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Cablegate: Daily Summary of Japanese Press 08/10/06

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UNCLAS SECTION 01 OF 09 TOKYO 004513

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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: DAILY SUMMARY OF JAPANESE PRESS 08/10/06


INDEX:

(1) If elected prime minister, Abe would introduce open-recruitment
system for administration; Private citizens would be appointed to
government posts

(2) Ozawa Minshuto (Part 2): Hatoyama, Kan give total support to
Ozawa

(3) M&As on sharp increase, reaching 7.8 trillion yen: Struggle to
increase market share to grow

(4) Yasukuni part 3: Thesis by leading Shinto history scholar raises
doubts about propriety of enshrinement of Class-A war criminals

(5) Yasukuni Shrine-Where to go now? (Part 4): Split over
structural reform; The forgotten peace shrine

(6) Pros and cons of prime minister's visits to Yasukuni Shrine:
Fuyuko Kamisaka, non-fiction writer - Settlement has already been
reached

ARTICLES:

(1) If elected prime minister, Abe would introduce open-recruitment
system for administration; Private citizens would be appointed to
government posts

TOKYO SHIMBUN (Top Play) (Full)
August 10, 2006

It was learned yesterday that if elected president of the Liberal
Democratic Party (LDP), Chief Cabinet Secretary Shinzo Abe would
give persons from the private-sector key government posts. He is
considering advertising for candidates for some posts. The new
government will have to deal with such controversial issues as cuts
in expenditures and reform of the public servant personnel system,
to which bureaucrats are expected to be opposed. Abe is determined
that in order to control bureaucratic resistance, political
leadership will be necessary to deal with such issues.

The political appointee system means that the prime minister and
politicians install bureaucrats under not jurisdiction and experts
from the private sector in key government posts.

Even under the present system, the political appointee is applied to
such special posts as cabinet public relations secretary, deputy
chief cabinet secretary for crisis management, ambassadors, and
advisory councils. Except for council member posts, there are a few
private-sector persons appointed to key government posts.

Under an Abe government, the practice of political appointees will
be carried out in a positive manner, subject to special posts.

Not only private citizens but also bureaucrats will likely be
picked. In that case, appointments would be made under the political
leadership regardless of the seniority-base system and the
intentions of government offices.

The government would advise for candidates for some posts and the
prime minister or cabinet ministers would select suitable persons
from the candidates.


TOKYO 00004513 002 OF 009


In medium- and long-term, legal amendment is being considered in
order to expand subject of political appointee to general public
servants. Modeling after the Policy Unit of the British prime
minister, a brain-trust group, Abe is also considering introducing
the Japanese version of Policy Unit, which would assist
policy-making. The policy unit would be made up of various experts
from the private sector picked by the prime minister and cabinet
ministers. They would work on a fulltime basis.

(2) Ozawa Minshuto (Part 2): Hatoyama, Kan give total support to
Ozawa

YOMIURI (Page 4) (Abridged slightly)
August 9, 2006

Naoto Kan, acting president of the largest opposition party Minshuto
(Democratic Party of Japan), and his fellow party members held a
barbecue party in Naoshima, an island town (in Kagawa Prefecture) in
the Seto Inland Sea, on the night of July 22. Kan talked about the
party situation with Satsuki Eda while drinking beer. Eda was former
chairman of the party's caucus in the House of Councillors.

Kan and his fellow members continued drinking until late that night
at the hotel where they were staying. Kan spoke passionately about
his plans: "This is the last chance. Together with Mr. Hatoyama, I
am determined to completely support Mr. Ozawa in order to take the
reins of government."

Nobody objected to Kan's view that Ichiro Ozawa would be reelected
in the September party presidential election.

This summer Kan is vigorously working as proxy for Ozawa, who is
busy with a nationwide campaign for the next House of Councillors
election, by appearing on TV programs and delivering speeches, was
well as calling on support organizations.

Also Yukio Hatoyama, who has been called the "owner" of Minshuto, as
he contributed funds to the party when it was inaugurated, has
firmly supported Ozawa.

The party makes decisions at board meetings (yakuin-kai) and
standing secretaries' meetings (joninkanji-kai) held every Tuesday.
However, the three top leaders -- Ozawa, Kan, and Hatoyama -- decide
on general directions in their meetings on Mondays. A tripartite
system of party management has taken root.

Some party lawmakers at first had a chilly view of Kan, assuming
that his self-centered personality would prevent him from being part
of a triumvirate, according to a mid-level member. It is true that
Kan, a former activist, and Ozawa, a former LDP mainstream faction
member, are fundamentally different. Kan gave Ozawa the acting
president post when Ozawa joined Minshuto in 2003. Kan's aide said
that Kan was unhappy with Ozawa's failure to attend party meetings.

Ozawa, however, as party head, never fails to give consideration to
Kan. He let Kan and Hatoyama come with him to China. The three went
even fishing together.

Kan and Hatoyama alternately held the party presidency after its
foundation. The Kan-Hatoyama era, however, is over. Katsuya Okada
was elected president in 2004 and Seiji Maehara in 2005. By devoting
himself to supporting Ozawa, Kan has come back to the party
leadership. Kan and Hatoyama are standing in the spotlight.

TOKYO 00004513 003 OF 009

As if further confirmation is needed, Ozawa clarified that he would
reappoint Kan and Hatoyama on a Yomiuri TV program on Aug. 5.

Kan no longer even criticizes Ozawa to his close friends. He is even
trying to pave the way for the uncontested reelection of Ozawa in
September. Some party members have speculated as to the
honeymoon-like relations among the three. A junior lawmaker said,
"Both Mr. Kan and Mr. Hatoyama may be expecting to become prime
minister when a Minshuto government is inaugurated," considering
Ozawa's heart problems.

Under the triumvirate, Ozawa's aggressive strategy focusing on the
Upper House election in the summer of next year seems stable.
However, some in the party feel wonder why there has been no
criticism of Ozawa. They wonder if it is possible to offer
appropriate opinions to Ozawa only when a correction in strategy is
needed.

A mid-level lawmaker said:

"I am anxious about the present situation. I want Mr. Kan, who
competed with Mr. Ozawa in the presidential race, to take the
diversity of opinion within the party into account and stand up to
Mr. Ozawa at times."

Is this mid-level lawmaker's worry for nought?

(3) M&As on sharp increase, reaching 7.8 trillion yen: Struggle to
increase market share to grow

NIHON KEIZAI (Top Play) (Slightly abridged)
August 10, 2006

Mergers and acquisitions (M&A) among domestic companies are on the
increase. The total sum in the January-July period this year reached
7.88 trillion yen, up 9 points from the same period year before,
showing a robust sign to update a record high. Takeover bids (TOB),
a method such companies as Oji Paper and AOKI Holdings adopted
toward their competitors, have jumped close to 3 trillion yen. In a
number of cases, financial institutions and investment funds were
seen backing bidders in terms of providing strategy and funds. M&As
are beginning to be a widespread practice as a common business
management strategy.

TOB close to 3 trillion yen

Recof, an M&A broker, in Chiyoda Ward, Tokyo, has worked out those
figures. M&As among domestic companies are particularly visible
these days. That is because domestic demand-oriented companies,
which are concerned about the scaling down of the market following
the declining birthrate, are actively acquiring companies or
defending from takeover bids in order to expand domestic shares in a
short period of time.

Consolidated rules have partially contributed to sharp growth in the
number of TOB, which reached 31 cases this year as of August 9 or
worth 2.9931 trillion yen. The figure has already largely topped
860.8 billion yen marked in 2004, the highest in the past.

Securing top place in short period of time

As a result of corporate managers beginning to question market

TOKYO 00004513 004 OF 009


players the propriety of an M&A strategy without fearing
confrontation, prices (average premiums) added to stock prices in
TOB TOP have risen. According to consulting firm KPMG FAS, such a
margin was 27% in the 2000 - 2005 period, excluding discount TOB
cases that were below market value). However, Oji Paper added 30% of
and Aoki 7% .

In global competition-type TOB cases, major bids, such as Toshiba's
bid to acquire Westin House of the US, have continued. M&As
targeting foreign companies account for 56% of all with 4.45
trillion yen, up 5.3 times over the level of the same term in the
preceding year.

Backing from financial institutions

Behind the active M&As are financial institutions that are positive
about supplying funds. Banks moved flexibly in the takeover of
Vodafone Japan Inc. by Softbank, by providing funds in concert.

Joint financing has surged in acquisition and reconstruction cases.
Such an amount for this year will likely top 30 trillion yen due to
an increase in such cases by approximately 20 points over the
preceding year. Major securities houses have also begun boosting
their M&A funds, as can be seen in the case of Nomura Securities,
which is planning a system of providing acquisition funds topping
500 billion yen by fiscal 2008.

Investment funds are also steadily increasing their presence. M&As
in the January-July period this year has dropped 7.6 points from the
same period year before, but the inflow of funds into acquisition
funds is robust. Permira of Europe in July set up an international
fund worth 1.4 trillion yen that targets Japan. The Carlyle Group of
the US also established a 215.6 billion yen fund targeting Japan in
July.

The Financial Products Trading Law, which secured a Diet approval in
June, incorporates strengthened regulations, such as mandating TOB
in purchasing stocks both on and off the market. Since the law will
come into force possibly within this year, the trend of increasing
TOB will likely continue.

(4) Yasukuni part 3: Thesis by leading Shinto history scholar raises
doubts about propriety of enshrinement of Class-A war criminals

MAINICHI (Page 2) (Excerpts)
August 8, 2006

Chief Priest Nagayoshi Matsudaira in October 1978 decided to
enshrine Class-A war criminals along with the war dead at Yasukuni
Shrine. Yasukuni Ashizu (69), then editor-in-chief of the Shrine
Courier, in February 1979 asked for a meeting with chief priest
Matsudaira personally. Matsudaira responded to the request, "Please
come after our staffers have gone home." Ashizu visited Matsudaira
in a reception room in the shrine's office in the evening.

"I would like to ask you a question. The unanimous view of the
Research Council on the Religious Service System (RCRSS) was to
openly enshrine Class-A war criminals at Yasukuni Shrine under the
protection of the state and with the support of the public. Did you
know that?"

The RCRSS, established in 1961, is an advisory organ reporting to
the chief priests, that sought the protection of Shinto shrines by

TOKYO 00004513 005 OF 009


the state. Uzuhiko Ashizu (died in 1992 at the age of 82), the
father of Yasukuni Ashizu, was a leading member of the RCRSS. Though
all committee members were opposed to the enshrinement of Class-A
war criminals at Yasukuni Shrine, chief priest Matsudaira decided to
do so without consulting anybody.

Matsudaira remained unyielding, saying: "We will enshrine (Class-A
war criminals) if we receive a list of those to be enshrined from
the state. That is logical." He repeatedly used the word "logical."
Yasukuni Ashizu reported the fruitless meeting to his father. Two
months later, the enshrinement of Class-A war criminals was revealed
to the public.

Uzuhiko Ashizu is a leading scholar of Shinto history with no formal
institutional affiliation. He was a central figure in the
Association of Shinto Shrines, which was established about 10 years
after the end of the war. At that time, there was bitter criticism
of those who led the war. Enshrining Class-A war criminals at
Yasukuni Shrine along with the war dead could have sparked
criticism.

Concerning the secret enshrinement of Class-A war criminals decided
on by Matsudaira, Uzuhiko anonymously released a thesis titled
"Freedom of religion and Yasukuni Shrine - conundrum about
enshrining executed war criminals along with the war dead" in a
minor magazine in July 1979. In the thesis, he argued that having
died in action while carrying out official orders of the state was a
condition for enshrinement in Yasukuni Shrine. He noted: "Whether it
is a shrine or a memorial, it is extremely important to set some
sort of limits. There is a lay argument calling for enshrining all
who contributed to the state, but this will disturb shrine
visitors."

Regarding the idea of rejecting the verdicts of the Tokyo Trials and
treating the executions of Class-A war criminals as combat deaths,
he took a critical view: "More than 500,000 civilians were killed by
foreign forces in Tokyo, Hiroshima, Nagasaki, and the former
Manchuria. What is the limit in these cases? There are those who
mislead the country into a disastrous defeat." Uzuhiko thus raised
doubts about the enshrinement of Class-A war criminals from the
standpoint of Shinto beliefs and war responsibility.

Koremaru Sakamoto, a key Shinto instructor at the council and a
Kokugakuin University professor, was a pupil who directly learned
from Uzuhiko. However, the 2005 view of the council written by
Sakamoto claimed: "The enshrinement of Class-A war criminals was
based on measures set by the Diet and the government. War criminals
are not criminals." His ideas go against those of his mentor.
Current Shinto scholars, including Sakamoto, are unable to explain
the theory behind Uzuhiko's argument. Sakamoto pondered and said,
"Mr. Uzuhiko Ashizu is right, but he is a man of the past."

According to a copy of papers from the former Imperial Japanese Army
recently discovered by Hisashi Yamanaka (75), a writer who lives in
Fujisawa City, Kanagawa Prefecture, former Prime Minister Hideki
Tojo, one of the Class-A war criminals enshrined at Yasukuni,
ordered that eligibility for enshrinement at Yasukuni be limited to
military personnel and civilian employees of the military whose
deaths are attributable to service during the war. This illustrates
that Yasukuni Shrine's claim deviates from Tojo's orders as well.

The issue of revising the Religious Corporation Law flared up again
in December 1995 after the Aum Shinrikyo case. Summoned to a

TOKYO 00004513 006 OF 009


question-and-answer session at an Upper House special committee,
unsworn witness Kenji Okamoto, then chief of the Association of
Shinto Shrines, strictly said: "There is no doctrine of Shinto
beliefs. A law requiring that a religion possess a formal doctrine
is nothing but religious persecution." Takeshi Arai, a professor
emeritus of religion at Komazawa University who was sitting next to
Okamoto at the hearing, said he felt extremely uncomfortable about
Okamoto's view that "they alone were special."

(5) Yasukuni Shrine-Where to go now? (Part 4): Split over
structural reform; The forgotten peace shrine

MAINICHI (Page 2) (Full)
August 9, 2006

There is a dark grove fenced around with steel rails right near the
main sanctuary of Yasukuni Shrine. In this grove stands a small
shrine. This small erection, called Chinreisha, is dedicated to the
souls of Japanese and foreign soldiers all over the world who died
in the battlefield and are not enshrined at the main sanctuary. It
was erected by Fujimaro Tsukuba, the guji or chief priest of
Yasukuni Shrine who delayed enshrining Japan's Class-A war
criminals. However, there are almost no visitors to this small
shrine.

In its January 1964 issue, Yasukuni Shrine's official bulletin,
Yasukuni, carried Tsukuba's New Year's greetings filled with a
liberal love for humanity.

Tsukuba's message was as follows: "The deities of Yasukuni (i.e.,

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the spirits of war-dead-turned-gods), hand in hand with the spirits
of fallen soldiers around the world, form a great god of peace. The
spirits of fallen soldiers from all nations in the world can be
deified (under Shinto beliefs) only in Japan, where various
religions come together into our hearts and need not struggle
against each other."

In 1963, Tsukuba and his wife visited Europe on a campaign against
nuclear weapons and for peace. Tsukuba there met with a number of
people in the religious world. Against the backdrop of the US-USSR
nuclear arms race, antiwar and peace movements were on the rise.

Tsukuba was born to the house of Prince Yamashina in the Imperial

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Family. Tsukuba graduated from the University of Tokyo. Shortly
thereafter, Tsukuba left the Imperial family. He later became a
scholar of Japanese history and then the chief priest of Yasukuni
Shrine soon after the war ended. He walked the same path as the
Imperial Household, which became a symbol of Japan's postwar
democracy.

Hisao Baba, who was a Yasukuni Shrine official in charge of public
relations, served Tsukuba at the shrine office as one of his aides.
According to Baba, Tsukuba was concerned about something to do with
the Imperial Household Agency in those days. "It would be difficult
to enshrine their (the Class-A war criminals') souls as long as I
live," Tsukuba told Baba soon after the Class-A war criminals were
executed in 1948. Tsukuba was worried about what was in the
Emperor's mind, according to Baba's account. "The gonguji, who is
the shrine's number-two official, was in charge of the shrine's
practical business, and the guji had only to administer shrine
festivities," said one of those who worked at Yasukuni Shrine and
knows Tsukuba. This person recalled, "Mr. Tsukuba himself was like a
symbol (of Yasukuni Shrine)."

TOKYO 00004513 007 OF 009

In July 1978, Nagayoshi Matsudaira became the new chief priest of
Yasukuni Shrine due to Tsukuba's sudden death. That October,
Matsudaira enshrined the Class-A war criminals in private at
Yasukuni Shrine. In his childhood, Matsudaira stayed at the house of
Tokyo Imperial University Professor Kiyoshi Hiraizumi, who is known
for his historical perspective of Japan under the state sponsorship
of Shintoism with the Emperor reigning as the living god. Matsudaira
was a lieutenant commander in the Imperial Navy when the war ended.
After the war, he worked for the Ground Self-Defense Force.

Yasukuni Shrine was left behind in the postwar days of high economic
growth, so Matsudaira set about to financially turn the shrine
around. Matsudaira himself undertook the practical business of
running the shrine. In those days, Yasukuni Shrine was staffed with
150 personnel. Matsudaira introduced an age limit system for a de
facto restructuring of the shrine, under which the shrine reduced
its personnel to about 100.

Yasukuni Shrine sold a portion of its landed property to the extent
of 3,290 square meters for one billion yen or so. The shrine put the
money into the renovation of its main sanctuary and office. In 1986,
Matsudaira reopened Yushukan, a museum of history on the shrine's
premises. "We got into financial trouble with fewer visitors, so he
wanted to make it a source of income," a former employee of Yasukuni
Shrine said, adding, "He's like Yasukuni's Carlos Ghosn (Nissan
Motor Co. president)."

Matsudaira weighed the traditions of Shinto shrines and tried to be
independent of the state. In the early 1970s, the ruling Liberal
Democratic Party presented to the Diet a bill seeking state support
for Yasukuni Shrine. This legislation was intended to fund the
shrine from state coffers. Eventually, however, the bill was
scrapped. Matsudaira opposed the legislation. "We would not be able
to say what we'd like to," he complained. On Aug. 15, 1985, then
Prime Minister Yasuhiro Nakasone made an official visit to Yasukuni
Shrine but performed no religious activity. It was "extremely
disrespectful to the deities" enshrined there, so Matsudaira did not
come out in person to meet Nakasone upon his arrival at the shrine.

Matsudaira was of a "stubborn and straightforward nature," according
a scholar who had known him for years. Matsudaira was also outspoken
to the Imperial Court, so he was alienated. Sukemasa Irie, grand
chamberlain to the Emperor Hirohito, writes in his published diary
that when the present-day crown prince turned 20, Matsudaira
suggested to Irie that the crown prince pay homage at Yasukuni
Shrine. Irie, however, answered Matsudaira, "That's none of your
business."

In his recently discovered personal notes, a one-time aide to the
Emperor Hirohito compares Matsudaira with his father, former
Imperial Household Minister Yoshitami Matsudaira, critically citing
an old saying: "No child knows how dear he is to his parents."
However, Matsudaira was also a breaker of taboos. "We," Matsudaira
believed, "cannot restore the spirit of Japan as long as we accept
the historical view of the Tokyo Trials." One may wonder if
Matsudaira wanted to carry out a structural reform of Yasukuni
Shrine by enshrining Class-A war criminals and reopening Yushukan.

Yasukuni Shrine was split within itself over whether to go for
postwar pacifism or to reject the Tokyo Trials. The enshrinement of
Class-A war criminals reflects such an internal standoff and also
has something to do with Japan's economic growth and Yasukuni

TOKYO 00004513 008 OF 009


Shrine's business management.

In May 2002, Sukei Hosankai, an association of voluntary supporters
for Yasukuni Shrine, held a general meeting of its members at
Yasukuni Kaikan Hall on the precincts of Yasukuni Shrine. In that
meeting, Sadanari Hisamatsu, formerly a professor at Ehime
University, became its president. "I was also struck by the small
universe of love shown by Chinreisha, which is dedicated to the
souls of Japanese and foreign soldiers who died on the battlefield,"
Hisamatsu said in his inaugural speech there. He insisted on the
necessity of promoting publicity for Chinreisha. Hisamatsu falls on
the 18th head of the domain of Iyo Matsuyama in old times, and his
father is a cousin of Tsukuba. "Chinreisha meets the Emperor Showa's
heart," Hisamatsu stresses. However, Yasukuni Shrine remains
silent.

Aizu Byakkotai, a death squad of samurai infants formed in 1868 in
the clan of Aizu against the government army, and a 'rebel army'
against the Meiji era government, including Takamori Saigo, are
enshrined at Chinreisha. "It's conceivable," one of the Yasukuni
Shrine's officials guesses, "that the Class-A war criminals were
also enshrined there (at Chinreisha)" until their souls were set up
in their enshrinement to the inner sanctuary of Yasukuni Shrine in
1978. Chinreisha is almost forgotten. Instead, the Yushukan museum,
which advertises the "Greater East Asia War" (i.e., World War II) as
an "inevitable" war, is crowded every day with summer holidays
having set in.

(6) Pros and cons of prime minister's visits to Yasukuni Shrine:
Fuyuko Kamisaka, non-fiction writer - Settlement has already been
reached

TOKYO SHIMBUN (Page 2) (Full)
August 9, 2006

-- How do you view Yasukuni Shrine?

Saying: "Let's meet at Yasukuni Shrine" and saluting, men of my age
left for the front. They were not acting but did it out of their
emotion. Unlike other ordinary shrines, Yasukuni is special.

-- The prime minister's Yasukuni visits have become a diplomatic
issue.

The People's Republic of China was created after the Tokyo Trials.
China and South Korea are not included among the signatories of the
Treaty of San Francisco. When China normalized diplomatic relations
with Japan, it agreed to refrain from interfering in Japan's
domestic affairs. I wonder what grounds China is protesting.

-- Aren't they protesting as victims?

Regarding the issue of Japan's culpability, a settlement was reached
under the Treaty of San Francisco. War is something that is caused
by the times. Japanese also suffered when they had to leave
Manchuria. They had to leave all their belongings behind (on the
Korean Peninsula, Japan's colony at that time, or in other places).

-- How do you view the Yasukuni issue from the standpoint of the
Constitution?

Article 20 of the Constitution stipulates the separation of religion
and state, but it is a gross exaggeration to take the prime

TOKYO 00004513 009 OF 009


minister's visits to Yasukuni as a religious activity that involves
the exercise of authority. When the law to protect those who were
injured or got sick in war and the bereaved families of the war dead
was amended in 1953, it was stipulated in it that the war criminals
should be treated the same as those who died in battle.

-- Some are calling for creating a national war memorial. There is
also the idea of separately enshrining Class-A war criminals.

It is not desirable for Japan to construct a new facility in
response to protests from other countries. A memorandum expressing
Emperor Showa's displeasure at the enshrinement of the Class-A war
criminals along with the war dead was revealed recently. Focusing on
the words of the late emperor, some assert that the enshrinement of
war criminals was inappropriate. But such an assertion is reckless.
I think it is impossible to unenshrine the war criminals as long as
Yasukuni Shrine says it is.

-- What measures do you think will resolve the Yasukuni issue?

Since the state is prohibited from Y_Qkc6UQkuni Shrine should be a
source of emotional support for the Japanese people, and to that
end, I hope that state subsidies will be used to make Yasukuni a
place for venerating those who gave their lives for the country, a
place that does not rigidly adhere to Shinto practices.

SCHIEFFER

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