Identifier
Created
Classification
Origin
06TOKYO1705
2006-03-31 00:57:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 03/31/06

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 11 TOKYO 001705 

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 03/31/06


Index:
UNCLAS SECTION 01 OF 11 TOKYO 001705

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 03/31/06


Index:

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

4) President Bush in speech praises Japan's democracy,
contributions to peace, while criticizing China's oppression of
freedom

Iraq reconstruction aid:
5) Japan asked to continue assistance to Iraq
6) Foreign ministers of Japan, Britain to meet in May, agree on
difficulty to set timetable for withdrawal of troops from Iraq

7) Japan pressed by US to fall in line with its diplomacy
toward Iran and the nuclear issue

China ties:
8) Shocking suicide notes left by Shanghai consulate employee
detailing entrapment and intimidation by Chinese intelligence
agencies
9) Former prime minister Hashimoto, now leading large
delegation to China, to meet President Hu today
10) New Komeito protests delay in ODA loans to China
11) New Ambassador to China Miyamoto sees improvement coming in
Japan-China relations
12) China tones down criticism somewhat of Japan's new textbook
screenings

13) South Korean government calls in Ambassador Oshima to blast
him on new crop of Japanese history textbooks

Defense issues:
14) Aomori accepts installation of X-Band, new US radar system
15) JDA chief Nukaga holds talks with mayors in cities near Nago
over Futenma issue
16) METI Minister Nikai to submit bill to Diet raising status of
JDA to ministry

17) Visiting Commerce Secretary seeks US-Japan cooperation to
press China for monetary policy reform

18) US explains that bones found in Hong Kong shipment of US
beef posed no safety risk

19) Report shows potential growth rate for Japan at 1.3%,

highest in a decade

20) Chief Cabinet Secretary Abe taking lead in study of social
disparity issue

21) Muraoka acquitted of charges of taking illegal dental
association check, raising greater question of former prime
minister Hashimoto's role in the incident

22) Former ambassador to US Kuriyama appointed to serve as
advisor to the Emperor

Articles:

1) TOP HEADLINES

TOKYO 00001705 002 OF 011



Asahi, Mainichi, Sankei, and Tokyo Shimbun:

Former Chief Cabinet Secretary Kanezo Muraoka acquitted of charge
of having concealed 100-million-yen donation from Japan Dental
Association to Hashimoto faction; Tokyo District Court rules
former treasurer's testimony not credible, suggesting donation
was given directly to Hashimoto

Yomiuri:
Suicide notes by Japanese diplomat in Shanghai testify to China's
persistent pressure to reveal secrets

Nihon Keizai:
Daiichi Sankyo to purchase Zepharma from Astellas to follow top
drug maker Taisho

2) EDITORIALS

Asahi:
(1) Muraoka acquitted: Hashimoto's turn to answer questions
(2) Revision to the Immigration Control and Refugee Recognition
Law: Merits and demerits on fingerprinting foreign visitors

Mainichi:
(1) Muraoka acquitted over 100-million-yen donation scandal: Who
is the bad guy?
(2) NEET and job-hopping part-time workers not "losers"

Yomiuri:
(1) Muraoka ruling shows murky side of politics
(2) Bid rigging-preventing reduced surcharge system worked

Nihon Keizai:
(1) Rice futures market must be approved
(2) Muraoka ruling points to true culprit

Sankei:
(1) Muraoka cleared in donation scandal: What is the truth?
(2) Learn lessons from high-rise apartment building ruling to
build pleasant communities

Tokyo Shimbun:
(1) Muraoka acquitted: Dark side of bypass donation not
clarified
(2) Deep gulf remains over pluthermal project

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 30

NIHON KEIZAI (Page 2) (Full)
March 31, 2006

11:00
Met at Kantei with Naoki Tanaka, who will become chairman of the
Postal-Privatization Committee, and followed by Chief Cabinet
Secretary Abe. Met again with Tanaka.

SIPDIS

14:00
Met with Chairman Iida of the expert panel on sliming and making
administration effective, Administrative Reform Minister Chuma,

TOKYO 00001705 003 OF 011


and Administrative Reform Promotion Chief of Secretariat Matsuda.

15:00
Met with Ambassador to Iraq Suzuki.

16:00
Met with METI Minister Nikai, Natural Resources and Energy Agency
Director General Kodaira. Met afterwards with Deputy Chief
Cabinet Secretary Futahashi.

17:23
Met with Gender Equality Minister Inoguchi and Gender Equality
Bureau chief Natori.

19:00
Met at his official residence with Upper House Budget Committee
Chairman Ono and chief director Ichikawa, and Deputy Chief
Cabinet Secretary Suzuki.

4) US President Bush, showing clear differences in his approach,
criticizes China's suppression of freedom, while praising Japan's
contributions to peace

SANKEI (Page 7) (Full)
March 31, 2006

By Yoshihisa Komori in Washington

US President George W. Bush brought up China's suppression of
freedom in a speech on freedom and democracy delivered in
Washington, DC, and in a subsequent question-and-answer session
on March 29, he declared that he would critically refer to
religious suppression and other issues in China in an upcoming
meeting with Chinese President Hu Jintao. Meanwhile, Bush
repeated his praise for Japan's contributions to democracy and
peace, clearly indicating differences in his approaches to these
two nations.

Bush delivered this speech at Freedom House headquarters, a
private organization for advancing democracy, in Washington. In
the speech, Bush stated freedom and democracy are also taking
root in Iraq. In the subsequent question-and-answer session, Bush
referred to the lack of democracy in China and stated, "I will
tell President Hu Jintao, who is expected to visit us shortly,
not to be afraid of a free society." In addition, he revealed he
was reading Mao, a book depicting the life of President Mao Tse-
tung, telling the audience, "I keenly realize how the rest of the
world was deceived by (President Mao) and how cruel China was."

Speaking of the planned meeting with the Chinese president in
late April, Bush revealed that in the meeting, he would directly
criticize China's suppression of freedom, including religious
oppression. Bush noted: "I will discuss freedom and frankly tell
Mr. Hu about a number of conversations with the Dalai Lama, the
concerns of Catholic churches as well as those of Evangelical
churches in China, and other matters. I will also tell him that a
healthy society is not built only by the market-opening
principles."

In answering questions about democratization in the Middle East,
Bush emphasized that democracy and freedom were not something
peculiar to the United States but they are the universal concepts

TOKYO 00001705 004 OF 011


that prevail on the globe. He then mentioned his relationship
with Prime Minister Junichiro Koizumi and stated: "Prime Minister
Koizumi is not only a good friend but also a partner for me in
pursuing peace. Nearly 1,000 Japanese troops are now stationed in
Iraq. This is the result of Prime Minister Koizumi having a good
grip on the benefits of democracy in the Middle East."

Additionally, Bush repeatedly emphasized the values of democracy
in Japan, noting: "Because Japan became a democratic nation and a
peace-loving nation, the leaders of Japan and the United States
can have discussions. Turning Japan into a democratic nation was
the right thing to do. This fact is a lesson to be noted."

5) Iraqi delegation expresses hopes for Japan's continued
assistance to Iraq

MAINICHI (Page 3) (Full)
March 31, 2006

A group of 10 Iraqi leaders, including the mayor of Muthanna
Province in southern Iraq, who are on a mission to Japan to study
local autonomy, held a press conference at the Foreign Ministry
yesterday. Provincial assemblyman Alzayadi commented on the
Ground Self-Defense Force's mission in the province, "It is the
Japanese government's responsibility to decide on a withdrawal.
We will respect your decision." He also expressed hopes for
Japan's continued assistance to Iraq, saying, "We hope that
either the SDF, the Foreign Ministry or private corporations will
continue carrying out activities in Iraq even after a new
government is established."

6) Japanese, British foreign ministers to meet in May on
timetable for GSDF withdrawal; Pullout in April now difficult

NIHON KEIZAI (Page 2) (Full)
March 31, 2006

Coordination has started for Foreign Minister Taro Aso and his
British counterpart Jack Straw to meet in Tokyo in May. Britain
is in charge of ensuring security in the southern part of Iraq.
The aim of the planned Japan-Britain meeting is to discuss a
timeframe for a withdrawal of Ground Self-Defense Force (GSDF)
troops stationed in Samawah. The Japanese government was planning
to pull them out of Iraq in two stages during the April - June
period, but if the foreign ministerial is arranged for May, it
will become impossible for Japan to withdraw GSDF in April.

The inauguration of Iraq's permanent government has been delayed.
Given this, Aso during the recent Japan-US-Australia strategic
dialogue at the foreign minister level put off a judgment on the
timing for a GSDF withdrawal. Britain intends to reduce its
troops in Iraq in May as scheduled.

7) UNSC statement on Iran's nuke program: Japan urged to act in
concert on diplomatic front

SANKEI (Page 5) (Full)
March 31, 2006

In connection with Iran's nuclear program, the United States has
now informally called on Japan to halt its Azagaden oil field
development project in Iran. Meanwhile, the United Nations

TOKYO 00001705 005 OF 011


Security Council has adopted a chairman's statement on the issue.
Japan, now pressed to make a decision, will have to pay for its
failure to review its bilateral relations with Iran and its
energy strategy.

"If we're nuclear-armed, no one would challenge us any more.
Anyone trying to do so will have to pay dear for that." This
statement came from Ali Larijani, secretary general of Iran's
Supreme National Security Committee (SNSC),when he addressed a
national meeting of political leaders from Iran's Islamic
Revolution Guards Corps (IRGC) on November 30 last year.

"Iran has a firm resolve to go nuclear. A nuclear-armed Iran
would come out with dauntless, offensive foreign policies." This
warning came from Gregg Schulte, US representative to the
International Atomic Energy Agency (IAEA) and US ambassador to
the United Nations agencies in Vienna. US Under Secretary of
State Joseph, who is in charge of arms control and international
security, presumes that Iran has enough nuclear materials to
produce highly enriched uranium for "10 nuclear weapons." In his
analysis, the US government official predicts that Iran would
acquire nuclear development capability in "5-10 years."

"Iran is dealing with several countries in an attempt to divide
the international community and threatening to stop trade and
oil," Ambassador Schulte said. Meanwhile, Iranian Foreign
Minister Mottaki delivered a speech in Tokyo on March 1. In the
speech, Mottaki issued a warning to Japan, Iran's best customer
that buys about 27% of that country's crude oil output. He said,
"Our close bilateral relationship must not be hurt by any third-
party (US) intervention."

The United States' strategy is to isolate Iran. But "it wouldn't
be a deal for Iran to stop uranium enrichment," says Koichiro
Tanaka, director of the JIME Center at the Institute of Energy
Economics, Japan. As it stands, the United States and Iran remain
wide apart from each other. Russia was expected to act as a go
between the two countries but it is now speaking for Iran.

The UNSC, from now on, will not likely go any further than to
adopt a resolution denouncing Iran at best and not go so far as
to adopt a resolution calling for sanctions against Iran. The
United States would then form a "coalition of the willing" with
its allies to implement sanctions against Iran, and the US-led
coalition would step up its pressure... Such a scenario is seen
as likely. "Japan will be sandwiched there," says Kunihiko
Miyake, formerly a Foreign Ministry bureaucrat and now
representing a foreign policy think tank.

The coalition would not take all-out economic sanctions at once.
They would begin with restricting investments and freezing
assets. And then, they will likely go on with sanction measures
in stages, such as issuing no passports (sic) to high-ranking
Iranian officials and prohibiting overseas travels. However, some
doubt such sanctions when it comes to their actual effectiveness.

In response to the UNSC chairman's statement, Senior Vice Foreign
Minister Yasuhisa Shiozaki said Japan would continue to work on
Iran. But the United States, in its heart of hearts, has no
expectations for Japan. The United States is rather casting
distrustful eyes on Japan. "The key to our diplomatic strategy
toward Iran is that countries concerned about Iran's activities

TOKYO 00001705 006 OF 011


act in concert," Schulte said. This US message had Japan in mind.

Japan will now have to make up its mind to give up on Iranian
oil. That's not only from the perspective of consideration for
the United States. "For Japan," Miyake said, "it's not choosing
between the United States and oil, it's choosing between oil and
nuclear nonproliferation." He added: "Japan should stop nuclear
proliferation even at the sacrifice of oil. That's Japan's good
sense as the only atomic-bombed nation. Japan should not cave in
to Iran's pressure. That's important."

8) Suicide notes of Shanghai consulate official reveals pressure
to reveal secrets by China side and threats to five information
on other diplomats; Decided to commit suicide when asked for
codes next

YOMIURI (Top play) (Excerpt)
March 31, 2006

This newspaper obtained the contents of a suicide note sent to
the consul general by a Japanese diplomat (then 46) assigned to
the Shanghai Consulate General. The diplomat committed suicide in
May 2004. The note revealed that the diplomat was forced by
Chinese intelligence agents to provide diplomatic secrets and
other information, and it details the process that led to his
decision to commit suicide. In the note obtained by this
newspaper, the Chinese intelligence agents ask him to tell them
from which ministry or agency each consulate official came. The
note details the persistent and clever tactics used by the
agents, such as pressing him to tell them the names of Chinese
contacts of consulate officials. The note is ample proof for the
Japanese government to judge that there was a violation of the
Vienna Convention. There is also a document in Chinese that was
used by the agents to put pressure on the individual. The Chinese
government has denied having anything to do with the suicide, but
the contents of the note and the document contradict its claim.

9) Delegation of seven groups to China, headed by Hashimoto,
arrives in Beijing for talks with President Hu today

NIHON KEIZAI (Page 2) (Full)
March 31, 2006

Manabu Morimoto, Beijing

A delegation of seven groups to promote Japan-China friendship,
headed by former Prime Minister Ryutaro Hashimoto, arrived in
Beijing yesterday. Hashimoto has served as chairman of the Japan
International Trade Promotion Association. The delegation will
meet with President Hu Jintao at the Great People's Hall today.
This will be the Chinese president's first meeting with Japanese
politicians since meeting Liberal Democratic Party Secretary
General Tsutomu Takebe and New Komeito Secretary General Tetsuzo
Fuyushiba last May.

The delegation is visiting China at the invitation of the China-
Japan Friendship Association. This is the first large-scale
Japanese mission to China since Prime Minister Junichiro Koizumi
visited Yasukuni Shrine last October. Hu is expected to give an
"important lecture" on bilateral relations during his meeting
with Hashimoto, former Foreign Minister Masahiko Komura, who
chairs the cross-party Federation of Diet Members for Promoting

TOKYO 00001705 007 OF 011


Japan-China Friendship, and other members. Attention is now paid
to what message the top Chinese leader will deliver on the
strained relations between Japan and China.

10) New Komeito protests Foreign Ministry's decision to defer yen
loans to China

MAINICHI (Page 3) (Full)
March 31, 2006

New Komeito called yesterday Foreign Ministry Economic
Cooperation Bureau Director-General Shigekazu Sato to its Foreign
Affairs Division to protest the ministry's postponement of its
decision on yen loans to China for fiscal 2005, saying, "It is
meaningless to shelve the decision." Secretary General Tetsuzo
Fuyushiba expressed strong displeasure, saying: "The Foreign
Ministry did not consult with the New Komeito beforehand. The
Liberal Democratic Party is not the only party that is supporting
the Foreign Ministry."

11) "There is ample possibility to improve Japan-China
relations," says new Ambassador to China Miyamoto

MAINICHI (Page 2) (Full)
March 31, 2006

Commenting on the strained Japan-China relations, Ambassador to
China Yuji Miyamoto, who is to take his post on April 10, in
yesterday's interview to the Mainichi indicated a perception:
"Both countries are in agreement on the point that relations with
the other country are important. There is ample possibility to
improve bilateral relations."

12) Screening of school textbooks: China restrains criticism

MAINICHI (Page 2) (Full)
March 31, 2006

The Ministry of Education, Culture, Sports, Science and
Technology (MEXT) has ordered that school textbooks to be
screened for next spring should mention that the Senkaku Islands
(known as the Diaoyu isles in China) belong to Japan. Deputy
Director General Qin Gang of the Chinese Foreign Ministry Press
Bureau yesterday responded, "The Diaoyu and islets belonging to
it have been China's territory since ancient times. There are
unquestionable legal grounds for our claim." He, however, did not
protest to the Japanese government. His criticism was restrained,
compared with past comments.

The Chinese side apparently stopped short of provoking Japan,
because President Hu Jintao was scheduled to meet with former
Prime Minister Ryutaro Hashimoto on March 31, yesterday and
release a key dialogue designed to improve bilateral relations.

13) Screening of school textbooks: South Korea lodges protest
with Ambassador Oshima

MAINICHI (Page 2) (Full)
March 31, 2006

Foreign Affairs and Trade Minister Ban Ki-moon of South Korea
yesterday called in Japanese Ambassador Shotaro Oshima to the

TOKYO 00001705 008 OF 011


Ministry of Foreign Affairs and Trade. Referring to the order
given by the Japanese Ministry of Education, Culture, Sports,
Science and Technology (MEXT) that high school textbooks to be
screened in fiscal 2005 should mention that Takeshima, known as
Toku-do in South Korea, are Japan's territory, Ban expressed his
regret: "It is regrettable that Japan has taken a measure that
could erode the sovereignty of South Korea amid ongoing efforts
to dissolve the stalemated bilateral relations."

Ambassador Oshima sought understanding from him, noting: "The
screening was carried out properly, based on the examination
system. It is Japan's consistent position regarding Takeshima."

14) Aomori governor and Tsugaru mayor agree to deployment of US
military's X-band radar

YOMIURI (Page 4) (Full)
March 31, 2006

Aomori Gov. Shingo Mimura and Tsugaru Mayor Hiroyoshi Fukushima
held a press conference at the prefectural government office
yesterday in which they expressed their agreement to the planned
deployment of mobile X-band radar at the Air Self-Defense Force's
Shariki detachment base in the city. The radar was developed by
the US military to build an early warning system to intercept
ballistic missiles. The deployment of the radar will be
incorporated into the US force realignment final report to be
compiled in April.

15) Nukaga holds talks with mayors of municipalities around Nago

MAINICHI (Page 3) (Full)
March 31, 2006

Defense Agency Director General Fukushiro Nukaga held talks last
night at his agency with the mayors of four municipalities around
Nago, Okinawa Prefecture. Given the difficulty to obtain Nago's
consent on the planned relocation of the US Marine Corps' Futenma
Air Station to the coastline of Camp Schwab, the defense chef
sought their cooperation.

16) Lawmakers to sponsor bill upgrading Defense Agency to a
ministry: METI Minister Nikai

TOKYO SHIMBUN (Page 2) (Full)
March 31, 2006

Economy, Trade and Industry Minister Toshihiro Nikai yesterday in
a general meeting of his faction promoted a set of bills to
upgrade the Defense Agency to the status of a ministry:

"It is desirable that (the government will submit) the bills
since they are designed to reform the government organization.
However, if the government is reluctant to do so, we are ready to
present them as bills sponsored by lawmakers."

The faction is now calling on LDP lawmakers to sign up to sponsor
the bills.

17) US Secretary of Commerce Gutierrez: "Japan, US need to work
together for a China's currency reform"


TOKYO 00001705 009 OF 011


NIHON KEIZAI (Page 9) (Full)
March 31, 2006/03/31

US Secretary of Commerce Gutierrez yesterday was interviewed by
the Nihon Keizai Shimbun in Tokyo, and in the interview, he
indicated an intention to join hands with Japan to urge the
Chinese government to reform the yuan, saying, "The currency
issue is the common matter of concern for both the Japanese and
US economies." Gutierrez also indicated that revaluing the yuan
would help improve America's trade deficits. On the US beef
issue, he again called on the Japanese government to reopen its
beef market to the United States as quickly as possible.

Gutierrez pointed out, "There is indeed the concern about whether
the value (of the yuan) is adequate." Citing the submission of a
bill intended to impose sanctions on China by influential US
senators, he urged Beijing to revalue the yuan even further.

Additionally, Gutierrez analyzed: "The US trade deficit is
closely linked to (the exchange rate of) the yuan," explaining
that the US' current account deficit has been brought about
chiefly by trade with China.

18) It was haunch bones that were included in beef shipment to
Hong Kong, US replies to Japan's inquiry

MAINICHI (Page 2) (Full)
March 31, 2006

The Ministry of Agriculture, Forestry and Fisheries (MAFF)
yesterday announced that it received a reply from the US to a
question it asked about the inclusion of bones in US beef
shipment to Hong Kong. According to the reply provided by the US,
two chips 2.5 - 5 centimeters long from parts sticking out of
haunch bones were found in the shipment. The US said that the
inclusion of such bones is not a breach of the import conditions,
because they are not a risk material. Hong Kong imports only
boneless beef from the US. It suspended imports in mid-March from
the meat packer that shipped the product in question. However,
the US appears to be claiming that it is not possible to say that
the inclusion of bone chips are the same as beef with bones
attached.

19) Projection for growth potential for fiscal 2005 reaches ten-
year high of 1.3%, according to provisional calculations by
Cabinet Office

NIHON KEIZAI (Page 2) (Excerpts)
March 31, 2006

The Cabinet Office has estimated that growth potential, which
indicates the Japanese economy's growth performance, for fiscal
2005 increased to 1.3%, up 0.1 points from the preceding year.
The recovery of capital investment and improved productivity has
raised the fundamental power of the Japanese economy, leading to
the surge in the growth potential. The figure is the highest
since 1995, when such a figure reached 1.5%. The Cabinet Office
sees that the economy is about to emerge from the deflationary
cycle due to the correction of the situation in which the actual
growth rate has been underperforming growth potential.

The Cabinet Office has calculated the growth potential for fiscal

TOKYO 00001705 010 OF 011


2005, based on the revised value of the gross domestic product
(GDP) for the October-December quarter last year. It is worked
out, based on the amount of capital companies invested in their
plants and manufacturing facilities, productivity, which reflects
the development of technology and production efficiency, and the
labor force needed for production activities.

Of the growth potential of 1.3%, capital contribution accounts
for 0.5 points, productivity for 1.1% and labor force for
negative 0.3%. The recovery of business showings has boosted
corporate production capacity as well as management efficiency.

20) With an eye on the presidential race, Abe takes lead in
discussion on measures to offer second chance for success, seen
as move to forestall criticism of income disparity,

NIHON KEIZAI (Page 2) (Excerpts)
March 31, 2006

In its first meeting yesterday, the government's Second Challenge
Promotion Conference, chaired by Chief Cabinet Secretary Shinzo
Abe, started discussion on measures to help out-of-work people or
failed entrepreneurs gain a second chance for success. Abe
instructed panel members to work out specific measures, including
those to back up companies' intermediate recruitment. Some
observers speculate that Abe, having an eye on the Liberal
Democratic Party presidential race in September, started moves to
forestall criticism of a widening gap in society allegedly caused
by structural reforms.

In yesterday's meeting, Abe said: "It is important to build a
society that offers a second chance at success and not to fix the
group of winners and the group of losers. He mentioned the words
"a second chance" as many as seven times. He asserted that
although a certain level of income disparity is unavoidable, "it
is necessary to increase chances to try again, instead of
distributing wealth with 'equality' as the buzzword."

Many officials in the LDP voice concern about the disparity
between winners and losers widening in society. The possibility
is strong that if Abe runs for the presidential race, the focus
of his election campaigning will be "second chance" measures.

21) Former Chief Cabinet Secretary Muraoka acquitted of
concealing 100 million yen political donation; Tokyo District
Court determines testimony of former treasurer not credible;
Perhaps covering up for Hashimoto

ASAHI (Top Play) (Excerpts)
March 31, 2006

Tokyo District Court presiding judge Masaaki Kawaguchi yesterday
acquitted former chief Cabinet Secretary Kanezo Muraoka, 74, of
the charge of having concealed a 100 million yen political
donation by the Japan Dental Association to the former Hashimoto
factions' political organization Heisei Kenkyu Kai (Heisei Study
Group) of the Liberal Democratic Party (LDP). The concealment was
alleged to be in violation of the Political Funds Control Low.
The presiding judge determined that the testimony by Toshiyuki
Takigawa, then treasurer of the faction, was not credible. The
testimony was the pillar of the prosecutions' allegation that
Muraoka had ordered Takigawa to hide the donation. The judge

TOKYO 00001705 011 OF 011


underscored the possibility of Takigawa having made the false
testimony to prevent the scandal from causing trouble for former
Prime Minister Hashimoto, who then headed the faction, and
Hiroshi Motojuku, the LDP's chief of secretariat, while pointing
out the possibility that the 100 million yen might have been a
donation to Hashimoto himself.

The presiding judge pointed out the reason for the possibility of
Takigawa having given a false testimony:

"Because he made the false testimony to prevent the scandal from
causing trouble for former Prime Minister Hashimoto and other LDP
officials, as well as minimize damage to the faction. He also
tried to prevent the scandal from revealing the LDP's murky
handling of political donations by bringing about investigations
into Motojuku. There is the possibility that he made false
statements, by mentioning the retired senor LDP official after
being defeated in the election."

Moreover, the judge stated:

"(If not issuing a receipt was Hashimoto's intent) It is
conceivable that since the former prime minister headed the
faction, chances are strong that he will be charged with a
violation of the Political Funds Control Law. It is only natural
to think that treasurer Takigawa tried to avoid the scandal
causing trouble for the former prime minister and the Heisei
Study Group."

22) Former ambassador to US Kuriyama to become advisor to Emperor
in post at Imperial Household Agency

TOKYO SHIMBUN (Page 3) (Full)
March 31, 2006

Former Ambassador to the US Takakazu Kuriyama, 74, and Tokyo
University Professor Emeritus Taichiro Mitani, 69, will assume
positions at the Imperial Household Agency, effective on April 1.
They will serve as advisors to the Emperor. Incumbent advisors --
Toshijiro Nakajima, 80, and Katsuya Onishi, 77 -- will step down
from their posts as of today.

Joining the Foreign Ministry in 1954, Kuriyama served in such
posts as administrative vice minister, advisor to the ministry,
and ambassador to the United States.

Mitani is a specialist in modern Japanese history. He headed the
Japanese team of the Japan-South Korea History Study Committee,
which compiled a report in 2005.

DONOVAN