JAPANESE MORNING PRESS HIGHLIGHTS 03/10/06

UNCLAS SECTION 01 OF 09 TOKYO 001272

SIPDIS

SIPDIS

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/10/06

Index:

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

4) Three returning GSDF troops from Iraq immediately committed
suicide, possibly from built up stress

Defense issues:
5) With central, local governments at impasse over Futenma
relocation issue, ruling camp lawmakers try to intervene to help
6) LDP's Yamasaki asks Prime Minister Koizumi to coordinate
solution to Futenma impasse with local governments
7) Prime Minister tells Yamasaki he is negative about revising
government's plan to relocate Futenma in Okinawa
8) Okinawa governor in meeting with JDA chief Nukaga restates
opposition to government's plan to relocate Futenma
9) Okinawa Governor Inamine says Tokyo is giving priority to US
over local interests in resolving USFJ realignment issues

China relations:
10) China says that since Senkakus are owned by China, quite
proper to present Japan with a joint gas development proposal in
that area
11) Koizumi upset at China: "The Senkakus are Japanese
territory!"
12) Foreign Minister Aso runs off the rails again, calling
Taiwan a "country" then retracting the statement, made in the
Diet
13) China blasts Aso's latest gaffe
14) China's Ambassador to Japan Wang, called in by Foreign
Ministry to hear protest, refuses to go, hears protest on phone

15) Fifteen-year old Indonesian girl a victim of human
trafficking at famous hot springs resort in Japan's Gumma
Prefecture

16) Bank of Japan lifts ultra-loose monetary policy after five
years, but keeps zero interest rate for time being

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Nihon Keizai & Tokyo Shimbun:
BOJ ends monetary-easing policy; Zero interest remains intact for
time being; First policy shift in 5 years

Sankei:
Government panel to approve NHK to air commercials overseas

2) EDITORIALS

Asahi:
(1) BOJ policy switch: Full consideration necessary to prevent
return of deflation
(2) Japan-China gas field development: Japan must hammer out
countermeasures in cool-headed manner

Mainichi:
(1) End of monetary-easing policy: BOJ should raise interest

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rates in line with economy
(2) US, Iran need to establish cooperative relations

Yomiuri:
(1) BOJ should reveal intent to keep interest rates zero for
time being
(2) International community must remain united in dealing with
Iranian nuclear issue

Nihon Keizai:
(1) BOJ policy shift a first step toward normalizing monetary
policy

Sankei:
(1) End of quantitative easing regarded as first step toward
normalization of monetary policy
(2) Attention must be paid to infectious diseases other than
bird flu

Tokyo Shimbun:
(1) With monetary policy switch, energy should be poured into
stabilizing market
(2) World Baseball Classic: Fans' expectations should be taken
into consideration

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 9

NIHON KEIZAI (Page 2) (Full)
March 10, 2006

10:31
Met LDP Secretary General Takebe at Kantei.

11:04
Met the highest award winner, Nozomi Watanabe, and others
entrants in the senior high school students' speech contests on
the Northern Territories.

13:45
Met Policy Research Council Chairman Nakagawa.

14:30
Met Parliamentary Foreign Secretary Yamanaka, Foreign Ministry
European Affairs Bureau Director-General Harada, and others.

15:00
Met Intelligence Officer Kanemoto.

16:00
Met former LDP Vice President Yamasaki. Afterward, met National
Policy Agency Director-General Urushima.

17:19
Attended a meeting of the Japan Investment Council.

18:17
Met Chief Cabinet Secretary Abe.

19:09
Met one-time LDP House of Representatives members at Akasaka

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Prince Hotel, joined by Takebe.Prime Minister: "Patience is a
virtue. Practice makes perfect. Three years of service will make
you feel familiar with politics."

19:53
Arrived at residence.

4) Three SDF members committed suicide after returning from Iraq

ASAHI (Page 38) (Excerpts)
March 10, 2006

Three of the Ground Self-Defense Force (SDF) troops committed
suicide after returning to Japan from Iraq, to which they had
been dispatched on a humanitarian and reconstruction assistance
mission. The three include a battery commander responsible for
ensuring the safety of a unit. An official of the Defense Agency
(JDA) said, "It was impossible to conclude whether they committed
suicide because of their experiences in Iraq," but it has been
reported that many of those who returned from Iraq remain unable
to adjust themselves to their surroundings and that others have
attempted to commit suicide. The JDA has not obtained accurate
information, but it might be urgently necessary to review mental
healthcare for troops.

About 4,500 SDF troops have so far returned to Japan from Iraq.
According to informed sources, one of the three was a former
battery commander in his 30s. He died from inhaling carbon
monoxide gas in his car last summer. After returning from Iraq,
he had been preoccupied with dealing with the aftermaths of
misconducts and a traffic accident caused by two subordinate
officers during his stay in Iraq.

A battery commander gives instructions to more than 100 guards to
support the commander. The unit of the former battery commander
had exposed to danger many times in Iraq. Its camp was attacked
with a shell and other means many times, and there is even a case
in which a member of the unit was about to be mistakenly shot by
an American soldier.

After returning to Japan two years ago, the former battery
commander was appointed to be a training senior officer at a
regional district headquarters. It has been reported that during
the Japan-US joint training last year, he suddenly shouted: "I
will be killed if I am with them (American soldiers)." His friend
commented: "He had been told 'don't go closer to American troops'
in order to avoid from being involved in a terrorist attack in
Iraq, so he might have had trauma."

Among the 240,000 SDF members, 94 (0.04%) committed suicide, the
highest record, in fiscal 2004. The number in this fiscal year is
70 (0.03%) as of the end of January. The rate of the Iraq-
returning suicide victims to all is 0.07%.

5) Futenma relocation: Ruling coalition launches efforts to
mediate between central government and local municipalities

NIHON KEIZAI (Page 2) (Full)
March 10, 2006

The ruling parties yesterday embarked on full-fledged
consultations over the relocation of the US military's Futenma

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Air Station in Ginowan City, Okinawa Prefecture, an issue drawing
much attention in the realignment of US forces in Japan. Prime
Minister Junichiro Koizumi has no intention to change the current
plan for relocating the Futenma airfield to Camp Schwab in Nago
City, as specified in the interim report the Japanese and US
governments released last October, but the central government has
had difficulties in coordinating views with local municipalities.

"I'd like you to leave coordination to our party," Hidenao
Nakagawa, chair of the Liberal Democratic Party (LDP) Policy
Research Council, said to Koizumi at the Prime Minister's
Official Residence (Kantei) yesterday. Taku Yamasaki, chair of
the LDP Security Research Council, who has been asked by Nakagawa
to act as a mediator, also met with Koizumi. Reportedly, Koizumi
told Yamasaki: "My hope is that the government plan will be
implemented as is, but I also understand that coordination is
necessary."

For the US, the relocation of Futenma is part of the integrated
package of the US military transformation that envisions possible
contingencies in East Asia and other factors. "Special treatment"
is not assumed in the package. The prime minister, too, perhaps
out of consideration for the US, appears to be coming around to
settling the issue in line with the interim report.

Okinawa's position is quite different. Governor Keichi Inamine
yesterday met with LDP Secretary General Tsutomu Takebe and
Nakagawa at party headquarters and told them: "We can't accept
the planned relocation, given the long history of debates over
the relocation of Futenma." Some in the government are suggesting
setting up a consultative body involving the central and local
governments, but it is not yet clear whether such a body will
actually be established. (The LDP) is therefore trying to look
for ways to resolve the issue under its leadership.

6) Koizumi tells Yamasaki to make arrangements with local areas
for Futenma relocation

ASAHI (Page 2) (Full)
March 10, 2006

Prime Minister Koizumi held talks at his official residence
yesterday with Liberal Democratic Party Security Research
Commission Chairman Taku Yamasaki over the planned relocation of
the US Marine Corps' Futenma Air Station in Okinawa Prefecture,
now in focus as part of the realignment of US forces in Japan.

According to Yamasaki, Koizumi instructed him and the LDP to make
arrangements to elicit compromises from local areas, saying, "I
would like to see the government plan implemented, but local
reaction is still mixed. The situation requires some
coordination."

After the meeting, Koizumi said to reporters, "I asked (Yamasaki)
to continue working hard to obtain cooperation of local residents
in Okinawa on the government plan."

Okinawa's Nago municipal government is seeking changes to the
Henoko relocation plan, agreed upon by the Japanese and US
governments. But Koizumi reiterated that the government at
present has no plan to revise the relocation plan.


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According to Yamasaki, Koizumi also expressed his desire to
obtain local consent by the end of this month when Japan and the
US are scheduled to produce a final report, noting, "I strongly
hope for a final settlement by the end of this month." Koizumi
also expressed his willingness to hold talks with Okinawa Gov.
Keiichi Inamine once a prospect is obtained for local consent.

Meeting with Inamine yesterday, Defense Agency Director General
Fukushiro Nukaga also indicated he would expedite coordination,
stating: "I will make a final decision, and then consult with the
prime minister." Inamine again refused the government plan,
saying, "Okinawa cannot accept such a plan."

7) Prime Minister asks Taku Yamasaki to coordinate Futenma
relocation, but is negative about revising government's plan

YOMIURI (Page 4) (Full)
March 10, 2006

In a meeting yesterday with Taku Yamasaki, chairman of the
Liberal Democratic Party's Security Research Committee, Prime
Minister Junichiro Koizumi asked him to cooperate with local
governments in coordinating the plan to relocate Futenma Air
Station (Ginowan City) to the coastal portion of Camp Schwab
(Nago City). He told him: "I would like you to discuss it with
the Defense Agency and then make efforts to coordinate the plan."
However, on the revisions being sought by the local community,
the Prime Minister again indicated that he would not respond,
stating, "I would like to see the government's plan adopted."
Yamasaki asked Koizumi to meet with Gov. Keiichi Inamine, but the
Prime Minister replied, "I will talk to him when the environment
has been prepared. Once that is the case, it will be fine."

8) Governor Inamine reiterates opposition to JDA chief Nukaga
regarding coastal plan for Futenma relocation

MAINICHI (Page 2) (Full)
March 10, 2006

Okinawa Governor Keiichi Inamine visited Defense Agency Director
General Fukushiro Nukaga yesterday at his agency. In the meeting,
the governor once more expressed his opposition to the relocation
of Futenma Air Station (Ginowan City, Okinawa Prefecture) to the
coastal portion of Camp Schwab (Nago City, same prefecture).

Inamine stressed the Camp Schwab coastal plan was "unacceptable,"
He advocated as appropriate the previous plan to build a facility
in the offing of Henoko district, as approved by the Cabinet in

1999. In respond, Nukaga sought the governor's understanding for
the coastal plan.

After the meeting, Governor Inamine told the press corps that a
meeting with Prime Minister Koizumi "is possible if the right
conditions are set up." He also met yesterday with Liberal
Democratic Party (LDP) Secretary General Takebe and LDP Policy
Research Council Chairman Hidenao Nakagawa.

On the other hand, Prime Minister Koizumi also met yesterday with
Taku Yamasaki, the Security Research Council chairman in the LDP
and instructed him to try to persuade the local governments on
the plan.


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9) Futenma relocation: Inamine tries to check government's
approach of putting US ahead of local areas

TOKYO SHIMBUN (Page 2) (Full)
March 10, 2006

Okinawa Gov. Keiichi Inamine held separate talks in Tokyo
yesterday with Defense Agency Director General Fukushiro Nukaga,
Liberal Democratic Party Secretary General Tsutomu Takebe, and
others. Inamine reiterated his opposition to the Japan-US
agreement to relocate the US Marine Corps' Futenma Air Station to
the coastline of Camp Schwab apparently in an effort to constrain
the government's intention to reach a final agreement on the
planned US force realignment by the end of this month even
without local consent.

In his talks with Nukaga, Inamine said, "It is provocative for
the government to prioritize negotiations with the US over talks
with local areas." Nukaga explained, "It's a misunderstanding
(that the government has jumped the gun)."

Meanwhile, Prime Minister Koizumi has ordered LDP Security
Research Committee Chairman Taku Yamasaki to advance coordination
in collaboration with the government and the ruling camp, saying:
"I would like to see the government plan implemented as it is.
But because there are objections in the ruling bloc and mixed
local reactions, coordination of views is essential."

10) China calls Senkakus "China's territory" in attempt to
justify new proposal on joint gas field development

SANKEI (Page 1) (Excerpts)
March 10, 2006

Hideaki Noguchi, Beijing

In his regular press conference yesterday, Chinese Foreign
Ministry Spokesman Qin Gang criticized Japan's stance over the
issue of joint development of gas fields in the East China Sea,
saying: "The Diaoyu Islands (called Senkaku in Japan) are China's
territory, so it is unreasonable for Japan to say, on the premise
that the islands are its territory, that it cannot accept our new
proposal." The remark is intended to justify China's new proposal
for exploring gas fields in two areas, including one near the
Senkaku Islands, and to try to put pressure on Japan.

Qin also revealed that China had refused in talks on March 7
Japan's proposal calling for China to suspend its ongoing
development of the Shirakaba gas field, which China calls
Chunxiao, until both sides reach an agreement on joint
development. He said: "China is developing oil fields in waters
near China and free from any dispute with Japan. The development
is a justifiable act, based on China's sovereignty."

11) Prime minister reacts to China's new proposal for gas field
development

SANKEI (Page 2) (Excerpts)
March 10, 2006

In reference to Chinese Foreign Ministry Spokesman Qin Gang's
remarks (concerning China's new proposal for Japan and China to

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jointly develop an area near the Senkaku Islands by defining the
islands as China's territory),Prime Minister Junichiro Koizumi
said: "Japan is in a different position from China." He indicated
that the Senkaku Islands are Japan's territory, so Japan cannot
accept the Chinese proposal. He was replying to questions by
reporters at his official residence.

A senior Foreign Ministry official fiercely reacted to Qin's
remark, claiming: "As long as China has made such an assertion,
talks will never move ahead." A source familiar with Japan-US
relations commented: "China might be aiming to delay talks by
bringing forth a territorial issue and making the talks
complicated."

The government has insisted that there are no territorial issues
pending between Japan and China. Foreign Minister Taro Aso has
also emphasized: "The Senkaku Islands are Japan's territory both
historically and under international law. Japan won't respond to
China's proposal."

12) Foreign Minister Aso again commits gaffe, perplexing some in
the government

NIHON KEIZAI (Page 2) (Full)
March 10, 2006

Foreign Minister Taro Aso called Taiwan a "country" during an
Upper House Budget Committee session yesterday, saying: "It has a
mature democracy and embraces a free economy. It is also a
country under the rule of law. It is a nation that shares values
with Japan." In his subsequent replies immediately after these
remarks, Aso modified them, noting: "I was speaking based on
Japan's position that (Japan) has recognized China as the only
legitimate government. Basically, it is correct to call it 'a
region.'" But some government officials have been perplexed by
his propensity to "go off the rails from official government
views."

Aso's controversial remarks came in reply to a question from
Naoki Okada of the Liberal Democratic Party (LDP),asking, "How
do you view Taiwan from a strategic viewpoint?" Aso is seen as
pro-Taiwan. In a recent speech, Aso pointed out that Japan had
emphasized compulsory education in Taiwan while it had been under
Japan's colonial rule. He also stated: "It has become a highly-
educated country in part owing to an improvement in its literacy
rate, and it has been abreast of the times."

Meeting the press yesterday, Chief Cabinet Secretary Shinzo Abe
stressed: "Our nation's position about Taiwan is mentioned in the
Japan-China Joint Statement. Our position remains the same. I
think the foreign minister also has understood our position."

13) Foreign Minister Aso's remarks draw strong objections from
China

NIHON KEIZAI (Page 2) (Full)
March 10, 2006

By Yuri Momoi, Beijing

Chinese Foreign Ministry Spokesman Qin Gang at a regular press
conference yesterday referred to Foreign Minister Taro Aso's

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remarks in which he called Taiwan a country, criticizing Aso: "We
are astonished to hear the top diplomat of Japan openly made
remarks that went against the China-Japan Joint Statement." The
spokesman added: "We strongly protest against rude interference
in China's internal affairs."

14) Chinese ambassador to Japan refused to come when called in by
vice foreign minister

YOMIURI (Page 2) (Abridged slightly)
March 10, 2006

In the wake of Chinese Foreign Minister Li Zhaoxing's reference
to Prime Minister Koizumi's visits to Yasukuni Shrine as "foolish
and immoral," Vice Foreign Minister Shotaro Yachi tried to summon
March 8 Chinese Ambassador to Japan Wang Yi over to the ministry
to lodge a protest but the Chinese ambassador refused to show up,
sources revealed yesterday. Wang did not visit the ministry,
citing his tight schedule, and Yachi protested on the phone. The
Foreign Ministry described the refusal as extremely unusual under
diplomatic protocol. The government and ruling coalition are
reacting strongly to Li's remarks and Wang's action.

Li criticized Koizumi's Yasukuni visits in a press conference
March 7 in Beijing, saying, "A certain German official said to
me, 'I cannot understand why the Japanese leader can do such a
foolish and immoral thing.'"

In response, the Foreign Ministry placed March 8 several calls to
the Chinese Embassy to urge Ambassador Wang to visit the
ministry, but the Chinese side refused to do so.

In the evening, Yachi protested Yachi on the phone, saying,
"There may be differences in views but one should use appropriate
expressions in expressing his views." Wang refused to offer an
apology, defending China's position on Koizumi's visits to
Yasukuni Shrine. An exchange of accusations followed.

In a House of Councillors Budge Committee meeting yesterday,
Chief Cabinet Secretary Shinzo Abe rapped Li, saying:

"Describing actions by the prime minister of another country as
'foolish' and 'immoral' proves a lack of dignity on the part of
the top diplomat. I don't know if there really is a government
official in Germany uttering such words."

15) Two men arrested for human trafficking of 15-year-old
Indonesian girl; Second case in Japan

ASAHI (Page 39) (Excerpts)
March 10, 2006

Gunma Prefecture Police arrested Yasuhi Nakaya, 53, a company
employee, Wang Yiru, 56, the owner of snack bar, on suspicion of
violating the Anti-prostitution Law, alleging that Nakaya sold an
Indonesian girl to Wang for money.

According to Gunma Police, since the law was revised in 2005 this
was the second arrest case following the first in October 2005.
The girl was forced to engage in prostitution since last October
at Ikaho Hot Spring Resort in Gunma Prefecture. She told the
police that she was 15 years old. Reportedly Nakaya has denied

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the allegation, but Wang admitted the charge.

The prefectural police found that Nakaya reportedly sold the girl
to Wang for about 2.3 million yen on Sept. 13, 2005. The police
intend to arrest a 26-year-old Indonesian woman on suspicion of
involvement in the human trafficking case.

The 15-year-old girl arrived in Japan last August with a fake
passport. She has been forced by Wang to pay about 5 million yen
for a loan. She reportedly has not been allowed to freely leave
the apartment where she lives. For her living expenses, she has
an allowance of about 10,000 yen a month from Wang.

16) BOJ ends quantitative easing; 1st policy switch in 5 years;
Zero interest rate remains intact; Short-term interest rates 0-2%

NIHON KEIZAI (Top Play) (Excerpts)
March 10, 2006

The Bank of Japan decided yesterday in a meeting of its Policy
Board to end its quantitative monetary-easing policy introduced
in March 2001, and implemented the new policy immediately
yesterday. The BOJ has made the decision based on the judgment
that the consumer price index (CPI) will not descend into
negative territory. The central bank will maintain the zero
interest rate policy for the time being even though it has
returned to a conventional monetary policy of using market
interest rates for the first time in five years. As measures to
prevent the market from falling into turmoil after the policy
shift, the central bank decided to use an inflation reference
rate with a range of zero to two percent as the appropriate
medium- and long-term rate of year-on-year change in the CPI.

Points of policy-making decision

Policy target: Shifts the BOJ's checking account to the overnight
call rate.

Monetary adjustment: Sets the overnight call rate at almost zero
percent, maintaining the amount of monthly purchase of long-term
government bonds at 1.2 trillion yen.

Target of stable prices: Medium- and long-term price stability
should be fall in an approximate range between zero to two
percent as inflation reference rate, the core rate should be
around one percent.

SCHIEFFER