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Cablegate: Japanese Morning Press Highlights 08/25/06

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UNCLAS SECTION 01 OF 10 TOKYO 004866

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 08/25/06

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Index:

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

4) Prime Minister Koizumi returns from a vacation at his official
residence of lounging around and watching the high-school baseball
tourney on TV

5) Prime Minister Koizumi in meeting with former Iranian president
presses for negotiated settlement of nuclear issue

6) Government in order to create world nuclear fuel supply to
provide assistance for uranium development

7) Three Aegis ships to be deployed to Yokosuka Navy Base

Political season:
8) Shinzo Abe now has over 300 supporters in the LDP who want him to
be next prime minister
9) Abe if elected prime minister plans summit meeting with Chinese
leader at APEC conference in November
10) Abe's pledge to create a Japan-style NSC aimed at strengthening
the US-Japan alliance
11) Foreign Minister Aso, also in the LDP presidential race, comes
down in favor of use of right to use collective self-defense
12) Anti-Abe forces in the LDP uniting under Koichi Kato and Taku
Yamasuki in foreign policy study group

Ozawa in action:
13) Minshuto (Democratic Party of America) President to visit the US
starting Sept. 3
14) Ozawa's "safety net policy" would cut in half the income and
fixed-property taxes

15) Yasukuni Shrine's controversial Yushukan war museum to tone down
exhibits that "invite misunderstanding" about US' wartime strategy


16) US beef demand still slack a month after imports resumed with
only 42 tons shipped

17) Cabinet Office poll shows 45% of adults condone buying fake
brand goods because they are cheap and easily available

Articles:

1) TOP HEADLINES

Asahi, Yomiuri, and Sankei:
Pluto no longer a planet under new guidelines, downsizing the solar
system to eight planets

Mainichi:
Yokohama hospital allowed unlicensed midwives to practice for over
40 years

Nihon Keizai:
Listed firms' rate of liability dependence falls to below 30%

Tokyo Shimbun:

TOKYO 00004866 002 OF 010


Justice Ministry to place crime victim advisers to provide
information and assistance starting in fiscal 2007

Akahata:
Japan Post to postpone abolishing mail-collection-and-delivery post
offices due to strong local opposition

2) EDITORIALS

Asahi:
(1) Wrongly held driver acquitted after 10 months
(2) Full-time jobs need to be increased

Mainichi:
(1) Capping interest rates: Special measures not a base
(2) Middle school efforts to prevent stealing of umbrellas

Yomiuri:
(1) Asian trade partnership will test diplomacy
(2) Shredder accidents revealed need to take greater safety
measures

Nihon Keizai:
(1) Japan must display leadership in Asia economic diplomacy

Sankei:
(1) Shredder accidents revealed unexpected dangers
(2) Prison guard scandal: Eliminate collusive system

Tokyo Shimbun:
(1) Nuclear nonproliferation takes persistent efforts
(2) Tsukuba Express marks first anniversary

Akahata:
(1) Historical views dangerous

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 24

NIHON KEIZAI (Page 2) (Full)
August 25,2006

10:56
Met at Kantei with former Finance Minister Shiokawa and Yasutaka
Kojima, visiting professor at Bukkyo University.

11:21
Met high school students, International Science Olympics winners.
Met afterwards with Deputy Chief Cabinet Secretary Futahashi.

12:01
Met with Education Minister Kosaka.

14:00
Met with Land, Infrastructure and Transport Minister Kitagawa,
followed by the Foreign Ministry's Deputy Minister Nishida and
European and Oceanian Affairs Bureau chief Harada.

15:55
Met with former Iranian President Khatami.


TOKYO 00004866 003 OF 010


16:44
Met with Cabinet Intelligence Director Mitani, JDA Defense Policy
Bureau chief Ofuru and Defense Intelligence Headquarters chief
Mukunoki.

17:07
Met with Internal Affairs and Communications Minister Takenaka,
followed by UNESCO Secretary General Matsuura and Japanese
Ambassador to UNESCO Sato. Met later with Agriculture, Forestry and
Fisheries Minister Nakagawa.

18:43
Had a haircut at the barber in Capital Tokyu Hotel.

19:36
Returned to his official residence.

4) Prime Minister returns to duty after spending nine days of summer
vacation lounging around and watching high-school baseball
tournament on TV

TOKYO SHIMBUN (Page 2) (Full)
August 25, 2006

Prime Minister Junichiro Koizumi yesterday returned to his official
duty after nine-days of summer vacation.

The prime minister appeared at the Kantei before 11:00 a.m., saying
to reporters: "Long time no see." He received a courtesy call by 16
prizewinners in the International Science Olympics, a world
convention for high school students.

After visiting Yasukuni Shrine on Aug. 15, the day marking the end
of World War II, the prime minister took summer vacation starting on
Aug. 16. He shut himself up in his official residence for eight
days. The prime minister told reporters: "I was lounging around,
listening to music and reading books. I enjoyed watching the
high-school baseball on TV and was impressed."

5) Hatami to Koizumi: "Settling Iran nuclear issue through talks is
desirable"

TOKYO SHIMBUN (Page 2) (Full)
August 25, 2006

Prime Minister Junichiro Koizumi met with former Iranian President
Mohammed Hatami at the Kantei yesterday.

In reference to Iran's nuclear development issue, Hatami said:

"The issue should be settled through negotiations. A hasty attempt
to resolve the issue will only lead to allowing extremism to gain
influence in Iran. I hope Japan will play a positive role to that
end."

Prime Minister urged Iran to accept the package of incentives
drafted by the permanent member nations of the United Nations
Security Council and Germany, saying: "It is important for Iran to
maintain the cooperative system with the international community.

6) Government to subsidize half of uranium development cost as
measure to secure fuel for nuclear plants

TOKYO 00004866 004 OF 010

SANKEI (Page 1) (Excerpts)
August 25, 2006

The government yesterday decided to move ahead with a plan to
promote the exploration of uranium by Japanese companies in
uranium-producing countries. The aim is to secure uranium fuel for
nuclear power generation. It will finance 50% of such costs starting
next fiscal year. The government will also strengthen cooperative
relations with Kazakhstan, which has the world's second-largest
uranium reserves, by providing technologies for uranium exploration
and the construction of a nuclear plant. Demand for uranium is now
high, following the construction of nuclear plants in China and
India. Since uranium prices continue to be high, the government has
determined that it is indispensable to strengthen relations with
uranium-producing countries and take part in development projects in
producing countries.

The Ministry of Economy, Trade and Industry (METI) and the Natural
Resources and Energy Agency will include 1.3 billion yen for
overseas uranium exploration projects in their fiscal 2007 budget
requests. They also plan to add Kazakhstan to Vietnam and Indonesia
on the list of countries eligible for assistance for the
introduction of nuclear plants. Prime Minister Koizumi, who is
scheduled to visit Kazakhstan on the 28th, will announce assistance
to that nation. Japan's cooperation on nuclear power will thus be
incorporated in a joint statement.

There are 474 million tons of confirmed uranium reserves worldwide.
Kazakhstan has the second-largest reserves of 810,000 tons,
following Australia's 1.14 million tons. Its reserves greatly exceed
those of Canada (440,000 tons) and the US (340,000 tons). However,
exports to Japan have been below 1% of its total export volume.

7) 3 US Navy Aegis ships deploying to Yokosuka

YOMIURI (Page 4) (Full)
August 25, 2006

The US Navy will deploy three Aegis-equipped vessels to its Yokosuka
base in Kanagawa Prefecture within the year, Defense Agency
Administrative Deputy Director General Takemasa Moriya told a press
conference yesterday. The three ships are loaded with the Standard
Missile 3 (SM-3), a sea-based intercept missile. The first one is
the USS Shiloh, which will arrive at Yokosuka on Aug. 29.

8) 2006 LDP presidency: Abe likely to get support from over 300
party members; His victory now certain

SANKEI (Page 2) (Excerpts)
August 25, 2006

Factions in the Liberal Democratic Party (LDP) decided yesterday on
their stance of whom they would back in the Sept. 20 party's
presidential election. As a result, the factions of Mori, Niwa-Koga,
Ibuki, and Nikai have made it clear to support Chief Cabinet
Secretary Shinzo Abe. Meanwhile, the Tsushima and Yamasaki factions

SIPDIS
have decided to let their members cast their votes independently.
However, many in the Tsushima faction favor Abe. Therefore, more
than 300 of the 403 LDP lawmakers will likely back Abe in the
September presidential race. It has become certain that Abe will win
in a landslide since the expectation is that a number of the LDP

TOKYO 00004866 005 OF 010


rank-and-file member votes will go to him.

Movements in LDP over the presidential race

Factions backing Abe
Mori faction (86 members)Niwa-Koga faction (48); part of the 48
supports Tanigaki or AsoIbuki faction (32)Nikai group (15)Members
with no factional allegiance (71); most of the 71 back Abe.

Factions letting their members cast their votes independently
Tsushima faction (74); majority of the 74 supports Abe.Yamasaki

SIPDIS
faction (36), including supporters for Abe and for Tanigaki

Faction backing Sadakazu Tanigaki
Tanigaki faction (15)

Faction supporting Taro Aso
Kono group (11)

Undecided
Komura faction (15); most of the 15 back Abe.

Abe approves Yanagisawa to head his election strategy headquarters

In his meeting yesterday with former economic planning agency chief
Koji Omi, a Mori faction member, Chief Cabinet Secretary Shinzo Abe
accepted his suggestion that Hakuo Yanagisawa, former Financial
Services Agency chief, be picked as chief of his election strategy
headquarters for the September party leadership race.

9) Japan-China summit may take place as early as November; Abe
considers meeting at APEC in Vietnam

MAINICHI (Page 1) (Full)
August 25, 2006

Chief Cabinet Secretary Shinzo Abe yesterday started coordination to
hold a Japan-China summit before the end of this year on the
assumption that he will assume the prime ministership after winning
the presidential election of the ruling Liberal Democratic Party
(LDP) in September. He hopes to realize a summit on the sidelines of
the Asia-Pacific Economic Cooperation (APEC) conference scheduled
for November in Vietnam. Abe and his aides believe that if Abe does
not visit Yasukuni Shrine before the end of this year, since he
already visited there in April, it will be possible to pave the way
for the summit.

LDP Policy Research Council Chairman Hidenao Nakagawa pointed out in
a speech in Naha City, Okinawa, the same day that there were moves
on the Chinese side seeking for improvement in bilateral relations,
stating:

"If a Japan-China summit is realized taking advantage of the APEC
conference and other occasions, this will serve Japan's national
interests. China released a statement on Aug. 18 calling on both
Japan and China to make efforts for opening summits."

Summits between the top leaders of Japan and China have been
suspended since Prime Minister Junichiro Koizumi and President Hu
Jintao held one in April 2005 on the sidelines of the Asia-Africa
summit conference held in Jakarta, Indonesia.


TOKYO 00004866 006 OF 010


10) Abe to set up National Security Council in Kantei, aiming for
stronger alliance with US

ASAHI (Page 2) (Abridged)
August 25, 2006

Chief Cabinet Secretary Abe is advocating setting up a National
Security Council (NSC) as a campaign pledge in his manifesto for the
ruling Liberal Democratic Party's upcoming presidential election.
This NSC initiative is intended to strengthen the Japan-US alliance.
The Koizumi cabinet has also studied it since 2002 with the goal of
strengthening the functions of the prime minister's office and
fulfilling crisis management and civilian control. However, there
are many challenges in store for the initiative, such as what to do
about its staffing and budget, as well as how to change politicians'
way of thinking.

The LDP held a convention of its southern and northern Kanto blocs
on Aug. 22, in which Abe noted that the foundation of Japan's
foreign and security policies is its bilateral alliance with the
United States. Abe also suggested the need for Tokyo to hold
periodic and strategic dialogues with Washington. "I hope the White
House and the prime minister's office can hold such dialogues, so
we'll have to create an organization at the prime minister's office
like the United States has the NSC at the White House," Abe said.

According to government officials, the prime minister's office and
the White House have had more direct dialogues since the September
2001 terrorist attacks in the United States. Abe has also held
frequent talks with White House National Security Adviser Hadley
over the telephone since he became chief cabinet secretary in
October 2005. Abe also thinks he has obtained results, such as a
United Nations resolution against North Korea's firing of ballistic
missiles.

The government, according to an official, has considered a Japanese
version of the NSC to reduce red tape and overcome bureaucratic
sectionalism and create political leadership. "It was not for the
purpose of strengthening the Japan-US alliance," the official said.
The Cabinet Secretariat had the National Institute for Defense
Studies, a think-tank of the Defense Agency, conducted a yearlong
study from April 2002 of NSC-related entities in major countries,
such as Britain, the United States, China, and South Korea, laying
emphasis on how to create a comprehensive national security
strategy.

Abe, meanwhile, will have to clear a number of challenged to
establish a new security body like the NSC at the White House. One
of the challenges is staffing. The US government has been proceeding
with the interdepartmental unification of intelligence functions. In
2005, the US government established the Office of the Director of
National Intelligence (DNI). The DNI briefs the president every
morning on the latest classified information and analytical
findings. In addition, the DNI also distributes three daily reports
to US government officials. The DNI is staffed with more than 60
personnel, excluding those seconded from other US government
offices.

In the meantime, the Cabinet Secretariat's staff for security and
crisis management is made up of about 100 personnel. However, its
full-time staff numbers only 10. Based on the 2002 study, there were
calls from within the government for increasing its staff to 30 or

TOKYO 00004866 007 OF 010


so. However, its staff has yet to be increased due to its budget
slot and opposition from other government offices.

11) Aso positive about collective defense

YOMIURI (Page 2) (Abridged)
August 25, 2006

Foreign Minister Aso, who has now announced his candidacy for the
ruling Liberal Democratic Party's presidential election, took a
positive stance in an interview yesterday about allowing Japan to
exercise the right of collective self-defense, which is prohibited
under the government's constitutional interpretation. "I don't know
why Japan cannot use it since it already has that right," Aso said.
"If the country is destroyed as a result of abiding by the law,
that's wrong," he added.

Aso also raised a question about the government's current
interpretation of constitutionality over its prohibitions against
the right of collective self-defense, saying, "It's strange that
even if a US ship comes under terrorist attack in the Indian Ocean,
a Self-Defense Forces ship is not allowed to fight back against
those who attacked." Aso also said, "We're asking for help when
we're attacked, but we're saying we don't care about our ally's
ship." He added, "I wonder if that's acceptable in the international
community."

12) 21 LDP anti-Abe lawmakers launch study group on foreign policy
under Kato, Yamasaki, to indirectly support Tanigaki

ASAHI (Page 4) (Full)
August 25, 2006

Liberal Democratic Party members critical of the Asia policy of
Prime Minister Koizumi and Chief Cabinet Secretary Abe yesterday
launched a group calling itself "the study group on visions for Asia
diplomacy." The group is chaired by former LDP Secretary General
Koichi Kato, with Hajime Funada, a member of the Tsushima faction,
as acting chairman. Its inaugural general meeting brought in 21
lawmakers, also including former LDP Vice President Taku Yamasaki
and Seiichiro Murakami, a Komura faction member. The group decided
in the meeting to release after the LDP presidential election a set
of recommendations on foreign policy that gives priority to Asia.
The decision stems from the view that "Prime Minister Koizumi's
foreign policy places too much weight on the Japan-US alliance," as
Yamasaki said.

The group is composed mainly of members of the Yamasaki faction and
the Tanigaki faction, with nine and seven joining the inaugural
meeting, respectively. The Mori faction, the Ibuki faction, and the
Nikai group have expressed support for Abe as the next prime
minister. No one from these factions has joined. The group aims to
indirectly support Finance Minister Tanigaki, who has stressed in
his election campaign the need to place importance on Asia.

13) Ozawa to leave for US on Sept. 3

YOMIURI (Page 4) (Full)
August 25, 2006

Ichiro Ozawa, president of the leading opposition Democratic Party
of Japan (Minshuto), will visit the United States on a five-day

TOKYO 00004866 008 OF 010


schedule from Sept. 3. He will participate in the Japan-America
Grassroots Summit to be held in Colorado.

14) Minshuto head Ozawa releases policy platform in run-up to party
presidential race; 50% cut in income, local taxes; Emphasis on
employment, agricultural administration

YOMIURI (Page 1) (Full)
August 25, 2006

Democratic Party of Japan (DPJ = Minshuto) head Ozawa yesterday
released a package of basic policy proposals, which he will present
for the party presidential election to be announced on Sept. 12. The
package characterized employment policy and agricultural
administration as key policy items with the slogan "establishing a
safety net suitable for Japan." Regarding the tax system, Ozawa
proposed large-size tax breaks, including 50% cuts in the income and
residential taxes from the present level, and turning the
consumption tax into a welfare purpose-tax. Regarding the diplomatic
field, the package called on Japan to positively take part in peace
activities by the United Nations, based on its request.

Ozawa is certain to be reelected in the presidential election. He
intends to promote intra-party debate, based on his policy platform,
and reflect the outcome in Minshuto's commitments to the Upper House
election next summer.

Regarding the image of the state Minshuto will aim at, the package
advocated the realization of a fair country, based on the ideal
"coexistence."

As employment measures, the package noted that the lifetime
employment system should be maintained, and the mandatory retirement
age should be extended to 65. Regarding agricultural administration,
an income guarantee system for all farm households would be
established, based on the target that the food self-sufficiency rate
should be raised to 100%.

The aim of the target for bringing down the income and residential
taxes 50% is to boost consumption by the people and bring about the
economy's sustainable stable growth. According to the proposal, the
income tax rates would be simplified from the present four steps -
10-20-30-37 % - to three steps - 5-1-20%. The name of the tax
(shotoku) will be changed to the shunyu (= income) tax. The package
does not refer to resources to fund tax cuts.

Various tax reductions would be abolished. A child allowance would
instead be introduced. The first child would receive 20,000 yen per
month, 40,000 yen for the second child and 60,000 yen for the third
child. The package thus gave consideration to the need to deal with
the nation's declining birthrate.

In the diplomatic area, the platform indicated a desire to improve
Japan-China and Japan-South Korea relations, noting that Japan as a
member of Asia should attach importance to the construction of a
relationship of trust with various Asian nations, including China
and South Korea.

15) Yushukan to make changes due to misleading display descriptions
regarding America's WWII strategy

SANKEI (Page 1) (Excerpts)

TOKYO 00004866 009 OF 010


August 25, 2006

The Yushukan war history museum run by Yasukuni Shrine has begun
reviewing part of the descriptions on the displays of the United
States' strategy during World War II, the reason being that some of
the expressions are misleading. Even some commentators who support
Yushukan's historical views have pointed out that the descriptions
in question were one-sided. As a result, the museum has decided to
make changes to the descriptions, admitting that there were some
subjective expressions. It is extremely rare for the museum to make
major such changes to its displays.

Changes will be made to the part titled "Roosevelt's great strategy"
that explains America's WWII strategy.

This part begins with an explanation on America's economic plight:
"Franklin D. Roosevelt, in his third term as US President, was
struggling with the US economy which had not recovered during the
Depression."

The description also suggests that there was anti-war public opinion
in the United States: "Roosevelt, having anticipated a war would
break out from early on, decided in 1939 that the United States
would join Great Britain to fight a war against Germany, but he
encountered hard resistance from anti-war sentiments among the
American public."

The description continues: "The only option available to Roosevelt,
who was promoting a 'victory plan' to prepare for war that involved
providing military assistance to Great Britain and China, was to
drive resource-poor Japan into a tight corner with a trade embargo
to force it to wage a war. The US economy totally recovered due to
its participation in the war." This part can be taken to mean that
the US pressed Japan to open war in order to turn round the US
economy. Yushukan reportedly began considering reexamining such
descriptions around April and started reviewing them seriously in
July.

16) A month after removal of embargo, 42 tons of US beef so far
imported: Retailers backing off due to BSE concerns

MAINICHI (Page 9) (Full)
August 25, 2006

Administrative Vice Agriculture Minister Yoshio Kobayashi yesterday
told a news conference that the total of US beef imported as of
August 23 a month after the lifting of an embargo is approximately
42 tons or 18 shipments. When the first ban was lifted last
December, 663 tons passed customs in a one-month-period until the
second ban was placed. Consumer concerns about the safety of US beef
are now stronger than the previous time. This appears to be the
background of retailers backing off importing US beef.

Though the first ban was removed on Dec. 12 last year, a ban was
reimposed on January 20, following the discovery of specified risk
materials (SRM), which are believed to be the cause of BSE, in
shipments that arrived at Narita Airport.

17) Cabinet Office survey on fake brand-name products: 45% tolerate
purchase of fakes

ASAHI (Page 4) (Full)

TOKYO 00004866 010 OF 010


August 25, 2006

In "a special survey on intellectual property" released yesterday by
the Cabinet Office, 45% of respondents said they tolerate the
purchase of fake brand-name products, citing their lower prices. If
one brings counterfeit products into the nation for business
purposes, the transportation itself constitutes a violation of the
Commercial Code, but bringing in such products on an individual
basis is acceptable even legally. Many travelers therefore bring in
fake brand-name products. The Cabinet Office has sent out a message
saying: "We want people to know that the transportation of
counterfeit products infringes on intellectual property rights." The
survey was conducted of 3,000 people aged 20 or over on July 20. Of
them, 60% responded.

In a question asking about an attitude toward fake products, 47.4%,
more than in a similar survey in July 2004 (39.6% ), replied: "We
should not buy fakes for any reason." But those who responded
favorably to the purchase of fakes accounted for 45.2%, almost the
same as in the previous survey (46.9% ). As the reason for
tolerating the purchase of fakes, "the prices are lower than those
of the real things" accounted for 29.7%, followed by "they have
different designs and styles from the real things with 9.8%, and
"fake goods are publicly sold" with 5.6%.

DONOVAN

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