JAPANESE MORNING PRESS HIGHLIGHTS 03/20/06

UNCLAS SECTION 01 OF 10 TOKYO 001449

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/20/06


Index:

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

Beef issue:
3) Ambassador Schieffer in speech warns of possible "trade war"
if US beef import ban is prolonged
4) Foreign Minister Aso, Secretary Rice discuss US beef import
issue while attending trilateral talks in Sidney
5) Japan will soon send a team of BSE experts to the US in
effort to speed up restart of US beef shipments
6) US replies to Japan's questions on beef violation issue will
be announced tomorrow

Defense and security issues:
7) Ambassador Schieffer in speech urges Japan to make positive
international contributions in military sphere
8) Possibility growing of minor revisions in the Futenma
relocation plan to respond to local concerns
9) Ruling camp taking lead in pushing for revision of Futenma
relocation plan
10) Prime Minister Koizumi to ask for reduced cost burden for
Japan in relocating Marines to Guam
11) Koizumi still negative about making changes in the
government's plan to relocate Futenma base
12) Cost of relocating US Marines from Okinawa to Guam to be
picked up by financing from JBIC
13) Area of Sagami Depot to be jointly used by USFJ, SDF troops
14) Japan asks US to pay 75% of total 47 million yen
compensation for US military helicopter's crash into Okinawa
campus
15) US sailor on trial admits murder of Yokosuka woman
16) Koizumi at defense academy graduation expresses concern
about China's and DPRK's military buildups

Strategic dialogue in Sidney:
17) US, Japan, Australia hold strategic dialogue in Sidney,
agree to cooperate on Iran nuke issue, and discuss GSDF pullout
from Iraq
18) Strategic dialogue: Decision on GSDF withdrawal from Iraq
put off
19) Hardliner Foreign Minister Aso, softliner METI Minister
Nikai clash over policy toward E. China gas field issus

Articles:

1) TOP HEADLINES

Asahi:
Asahi Shimbun survey of 100 companies: More than 50% plan to
increase hiring of new college graduates for the first time in
nine years, mainly in engineering field

Mainichi:
Japan defeats South Korea in World Baseball Classic Semifinals

Yomiuri:
Earthquake-proof measures at elementary and middle schools;
Government to release survey results by municipality, starting
next month


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Nihon Keizai:
Equipment manufacturers plan to increase capital investment

Sankei:
Global-scale M&As picking up speed, especially in energy,
telecommunications

Tokyo Shimbun:
Harassment by bosses at one in six companies, according to survey
by Tokyo Metropolitan Government: Merit-based pay system to
blame?

2) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 19

NIHON KEIZAI (Page 2) (Full)
March 20, 2006

09:43
Met at National Defense Academy with Defense Agency chief Nukaga
and Academy President Nishihara.

10:03
Attended the NDA's graduation ceremony.

12:48
Returned to his official residence.

13:53
Met with LDP Policy Research Council Chairman Nakagawa.

3) US Ambassador Schieffer in speech expresses concern about
possibility of "trade war" over US beef import issue

MAINICHI (Page 2) (Full)
March 18, 2006

US Ambassador to Japan Schieffer, in a speech at a Tokyo hotel
before the Asian Affairs Research Council (chaired for former
ambassador to the US Nobuo Matsunaga) on March 17, expressed
strong hope that US beef imports now banned would be restarted
soon. He stated: "It is conceivable that the issue could have an
ill effect on US-Japan relations. If it is not resolved in the
near future, I am greatly concerned that the US Congress might
lose its patience, leading to a trade war."

The Ambassador said, "It is extremely regrettable, but we are at
a loss on what to do," indicating that he thought sufficient
measures are being taken to prevent a reoccurrence. He revealed
the US intention to accept surprise inspections by the Japanese
government.

However, on the issue of vertical columns having been found in a
shipment of beef to Japan, he rebutted the majority view in Japan
that this was a structural problem in the US' inspection system,
saying, "The system if functioning properly. The meat that
violated the agreement never reached consumers." He stressed the
safety of the meat itself: "Though it was a violation for the
meat to be attached to the bone, if the bones were removed and
the meat eaten, there would be no danger."


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4) US beef: Japan, US exchange principle arguments; Foreign
Minister Aso denies antagonism

NIHON KEIZAI (Page 2) (Full)
March 19, 2006

In a Japan-US strategic dialogue, US Secretary of State Rice and
Foreign Minister Aso acrimoniously discussed the underlying
principles of the total embargo of US beef adopted because of the
BSE issue.

If the import ban on US beef becomes protracted, US Congress and
industrial organizations are bound to increase pressure. It was,
therefore, imperative for Rice, who is responsible for diplomacy
toward Japan, to call on Japan to deal with the issue at a formal
setting.

At the same time, the Japanese government has faced harsh
criticism at home that it succumbed to US pressure when it lifted
the ban last December, so it is unable to easily assent to the US
request this time. Aso told Rice, "We must not forget the peace
of mind and safety of Japanese consumer."

Commenting on the atmosphere when Rice brought up the beef import
issue, Aso on the evening of Mar. 18, told reporters traveling
with him, "She spoke very politely." To a question about whether
she harshly urged an import resumption, Aso denied any antagonism
between the two countries, saying, "She was not like that at
all."

5) Japan-US vice foreign ministerial meeting: US to dispatch beef
expert to Japan with eye on early resumption of exports

NIHON KEIZAI (Page 2) (Full)
Evening, March 18, 2006

Vice Foreign Minister Shotaro Yachi, now visiting the US, met
with Under Secretary of State Burns. They discussed bilateral
relations, including the BSE issue, and the international
situation for about an hour. Regarding a resumption of US beef
exports to Japan, Burns said: "We are becoming very frustrated.
We want Japan to resume US beef imports quickly." He then
revealed a plan to dispatch a beef expert to Japan shortly.

Futenma relocation: Asked to persuade residents of local
communities

Japan imposed a second ban on imports of US beef in January, when
the inclusion of vertebral columns was found in a US beef
shipment. In addition, a third case of BSE was confirmed in the
US on Mar. 13. Japan has requested that the US answer questions
the Japanese side asked regarding the US inspection report. A
forthcoming meeting between Japanese and US experts will be the
first step toward a resumption of beef trade.

Regarding the USFJ realignment issue, Burns told Yachi, "We want
Japan to persuade residents of local communities as soon as
possible for a settlement of the issue." He thus urged Yachi
quickly undergo coordination with local communities, including
Nago, where Futenma functions are to be relocated.

Yachi explained the Japanese government's approach ahead of the

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end-of-the-month deadline.

Concerning Iran's nuclear development, Yachi noted, "It is
important to settle the issue in a peaceful manner through
repeated discussions at the UN Security Council." While pointing
out the significance of diplomatic efforts, Burns indicated a
stance of aiming for an early settlement, saying, "Seventeen
resolutions were submitted on Iraq over a period of 17 years, and
we cannot handle the Iranian issue at this pace."

On North Korea's nuclear ambitions, the two agreed that it is
desirable for Pyongyang to return to the six-party talks at an
early date.

Yachi's visit to the US is part of the Japan-US strategic
dialogue. He met with Burns on March 16, as well. He also met
with Under Secretary of Defense Edelman and Assistant to the
President Crouch (Deputy National Security Advisor). Commenting
on Japan's dispatch of Self-Defense Forces to Iraq, Edelman said:
"We highly appreciate the dispatch. We want Japan to continue to
contribute to the reconstruction of Iraq."

6) Agriculture Ministry possibly make public today US replies on
backbones-containing veal shipment

NIHON KEIZAI (Page 3) (Full)
March 20, 2006

The Agriculture, Forestry and Fisheries Ministry (MAFF) indicated
yesterday that it has received replies from the US government to
its questions on the US report on the ineligible shipment to
Japan of veal products containing backbones, a BSE risk material.
MAFF and the Ministry of Health, Labor and Welfare Ministry
intend to speed up the translation and analysis of the US replies
with a view to making public the US reply today. The US
government is expected to send experts to Japan shortly to brief
Japan on preventive measures and other efforts to seek Japan's
understanding.

But following the discovery of backbones in a US beef shipment to
Hong Kong, distrust of US beef is growing in Japan. MAFF and
other offices are closely analyzing the US replies to determine
if they can dissolve questions in Japan. They will determine
comprehensively if, among other things, the US replies can
convince the Japanese public about the safety of US beef.

7) US Ambassador Schieffer urges Japan to make positive military
contributions

MAINICHI (Page 2) (Full)
March 18, 2006

In a speech on March 17 in Tokyo, US Ambassador to Japan
Schieffer positioned Japan and the United States as "equal
partners," and he urged Japan to make even more positive
contributions to stabilizing the international community. On the
question of how Japan should become involved, the ambassador
suggested contributions in the military sphere, remarking: "The
US spends close to 4% of its GDP on defense, or 10 times what
Japan's spends on defense. Japan keeps its defense spending in
fact at about 1% of GDP, something that the American people find
hard to understand." He urged Japan to take an even larger share

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of the burden.

On the issues of sovereignty over the Senkaku Islands and the
issue of gas-field development in the E. China Sea, he showed
understanding toward Japan's ownership claim to the isles as
Japanese territory. He took the stance of hoping that a peaceful
resolution could be made though talks between Japan and China.

8) Futenma relocation site to be slightly adjusted; Government,
ruling camp considering changing angle of runway; Local
governments express some understanding

YOMIURI (Page 1) (Full)
March 18, 2006

The government and ruling parties on March 17 have begun to
consider the possibility of making a slight revision in the plan
to relocate the US Marines Corps' Futenma Air Station (Ginowan
City) in Okinawa Prefecture to the coastal portion of Camp Schwab
(Nago City),premised on the agreement of local governments and
communities. While the main elements of the coastal plan will be
maintained, the direction of the runway will be changed and the
facility slightly moved toward the ocean. This should ease the
noise and other factors that would impact on the neighboring
residential area, so local authorities are expressing a modicum
of understanding. The government until now rejected any revision
of the coastal plan, but now it judges that obtaining the
cooperation of the local community would be indispensable to
bringing about the relocation of Futenma Air Station, it decided
to seek a breakthrough in the situation.

Nago City on March 8 announced that if there was a modification
of the relocation site to a spot in between the coastal plan and
the original plan for the offing of Henoko District, it would
respond to consultations with the government. In case the
relocation site is moved toward the ocean, the government is
negative about a large-scale revision of the plan, judging that
it would be difficult to avoid affecting the environment or to
counter moves to block the construction work.

However, with the US urging the Japanese government to reach an
understanding quickly with local governments, Defense Agency
Director General Nukaga , former Liberal Democratic Party (LDP)
Vice President Taku Yamasaki, and others have been informally
coordinating with local authorities the possibility of a minor
revision of the relocation site, such as moving the direction of
the runway in a way that leaves a good part still on Camp
Schwab's land.

Some local government officials have informed the government that
"even if the revisions are minor, if they reflect consideration
to the local community, we can give think positively about
accepting the plan." Yamasaki on March 17 after meeting with
senior officials of the town and city council representing the
northern part of Okinawa Prefecture, stated, "With the
government's plan as the base, I would like to ask that something
be done, " bringing up the possibility of a slight revision in
the plan.

Currently, under the coastal plan, fixed wing and helicopters are
expected to fly over 10 civilian houses that are situated in the
flight route south of the runway. The government and ruling camp

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have been considering moving the direction of the runway so that
the flight route will not pass over the 10 homes. The current
thinking is to only shift the runway some dozens of meters toward
the ocean side.

9) LDP leaning toward modifying Futenma relocation plan

ASAHI (Page 1) (Abridged)
March 20, 2006

The government will not change its basic course of action
regarding the planned relocation of the US Marine Corps' Futenma
Air Station in the city of Ginowan, Okinawa Prefecture, to the
island prefecture's northern coastal city of Nago in the
realignment of US forces in Japan, Hidenao Nakagawa, chief of the
ruling Liberal Democratic Party's policy board, said on an NHK TV
program yesterday. "But," Nakagawa added, "the government may
have to do something in the process of coordinating with local
governments and in the process of making sincere efforts." Later
in the day, Nakagawa met with Prime Minister Koizumi at his
official residence. In the meeting, Koizumi and Nakagawa
concurred on the necessity of local consent to the Futenma
relocation plan. This is the first time that Nakagawa has hinted
at the likelihood of modifying the relocation plan. The LDP is
now leaning toward modifying the plan.

Meanwhile, Taku Yamasaki, chair of the LDP's security affairs
panel, has visited Okinawa time and again to continue local
coordination. "The US government is flexible," one of the LDP's
executives said yesterday evening. "It's not impossible to make
some modifications," the executive added.

Nago City is ready to talk with the government if it modifies the
current Futenma relocation plan and builds a sea-based facility
off the city's Cape Henoko. The focus is on how far the
government will proceed with local coordination.

10) Prime Minister Koizumi plans to ask US to reduce Japan's
burden of US Marines relocation

TOKYO SHIMBUN (Page 2) (Full)
March 18, 2006

The House of Councillors Budget Committee held on March 17
intensive deliberations on foreign and defense issues at the
presence of Prime Minister Junichiro Koizumi and relevant cabinet
ministers.

Koizumi revealed his intention to ask the US administration to
reduce Japan's burden of the costs for transfer of US Marines to
Guam as part of the realignment of US forces in Japan. He stated,
"The US has told us its view, but Japan has its own one."

Defense Agency Director General Fukushiro Nukaga, meanwhile,
clarified that his agency is now looking into various ways of
shouldering the relocation costs, pointing out one method that
Japan first would shoulder part of the US side's burden and the
US then later would repay it to Japan.

Regarding the leakage of Self-Defense Forces' information,
Koizumi categorically said, "They are slackening off. We will
deal with them severely in order to prevent a recurrence."

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11) Prime Minister Koizumi: "No intention of revising" US Marine
Futenma relocation plan

TOKYO SHIMBUN (Page 2) (Full)
March 18, 2006

Asked by reporters about the plan to relocate the US Marine
Futenma Air Station to the coast of Camp Schwab (Nago City in
Okinawa Prefecture),Prime Minister Junichiro Koizumi responded
on the night of March 17: "We have been making efforts to obtain
an agreement from (the local community) on the current
government's plan. I have no intention of (adjusting it).

With this regard, Chief Cabinet Secretary Shinzo Abe indicated in
a press conference the same day that the government intends to
get the understanding of the local government before the end of
March. He stated:

"We will do our best to obtain an agreement (between the
governments of Japan and the United States) basically before the
end of March, as well as the understanding of the local
government."

12) Okinawa US Marines relocation cost: Government plans to
extend loans to the US through JBIC to limit use of tax money

NIHON KEIZAI (Page 2) (Full)
March 18, 2006

The government yesterday began earnestly searching for ways to
pay for the planned relocation of US Marines from Okinawa to
Guam. In order to limit the use of tax money, the government is
planning to finance a large portion of the costs with loans
through the Japan Bank for International Cooperation (JBIC). The
government also envisages making some changes to the JBIC Law,
which basically applies to aid to developing countries.

Bureau-director-level foreign and defense officials of Japan and
the US are scheduled to resume talks in Tokyo on March 23-24. In
the previous talks, the US indicated that the relocation would
cost 10 billion dollars, or 1.18 trillion yen, asking Japan to
pay 75%, or 880 billion yen, of the total cost. Japan, estimating
the total cost at 8 billion dollars, or 940 billion yen, intends
to directly contribute 40% and lend the US the remaining 60%.

Japan and the US remain far apart in their views. But in the
upcoming talks, Japan intends to clarify its intention to limit
direct contributions by conveying its plan to the US to amend
legislation to accommodate the US with loans.

The JBIC Law classifies loans into three categories: exports,
imports, and finance of investment. The law is not applicable to
loans to the US for the planned Marines relocation to Guam. For
industrialized countries, loans are limited to JBIC-invested
joint ventures. The JBIC is scheduled to be merged into a new
organ in fiscal 2008. With the merger, the yen-loan department
will be centralized in the Japan International Cooperation
Agency.

13) Japan, US to share 37 hectares at Sagami Depot


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YOMIURI (Page 4) (Full)
March 18, 2006

The Defense Facilities Administration Agency yesterday informed
Kanagawa Prefecture, Sagamihara City, and Zama City of agreements
reached between Japan and the United States in their recent
intergovernmental talks held in Hawaii over the realignment of US
forces in Japan. When it comes to the US Army's Sagami Depot in
Sagamihara covering an area of about 214 hectares, the United
States will return the 15-hectare site of housing for US military
and their families at open-air storage covering about 52 hectares
on the depot's west side. In addition, the remaining space of
about 37 hectares will be shared by Sagamihara City, the Ground
Self-Defense Force, and the US Army. This will make it possible
to extend a railway and a prefectural road to Sagamihara Station
on the JR Yokohama Line as requested by local communities.

14) Gov't pays 47-million-yen damages for US military helo crash,
asks US to pay 75%

YOMIURI (Page 4) (Full)
March 18, 2006

The government adopted a parliamentary statement in a cabinet
meeting yesterday, recounting that it has paid damages totaling
47 million yen for 70 cases by the end of this February in
connection with the crash of a US military helicopter at the
campus of Okinawa International University in August 2004. The
statement was prepared for a question from Kantoku Teruya, a
House of Representatives member with the opposition Social
Democratic Party (SDP or Shaminto).

According to the statement, Okinawa International University
sustained damage in 22 cases, including buildings and vehicles.
The government has paid damages amounting to about 32 million yen
for 16 cases. There were 55 other cases to be compensated for the
damage caused to houses, vehicles, and other properties near the
university. In those cases, the government has paid about 15
million yen for 54 cases.

The Japanese government has asked the US government to pay 75% of
the total damages under the Japan-US Status of Forces Agreement
(SOFA) and has been receiving repayments. The SOFA treaty
stipulates bilateral burden sharing for Japan at 25% and the
United States at 75% to compensate damage that is entirely
attributable to the United States.

15) Yokosuka murder case: US sailor admits charges in first
hearing; Lawyer does not deny willful negligence

TOKYO SHIMBUN (Page 27) (Abridged slightly)
March 18, 2006

The Yokohama District Court held yesterday its first hearing for
William Reese, a 21-year-old crewmember of the USS Kitty Hawk
based at the US Navy Yokosuka Base, in connection with a murder-
robbery case involving Yoshie Sato, a 56-year-old part-time
worker of Yokosuka City. In the hearing trial, Reese admitted
charges, answering, "That is correct."

The hearing opened with a prosecutor's statement that Reese had
assaulted Sato as she cried out loud in resistance when he tried

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to rob Sato of her bag. The prosecutor also maintained that the
sailor had spent the stolen money at adult entertainment
establishments and other places.

Reese pleaded guilty, saying, "Although I did not intend to kill
the woman, I did kill her." Reese's lawyer said: "I understand
that he did not have any premeditated intent, but I do not deny
his willful negligence (from the fact that he continued
assaulting her knowing that she might die). I will not contend
the charges."

After the hearing, Sato's brother, Shuichi Sanada, 56 said
angrily: "Reese does not seem to have any sense of guilt. The US
Navy should teach its troops about the preciousness of human life
and other basic values."

16) Koizumi expresses concern over North Korean, Chinese military
expansion

YOMIURI (Page 1) (Full)
March 20, 2006

Prime Minister Koizumi pointed out at yesterday's graduation
ceremony of the National Defense Academy in the city of Yokosuka,
Kanagawa Prefecture. Referring to challenges facing the
international community, Koizumi noted that some countries have
been pushing for nontransparent military expansion in recent
years. "Affected by the intentions of these countries, there has
been a proliferation of technologies relating to weapons of mass
destruction and ballistic missiles," Koizumi said. The premier
avoided singling out any country in the remark. However, his
remark can be taken as expressing concern over the military
expansion of China and North Korea.

Koizumi also indicated that he would expedite settlement of the
ongoing intergovernmental consultations between Japan and the
United States, underscoring the "critical significance" of the
Japan-US security alliance for the security of not only Japan but
also the Asia-Pacific region.

17) Trilateral Strategic Dialogue among Japan, United States, and
Australia: Cooperation on Iran's nuclear issue; Talks on the
timing of withdrawal of GSDF troops from Iraq

NIHON KEIZAI (Page 1) (Excerpt)
Evening, March 18, 2006

By Naoya Yoshino in Sidney

Foreign Minister Taro Aso, visiting Australia, joined US
Secretary of State Rice and Australian Foreign Minister Downer on

SIPDIS
March 17 to the first Trilateral Strategic Dialogue among the
three countries. They later issued a joint statement that
included a call on North Korea to return to the 6-party talks on
that country's nuclear development program. They also hammered
out a policy course toward Iran of urging that country to
immediately halt its uranium-enrichment activities and to submit
to inspections by the IAEA.

The talks also covered the timing of withdrawal of Ground Self-
Defense Force troops now operating in Samawah, Iraq.


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18) Japan, US, Australia agree to continue Iraq assistance;
Government to postpone decision on GSDF withdrawal

NIHON KEIZAI (Page 1) (Excerpt)
March 19, 2006

Naoya Yoshino, Sydney

Foreign Minister Taro Aso, now visiting Australia, held his first
strategic talks with US Secretary of State Condoleezza Rice and
Australian Foreign Minister Alexander Downer on March 18 in which
they agreed to continue their countries' assistance for Iraq's
reconstruction for the time being. After the talks, Aso indicated
to reporters that the government would postpone its decision on
the withdrawal of Ground Self-Defense Force troops from Iraq,
saying, "It is not appropriate to withdraw troops from Iraq while
there still is no new government."

19) Gap in views on China's gas exploration between Foreign
Minister Aso, who takes hard-line stance, and METI Minister
Nikai, who is cautious

TOKYO SHIMBUN (Page 9) (Full)
March 20, 2006

A gap in views between Foreign Minister Taro Aso and Economy,
Trade and Industry Minister Toshihiro Nikai has now become clear
over negotiations with China on gas exploration in the East China
Sea, a pending bilateral issue.

Asked about what Japan would do if China started exploration in
the Shirakaba gas field at a House of Representatives Foreign
Affairs Committee, Aso responded March 15, "Japan has to consider
countermeasures at that stage."

Nikai, however, at a cabinet meeting on March 17, said, "If we
announce (countermeasures) in advance, the negotiations will not
move ahead. Dealing with the matter through discussion is an
positive view." He then expressed unhappiness with (Aso's
statement),saying, "A senior Foreign Ministry official also
takes part in the negotiating table (on the gas issue)."

Nikai takes pride in resuming the bilateral talks on the gas
exploration, which has been suspended in effect since last fall.
The Foreign Ministry, however, is concerned that if Nikai, a pro-
Chinese politician, takes the lead in the gas talks, China may
twist Nikai round its finger.

The Japan-China relationship has been cold due to Prime Minister
Junichiro Koizumi's repeated visits to the controversial Tokyo's
Yasukuni Shrine. Under such circumstances, a senior METI official
commented, "A standoff between the Japanese ministers will
benefit China as China would see it as discord in the cabinet."

SCHIEFFER