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Cablegate: Japanese Morning Press Highlights 08/29/06

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UNCLAS SECTION 01 OF 09 TOKYO 004926

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 08/29/06

Index:

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

4) Prime Minister Koizumi begins Central Asia energy quest with stop
in uranium-rich Kazakhstan

Opinion poll:
5) Support rate of Koizumi Cabinet over last five years in Asahi
polls averaged 50%, second highest after short-lived Hosokawa
Cabinet
6) Secret of Koizumi's popularity as seen in polls is public's
belief that under him "the LDP has changed"

Defense and security affairs:
7) US Navy's SM3-mounted Aegis, the Shiloh, arrives in Yokosuka
today as part of MD deployment
8) Planned V-shaped runway for Camp Schwab beach area capable of
large-aircraft use during emergency: JDA vice minister
9) Nago city and Okinawa prefectural representatives stay away from
first meeting of government-prefecture consultative body on Futenma
relocation
10) Government proposes special resolution calling for permanent PKO
dispatch law

Political campaign:
11) Finance Minister Tanigaki comes out against reinterpreting
Constitution to allow use of right of collective self-defense
12) Peoples New Party head Watanuki, former postal rebel, rules out
cooperation with ruling camp in Upper House election next summer
13) Minshuto President Ozawa says he is ready to run for party
reelection in Sept.

14) Cabinet Office to declare next month the official end of
deflation in Japan

Articles:

1) TOP HEADLINES

Asahi:
Economy, Trade and Industry Ministry survey finds 89 deaths in 21
years from defective exhaust system of gas-heated baths

Mainichi:
Captain of fishing boat seized by Russia to be indicted by Sept. 7;
Two crewmembers expected to be released early

Yomiuri:
Economy, Trade and Industry Ministry releases 31 gas and electric
appliance safety measures, including mandatory accident reporting
system

Nihon Keizai:
Outstanding government bonds slow down due to rising tax revenues
and growing consumption

Sankei:
Social Insurance Agency to punish 1,752 staffers over pension
scandal

TOKYO 00004926 002 OF 009

Tokyo Shimbun:
METI orders Paloma to recall up to 24,000 heaters over CO poisoning
and report all accidents

Akahata:
Monk who distribute JCP leaflets acquitted in trespassing case

2) EDITORIALS

Asahi:
(1) Court decision to acquit a leaflet-distributing monk reasonable
(2) Make no loopholes for consumer loan companies

Mainichi:
(1) Central Asia diplomacy: Lead the way to open regional
cooperation
(2) Political flyer distribution case: Protecting freedom of
expression takes innovative ideas

Yomiuri:
(1) Soaring fuel costs hit bus, taxi businesses
(2) Food and radiation: Do not regard necessary technology as taboo

Nihon Keizai:
(1) Companies must stop illegal exports by own efforts
(2) Eliminate drunken driving

Sankei:
(1) Drunken driving a vicious crime comparable to homicide
(2) Coexistence of music distribution and CDs requires wisdom

Tokyo Shimbun:
(1) Flyer distribution case: Police control partial
(2) Illegal exports a threat to peace

Akahata:
Victory of freedom of speech, social commonsense

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 28

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

09:18
Left Haneda Airport for Central Asia on government plane.

Afternoon(Local time)
Arrived at Astana International Airport in Astana, Kazakhstan.

Evening
Attended welcoming ceremony at the presidential palace. Held summit
with President Nazabayev. Attended signing ceremony and joint press
conference.

Night
Attended dinner party hosted by the president. Toured Baiterek
Tower. Stayed at Rixos President Hotel.

4) Koizumi agrees with Kazakh president to boost cooperation for

TOKYO 00004926 003 OF 009


uranium development in attempt to check moves by China, Russia over
resources, security

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

Yasuhiro Otaki, Astana

Prime Minister Junichiro Koizumi and Kazakh President Nursultan
Nazarbayev issued a joint statement on Aug. 28 saying that the two
countries would boost cooperation to develop natural resources,
including uranium. Koizumi became the first Japanese prime minister
to visit Central Asia. He will visit Uzbekistan on Aug. 29. The
prime minister's visit to Central Asia is aimed at playing up
Japan's presence in the region, which is blessed with rich natural
resources. The region is also strategically important from the
standpoint of global security. Japan is likely to face intensifying
maneuvering over resources and security from China and Russia, which
have long ties with the countries in the region.

The Koizumi-Nazarbayev meeting lasted for about one hour at the
Presidential Palace in Astana, the capital of Kazakhstan. Koizumi
said: "This visit reflects the Japanese government's desire to
deepen cooperative relations with Kazakhstan." Nazarbayev replied:
"I would like Japanese firms to invest in our nation."

Kazakhstan has the second-largest deposits of uranium. Koizumi
proposed that Japan would help the nation excavate mines and turn
uranium into nuclear fuel. Both countries will soon launch work to
sign an atomic energy deal. Japan now imports uranium mainly from
Australia and Canada. It hopes to diversify supplies. The joint
statement says: (1) Japan will accept about 2,000 students from
Central Asia over the coming three years; and (2) the two countries
will hold periodic talks on the North Korean situation and other
issues.

Central Asia, situated near Iraq and Afghanistan, is a strategically
key region for global security. Japan's deepened ties with the
region will contribute to indirectly supporting the US-led fight
against terrorism. In addition, Japan also aims to prevent China and
Russia from exerting greater influence in this region.

Japan's approach to the region is also consistent with the Central
Asian countries' diplomatic strategy. Although the region is blessed
with abundant natural resources, Russia has blocked the export of
gas. Cooperation with Japan and China is indispensable for them to
craft an advantageous strategy.

Even so, China and Russia have actually taken the lead in the
region. In 2001, the two countries established the Shanghai
Cooperation Organization (SCO) with Kazakhstan and Uzbekistan. Japan
set up a dialogue with four Central Asian countries in 2004. Japan
is competing with China and Russia over Central Asia diplomacy.

In the summit on Aug. 28, Koizumi said: "I would like to pay my
respects to Kazakhstan, which has taken a balanced diplomatic
approach by establishing friendly relations with the United States
and Europe while being situated between China and Russia." What the
Central Asian countries are pursuing, however, is omni-directional
diplomacy. They might in a sense be cashing in on the speculation of
Japan, China, and Russia.


TOKYO 00004926 004 OF 009


5) Poll: Koizumi cabinet ranks 2nd in average rating, sustained high
at 50%

ASAHI (Page 1) (Abridged)
August 29, 2006

The rate of public support for Prime Minister Koizumi-who will step
down in September-and for his cabinet was 47% in a telephone-based
nationwide public opinion survey conducted by the Asahi Shimbun on
Aug. 26-27. The nonsupport rate for the Koizumi cabinet was 36%. The
approval ratings for the Koizumi cabinet to date since coming into
office averaged 50%, the second-highest rate of popularity next to
that of the Hosokawa cabinet, which averaged 68%, among the cabinets
of Koizumi's postwar predecessors from Prime Minister Yoshida on.
The highest rate of public support for the Koizumi cabinet was 84%,
which was marked in May 2001, a month after Koizumi came into
office. The lowest rate was 33% in January 2005. Meanwhile, those
who think the nation's income and other economic disparities have
expanded accounted for 73% in the latest survey. Among them, 62%
answered that it has something to do with Koizumi's policy
measures.

Most postwar prime ministers eventually fell into disfavor and
stepped down. However, the Koizumi cabinet is a rare case, as its
public support rate is still at nearly 50% even in its closing days.
In the past, the Hosokawa cabinet, which was a coalition of non-LDP
parties, resigned en masse only eight months after its inauguration
when its support rate was 57%. In the case of the Murayama,
Hashimoto, Obuchi, and Mori cabinets, however, their respective last
approval ratings were far lower than their disapproval ratings.

In April 2001, the Koizumi cabinet set sail, standing at 78% in
public support. In February 2002, the Koizumi cabinet's support rate
nosedived to the 40% level, reflecting Koizumi's sacking of Foreign
Minister Tanaka. In September that year, however, his cabinet's
public support rebounded with his visit to North Korea. After that,
it again fell with his dispatch of Self-Defense Forces troops to
Iraq. In September 2003, however, Koizumi and his cabinet rose again
in popularity with his appointment of Shinzo Abe to the post of LDP
secretary general. In 2004, his cabinet was stagnant in public

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support, in part reflecting its lack of appropriate action for
pension reform. In 2005, however, Koizumi dissolved the House of
Representatives for a general election over his postal privatization
initiative and won a landslide victory. This year, its approval
ratings have been between 40% and 50%.

Average ratings for postwar cabinets
(From Prime Minister Shigeru Yoshida's cabinet on)

1. Morihiro Hosokawa 68%
2. Junichiro Koizumi 50%
3. Tsutomu Hata 47%
3. Toshiki Kaifu 47%
5. Hayato Ikeda 44%
6. Ryutaro Hashimoto 43%
7. Tanzan Ishibashi 41%
8. Yasuhiro Nakasone 40%
9. Eisaku Sato 38%
10. Tomiichi Murayama 37%
(Note) Figures rounded off. Surveyed only once for the Hata and
Ishibashi cabinet.


TOKYO 00004926 005 OF 009


6) Asahi Poll: 65% say Koizumi has changed LDP

ASAHI (Page 2) (Abridged slightly)
August 29, 2006

The Koizumi government has maintained unprecedented high popularity
as a Liberal Democratic Party cabinet. This seems to be ascribable
to high public regard for Prime Minister Koizumi's achievements in
reform and the judgment that he has changed the LDP. That the
economy has broken away from deflation also seems to have worked
favorably for Koizumi.

An opinion survey was conducted on Aug. 26-26 to gauge the public's
assessment of the Koizumi cabinet's achievements over the last five
and a half years. In the survey, 68% of respondents gave positive
assessments to the cabinet, with 12% giving extremely high marks and
56% fairly good marks. At the same time, 23% gave low marks, and 7%
gave extremely low marks. Evaluations were particularly high among
younger generations. Seventy-five% of respondents in their twenties
gave the cabinet high marks.

Forty-one% of respondents picked "administrative reform" out of four
options as policy that deserved high marks, apparently with postal
reform and highway corporation reform in mind. Forty-seven% cited
"pension and welfare" as policies that merit poor marks.

A total of 65% of respondents said they had "felt pain" from the
Koizumi reform drive, while 33% said they did not experience such.
Seventy-three% said social disparity, including an income gap, has
expanded. Nearly 80% of respondents in their forties and fifties
pointed to an expanding social disparity. In addition, 62% of them
-- mostly older people -- identified some kind of relationship
between the growing social disparity and Koizumi's policies, while
30% indicated no relationship between the two.

Despite the reform pain and the issue of social disparity, the
public did not deny the cabinet's overall achievements, however. In
fact, 66% of those who pointed out growing disparity and 78% of
those who felt pain gave positive assessments to the cabinet. With
the economy on a recovery tack, the poll exposed the public trend of
not denying the cabinet's achievements, while acknowledging its
negative sides.

Sixty-five% of all respondents -- 72% of male respondents -- also
said that Koizumi has changed the LDP. Of them, 59% expressed their
support for the cabinet, and 80% gave positive assessments to its
achievements.

"I have destroyed some special support organizations, believing the
interest of the public must come first. I have also destroyed the
factional recommendation and seniority system," Prime Minister
Koizumi has boasted. Such a stance of Koizumi seems to have
resonated with the general public.

7) US missile cruiser to arrive in Yokosuka today for 1st MD
deployment to Japan

MAINICHI (Page 3) (Full)
August 29, 2006

The USS Shiloh, a US Navy Aegis-equipped cruiser loaded with the
Standard Missile 3 (SM-3), a sea-based intercept missile, will be

TOKYO 00004926 006 OF 009


deployed to the US Navy's Yokosuka base in Kanagawa Prefecture
today. The SM-3, a missile defense (MD) system to shield Japan
against missile attacks, is actually capable of intercepting
ballistic missiles. The Shiloh is the first MD ship to be deployed
to Japan. With the Shiloh deploying to Yokosuka, Japan and the
United States are gearing up to build an MD shield system in the
wake of North Korea's firing of ballistic missiles.

Foreign Minister Taro Aso met with visiting US Navy Secretary Winter
yesterday at the Foreign Ministry. In the meeting, Aso welcomed the
Shiloh, saying its deployment will complement Japan's MD capability.
"We highly appreciate it," Aso told Winter.

The US Navy has three MD-capable Aegis vessels, including the
Shiloh. In response to North Korea's missile launches, the US Navy
will deploy three more SM-3 Aegis ships on the Pacific front. They
will be on stage around Japan as needed. The Maritime Self-Defense
Force will also mount the SM-3 on its Aegis ships. However, the
first one's renovation will be completed at the end of fiscal 2007.

Meanwhile, the US military plans to deploy the Patriot Advanced
Capability 3 (PAC-3), a ground-based intercept missile, to its
Kadena base in Okinawa Prefecture within the year. The Air
Self-Defense Force will also begin its PAC-3 deployment by the end
of the current fiscal year. The ASDF's PAC-3 deployment schedule
will be moved up with a substantial increase in the number of PAC-3
missiles, with consideration shown by the United States.

8) US military may deploy large warplanes to Futenma alternative in
times of emergency: vice defense minister

TOKYO SHIMBUN (Page 3) (Full)
August 29, 2006

The US military may use a newly planned air facility in Okinawa
Prefecture for its C-130 transports and other large-size military
aircraft during emergencies, Defense Agency Administrative Deputy
Director General Takemasa Moriya stated in a news conference
yesterday. The Japanese and US governments have finalized a report
on their talks over the realignment of US forces in Japan,
incorporating an agreement to build V-shaped airstrips in a coastal
area of Camp Schwab, a US military base in the city of Nago in
Okinawa Prefecture, to take over the heliport functions of the US
Marine Corps' Futenma Air Station currently located in the island
prefecture's city of Ginowan.

"We've yet to talk about what will become of it in times of
emergency," Moriya said. "If there's something they need to defend
Japan, we cannot tell them that we will refuse anything other than
small airplanes," he added.

Meanwhile, the Okinawa prefectural government has proposed
installing a ground-based heliport on the premises of Camp Schwab as
a temporary alternative for Futenma airfield. Okinawa is opposed to
the government's V-shaped tarmac plan, so Moriya's remarks will
likely incur an even stronger backlash from Okinawa.

9) Okinawa Prefecture, Nago City refuse to attend consultations on
Futenma relocation today

YOMIURI (Page 4) (Full)
August 29, 2006

TOKYO 00004926 007 OF 009

Okinawa Prefecture and Nago City decided early on Aug. 29 to refuse
to attend the government's proposed first meeting today of a
consultative organ made up of representatives from the government,
the prefecture and concerned municipalities to discuss the
relocation of US Marine Corps' Futenma Air Station in Ginowan City
to coast of Camp Schwab in Nago City. The reason is that Okinawa and
Nago have toughened their position because the Defense Agency turned
down their request to continue economic development measures for the
northern part of Okinawa. A senior prefectural government official
told reporters yesterday in Tokyo, "Environmental arrangements that
Okinawa people had sought have not be made."

The consultative organ had planned to discuss the construction plan
for an alternate facility for Futenma and regional economic
measures.

10) Overseas dispatch of SDF troops: Plan to adopt supplementary
resolution mentioning need for enactment of permanent law floated in
government circles

TOKYO SHIMBUN (Page 1) (Full)
August 29, 2006

The government will submit a bill extending the Antiterrorism
Special Measures Law, which expires in November, to the
Extraordinary Diet session to be convened in September. In a related
development, it was found yesterday that a plan had been floated to
adopt a supplementary resolution mentioning the need to enact a
permanent law that enables the overseas dispatch of Self-Defense
Forces (SDF) as needed.

Chief Cabinet Secretary Shinzo Abe, the front-runner in the Liberal
Democratic Party (LDP) presidential race, is in favor of enacting
such a law. However, there are many challenges to tackle before such
a law can be enacted, including compatibility with Article 9 of the
Constitution, which bans the use of force abroad. The prevalent view
is, therefore, it would be difficult to enact such a law at an early
date. Such being the case, the government appears to want to
demonstrate its determination to pave the way for the enactment of
such a law by adopting a supplementary resolution, which has no
binding authority.

The Antiterrorism Special Measures Law is a time-limited act
enabling the Maritime Self-Defense Force to supply oil to US
military vessels in the Indian Ocean. It has been extended each time
it expired. The government plans to submit a bill calling for its
extension by another year. The growing view in the government and
the LDP is that a supplementary resolution that mentions the need
for the enactment of a permanent law should be adopted from the
standpoint of eliminating this procedure, too.

An LDP subcommittee is expected to adopt a draft article on the
enactment of a permanent law before the end of the week. The Cabinet
Secretariat's international peace cooperation promotion team has

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also started considering the issue.

11) Tanigaki in policy platform opposed to change in interpretation
of Constitution to allow use of right to collective self-defense

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

TOKYO 00004926 008 OF 009

The outline of the policy platform of Finance Minister Sadakazu
Tanigaki for the Liberal Democratic Party presidential election was
revealed yesterday. The platform has this reference to
constitutional revision: "It is impossible to use the right to
collective self-defense under the current Constitution." Tanigaki
aims to demonstrate the difference in his stance from those of Chief
Cabinet Secretary Shinzo Abe and Foreign Minister Taro Aso, both of
whom have proposed allowing the use of the right by changing the
government's interpretation of the Constitution.

Tanigaki plans to announce the platform tomorrow. It is titled: "I
am determined to build a vital, trustworthy state" (tentative name).
The platform stresses the need to promote debate on a constitutional
revision in order to strengthen the function of monitoring
administrative authorities, based on the view that "it is now time
to discuss future options for the nation's governing system." On the
right to collective self-defense, Tanigaki, without touching on
Article 9 revision, underscores his stance of rejecting a change in
the interpretation of the Constitution: "The government long ago
adopted an interpretation that rules out the use of the right of
collective self-defense. Under the principles of the Constitution,
it is first necessary to form a (national) consensus." The platform
also includes measures to create a "hometown joint taxation"
system.

12) People's New Party head Watanuki rejects cooperation with ruling
coalition in Upper House election

YOMIURI (Page 4) (Excerpts)
August 29, 2006

Following the first anniversary of his party's foundation, People's
New Party representative Tamisuke Watanuki held a press conference
yesterday. Asked about the possibility of his party joining hands
with the ruling Liberal Democratic Party (LDP) and New Komeito, the
LDP's coalition partner, if the ruling coalition fails to secure a
majority in the House of Councillors in next year's election, he
rejected the idea, saying: "I don't think so. We cannot get together
behind closed doors regarding policies after fighting openly and
squarely."

Acting head Shizuka Kamei, who also took part in the press meeting,
lashed out at LDP presidential candidates Chief Cabinet Secretary
Shinzo Abe, Finance Minister Sadakazu Tanigaki, and Foreign Minister
Taro Aso. He said:

"Public works projects, closing the gap between rich and poor --
they are brazenly saying the opposite of what Koizumi has done.
They're a bunch of charlatans. If they'd reflect on what they've
done in the past, they'd all resign from the cabinet immediately."

13) Ozawa tells Kan and Hatoyama intention to seek reelection in
Minshuto leadership race and Asks their cooperation

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

Minshuto (Democratic Party of Japan) President Ichiro Ozawa
yesterday told Acting President Naoto Kan and Secretary General
Yukio Hatoyama that he would run in the September party leadership
race. The official campaign for the Sept. 25 presidential election

TOKYO 00004926 009 OF 009


will on Sept. 12. It was the first time for Ozawa to express his
intention to seek reelection.

Ozawa told Kan and Hatoyama: "I would like you to cooperate with me
because I want to run for the presidency." Kan replied, "I greatly
welcome your decision." Hatoyama also expressed his support for
Ozawa, saying, "You have done so much to bring our party together.
If you didn't run, we would be in trouble." Ozawa has already
clarified that he will retain them in their respective posts after
he is reelected. He will formally announce his candidacy in early
September and reveal his basic policy for the presidency.

14) Cabinet Office to declare end of deflation next month: Price
indexes continue their uptrend

YOMIURI (Page 1) (Full)
August 29, 2006

The Cabinet Office yesterday began looking into the possibility of
declaring an end to deflation in its monthly economic report for
September to be released in mid-September. The decision stems from
the steady uptrend of price-related indexes, such as a supply-demand
gap that indicates the difference between domestic demand and
supply, and consumer price indexes. The aim is to play up the
results of the Koizumi administration's management of the economy.
The Japanese economy is believed to have plunged into a deflationary
spiral in 1998, and it will have taken eight years to emerge from it
if such a declaration is issued.

The Cabinet Office will reach a final judgment on whether the
economy has climbed out of the deflationary period after vetting
gross domestic product (GDP) for the April-June quarter to be
released on Sept. 11.

Domestic demand is gradually increasing as the economy picks up. The
supply-demand gap for the April-June quarter (gap between actual GDP
and potential GDP, which is the amount that would be produced with
facilities and labor operating at normal output) marked 0.2%, the
third consecutive quarter of demand exceeding supply, an indication
that the economy is emerging from deflation.

The consumer price index (prices of general goods, excepting
perishable food) for July, released by the Ministry of Internal
Affairs and Communications (MIC) on the 25th, was up 0.2% over the
same month a year before, with the margin of increase declining
under the revised standard. A number of government officials are
opposed to the idea of issuing such a declaration, though, with MIC
Minister Takenaka noting, "Mild deflation is continuing." However, a
senior official at the Cabinet Office stated: "An upward trend has
been confirmed, and there is a strong possibility of it
continuing."

The government standard for determining the end of deflation is that
"prices have emerged from a period of continuing decline, and there
are no signs of a return to that situation." The government in its
July monthly report stated, "The present situation is not
deflation." The focus is on whether it can be confirmed that the
economy will not return to a deflationary state.

DONOVAN

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