JAPANESE MORNING PRESS HIGHLIGHTS 03/16/06

UNCLAS SECTION 01 OF 12 TOKYO 001382

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
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OFFICE; SECDEF FOR JCS-J-5/JAPAN,
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E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/16/06


Index:

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

US-Japan ties:
4) "Koizumi's children" take on American Embassy team in
friendly baseball game at Tokyo Dome
5) Score is even, 15-15, at end of baseball game between LDP
freshman lawmakers "Liberty 83" and US Embassy team

Defense and security issues:
6) US negative about Japan's call for a 2 plus 2 meeting at
this time
7) Reconsideration of entire USFJ realignment scenario may be
necessary due to local snags and other issues
8) Major gap between US, Japan over funding the move of Marines
from Okinawa to Guam
9) Japanese government sees bearing 75% of cost of Marine
relocation to Guam as impossible
10) Strong domestic reaction likely if Japan has to bear brunt
of cost of building facilities for US Marines in US
11) Japan happy about US offer to let ASDF fully use training
facility on Guam
12) LDP's Yamasaki, Komeito's Kanzaki trying to convince local
acceptance of USFJ realignment with offers of economic packages,
assurances

13) China raps latest essay by Foreign Minister Aso

14) Used autos and parts exports to North Korea being given
close scrutiny by Japanese officials

Japan is cutting oil imports from Iran to lessen risk factor

Political agenda
15) Minshuto still suffering the aftershock of the e-mail fiasco
16) New non-factional LDP study group formed to look into Asia
policy
17) Minister Takenaka accused of murky political funds by
opposition lawmaker
18) New Komeito reiterates opposition to inclusion of phrase on
patriotism in revising Basic Education Law

Articles:

1) TOP HEADLINES

Asahi:
USEN purchases Livedoor stock from Fuji TV; Now considering
takeover bid

Mainichi:
Health, Labor, and Welfare Ministry plans annual revisions to
medicine prices to correct differences from market prices; Aim is
to reduce medical services expenditures

Yomiuri:
Premiums for employees' pension and mutual aid pension to be
unified possibly in 2018; LDP drafts three other plans; Efforts
to eliminate discrepancies between public and private pension

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systems to be speeded up

Nihon Keizai:
Companies to preempt interest rate fluctuations; Money market
loan for procurement of short-term funds; Corporate bonds and
securitization for long-term funds

Sankei:
No end to information leak through Winny; Serious lack of threat
awareness

Tokyo Shimbun:
Survey of determination of appropriate punishment in murder cases
by Supreme Court Legal Research and Training Institute; 25% of
citizens want to see heavier punishment for juveniles; No judges
seek heavier punishment

2) EDITORIALS

Asahi:
(1) Right to keep news sources secret denied: Outrageous
decision by court
(2) Spring wage struggle: Seriously tackle improvement of wages
of part-timers

Mainichi:
(1) Right to keep news sources secret denied: Decision by court
to deny people's right to know outrageous
(2) Wage negotiations: Spring wage struggles return with wage
hikes

Yomiuri:
(1) Corporate replies in spring wage battle: Restoration of pay-
rise as starting point for favorable economic cycle
(2) Loan sharks: Do not create potential victims

Nihon Keizai:
(1) Corporate reply to meet pay-rise demand reflects bullish
managerial sentiment
(2) Special pricing system for newspapers must be maintained

Sankei:
(1) Right to keeping news sources secret denied: It is
surprising that there is a judge who makes such a decision
(2) Spring wage struggle: We want to continue discussion on ways
of working

Tokyo Shimbun:
(1) Right to keeping news sources secret denied: The decision
will deny people's right to know
(2) Corporate replies to wage-hike demands: Companies' replies
are varied

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 15

NIHON KEIZAI (Page 2) (Full)
March 16, 2006

09:58
Met METI Minister Nikai, Agriculture Minister Nakagawa, and

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others at Kantei.

10:36
Met Deputy Chief Cabinet Secretary Suzuki.

12:45
Arrived at Haneda Airport to send off the Crown Prince for Mexico
and Canada.

13:40
Arrived at Kantei.

14:00
Attended an Upper House Budget Committee meeting.

17:15
Met State Minister in charge of Economic, Fiscal, and Financial
Policy Yosano, and Assistant Deputy Chief Cabinet Secretary Saka
at Kantei.

17:33
Attended a meeting of ministers responsible for working on the
monthly economic report.

19:15
Returned to his official residence.

4) LDP rookies play US embassy, fail to get revenge for WBC
ballgame

TOKYO SHIMBUN (Page 2) (Full)
March 16, 2006

Hachisankai or the 83-kai, a group of newly elected lawmakers in
the ruling Liberal Democratic Party, hosted a Japan-US charity
baseball event yesterday with the US embassy in Japan at Tokyo
Dome.

US Ambassador to Japan Schieffer, who once manned the front
office of a US Major League Baseball (MLB) club, the Texas
Rangers, addressed the opening ceremony for the event: "We're
honored to be invited to the game. Let me propose making a
tradition of this game." LDP Acting Secretary General Ichiro
Aisawa returned a salute: "I'm expecting this event to outshine
the World Baseball Classic (WBC)."

In the first-pitch ceremony, Bobby Valentine, manager of the
Chiba Lotte Marines, showed up to heat up the audience. In the
game, Yoshitami Kameoka was the playing manager of the LDP
rookies to command his buddies in the dugout and himself on the
field. Kameoka, when he was in Sakushin Gakuin High School,
formed a battery with Suguru Egawa, who later pitched for a
professional baseball team, the Tokyo Yomiuri Giants. However,
the game ended in a 15-15 tie. In the end, the Diet team could
not get revenge the recent WBC Japan-vs.-US ballgame for Team
Japan.

The audience-donated money at the ballpark and their baseball
equipment used in the game, including gloves, will be sent to
children in Africa as presents.

5) Friendly game of baseball between LDP lawmakers team and US

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embassy

ASAHI (Page 4) (Full)
March 16, 2006

A friendly game of baseball was played last night at the Tokyo
Dome between freshmen House of Representatives lawmakers
belonging to the Liberal Democratic Party (LDP) and US embassy
staff. The LDP team was called "Liberty 83" and the members even
had their own uniforms. At the opening ceremony of the game, LDP
Acting Secretary General Ichiro Aisawa said, "Through this, we
will be able to strengthen the bonds of the Japan-US alliance."

The game ended in a 15-15 tie. Chief Cabinet Secretary Shinzo Abe
rushed over to attend the closing ceremony.

The idea of holding a baseball game came up in a meeting in
December between Ambassador Thomas Schieffer and the new
lawmakers. According to the US embassy, hold such an event at the
Tokyo Dome is highly unusual.

6) US reluctant to hold 2+2; Circulation of document for
signatures now under study

SANKEI (Page 5) (Full)
March 16, 2006

It was learned yesterday that the Japanese government is
considering the idea of circulating a document so that each
cabinet member will sign it, instead of holding a meeting of the
Japan-US Security Consultative Committee (2+2) of foreign and
defense officials intended to reach a final agreement. This idea
has come out as a last resort, reflecting the US government's
reluctance about holding a 2+2, as well as the fluid situation
about whether an agreement will be reached, given that the two
countries are still wide apart over cost-sharing concerning the
transfer of US Marines from Okinawa to Guam.

Yesterday, a government source said of a 2+2: "How about
circulating a document for cabinet ministers to sign? There's no
need to hold it." A 2+2 would be attended by Secretary of State
Rice and Secretary of Defense Rumsfeld. Another government source
explained: "It's difficult to schedule a meeting (for these two
top officials). Japan, too, takes into consideration the Diet
schedule."

From the beginning, the US has been unwilling to hold a 2+2. In
the recent Japan-US working-level talks, the US frowned on
holding it before efforts to persuade local areas are completed,
or in the words of Deputy Under Secretary of Defense Lawless, "We
don't want to see a final agreement at the 2+2 forced on local
residents."

7) Gap expanding in views between Japan and US on convincing
local areas for US force realignment; Japan wants to hold cabinet
talks, US thinks it concerns Japan only

NIHON KEIZAI (Page 2) (Excerpts)
March 16, 2006

Hiroshi Marutani, Washington


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A gap in views between Tokyo and Washington over the realignment
of US forces in Japan is becoming evident. Tokyo attempted to
force its views on the realignment with cabinet talks, but
Washington rejected it, saying: "Coordination with local
governments is a matter that concerns only the Japanese
government. Cabinet talks are unnecessary." Six months have
passed since the bilateral agreement that specified coordination
between the cabinet and local areas. Any misstep might create
strains in the Japan-US alliance.

"Cabinet ministers are too busy"

US Defense Department authorities rejected Japan's call for a
Japan-US Security Consultative Council meeting (2 plus 2) by
commenting to Japanese reporters:'

"Both Japanese and US cabinet minister are busy because they have
other things to take care of. It is meaningless for high-ranking
officials to get together by pretending that everything has
completed. It's too early for that."

Since the foreign and defense ministers' talks last October,
Japan has repeatedly asserted at bureau director-level talks that
it would be difficult to convince local governments to host US
bases.

Then came the outcome of the March 12 plebiscite held in Iwakuni,
Yamaguchi Prefecture, the relocation site for US carrier-borne
aircraft, now based at the Atsugi base. The US exploded with
dissatisfaction, saying, "Enough is enough! We don't want to hear
another story about a local election."

Secretary of Defense Donald Rumsfeld has met as many visiting

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Japanese lawmakers as possible and urged Japan to finish
coordination by the end of this month.

Rumsfeld and Secretary of State Condoleezza Rice have been
preoccupied with the Iraq war and the Iranian nuclear issue,
respectively. Japan's slowness in coordination prompted the
frustrated US officials to describe Rumsfeld and Rice as "busy
people."

The US force transformation is part of Washington's global
strategy with an eye on the war on terror, and the US cannot
remain receptive to Japan's circumstances forever. The US
authorities' message is this: Japan must complete local
coordination by the end of March, as promised, without calling
for cabinet talks with the US.

8) USFJ realignment: US unexpectedly calls for 7.5 billion
dollars; Gulf deepens over Guam relocation cost

ASAHI (Page 1) (Abridged)
March 16, 2006

How to share the cost of relocating US Marines from Okinawa to
Guam? A deep gulf separated Japan and the United States in their
intergovernmental consultations over their respective cost
burdens for the realignment of US forces in Japan. The Japanese
government wants to have Okinawa Marines relocated in order to
alleviate Okinawa's base-hosting burden. However, the US
government asked the Japanese government to pay approximately 7.5

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billion dollars (equivalent to approx. 885 billion yen) to
partially fund the relocation. That amount was far higher than
the Japanese government anticipated. In the meantime, the
Japanese government has now been facing rough going in its
coordination with the governments of base-hosting localities over
the issue of relocating the heliport functions of Futenma
airfield in Okinawa Prefecture and the issue of bringing a US
carrier-based air wing to Iwakuni. As it stands, it would be even
more difficult for the Japanese government to expect a final
report to be worked out by the end of March.

The United States will urge the Japanese government to carry it
out, an official from the US Department of Defense told reporters
on the afternoon of March 14.

"Japan asked the United States to move (Okinawa Marines) to
Guam," the Pentagon official stressed. "The United States is
responsible for the defense of Japan," the official said. "But,"
the official went on, "Japan is not responsible for the defense
of the United States." The official added: "Then, what's Japan's
role? If Japan does not provide bases, that's our burden, isn't
it?"

The proposed relocation of US Marines from Okinawa to Guam is a
pillar of Japan's proposal to alleviate Okinawa's base-hosting
burden. The US government emphasized that Japan and the United
States have agreed to settle the issue of moving US Marines from
Okinawa to Guam along with the issue of relocating Futenma
airfield in the city of Ginowan to Cape Henoko in the city of
Nago and the issue of redeploying US carrier-borne fighter jets
to Iwakuni base in Yamaguchi Prefecture. The US government was
therefore growing increasingly irritated to see little progress
in the Japanese government's coordination with their local hosts.

And then, the Guam relocation cost problem cropped up. The United
States called for Japan to shoulder 75% of the cost burden
totaling 10 billion dollars (approx. 1.18 trillion yen). However,
Japan's proposed ceiling is below 5 billion dollars, or half that
total amount.

Japan and the United States have been sharing the cost of
stationing US forces in Japan on a fifty-fifty basis, according
to a Japanese government official. In fiscal 2004, the stationing
cost totaled 1.2 trillion yen. A Foreign Ministry official was at
a loss, saying, "We don't know why they came up with the 75%
figure."

The total cost of Marine relocation to Guam was initially
estimated at 8 billion dollars. The US government also explained
why the total cost has swollen. "We first estimated costs only
inside the fence of a base, but we need to do so outside the
fence," a US government official said. The official continued:
"There are no facilities for the Marines in the port of a naval
base. The new base is in a jungle, so we don't have our own
headquarters or housing there. Also, we don't have enough
infrastructure, such as water supply, sewerage, electricity, and
roads."

Japan's defense spending is about 1% of gross domestic product
(GDP),with the United States at more than 3%, South Korea at
2.5%, China at over 4%, and Singapore at over 5%, a Pentagon
official noted. "Japan's cost is extremely small," the official

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said.
"We will not agree to that figure." With this, a senior official
of the Defense Agency was upset yesterday morning when the agency
learned of the US government's demand for 7.5 billion dollars.

The government will need a new law to fund an overseas US
military facility. The government cannot get through Diet
deliberations as long as the grounds for the US government's
estimate remain unclear.

No new law is needed for the relocation of Futenma airfield and
other base realignment plans. However, their costs are also
murky.

The Finance Ministry fears the ballooning cost of realignment.
The ministry prefers to extend loan-based funding cooperation for
the Guam relocation rather than direct budgeting.

9) Japanese government: Paying 75% of Marine relocation cost is
impossible

YOMIURI (Page 2) (Full)
March 16, 2006

The government yesterday started final arrangements to finance
the proposed construction of facilities for Self-Defense Force
(SDF) personnel to use when they take part in training with US
troops on Guam, according to government sources.

In the Japan-US working-level talks held in Hawaii in late
February, the US asked Japan to pay more than the amount it had
presented earlier for the construction work. The planned
facilities would be managed by the US and used mainly by Ground
Self-Defense Force and Air Self-Defense Force personnel as their
accommodations when they carry out joint training with US troops.

The details and cost of the facilities have yet to be disclosed,
but the Defense Agency (JDA) intends to hurriedly make
arrangements, involving Finance Ministry officials. A JDA
official remarked: "Since the facility is intended to be used by
SDF members on the occasion of Japan-US joint training, we will
be able to provide a proper reason."

Meanwhile the US has asked Japan to pay 75% of the estimated cost
of 10 billion dollars (approximately 1.07 trillion yen at the
exchange rate used for the fiscal 2005 budget) for transferring
US Marines from Okinawa to Guam. The Japanese side has indicated
reluctance to accept the request, a Foreign Ministry source
saying: "This is too much. The US has come up with a request that
is unacceptable for Japan." The estimated cost includes those for
constructing operation buildings including a Marine headquarters
building, a welfare facility, housing, and infrastructure inside
and outside the base.

10) US at its own pace asking Japan to foot huge bill for
relocating Marines to Guam, taking advantage possibly of the
situation; Negative domestic reaction likely

MAINICHI (Page 2) (Excerpt)
March 16, 2006

The United States has asked Japan to pay 75% of the total cost of

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approximately $10 billion (about 1.18 trillion yen) to relocate
US Marines on Okinawa to Guam. A Pentagon official involved in
the negotiations revealed this to the Japanese press corps in
Washington. It appears that this was revealed in order to propel
bilateral talks on US force realignment in Japan along at the US'
pace with an eye of concluding the final report at the end of
March. Although the Japanese side has asked for a reduced amount,
the predominant view in the government, as seen in the comment of
a senior Foreign Ministry official, seems to be that "accepting"
the US' hard-line stance "may be unavoidable." If Japan has to
bear the brunt of the burden of the huge cost of building US
military facilities inside the US, a strong domestic reaction in
Japan can be expected.

11) Japan positive about US proposal to add ASDF facilities in
Guam

NIHON KEIZAI (Page 2) (Full)
March 16, 2006

The United States has proposed a plan to build facilities in Guam
for Japan's Air Self-Defense Force as part of the realignment of
US forces in Japan, sources revealed yesterday. Japan and the US
have conducted joint fighter exercises in Guam every year. The US
has explained that the construction of barracks and other
facilities would help increase the frequency of training, thereby
reducing the burden for training in Japan. Japan intends to study
the plan positively. The US also explained that the relocation of
the US Marines from Okinawa to Guam would cost 10 billion dollars
in total, including the facilities for the ASDF.

12) USFJ realignment: LDP's Yamasaki, New Komeito leader Kanzaki
urge the government to present safety and promotion measures to
Okinawa

ASAHI (Page 4) (Full)
March 16, 2006

Liberal Democratic Party (LDP) Security Research Commission
Chairman Taku Yamasaki yesterday told an Asahi Shimbun reporter
about the relocation of the US Marine Futenma Air Station to Nago
City, Okinawa Prefecture: "There will be no change in the
government's relocation plan, but the government will coordinate
views with (Nago City). I think Nago City will accept the plan in
the end."

Nago City has called for some corrections, presenting a range of
what it would accept. Yamasaki rejected corrections of the
government plan. He said:

"The government does not coordinate views with (the city) on the
location, area, or the length of the runway, as such matters have
been already coordinated with the US government."

He then indicated the view that he would like to obtain Nago
City's agreement after coming up with conditions for the city's
acceptance, noting, "I think what Nago citizens have hoped for is
their safety and regional promotion measures."

New Komeito leader Takenori Kanzaki at a press conference
yesterday said:


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"Protecting the livelihoods of land owners and securing the
employment of Okinawa citizens working at the base are issues to
be resolved. The government should present some specific measures
as early as possible. Otherwise, discussion will not occur."

Kanzaki urged the government to present concrete regional
promotion measures as quickly as possible.

13) China again raps Aso's article

SANKEI (Page 2) (Full)
March 16, 2006

Beijing, Jiji

Foreign Minister Taro Aso contributed an article titled "Japan
Awaits a Democratic China" to the Wall Street Journal March 13
issue urging China to completely disclose its defense spending.
In response, Chinese Foreign Ministry spokesman Qin Gang released
a critical statement March 15 saying:

"It is not appropriate for the top Japanese diplomat to meddle in
China's political system. It is important for Japan to
appropriately settle the question of its historical views to earn
the trust of Asian neighbors."

14) Japan to monitor used car exports to DPRK even more strictly,
not allowing exports of such cars for the use of their components

YOMIURI (Page 2) (Full)
March 16, 2006

The government yesterday held the first meeting of the Law
Enforcement Team under the Experts Council on the Abduction
Issue, chaired by Deputy Chief Cabinet Secretary Seiji Suzuki.
The meeting confirmed the need to strengthen cooperation among
ministries and agencies in order to strictly enforce the existing
laws as part of steps to further pressure North Korea. In
addition to the Law Enforcement Team, the Experts Council has the
Information-Gathering Conference intended chiefly to share
information on North Korea.

As part of the strict application of the current laws, the
government is mulling a strict monitoring of exports of used cars
as well as used tires and other parts to North Korea.

If used cars and used tires were exported to the North for such
purposes as extracting metals from car components or using tires
for fuel, the government would ban their export in accordance
with the Waste Management Law. The objects to be monitored will
include used cars, used tires, and rubber and plastic scraps to
be used for recycling.

Exports of items that can be used intact will be allowed if their
exports are declared at customs. But if items that require
reprocessing for recycling, for instance, melting them down, they
are regarded as waste and are subject to export control under the
Waste Management Law.

Items the government intends to categorize as waste will include
used cars unable to run, irregular shapes of used tires and worn-
out used tires, and rubber containing foreign substances and

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plastic scraps.

15) Nippon Oil Corporation cutting back on crude oil imports from
Iran; Switching suppliers to other countries to reduce potential
risk

SANKEI (Page 10) (Full)
March 16, 2006

Fumiaki Watari, chairman of the Petroleum Association of Japan
and Nippon Oil Corporation (ENEOS),told a news conference
yesterday that ENOS is cutting back on crude oil imports from
Iran. In view of mounting tension over Iran's nuclear development
program, the company made this decision in case it becomes
difficult to procure crude oil from that nation. Though it will
not reduce portions imported under direct contracts, it will
switch the suppliers of products imported through trading
companies to other countries.

ENEOS last year imported 142,000 barrels a day from Iran. The
amount accounts for 13% of the total imports. Iran is the fourth-
largest crude oil supplier to Japan. The company plans to reduce
imports from that nation to 120,000 barrels a day. The aim is to
reduce potential risk by reducing the proportion of crude oil
imports from Iran, as well as to increase imports of light oil,
which can be refined into kerosene and gasoline, as a measure to
deal with the firm's lack of refining capacity caused by the fire
at its Muroran Refinery in February.

There is a looming possibility of the UNSC applying sanctions
against Iran, following its deliberations on the nation's nuclear
development program. In response, the Iranian side has warned
that it would take retaliatory action, by closing Straits of
Hormuz, a strategic point for oil exports by Middle East nations.
Tensions are mounting.

16) Minshuto still suffering aftershocks of e-mail fiasco;
Question of whether Nagata should resign smoldering in Diet

NIHON KEIZAI (Page 2) (Excerpts)
March 16, 2006

The Democratic Party of Japan (Minshuto) unprecedentedly placed
an advertisement in national newspapers yesterday apologizing for
damaging the reputation of the second son of Liberal Democratic
Party Secretary General Tsutomu Takebe in connection with a fake
e-mail. The opposition party, though, is still suffering the
aftershocks of the uproar, some calling for Hisayoshi Nagata to
resign his Diet seat to take responsibility for causing the e-
mail fiasco.

Appearing on TV programs yesterday, Diet Affairs Committee
Chairman Kozo Watanabe made remarks urging Nagata to voluntarily
quit his seat, saying: "I believe he will take action in line
with his words 'I love Minshuto," when the House of
Representatives Committee on Discipline comes up with its
decision on punishment on him.

Yesterday, Social Democratic Party head Mizuho Fukushima and
Kokumin Shinto (people's new party) head Tamisuke Watanuki also
referred to the question of whether Nagata should resign or not.
Minshuto thus has come under attack from other political parties.

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Takebe, who said: "The issue has been settled" with the apology
placed on newspapers, added: "It is necessary for Minshuto and
Mr. Nagata to explain to the public the process that led to the
questioning and other details." No prospects are in sight for a
settlement of the problem.

The e-mail uproar is also expected to have some effect on the by-
election in Chiba 7th District for a Lower House seat on April

23. Minshuto decided yesterday to field Kazumi Ota, 26, as its
official candidate. Ota told reporters in the Diet building: "I
will turn around the situation in the election."

17) A cross-factional study group of 41 lawmakers formed from
former Kochikai-affiliated factions

ASAHI (Page 4) (Excerpts)
March 16, 2006

Lawmakers of the Niwa-Koga, Tanigaki, and Kono factions who used
to belong to the Miyazawa faction (Kochikai) in the Liberal
Democratic Party (LDP) yesterday launched a cross-factional study
group on Asia policy. A total of 41 lawmakers, including members
from other factions, joined the group. Former Chief Cabinet
Secretary Yasuo Fukuda, one of the possible successors to Prime

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Minister Junichiro Koizumi, arrived in South Korea last night to
attend a symposium and other events. While the Chinese government
has made clear its policy stance of repairing the now strained
Japan-China relations when Prime Minister Koizumi is gone, LDP
lawmakers are accelerating moves to develop an Asia policy with
an eye on the September presidential election that will determine
who will succeed Koizumi.

"I wonder whether other countries fully understand the prime
minister's explanation about his visits to Yasukuni Shrine that
foreign governments should not intervene in a matter of the
heart," said Lower House Speaker Yohei Kono, who is know as a pro-
Chinese politician, in a speech delivered at an inaugural meeting
of the study group.

Kono, who has been critical about Koizumi's visits to Tokyo's
controversial Shinto shrine, stressed the importance of repairing
the strained bilateral ties between Japan and China. Explaining
why Japan had to give up its bid for a permanent United Nations
Security Council seat, he said, "The conclusive reason for
Japan's failure is because we could not secure approval of China
and South Korea, nearest neighboring countries."

Former Prime Minister Kiichi Miyazawa, who gave a speech prior to
Kono, stated: "While maintaining close ties with the United
States, Japan should accumulate dialogues with China and South
Korea for the sake of national interests."

The promoters of the study group are mid-level lawmakers of the
Kochikai-affiliated factions such as LDP Acting Secretary General
Ichiro Aisawa and Lower House member Fumio Kishida. Of the 41
participants, nearly 80% are lawmakers belonging to the Niwa-
Koga, Tanigaki and Kono factions. Some lawmakers of the Tsushima
and Komura factions took part in yesterday's session.

The study group will continue to invite former prime ministers to
its sessions for the time being. It plans to invite post-Koizumi
contenders as lecturers soon before the start of the September

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leadership race. If the study group can conduct heated discussion
to improve Japan's relations with China and South Korea, it may
become a new LDP force in deciding Asia policy.

18) Internal Affairs Minister Takenaka infuriated at Minshuto's
pursuit of his political funds as nontransparent

SANKEI (Page 5) (Full)
March 16, 2006

At a meeting yesterday of the Upper House Budget Committee,
Internal Affairs Minister Heizo Takenaka, enraged at a question
raised by Mitsuru Sakurai of Minshuto (Democratic Party of
Japan),stated: "I must strongly object."

The question concerned "Trigger Lab.," an intermediary corporate
think tank. According to the think tank's website, it calls
itself "Takenaka Heizo Economic Research Institute," an
organization that aims to realize Minister Takenaka's ideals.
Lawmaker Sakurai pointed out that this organization's activities
are considered political, and referring to such activities as
Takenaka giving a speech to the organization, Sakurai said, "Such
activities are in effect a briefing session on national
politics." Sakurai argued that the group should be reported as a
political organization. Additionally, Sakurai mentioned the fact
that the organization's funds have increased from 50 million yen
to 90 million yen over the past half year and pursued Takenaka:
"If you fail to make clear the flow of money, the Political Fund
Control Law will end up full of loopholes."

Takenaka answered: "I think you've raised the question with
evidence and determination." Pounding the podium at times,
Takenaka rebutted: "The director of the organization has denied
that it has engaged in political activities."

19) Most members of New Komeito educational panel against
including expression "spirit of love of country" in Basic
Education Law revision

MAINICHI (Page 5) (Excerpt)
March 16, 2006

The New Komeito's division on education and science yesterday
started full-scale discussion of the draft amendments to the
Basic Education Law. The vast majority of the members were
opposed to the expression, "spirit of love of country" (kuni o
aisuru kokoro),which is the key issue in the bill. Although the
Liberal Democratic Party and New Komeito have agreed to present a
bill to the Diet this session amending the education law, the
fierce reaction against the expression that came out yesterday
underscores that the issue is as strong as ever.

SCHIEFFER