UNCLAS SECTION 01 OF 12 TOKYO 001257

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 03/09/06


Index:

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

China issues:
4) Government reacts angrily to China's proposed joint
development of gas field around disputed Senkaku Islands
5) Chief Cabinet Secretary Abe blasts China's Foreign Minister
Li for remarks linking Nazi worship to Yasukuni Shrine
6) In surprising move, Foreign Minister Aso suggests removing
enshrined Class A war criminals from Yasukuni Shrine

7) Foreign Minister Aso, sounding more like prime ministerial
candidate, gives speech at National Press Club backed by Foreign
Ministry

8) Japan's new UN reform proposal would revamp the shared
budget-contribution scheme of the Permanent Five in the Security
Council to remove inequities

North Korea problem:
9) North Korea test fires missiles that land in Japan Sea
10) Abe says government considering response team to rescue
Japanese nationals in event of North Korea collapse scenario

11) Aso denies existence of secret US-Japan pact on Okinawa
reversion

DPRI talks:
12) Government says it will not change at all the current
Futenma relocation plan
13) Prime Minister Koizumi wants the government's Futenma
relocation plan implemented
14) Nago City mayor would accept the Futenma relocation plan if
the runway were moved a bit
15) Prime Minister now seems willing to meet Okinawa Governor
Inamine to try to obtain local agreement to base realignment
plans for that prefecture
16) Government to establish a consultative organ with local

government to discuss USFJ realignment-related security and
economic development issues
17) Final report on USFJ realignment will contain a separate
strategic portion designed to strengthen the US-Japan global
alliance

18) Poll shows almost everybody in Japan is seriously worried
about shrinking population and that social security system will
collapse

19) BOJ will decide today to lift ultra-loose monetary policy

Articles:

1) TOP HEADLINES

Asahi:
Fire and Disaster Management Agency eyes introduction of triage
to deal with growing demand for emergency transport

Mainichi:

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Government to offer financial support for research on spinal
fluid leakage

Yomiuri:
BOJ to decide today on whether to end monetary-easing policy

Nihon Keizai:
Labor-management talks focus on childcare, nursing care

Sankei:
FTC to launch full investigation into leading machinery plant
makers over bid rigging for sewage plant projects

Tokyo Shimbun:
Leading electric-appliance makers plan to recruit 34% more
employees next spring

2) EDITORIALS

Asahi:
(1) Government urged to review quake-resistance standards
(2) We expect Paralympics athletes to have just as much
competitive spirit

Mainichi:
(1) Japan should be tenacious in gas development talks with
China
(2) If Upper House reform is delayed, debate may grow over the
body's uselessness

Yomiuri:
(1) Sales of government assets cannot be trump card for fiscal
reconstruction
(2) We are looking forward to watching athletes in Paralympics

Nihon Keizai:
(1) Joint gas-field development should be limited to areas near
median line
(2) Negotiations in Human Rights Council now at crucial juncture

Sankei:
(1) Interference from China not necessary in selection of
Koizumi successor
(2) Making baseball more entertaining

Tokyo Shimbun:
(1) Leaks of investigation data show sloppy management by police
(2) China's new proposal on gas field development in East China
Sea totally unacceptable

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 8

NIHON KEIZAI (Page 2) (Full)
March 9, 2006

10:32
Arrived at Kantei.

11:03
Met with ROK's Grand National Party Representative Park Geun Hye.

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13:12
Met Deputy Chief Cabinet Secretary Nikai.

14:00
Met Natural Resources and Energy Agency Director-General Kodaira
and Foreign Ministry's Asian and Oceanian Affairs Bureau Director-
General Sasae.

16:30
Met with US Boeing CEO McNerney, joined by Foreign Ministry's
North American Affairs Bureau Director-General Kawai.

17:20
Attended a meeting of the Council on Gender Equality.

18:24
Met Minister of Economy, Trade, and Industry Nikai.

19:14
Dined with Nikai, former LDP President Yamasaki, and New Komeito
Secretary General Fuyushiba at the restaurant, Blue Gardenia, at

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Akasaka Prince Hotel.

21:27
Returned to residence.

4) Government, ruling parties strongly react to China's proposal
for joint gas development in area near Senkakus

YOMIURI (Page 2) (Full)
March 9, 2006

China made a new proposal for joint development of natural gas
fields in areas in the East China Sea, including near the Senkaku
Islands. The proposal was presented during the fourth round of
bureau director-level talks of the Japanese and Chinese
governments on March 7. The Senkakus are on the Japanese side of
the median boundary set by Japan. The new proposal has set off
strong reactions from the government and the ruling parties.

Chief Cabinet Secretary Abe expressed displeasure at the Chinese
proposal in a press conference yesterday, saying: "We want China
to make a more realistic proposal. China should thoroughly
examine our proposal." Adding, "Naturally, Japan has the right to
carry out test-drilling," Abe indicated that Japan would start
trial drilling depending on China's future moves.

In a press briefing, Foreign Minister Aso said: "The Senkaku
Islands are indisputably Japan's territory both historically and
under international law. Japan won't co-develop those gas
fields." A government source assailed: "The contents of the
proposal are provocative." An official of the Prime Minister's
Office also commented: "This is out of the question. It seems
that China is picking a fight."

In the Liberal Democratic Party, the Special Committee on Ocean
Rights and Interests has engaged in drawing up a bill designed to
ensure the safety of gas field development and test drilling. Its
Chief of Secretariat Yasunori Nishimura, a House of
Representatives member, stated: "In order to show Japan's
position, we must get the bill (through the Diet)."

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Meanwhile, some government officials stress the need for
continued talks with China. Speaking at a House of
Representatives economy, trade and industry committee meeting
yesterday, Economy, Trade and Industry Minister Nikai said:

"Various problems pending between Japan and China have been on
the negotiating table, such as territorial land and waters, as
well as history,. This is not a problem that can be solved
quickly. Although many difficulties remain, we would like to deal
with the issue tenaciously."

After receiving from Nikai a report on the results of the talks
with China, Prime Minister Koizumi told Nikai: "Even if it takes
time, I want you to make utmost effort to try to resolve the
problem amicably."

5) Chief Cabinet Secretary Abe blasts Chinese foreign minister's
remarks

ASAHI (Page 4) (Full)
March 9, 2009

Commenting on Chinese Foreign Minister Li Zhaoxing's remarks that
Prime Minister Junichiro Koizumi's visits to Yasukuni Shrine,
likened to Nazi leaders, are foolish and immoral, Chief Cabinet
Secretary Shinzo Abe at a press conference stated, "It is

SIPDIS
inappropriate for a top foreign ministry official to use the
words "foolish" and "immoral" that lack respect toward another
country's top leader." Administrative Vice Foreign Minister
Shotaro Yachi also made a protest against Chinese Ambassador to
Japan Wang Yi by phone.

6) Foreign Minister Aso hints at separate enshrinement of Class-A
war criminals at Yasukuni Shrine

ASAHI (Page 4) (Full)
March 9, 2006

At the Japan National Press Club yesterday, Foreign Minister Taro
Aso revealed his view on Prime Minister Junichiro Koizumi's
visits to Tokyo's controversial Yasukuni Shrine that we ways
should be found so that the Emperor and the prime minister will
be able to pay their respects (for the war dead). Asked about his
view on Yasukuni Shrine's honoring the Class-A war criminals
along with the war dead, Aso stated, "Yasukuni Shrine honors both
the war dead and those who did not die in wars. This is a
significant problem." He indicated in his remarks that in order
to resolve the shrine issue, the war dead and the Class-A war
criminals should be separately enshrined.

7) Aso delivers third foreign policy speeches at Japan National
Press Club to make public appeal about political identity,
Foreign Ministry supports him, hoping for assertiveness

ASAHI (Page 4) (Full)
March 9, 2006

Foreign Minister Taro Aso delivered a speech yesterday at the
Japan National Press Club on the theme "What does economic
diplomacy mean for Japan?" He has so far given three foreign
policy speeches at this press club since he assumed his post for

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months ago. Lurking in the background is the Foreign Ministry's
hidden motive of hoping to see Aso assert himself as a possible
candidate in the presidential election of the Liberal Democratic
Party that will choose a successor to Prime Minister Junichiro
Koizumi. Aso also wants to play up his political identity before
the LDP leadership race.

Aso revealed in his speech a plan to accelerate negotiations on
free trade agreements (EPAs) with various countries. His aim of
delivering the three speeches is to publicize that the ministry
has supported economic cooperation with other countries,
according to Aso's aide.

In his speech in January, Aso advocated an idea of creating a
strategic council on the government official development
assistance (ODA) in an attempt to review the ODA program for
developing countries. His view was just what the Foreign Ministry
had expected.

The Foreign Ministry suggested that Aso take advantage of
opportunities to give speeches at the press club. The ministry
picks the subject of a speech, discussing it with Aso. Concerned
bureaus draft the speeches and Aso then edits them.

8) Government to propose setting floor for permanent UN members'
share at 3 or 5%

YOMIURI (Page 2) (Full)
March 9, 2006

The government yesterday finalized a proposal for setting a floor
for five UNSC permanent members' shares at 3 or 5%. The proposal
is in effect designed to raise the shares of China and Russia.
Japan will present it to the fifth committee of the UN General
Assembly responsible for discussing the UN's administrative and
fiscal affairs in general.

Japan's share was 1.97%, when it joined the UN in 1956. However,
as its economy grew, its share has increased. Its share in 2004
through 2006 was 19.468%, the second largest following the US'
22%. The combined shares paid by Japan and the US account for
approximately 40% of total expenses paid by all members.

The combined shares paid by other four permanent UNSC member
nations, excluding the US, are smaller than the amount paid by
Japan with Britain and France paying about 6% respectively, China
shouldering about 2% and Russia contributing about 1%. For this
reason, calls for due financial contributions from permanent
member nations, which have the veto power, are growing in the
government and the ruling camp.

9) North Korea fires missiles

TOKYO SHIMBUN (Page 3) (Full)
March 9, 2006

North Korea launched short-range missiles into the Sea of Japan
from that country's northeastern coastal town of Dancheon in
Hamgyeongnam-do after 9 a.m. yesterday, according to the Defense
Agency and other sources. The launched missiles flew about 100
kilometers in the east-northeastern direction along North Korea's
coastline on the Sea of Japan and landed in the sea, according to

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the agency.

The agency has asked US forces for information about the
missiles. However, the agency judged that the missiles were
launched in ordinary training and did not affect Japan's national
security, judging from its range and other factors. The agency
has issued no particular alert, an official said.

"We're gathering intelligence at all times," Prime Minister
Junichiro Koizumi told reporters yesterday evening. "This is not
the kind of matter we should say in particular," he added. In
this connection, an agency official revealed that there were
signs in North Korea a couple of weeks before the missile launch.

In May last year, North Korea launched a short-range missile to
the Sea of Japan.

10) Chief Cabinet Secretary Abe reveals government plan to look
into ways to rescue Japanese nationals in event of collapse of
North Korea

SANKEI (Page 5) (Full)
March 9, 2006

Regarding the rescue of Japanese nationals in the event of the
collapse of North Korea from within, Chief Cabinet Secretary
Shinzo Abe during an Upper House Budget Committee session
yesterday indicated the government's plan to look into ways to
respond to such a situation, saying, "How to deal with abductees
to North Korea and Japanese wives of North Koreans is a major
issue. We will deal with the matter with an awareness of the
problems." He then said, "We must at least grasp the names of
Japanese nationals who might reside in North Korea." Abe made
this statement in reply to a question asked by Ryuji Yamane of
the Democratic Party of Japan.

Foreign Minister Taro Aso pointed out, "If North Korea collapses,
a large number of people will drift ashore the coast of the Sea
of Japan. We must think about the issue from the perspective of
security control." Though Defense Agency Director General
Fukushiro Nukaga said, "There is no legislative framework that
allows Japan to dispatch personnel to rescue Japanese nationals,
by invoking the right to self-defense," he added that it is
conceivable to determine that Japan can provide means of
transportation at the order of the foreign ministry in time of
emergency under the condition that safety is secured."

Commenting on Japan's diplomacy toward North Korea, Abe said,
"The ultimate measure is to slap economic sanctions in compliance
with the Special Measures Law to Ban Port Calling by Specified
Vessels, but we want to have North Korea change its stance, by
fully using various kinds of pressure before opting for such a
measure."

11) Foreign Minister Aso again denies existence of secret deal on
Okinawa reversion

MAINICHI (Page 2) (Full)
March 9, 2006

By Takashi Suto


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At an Upper House Budget Committee meeting yesterday, Foreign
Minister Taro Aso was asked about a secret deal in accordance
with which Japan shouldered the cost of restoring land to its
original state at the time of the reversion of Okinawa in May
1972, even though the cost was supposed to be paid by the United
States. Aso again denied such a deal, noting: "No other pacts
than the agreement on the reversion of Okinawa existed. There was
no secret deal."

Aso was replying to a question posed by Mizuho Fukushima of the
Social Democratic Party.

12) Government determined not to comply with call for revision of
Futenma relocation plan; Gap with local residents yet to be
bridged

MAINICHI (Page 2) (Full)
March 9, 2006

By Teruhisa Mitsumori, Yoso Furumoto

Nago City in Okinawa Prefecture yesterday expressed a "tolerable
area" that may allow the city to respond to discussions with the
central government regarding revision to the relocation plan for
the US military's Futenma Air Station from Ginowan City in the
prefecture to the coastal area of Camp Schwab in Nago City. But
the central government intends to refuse discussions with the
city on revision, with a high-level Defense Agency (JDA) official
remarking, "There's nothing to talk about." Given the wide gap in
the perceptions over the relocation plan between the central
government and the local community, it appears increasingly
difficult for them to achieve a consensus before the end of
March, which is the target for an agreement on a final report on
the realignment of US forces in Japan.

Administrative Vice Defense Minister Takemasa Moriya yesterday
met with a delegation from the Okinawa Prefectural Assembly at
the JDA and declared that it would impossible to revise the plan,
telling the delegation: "Prime Minister Koizumi has stated that
the government plan will not be changed. We don't intend to
create a revision."

Until recently, Nago City had insisted that the central
government should come up with a proposal for a revision, but
yesterday Deputy Mayor Bunshin Suematsu indicated that the sea
off the southern part of the Schwab coast was an area on which
the city could hold revision talks with the central government,
assuming a flexible stance.

The proposed area, however, is almost the same as that of the
Henoko shallow water plan the United States proposed during Japan-
US talks last year. Japan rejected this US plan in part because
the plan could destroy the algae feeding ground for dugongs, a
protected species. Nago City hopes that the central government
"will move to revise the relocation plan," according to a city
assembly member, but the central government has shown no sign of
doing so.

There is also a difference in perceptions between Okinawa
Prefecture and Nago City over revisions to the relocation plan.
The prefectural government has insisted on the propriety of the
previous Henoko offshore plan that was approved by a cabinet

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meeting in 1999. Nago City's move this time has perplexed the
prefectural government. A senior prefectural government official
remarked: "It's troublesome because we have stressed that both
Nago City and the prefecture have been in agreement not to call
for revision."

13) Prime Minister: "I hope to see the government plan
implemented"

MAINICHI (Page 2) (Full)
March 9, 2006

Prime Minister Junichiro Koizumi late yesterday dined with Taku
Yamasaki, former vice president of the Liberal Democratic Party
(LDP), and others at a Tokyo hotel. Yamasaki asked Koizumi to
respect the wishes of local residents regarding the relocation of
the US military's Futenma Air Station to the coastal area of Camp
Schwab. Koizumi reiterated that he had no intention to revise the
planned relocation of the airfield to Camp Schwab. This
relocation plan was agreed on last October by Japan and the
United States.

Prior to this gathering, Yamasaki met in Tokyo with a delegation
of ruling-party members of the Okinawa Prefectural Assembly. He
indicated to the delegates that he would urge the government to
comply with calls for a revision, telling them: "It's of great
significance (that Nago City has specified an acceptable area).
Under the party's leadership, I'd like to find possible ways to
resolve the issue."

14) Nago may accept relocated runway

SANKEI (Page 5) (Full)
March 9, 2006

Vice Mayor Fuminobu Suematsu of Nago, Okinawa Prefecture, the
relocation site for the US Marine Corps' Futenma Air Station
according to the interim report on the realignment of US forces
in Japan, indicated in the municipal assembly yesterday that if
the government decided to move the coastal plan in a southwestern
direction to build a runway mostly on the water, the city would
consider accepting it. Masamitsu Tamaki, policy promotion chief
of Nago, also said: "(A revised plan) should come from the
government. The city has no intention of producing one."

15) Koizumi willing to hold talks with Inamine to obtain local
consent on Futenma relocation

ASAHI (Page 3) (Full)
March 9, 2006

Prime Minister Junichiro Koizumi held talks last night with
Liberal Democratic Party Security Research Commission Chairman
Taku Yamasaki and others. In the talks, Koizumi expressed his
willingness to settle the planned relocation of the US Marine
Corps' Futenma Air Station through talks with Okinawa Gov.
Keiichi Inamine, saying, "I will meet the governor once the stage
is set." "Top-level talks will be held to reach an agreement," a
person close to Koizumi also said, suggesting the possibility of
making compromises to obtain local consent before producing a
final report on US force realignment with the US.


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Economy, Trade and Industry Minister Toshihiro Nikai and New
Komeito Secretary General Tetsuzo Fuyushiba also attended the
talks. Prior to his meeting with Koizumi, Yamasaki met
representatives of three ruling parties in Okinawa, such as the
Liberal Democratic Party and New Komeito, who are opposed to the
Futenma relocation plan. In the meeting, Yamasaki took a positive
view about revising the relocation plan, saying, "The party would
like to search for a feasible (relocation site) to settle the
matter."

But in his talks with Yamasaki and others, Koizumi made it clear
that at present the government has no intention of complying with
Nago's request for changes to the relocation plan, saying,
"Problems would follow changes to the government plan. We need to
settle the matter based on the government plan."

16) Futenma relocation: Government to establish consultative body
next month to discuss safety, promotion measures with local areas

YOMIURI (Page 1) (Full)
March 9, 2006

The government decided yesterday to establish a body as early as
April to discuss with affected municipal governments a plan to
relocate the US Marine Corps' Futenma Air Station from Ginowan,
Okinawa Prefecture, to the coastline of Camp Schwab in Nago in
the prefecture. The government intends to make arrangements to
mainly discuss such themes as safety measures for areas
surrounding Futenma Air Station until the relocation is completed
in about eight years, and steps for revitalizing the local
economy centering on the northern part of Okinawa. The government
plans to obtain local consent on the realignment plan through the
consultative body.

The government has basically no intention of complying with local
calls for changes to the relocation plan. And it has decided to
begin making arrangements with concerned local areas in real
earnest after releasing a final report at the Japan-US Security
Consultative Committee of foreign and defense ministers (2 plus
2) later this month.

Meanwhile, Nago expressed its willingness yesterday to hold talks
with the government if the relocation site was moved to somewhere
between the Camp Schwab coastal plan and the original Henoko
plan, showing its tolerance prior to the planned coordination
with the government. Nago Mayor Yoshikazu Shimabukuro said, "If
changes are made to fit the variation of the original plan, we
will discuss the matter with government." But Prime Minister
Junichiro Koizumi took a negative view last night about modifying
the relocation plan, saying, "New problems would follow
concessions on the government plan." Koizumi made this comment in
his talks at a Tokyo hotel with former Liberal Democratic Party
Vice President Taku Yamasaki, Economy, Trade and Industry
Minister Toshihiro Nikai, and New Komeito Secretary General
Tetsuzo Fuyushiba.

17) USFJ realignment: Final report to incorporate strategy,
suggest need to strengthen alliance on global scale

SANKEI (Page 1) (Full)
March 9, 2006


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Japan and the United States entered into talks in Hawaii on March
7 (March 8 Japan time) over the realignment of US forces in
Japan, with their senior officials attending. The Japanese and US
governments are now in the final phase of negotiations focusing
mainly on the issue of alleviating the burden of hosting US
military bases. The two governments will also outline a final
report to be released in April. The final report is expected to
suggest the need for the two countries to strengthen their
bilateral alliance on a global scale, while seeking to revise the
Japan-US Defense Cooperation Guidelines. In addition to this
strategy, the report will detail specific realignment plans.

The talks, scheduled for five days through March 11, will focus
on specific realignment plans to lessen Japan's base-hosting
burden in its southernmost island prefecture of Okinawa and in
other prefectures. The Japanese and US governments are expected
to nail down specific realignment plans, such as: 1) returning
the sites of US military bases and facilities located in Okinawa
Prefecture's central and southern areas; 2) redeploying the KC-
130 air tanker fleet from Futenma airfield to mainland Japan; and
3) dispersing some of Kadena-based fighter jets' flight training
missions to other prefectures.

When it comes to the reversion of US military bases and
facilities in the island prefecture's central and southern
localities, the Japanese and US governments are expected to agree
on the overall return of three facilities, including the Naha
port facility. In the case of Camp Zukeran (i.e., Camp Foster),
the two governments would like to agree on its partial return. In
October last year, the two governments released an interim
report, which incorporated an agreement to consider redeploying
KC-130s from Futenma to the Maritime Self-Defense Force's Kanoya
base in Kagoshima Prefecture. However, the US military frowned on
that plan from the perspective of convenience. The Japanese
government will instead offer to build housing at Iwakuni base in
Yamaguchi Prefecture. The US government has yet to agree on the
proposed dispersion of fighter jets' flight training from Kadena
to mainland prefectures.

In addition, the realignment talks will focus on Japan's proposal
to reduce the US military's airspace controlled at Yokota base in
Tokyo. However, the US military is strongly opposed to that
proposal. It is also unclear whether the United States will
return its air traffic control.

In the meantime, the final report will also set forth a strategic
course of action to strengthen the bilateral alliance on a global
scale with an eye to revising the 1997 new version of bilateral
defense cooperation guidelines, which came after the
intensification of tensions over the Korean Peninsula with
emphasis on cooperation during regional contingencies or
emergency situations in periphery of Japan. Meanwhile, Japan and
the United States have already been working together on a global
scale, as seen from the Self-Defense Forces deployment in Iraq
and disaster relief operations in the aftermath of the Indian
Ocean tsunami. The Defense Agency, aiming to review such
bilateral cooperation, is positive about renewing the defense
guidelines. A senior official of the agency has suggested the
need to study bilateral arrangements that will enable Japan and
the United States to deal effectively with military operations
other than war, or MOOTW for short. However, the Foreign Ministry
is negative about remaking the defense guidelines. "Japan may

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expand the scope of its cooperation within the current framework,
and that's enough," a senior official of the ministry said.

The Japanese and US governments will hold the final round of
working-level consultations in Tokyo for two days or so after
March 20, following up the Hawaii round. The United States,
meanwhile, has offered to move US Marines from Okinawa to Guam.
In this regard, the US government, which estimates the total cost
for their relocation to Guam at approximately 8 billion dollars
(approx. 940 billion yen), wants Japan to make a political
decision on burden sharing and will work out the final report.

In response, Japan will tell the United States that the Japanese
government will continue even after releasing the final report to
persuade base-hosting localities to consent to specific base
realignment plans. In early April, the two countries are
scheduled to hold a two-plus-two meeting of their
intergovernmental security consultative committee, with their
foreign and defense ministers attending. On that occasion, the
Japanese and US governments are to release the final report.
There are also fluid factors. The United States is reportedly
negative about holding another two-plus-two meeting, since the US
government has already come up with an outline of its realignment
proposals in the interim report.

18) Yomiuri opinion poll: 87% see shrinking population as
"serious" issue; 94% worried that social security system cannot
be sustained

YOMIURI (Page 1) (Excerpt)
March 9, 2006

In a national opinion survey (face-to-face interviews) carried
out by the Yomiuri Shimbunsha, a vast majority of Japanese took
the shrinking population trend as a serious issue, and felt
worried that the social security system could not be sustained.
At present, the Japanese population totals approximately 127.76
million people (as of 2005 national census), but it is expected
to shrink by half by the year 2100. The poll underscored the
strong sense of alarm of the Japanese people about the rapidly
shrinking population.

The survey was carried out during Feb. 11-12. According to the
results, a total of 87% of the public took the population drop as
a serious problem. Only 11% felt it was not a problem. With the
drop in the birth rate and the aged population growing, there is
a feeling of concern among the population -- 94% in the survey --
that the social system, including pensions, medical services and
elderly care -- cannot be sustained.

19) Bank of Japan to reach final judgment today on whether to
lift ultra-loose monetary policy

YOMIURI (Top Play) (Excerpts)
March 9, 2006

The Bank of Japan (BOJ) will today hold a second day of policy
consultations to reach a final judgment on whether to lift the
five-year super-loose monetary policy. The central bank is now
determined that with the price movements moving into the plus
column, the situation permits it to confirm the judgment that the
economy has emerged from a deflationary cycle. BOJ Governor

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Toshihiko Fukui plans to propose lifting the quantitative easing
monetary policy during the meeting. Since another focus of the
meeting is on a new framework for stabilizing interest rates and
prices after the removal of that policy, whether a consensus can
be reached on the removal of the policy is not certain. However,
it appears certain that if Fukui proposes the lifting of the
policy, most members will support it and its removal will be
accepted.

The meeting will bring together one governor, two deputy
governors and six panel members. In the first round of the
meeting held yesterday, the BOJ leadership explained the present
economic and price situations and participants exchanged
opinions. The meeting ended in about two hours, as expected. The
members will today discuss, based on yesterday's discussions, the
propriety of lifting the current monetary policy and whether a
desirable price index should be indicated for a stable interest
rate constraint, and determine the opinion of the panel.

SCHIEFFER