Cablegate: Japanese Morning Press Highlights 09/13/06

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SIPDIS

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
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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 09/13/06

Index:

1) Top headlines

2) Editorials

3) Prime Minister's daily schedule

4) It is all smiles when Prime Minister Koizumi shakes hands with
Chinese premier at ASEM

5) Koizumi returns from his last overseas trip as prime minister

6) Chief Cabinet Secretary Abe's rejection of China's 1972 statement
of Japanese wartime leaders' responsibility likely to annoy Beijing

7) JETRO president, visiting Russia, creates local stir by saying
Northern Territories issue should not obstruct mutual economic
development

8) LDP support for Shinzo Abe as next prime minister tallied at 66
percent in Nikkei poll

9) Kyodo survey shows 56 percent of LDP supports Abe

10) In addition to Komeito's Fuyushiba, Abe cabinet may include
Upper House members Wakabayashi and Mizote

11) Abe in putting together his administration faces factional
pressure and need for generational change

12) Ichiro Ozawa "reelected" head of Minshuto (Democratic Party of
Japan) without a vote

13) Ozawa creates team to flesh out his policy vision

14) LDP and Abe blast Ozawa's policy vision as lacking vision

15) Environmental Minister Koike proposes disposal of CO2 on ocean
floor as solution to meeting warming gas-reduction target

Articles:

1) TOP HEADLINES
Asahi:
Major consumer loan firms received insurance money in 3,600
borrowers' suicide cases in FY2005

Mainichi:
Poll: 40 percent of 96 local governments have no penalties for drunk
driving

Yomiuri:
Health Ministry to conduct free health checks to detect
asbestos-related diseases

Nihon Keizai:
MIC eyes measures to allow local governments to issue debt-servicing
bonds

Sankei:

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Only 9 local governments dismiss employees for drunk driving

Tokyo Shimbun:
New prince named Hisahito

Akahata:
Government's tax panel chairman: Hike consumption tax in FY2009 and
reduce taxes on profit-making companies

2) EDITORIALS
Asahi:
(1)Reelection of Ozawa: Unity, policies to be tested
(2)Information-gathering satellite must be widely utilized

Mainichi:
(1)How will Ozawa respond to criticism "he is an old-type
politician"?
(2)LDP presidential election: Constitutional revision, Japan-US
Security Treaty must be cool-headedly discussed

Yomiuri:
(1)Restrictive principles on information-gathering satellite should
be reviewed
(2)Consider introducing reward system to facilitate resolution of
crime cases

Nihon Keizai:
(1)Minshuto head Ozawa urged to take more drastic policies
(2)Atomic furnace manufacturers, sit up straight!

Sankei:
(1)Ozawa should come up with specific policies
(2)Use acceptance of nurses from the Philippines as model for labor
market liberalization

Tokyo Shimbun:
(1)Minshuto head Ozawa now faces real fight
(2)Police should make efforts to improve investigation capability
before introducing reward system

Akahata:
(1)Don't support killing Iraqis

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, September 11 & 12

NIHON KEIZAI (Page 2) (Full)
September 13, 2006

Sept. 11
Night:
Left Vantaa Airport in Helsinki, Finland, aboard government plane.
Sept. 12
14:30:
Arrived at Haneda Airport.
15:02:
Made a return report at the Imperial Palace.
15:17:
Arrived at Kantei.
16:06:
Met Policy Research Council Chairman Nakagawa and later with Chief

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Cabinet Secretary Abe.
18:07:
Arrived at his residence.

4) Beijing asks ASEM to post photo of Japanese, Chinese premiers
shaking hands with smile on its official website

YOMIURI (Page 2) (Full)
September 13, 2006

The official website of the Asia-Europe Meeting (ASEM), which
convened in Helsinki on Sept. 11, carried a photo of Prime Minister
Koizumi and Chinese Premier Wen Jiabao shaking hands with a smile in
the conference hall. Relations between them have chilled over
Koizumi's visits to Yasukuni Shrine. However, they informally
greeted each other several times during the conferences on the 10th
and the 11th. No photos of them shaking hands were available from
any news organizations.

However, the official photographer of the Chinese government on the
11th reportedly took a close-up of the two premiers shaking hands.
According to the Finnish government, the host country, the Chinese
government on the afternoon of the same day provided the photo and
asked to post it on ASEM's website. The Finnish government agreed to
do so. Upon receiving a message from the Finnish government, a
Japanese government source said in Helsinki, "We take it a clear
message from China that it wants to repair relations with Japan."

5) Prime Minister Koizumi returns home from ASEM conference, leaving
impression of stalemated Asia diplomacy

MAINICHI (Page 5) (Excerpts)
September 13, 2006

Prime Minister Junichiro Koizumi returned home yesterday from a
conference of the Asia-Europe Meeting (ASEM). He has made the most
foreign trips of any Japanese prime minister. The visit to Finland
was his 51st and last foreign trip as prime minister. As he wrapped
up his five-and-a-half years of diplomacy, he left the impression
that the nation's Asia diplomacy is stalemated, symbolized by the
fact that his conversations with his Chinese and South Korean
counterparts at the meeting all took place while the leaders were
standing.

French President Chirac told Koizumi at the opening ceremony of the
conference, "I do not mean to interfere with your decision to step
down, but it is regrettable that you are leaving." Koizumi gave a
wry smile in response.

Koizumi, who has become a regular participant at international
conferences during his long term in office, drew attention in
Finland. During a joint press conference with Finnish Prime Minister
Vanhanen, local reporters asked Koizumi a barrage of questions. To a
question concerning Japan's relations with Asian countries, Koizumi
once again criticized China and South Korea, stating as he has in
the past, "I am not the one refusing to hold a summit." The prime
minister hastily included the signing of an economic partnership
agreement (EPA) with the Philippines in his schedule probably
because he wanted to play up his Asia diplomacy.

6) Abe nixes China's logic for diplomatic normalization with Japan

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MAINICHI (Page 2) (Full)
September 13, 2006

Chief Cabinet Secretary Shinzo Abe, meeting the press yesterday,
reiterated his rejection of China's logic regarding war
responsibilities. In 1972, Japan and China normalized their
diplomatic relations. On that occasion, China persuaded its people
by separating the responsibilities of Japan's war leaders and the
general public in those days. "I wasn't there, so I don't know what
they talked about," Abe said. "All I know is based on what I've
learned from (official) documents," he added.

China separated war leaders and the Japanese people in general, and
this is why Beijing has decried Japanese prime ministers for their
visits to Yasukuni Shrine, where Class-A war criminals are
enshrined.

Finance Minister Sadakazu Tanigaki criticized Abe's perception in
his press remarks yesterday. "Japan and China have talked with each
other at various levels," Tanigaki said. "He ignores everything,"
Tanigaki added, "He says that (he doesn't know) because it was not
written down on paper, but I wonder if it's all right to say things
like that in the process of building confidence." Abe rebutted, "I
disagree."

7) JETRO chairman's statement that the territorial issue must not
block economic development causes a sensation; Russian paper makes
expanded interpretation that Japan would make concessions

SANKEI (Page 2) (Excerpts)
September 13, 2006

Yasuo Naito, Moscow

During his recent business trip to Russia, Japan External Trade
Organization (JETRO) Chairman Osamu Watanabe stated, "The
territorial issue between Japan and Russia must not block the
economic development of the two countries." The statement, made
during a visit to Russia by a Japanese investment delegation he led,
has created a stir.

The Russian media reported the statement as a sign of Japan's
willingness to make concessions on the disputed four northern
islands off Hokkaido. The statement ended up sending a signal
different from Japan's traditional policy line of pursing progress
in politics and economics at the same time.

Watanabe became the first JETRO chairman to visit Russia since the
1992 Japan trade fair. He made the remarks in question at a press
conference that included Russian journalists, held in Moscow on
Sept. 4.

In the session, a Russian reporter asked Watanabe if the lack of a
peace treaty between Japan and Russia would have any effect on
economic development of the two countries. In response, Watanabe
said:

"It is important to exercise caution so as not let political issues
have a negative impact on economics. That is the responsibility of
the political leaders of the two countries. If the economic
development of the two counties would suffer from a harmful effect,
the leaders of both countries must make efforts to settle political

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issues to prevent that."

Although Watanabe called for "efforts by leaders of both countries,"
his statement seemed to have left the door open for an
interpretation that the Japanese government might make concessions
on the territorial issue for the sake of economic development.

In fact, the influential Russian daily Gazeta quoted Watanabe as
saying that the absence of a peace treaty was no longer an obstacle
to the economic development of Russia and Japan. The Watanabe
statement might result in a misconception that cooperation with
Japan would move forward without settling the territorial issue or
concluding a peace treaty.

8) Net polling on LDP race: 66 percent of LDP supporters favor Abe

NIHON KEIZAI (Page 2) (Abridged)
September 13, 2006

The Nihon Keizai Shimbun conducted the second Internet-based public
opinion survey on Sept. 8-10 about the ruling Liberal Democratic
Party's presidential election. Respondents were asked to pick the
name of an appropriate person as the next prime minister from among
three running candidates-Shinzo Abe, Sadakazu Tanigaki, and Taro
Aso. In this popularity rating, Abe ranked top at 39 percent with a
wide margin over the other two candidates, up 2 percentage points
from the first poll taken two weeks ago. Aso ranked second at 15
percent, up 2 points, and Tanigaki in third place with 13 percent,
up 1 point.

Among those who supported Abe in the previous survey, 84 percent
continued their support for Abe in the latest survey. Among
supporters for Aso in the previous survey, 71 percent continued
their support for Aso. Among supporters for Tanigaki in the last
survey, 72 percent continued their support for Tanigaki. The LDP is
set to elect its new president on Sept. 20. There is still another
week left until the election, but public support for Abe is steady.
Among LDP supporters, Abe overwhelmed the other two candidates at 66
percent, up 4 points from the previous survey, with Aso standing at
15 percent, up 2 points, and Tanigaki leveling off at 7 percent.

9) Poll: 56 percent of LDP's local bloc members to vote for Abe, 11
percent for Aso, 8 percent for Tanigaki

TOKYO SHIMBUN (Page 1) (Abridged)
September 13, 2006

Kyodo News Service polled the ruling Liberal Democratic Party's
nonparliamentary members and fraternity members across the nation on
Sept. 9-10 to probe into trends in the party's presidential
election. In the survey, 73.7 percent picked the name of Chief
Cabinet Secretary Shinzo Abe as their choice to vote for. The figure
shows that Abe will likely garner more than 200 of the party's 300
local votes. Abe has ensured about 80 percent of the party's 403
parliamentary votes. Consequently, Abe is now certain to become the
party's new president with a majority of the votes in the first
ballot.

In the survey of the LDP's local members, Foreign Minister Taro Aso
ranked second at 15.1 percent, followed by Finance Minister Sadakazu
Tanigaki at 11.2 percent. Asked what they would like the party's new
president to pursue first, 44.9 percent said "pension and other

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social security issues," topping all other answers. However, their
opinions were split over the advisability of raising the consumption
tax for that purpose.

In the survey of party members and fraternity members, valid answers
were obtained from 1,458 persons, with 76.8 percent specifying the
names of candidates to vote for. On the whole, Abe stood at 56.7
percent, followed by Aso at 11.5 percent and Tanigaki at 8.6
percent. Undecided voters accounted for 19.6 percent. Those who said
they "don't know" and those who gave no answer totaled 3.6 percent.

Among priority issues, "economic measures" ranked second at 20.7
percent, followed by "educational reform" at 11.7 percent, "local
divide" at 8.6 percent, "better relations with China and South
Korea" at 7.1 percent.

Asked about raising the consumption tax, positive answers accounted
for 46.0 percent, with negative answers at 47.2 percent. In
addition, 52.4 percent answered "yes" when asked if they would like
the Constitution to be amended, with 27.2 percent saying "no."

They were also asked if they thought the party's new president
should pay homage at Yasukuni Shrine. In response to this question,
their opinions were split with 40.5 percent saying "yes" and 37.3
percent saying "no."

10) New Komeito to seek portfolio for Fuyushiba: Upper House LDP
plans to recommend Wakabayashi, Mizote

YOMIURI (Page 2) (Full)
September 13, 2006

The New Komeito yesterday decided to seek a post for Secretary
General Tetsuzo Fuyushiba (70) in a new cabinet to be launched on
Sept. 26, following the Liberal Democratic Party's presidential
election. Fuyushiba will step down, coinciding with party head
Kanzaki's voluntary resignation. Since Land, Infrastructure and
Transport Minister Kitagawa is set to replace Fuyushiba, the New
Komeito has decided to seek a cabinet post for Fuyushiba, instead of
Kitagawa. Chief Cabinet Secretary Abe, who is believed certain to
assume the premiership, will likely accept the request.

The LDP in the Upper House has decided to seek two posts for Upper
House members, as was the case under the Koizumi cabinet. It will
recommend Upper House Policy Deliberation Council Chairman Masatoshi
Wakabayashi (72), a member of the Mori faction, and Upper House Diet
Steering Committee Chairman Kensei Mizote (64), a member of the
Niwa-Koga faction. Wakabayashi has been elected to the Upper House
twice and served as senior vice finance minister. Mizote has been
elected three times and served in such posts as state secretary of
the Ministry of International Trade and Industry.

11) How far will generational change go and how far will the LDP
break the influence of factions? Rumors flying about selection of
cabinet members

NIHON KEIZAI (Page 2) (Almost full)

With Chief Cabinet Secretary Shinzo Abe, 51, enjoying an
overwhelming lead in the Liberal Democratic Party (LDP) presidential
campaign, rumors are flying in the party about who will be chosen
for his administration. Following in the footsteps of Prime Minister

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Junichiro Koizumi, 64, Abe remains mum on personnel affairs, but
generational change, breaking faction-based practices, and
reward-oriented appointments are likely to be key to the new cabinet
and LDP lineup. Within the party there are both hopes and fears
about a generational change.

"Such a matter has not been talked about at this stage," Hidenao
Nakagawa, 62, chairman of the LDP Policy Research Council, said
yesterday after reporting on the situation in the party to Koizumi.
Nakagawa was asked by reporters if he discussed the selection of
cabinet members for an Abe administration. Nakagawa thus dismissed
the question on the spot. But the selection of cabinet members and
party executives is a matter of great concern in the party at
present.

Focus now on how to treat veteran lawmakers and reward-oriented
appointment

Much attention is being paid to who will be chosen as chief cabinet
secretary and LDP secretary general. The chief cabinet secretary is

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the spokesperson who provides the government's views at press
conferences twice a day everyday, except for Saturdays and Sundays.
This post is becoming more important as a coordinator between
ministries and agencies and the ruling camp now that the Kantei is
getting more involved in the policy-decision process.

It is customary to appoint someone from the same faction to which
the party president belongs. In view of breaking faction-based
practices and bringing about a generational change, both of which
Abe wants to realize, Nobuteru Ishihara, 49, who does not belong to
any faction, and Yasuhisa Shiozaki, 55, who belongs to the Niwa-Koga
faction, are viewed as likely candidates for the post. Both
lawmakers are close to Abe. If veteran lawmakers are chosen in view
of harmony, Nobutaka Machimura, 61, and Kaoru Yosano, 68, will be
considered.

A major political battle next year will be the Upper House election.
As for the three top party officers' posts, including the secretary
general, who handles elections, some have speculated that Nakagawa,
who belongs to the same Mori faction as Abe and who has helped the
party advance Koizumi's structural reforms, is fit for one of the
three posts. This speculation is growing in the party in part
because Abe has expressed a lack of interest in making sure that the
secretary general and the party president hail from the same

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faction.

The three top party officers need to coordinate intraparty views on
such questions as what to do about the return to the party of former
LDP members who were forced out because of their opposition to the
postal privatization bills last year. Given this sort of party
business, many think it wise to appoint veterans for those posts.
General Council Chairman Fumio Kyuma, 65, who in effect forced
Defense Agency Director-General Fukushiro Nukaga, 62, not to run in
the presidential race, is viewed as a person to whom both favorable
treatment toward veterans and reward-oriented appointment would
apply. Following Kyuma, Hakuo Yanagisawa, 71, who was first among
the Niwa-Koga faction to declare his support for Abe, has also been
mentioned. Minister of Economy, Trade and Industry Toshihiro Nikai,
71, and presidential candidate and Foreign Minister Taro Aso, 67,
have also been mentioned.

The question of who will be chosen for the posts of deputy chief

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cabinet secretaries and prime ministerial assistants in an
administration led by Abe, who has called for strengthening the
Kantei, is also drawing public attention. Rumor has it that likely
candidates include Hakubun Shimomura, 52, an aide to Abe on
educational reform, and Hiroshige Seko, 43, a member of the House of
Councillors in charge of Abe's public relations strategy.

Members of parliamentary league on second chances

The question of whether mid-level and junior lawmakers will receive
reward-oriented appointments is also drawing attention. It is said
that there is a high possibility that reward-oriented cabinet posts
will go to Yuji Yamamoto, 54, and Yoshihide Suga, 57, both of whom
helped establish a parliamentary league that aims to ensure that
those who fail in society can receive a second chance and who have
played a role in staking Abe to the lead, as well as to Deputy
Policy Research Council Chairman Toshiaki Amari, 57, who serves as
chief secretariat for Abe's support group.

More than 70 percent of LDP lawmakers have rushed to support Abe, so
it will be impossible to give favorable treatment to all of them. A
senior member of an anti-Abe group pointed out the difficulties in
personnel selection for Abe, saying, "Personnel selection will win
him a handful of friends and many more enemies." Abe has said that
he will choose the cabinet members himself, but he also has stated,
"As for the posts of senior vice ministers and parliamentary
secretaries, the party will appoint them in a fair and equal

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manner."

12) Minshuto President Ozawa reelected without a formal vote; Plans
to retain Kan, Hatoyama

YOMIURI (Page 1) (Full)
September 13, 2006

Ichiro Ozawa (64) has been reelected president of Minshuto
(Democratic Party of Japan) without a vote, the party announced
yesterday. Since no other party member registered, Ozawa was the
only candidate. The party will convene an extraordinary convention
on Sept. 25 and formally install the new president. His tenure will
be for two years until September 2008.

In a press conference at party headquarters last evening, Ozawa
announced the goal of his second term: "Gaining the support of the
public through the local elections next year, we will secure a
majority for the opposition side in the Upper House election. I
intend to put my every effort into reaching that major goal." He
expressed the view that the party could reach a majority in the
Upper House election next summer.

Commenting on the party executive lineup, Ozawa said: "I would like
to obtain the continued support that Acting Representative Kan,
Secretary General Hatoyama, and the others in our executive group

SIPDIS
have given me for the five months (since first elected in April)."
Ozawa already has reappointed Kan and Hatoyama and has expressed his
intention to continue the troika arrangement. The focus now will be
on other key officials, such as the policy research chief, who will
be in charge of compiling basic party policies, and the Diet affairs
chairman, who will be key to managing the party's strategy in the
Diet.

13) LDP launches team to examine "Ozawa vision"

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ASAHI (Page 4) (Abridged slightly)
September 13, 2006

The Liberal Democratic Party yesterday launched a team to examine
Minshuto (Democratic Party of Japan) policies. The team will analyze
the "Ozawa vision" -- a collection of Ozawa's basic ideas and
policies -- and his past statements for use in party-head debates
and other occasions. The team will produce a report by the end of
this month with a Lower House by-election for October in mind.

In a meeting yesterday of the chairman and the vice-chairmen of the
Policy Research Council, chairman Hidenao Nakagawa described the
Ozawa vision this way: "It reflects his irresponsibility. . . . In
the past, it was regarded as somewhat childish for the government to
questions the policies of an opposition party. But it is important
now to examine the main opposition party's policies."

Many in the meeting criticized the Ozawa vision's social security
policy for correcting social disparity and compensation for
individual farmers as pork-barrel largesse typical of a large
government.

14) Ozawa policy examination team launched to report results to new
LDP president

TOKYO SHIMBUN (Page 2) (Full)
September 13, 2006

The Liberal Democratic Party yesterday launched an opposition party
policy examination team within the Policy Research Council and held
its inaugural meeting at party headquarters. The team is tasked with
thoroughly examining Minshuto (Democratic Party of Japan) President
Ichiro Ozawa's basic policies and his statements in press
conferences to submit a report to the new LDP president replacing
Koizumi. The team is hoping that the new LDP president will find the
report useful in attacking Ozawa at party-head debates and other
occasions.

The team, composed of 16 council members and others, including
chairman Nakagawa, will chiefly examine three points: (1) how to
correct social disparity and safety nets; (2) a plan to reduce the
number of civil servants; and (3) economic policies.

Abe: Ozawa vague on constitutional revision and collective defense

Touching on Ozawa's stance toward constitutional revision and the
right of collective self-defense revealed in his basic policies,
Chief Cabinet Secretary Shinzo Abe said in a press conference
yesterday:

"I feel that his stance is ambiguous. We would like to win public
support by presenting a clear direction to the public and
implementing policies."

Ozawa was reelected Minshuto president uncontested yesterday
afternoon.

15) Environment minister asks panel to discuss legal revisions to
enable CO2 disposal at sea

MAINICHI (Page 3) (Full)

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September 13, 2006

Environment Minister Yuriko Koike yesterday asked the Central
Environment Council to deliberate on how to use technology to
dispose of carbon dioxide (CO2) under the seabed and how to prevent
a negative impact on the maritime environment. Upon receiving a
package of recommendations from the council, the Environment
Ministry will submit to the regular Diet session next year bills
amending relevant laws to enable disposal of CO2 at sea.

Research and development of this method are underway at home and
abroad. Should many countries introduce it, CO2 emitted in the air
is expected to significantly decrease. However, much is still
unknown about safety, such as the effect on the ecosystem.

This development came in response to a decision made to add CO2 to
the list of waste materials allowed to be dumped into the ocean
under a protocol based on the London Treaty governing sea disposal.
In conjunction with this decision, the government has decided to
revise the Seawater Protection Law and ratify the protocol.

The Central Environment Council will start deliberations mainly on
how the storage technology should be utilized and what the effect on
the maritime environment would be if buried CO2 leaked. Japan will
legally allow the use of this technology for the first time, and
discussion on whether Japan should adopt this method to limit global
warming is likely to be conducted in a cautious manner.

Koike commented:

"I would like specific and wide-ranging deliberations on such
matters as what can be done in Japan to make this a reality and how
the nation's targets under the Kyoto Protocol can be reached."

SCHIEFFER

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