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Cablegate: Japanese Morning Press Highlights 12/07/06

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UNCLAS SECTION 01 OF 10 TOKYO 006877

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 12/07/06

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Index:

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

4) Kyodo poll: Sudden drop in support rate for Abe Cabinet to 48.6%
attributed to public reaction premier's decision on reinstating
postal rebels into LDP

5) Government planning to send police for PKO in East Timor, first
time in 7 years for civilian dispatch for such service

6) Tokyo sees no radical change in US policy toward Iraq but careful
watching White House response to latest critical report

Defense and security issues:
7) Deputy Under Secretary of Defense Lawless: If Japan doesn't
intercept missile heading over Japan toward the US, it's "crazy" and
"not an alliance then"
8) Upper House deliberating bill elevating JDA to a ministry
9) JDA upgrade bill expected to be enacted on Dec. 13

Diplomatic agenda:
10) Prime Minister Abe attending the East Asia Summit tomorrow to
announce and energy conservation aid plan
11) Japan, China, South Korea meet trilaterally on easing investment
restrictions
12) Nishida appointed Ambassador to Canada
13) UNDP asks Japan to make efforts to reach international ODA
outlay target of 0.7% of GNI
14) Japan urged to join the International Criminal Court
15) Former Prime Minister Koizumi says he had wanted to make a third
trip to Pyongyang

Political agenda:
16) Farm Minister Matsuoka, when he was LDP official in charge of
avian flu policy, took large contributions from the poultry industry

17) LDP reaches general agreement on the road tax issue
18) Minshuto (Democratic Party of Japan) still hung up internally
over finalizing its policy platform

Articles:

1) TOP HEADLINES

Asahi:
Four-Hospital Council to send unpaid bills to National Health
Insurance and other insurers

Mainichi Yomiuri and Sankei:
Iraq Study Group report urges President Bush to withdraw all US
combat troops from Iraq by spring 2008

Nihon Keizai:
Elpida to finance 800 billion yen for new Taiwan chip plant

Tokyo Shimbun:
Poll: Cabinet support plunges to 48.6% ; 67.9% do not support
readmission of postal rebels


TOKYO 00006877 002 OF 010


Akahata:
Calls for more discussion on Basic Education Law revision dominate
public hearings yesterday

2) EDITORIALS

Asahi:
(1) Japan-Australia FTA: Agricultural reform essential
(2) Nepal moving toward democracy

Mainichi:
(1) Pork tariff evasion case exposes need to review system
(2) Teacher's disturbing website overlooked

Yomiuri:
(1) Shortage of nurses serious
(2) Drivers with dementia should hang up car keys

Nihon Keizai:
(1) Steel realignment must follow tie-ups among three Asian giants
(2) Digital terrestrial broadcasting requires improved viewing
system

Sankei:
(1) Road-related taxes must be used for general purposes
(2) Extended ASDF Iraq mission comes with international
responsibility

Tokyo Shimbun:
(1) Business circles and politics: Pay taxes before making political
donations
(2) Kinmirai Tsushin fraud case

Akahata:
(1) Burden on the handicapped must be reduced

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, Dec. 6

NIHON KEIZAI (Page 2) (Full)
December 7, 2006

09:50
Met Chief Cabinet Secretary Shiozaki at Kantei.

10:10
Met Deputy Chief Cabinet Secretary Shimomura, Foreign Ministry
Deputy Foreign Minister Yabunaka, Asian and Oceanian Affairs Bureau
Director General Sasae, and others. Joined by Special Advisor Seko.

12:00
Met journalist Soichiro Tawara, Dentsu Supreme Advisor Yutaka
Narita, Central Japan Railway Company Chairman Kasai, and others at
the Garden Court Club in the Hotel New Otani.

13:06
Attended a meeting of the "Wives Network" of LDP lawmakers' wives at
the Akasaka Prince Hotel.

14:45
Met Finance Minister Omi at Kantei. Later met former Foreign

TOKYO 00006877 003 OF 010


Minister Machimura and Central Union of Agricultural Cooperatives
Chairman Miyata. Followed by JICA President Sadako Ogata.

6:09
Met Cabinet Intelligence Director Mitani. Followed by State Minister
in Charge of Economic and Fiscal Policy Ota, Special Advisor Nemoto,
Assistant Deputy Chief Cabinet Secretary Saka, and others

17:03
Attended a meeting of the Intellectual Property Strategy
Headquarters.

18:46
Dined with Upper House Secretary General Katayama and others at a
restaurant in the Hotel Okura. Joined by Upper House LDP Caucus
Chief Aoki, Policy Research Council Chairman Nakagawa, and Secretary
General Nakagawa.

20:26
Met Shiozaki, Deputy Secretary General Ishihara and others at a
Japanese restaurant in the same hotel.

21:35
Returned to his official residence.

4) Poll: Cabinet support tumbles to 48.6%

TOKYO (Top play) (Abridged)
December 7, 2006

The rate of public support for Prime Minister Shinzo Abe and his
cabinet was 48.6% in a telephone-based spot nationwide public
opinion survey conducted by Kyodo News on Dec. 5-6 after the ruling
Liberal Democratic Party's reinstatement of postal rebels. The
survey posted a sharp drop of 7.9 percentage points from a previous
survey conducted Nov. 25-26. The Abe cabinet's support rate was
65.0% right after its inauguration in September. However, it
continued to go down and fell below 50% in two months. The
nonsupport rate was 35.3%, up 11.2 points from last time.

The LDP recently reinstated 11 independent lawmakers who voted
against the government's now-enacted postal privatization bills in
the Diet last year as LDP members and left the LDP. In the survey,
respondents were asked whether they support those postal rebels'
return to the LDP. In response to this question, a total of 67.9%
answered "no." Even among LDP supporters, more than half, or 53.2%,
were negative about their return to the LDP. Their return to the LDP
has not won public understanding, and this is presumably why the
support rate went down.

In the breakdown of public support for political parties, the LDP
stood at 44.6% (43.3% in the last survey), and the leading
opposition Democratic Party of Japan (Minshuto) was at 20.3% (16.4%
in the last survey). The New Komeito, the LDP's coalition partner,
was at 3.5%. Among other parties, the Japanese Communist Party was
at 3.0%, the Social Democratic Party (Shaminto) at 1.4%, the
People's New Party (PNP or Kokumin Shinto) at 0.6%, the New Party
Nippon (NPN or Shinto Nippon) at 0.1%, and no particular party
affiliation at 25.0%.

5) Japan to send civilian police to E. Timor for PKO, first such
dispatch in 7 years

TOKYO 00006877 004 OF 010

ASAHI (Page 2) (Abridged)
December 7, 2006

The government decided yesterday to send civilian police officers to
the United Nations Integrated Mission in Timor-Leste (UNMIT), an
entity for UN peacekeeping operations in East Timor. The government
will shortly send a fact-finding team to East Timor to look into the
local security situation. After that, the government will make a
formal decision early next year to send about three civilian police
officers from the National Police Agency and local police.

Japan first sent civilian officers to Cambodia in 1993 under the Law
for Cooperation on United Nations Peacekeeping Operations, or the
so-called PKO cooperation law, and next to East Timor in 1999. This
is the third time for Japan to send civilian police on a PKO mission
overseas.

According to government officials, Japan will send a total of about
three civilian police officers, broken down into one from the NPA
and two from local police headquarters. The United Nations has asked
Japan to send 20-30 police officers. However, there are also
cautious arguments because of the aggravated local security
situation. The government therefore decided to send three or so as
it did in 1999. The government is now preparing to send a
fact-finding team of officials from the Foreign Ministry and the NPA
to East Timor within the month at the earliest.

East Timor is interested in Japan's policing system to recover
public security, and the country mulls introducing Japan's koban
(police box) system. In East Timor, Japanese civilian police
officers are expected to pass on Japan's advanced koban system as
their main task.

6) Government expects no drastic change in Iraq policy, determined
to watch US response

SANKEI (Page 5) (Abridged slightly)
December 7, 2006

The government does not think the presentation of a report by the
Iraq Study Group to US President George W. Bush will result in a
drastic change in the country's Iraq policy. Iraq policy is a symbol
of the Japan-US alliance. The government intends to carefully watch
Washington's response for formulating a new strategy.

Against the backdrop of growing calls in the US for reviewing Iraq
policy, the government plans to approve at its cabinet meeting today
an extension of the Air Self-Defense Force's airlift mission in Iraq
until July 31 under the Iraq Reconstruction Support Special Measures
Law.

Vice Foreign Minister Shotaro Yachi noted: "Japan must consider what
to do in the future based on changes in America's policy, but I
don't think a situation will arise where the need for the ASDF's
airlift mission will disappear immediately or need to be enhanced
significantly."

The government has rejected America's wishes for dispatching Ground
Self-Defense Force troops to Iraq as well as for the ASDF's expanded
activities after the departure of the ground troops. Even after the
Republican Party's defeat in the US midterm elections, which were

TOKYO 00006877 005 OF 010


fought mainly over Iraq policy, Tokyo has emphasized that there
would be no change in Iraq policy, with Prime Minister Shinzo Abe
declaring, "Japan has been extending reconstruction assistance based
on its own decisions." If the government changes its Iraq policy in
linkage to Washington's move, it might be criticized as a liar.

In expressing support for the Iraq war, former Prime Minister
Junichiro Koizumi said, "The United States is the only country that
has declared, 'We will regard an attack on Japan as an attack on
us.'" This rhetoric has helped strengthened the Japan-US alliance.
In view of such developments, America's move might affect Japan's
own decision.

The government is wary of the Bush administration fundamentally
reexamining its overall foreign policy because of Iraq policy. The
US Democratic Party is critical of the Bush administration that
places high priority on the six-party talks on the North Korean
issue, Japan's top priority. If Washington shifts weight to
bilateral talks with Pyongyang, Tokyo might be out of the loop.

7) Lawless: "It would be crazy for Japan not to intercept" missile
headed for US

SANKEI (Page 5) (Full)
December 7, 2006

It was confirmed yesterday that during his visit to Japan for senior
bilateral consultations, US Deputy Undersecretary of Defense
Lawless, in connection with missile defense (MD) and collective
self-defense, stated, "It would be crazy if it was clear that a
missile was headed for the United States, and Japan had the
capability of shooting it down but did not do so." The remark was
made to former Defense Agency Shigeru Ishiba by Lawless during their
meeting last week, and introduced to the Liberal Democratic Party
subcommittee on defense policy studies, which Ishiba chairs.

8) Deliberations on bill elevating the JDA to ministry start in
Upper House

ASAHI (Page 4) (Full)
December 7, 2006

The explanation of the bills upgrading the Defense Agency (JDA) to a
ministry and also moving up the Self-Defense Forces' (SDF) overseas
operations into primary duties was given in a plenary session
yesterday in the Upper House. JDA Director-General Kyuma and other
officials took the floor to answer. The bills were approved by a
majority of votes from the ruling Liberal Democratic Party (LDP),
its junior coalition partner New Komeito, the main opposition
Democratic Party of Japan (DPJ) and others. The bills are likely to
be enacted during the current session of the Diet. Deliberations on
the bills in the Upper House Committee on Foreign Affairs and
Defense will begin today.

9) Defense Ministry bill likely to be enacted Dec. 13

NIHON KEIZAI (Page 2) (Excerpt)
December 7, 2006

A bill to upgrade the Defense Agency to a ministry is expected to
become law on Dec. 13. The ruling coalition of the Liberal
Democratic Party and the New Komeito will take a vote on the

TOKYO 00006877 006 OF 010


legislation in a meeting of the House of Councillors Foreign and
Defense Affairs Committee on Dec. 12 and in a plenary sitting of the
House of Councillors on Dec. 13. The leading opposition Democratic
Party of Japan (Minshuto) also supports the legislation. The bill
will likely be enacted into law as envisioned by the ruling parties
if the Diet is not stalled with confusion in the House of
Councillors' voting on a bill to amend the Fundamentals of Education
Law.

10) Prime Minister Abe to announce at East Asia summit Japan's
support for energy conservation

MAINICHI (Page 5) (Full)
December 7, 2006

Prime Minister Shinzo Abe will visit the Philippines on Dec. 8-13 to
attend the second East Asia summit to take place on the Cebu Island.
He plans to announce Japan's support, including financial
assistance, for energy conservation, as well as for the development
of alternative energy. The government is also undertaking
coordination to set forth its assistance for disaster prevention,
including measures to cope with a tsunami.

The East Asia summit aims to decide the areas of cooperation such as
disaster prevention and financial cooperation, and to consolidate a
system to check progress in cooperation. The expectation is that a
chairman statement on the energy security issue will be released.

The Association of Southeast Asian Nations (ASEAN) plus three
(Japan, China and South Korea) summit will be held on Dec. 11. Japan
and ASEAN will hold a summit on Dec. 12. In his meeting with the
ASEAN leaders, Abe is expected to announce Tokyo's support for
correcting gaps among ASEAN member countries, as well as its
determination to push ahead with negotiations on economic
partnership agreements (EPAs). In the series of meetings, North
Korea's nuclear programs seems to be discussed but they will
unlikely become a main topic of discussion.

Abe will hold a meeting with Chinese Premier Wen Jiabao. He is also
going to attend the Japan-China-South Korea summit, which will be
held for the first time in two years. Abe and Wen will carry out
final coordination on a visit to Japan by a Chinese leader. Abe
plans to hold talks also with Australian Prime Minister John Howard
and the two will likely to agree to start negotiations for an EPA
conclusion. In his meeting with the leaders of Cambodia, Laos, and
Vietnam, Abe will reveal Tokyo's decision to continue its assistance
of 1.5 billion dollars for the development of the Mekong Basin
Development.

11) Japan, China, South Korea to launch negotiations on investment
pact

NIHON KEIZAI (Page 5) (Full)
December 7, 2006

The governments of Japan, China and South Korea have agreed to
initiate negotiations on concluding a trilateral investment pact.
The three countries aim to promote investment among three countries
by removing improper discriminatory and restrictive measures toward
foreign firms, including China's authorization system and investment
restrictions imposed on Japanese and South Korean firms. The three
countries expect to officially decide on the start of negotiations

TOKYO 00006877 007 OF 010


during the Japan-China-South Korea summit to be held in the
Philippines next week.

Japan concluded an investment agreement in 1989. This agreement,
however, includes only these basic provisions: "Japanese companies'
assets should not be seized without their permission;" and
"companies' remittances should not be obstructed." Given this, there
reportedly were cases in which a Japanese company willing to invest
in China was told to set up a research section, beside a
manufacturing one, or in which restrictions were placed on the
number of branch offices.

Japan and South Korea will call on China to ease regulations so than
their companies will be able to do business in China on equal terms
with local companies. Other major themes include the protection of
intellectual property rights and the establishment of rules for
dispute-settlement procedures. Such problems as China's sudden
change in its rules have also been pointed out, so measures to
ensure transparency in administrative procedures will also be placed
on the agenda.

12) Deputy Foreign Minister Nishida to become ambassador to Canada

MAINICHI (Page 5) (Full)
December 7, 2006

The Ministry of Foreign Affairs (MOFA) decided yesterday to transfer
Deputy Minister for Political Affairs Tsuneo Nishida to the post of
ambassador to Canada. The ministry will then appoint Deputy Minister
for Economic Affairs Mitoji Yabunaka as the replacement of Nishida.
Some government officials regard these personnel changes as the
dismissal of Nishida because of his leaving the post after serving
only 16 months, as well as of confrontation with the Prime
Minister's Official Residence (Kantei) over the North Korea missile
issue.

Nishida jointed MOFA in 1970. He assumed his current post in August
2005, as the successor to Hitoshi Tanaka, a senior fellow at the
Japan Center for International Exchange. It is believed that his
relationship with Prime Minister Shinzo Abe has worsened as he
called on the government for a cautious response to a UN Security
Council sanction resolution against North Korea's firing of missiles
in July when Abe was chief cabinet secretary.

13) UNDP administrator calls on Japan to "achieve the ODA outlay
goal"

NIHON KEIZAI (Page 8) (Full)
December 7, 2006

United Nations Development Programme (UNDP) Administrator Dervis in
an interview yesterday with the Nihon Keizai Shimbun called on the
Japanese government to achieve the goal of disbursing 0.7% of the
gross national income for official development assistance (ODA) as
set by the UN. Pointing out such nations as Denmark and the
Netherlands have already achieved that goal, Dervis continued: "That
figure is fully possible for Japan to achieve."

14) ICC hopes for Japan's early participation

NIHON KEIZAI (Page 8) (Full)
December 7, 2006

TOKYO 00006877 008 OF 010

Visiting Judge Philippe Kirsch, president of the International
Criminal Court (ICC), yesterday met the press at the Japan National
Press Club in Tokyo's Uchisaiwai-cho and expressed his expectation
of Japan joining the ICC as soon as possible. Kirsch stated: "It
will be very significant if Japan, a leader of Asia, becomes a
member of only the standing international court to try
individuals."

15) Is former Prime Minister Koizumi eager to make third trip to
North Korea?

NIHON KEIZAI (Page 2) (Full)
December 7, 2006

Former Prime Minister Junichiro Koizumi dined yesterday with Taku
Yamasaki of the Liberal Democratic Party (LDP) at a Japanese
restaurant in Tokyo. According to Yamasaki, Koizumi lamented the
2002 Pyongyang Declaration, which he and North Korean leader Kim
Jong Il signed, becoming a dead letter due to North Korea's nuclear
test. Yamasaki quoted Koizumi as saying: "I think it is all right
for me to consider making a third trip to Pyongyang in order to
reaffirm the declaration. I will revive it."

Yamasaki also quoted Koizumi as saying:

"I will never interfere with what the Abe government does. But I
want to realize denuclearization on the Korean Peninsula. Both
dialogue and pressure are necessary. We must not do away with
dialogue."

Koizumi was quoted as saying, "I would like to hold a YKK (Yamasaki,
Koizumi and Koichi Kato) meeting soon." He was positive about
mending fences with Kato.

16) Political donations from poultry farmers funneled toward
Agriculture Minister Matsuoka

ASAHI (Page 39) (Excerpts)
December 7, 2006

Political groups of Agriculture, Forestry and Fisheries (MAFF)
Minister Toshikatsu Matsuoka, a House of Representatives lawmaker
elected in the Kumamoto No. 3 district, received approximately 11
million yen worth of political donations from more than 10 poultry
farmers and related persons during about three months starting just
after the outbreak of bird flu in Ibaraki Prefecture last year.
During this period, poultry farmers were petitioning the ministry to
take measures to protect the industry, and Matsuoka was in the post
of heading the Liberal Democratic Party's Bird Flu Taskforce. Their
political donations were funneled mainly toward Matsuoka. In
response to an interview with the Asahi Shimbun, one donor
commented, "We wanted to support Matsuoka, who understood our call
to protect the industry."

In the financial reports for 2005 of two political groups for
Matsuoka, the Asahi Shimbun examined donations from about 40
executives of the two political groups and related entities.

The group that manages Matsuoka's political funds received about 4.3
million yen from 11 persons, including executives at seven entities
and their relatives. The LDP Kumamoto No. 3 Constituency Branch

TOKYO 00006877 009 OF 010


Office, in which Matsuoka serves as head, accepted about 7 million
yen from six leading group companies and six poultry entities.

In late June of last year, avian flu broke out in Ibaraki
Prefecture. Most of the donations to Matsuoka were offered from late
July, just after the outbreak, through late October. During this
period, poultry industry groups presented MAFF with several written
requests calling for killing chickens with state subsidies and
allowing vaccination as part of measures to prevent the spread of
bird flu. There were few donations to lawmakers other than Matsuoka
from executives in the two industrial groups.

The Japan Poultry Political League, composed of industrial groups,
purchased party tickets worth 1.5 million yen from Matsuoka, and two
companies operated by executives in industrial groups purchases
tickets worth 1.4 million yen.

A poultry farmer who is also an executive in an industrial group
said, "Entities offered donations on their own judgment and not on a
systemic basis.

17) LDP approves government plan to revise road tax system in
principle

YOMIURI (Page 1) (Excerpts)
December 7, 2006

The Liberal Democratic Party decided yesterday to accept in
principle a government plan to revise the system of road-related tax
revenues. The proposal seeks to revise the special law on tax
revenues during the 2008 ordinary Diet session to pave the way for
gasoline tax revenues to be used for general purposes. The LDP will
discuss the government proposal with the New Komeito. It then is
expected to ask the government to include provisions for
guaranteeing necessary road construction and maintenance and for
giving consideration to local communities beyond fiscal 2008

The LDP hopes to exchange a formal agreement on the matter between
the government and the ruling camp before Prime Minister Shinzo Abe
leaves for an overseas trip on Dec. 8.

In a meeting of the LDP taskforce on reviewing road-related tax
revenues, Chief Cabinet Secretary Shiozaki presented a four-point
proposal. The proposal calls for truly necessary road development to
be implemented in a planned manner. It also says that if revenues
from road-related taxes surpass road-related expenditures in a
single fiscal year, the difference should be used as general
revenue.

In the meeting of the taskforce, many participants voiced opposition
to the government proposal, but the members agreed to leave the
matter to Policy Research Council Chairman Nakagawa.

18) DPJ faces difficulties in coordination of views over policy
platform with eruption of objections to pension plan, security
posture

SANKEI (Page 5) (Full)
December 7, 2006

The Democratic Party of Japan (Minshuto or DPJ) has run into
difficulties in shaping its "policy platform" ahead the Upper House

TOKYO 00006877 010 OF 010


election slated for next summer. Of the policy proposals shown by
the party's Policy Platform Committee chaired by Hirotaka Akamatsu,
pension and security policy proposals have encountered objections.
At the three rounds of the plenary meeting held until yesterday of
the party's members of both houses of the Diet, pension policy,
which had been extensively modified from the one declared in the
party's manifesto for last year's Lower House election, met with
this objection: "The previous one is better." Which will come first,
campaign strategy or policy consistency? The party is wavering
between these two.

The primary issue for pension policy is whether to hike the
consumption tax with an eye on a future drastic reform of the
pension programs. Minshuto in its manifesto released last year
mentioned that the basic pension should be all financed by the
consumption tax by raising the tax by 3 points. But the pension
policy proposal shown this time states that the current consumption
rate should be retained, that all the consumption tax revenue should
be used to fund the pension (basic portion), and that the shortage
should be covered by premiums.

President Ichiro Ozawa is concerned that the party might not be able
to do well in the election if it proposes hiking the consumption
tax.

At the plenary meeting, however, one person said: "The public wants
peace of mind through a quick hike of the consumption tax." The
policy change came under fire, in part because in the 2004 Upper
House election Minshuto had made gains by asserting the need to
raise the consumption tax for pension purposes.

On the other hand, a number of the participants favor the policy
proposal this time, arguing that the party cannot win the election
if it calls for a tax increase at a time when the ruling parties
remain mum. Akamatsu intends to go against the opposition with the
policy proposal, thinking that a majority is not opposed to the
policy proposal.

On the right to self-defense, the security policy proposal states:
"We should not insist on a conceptual debate over what is individual
and what is collective, and we should exercise the right to
self-defense only in cases where our nation's peace and safety are
threatened by an imminent and illegal attack." Former President
Seiji Maehara criticized this expression as "conceptual" and
insisted on rephrasing that passage in a way to enable Japan to cope
with ballistic missile launches, terrorism, and contingencies near
the country.

SCHIEFFER

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