UNCLAS SECTION 01 OF 10 TOKYO 001199

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 03/07/06

Index:

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

Iraq assistance:
4) Government planning to delay start of GSDF withdrawal from
Iraq until after March, depending on situation in new Iraqi
government
5) Japanese troops' phased withdrawal from Iraq could slip to
even beyond mid-April, with government mulling the dispatch of
additional 100 support troops

6) Foreign Minister Aso and Russian counterpart in phone call
agree on peaceful settlement of Iran nuclear issue

7) Strategic talks between Japan, ROK at vice-minister level
preparing way for "future-oriented relationship" post-Koizumi

China connection:
8) Japan, China agree on need for early restart of 6-party
talks on North Korea
9) China rejects Japan's proposal in talks on E. China Sea gas
field development

Defense issues:
10) LDP's Taku Yamasaki predicts Prime Minister Koizumi will
reach political deal with Okinawa Governor Inamine to break
impasse on Futenma relocation issue
11) Koizumi negative about meeting Okinawa Governor Inamine
12) Chief Cabinet Secretary Abe stresses that final USFJ
realignment report will be inked, "even without local agreement"
13) JDA chief Nukaga meets Nago City mayor and other officials
in Okinawa on base issue but to no avail
14) JDA Vice Minister Moriya sees no possibility of revision of
current Futenma relocation plan

Minshuto (Democratic Party of Japan) after the crash landing:
15) In Upper House Budget Committee deliberations, Minshuto does

not even bring up its set of four issues that include Livedoor
scandal and US beef
16) Minshuto showing lack of spirit as returns to Diet
deliberations
17) Minshuto lawmaker Renho clashes sharply with State Minister
Inoguchi on government's budget and policy toward shrinking
population

18) Agriculture and health ministries submit list of 20
questions to USDA on recent BSE beef report

Articles:

1) TOP HEADLINES

Asahi:
One of the so-called Aneha buildings identified as lacking
strength is found to be safe according to another authorized
strength calculation formula

Mainichi:
Tokyo Metropolitan Government warns against high levels of lead

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detected in imported accessories for children

Yomiuri:
Government's draft of rescue guidelines gives priority to the
aged and the disabled in event of disasters, avoids uniform
treatment

Nihon Keizai:
Council on Fiscal and Economic Policy plans to specify sector-by-
sector cuts in expenditures in the reform timetable; A maximum 20
trillion yen cut planned in such areas as social welfare, local
allocation tax; Binding force to constrain tax increase

Sankei:
AT&T's purchase of BellSouth casts doubts about splitting up NTT;
US certain to enter an age of two major telecoms

Tokyo Shimbun:
Japan Post mulling opening postal saving banks in more than 200
places across the nation; Objections may arise with the
possibility of bringing pressure on private-sector banks

2) EDITORIALS

Asahi:
(1) Hollow Diet: Minshuto (DPJ) should not recoil
(2) Iran's nuclear ambitions: Not yet time to throw our hands up

Mainichi:
(1) Minshuto: Do not be swayed by Sunday talk shows
(2) China's National People's Congress: No immediate remedy to
create an integrated society

Yomiuri:
(1) New corporate recruitment: A good utilization of a broad
range of choices
(2) Air gun regulations: Sale of dangerous weapons has been
allowed

Nihon Keizai:
(1) When will China initiate political reform?
(2) Reorganization of US telecom firms ahead of international
mega-competition

Sankei:
(1) China's National People's Congress: Steel beneath the smile
(2) Japanimation: Time to face hard truth

Tokyo Shimbun:
(1) China's National People's Congress: Hope for agriculture?
(2) Revitalization of urban areas: The viewpoint of the elderly
necessary

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 6

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

08:02
Met at Kantei with Deputy Chief Cabinet Secretary Suzuki.

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09:00
Attended an Upper House Budget Committee session.

12:03
Returned to Kantei.

13:00
Attended the Upper House Budget Committee session.

17:05
Attended an LDP executive meeting.

17:57
Met at Kantei with Economic and Fiscal Policy Minister Yosano.

18:40
Met with Economy, Trade, and Industry Minister Nikai.

19:05
Dined with Council on Economic and Fiscal Policy members,
including BOJ President Fukui and Japan Business Federation
Chairman Okuda.

21:16
Returned to his residence.

4) Gov't to put off GSDF pullout originally scheduled for this
month

TOKYO SHIMBUN (Page 1) (Abridged)
March 7, 2006

The government will postpone the timetable for pullout of Ground
Self-Defense Force troops in the southern Iraqi city of Samawah
until after April, officials said yesterday. The GSDF had planned
to begin recalling the Samawah-based troops this month. In Iraq,
however, Islamic Sunnis and Shiites are intensifying their
conflict. In such a situation, the two conflicting groups cannot
be expected to enter into talks for a permanent government. As it
stands, the government has now made the decision. The US
government, frowning on Japan's troop pullout planned for March,
asked Japan to continue its troop deployment in Iraq. Japan is
now expected to comply with the request.

Britain, meanwhile, has told Japan that British troops, currently
tasked with the security of Samawah, would pull out in March. The
government has therefore coordinated its plan to begin
withdrawing the GSDF troops and complete their withdrawal in May.

In late February, however, a bomb exploded at a Shiite mosque in
the central Iraqi city of Samara. The incident touched off
conflict between the Sunnis and the Shiites, resulting in
deteriorating security conditions in Iraq. The government judged
that Iraq has yet to recover its public security and has seen no
progress in its political process, and that such a situation
still does not allow the GSDF to pullout.

5) GSDF troops to begin pullout not until mid-April or later;
Government to send 100-strong support unit to Iraq

SANKEI (Page 1) (Excerpts)

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March 7, 2006

The government decided yesterday to begin pulling Ground Self-
Defense Force troops out of southern Iraqi city of Samawah in mid-
April or later. The decision follows Britain's step to postpone
withdrawing its troops carrying out security duties in Samawah.
Australian troops will continue providing support until all GSDF
troops are out of Iraq. The government intends to send a 100-
strong withdrawal support unit to Iraq. The government also plans
to hand over the GSDF camp in Samawah to Iraqi authorities.

Working-level foreign and defense officials of Japan, US,
Britain, and Australia met in London on Feb. 24. At the London
meeting and subsequent informal talks, the British government
sounded out other countries on a plan to withdraw its troops from
Samawah starting in mid-April.

The British government, which intended to beef up its troops in
Afghanistan in May, had initially studied a plan to begin
withdrawing from Samawah in March. Britain, however, eventually
decided to postpone such a plan due to: (1) the deteriorating
security situation in Iraq because of intensifying religious
conflict; (2) the need to watch the future of a full-fledged
Iraqi government; and (3) US discontent with Britain withdrawing
from Iraq before the situation calms down.

As a result, Japan decided to withdraw GSDF troops starting in
mid-April or later by keeping pace with British troops. Even if
Britain begins withdrawal in mid-April, it can reportedly
complete the withdrawal by the end of May, as originally
scheduled. In contrast, it would take more than two months for
the GSDF to leave Iraq. Complete withdrawal may not occur until
June or later.

6) Japanese, Russian foreign ministers agree to settle Iranian
nuclear issue peacefully

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

Foreign Minister Taro Aso discussed Iran's nuclear program and
other matters with his Russian counterpart, Sergey Lavrov, for
about 30 minutes on the phone last night. Aso praised Moscow's
proposal to Teheran to pursue a uranium enrichment program in
Russia instead of its own nuclear activities in Iran. The two
foreign ministers reached an agreement on the need to settle the
issue peacefully.

Aso placed the call to Lavrov prior to the International Atomic
Energy Agency opening its board meeting on Iran's nuclear program
in Vienna on March 6, local time, according to the Foreign
Ministry.

7) Japan-South Korea strategic dialogue to pave way for post-
Koizumi relations; Agreement reached to promote future-oriented
relationship

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

Though Japan's Asian diplomacy has cooled down due to Prime
Minister Koizumi's visits to Yasukuni Shrine, working-level talks

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are now picking up. As part of the move, Tokyo and Seoul held
strategic talks in Tokyo yesterday. A two-day bureau-director-
level meeting between Tokyo and Beijing also started in Beijing
yesterday to discuss the development of gas fields in the East
China Sea. There is a deep-seated view on both sides that it will
be difficult to repair the strained bilateral relationship before
September, when the prime minister's tenure as the president of
the Liberal Democratic Party expires. However, the move seems to
point the way to build post-Koizumi bilateral relations.

At the outset of the meeting with South Korea, Vice Foreign
Minister Shotaro Yachi stressed: "Both Japan and South Korea
share freedom, democracy, and a market economy. They are both
allies with the US. Friendship and cooperation between the two
countries is extremely important for peace and stability in
Northeast Asia." South Korean Vice Foreign Minister Yu Myung Hwan
responded, "I am pleased that we can now exchange views with Mr.
Yachi after a long time since we met in Seoul last October."

The strategic dialogue was held for the first time since last
October, when the prime minister visited Yasukuni Shrine. Yu and
Yachi agreed to promote a future-oriented relationship, including
expanded exchanges of young people, but they remained at odds
over the Yasukuni issue. During a speech given on Mar. 1, South
Korea President Roh Moo Hyun criticized Koizumi's Yasukuni
visits. A growing view among Japanese government officials is
that it will be difficult to resume the suspended shuttle
diplomacy between the leaders of the two countries while Koizumi
is in office.

The two countries are, however, continuing working-level talks
amid the suspension of mutual visits by their leaders, envisaging
post-Koizumi relations. South Korean Foreign Minister Ban Ki Moon
has entered the race to succeed UN Secretary General Annan, who
is to rotate out at the end of the year. Japan's support is
essential for South Korea. The continuation of strained relations
with Japan, with which it has a close economic relationship, is
disadvantageous to it, too.

Japan is in the same situation. Signing a free trade agreement
(FTA) with South Korea is a model FTA case, because it can expect
expanded trade and strengthened corporate competitiveness from
it. The FTA talks with South Korea were suspended last December,
and there are no prospects for resuming them. The setback could
undermine Japan's economic diplomacy as a whole.

8) Japan, China in agreement to resume six-party talks as swiftly
as possible

YOMIURI (Page 2) (Full)
March 7, 2006

By Hidetoshi Ikebe, Beijing

The Foreign Ministry's Asian and Oceanian Affairs Bureau Director-
General Kenichiro Sasae, now in China to attend the senior
working-level talks with China on the explorations of natural gas
fields in the East China Sea, yesterday met with Chinese Vice
Foreign Minister Wu Dawei at the Chinese Foreign Ministry. The
two diplomats agreed on the need to resume the six-party talks as
quickly as possible. Sasae said to Wu: "We hope to see China make
even more efforts as the host nation to restart the six-nation

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talks." Wu replied, "We'll continue our efforts to work on the
United States and North Korea," explaining North Korea's moves.
Sasae also met with the Chinese Foreign Ministry's Asian Affairs
Bureau Director-General Hu Zhengyue yesterday and exchanged views
about specific approaches to enliven cultural exchanges.

9) China rejects Japan's proposal for joint gas field development
in East China Sea; Both sides still far apart on joint
development

YOMIURI (Page 2) (Excerpts)
March 7, 2006

By Hidetoshi Ikebe, Beijing

Senior working-level talks between Japan and China to discuss the
development of natural gas fields in the East China Sea began at
the Diaoyutai State Guest House in Beijing yesterday afternoon.
The Chinese delegation declared its intention not to accept
Japan's proposal for the joint development of four gas fields,
including Shirakaba (or Chunxiao in Chinese), located near the
equidistance line between Japan and China. That proposal had been
offered in the previous round of talks held at the end of last
September. In the talks yesterday, both delegates went no further
than to explain their respective positions. They will continue
the talks today. On the occasion of the talks held late last May,
China came up with a joint gas field development proposal within
the Japanese territory on the east side of the Japan-China medial
line, but Japan turned it down. In the previous meeting, Japan
offered a counterproposal, and China took it back home, saying,
"We'll discuss it."

The talks this time were attended by Kenichiro Sasae, director-
general of the Foreign Ministry's Asia and Oceanian Affairs,
Nobuyuki Kodaira, director-general of the Natural Resources and
Energy Agency and other officials from Japan. The Chinese
delegation included Hu Zhengyue, director-general of the Chinese
Foreign Ministry's Asian Affairs Bureau.

10) Futenma relocation at top meeting: Yamasaki

YOMIURI (Page 4) (Abridged)
March 7, 2006

Former Liberal Democratic Party Vice President Taku Yamasaki,
currently presiding over an LDP panel on security affairs, held a
press conference yesterday at the Japan National Press Club, in
which he indicated that Prime Minister Koizumi and Okinawa Gov.
Inamine would make a political decision over the pending issue of
relocating the US Marine Corps' Futenma Air Station in the city
of Ginowan, Okinawa Prefecture, to a coastal area of Camp Schwab
in the island prefecture's northern coastal city of Nago. "This
issue will be settled at a top-level meeting of Prime Minister
Koizumi and Governor Inamine," Yamasaki said. "We'll have to be
in a hurry for coordination," he added.

Yamasaki also noted that Inamine has been raising questions about
the Futenma relocation plan while taking the position that it
runs counter to the agreement of the Special Action Committee on
Facilities and Areas in Okinawa (SACO). In this regard, he
insisted that the government should ask for local understanding
in an even more careful manner, suggesting the need for the

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government to explain that the plan is within the framework of
the SACO accord.

11) Koizumi rules out meeting with Inamine over Futenma
relocation

MAINICHI (Page 2) (Full)
March 7, 2006

Prime Minister Koizumi has ruled out the possibility of meeting
with Okinawa Gov. Inamine over the bogged-down issue of
relocating the US Marine Corps' Futenma Air Station in Okinawa
Prefecture to a coastal area of Camp Schwab in the island
prefecture's northern coastal city of Nago. "Officials have met
with him, so I'm not sure about that," Koizumi told reporters
yesterday evening. "I don't know about that in the future,
though," he said.

12) Japan, US to finalize USFJ realignment even without local
consent: Abe

MAINICHI (Page 2) (Full)
March 7, 2006

The Japanese and US governments will work out a final report on
the planned realignment of US forces in Japan even without local
consent, Chief Cabinet Secretary Abe told a news conference
yesterday. The government has now run into rough waters with
Okinawa and other base-hosting localities over the issue of
realigning the US military presence in Japan. The Japanese and US
governments are expected to release a final report in late March
on specific realignment plans. "I hope that the government can
obtain local consent at the earliest possible date before that,"
Abe said. "But when it comes to the final agreement," he added,
"Japan and the United States have been negotiating, so that will
be the final agreement after the negotiations." The Japanese and
US governments will resume working-level consultations today in
Hawaii over the US military realignment, with their senior
officials for foreign affairs and defense attending. The two
governments are expected to push for coordination to work out the
final report late this month. However, officials deem it
difficult to obtain base-hosting local communities' agreements
before releasing the final report.

13) Nukaga remains at odds with Nago mayor and others over
Futenma relocation plan

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

Defense Agency Director General Fukushiro Nukaga dined together
last night in Tokyo with mayor Yoshikazu Shimabukuro of Nago, the
relocation site for the US Marine Corps' Futenma Air Station, as
well as Higashi Mayor Shigeru Miyagi and Kin Mayor Tsuyoshi Gibu,
to exchange views on the relocation plan.

Shimabukuro and others reiterated their request for the
government to present a revision to the plan to relocate the
airfield to Cape Henoko, agreed upon by Japan and the US last
year, saying, "We would like to see the government listen to
local requests and alter the plan even slightly."


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In response, Nukaga said: "We will listen to local requests, but
talks are underway between Japan and the US. I hope you will
understand the Cape Henoko plan." The two sides remained far
apart.

14) No revision to Futenma relocation plan

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

Referring to the Okinawa rally held in opposition to the planned
transfer of US forces' Futenma heliport, Defense Agency Vice
Minister Takemasa Moriya yesterday told reporters: "We are aware
that the people of Okinawa are highly interested in the issue.
However, we have reached an agreement with the US with the
intention to improve the situation in Okinawa as soon as
possible, taking into account the past circumstances." He thus
reiterated that the government has no intention of revising the
plan to transfer Futenma functions to the coastal part of Camp
Schwab.

15) Minshuto losing guts to fight, hardly touches on four main
issues in Upper House Budget Committee meeting

TOKYO SHIMBUN (Page 2) (Full)
March 7, 2006

The House of Councillors Budget Committee started deliberations
on the fiscal 2006 budget yesterday. This session was a good
chance for Minshuto (Democratic Party of Japan), which has been
hurt over the fake e-mail fiasco, to take a step forward to
reconstruct itself. But the opposition party kept a low profile,
hardly touching on four controversial issues, including the
Livedoor scam and the faulty architectural standards issue.

Azuma Koshiishi, who took the floor as the first questioner from
Minshuto, said: "I would like to ask about Prime Minister
Koizumi's determination in addressing administrative reform at
the current Diet session." This was the very theme of which the
prime minister wanted to speak even if there were no question, so
the premier shot back: "The main purpose is to simplify and make
effective (the jobs of) the government."

In response promptly, Koshiishi said: "We have defined this
session as a 'safety session.' We are in stark contrast with
you." But the prime minister replied: "Safety is also the top
priority for the government. An administrative reform Diet
session and a safety Diet session are not contradictory." As it
stands, Koshiishi's question ended up stage-managing the
administrative reform Diet session.

Koshiishi and other Minshuto members did not take up the so-
called four-point package. Only Tasuo Hirano, the last questioner
from Minshuto, briefly referred to the US beef issue, but he
stopped shy of deeply pursuing the Japanese government's
responsibility. His remark also gave Agriculture, Forestry, and
Fisheries Minister Shoichi Nakagawa a chance to speak of his
determination. Nakagawa said: "Although there were problems on
the US side, Japan will also make its utmost efforts."

Hirano concluded his question with this remark: "Minshuto is in a
quite serious situation, but it is now on the path to its

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reconstruction. Ruling party members, you just wait." But in the
Diet session yesterday, the will to fight was not detected among
Minshuto members.

16) Minshuto less energetic, while LDP's Katayama takes shine of
Minshuto at Upper House Budget Committee session

ASAHI (Page 2) (Full)
March 7, 2006

The House of Councillors yesterday started a basic question-and-
answer session at the Budget Committee. As the Livedoor e-mail
fiasco caused by a Minshuto (Democratic Party of Japan) lawmaker
has dragged on, yesterday's Lower House Budget Committee session
was conducted under the leadership of the ruling parties.
Representatives of the Liberal Democratic Party (LDP) posed
questions with ease at the session, while seeking to stymie the
largest opposition party with the e-mail issue.

The LDP intends to bring up the so-called set of four issues,
including the earthquake-resistance data falsification scam, if
Minshuto does not. Counterintuitively, it was Minshuto's
questioners who were hesitant.

LDP Upper House Caucus Secretary General Toranosuke Katayama, the
first questioner of the ruling parties, categorically said,
"Since the Lower House was unable to spend much time for
deliberations in the second half of the session because of the e-
mail uproar (raised by Minshuto), we will carry out heated debate
on policies." Minshuto members could only sit silently and listen
to Katayama's statement.

Katayama launched into his idea on the so-called trinity reform
that would rearrange taxation and fiscal relations between the
central and local governments. He underscored the importance of
transferring tax collection authority to local governments. He
then said to Prime Minister Junichiro Koizumi, "I want you to
focus your reform drive on that point."

Meanwhile, Yukihiro Tani of Minshuto mainly focused on the
reconstruction of Ashikaga Bank, which is located in his home
constituency. He did not raise the issue of US beef imports, even
though he had planned to do so.

Tatsuo Hirano, Minshuto's second questioner, addressed the
government's monetary policy and the trinity reform. He then
brought up the beef issue, but he only went so far as to say, "We
want the government to make clear what it will demand from the
United States." His pursuit of the government lacked punch.

17) Heated debate between Inoguchi and Reiho over spending for
falling birthrate measures

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

At a House of Representatives Budget Committee session yesterday,
Minshuto lawmaker Reiho and Kuniko Inoguchi, state minister in
charge of measures for the declining birthrate, traded barbs over
how much should be spent for measures to counter the falling
birthrate and whether expenses for delivery should be free of
charge. Of the total of approximately 80 trillion yen in the

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state budget for fiscal 2006, 1.58 trillion yen is allocated for
measures to counter the falling birthrate.

Reiho asked Inoguchi's view on the 1.58 trillion yen: "Don't you
think the budget is extremely small?" Inoguchi, however, reacted
strongly, responding, "I think we were able to secure the
necessary budget within the framework of the state budget."

Inoguchi made a statement at a press conference in January that
the idea of making expenses for delivery free of charge would be
considered. She, however, later corrected her earlier remarks
after meeting Chief Cabinet Secretary Shinzo Abe, saying, "I did
not say that we would look into it." With this regard, Reiho
questioned the minister, "Did Mr. Abe warn you about it?"

Inoguchi responded, "Making delivery charges free is one of the
requests I have received." Abe also stated: "Issues will not be
resolved only by making expenses for delivery free. We would like
to implement various measures in addition to conventional
measures."

18) Government makes 20 inquiries about USDA beef report

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

The Ministry of Agriculture, Forestry and Fisheries (MAFF) and
the Ministry of Health, Labor and Welfare yesterday submitted to
the US government a set of questions about a US Department of
Agriculture (USDA) report on the issue of vertebral columns found
in a US beef shipment to Japan. The inquiries include whether
there were any problems with the US inspection system and what
measures USDA plans to take to prevent a recurrence of a similar
incident. The paper noted: "The US should sort out and look into
problems in a comprehensive manner." It then called on Washington
to present specific grounds for its assertion that the incident
was a "unique" case.

The 20 questions were classified into six items, including the
relevant US government institutions, the facilities in question,
and preventive measures. In questions pertaining to the US
government institutions, the paper seeks explanations about
whether there were any problems about authorizing the facilities
in questions and what training the inspectors received.

In questions concerning the meat-processing facilities, the paper
asked the US to explain who was responsible for handling exports
to Japan, and why that person failed to fulfill his or her
responsibility. The ministries called on Washington to present to
Tokyo the specific ways it is planning to implement an
improvement plan for recurrence prevention, including the methods
of unannounced on-site surveys of the facilities, as well as the
training system for inspectors.

The USDA report was submitted to the Japanese government on Feb.

17. MAFF finished translating the contents of the report into
Japanese on March 3 and held consultations with other government
ministries concerned on additional inquiries.

SCHIEFFER