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Cablegate: Japanese Morning Press Highlights 08/28/06

DE RUEHKO #4895/01 2400116
P 280116Z AUG 06





E.O. 12958: N/A


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1) Top headlines 3
2) Editorials 3
Prime Minister's weekend schedule: None

Iran problem:
3) Visiting former Iranian President Khatami warns of "new crisis"
if sanctions imposed on his country
4) Iran warns Japan that other countries are waiting if it pulls
back from Azadegan oil field project
5) Mitsutoyo Company also illegally exported nine other military-use
units Iran, as well

6) Japan planning to work on countries friendly to North Korea to
urge it to return to six-party talks, abduction talks

7) South Korea again planning maritime survey in disputed waters
near Takeshima isles

8) Prime Minister Koizumi departs today for central Asia tour

Defense and security affairs:
9) Government decides to extent anti-terror law a year to allow
continued refueling of US, British vessels in Indian Ocean
10) USFJ to participate in Tokyo's disaster-prevention drill on
Sept. 1 at governor's request
11) Foreign Minister Aso in LDP presidential campaign comes out in
favor of Japan's use of collective self-defense
12) Chief Cabinet Secretary Abe in election campaign wants permanent
law for overseas SDF dispatch as Japan's international contribution

13) Abe calls for strategic dialogue of Japan, US, Australia

Political agenda:
14) In poll of LDP secretaries general from local chapters, 66% see
key campaign debate as income disparity issue
15) Komura faction now supports Abe candidacy
16) Prime Minister Koizumi insisted on Sept. 22 Diet reopening in
order to allow new prime minister Abe chance speedily firm up his
administration, key posts
17) Minshuto (Democratic Party of Japan) working on former LDP
postal rebels, Social Democratic Party to cooperate in Upper House
election to crush LDP

18) Japan-Philippines FTA negotiations: auto tariff scrapping will
be put off, revisited in 2009



Health, Labor, and Welfare Ministry to put emphasis on easing pain
for cancer patients

Mentally incompetent arsonist who was kept in hospital for three
months unable to receive compensation due to Fukuoka High Court's


TOKYO 00004895 002 OF 010

Public schools to be ranked on a scale of five

Nihon Keizai:
Firms bought 1.68 trillion yen worth of their own stocks in Apr-Jul
quarter to protect against takeover bids, M&A

Special tourist railway to bring trains back to Usui Pass

Tokyo Shimbun:
Oji paper gives up bid for Hokuetsu

60-year-old Oki Electric Industry employee wins continued


(1) Tax reform: LDP presidential candidates must discuss tax hikes
(2) Niigata plebiscite 10 years ago must not be used as a tool for
municipal merger

(1) New CPI: Prices of some products dropping
(2) Gifu slush fund scandal destroyed public trust

(1) Cell phone number portability: Not everything is portable
(2) Rising labor costs may dim China's appeal

Nihon Keizai:
(1) Expectations high for public procurements that are transparent
and fair
(2) Koizumi must play up Japan's leadership in Central Asia

(1) Deployment of USS Shiloh: Right to collective defense must be
(2) Visit to China by members of Association of the Families of
Victims of Kidnapped by North Korea: Tighten noose around North

Tokyo Shimbun:
(1) Scandals involving local governments: Greater awareness
(2) Eliminate doping in sports

(1) Painful plan must not be pressed on Okinawa

3) Khatami warns of "new crisis if sanctions imposed on Iran" over
nuclear issue

YOMIURI (Page 2) (Full)
August 28, 2006

In a press conference in Kyoto yesterday, visiting former Iranian
President Khatami reiterated his country's determination to continue
its nuclear development program, saying that the program is intended
for peaceful purposes as guaranteed under the Nuclear
Nonproliferation Treaty (NPT) and is not for military purposes. He

TOKYO 00004895 003 OF 010

then warned that if the United Nations Security Council imposes
economic sanctions on Iran in the event of Iran not suspending its
uranium enrichment program by the end of this month, "a new crisis
will be brought into the Middle East, and the measure will be proved
to be wrong."

Asked about the proposal by six countries, including the United
States, China, and Russia, to construct light-water reactors in
exchange for Iran's suspension of uranium enrichment, Khatami flatly
replied: "We cannot entrust (our energy policy) to an empty

4) Iran warns Japan: "China, Russia also eager to develop Azadegan
oil field

YOMIURI (Page 2) (Full)
August 28, 2006

Taketo Kudo, Teheran

Regarding the Azadegan oil field in the southwestern part of Iran,
for which Inpex Corp. of Japan has concession rights, the news
agency operated by the Iranian Petroleum Ministry released the
following statement by the president of the Oil Development
Technology Corporation under the state-run Iran Oil Corporation:

"Should Iran be unable to launch development of the oil field with
Japan by Sept. 15, we will launch efforts for joint development with
domestic firms, China, or Russia."

5) Mitsutoyo also exported nine sets of precision machines to Iran;
Business transaction since 1980s; Importers include military

TOKYO SHIMBUN (Top Play) (Excerpts)
August 26, 2006

The Public Safety Bureau of the Tokyo Metropolitan Police Department
has investigated Mitsutoyo, a leading precision measuring instrument
manufacturer based in Kawasaki City, over alleged illegal exports to
Iran. As a result, it was found yesterday that the company has
exported a total of nine precision machines to that nation since the
1980s. Some invoices carried the names of Iran's military
organizations. The investigation has thus unveiled that the company
has engaged in trade with Iran, a country suspected of nuclear
weapons development, for more than 20 years. Among the five who were
arrested, President Kazusaku Tezuka (67) and Managing Director
Hideyo Chikugo (66) are reportedly denying the allegations, while
three others, such as Vice Chairman Norio Takatsuji and three former
employees, have totally admitted the charges.

According to the investigation, Mitsutoyo exported precision
machines, including three-dimensional measuring instruments to Iran
- two in the 1980s, six in the 1990s and one in 2002. The exports of
precision measuring instruments and related software in 1997 and
2002 are suspected of being unlicensed export cases, a violation of
the Foreign Exchange and Foreign Trade Control Law.

Some business transactions between Mitsutoyo and Iran were carried
out through an Iranian trading company located in Shibuya Ward,
Tokyo, whose premise the Public Safety Bureau searched on the 25th.
The police seized some invoices that carried the names of Iranian

TOKYO 00004895 004 OF 010

military organizations, such as the "Revolution Defense Force."

The Public Safety Bureau suspects that the trading company might
have been a front company responsible for procuring goods for Iran's
military organizations.

6) Government aims to apply pressure on North Korea through friendly
countries over six-party talks, abduction issue

NIHON KEIZAI (Page 2) (Full)
August 28, 2006

In an effort to break the impasse in its stalled relations with
North Korea, the government will ask countries that have established
friendly ties with Pyongyang to increase mutual visits among their
senior government officials and provide information held by their
embassies in the North. By indirectly applying pressure on North
Korea through this, the government aims to bring about the
resumption of the six-party talks, as well as a settlement to the
abduction issue.

According to the Foreign Ministry, 155 countries have diplomatic
ties with North Korea, and 42 countries of them have set up their
diplomatic missions in Pyongyang, including 20 that also host North
Korea's missions.

Of the 42 countries, Prime Minister Junichiro Koizumi visited Sweden
in May. In August, he went to Mongolia on the 10th and will tour
Uzbekistan on the 29th. Foreign Minister Taro Aso also visited
Bangladesh in July and asked its government to urge the North to
suspend its missile launches.

In August, Defense Agency Director General Fukushiro Nukaga visited
Indonesia, and State Minister in charge of Science and Technology
Iwao Matsuda and Land, Infrastructure and Transport Minister Kazuo
Ktagawa visited Libya and Slovakia, respectively. Matsuda is the
first Japanese cabinet minister to have visited Libya. He affirmed
with leader Moamer Kadhafi that Japan and Libya would cooperate in
dealing with North Korea.

From overseas, Japan received the foreign ministers of Poland and
Egypt, the vice prime minister from Cambodia and others. In October,
the Bulgarian vice prime minister will come to Japan.

The Foreign Ministry has picked countries to which cabinet minister
will go based on the degree of their diplomatic relations with North

7) South Korea set to resume research activities near Takeshima in

TOKYO SHIMBUN (Page 1) (Excerpts)
August 28, 2006

It was learned yesterday that the South Korean government plans to
carry out research activities in waters near Japan again in
mid-October. The area covered by the survey plan is expected to
include the Japan-claimed exclusive economic zone (EEZ) around the
Takeshima islets and its territorial waters, as Seoul did in July.
The Takeshima islets (Dokdo in South Korea) are currently under
South Korean control.

TOKYO 00004895 005 OF 010

The Japanese government has already gained information about the
planned research activities. Tokyo and Seoul are coming closer to
starting negotiations on a plan to introduce a prior notification
system as part of efforts to avid a dispute over maritime surveys in
the water area. Given this, the government is concerned about the
recent moves by South Korea. Upon listening to detailed explanations
from Seoul at the Japan-South Korea EEZ demarcation talks slated for
early September in Seoul, the government intends to ask the Seoul to
exercise self-restraint.

Despite Japan's repeated protests, however, South Korea implemented
research activities in July to study the concentration of slat
contents in sea current in the Japan-claimed EEZ and its territorial

It therefore is uncertain if Seoul will accept Japan's request.
Should South Korea forcibly go through with the planned survey,
Japan will consider the possibility of undertaking its own marine
research activities in protest.

8) Prime Minister Koizumi to visit Central Asia today; Japanese
still remembered in Uzbekistan; Hard-working detainees built

SANKEI (Page 2) (Excerpts)
August 28, 2006

Prime Minister Junichiro Koizumi will visit Kazakhstan and
Uzbekistan in Central Asia starting today. During the trip, Koizumi
will hear the story of Japanese in Uzbekistan, which was once a part
of the USSR. Uzbeks are still grateful for the assets Japanese
detainees left after World War II.

Among the countries Koizumi will visit this time, the spotlight
tends to be focused on Kazakhstan, as it is drawing close attention
from the international community for its rich energy resources.
However, there is a major reason that made Koizumi to decide to
visit Uzbekistan.

Approximately 25,000 Japanese were sent to Uzbekistan from Siberia
from 1945 through 1946 after the end of World War II. These people
were housed in 13 camps and forced to labor. Nevertheless, Japanese
detainees left a favorable image on the people of Uzbekistan.
Pro-Japanese sentiment is strong in Central Asia, especially in

9) Antiterrorism law to be extended by another year

ASAHI (Page 4) (Abridged slightly)
August 26, 2006

The government decided on Aug. 25 to extend the Antiterrorism
Special Measures Law, scheduled to expire in November. Coordination
is underway to extend it for one year until November 2007. The
government aims to get a bill to extend the law approved in the next
special Diet session to be convened after the Sept. 20 LDP
presidential election. The final decision on whether to extend the
law will be made by the next prime minister. Chief Cabinet Secretary
Shinzo Abe, who is eager to enhance the Japan-US alliance and holds
a commanding lead in the LDP presidential race, has decided to
extend the law before launching his administration.

TOKYO 00004895 006 OF 010

The law provides legal grounds for the Self-Defense Forces to extend
rear-area support to the multinational forces in Afghanistan, such
as US and British vessels. In the wake of 9/11, the law took effect
in November 2001 as temporary legislation good for two years. It was
extended for two years in 2003. The law, which was extended for only
one year last year due to Koizumi's reluctance, is scheduled to
expire on Nov. 1.

The government has decided to extend the law once again, concluding
that the SDF's refueling mission in the Indian Ocean should be
continued for the sake of the Japan-US alliance, now that the SDF's
mission in Iraq, Japan's major assistance for the US, ended in

10) YOMIURI (Page 2) (Abridged)
August 26, 2006

US Forces Japan (USFJ) will participate in a disaster drill to be
conducted by the Tokyo metropolitan government on Sept. 1, Disaster
Preparedness Day, officials said yesterday. A US naval ship will
carry metropolitan government personnel as earthquake-affected
commuters to Kanagawa Prefecture. In addition, US military
helicopters will also deliver relief goods. USFJ cooperated in
relief operations for those affected in the Hanshin Earthquake of
the Osaka-Kobe area and the Chuetsu Earthquake of Niigata
Prefecture. However, this is the first time for USFJ to send troops
and naval vessels to participate in a local government's drill.

The disaster drill will be conducted in anticipation of a strong
earthquake that hits Tokyo and its metropolitan environs. It will be
conducted by 8 prefectural and municipal governments in the
metropolitan area, including Tokyo, with Prime Minister Koizumi
participating. USFJ will participate in the drill at the request of
Tokyo Governor Shintaro Ishihara. "They have bases nearby, so it
would be better to (ask them to) use their capabilities," Ishihara

The Tokyo metropolitan government presumes that it would be
difficult for up to approximately five million people, including
tourists, to get home in the event a major earthquake hits Tokyo and
its metropolitan environs. The metropolitan government plans to lift
elderly persons and children to prefectures near Tokyo through sea
or river routes in case transportation facilities are paralyzed or
arterial roads are cut off. The drill this time will also employ
ships for river and sea transportation.

USFJ will send a naval vessel to the port of Tokyo from its Yokosuka
base in the city of Yokosuka, Kanagawa Prefecture, to sealift 30
metropolitan government personnel to Yokosuka. In addition, two US
military helicopters deployed to the Yokota base, located in the
city of Fussa and other municipalities in the metropolis of Tokyo,
will airlift medical supplies and other relief goods to the training
site in Tokyo's Adachi Ward and to a heliport at USFJ's Akasaka
Press Center in Tokyo's Minato Ward.

"The fire department authorities and the Self-Defense Forces alone
cannot respond to the Tokyo earthquake, so we'd like to ask USFJ for
rear support," a metropolitan government official said.

11) Constitution should be reinterpreted for Japan's participation
in collective self-defense: Aso

TOKYO 00004895 007 OF 010

YOMIURI (Page 2) (Abridged)
August 28, 2006

Foreign Minister Aso, appearing on an NHK news program aired
yesterday, suggested the need for the government to reinterpret the
Constitution so Japan can exercise the right of collective
self-defense. "Japan has the right but cannot use it-that's the
government's interpretation (of the Constitution)," Aso said. "So,"
Aso added, "it would be more realistic to change such an

Aso, who has now announced his candidacy for the ruling Liberal
Democratic Party's forthcoming presidential election, is an advocate
of amending the Constitution. However, Aso took the position that
the nation should discuss the right of collective self-defense,
aside from constitutional revision, in order to make it possible for
Japan to exercise the right at an early date.

Among other LDP presidential candidates, Finance Minister Tanigaki,
basing his assertion on the government's constitutional
interpretation for years, has been insisting on the necessity of
going through constitutional revision in order to make it possible
for Japan to participate in collective self-defense.

12) Abe eager to establish permanent SDF deployment law

YOMIURI (Page 1) (Excerpts)
August 26, 2006

Chief Cabinet Secretary Shinzo Abe delivered a speech in a seminar
on the SDF Iraq mission's for reconstruction support, held at a
Tokyo hotel on Aug. 25 by the nonprofit organization US-Japan Link.
In the speech, Abe called for the establishment of a permanent law
to enable the overseas deployment of the SDF, saying:

"It's necessary to have a permanent law for (the SDF's overseas
deployment). By establishing such legislation, we could make a rapid
response (to an emergency). The Liberal Democratic Party is having
discussion on the issue, and the government needs to work toward
creating such legislation."

Defense Agency Director-General Fukushiro Nukaga also noted in the
same seminar:

"It's desirable to establish a general (permanent) law so that the
government could promptly respond at its own decision while seeking
approval from the Diet."

Regarding the SDF's overseas deployment, Japan has such legislations
as the UN Peacekeeping Activities Cooperation Law allowing SDF
personnel to be engaged in UN peacekeeping activates, the
Antiterrorism Special Measures Law, a time-limited legislation, and
the Iraq Humanitarian Reconstruction Support Special Measures Law.
Prime Minister Junichiro Koizumi has also expressed a similar view,
saying that the establishment of a permanent law, rather than a
special law or a law of specified duration, should be considered in
the future.

13) Abe advocates strategic dialogue among Japan, US, Australia, and

MAINICHI (Page 1) (Full)

TOKYO 00004895 008 OF 010

August 27, 2006

The Liberal Democratic Party's (LDP) Hokuriku and Shinetsu regional
chapters held a convention on Aug. 26 in Toyama City, inviting three
LDP presidential candidates. At the convention, Chief Cabinet
Secretary Shinzo Abe advocated a "strategic dialogue" among the

leaders and foreign ministers of Japan, the United States,
Australia, and India. He stated, "I think it would be good to create
a framework for dialogue to spread our sense of values, along with
India and other counties." He is expected to include this idea in
his policy platform, which he will announce on Sept. 1.

Japan, the US, and Australia have continued discussions on security
issues in the Asia-Pacific region and the world. Abe is looking to
check China by including India in the "strategic dialogue."

14) Poll of LDP local execs: 66% urge debate on how to correct
social divide

TOKYO SHIMBUN (Page 1) (Abridged)
August 27, 2006

With the ruling Liberal Democratic Party's presidential election
ahead, Kyodo News Service polled the party's local secretaries
general, including their deputies, in the nation's 47 prefectures.
In the survey, 31 persons or 66.0% picked the nation's social divide
between Tokyo and local areas for correction when they were asked
what they would like to be debated in the election. In addition,
they were also asked who they thought would be appropriate to become
their party's next president (as successor to Prime Minister
Junichiro Koizumi), and 29 persons gave specific names. Among them,
21 persons named Chief Cabinet Secretary Shinzo Abe. This shows that
Abe is leading all other candidates among the LDP's local executives
as well. They also voiced concerns about the race led by Abe, ahead
of next year's simultaneous local elections and House of Councillors

Meanwhile, five persons supported Foreign Minister Taro Aso and two
persons recommended Finance Minister Sadakazu Tanigaki. The LDP's
Kanagawa prefectural chapter executive was the only one to back up
Senior Vice Justice Minister Taro Kono, a lawmaker elected from
Kanagawa Prefecture. There were 18 persons who gave no answer or
picked two or more candidates.

In the survey, they were also asked if they thought the next prime
minister should pay homage at Yasukuni Shrine. In response, 14
persons answered "yes," with 9 persons saying "no."

15) LDP's Komura faction to back Abe in presidential election; Five
of 9 factions support Abe

ASAHI (Page 2) (Excerpts)
August 28, 2006

Factions in the Liberal Democratic Party (LDP) have decided on whom
they will back in the September party leadership race. With the
Komura faction's decision to support Chief Cabinet Secretary Shinzo
Abe, five of the nine LDP factions intend to back Abe. Adding new
House of Representatives members, who are called as "Koizumi's
children" to the number of five faction members, the number of LDP
members supporting Abe will make up more than a majority of the LDP
Diet members. Abe will certainly dominate his opponents since many

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in the Tsushima and Yamasaki factions, which will allow their
members to cast their votes independently, favor Abe.

The Komura faction held yesterday a study session in a Karuizawa
hotel, Nagano prefecture, in which the faction decided to support
Abe. Faction head Masahiko Komura, former foreign minister, told
reporters, "We considered who would be able to implement our
policies." He indicated that Abe's dominance in the race was a major
reason for his faction's decision.

16) Special Diet session to be convened on Sept. 22 to pave way for
Abe administration by avoiding confusion over personnel

ASAHI (Page 4) (Excerpts)
August 26, 2006

A decision to convene a special Diet session on Sept. 22 shortly
after the Sept. 20 LDP presidential election reflects the strong
wishes of outgoing Prime Minister Koizumi. Assuming that Chief
Cabinet Secretary Shinzo Abe will win the LDP presidency, Koizumi's
aim apparently is to pave the way for an "Abe setup" in anticipation
of a showdown with the Ozawa-led Minshuto (Democratic Party of
Japan) by avoiding as much confusion as possible in determining a
new lineup of LDP executives and forming a new cabinet.

Koizumi told reporters in Kyoto on Aug. 25: "The new LDP president
will be determined on Sept. 20, so I think the next (special) Diet
should be convened as soon as possible. Once the new LDP president
is picked, the focus will shift to forming a new cabinet, which will
be done by the person named prime minister in the Diet."

Given Abe's predominance in the LDP presidential race, the Kantei
side, including Koizumi and Abe, has begun studying a timetable
after the LDP presidential election. Koizumi and Abe compared their
schedules on Aug. 24.

The government and the ruling coalition considered a plan to convene
the Diet on Sept. 29. A government official explained, "The
timetable was moved up because it's better not to leave a gap
between the LDP presidential election and determining the new LDP
leadership and new cabinet."

17) Minshuto active in boosting election cooperation with SDP and
LDP rebels

MAINICHI (Page 2) (Excerpts)
August 28, 2006

The main opposition party Minshuto (Democratic Party of Japan) is
now actively working on strengthening cooperation with the Social
Democratic Party (SDP) and former Liberal Democratic Party (LDP)
rebels who bolted against the LDP's decision to privatize postal
services in single-seat constituencies up for grabs in next summer's
House of Councillors election. President Ichiro Ozawa played golf on
Aug. 22 with the former postal rebels. On Aug. 23, Secretary General
Yukio Hatoyama held talks with SDP Secretary General Seiji Mataichi
and the two agreed that their parties would cooperate in the Upper
House election, by jointly recommending candidates belonging to no
party in single-seat constituencies. The reason is that Minshuto is
concerned about a delay in selecting its own candidates. Since there
are mixed motives among those involved, it will be difficult for the

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two parties to form united front.

People's New Party head Tamisuke Watanuki, former trade minister
Mitsuo Horiuchi, and former METI minister Takeo Hiranuma, who played
golf with Ozawa, will all run in single-seat constituencies in
Toyama, Yamanashi and Okayama prefectures. Ozawa told Watanuki
during luncheon: "I'm counting on your cooperation in Fukui. We wish
to field a unified candidate in Ishikawa."

18) Scrapping of auto tariffs put on hold in FTA with Philippines:
Renegotiations on compact cars in 2009

NIHON KEIZAI (Page 3) (Excerpts)
August 28, 2006

Japan and the Philippines are aiming at signing a final agreement on
an economic partnership agreement (EPA), including a free trade
agreement (FTA). However, it was found that the unveiled specifics
of the final agreement have backed away from the original agreement
in principle on the total abolition of auto tariffs imposed by the
Philippines, the focus of the FTA talks. Tariffs on compact cars
will instead be kept intact until further negotiations in 2009.
Tariffs on large vehicles will be abolished only in stages. The
outlook is that the leaders of the two countries will sign the
agreement as early as September and that the accord will take effect
by the end of next year.

Japan and the Philippines agreed in principle on the signing of an
EPA in November 2004. They decided to eliminate tariffs on more than
90% of trade items. In the auto sector, they agreed to immediately
scrap tariffs on vehicles with a displacement of over 3,000 cc and
those on vehicles of less than 3,000 cc 2010. In the FTA that Japan
and Thailand agreed in principle on in September 2005, though,
Thailand kept its auto tariffs, which brought a sharp reaction from
the Philippines, leading to renegotiation on this point.

In this agreement, Japan made concessions to allow tariffs on
vehicles of more than 3,000 cc to be eliminated in stages by 2010
and for tariffs on compact cars to be reduced from 30% to 20% with
further negotiations in 2009.


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