Cablegate: Japanese Morning Press Highlights 08/11/06

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08/11/06

Index:

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

4) Foiled terrorist plot Heathrow Airport, England, puts Japanese
airliners on alert

5) Prime Minister Koizumi reveals 10-year comprehensive cooperative
plan during Mongolia visit

6) Yomiuri poll shows extraordinary popular distrust toward China
65% with 66% of public seeing bilateral relations in bad shape

"Spy paradise" Japan:
7) Company caught shipping chemical weapons-related freeze-dry unit
to North Korean firm directly under Kim Jong Il
8) Russian industrial-secrets spy caught trying acquiring missile
guidance-related devices

Political season:
9) LDP presidential candidate Shinzo Abe seems to have gathered 70%
of the party's support, will announce candidacy tomorrow
10) Abe with majority support in his party seems assured of being
elected LDP president
11) Abe running way ahead of other candidates but "forces of
resistance" in LDP should not be discounted

12) Three conditions for turning Yasukuni into a non-religious
organization: keep name, facility, and ceremonies

13) Japan, South Korea to negotiate prior notification system for
nautical surveys in disputed waters

14) Mexican-origin cattle cannot be processed and shipped to Japan
as US beef

15) Overseas Economic Cooperation Council to promote assistance for
energy conservation by China and India, using ODA

Articles:

1) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun:
Terrorist attacks on US-bound aircraft thwarted; London police
arrest 21 suspects

Nihon Keizai:
New guidelines for screening companies to be listed to be
strengthened; Cautious stance toward corporate governance and
information disclosure to be required from securities houses

Akahata:
Liberal Democratic Party to use new fund-raising method using
intermediary corporations; Seminars that collect 500,000 yen from
corporate participants planned

2) EDITORIALS

Asahi:

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(1) LDP presidential election: Factions continuing to weaken
(2) Lebanon crisis: Expanding diplomacy for a ceasefire

Mainichi:
(1) National Police Agency to adopt reward system for crime tips:
Many issues to be resolved
(2) Prime minister's ambition has sparked nationalism

Yomiuri:
(1) Mongolia: Affinity with this nation will support strategic
relationship
(2) Proliferation of private universities: Brand power needed to
survive

Nihon Keizai:
(1) Revitalize local economies: Northern Kyushu making best use of
its ties with Asia

Sankei:
(1) Gifu Prefecture conceals off-the-books money; Expose collusive
ties between prefecture and labor union
(2) Prime minister visits Mongolia: We want to see strengthened
strategic diplomacy

Tokyo Shimbun:
(1) Child murders in Akita: Police investigation should be examined
(2) Law schools: Study of law at turning point

Akahata:
(1) Asbestos Safety Treaty to come into force in Japan: Use it to
prevent health hazard

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 10

NIHON KEIZAI (Page 2) (Full)
August 11, 2006

08:29
Departed for Mongolia from Haneda Airport on government plane.

Afternoon
Arrived at Genghis Khan International Airport and Genghis Khan
Hotel. Attended welcoming ceremony. Offered flowers before Genghis
Khan statue. Held summit meeting with Prime Minister Enkhbold.
Attended the signing of economic aid package and joint press
conference. Returned to Genghis Khan Hotel.

Evening
Enjoyed the second act of opera "Genghis Khan." Returned to the
hotel. Attended welcoming dinner party hosted Prime Minister
Enkhbold at Guesthouse. Returned to the hotel.

4) JAL, ANA taking security measures following suspension of flights
to Heathrow Airport due to terrorist plot

SANKEI (Page 3) (Full)
August 11, 2006

British police on Aug. 10 foiled a terrorist plot to blow up
aircraft in midair. In response, tighter security measures have been

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taken at Heathrow Airport. Narita Airport, Kansai Airport, and
Japanese airlines were also preoccupied yesterday with making
responses and gathering information, just a few days before a rush
of people going on trips abroad during the O-Bon holidays. The Land,
Infrastructure, and Transport Ministry has not raised the threat
level at domestic airports, but it instructed airlines to take
thorough security measures, including checking liquids to be carried
on planes. The ministry also instructed that all liquids be banned
from being carried on flights. Airlines have asked passengers to
hand over even drinks and shampoo.

Japan Airlines (JAL) and All Nippon Airways (ANA) operated all
London-bound flights on schedule yesterday. Long flights are allowed
to land at Britain's Heathrow Airport, but the destination might be
changed. The two airlines have collected information to learn if
landing and taking-off are possible at the airport today and
beyond.

In London, passengers are required to put all carry-on items in
clear plastic bags. The two companies distributed bags to passengers
at the airports in London. JAL will distribute bags to passengers at
Japanese airports starting today.

5) Japan, Mongolia to map out 10-year comprehensive plan with
cooperation in energy development in mind

NIHON KEIZAI (Page 2) (Full)
August 11, 2006

Prime Minister Junichiro Koizumi yesterday met with Mongolian Prime
Minister Enkhbold at the Mongolian government office. The two
leaders agreed to map out a 10-year comprehensive action program
aimed at strengthening bilateral cooperation in the political,
economic, educational, and cultural fields. They also agreed to
establish an intelligence exchange framework with Mongolia's
diplomatic ties with North Korea in mind.

The aim is to expand relations with a pro-Japan Mongolia, thereby
encouraging Japanese companies to participate in the development of
natural resources in that nation, as well as to counter China, which
is increasing its political presence in Asia.

The action program will contain specific targets for each field. The
two countries will speed up efforts to lay the groundwork in the
run-up to President Enkhbayar's planned visit to Japan next
February. Mongolia has rich underground mineral resources, such as
coking coal, a material used for manufacturing steel, gold, and
copper. The objective of the program is to develop these resources.
Prime Minister Koizumi underscored, "Japanese companies are
interested in underground resources. I would like to make efforts to
consolidate investment conditions."

Koizumi is the third Japanese prime minister to visit that nation,
following Prime Minister Toshiki Kaifu in 1991 and Prime Minister
Keizo Obuchi in 1999. Koizumi announced that Japan would provide
approximately 300 million yen in grant aid for the construction of a
museum in Karakorum, the capital of the former Mongol Empire. He
handed over a museum model to the prime minister, creating a
friendly atmosphere in the talks.

During the talks, Enkhbold expressed his support for Japan's bid for
a permanent seat on the United Nations Security Council (UNSC). He

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also pledged to have stories from illustrated books for children
"The Grateful Crane (Tsuru no Ongaeshi)" and "Guardian Deity in a
Hat (Kasa Jizo)" carried in elementary and middle school textbooks
in Mongolia.

Mongolia, sandwiched between China and Russia, attaches importance
to relations with Japan, characterizing it as a third neighbor.
China has formed the Shanghai Cooperation Organization with Russia
and four Central Asian nations. Mongolia has taken part in the
framework as an observer. Koizumi plans to visit Central Asia later
in the month. He intends to check China's diplomatic offensive by
visiting that region.

6) Poll: 65% can't trust China, 66% see Japan-China ties as bad

YOMIURI (Page 1) (Full)
August 11, 2006

A recent Yomiuri Shimbun poll, conducted July 8-9 across the nation
on a face-to-face basis, has found that a total of 65% cannot trust
China, the worst ever rating in the six surveys taken since 1988.
Meanwhile, a total of 66% think that Japan-China relations are
currently in bad shape, nearly twice as high as the percentage shown
in a previous survey taken in 1996. The figure in the latest survey
appears to reflect China's strong backlash to Prime Minister Koizumi
paying homage at Yasukuni Shrine.

The proportion of those who cannot trust China is up 10 percentage
points from a previous survey in 2002. Those who can trust China
totaled 30%, down 8 points. In addition, respondents were also asked
if they thought Japan-China relations are now in good shape, with
only 27% saying "yes," down 29 points from the 1996 survey. When it
comes to the public image of China, "bad" totaled 67%, with "good"
at 27%.

Respondents were also asked to pick only one country they thought
would be most influential in Asia. In response to this question,
China topped all other countries at 57%, followed by the United
States at 14%. Japan ranked third at 10%.

They were further asked to pick up to three countries as potential
economic powers in Asia, and China ranked first at 70%. As seen from
this figure, an increasing number of people think China would be an
important country mainly in the economic area.

However, 36% think China's economic growth would have a negative
impact on the economy of Japan, with 28% anticipating a positive
impact.

Respondents were also asked to pick one or more countries as
potential military threats. China ranked second at 44%, with North
Korea topping all other countries at 78%.

7) Illegally exported freeze dryer possibly shipped to Kim Jong Il's
bioweapon lab

SANKEI (Page 1) (Abridged)
August 11, 2006

Kim Yong Gun, 58, a North Korean resident in Japan and former
president of the trading firm Meisho Yoko, was arrested yesterday by
Yamaguchi and Shimane prefectural police on suspicion of illegally

TOKYO 00004520 005 OF 010

exporting a freeze dryer that could be used for the production of
biological weapons.

Judging from confiscated documents, police authorities suspect that
the freeze dryer has been installed at a research facility of Kim
Jong Il as part of plans to build a bioweapon plant. The police are
investigating North Korea's involvement.

According to investigators, Kim is alleged to have illegally shipped
a freeze dryer to North Korea via Taiwan from Yokohama in September
2002 without permission from the Ministry of Economy, Trade, and
Industry.

8) Russian spy demanded infrared sensor for missile guidance

SANKEI (Page 27) (Abridged)
August 11, 2006

An official of the Russian Trade Representative Office in Japan and
a former researcher of Nikon Corp., a major precision equipment
manufacturer headquartered in Tokyo's Chiyoda Ward, were referred to
prosecutors yesterday on suspicion that the 47-year-old researcher
had given a stolen communications device to the 35-year-old Russian
trade official. In this case, the Russian demanded technologies that
could be used to assist a missile in sensing its target via
infrared, the Tokyo Metropolitan Police Department's Public Security
Bureau discovered yesterday from its investigations. The Russian
official also secured a variable optical attenuator (VOA) that
adjusts the wavelength of light through optical fiber. This is also
indispensable for advanced missile guidance systems, as well as for
infrared sensing systems. The MPD suspects that the Russian
attempted to get missile-related technologies.

The Russian trade official is Vladimir Petkevich, who belongs to the
Chief Administration for Intelligence (GRU), an intelligence unit of
Russia. Petkevich began approaching the former Nikon researcher
around March last year. He wined and dined the former researcher
more than 10 times at bars or elsewhere in Tokyo until around
October last year and also handed him several tens of thousands of
yen in cash. The MPD asked Petkevich last month to report in person
for questioning. However, he left Japan for Russia on Aug. 2.

9) LDP presidential race: Nearly 70% support Abe; Nukaga, Yamasaki
not to run

SANKEI (Page 1) (Excerpts)
August 11, 2006

Chief Cabinet Secretary Shinzo Abe, regarded as the strongest
candidate in the Liberal Democratic Party (LDP) presidential
election in September to choose a successor to Prime Minister
Junichiro Koizumi, yesterday had secured nearly 70% of the LDP Diet
member votes (403). The Tsushima faction, the second largest in the
party, decided the same day not to field Defense Agency
Director-General Fukushiro Nukaga. Former LDP Vice President Taku
Yamasaki a will likely give up on joining the race. Furthermore, the
Ibuki faction announced its support for Abe, giving him a boost.
There is a growing possibility of an Abe landslide (300 party member
votes).

In a study session last evening of the Tsushima faction, Nukaga
stated: "I have to come to my own conclusion after discussing the

TOKYO 00004520 006 OF 010

matter with faction head Yuji Tsushima and LDP Upper House Chairman
Mikio Aoki." He later met with Tsushima and Aoki. Tsushima indicated
that he would wait for Nukaga's decision, telling reporters, "He
will give me his conclusion as early as possible after he considers
it carefully." Nukaga is likely to give up on running in
consideration of the unity of the faction.

The reason the Tsushima faction has decided not to field Nukaga is
that many of its Lower House members back Abe and are concerned that
if Nukaga suffers a crushing defeat, the faction would lose its
influence in the party. The faction intends to allow its members to
make their own decisions on how to vote. Many will likely vote for
Abe.

Abe to announce candidacy tomorrow

Chief Cabinet Secretary Shinzo Abe decided yesterday that he would
announce his candidacy for the LDP presidency on Aug. 12 when he
returns to his home constituency of Yamaguchi Prefecture, according
to several sources.

Following his announcement, a group of Diet members supporting Abe,
mainly from the Mori faction, will start forming an election setup
soon after the mid-August O-Bon holiday break.

Abe will attend a party hosted by his support group in the city of
Shimonoseki starting on 11:00 a.m. on Aug. 12. He will announce his
candidacy for the LDP presidency before about 3,000 senior LDP
prefectural chapter members and supporters. Visiting Nagato City on
Aug. 13, he will express his determination to run in the race before
the grave of his father, former Foreign Minister Shintaro Abe.

10) Abe has majority support in LDP presidential race; Taku Yamasaki
to give up on running

YOMIURI (Page 1) (Full)
August 11, 2006

The Ibuki faction of the Liberal Democratic Party (LDP) held an
executive meeting last night. The meeting agreed that the faction
would support Chief Cabinet Secretary Shinzo Abe, 51, in the Sept.
20 LDP presidential election. Former LDP Vice President Taku
Yamasaki, 69, decided the same day to give up on running in the
race. Defense Agency Director-General Fukushiro Nukaga, 62, is
expected to announce soon his intention not to run. The election is
expected to be a three-way race involving Abe, Foreign Minister Taro
Aso, 65, and Finance Minister Sadakazu Tanigaki, 61. A majority of
the 403 Diet members will likely support Abe in the presidential
race.

If no candidate secures a majority of the 703 votes, including the
300 party member votes, the top two candidates will hold a runoff to
be decided by the party's Diet members. Even in a runoff, Abe would
be sure to dominate his opponent.

Abe told reporters yesterday morning, "I can go along with (policy
proposals made by the Ibuki faction)." Following this, Bunmei Ibuki,
a former labor minister who heads the faction, announced yesterday
afternoon that his faction would back Abe. During his meeting last
evening with LDP acting policy chief Akira Amari in Tokyo, Yamasaki
said he would seriously consider the sentiments of his 36-member
faction, many of whom back Abe.

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Yuji Tsushima, a former health and welfare minister who heads a
75-member faction, and Mikio Aoki, chairman of the LDP caucus in the
House of Councillors, met last night with Nukaga and told him that
it would be difficult for the faction to support him. After the
meeting, Nukaga told reporters, "I will come to my own conclusion as
soon as possible." If he decides not to run in the race, the faction
will let its members cast their votes independently.

Almost all the 86-member Mori faction, the 32-member Ibuki faction,
and the 15-member Nikai faction will back Abe. About 35 of the 48
members of the Niwa-Koga faction and 35 of the 70 lawmakers
belonging to no faction, now support Abe. About half of the
15-member Komura faction backs Abe at present.

11) Abe far ahead of other candidates in "destroyed" LDP
presidential race; LDP members rallying around "winning horse" for
fear of being labeled "forces of resistance"

TOKYO SHIMBUN (Page 1) (Abridged slightly)
August 11, 2006

Support for Chief Cabinet Secretary Shinzo Abe, a shoo-in for the
September Liberal Democratic Party presidential election, is
increasing by the day, visibly outdistancing other candidates.

The 85 members of the Mori faction, to which Abe belongs, are almost
certain to vote for him. Large portions of the Ibuki, Komura, and
Nikai factions, which have announced their support, and a majority
of the Niwa-Koga faction support Abe. The membership of these five
factions comes to 195. Some may rally around other candidates. But
more members from the Tsushima and Yamasaki factions plus
unaffiliated members are expected to back Abe. A simple calculation
shows that well over a majority of 202 of the 403 LDP lawmakers are
expected to vote for Abe.

The LDP lawmakers and local rank-and-file members who hold 300 votes
in total will determine the new LDP president. Even if another
candidate were to best Abe in terms of local votes, a runoff would
be held between the top two contestants by the LDP Diet members. For
this reason, Abe's lead is unshakable.

In the past, many LDP members have sought the party presidency out
of an Olympics-like spirit of participation without any expectation
of winning.

The ultimate goal of any faction was to make its leader the prime
minister. There was a tendency for LDP lawmakers not to win
recognition from other members until they ran in a presidential
race. Prime Minister Koizumi, too, secured the LDP presidency on his
third try.

But the situation has changed over the five-and-a-half years of the
Koizumi administration.

Today, factions that lose in a presidential race are labeled "forces
of resistance." Koizumi has been hostile toward them. Last year,
some postal rebels were forced out of Nagatacho after their defeat
in the Lower House election.

Vivid memories of last year's developments are pushing LDP members
to flock to Abe. Koizumi declared that he would destroy the LDP.

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True to his words, the environment surrounding the presidential race
has markedly changed.

12) Yasukuni Shrine confirms three conditions -- maintenance of
name, facilities, and rituals -- for turning itself into
nonreligious corporation

MAINICHI (Page 1) (Abridged slightly)
August 11, 2006

Amid growing calls in the LDP for making Yasukuni Shrine a
nonreligious entity to resolve the question of Class-A war
criminals, Yasukuni Shrine has come up with its basic policy on
transforming itself into a nonreligious corporation, sources said
yesterday. The policy does not reject the option of abandoning
religious status and becoming a special corporation with state
intervention. But following the shrine's 1963 view, the policy sets
three conditions: (1) continued use of the name Yasukuni Shrine; (2)
maintaining facilities; and (3) protection of rituals and events.
The conditions would pose a high hurdle for turning the shrine into
a nonreligious corporation.

Chief priest Toshiaki Nambu and other Yasukuni Shrine executives
confirmed the policy this May. Foreign Minister Taro Aso announced
on Aug. 5 his private plan to transform the shrine into a
nonreligious entity, but the shrine has kept its silence. In truth,
however, the shrine made a move ahead of the government and the
Liberal Democratic Party. Former LDP Secretary General Makoto Koga,
who chairs the Japan War-Bereaved Association, proposed in May
studying the option of unenshrining Class-A war criminals from
Yasukuni.

Following the appearance of a state maintenance plan in the bereaved
association and the LDP since the 1950s, Yasukuni Shrine produced in
1963 a set of state protection guidelines calling for the
maintenance of the name Yasukuni Shrine and facilities and major
rituals and events.

But the new policy calls for the maintenance of: (1) the name
Yasukuni Shrine; (2) facilities, such as the Torii gate and shrine
pavilions; and (3) rituals and events, such as collective
enshrinement of Shinto deities (eirei) at Yasukuni and paying
tribute to the war dead. But the strict observance of the three
highly religious conditions might constitute a violation of Article
20 of the Constitution stipulating separation of religion and
state.

13) Japan, South Korea to hold talks on prior-notification system on
maritime research

YOMIURI (Page 2) (Full)
August 11, 2006

The governments of Japan and South Korea decided yesterday to hold
talks of bureau-director-level foreign ministry officials on the
introduction of a system of prior notification on maritime research
in waters where the two countries' respective EEZs have not yet been
demarcated, such as near the Takeshima /Dokdo islets. Their first
meeting will be held in Tokyo today. Participating in the meeting
will be International Legal Affairs Bureau Director-General Ichiro
Komatsu and others from Japan and Treaty Bureau Director General Pak
Huikwon and others from South Korea.

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Over maritime research in waters near Takeshima/Dokdo, Japan planned
to study seafloor topography in April, and South Korea mobilized
patrol boats in reaction. Japan called off the survey, but South
Korea carried out a survey of ocean currents in July. This time,
Japan was considering a plan to conduct a radioactivity survey

Seoul was initially opposed to the introduction of a
prior-notification system, saying: "Since waters near
Takeshima/Dokdo are within our EEZ, the system is not necessary." In
actuality, though, if Tokyo undertakes the planned survey, Seoul
will find it difficult to chase off Japanese ships in view of
international law. Probably keeping such a circumstances in mind,
South Korea has become positive about the prior-notification
system.

A senior Foreign Ministry official said yesterday: "South Korea
supposedly has judged it better not to cause unnecessary confusion."
If South Korea takes part in the talks, Japan plans to put off the
radioactivity survey to October or later.

Should Prime Minister Koizumi visit Yasukuni Shrine on Aug. 15,
however, the talks might be negatively affected due to the expected
fierce reaction by the South Korean government and people.

14) Prion panel: Cattle born in Mexico do not meet import condition

SANKEI (Page 3) (Full)
April 11, 2006

In a meeting of the prion panel under the Food Safety Commission
yesterday, one member pointed out that beef from cattle born in
Mexico could not meet the condition Japan set to limit imports to
only beef from cattle 20 months of age or younger.

A satisfactory birth-recording system has not been introduced in
Mexico, so the age of cattle is determined based on meat maturity.
Panel Chairman Yasuhiro Yoshikawa said:

"We discussed if the United States' methodologies to verify the age
of cattle was scientifically appropriate, premised on cattle born in
the US. When it come to cattle born in other countries, however, we
cannot say that the same is true."

15) Overseas Economic Cooperation Council to promote assistance for
energy conservation by China and India, using ODA

Nihon KEIZAI (Page 2) (Full)
August 11, 2006

The government yesterday held a meeting of the Overseas Economic
Cooperation Council (chaired by Prime Minister Junichiro Koizumi)
and reaffirmed a policy of strengthening ties with
natural-resource-producing nations through official development
assistance (ODA). Participants in the meeting also shared the
perception that Japan should promote cooperation with China and
India in the energy-conservation area. Energy consumption by those
countries is rapidly increasing. It is likely that Japan will
increasingly use ODA for resource energy diplomacy.

They also agreed to distribute ODA on a priority basis to secure
interests in such energy resources as oil. As part of such efforts,

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the government will continue to use international financing services
by the Japan Bank for International Cooperation and the trade
insurance system. In Asia, the government will also go ahead with
technical cooperation in the nuclear area, while giving
consideration to nuclear nonproliferation efforts.

ODA will also be allocated for the promotion of trade investment,
such as an early signing of trade agreements under the multilateral
trade negotiations of the World Trade Organization, which have
recently collapsed, and the signing of economic partnership
agreements.

The council first met in May. Yesterday's meeting was the third,
bringing together Chief Cabinet Secretary Shinzo Abe; Foreign
Minister Taro Aso; Finance Minister Tanigaki; Economy, Trade and
Industry Minister Toshihiro Nikai; and Agriculture, Forestry and
Fisheries Minister Shoichi Nakagawa.

SCHIEFFER

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