

South Korea hosted the working group meeting. At its outset, Chon
Yong U, South Korea's chief negotiator for the Korean Peninsula's
peace process, urged North Korea to implement an agreement reached
at the six-party talks, saying, "Aid must be linked to the scope and
speed of denuclearization." South Korea will provide North Korea
with 50,000 tons of fuel oil in aid along with the arrival of
International Atomic Energy Agency (IAEA) inspectors in North Korea
to verify the shutdown and sealing of nuclear facilities at Yongbyon
in that country.

North Korea explained its energy situation and requested aid. In
that course, North Korea referred to its thermal and hydroelectric
power plants, saying they are now superannuated and need to be
renovated. In addition, North Korea revealed that its capacity of
fuel oil storage is limited and that it cannot store more than
50,000 tons at a time.

Representing Japan, Junichi Ihara, director of the Foreign

TOKYO 00001158 005 OF 010


Ministry's Asian and Oceanian Affairs Bureau, attended the meeting.
Japan stressed its position that it cannot respond to aid as long as
there is no progress in the issue of Japanese nationals abducted to
North Korea, Ihara revealed yesterday evening.

7) Abe describes lifting of sanctions "as expected"; To reaffirm
Japan-US cooperation in six-party talks

YOMIURI (Page 2) (Full)
March 16, 2007

Prime Minister Shinzo Abe, speaking to reporters yesterday, took
this view on Washington's decision to partially lift its financial
sanctions on North Korea: "The move was expected. I don't think it
will have a serious impact on matters, including Japan-DPRK talks."
The government intends to reaffirm close cooperation between Japan
and the United States with the aim of bringing a comprehensive
settlement to the nuclear and adduction issues.

Liberal Democratic Party Policy Research Council Chairman Shoichi
Nakagawa noted: "I think the United States will continue with its
(financial sanctions) under its legislation. I don't think
Washington has shifted its course." Senior Vice Foreign Minister
Katsuhito Asano indicated that the brakes on North Korea's
money-laundering will remain effective, saying, "Banco Delta Asia
will be shut out of the international financial system."

A senior Foreign Ministry official indicated that America's latent
"pressure" is in place, noting, "The United States has learned that
the financial sanctions are quite effective. It has obtained a stick
other than force."

Meanwhile, Former Foreign Minister Masahiko Komura, in a Komura
faction meeting yesterday, expressed wariness about the United
States removing North Korea from its list of state sponsors of
terrorism before the abduction issue makes progress. He said:
"Although Japan is not in a position to say this and that about a
decision made by US financial authorities, the government should
urge Washington not to remove North Korea from its list of nations
sponsoring terrorism."

Association of the Families of Victims of Kidnapped by North Korea
(AFVKN) Representative Shigeru Yokota, in yesterday's
government-prefecture abduction meeting, said: "North Korea is
waiting to hear a call in Japan for making concessions so as not to
become isolated (in the six-party talks)." AFVKN Secretary General
Teruaki Masumoto expressed concern to reporters, saying, "(The
lifting of the sanctions by the United States) will have an adverse
effect."

In contrast, former LDP Vice President Taku Yamasaki told reporters
in the Diet building: "The dialogue between Washington and Pyongyang
has advanced. Japan, too, should take a flexible stance."

8) Macau likely to unfreeze North Korea's bank account: Japan
alarmed about related countries softening their attitude

SANKEI (Page 1) (Full)
March 16, 2007

The US Department of the Treasury yesterday announced its decision
to bar US banks from dealing with Banco Delta Asia in Macau, a

TOKYO 00001158 006 OF 010


special administrative region of China, for its having been involved
in North Korea's unlawful financial activities, such as money
laundering. This measure is based on the Anti-Terrorism Act. The
decision will come into force within 30 days.

At the same time, it also announced the decision to let local Macao
government authorities decide whether to unfreeze North Korean
assets amounting to 25 million dollars (approximately 2.93 billion
yen) held by that bank. The bank will reportedly release Pyongyang's
assets in some form or other. It means that Washington will
effectively accept the lifting of financial sanctions against North
Korea.

North Korea demanded the return of the entire amount of money it
holds at Banco Delta Asia in exchange for its returning to the
six-party talks on North Korea's nuclear ambitions. Quoting a
comment by a US senior government official, the March 15 edition of
the New York Times reported, "Only assets obtained through legal
activities will be eligible for the lifting of the sanctions. Assets
obtained by an illegal means will not be returned."

Tokyo has been reserved in assessing the effective approval by the
US to release the North's frozen assets. There is concern that North
Korea may now turn bullish taking advantage of the concessions made
by the US. As such, the government intends to keep an eye on the
North regarding whether it will properly take actual measures to
dismantle its nuclear facilities. It is also determined not to
respond to Pyongyang's demand unless the abduction issue makes
progress. Prime Minister Shinzo Abe yesterday said, "Japan will
continue with sanctions."

Foreign Minister Taro Aso also noted during a meeting of the Upper
House Foreign Affairs and Defense Committee: "The US in a way has
made concessions to North Korea, but it is praiseworthy that the
talks have made progress toward the denuclearization of the Korean
Peninsular. At least, it will be good if talks on suspending nuclear
facilities in Yongbyon will get under way."

The government has viewed that progress in the US-North Korea talks
on the financial sanctions issue has led to resumption of the
six-party talks in February, when agreement was reached on the
suspension and sealing of a nuclear facility in North Korea. Though
the US decision this time was assumed, the prime minister reiterated
it would not affect Japan's position. However, there still remains
concern that the North might bargain about the blanket lifting the
financial sanctions taking advantage of pressure from the
international community.

The government is alarmed about the possibility of other nations
softening their attitude to the North, occasioned by the removal of
the financial sanctions. As such, it plans to work on the US, China,
South Korea and Russia to tighten cooperation at such venues as the
six-party talks. In particular, it intends to continue to ask the
US, which has begun talks to remove the North from a list of state
sponsors of terrorism, to make the resolution of the abduction issue
a condition.

9) Foreign Minister Aso: Abduction issue will be the last to be
discussed

MAINICHI (Page 2) (Full)
March 16, 2007

TOKYO 00001158 007 OF 010

When asked by Minshuto (Democratic Party of Japan) member Shinkun
Haku at an Upper House Foreign Affairs and Defense Committee session
yesterday about his view on the abduction issue following the US
decision to lift its freeze on accounts related to North Korean
funds at the Banco Delta Asia, Foreign Minister Taro Aso stated
yesterday: "I felt initially that this issue would be the last (on
the list of priority issues at the six-party talks)." The Japanese
government regards the abduction issue as its top priority. Aso
appears to have aimed at avoiding public criticism of the government
by stressing the difficulty of negotiations with North Korea,
although other discussions on the denuclearization of North Korea
have moved forward.

Aso showed his understanding for the US decision on removing its
financial sanctions on the North, saying, "The six-party talks were
launched to denuclearize North Korea. I hope that great progress
will be made on the nuclear weapons issue."

Citing the fact that a working group meeting on March 7-8 on
normalization of Japan-North Korea relations made no headway, Aso
stated:

"There are considerably large differences in views between the two
sides. The abduction issue will be taken up for discussion at the
end. We are prepared for such a situation."

10) Influential US Republican Party lawmakers: Resolving the
abduction issue should be precondition for removing the North from
terrorist list

MAINICHI (Page 2) (Full)
March 16, 2007

Masaya Oikawa, Washington

Three influential members of the House of Committee on Foreign
Affairs of the Republican Party sent a letter to Secretary of State
Condoleezza Rice calling for premising the removal of North Korea
from the US list of state sponsors of terrorism on resolving the
abduction issue. The three members of Congress appear to be giving
consideration to Japan, as well as applying the brakes to a possible
expeditious removal of the DPRK from the list.

The letter to Secretary Rice came from Republican Party lawmakers
Ileana Ros-Lehtinen, a ranking committee member, Edward Royce, and
Donald Manzullo. The letter stated: "North Korea should remain on
the list of state sponsors of terrorism until the issues of North
Korea's abductions of Japanese and South Korean nationals are
resolved and assurances are given regarding any such future acts."

The United States agreed to begin the process of removing its
designation of the North as sponsor of terrorism, but many
Republican Party members are opposed to the US government's
decision.

11) Kono: I issued the statement with conviction

YOMIURI (Page 4) (Full)
March 16, 2007

In 1993, then Chief Cabinet Secretary Yohei Kono released the

TOKYO 00001158 008 OF 010


so-called Kono Statement on the wartime comfort women issue. Kono,
now Lower House Speaker, made the following comment on the statement
during a press conference yesterday: "I issued it with conviction
(shinnen o motte). I have no intention of saying this or that at
this point. I hope people will take it as it is."

There is a call in the ruling Liberal Democratic Party and the
opposition Minshuto (Democratic Party of Japan) for a review of the
Kono Statement. Prime Minister Shinzo Abe, however, has indicated
that the government would basically continue upholding the
statement.

12) Key bills representing Abe's policy agenda face uphill battle in
gaining Diet approval

MAINICHI (Page 5) (Excerpts)
March 16, 2007

Tatsuo Eto

Uncertainties are looming large over the important bills the Abe
administration aims to enact during the current session of the Diet.
The bills are related to constitutional revision, security, the
pension program, public servants, and other matters strongly linked
to Abe's policy imprint. The reason is that other bills have been
randomly created by cabinet members out of their "ambition to
receive recognition" and without any consultation with the Prime
Minister's Official Residence (Kantei), which is lacking a "control
tower" for the coordination of bills. As a result, bills failed to
be introduced in the Diet by the deadline for the submission of
March 13. In addition, adequate time for deliberations is lacking.
Given that the Upper House election is coming this summer, it is
unlikely the current Diet session can be extended beyond its June 23
closing date. The government and the ruling parties are certain to
be stuck in a "traffic jam" in handling the backlog of bills,
submitted or not submitted.

In the area of foreign and defense affairs, the special measures
bill for the realignment of the US Forces Japan (USFJ) and 15 bills
that are treaty-related have already been introduced in the Diet.
The Special Iraq Measures Law, which is to expire at the end of
July, must be amended during the current Diet session, given the
importance of Japan's alliance with the United States. When
amendments to laws are introduced in the Diet, it is expected that
such measures would be discussed first before any other bills. The
bill amending the Security Council Establishment Law aimed at
establishing a Japanese-style National Security Council (JNSC),
sponsored by Chief Cabinet Secretary Yasuhisa Shiozaki and Special
Advisor to the Prime Minister Yuriko Koike -- may not have ample
time for deliberation.

The national referendum bill setting the procedures for revising the
Constitution, which is under deliberation, is expected to be sent to
the Upper House in mid-April or after as result of the ruling
Liberal Democratic Party's (LDP) consideration for its junior
coalition partner New Komeito, which is cautious about passing the
bill before the first round of the unified local elections (election
day on April 8). Prime Minister Shinzo Abe turned around his
previous stance about the bill, noting, "I am not insisting on
enacting the bill by May 3, Constitution Day." But a senior House of
Councilors member of the LDP expressed concern: "If we fail to get
the bill approved by early May, it will be difficult to enact it

TOKYO 00001158 009 OF 010


during the current Diet session." A senior member of the LDP Diet
Affairs Committee is getting increasingly irritated at the fact that
the priority order of deliberations on the bills has yet to be
determined and complained: "The Kantei is overstepping itself in
insisting that all the bills must clear the Diet. We need to ask the
prime minister whether he is unwaveringly resolved to handle (every
bill)."

13) National referendum bill likely to clear Lower House in
mid-April; Ruling coalition gives up on coordination with Minshuto

YOMIURI (Page 1) (Full)
March 16, 2007

The outlook is that a bill outlining procedures for a national
referendum, which is needed to amend the Constitution, will pass the
House of Representatives in mid-April. The ruling Liberal Democratic
Party (LDP) and coalition partner New Komeito gave up yesterday
jointly marking up the bill with the main opposition party, Minshuto
(Democratic Party of Japan). Having given up its plan to jointly
submit the bill to the Diet with Minshuto after working out
differences on the bill, the ruling coalition decided yesterday to
present their own revised bill to the Lower House Special Research
Commission on the Constitution. The ruling camp also decided to send
the legislation to the House of Councillors after the full Lower
House adopts it on April 13. As it stands, the referendum bill, one
of the key bills for Prime Minister Shinzo Abe, will likely be
enacted during the current Diet session.

The special constitutional commission decided by a majority of
members from the two ruling parties yesterday to hold a central
public hearing on March 22. Although the opposition camp has opposed
the decision to hold the public hearing on March 22, the ruling bloc
intends to submit the corrected bill to the public hearing and put
it to a vote at the special commission on April 12, after holding
several debate sessions. The ruling camp aims to have the
legislation clear the Diet during the ongoing session, after holding
deliberations twice a week at the House of Councillors.

The New Komeito, which is concerned about a negative impact on
campaigns for the unified local elections, had urged the LDP to take
a vote on the bill on or after April 8, the date of the Tokyo
gubernatorial election. The LDP accepted the New Komeito's request.

The ruling coalition's bill includes such revisions as: (1) the
minimum age for granting voting rights should be 18 (20 years old
for the time being), and (2) the referendum law should be
implemented three years from its promulgation, during which period
Diet debate on constitutional amendments would be frozen.

The ruling camp intends to limit the application of the referendum
law to a vote on constitutional reform. Therefore, Minshuto's
proposal that the law should be applied to other important national
issues will be listed as a "topic under consideration."

14) Ozawa urges Matsuoka to take responsibility

YOMIURI (Page 4) (Full)
March 16, 2007

Ichiro Ozawa, president of the major opposition party Minshuto
(Democratic Party of Japan), held a press conference in Tottori City

TOKYO 00001158 010 OF 010


yesterday in which he urged Agriculture, Forestry, and Fisheries
Minister Toshikatsu Matsuoka to step down from the post for his
failure to offer a detailed account on his utility charges. Ozawa
said: "If he cannot fulfill his accountability, he has no other
option but to take political responsibility." Social Democratic
Party Secretary General Seiji Mataichi also said in a press
conference yesterday: "We must consider filing criminal charges
against Matsuoka (over a violation of the Political Funds Control
Law)."

15) MLIT to regulate airport companies regarding foreign capital:
Issuance of golden shares up for consideration

YOMIURI (Page 11) (Full)
March 16, 2007

The Ministry of Land, Infrastructure and Transport (MLIT) yesterday
revealed its policy of introducing an investment regulation intended
to bar foreign companies from becoming major stockholders of Japan's
major airport companies with the planned listing of Narita Airport
Company in fiscal 2008 or later in mind. It presented a draft report
on privatization of airports at an informal meeting held by the
Civil Aviation Bureau chief yesterday. The draft noted: "It is
necessary to prevent hostile takeovers by those who do not
understand the public nature of airports or the ruling of the
management of airports by foreign capital or specific persons."

MLIT plans to set a concrete framework for that policy at the
Transport Policy Council, an advisory panel reporting to the MLIT
minister, and to submit related bills to the regular Diet session
next year.

As specific measures, the draft included the adoption of golden
shares, which grant owners veto powers on key matters, and rules on
the possession of stocks by foreign companies and bulk possession by
single owners. As domestic rules on foreign capital restriction, NTT
and airlines set the ceiling at one-third of total shares and
broadcasters at one-fifth. MLIT wants to set up a regulation based
on those examples. It will also look into the possibility of issuing
golden stocks, consulting with the Tokyo Stock Exchange.

Narita International Airport is currently a special company wholly
owned by the government. The plan is to completely privatize it in
the future, eliminating the government stake

SCHIEFFER

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