DAILY SUMMARY OF JAPANESE PRESS 03/20/06

UNCLAS SECTION 01 OF 09 TOKYO 001461

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: DAILY SUMMARY OF JAPANESE PRESS 03/20/06


INDEX:

(1) Nago City mayor on Futenma relocation plan: Minor change is
unacceptable; Must be on the outer side of Henoko Point

(2) Chief Cabinet Secretary Abe negative about revising Futenma
relocation plan

(3) Editorial: US request for 7.5 billion dollars for force
realignment extravagant

(4) Editorial: The price tag for US troops relocation extravagant

(5) Gas fields in East China Sea: JDA considering expanding
interpretation of SDF Law to allow ASDF planes to back up MSDF
vessels

(6) Successors to Koizumi (Part 1): Study of Shinzo Abe --
playing up own political identity is a double-edged sword

(7) US closely examining third BSE case

(8) Personnel affairs at Foreign Ministry

(9) CEFP changing its nature from top-down decision making forum
to setting for various government agencies to coordinate views:
Chasm between Takenaka and private-sector members: Yosano
gradually seizing initiative

(10) EDITORIALS

ARTICLES:

(1) Nago City mayor on Futenma relocation plan: Minor change is
unacceptable; Must be on the outer side of Henoko Point

ASAHI (Page 3) (Excerpt)
Evening, March 20, 2006

Commenting on the issue of the relocation of the US Marines'
Futenma Air Station to Henoko Point in Nago City, Okinawa
Prefecture, Nago City Mayor Yoshikazu Shimabukuro today said, "We
cannot go along with a revision that goes no farther than
changing the angle of the proposed runway." He made it clear that
the city was sticking its call for a large-scale revision that
would move the location to "someplace in between the outer
perimeter of the seaside of the Henoko Point proposal and the
formerly planned site in the offing of Henoko." The mayor was
responding to coverage by the Asahi Shimbun and other news
companies.

Mayor Shimabukuro also commented on the statements of flexibility
toward revising the government's plan that are starting to come
from senior ruling camp officials, such as Liberal Democratic
Party Policy Research Council Chairman Hidenao Nakagawa, saying:
"(Minor revisions) are unacceptable. We insist that it be on the
outer side of the proposed Henoko Point site."

(2) Chief Cabinet Secretary Abe negative about revising Futenma
relocation plan

Asahi, (Page 3) (Full)
Evening, March 20, 2006

TOKYO 00001461 002 OF 009



Chief Cabinet Secretary Shinzo Abe during his press briefing this
morning touched on remarks by Liberal Democratic Party Policy
Research Council Chairman Hidenao Nakagawa suggesting the
possibility of a revision of the plan to relocate the US Marines'
Futenma Air Station. He said, "I think he was only speaking from
the point of view of the party." In addition, he took a negative
view about revising the government's plan, saying: "I would like
to expend every effort to explain to the local community the
contents of the joint document of agreement between Japan and the
US from last October. With the final compilation by Japan and the
US coming in March, there will be no change in the stances that
were taken during the talks on the current proposal."

(3) Editorial: US request for 7.5 billion dollars for force
realignment extravagant

MAINICHI (Page 5) (Full)
March 19, 2006

A fierce tug-of-war between Japan and the United States over the
cost of relocating US Marines from Okinawa to Guam is becoming a
major focus in the ongoing bilateral talks on the realignment of
US forces in Japan, now in the final stretch.

US Defense Department authorities have revealed that they have
estimated the cost for relocating 8,000 US Marines from Okinawa
to Guam to be 10 billion dollars, or 1.18 trillion yen, in total
and that they have asked Japan to bear 75% of it. It was unusual
for the US to reveal what was being discussed at the
administrative level. What was more unusual and surprising was
Japan's share of 885 billion yen.

Reportedly, the US government had initially estimated the
relocation cost to be 3 billion dollars and presented Japan with
a figure of 8 billion dollars in February. An additional 2
billion dollars on top of that is hardly acceptable. The price
tag is extravagant in comparison to Japan's annual host nation
support for US forces in Japan, which is approximately 230
billion yen.

To begin with, the realignment of US forces in Japan is part of
the ongoing global transformation of US forces. In other words,
the realignment of US forces in Japan is designed to serve the
interests of the United States.

In the bilateral talks, Japan has also asked the US for steps to
reduce the burden on local areas hosting US bases. Relocating US
Marines to Guam is the largest step to reduce the burden on
Okinawa. The US logic is that because US Marines will be
transferred to Guam in compliance with Japan's request, there is
every reason for Japan to bear the cost.

Some Japanese have doubts about the need for Japan to foot the
bill for relocating US troops. There are various views on the
cost-sharing percentages of Japan and the US and exactly what
should be borne by Japan.

Approximately three decades ago, Japan began providing host
nation support (HNS),which is commonly called the "sympathy
budget" in Japan, to shoulder the salaries of Japanese workers
employed at US bases in Japan. The system has gradually expanded,
and there is criticism that the government has been too generous.

TOKYO 00001461 003 OF 009



The government has refused to acknowledge the reported cost of 10
billion dollars for the redeployment of US Marines to Guam,
pointing to the inappropriateness of revealing matters under
discussion with the US.

It is not good, however, for figures alone to run ahead of a
clear basis for the calculation. The government needs to explain
its views on the relocation cost to the general public. What is
the definition of relocation expenses? To what extent should
Japan foot the bill? If the relocation cost is borne by Japan,
will Japan's host nation support shrink? Will the relocation cost
be financed with defense spending? There are mounting questions.

The US is becoming increasingly irritated with Japan's delay in
coordinating views with local areas, a matter specified in the
interim report produced last October.

That does not justify the US request for 7.5 billion dollars. The
Japanese people would still find such a request perplexing and
react negatively to it. If US force realignment is aimed at
greater credibility of the Japan-US alliance, the two countries
need to spell out matters step by step in order to win the
support and understanding of the Japanese public.

The two countries' timetable for producing their final report
before the end of this month is in danger. We would like to see
the two countries proceed with talks coolly and vigorously.

(4) Editorial: The price tag for US troops relocation extravagant

ASAHI (Page 3) (Full)
March 19, 2006

In its ongoing talks with Japan on the realignment of US forces
in Japan, the US has asked Japan to bear a large portion of the
cost required for relocating US Marines from Okinawa to Guam.

The estimated relocation cost is extraordinary. The US Defense
Department has estimated the relocation cost to be10 billion
dollars, or 1.16 trillion yen, in total. Of it, the US has
reportedly asked Japan to shoulder 75%, or 7.5 billion dollars
(870 billion yen).

At present, there are 15,000 US Marines in Okinawa. The US has
presented Japan with a plan to remove 8,000 of them, mostly
headquarters personnel, to Guam. According to the US, the 10
billion dollars is necessary just for relocating the troops,
building facilities, such as barracks, and infrastructure, such
as roads, in Guam, and that the amount could swell further.

Japan has long asked for ways to reduce the burden on Okinawa,
which houses the bulk of US bases in Japan. The planned
relocation of US Marines is part of such steps. Japan therefore
must be prepared to pay a price for it to some extent.

But the price tag of 7.5 billion dollars is extravagant by any
standards. Japan's budget for official development assistance
(ODA) for fiscal 2006 is 760 billion yen. Japan's share of 870
billion yen is greater than that by more than 100 billion yen.

Japan has been providing 230 billion yen annually in host nation
support (HNS),which is commonly called the "sympathy budget," to

TOKYO 00001461 004 OF 009


shoulder the necessary costs for the US forces in Japan,
including maintenance expenses for US base facilities in Japan
and the salaries of Japanese workers employed at US bases.
Japan's generously stands out among countries hosting US bases.

Japan's financial assistance has been confined to US bases in
this country. This time, Japan is being asked to foot the bill
for building new base facilities in Guam, which is US territory.
There is every reason for Japanese people to criticize such a
step as going overboard.

There is no legal ground to spend our tax money for such a
purpose, and the government is even considering establishing a
new law.

The US thinks that because US Marines will be removed in
compliance with Japan's request, Japan should bear the cost
accordingly. A US official in charge also said: "The United
States is responsible for the defense of Japan. It is Japan's
role to bear the cost."

US bases in Japan have been playing an important role in the US'
global strategy. Bases in the US have been playing an even
greater role. The comment suggesting that Japan is the sole
beneficiary is deviated from the reality of the Japan-US security
system and is unconstructive.

The government described the figure as hardly agreeable. In view
of the nation's financial situation, the amount is hard to
swallow.

The government must explain clearly to the public why Japan has
to foot the bill for building facilities at a base outside Japan.
The government also needs to ask the US for a clear basis for the
calculation.

Washington is trying to strengthen Guam as a strategic stronghold
in the Asia-Pacific as part of its ongoing global transformation
of U.S. forces. The matter is not just about relocating troops
there. The two countries need to conduct in-depth discussion to
probe such a political and diplomatic implication, as well.

(5) Gas fields in East China Sea: JDA considering expanding
interpretation of SDF Law to allow ASDF planes to back up MSDF
vessels

SANKEI (Page 1) (Full)
March 17, 2006

The Defense Agency is now looking into the possibility of
adopting a measure that will enable the Self-Defense Forces'
(SDF) fighter planes to provide covering fire, applying the
article under the Self-Defense Forces Law prescribing the
protection of weapons and other objects, in the event Maritime
Self-Defense Force (MSDF) vessels are attacked within the
Japanese air defense identification zone. This presumes a
military collision with China over the development of gas fields
in the East China Sea. Coinciding with the switch to integrated
operations of the Ground Self-Defense Force (GSDF),the MSDF, and
the ASDF, the Defense Agency (JDA) will strengthen cooperation
between the MSDF and the ASDF in monitoring areas close to the
gas fields.


TOKYO 00001461 005 OF 009


The air defense identification zone is set wider than the
territorial airspace for the defense of the mainland.

In the East China Sea, it is set beyond the median line with
China, and the gas fields in question are located within the
defense identification zone. In the event an aircraft of
unidentified nationality, such as a military plane, intrudes into
Japanese airspace, an ASDF fighter will scramble and urge the
intruder to alter its flight route.

If that aircraft fires a machine gun or other weapons at the ASDF
jet, the pilot will fire back to defend himself and to facilitate
an emergency escape. JDA is now looking into the possibility of
applying the interpretation of Article 95 of the SDF Law, which
prescribes the protection of weapons and other items, so that a
commander can order the use of weapons under such a situation
from the perspective of protecting fighter jets as a weapon.

The JDA also intends to use the interpretation of the article on
the use of weapons and other items in protecting MSDF escort
ships. Under the current law, ASDF fighter jets can use weapons
only for the purpose of protecting other jets in the same
operation, but JDA intends to expand this interpretation so that
they can protect MSDF equipment as well.

Specifically, if escort ships on patrol in the East China Sea or
P3C patrol aircraft come under attack by Chinese aircraft within
Japan's air defense identification zone, fighter jets that have
been scrambled would back up the attacked vessels or planes. This
would be the strongest possible step under the current legal
framework.

Focusing on sovereignty over the Nansha Archipelago and the
Paracel Islands, China has repeatedly carried out military
drills, including amphibious operations, alongside oceanographic
surveys, thereby strengthening effective control of the areas.
The JDA has determined that it is imperative to urgently consider
the matter with this fact in mind.

However, provided that Japan starts test drilling in gas fields
and China tries to obstruct it by such means as firing warning
shots, it will be the Japan Coast Guard that will face the
situation first. It is not possible to protect the JCG's patrol
ships just by changing the interpretation. For this reason, many
ruling party members are calling on the government to drastically
change the legal framework.

(6) Successors to Koizumi (Part 1): Study of Shinzo Abe --
playing up own political identity is a double-edged sword

NIHON KEIZAI (Page 2) (Slightly abridged)
March 20, 2006

The major political issue of the year is how the September
Liberal Democratic Party (LDP) presidential election will turn
out. Since this will be the first LDP leadership race to be held
in five and a half years, this newspaper feature monthly articles
about the presidential candidates.

"China should make its military spending much clearer. Let's
further strengthen the bonds of the Japan-US alliance, while
watching the movements of China," Abe told former US Deputy
Secretary of State Richard Armitage. The two held a secret

SIPDIS

TOKYO 00001461 006 OF 009


meeting on March 4 at a Tokyo hotel. The main topic of their
conversation was the China problem.

Although Abe has been cautious in his remarks since he assumed
his present post last October, he has now begun to show some of
his own political identity not just on his hard-line stances
toward China and North Korea but also on other issues, as well.
He even suggested an early revision of the Basic Education Law,
on which views are split in the ruling coalition. He has started
revealing subtle differences between his views and that of Prime
Minister Junichiro Koizumi, as in February when he suggested
Koizumi put off revising the Imperial House Law.

When it comes to the LDP leadership race, Abe has repeatedly
said, "I've concentrated all my energies into my current job as
chief cabinet secretary."

But many junior LDP lawmakers supporting Abe do not think (he is
indifferent to the presidential post). On March 13, about 20
young lawmakers from various LDP factions, including Yoichi
Miyazawa of the Niwa-Koga faction, got together at a Japanese
restaurant in Tokyo in order to listen to what Abe would say. On
the day when Koizumi dissolved the House of Representatives last
year for a snap election, the 20 members assembled at party
headquarters and promised to aim at creating "a young LDP" led by
Abe.

Abe enjoys the highest popularity among the post-Koizumi
contenders. When he moves into action, it always causes
significant ripples in the LDP.

House of Councillors member Shuntaro Kageyama, in a speech
delivered on March 11 in the city of Unnan, Shimane Prefecture,
stated, "I would like to select as the next LDP president a
person who can mend Japan's strained relations with China and
South Korea." This remark by Kageyama, who has close ties with
Mikio Aoki, the chairman of the LDP caucus in the Upper House,
immediately spread across the party. Aoki, who has supported the
Koizumi government, has yet to clarify whom he will back. But
Aoki does not seem to look favorably on Abe. Aoki said in a cool
manner: "A total of 65 LDP candidates (including the now defunct
Conservative Party members, who rejoined the LDP) were elected in
the 2001 Upper House election, taking advantage of the Koizumi
boom. In the 2004 election, the number of LDP candidates elected
totaled 49. At that time, Mr. Abe was the party's secretary
general."

Aoki's reluctance to support Abe stems from concern expressed by
business leaders that they do not expect Abe as prime minister
would be able to repair Japan's strained relations with China and
South Korea.

Taku Yamasaki, who has proposed building a national war memorial
to replace Yasukuni Shrine, bluntly commented on Abe, "He has a
open-and-shut ideology."

Even though the LDP replaced many old lawmakers with younger ones
in the Lower House election last year, 179 of the 408 Diet
members belonging to the LDP are senior to the 51-year-old Abe.
Therefore, there still remains strong resistance to generational
change in the LDP.

On March 14, Abe asked his deputy Ichiro Aisawa to consider

TOKYO 00001461 007 OF 009


advertising for candidates. He advertised for candidates for the
Lower House election while he was serving as secretary general of
the LDP. He flatters himself that he worked hard to make the LDP
"an open party." His fight against "the old LDP" is one of his
selling points. The LDP Upper House executives, including Aoki,
prioritize repairing relations with industrial associations and
the party's regional chapters.

Abe must show his own policy imprint if he is to attract young
lawmakers to his side, but it is also a double-edged sword for he
could find himself surrounded by an encircling net of this party
enemies. Abe has yet to find the way to succeed Koizumi as LDP
president and prime minister.

(7) US closely examining third BSE case

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

Kazuaki Fujii, Washington

The US Department of Agriculture has begun a thorough
investigation into the nation's third case of BSE found in
Alabama. The department has begun reexamining the cow itself,
which had been buried, and its offspring. USDA had earlier
generally concluded that the cow was over 10 years of age from
its dentition and other factors, but the department has again
asked experts to examine the case from all angles. USDA aims to
find out how the cow became infected with the disease by closely
examining when and where it was born. USDA apparently also
intends to demonstrate the US government's sincere efforts toward
Japan and other countries.

(8) Personnel affairs at Foreign Ministry

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

The following personnel appointments are to take effect March 20:

Hideaki Hoshi as consul general in Penang; Hajime Hayashi as
Financial Affairs Division director general; and Koichi Mizushima
as Second North American Division director general.

(9) CEFP changing its nature from top-down decision making forum
to setting for various government agencies to coordinate views:
Chasm between Takenaka and private-sector members: Yosano
gradually seizing initiative

MAINICHI (Page 2) (Full)
March 19, 2006

The nature of the Council on Economic and Fiscal Policy (CEFP),
which has served as a vehicle for implementing the Koizumi reform
initiative, is now greatly changing. Until last fall when it was
still under the leadership of Heizo Takenaka, now internal
affairs and communications minister, the panel made one policy
proposal after another, eliminating the involvement of ruling
party members and the bureaucracy, with Takenaka teaming up with
four powerful private-sector members. However, the panel has lost
its forceful driving force ever since State Minister in charge of
Economic and Fiscal Policy Hajime Yosano replaced Takenaka. It
has instead turned into a setting for various government agencies

TOKYO 00001461 008 OF 009


to coordinate views when vetting reforms. With Yosano steadily
seizing the initiative, a gulf has widened between Takenaka and
the CEFP's private-sector members.

Changes that had occurred to the panel were visible at a meeting
held on March 16. As a mid- to long-term target of overhauling
the nation's finances, private-sector members came up with nine
cases, based on a basic-case scenario of achieving a nominal
growth rate of 3% and a long-term interest rate of 4% over the
next 20 years. In presenting the basic case, the panel potently
hinted at its judgment that tax hikes would be unavoidable, by
differentiating the data used to back its decision from other
data by using blue ink.

Takenaka countered that judgment, saying, "It is strange to reach
a decision in advance." He pitted himself against private-sector
member Hiroshi Yoshikawa, professor at Tokyo University, who
called for boiling down assumptions. In the end, Prime Minister
Junichiro Koizumi judged, "We will not reach a decision in
advance. We will make a political decision in the final stage."
The panel then agreed to discuss four estimates out of nine.

The private-sector members are Yoshikawa, Masaaki Honma,
professor at Osaka University, Hiroshi Okuda, chairman of the
Japanese Business Federation (Nippon Keidanren),and Jiro Ushio,
chairman of Ushio Inc. They, along with Takenaka, are the
original members of the panel since its inauguration under the
Koizumi Administration. For four years and a half through the
reshuffle of the cabinet last fall, private-sector panel members
held their own sessions in advance before panel meetings and
submitted their own papers at every panel meeting, which often
helped Takenaka to get his views reflected in the government's
policy stances. However, cooperation so common in the past is now
nowhere to be found.

A certain senior official of the Cabinet office portrayed the
current structure of the panel: " Yoshikawa was never close to
Takenaka from the start. Nowadays, Honma does not align himself
with the opinions of Takenaka very much. Okuda, a leading figure
in business circles, takes a neutral position. Ushio, a relative
of Abe (chief cabinet secretary),is the only private-sector
member close to Takenaka." During discussions on Mar. 16, Ushio
acted as arbitrator, saying: "We need to set a target sooner or
later. But it is not necessary to do so today." Honma and
Yoshikawa acrimoniously exchanged views with Takenaka over fiscal
reconstruction on Feb. 1 and Mar. 15, as well.

It is Yosano who holds together the private-sector members who
have split with Takenaka. He sometimes does not even introduce
Takenaka's statements in press conferences held after meetings.
Yosano is thus tactfully increasingly his presence, taking
advantage of the management style set by Takenaka. Yosano and
Finance Minister Sakadakazu Tanigaki take the position that it is
unavoidable to raise the consumption tax in order to reconstruct
the nation's finances. The panel is expected to finalize its
major policy theme "package reform of expenditures and revenues"
in June. It wants to take the lead in policy-setting by a post-
Koizumi administration.

Takenaka, on the other hand, fights back, sparring with private-
sector members at every panel meeting, alarmed that they might
reach a conclusion in a way that would directly lead to a hike in
the consumption tax. His last resort is a solid channel with

TOKYO 00001461 009 OF 009


Prime Minister Koizumi and Liberal Democratic Party Policy
Research Council Chairman Hidenao Nakagawa, but this channel is
also waning in strength.

(10) EDITORIALS

Asahi:
(1) Information leak: Winny not the only cause
(2) Recognition of Minamata disease patients; Criteria should be
set first

Mainichi:
(1) Integration of government-affiliated financial institutions
is not the end of the issue
(2) Is widening social divide indispensable for revitalization
of Japanese society?

Yomiuri:
(1) Continuation of employment through age 65: Make best use of
older people's desire and capability to work
(2) Three years since start of Iraq war: Bush diplomacy throws
out isolationism

Nihon Keizai:
(1) Three years of chaos in Iraq: Use lessons learned to bring
about stabilization

Sankei:
(1) Winny: If problem goes unattended, Japan will become an IT
developing country
(2) Health food: Consider new legal framework

Tokyo Shimbun:
(1) Human rights council at UN: Effective activities urged
(2) Ferrosilt: End the vicious circle

SCHIEFFER