UNCLAS SECTION 01 OF 11 TOKYO 001536

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS
OFFICE; SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/24/06

Index:

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

Defense and security:
4) US, Japan reach final coordination stage on Futenma
relocation, Marines' move to Guam
5) Japan to propose 300 billion yen in financing to cover its
share of cost of move to Guam by Okinawa Marines
6) US, Japan restart senior working-level talks on USFJ
realignment, agree to meet end of March deadline for final report
7) Nago City mayor hints at compromise to break stalemate over
Futenma relocation site
8) Possibility that Nago City may be willing to meet government
halfway on Futenma relocation
9) US, Japan agree to fully turn over Kadena Air Base's air
control (RAPCON) rights
10) Henoko district seeking compensation for relocation of US
Marines

China ties:
11) Government plans to freeze yen loans to China, even speed up
end to all ODA to that country
12) China blasts Japan for cutting off of yen loans
13) Japan, China friendship committee meeting ends up discussing
Yasukuni Shrine

Broad agenda:
14) Prime Minister Koizumi making administrative reform package
his final hurrah in the Diet
15) Ruling camp still battling over use of word "patriotism" in
the amendments to the Basic Education Law
16) Government survey shows that among regular company
employees, women only make 70% of what men make as salaries

17) Agriculture and health ministries holding public hearings
all over Japan to hear consumer opinions on US beef

Articles:

1) TOP HEADLINES

Asahi, Nihon Keizai, Sankei, Tokyo Shimbun:
Land prices in three big business areas boost for first time in
15 years

Mainichi, Yomiuri:
JAL flew MD-87 aircraft without having it undergo complete checks

2) EDITORIALS

Asahi:
(1) Rising land prices: Don't allow another bubble
(2) Thai political situation: Relying on the King unsound

Mainichi:
(1) President Bush's statement: Iraq should be stabilized during
his term
(2) Social divide: Money alone does not make a community happy


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Yomiuri:
(1) Uncover facts behind North Korea's state terrorism
(2) Land prices: Has mini-bubble started in urban areas?

Nihon Keizai:
(1) Land prices entering new phase in big business areas
(2) Efficacy of investment in research strategy questioned

Sankei:
(1) Land prices: Urgent need for measures to revitalize regions
(2) Reduction in and sale of government assets: Lax calculations
adversely affect reconstruction

Tokyo Shimbun:
(1) Land prices: Watch rise in land prices in calm manner
(2) PSE mark: Substantial measures needed before introducing the
new system

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 23

NIHON KEIZAI (Page 2) (Full)
March 24, 2006

10:57
Met with East Timor Prime Minister Alkatiri at the Prime
Minister's Official Residence.

13:06
Lower House plenary session.

15:10
Met with Cabinet Intelligence Director Kanemoto, followed by
Deputy Chief Cabinet Secretary Futahashi.

16:12
Met with Bulgarian National Assembly Chairman Pirinski. Then met
with LDP Secretary General Takebe.

17:12
Met with Cabinet Office Senior Vice Minister Yamaguchi and Vice
Minister Erikawa. Then attended a security meeting.

18:11
Met with senior GSDF, MSDF an ASDF officer to be transferred.

19:04
Dined with Takebe, Acting Secretary General Aizawa and Chief
Cabinet Secretary Abe at a French restaurant at Akasaka Prince
Hotel.

20:42
Arrived at the official residence

4) Japan, US in final phase of coordination over Futenma
relocation, Marine relocation cost

NIHON KEIZAI (Page 2) (Abridged)
March 24, 2006

Japan and the United States entered into another round of

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intergovernmental consultations yesterday in Tokyo on issues
regarding the realignment of US forces in Japan, with senior
officials for foreign and defense affairs attending. In the
talks, the Japanese and US governments continued final
coordination to reach an agreement late this month. The two
governments still remain wide apart over how to share costs
incident to moving US Marines from Okinawa to Guam, where to
redeploy an air tanker fleet from Futenma base in the city of
Ginowan, Okinawa Prefecture, and other specific realignment
issues. The two countries are expected to hold talks over again
in case they cannot find a way out of the impasse over these
pending issues.

The talks this time are scheduled to wind up today. Yesterday's
meeting included Foreign Ministry North American Affairs Bureau
Deputy Director General Kazuyoshi Umemoto and Defense Agency
Defense Policy Bureau Deputy Director General Hironori Kanazawa
on the Japanese side and Deputy Under Secretary of Defense
Lawless on the US side.

5) Realignment of US forces in Japan: Japan to offer 300 billion
yen to cover part of the cost of relocating troops to Guam

MAINICHI (Page 2) (Full)
March 24, 2006

By Yoso Furumoto

The government yesterday decided to propose at Japan-US working-
level talks today that Japan finance the cost of the construction
of family housing, which will come to 2.5 billion dollars
(approximately 300 billion yen), as part of Japan's share of the
cost of relocating US Marines from Okinawa to Guam in the ongoing
realignment of US forces in Japan. But this amount is still far
from the US-requested amount of 7.5 billion dollars, or about 880
billion yen, so bilateral talks are certain to hit a snag before
the end-of-March deadline for a final report.

The United States intends to move the Marines headquarters in
Okinawa and its staff -some 8,000 personnel and about 9,000
dependents - to Guam, and has estimated the total relocation cost
at approximately 10 billion dollars, or nearly 1.17 trillion yen.
The US has urged Japan to pay 75% of that amount. The housing
construction cost is estimated at some 4.7 billion dollars, or
some 550 billion yen. Half of that amount will be necessary for
the construction of family housing. Japan is considering
financing the cost of the construction of family housing. Japan
plans to adopt the private finance initiative (PFI) system to
this family housing so that the construction and management of
housing will be put in the hands of the private sector, and that
the loans will be repaid through rent. Japan is discussing the
introduction of this PFI system with the US.

Japan wants to exclude barracks from its financing, because they
are considered part of the base, so they are not fit for
management by the private sector. The US, however, has urged
Japan to cover the cost of the construction of barracks, a
headquarters building, and other facilities, as well. Both sides
are still far apart.

Foreign Minister Aso meets with senior officials of affected
municipalities

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By Takuji Nakata

Foreign Minister Taro Aso yesterday separately met at his
ministry with Gov. Sekinari Nii of Yamaguchi Prefecture, Mayor
Ryouichi Kabaya of Yokosuka City, Kanagawa Prefecture, and Deputy
Mayor Toshio Kayama of Sagamihara City, Kanagawa Prefecture, and
discussed the ongoing realignment of US forces in Japan and the
US base issue. Referring to the outcome of the Iwakuni City
plebiscite conducted before the merger of the city and nearby
municipalities in which nearly 90% of citizens were opposed to
the planned relocation of a US carrier-based wing to the Iwakuni
base, Gov. Nii stated, "We on the part of the prefectural
government cannot accept the plan immediately." He then urged the
central government to make efforts to obtain local understanding.

6) Japan, US reconfirm agreement should be reached at end of
March; Negotiations on Guam relocation cost enter final phase

ASAHI (Page 2) (Full)
March 24, 2006

Working-level talks on the realignment of US forces in Japan of
foreign and defense officials from the Japanese and US
governments yesterday began in Tokyo. The talks will continue
through today. Both sides will discuss details about such items
as the sharing of the relocation cost of US Marines from Okinawa
to Guam, the centerpiece of efforts to lessen Okinawa's burden.
Late yesterday, Defense Agency (JDA) Director-General Nukaga met
with US Deputy Under Secretary of Defense Lawless, and the two
reconfirmed that both sides would strive to reach agreement on a
final report at the end of March.

On the relocation costs, Japan is likely to propose financing the
cost of the construction of housing on a loan basis during
working-level talks. The US is expected to urge Japan to pay, in
addition to housing, costs related to the construction of other
buildings, including training facilities that will be jointly
used by the Self-Defense Forces (SDF), an operational facilities,
and recreational facilities. Japan has estimated its share to be
less than 5 billion dollars, but the US has requested Japan to
pay about 7.5 billion dollars of a total of 10 billion dollars.
The US has stated that determining the %ages of cost-sharing is a
premise for Japan and the US to reach agreement. Whether both
sides can compromise to reach agreement before the end of March
is now the focus of attention.

Meanwhile, Liberal Democratic Party (LDP) General Council
Chairman Fumio Kyuma yesterday met with Lawless at LDP
headquarters and said of Japan's share of the cost of the Guam
relocation: "The Japanese public could be convinced regarding
paying the construction costs of housing, port facilities that
will be used for joint drills with the SDF, and a runway. But we
think it would be difficult to obtain public understanding if our
payment involves the costs of constructing basic elements for the
US military, for instance, a headquarters building."

7) Nago mayor does not rule out possible concessions with central
government

MAINICHI (Page 2) (Full)
March 24, 2006

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By Teruhisa Mitsumori

As part of his efforts to deal with the planned relocation of the
US military's Futenma Air Station in Ginowan City, Okinawa
Prefecture, to the coastal area of Camp Schwab in Nago City, Nago
Mayor Yoshikazu Shimabukuro yesterday referred to the possibility
of responding to talks on revising his municipality-proposed sea-
based relocation plan so as to come a little bit closer to the
coastline and hinted that there is room for him to make
concessions with the central government, which has insisted on
the coastal plan.

Shimabukuro had until recently insisted that he would respond to
talks on revisions if revisions were variations of the sea-based
plan, but his remark yesterday hinted for the first time that he
is willing to respond to talks even if revisions are not within
that scope. A senior municipal government official was bolder
than the mayor, saying, "A good idea is to exclude the housing
area from flight routes." The central government also is showing
its willingness to respond to minor revisions of the coastal
plan.

8) Nago may assent to Futenma relocation

YOMIURI (Page 2) (Abridged)
March 24, 2006

Japan and the United States have now agreed to relocate the US
Marine Corps' Futenma Air Station from its current location in
the city of Ginowan, Okinawa Prefecture, to a coastal area of
Camp Schwab in the island prefecture's northern city of Nago.
Asked about this coastal relocation plan, Nago Mayor Yoshikazu
Shimabukuro told reporters yesterday at his city's municipal
government office that he would continue to talk with the
government about the issue. "We've yet to reach a conclusion on
whether to accept the government's relocation plan," the mayor
said. Deputy Mayor Bunshin Suematsu also said the city would
enter into consultations if the course of flights to and from the
newly planned tarmac would not extend over the city's two local
communities, including Toyohara.

Meanwhile, the city has asked the government to avoid setting a
flight course over residential areas. In this regard, the two
Nago officials indicated that they could accept the relocation if
the flight course is off the city's populated areas even if it is
close to the shore.

9) Japan, US agree to talk about Yokota base air traffic control
for overall return

YOMIURI (Page 2) (Full)
March 24, 2006

Japan and the United States have now agreed to consult on the
pending issue of returning the US Yokota Air Base's radar
approach control, or RAPCON for short, to Japan's air traffic
controllers. The agreement will be incorporated in a final report
to be worked out in late March on various issues regarding the
realignment of US forces in Japan. The United States has so far
frowned on the complete return of RAPCON. The Japanese and US
governments appear to have confirmed this course of action in

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yesterday's meeting of their senior officials for foreign affairs
and defense. Meanwhile, the United States has already agreed to
return Yokota-controlled airspace in part. The two governments
are expected to hold procedural consultations on this matter.

In yesterday's meeting of senior working-level officials, the
Japanese and US governments also discussed where to redeploy a
fleet of KC-130 air tankers currently deployed to the US Marine
Corps' Futenma Air Station in the city of Ginowan, Okinawa
Prefecture. However, the two sides failed to reach an agreement
on this issue. The two governments will enter into the final
phase of coordination tomorrow over their respective shares of
costs involved in moving US Marines from Okinawa to Guam.

10) Henoko locals demand compensation for moving

YOMIURI (Page 2) (Full)
March 24, 2006

Nago City's coastal community of Henoko, with about 500
households and 1,500 residents, has asked the government to pay
150 million yen per household as compensation for those who want
to move due to the planned relocation of the US Marine Corps'
Futenma Air Station from its current location in the city of
Ginowan in the island prefecture to a coastal area across the
cape of Henoko in Nago, sources said yesterday. All Henoko
residents have already agreed to claim such compensation from the
government, and the community's representative has already
informed the municipal government of the claim as the community's
consensus. It is the first time a local community has come up
with a conditional agreement to the relocation. The government
frowned on the claim as being excessive, according to the
sources.

According to the sources, the community of Henoko has asked the
government to compensate all of those who want to move because
they could suffer from US military aircraft noise and could be
endangered in case the newly planned facility's runway-initially
planned to be installed in waters off the coast of Henoko-closes
in on their houses.

11) Government to defer decision on new yen loans to China

SANKEI (Page 2) (Excerpts)
March 24, 2006

The government decided yesterday to put off a decision on new yen
loans to China for fiscal 2005, although a decision is usually
made at the end of the fiscal year. The decision reflects growing
criticism of China in the government and the ruling parties over
China's reactions to the Prime Minister's visits to Yasukuni
Shrine, as well as China's oil and gas field development in the
East China Sea. The Japanese and Chinese governments have agreed
on a plan for Japan to cut off new yen loans to China before the
Beijing Olympic Games in 2008, but calls may grow for speeding up
the suspension or for immediately ending the yen-loan program.

Prime Minister Junichiro Koizumi told reporters last night:
"Coordination (on yen loans to China) should be carried out in
the context of overall Japan-China relations. Both sides have
agreed to end the yen-loan program before the Beijing Olympic
Games."

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New Komeito Takenori Kanzaki, though, commented: "We must make
utmost efforts to improve Japan-China ties by resorting to every
possible means. What is the point in putting off a decision."

The government has prepared a scenario under which it would cut
off new yen loans for infrastructure buildings in China before
the Beijing Olympics but continue to offer grant aid and
technical aid with official development assistance (ODA) funds to
finance mainly environment-protection measures, for instance,
those to contain air and water pollution, as well as global
warming.

The government has been calling on China to establish a system
for Tokyo and Beijing to jointly implement economic assistance
for developing countries in African and Latin America. China,
however, has not willingly responded to the call in reaction to
Prime Minister Koizumi's visits to Yasukuni Shrine. A source
familiar with Japan-China relations said: "Negotiations between
the Japanese and Chinese governments on ODA have not necessarily
forged ahead smoothly."

12) Chinese spokesman expresses displeasure with Japan's delay in
deciding on yen loans to China

ASAHI (Page 4) (Full)
March 24, 2006

Nobuyoshi Sakajiri, Beijing

The Japanese Foreign Ministry announced on March 22 that it would
not make a cabinet decision within this fiscal year on yen loans
to China for fiscal 2005 (to be implemented in fiscal 2006). In
reaction, Chinese Foreign Ministry Spokesman Qin Gang expressed
displeasure in a regular press conference on March 23, saying:
"The Japanese government's unilateral decision will do more harm
than good in improving the atmosphere surrounding China-Japan
relations."

13) China urges "settlement of Yasukuni issue" while Japan
presents roadmap for reconciliation in friendship committee
meeting

ASAHI (Page 4) (Full)
March 24, 2006

The New Japan-China Friendship 21st Century Committee started its
fourth round of meetings in Kyoto yesterday. The panel, composed
of experts from both countries, is tasked with working out
measures to improve and develop bilateral ties. The committee was
launched with the aim of exploring ways to break the impasse in
strained bilateral relations by promoting medium- and long-term
exchange programs. In order to improve relations, the Chinese
side stressed the need to resolve the issue of Prime Minister
Koizumi's visits to Yasukuni Shrine first.

Representing the Japanese side, Fuji Xerox Chairman Yotaro
Kobayashi stated:

"Both sides have made remarks that lack consideration for the
other side, resulting in unnecessarily irritating each other. It
is really too bad."

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Reform and Openness Forum President Zheng Pichien, who chairs the
Chinese delegation, rapped Prime Minister Koizumi's visits to
Yasukuni, saying:

"The continued visits by the top Japanese leader to Yasukuni
Shrine, which enshrines Class-A war criminals, hurt the Chinese
people's feelings severely. The visits rub salt in the wounds
contained in the Chinese memory. . . . The Chinese government
will resolutely carry out measures to promote Japan-China
friendship. It has no intention to use the history card in
negotiations with Japan. We must make efforts first to resolve
this issue in order to improve our relations."

In the meeting, the Japanese side presented a "roadmap for
reconciliation and cooperation" that included such programs as
youth exchange and study of the history of Japan-China relations.

The committee was inaugurated based on an agreement reached
between Prime Minister Koizumi and Chinese President Hu Jintao in
their meeting in May 2003. The panel plans to present the
government with a report of recommendations next year.

14) Deliberations on administrative reform promotion bill get
under way; Prime Minister eager to make reform take root;
Opposition parties point out flaws in measures on reduction in
number of public servants, amakudari practices

YOMIMURI (Page 4) (Slightly abridged)
March 24, 2006

Deliberations on the administrative reform promotion bill, which
the government and the ruling camp regard as the top priority
bill in the current Diet session, started in a Lower House
plenary session yesterday. In a Diet reply, Prime Minister
Koizumi stated, "I would like to solidify the reform policy in
order to realize a simple and effective government." He thus once
again played up his desire to make his small government policy
take root and continue to grow even after he steps down in
September. The opposition camp is geared up to point out
deficiencies in the bill, by bringing up such issues as amakudari
(golden parachute) practices rampant among public servants.

In the reply, the prime minister indicated his view that a hike
in the consumption tax would be unavoidable in the future,
noting, "It is difficult to restore the primary balance through
spending cuts alone." He then said, "Even if taxes must be
increased in the future, far-reaching administrative and fiscal
reform efforts will enable to reduce the margin of the hikes." He
thus indicated a stance of doing his utmost to cut back on
government expenditures through administrative reform.

Opposition parties criticized the government's plans to cut back
on the number of public servants and regulate amakudari practices
as lacking specific measures.

The bill mentions a net reduction in the number of public
servants by more than 5% in five years. Shu Watanabe of the
Democratic Party of Japan (DPJ = Minshuto) criticized this as no
specific measures being included. He said, "The government plans
to decide on the specifics of the proposed reduction in the
number of public servants by June, independently of the

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legislation. It is impossible to discuss the bill, if it does not
contain specific measures.

15) How to express the word "patriotism" in revised education
law: LDP reluctant to accept third proposal as well; Full-scale
consultation to start next month; Agreement in ruling camp
remains uncertain

TOKYO SHIMBUN (Page 2) (Excerpts)
March 24, 2006

In the meetings of a study team on revising the Basic Education
Law, the ruling Liberal Democratic Party (LDP) and its coalition
partner New Komeito have been at odds over how to express the
word "patriotism" in amending the law. As a compromise proposal,
one idea that has now emerged for describing the word
"patriotism" would be that each person should have "awareness and
responsibility of being Japanese." In an attempt to submit a bill
amending the education law to the ongoing Diet session, the New
Komeito has taken a positive stance toward this expression, but
it is uncertain whether the LDP will accept it.

The reference to patriotism would be incorporated in the item
called "objectives of education" in the amended law. The LDP and
New Komeito have discussed the issue of patriotism already for
two years and nine months. They initially asserted separate
proposals - the LDP insisting on the expression "love of nation,"
while the New Komeito proposing using the expression "cherish the
nation."

In order to break the impasse, a third idea has been floated.
House of Representatives member Kosuke Hori, an advisor to the
education law reform study team, told reporters in January:

"There is a view that we should teach children to love our
country, while including the expression awareness of being
citizens of Japan and responsibility as Japanese nationals."

Hori indicated that the two parties should search for a
compromise.

The government did not submit to the current Diet session a bill
revising the Imperial House Law and a bill upgrading the Defense
Agency to the status of a ministry even though it characterized
them as important bills. The dominant view in the LDP was that a
bill revising the Basic Education Law, the remaining key bill,
should be submitted first to the ongoing session. Therefore, the
ruling camp is seriously looking into a new proposal. A senior
New Komeito member commented, saying, "We should not show that we
are reluctant to revise the law."

The reason for the New Komeito opposing the expression "love of
country" is because the party says that the expression remind
them of nationalism in the prewar period. Since the present law
stipulates the similar one to the expression "awareness of being
citizens of Japan and responsibility as Japanese nationals," the
third idea would be more acceptable. A senior New Komeito
lawmaker said, "This will not be a problem. It is much better
than the LDP's proposal."

16) Initial tabulation by Health and Labor Ministry comparing
salaries of regular company employees reveals woman making a

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little less than 70% of wages that men receive

MAINICHI (Page 2) (Full)
March 24, 2006

The Ministry of Health and Labor yesterday announced the results
of its basic statistical survey of the wage structure for 2005.
The set wages for general workers was a monthly 302,000 yen, up
0.1% from the previous year, the first increase in four years.
Men made a monthly 337,800 yen (up1.2%), while women made 222,500
yen (a drop of 1.4%). This survey introduces tallies based on
different types of employment. Among the full-time general
workers, if the salaries of male regular employees are set at
100, male non-regular employees had 64, regular female employees
had 69, and non-regular female employees had 48. In addition,
there was very little difference in the salaries of younger
regular employees and non-regular employees. If the salaries of
young men in their early 20s is set at 100, non-regular male
employees had 86. For (young) female employees, compared to
regular employees (100), non-regular employees had 85. But when
it came to employees in their early 50s, in the case of men, (non-
regular employees) had 54, and women (non-regular employees) had
60, showing that the wage gap expanded as employees grew older.

For part-time workers who are paid an hourly wage, men received
1,069 yen (up 5.6%) and women 942 yen (up 4.2%). In the case of
men, the peak for their hourly wages was in their early 40s with
1,204 yen, while women peaked in their late 20s with 993 yen.
After that, the hourly wage level dropped gradually.

17) MAFF, MHLW to hold opinion exchange meetings with consumers
with eye on resumption of US beef imports

MAINICHI (Page 2) (Full)
March 24, 2006

The Ministry of Agriculture, Forestry and Fisheries (MAFF) and
the Ministry of Health, Labor and Welfare (MHLW) yesterday
decided to hold opinion exchange meetings with consumers at
several locations throughout the country ahead of a decision to
lift the ban on US beef imports so that the results of meetings
could be reflected in conditions for beef trade resumption. This
policy is based on the thinking that the resumption of beef
imports should be premised on people's desire to eat US beef and
their trust in it, as MAFF Minister Shoichi Nakagawa put it.

When MAFF and MHLW decided to resume US beef imports last
December, they held a briefing afterwards, but there were no
occasions provided for consumers to directly express their
opinions. This invited the criticism that the decision was made
in a rough-and-ready manner. The two ministries now intend to
hold prior meetings in order to give the impression that they
were handling the issue in an elaborate manner.

Bilateral meetings of experts to discuss the US import ban issue
will take place on March 28 and 29. However, the two countries
remain at odds over the cause of the inclusion of Vertebral
columns in US beef shipment with Washington insisting that it was
a unique case, while Tokyo suspecting defects in the US
inspection system. The two countries will work out measures to
prevent a recurrence, after ascertaining the cause of the
incident. Whether preventive measures set by the governments of

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the two countries are sufficient or not will be put to the test
by consumers at the planned opinion exchange meetings.

MAFF are inviting opinions on the US beef issue by mail or e-mail
(goiken@nm.maff.go.jp). It will refer to opinions received in
making the decision.

SCHIEFFER