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Cablegate: Japanese Morning Press Highlights 06/29/06

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UNCLAS SECTION 01 OF 09 TOKYO 003595

SIPDIS

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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 06/29/06


Index:

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

Bush-Koizumi reunion today:
4) President Bush, Prime Minister Koizumi to meet today at White
House
5) Friendship between samurai, cowboy: US paper

Prime Minister Koizumi in Canada:
6) Japan, Canada agree to propel economic cooperation
7) Japan, Canadian leaders concerned about North Korean missiles
8) Canadian prime minister vows to stand behind Japan against North
Korea

Pre-summit foreign ministerial in Moscow:
9) Japan, Russia agree to raise DPRK abduction, missile issues at
G-8 summit
10) Japan, France agree to call for Iran to accept overtures

WTO Geneva ministerial talks:
11) Focus on compromise between exporters, importers
12) Farm minister urges US to compromise
13) Japan alone can't give up: farm minister

Japan-DPRK issues:
14) Abducted son as 'Yokota's husband' meets mother in North Korea

15) Tokyo guarded against Pyongyang's intent to end abduction issue


Japan-China ties:
16) DPJ President Ozawa likely to meet with President Hu's potential
successor
17) China willing to expand defense exchanges with Japan

Domestic politics:
18) LDP looking to hold presidential election on Sept. 20
19) Prime Minister Koizumi poised to visit Yasukuni Shrine

Articles:

1) TOP HEADLINES

Asahi:
Murakami Fund scandal: Investment association exclusively for Fukui
established, with Orix serving as coordinator

Mainichi:
Kim Yong Nam, believed to be husband of abductee Megumi Yokota,
reunites with family; No reference made to Megumi

Yomiuri:
Waseda professor suspected of fabricating data

Nihon Keizai:
MHLW to ease standards for part-timers to join employee pension
system, corporate health insurance system

Sankei:

TOKYO 00003595 002 OF 009


MLHW to cancel plan to sell national hospital in Chiba to
corporation that hires ex-ministry officials

Tokyo Shimbun:
Kokudo hit with additional taxes upon revelation that Tsutsumi held
a majority of shares

2) EDITORIALS

Asahi:
(1) Bankruptcy of Yubari City: Measures urged to prevent similar
cases
(2) Ishihara Sangyo must be strictly punished

Mainichi:
(1) Efforts needed to reduce damage by sharing information with
residents
(2) Intermediary efforts necessary to bring Israel, Palestinian
Authority to negotiating table

Yomiuri:
(1) Japan should follow Germany's 3% consumption tax hike
(2) Shareholders general meetings: Not apologies, but constructive
dialogue necessary

Nihon Keizai:
(1) Overly optimistic estimates of future birthrate unacceptable
(2) Sharp increase in appropriations lies behind embezzlement of
scientific research funds

Sankei:
(1) Postal privatization: Don't forget principles of reform
(2) Expand use of idle land

Tokyo Shimbun:
(1) Illegal labor contract law important but needs thorough debate
(2) Measures against illegal parking: Consideration should be given
to welfare services

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 28

NIHON KEIZAI (Page 2) (Full)
June 29, 2006

June 27
Afternoon Toured Niagara Falls in Toronto, Canada.
Evening
Left Toronto for Ottawa aboard a government plane.
Night Arrived at his hotel and held talks with reporters traveling
with the prime minister.
June 28
Morning
Held a meeting with Canadian Prime Minister Harper at the Canadian
Houses of the Parliament and later held a joint press conference.

4) Japan-US summit to take place today

YOMIURI (Page 2) (Full)
June 29, 2006


TOKYO 00003595 003 OF 009


Takaharu Yoshiyama, Ottawa

Prime Minister Junichiro Koizumi and US President George W. Bush
will hold a meeting on the morning of June 29 (on the evening of
June 29, Japan time) at the White House in Washington. The two
leaders will meet for the first time since their summit last year in
Kyoto and the upcoming summit will be their 15th. They will sum up
that the five years of their efforts to strengthen the Japan-US
alliance based on their relationship of trust will become the basis
for the improvement of bilateral ties in the 21st century.

5) US newspaper runs feature on samurai-cowboy friendship, with
focus on visit to Graceland

SANKEI (Page 2) (Full)
June 29, 2006

Prime Minister Junichiro Koizumi's plan to visit the legendary
singer Elvis Presley's mansion Graceland in Memphis, Tennessee,
accompanied by US President George W. Bush on June 30 is drawing
much attention in the United States.

The Washington Post ran a feature article on June 27 describing the
Graceland visit as an appropriate ending to the unusual
samurai-cowboy relationship. In a press briefing by a senior US
official on June 27, many journalists also raised questions about
Koizumi's visit to Graceland. The official introduced an episode
that when Koizumi's US visit had been nailed down, President Bush
expressed his eagerness to do something for his friend, suggesting
that Bush proposed the trip to Graceland, according to the paper.

The Washington Post, running a composite CD jacket photograph of a
beaming Koizumi standing besides Presley, said that both Koizumi and
Bush have strong beliefs and have the stubbornness never to admit
any mistakes. The paper also cited Japan's cooperation on missile
defense and the SDF mission in Iraq as examples of strengthened
Japan-US relations owing to the friendship between Koizumi and Bush.
The paper also referred to Washington's tilt toward Tokyo's call for
raising the abduction issue at the six-party talks, a framework to
discuss the North Korean nuclear issue.

The paper also introduced an expert's view that America's visibly
pro-Japan stance has estranged its relations with other Asian
nations, particularly with South Korea.

6) Japanese, Canadian leaders agree on deepening economic
cooperation

NIHON KEIZAI (Page 2) (Full)
June 29, 2006

Fumiyoshi Kendou

Prime Minister Junichiro Koizumi, now visiting Canada, and his
counterpart Harper agreed in their meeting in Ottawa on the morning
of June 28 that Japan and Canada would deepen economic cooperation.

In a joint press conference after the meeting, Harper stated in
reference to bilateral economic relations: "We discussed a free
trade agreement (FTA) between Japan and Canada." Koizumi said:
"There is still room for development in economic relations. The
Japanese market is attractive to Canada, and the Canadian market is

TOKYO 00003595 004 OF 009


attractive to Japan."

Sharing strong concern about North Korea's nuclear and missile
development, the two leaders agreed that the two countries would
strengthen cooperation and try to resolve the issue at the G-8 (St.
Petersburg Summit) in mid-July and on other occasions.

7) Japanese, Canadian leaders express concern about North Korea's
nuclear program

TOKYO SHIMBUN (Page 2) (Full)
June 29, 2006

Yoichi Toyoda, Ottawa

Prime Minister Junichiro Koizumi met with Canadian Prime Minister
Harper in Ottawa on the morning of June 28, local time. Harper
assumed office in February in the first change of government in 12
years with the victory of his Conservative Party in the House of
Representatives election this January. After their first meeting,
Koizumi and Harper gave a joint press conference.

In the summit, Koizumi expressed strong apprehension about North
Korea's nuclear and missile development. In response, Harper said:
"It is a major threat to international peace, and we will not spare
our support for Japanese and other allies' efforts to deal with the
North's provocative stance." The two leaders also agreed that Japan
and Canada would cooperate to bring about a settlement to the issue
of abductions by North Korea.

Koizumi sought Canada's support for United Nations reform and
Japan's bid for a permanent seat on the UN Security Council, but
Harper refrained from revealing Canada's position, just saying:
"Canada and Japan have different positions toward UNSC reform."

8) Canadian prime minister expresses support for Japan

YOMIURI (Page 2) (Full)
June 29, 2006

Takaharu Yoshiyama, Ottawa

Prime Minister Junichiro Koizumi met with Canadian Prime Minister
Stephen Harper on the morning of June 28, in which Koizumi expressed
concern about North Korea's nuclear and ballistic missile programs.
Harper then said: "Those are a threat to the peace and stability of
the international community. We will give Japan our strong
cooperation."

Koizumi also asked Canada's understanding and support for Japan's
bid for a permanent UN Security Council seat.

The two leaders agreed to cooperate on the reconstruction of
Afghanistan. They also agreed to strengthen bilateral relations,
confirming that Japan and Canada share such basic values as
democracy and human rights.

9) Japanese and Russian foreign ministers agree to take up abduction
and missile issues at G-8 summit

YOMIURI (Page 2) (Full)
June 29, 2006

TOKYO 00003595 005 OF 009

Yoshitaka Kuribayashi, Moscow

Foreign Minister Taro Aso met on the afternoon of June 28 with
Russian Foreign Minister Lavrov at the Russian Foreign Ministry. The
two ministers agreed to take up the abductions of Japanese nationals
by North Korea and Pyongyang's preparations for launching a
Taepodong-2 long-range ballistic missile at the foreign ministerial
meeting on June 29 of the G-8 nations and at the G-8 summit on the
middle of July to be held in St. Petersburg, Russia.

Aso, touching on the Northern Territories, said:

"Both Japan and Russia should make efforts to resolve the
territorial issue based on such past agreements as the 1956
Japan-Russia Joint Declaration and the 1993 Tokyo Declaration so
that a solution acceptable to the two countries can be reached."

Aso expressed anew Japan's basic stance of concluding a peace treaty
with Russia after resolving the issue of ownership of four
Russia-held islands -- the Habomai islets, Shikotan, Kunashiri, and
Etorofu.

The Russian foreign minister only stated: "Giving consideration to
the various accords and documents that you mentioned, Russia will
continue negotiations for concluding a peace treaty. " No compromise
was reached, however.

Regarding the idea of constructing a Pacific pipeline to transport
crude oil from eastern Siberia to East Asia, the two officials
reached an agreement to speed up discussions in both countries,
aiming at construction at early date.

10) Japanese, French foreign ministers agree to urge Iran to accept
package of incentives for ending nuclear program

NIHON KEIZAI (Page 2) (Full)
June 29, 2006

Foreign Minister Taro Aso met with his French counterpart
Douste-Blazy at a hotel in Moscow on the afternoon of June 28, local
time. On Iran's nuclear problem, the French foreign minister said:
"The ball is in Iran's court. Iran should quickly give a reply." Aso
replied: "It is important to have Iran sit down at the negotiation
table at an early date." The two foreign ministers thus agreed that
Japan and France would urge Iran to accept the package of incentives
for ending its nuclear program, which was worked out by the
permanent members of the UN Security Council plus Germany.

11) WTO ministerial meeting kicks off; Concessions by farm-produce
importing and exporting countries to take centerstage of
agricultural talks; US remains firm

YOMIURI (Page 9) (Full)
June 29, 2006

Geneva, Tatsuya Watanabe

Talks aimed at reaching a modality agreement on agricultural and
non-agricultural (mined and manufactured) products under the new
multilateral talks (Doha Round) of the World Trade Organization
(WTO) started yesterday. The aim is to create new trade

TOKYO 00003595 006 OF 009


liberalization rules. More than 30 countries are taking part in an
informal ministerial meeting with the aim of reaching an agreement
by this weekend. Whether farm-produce exporters countries, such as
the US and Brazil, and farm-produce importers, such as Japan and the
EU, can make concessions holds the key to finding a breakthrough in
the talks. Major participating countries are already engaging in
bargaining.

Agriculture Minister Nakagawa met with Crawford Falconer, chairman
of the WTO agriculture negotiations group, the same day and conveyed
Japan's stance: "Farm-produce exporters, such as the US, should come
up with a proposal for a cut in domestic subsidies." He also sought
understanding from the chairman for Japan's position, including an
increase in the ratio of key trade items that are treated as
exceptions to liberalization. Falconer indicated his view that the
informal ministerial meeting would also encounter complications. He
said: "The US will not change its firm stance. The outlook is
unclear."

Many countries have growing hopes that the US will make concessions,
following US President Bush's statement made during the US-EU summit
on the 21st: "The US will do its utmost to reach an agreement."
However, United States Trade Representative Susan Schwab during a
press conference on the 27th once again urged importing countries to
make concessions: "The negotiations will reach a breakthrough if
farm-produce importers make a tough decision on tariff cuts and
other issues." A Japanese negotiator commented: "There is no change
in the firm stance of the US. Whether the talks will make any
progress has become even more unclear."

The talks this time appear to be a three-sided fight involving
farm-produce importers, such as the EU and Japan, developing
countries, such as Brazil, and the US. Brazil in May indicated its
readiness to cut tariffs on mined and manufactured products. The UE
has also hinted at the possibility of agreeing to further reduce
tariffs on agricultural products. Moves to search for ways to find a
breakthrough are thus underway behind the scenes.

12) Agriculture minister urges US to make concessions during WTO
talks

ASAHI (Page 11) (Full)
June 29, 2006

Geneva, Yasushi Sato

Agriculture, Forestry, and Fisheries Minister Shoichi Nakagawa and
Economy, Trade, and Industry Minister Toshihiro Nikai, both of whom
are now in Geneva to take part in an informal ministerial meeting
under the World Trade Organization (WTO), on June 28 separately met
with WTO Secretary General Pascal Lamy. Meeting the press after
talks with Lamy, Nakagawa stressed his stance that unless the US
comes up with fresh concessions during the upcoming agricultural
talks, Japan will not agree to substantially cut tariffs on
agricultural products, including rice.

Nakagawa told Lamy: "Unless countries on the offensive, such as the
US, make concessions, Japan will not be able to move, even if it has
a new concession plan." Lamy responded, "I want the US to deepen
discussions on its domestic subsidies and Japan and the European
Union (EU) on market opening."


TOKYO 00003595 007 OF 009


Nakagawa also met with Crawford Falconer, who chairs the WTO
agricultural negotiations group. Falconer indicated his view that
the US would not come up with new proposals on agricultural
products. Commenting on new liberalization rules for the
agricultural sector, he noted, "It would be difficult for the
meeting to cover necessary discussions by this weekend." He thus
predicted rocky developments for the ministerial meeting.

The informal ministerial talks will start on the 29th.

13) "It is impossible for Japan alone to lower the level of its
requests," says Agriculture Minister Nakagawa on WTO

MAINICHI (Page 9) (Full)
June 29, 2006

Geneva, Katsumi Sawada

Agriculture, Forestry, and Fisheries Minister Shoichi Nakagawa, now
visiting Geneva to take part in a ministerial meeting of the
multilateral trade talks (Doha Round) at the World Trade
Organization (WTO), on June 28 noted, "If the US insists that it
cannot lower the level of its request, Japan cannot do so, either."
He made this comment during a press conference held after his
meeting with WTO Secretary General Pascal Lamy.

In the agricultural talks, the US is opposing a proposal for cutting
its agricultural subsidies. According to AP, United States Trade
Representative Schwab on the 27th told reporters, "I have no
intention of wrapping up small agreements," thus indicating that the
US has no intention of making concessions.

14) South Korean abductee Kim Young Nam has reunion with family

ASAHI (Page 1) (Lead paragraph)
June 29, 2006

Tadahisa Takatsuki, Seoul

South Korean abductee Kim Young Nam, 44, believed to be the husband
of Japanese abductee Megumi Yokota, yesterday reunited in Mount
Kumgang in North Korea with his mother, Choi Gye Wol, 79, and his
sister, Kim Young Ja, 47, both living in South Korea, for the first
time in 28 years. Kim Young Nam made his first public appearance.
The family reunion involved Kim Hye Gyong, 18, the daughter of Young
Nam and Megumi. Young Nam seems to be the man who identified himself
as Kim Chol Jun when he met with a Japanese government delegation.
Chief Cabinet Secretary Abe told a news conference yesterday: "It is
highly likely that the two are the same person."

15) Reunion between South Korean abductee Kim Young Nam and his
mother, sister: Japan alarmed by North Korea's move to bring
abduction issue to end

NIHON KEIZAI (Page 3) (Excerpts)
June 29, 2006

Will fresh information about Japanese abductee Megumi Yokota come
out? Japan noted that it was a good thing for Kim Young Nam,
believed to be the husband of Japanese abductee Megumi Yokota, to
meet in North Korea with his family members, including his mother,
Choi Gye Wol, but it remains cautious about a possible move by North

TOKYO 00003595 008 OF 009


Korea to bring the curtain down on the abduction issue.

"It was a good thing for family members to reunite," Chief Cabinet
Secretary Shinzo Abe said. But the Japanese government harbors mixed

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feelings about this family reunion, because North Korea might insist
via Kim Young Nam that Megumi has died. Even if information about
the death of Megumi comes out, though, Tokyo will continue to push
North Korea to reveal the truth.

Late at night on June 27, Abe met with Megumi's mother, Sakie, and
told her: "North Korea is likely to have Kim or his family say that
Megumi is dead." Sakie said to Abe: "I'm ready to face such a
situation. I won't be shaken."

16) Coordination underway to set a meeting with President Hu
Jintao's likely successor

NIHON KEIZAI (Page 2) (Full)
June 29, 2006

A meeting between Ichiro Ozawa, president of the Democratic Party of
Japan (Minshuto), and Liaoning Province Secretary Li Keqiang, the
likely successor to President Hu Jintao, is being arranged for
Ozawa's China tour that starts on July 3, sources revealed. If the
meeting is fixed, Ozawa intends to shift the date of his return home
from July 6 to July 8.

17) China eager about expansion of Japan-China defense exchanges

NIHON KEIZAI (Page 2) (Full)
June 29, 2006

Yuri Momoi, Beijing

Former Defense Agency (JDA) Director-General Shigeru Ishiba and
others yesterday met with China's State General Military Commission
Vice Chairman Xu Caihou in Beijing. Xu emphasized that the visit to
China by Ishiba and other Japanese "will lead to expanding mutual
understanding in the defense sectors of the two countries, as well
as developing friendly bilateral relations." Xu thus displayed a
positive stance toward expanding defense exchanges.

18) LDP to officially announce presidential election on September 8
for a vote on September 20

MAINICHI (Page 2) (Full)
June 29, 2006

The Liberal Democratic Party decided yesterday to make an official
announcement on September 8 for the presidential election on
September 20. The LDP presidential election committee, chaired by
Lower House member Hideo Usui, will meet in early July to formally
adopt the decision. Prime Minister Junichiro Koizumi has ordered
Secretary General Tsutomu Takebe to make arrangements centering on

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the same period as that of the previous presidential election in
2003.

19) Koizumi: It poses no problem no matter how many times I visit
Yasukuni Shrine, for it's an issue of individual freedom; Shrine
visit on August 15 a real possibility

MAINICHI (Page 2) (Excerpts)

TOKYO 00003595 009 OF 009


June 29, 2006

Prime Minister Junichiro Koizumi, now visiting Canada, suggested on
June 27 (June 28, Japan time) that he would visit Yasukuni Shrine a
sixth time before stepping down, saying, "It poses no problem mo
matter how many times I go there." His statement has spread
speculation in the Liberal Democratic Party that he will visit the
controversial shrine on the August 15 end-of-the-war anniversary.
Koizumi's statement came when rumor was, and still is, rife that any
comment on a Yasukuni visit by Koizumi would force Chief Cabinet
Secretary Shinzo Abe to postpone the announcement of his candidacy

SIPDIS
for the LDP presidency until late August and that it would also
affect former Chief Cabinet Secretary Yasuko Fukuda's decision.
Maneuvering in the presidential race is likely to intensify in the
LDP.

Koizumi has repeatedly said he will make an appropriate decision on
a shrine visit. But in Canada, he stated:

"I think those opposing my shrine visit are subscribing to China's
view. Is China's view correct? It poses no problem no matter how
many times I go there. It's an issue of individual freedom."

He also indicated that he would not "back away" from relations with
China, which has been critical of his shrine visits.

A senior LDP lawmaker noted: "It has become certain that the prime
minister will visit the shrine during his tenure of office."

DONOVAN

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