JAPANESE MORNING PRESS HIGHLIGHTS 04/18/06

UNCLAS SECTION 01 OF 10 TOKYO 002075

SIPDIS

SIPDIS

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 04/18/06

Index:


1. Top headlines

2. Editorials

3. Prime Minister's daily schedule

Middle East focus:

4. Government plans to freeze aid to Palestinian Authority,
lining up with US, EU

5. Vice foreign minister lining up talks with Iranian officials
on nuclear issue

China affairs:

6. Another headache for government as China challenges Japan's
EEZ in E. China, Japan seas

7. Japan Coast Guard did not notify Prime Minister's office
about China's ban on navigation in E. China Sea median line area
until two weeks later

Defense issues:

8. Mayor of Yokosuka ready to accept US nuclear-powered CARRIER
if safety assured

9. Ambassador Schieffer briefs Foreign Minister Aso on safety
of US nuclear-powered carriers

10. Japan to allow US forces to use two bases in Kyushu as relay
hubs during a contingency

11. US, Japan agree to efforts to persuade Iwakuni City to
accept Atsugi jet transfer to Iwakuni base

12. Chief Cabinet Secretary Abe wants to probe into government's
interpretation of Japan's use of right of collective self-defense

Political agenda:

13. Prime Minister Koizumi's statement ruling out extension of
current Diet session perplexes ruling camp, which has backlog of
important bills

14. Uncertain whether the amendments to the Basic Education Law
will pass the Diet this session as planned

15. Minshuto head Ozawa, changing personal policy, will now hold
regular press conferences


16. Environment Minister Koike returns to work after 19 days in
hospital for acute pneumonia


17. Japan's overseas production of autos at 10 million mark now
exceeds domestic production

Articles:

1) TOP HEADLINES

Asahi, Mainichi & Sankei:
Kubota to pay up to 46 million yen to compensate asbestos victims

Yomiuri:
FTC suspects bid rigging for sewage plant projects worth 100
billion yen

Nihon Keizai:
Nomura Group to set up investment fund for hospital, nursing care
facilities, real estate

Tokyo Shimbun:

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Kimura Construction suspected of window-dressing accounts to the
tune of 360 million yen

2) EDITORIALS

Asahi:
(1) Shortage of doctors: Consolidating hospitals is one idea
(2) Organ transplant law: Find a way to help children

Mainichi:
(1) Long-term interest rate hike: Show ultimate solution for
fiscal reconstruction
(2) Private Information Protection Law: A year in which only
bureaucrats benefited

Yomiuri:
(1) Fingerprinting visitors common, necessary
(2) Utilize labor law system as means to settle labor-management
disputes

Nihon Keizai:
(1) Find legal gaps by investigating the quake-resistance data
falsification scam
(2) China urged to explain sea traffic ban

Sankei:
(1) China's ban on ship traffic: Japan must lodge protest with
China against aggression
(2) Falsified quake-resistance data scam: Nothing has been
resolved yet

Tokyo Shimbun:
(1) Get to the root of faulty quake-resistance scandal
(2) ETC trouble: Use should be made easier

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 17

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

10:27
Met with Brazil TV Bandeirantes president and his wife.

11:27
Met with JDA Director-General Nukaga.

12:04
Attended a liaison meeting of the government and the ruling
parties.

14:29
Met with State Minister in Charge of Administrative Reform Chuma
and Deputy Chief Cabinet Secretary Saka.

15:32
Met METI Minister Nikai, Natural Resources and Energy Agency
Director-General Kodaira, and METI International Trade Policy
Bureau Director-General Kitamura.

16:04

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Met with Ambassador to Russia Saito and others. Afterwards, met
with Public Security Investigation Agency Director-General
Oizumi.

17:01
Attended a staff meeting in Diet.

17:28
Met with Environment Minister Koike at Kantei.

18:30
Met with Cameroon President Biya at residence and later hosted a
dinner party for the president.

4) Government plans to freeze aid to Palestinian Authority,
lining up with US, EU

YOMIURI (Page 2) (Excerpt)
Evening, April 17, 2006

The Japanese government has firmed up its intention to freeze for
the time being new economic assistance, such as social
infrastructure, to the Palestinian Authority that is led by
Hamas, an Islamic fundamentalist organization. The aim is to line
up with the United States and European Union (EU),which have
already announced a halting of assistance, and to pressure Hamas
to change its armed-struggle policy line.

The halt in assistance will be limited to new projects to
construct social capital infrastructure. In the event that Hamas
requests humanitarian assistance, such as food supplies, Japan
will take a stance of complying with it.

The government will consider restarting aid upon consulting with
the US and EU, and assessing whether the Hamas-led government has
changed its antagonistic policy toward Israel. When Foreign
Minister Aso visits the US during the Golden Week holidays in
early May, he plans to exchange views with US officials on this
issue, as well. The government's position is to avoid direct
negotiations with the Hamas government, and instead, to use
President Abbas as the contact point for negotiations.

5) Coordination underway to hold senior-working-level talks with
Iran

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

Vice Foreign Minister Shotaro Yachi yesterday told a press
conference that the Japanese and Iranian governments were making
arrangements to hold senior-working level talks in Teheran. Yachi
stopped short of mentioning a specific timeframe, but he stated:
"We'd like to meet them as soon as possible."

6) Emergence of disputes over EEZ in East China Sea and Sea of
Japan involving Japan, its neighbors

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

Disputes over exclusive economic zones in the East China Sea and
the Sea of Japan are emerging, involving Japan, China, and South

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Korea. In the East China Sea, China issued a warning notice
against navigation, which bans ships from navigating in the
waters around the Japan-China median line, and Japan has raised
an objection. In the Sea of Japan, the Japan Coast Guard (JCG)
plans to conduct a marine survey around Takeshima (or Dokdo in
Korean),while South Korea has warned that it will take strong
measures, including seizing ships.

China's "warning against sea traffic" around its gas field

China's warning notice is intended to ban ship traffic in a
narrow area stretching some 200 kilometers south and 3.6 or so
kilometers east to west from its Pinghu gas field located on the
north side of the Japan-China median line, on the grounds of
expanding the gas field. China has stated in the notice that it
will lay pipelines and cables in the area from March 1 through
Sept. 30. But Japan was unaware of the ban until April 13, when
it alerted ships around the area to the sea traffic ban, because
it had not been notified.

According to the JCG, it is often the case that bans on ship
navigation are issued in a narrow area, such as the inside of a
bay, for the safety of ships when offshore construction or
military drills are carried out, but it is unusual to ban sea
traffic for a long time and in a broad area in the middle of the
ocean. The government sees it as a problem that the area subject
to China's traffic ban involves Japan's territory, crossing over
Japan-China median line.

Japan and China are in a dispute over the rights to explore gas
fields around the median line. At a press briefing yesterday,
Chief Cabinet Secretary Shinzo Abe criticized China for violating
Japan's rights: "Such an action violates our country's sovereign
rights, as well as the United Nations Convention on the Law of
the Sea (that stipulates the rights of coastal countries and
other rights)." The Foreign Ministry conveyed Japan's concern to
China on April 14 and 16 and made inquiries about all the facts
concerning the matter. It is waiting for a response from China.

7) Prime Minister's office out of the loop for two weeks about
China's sea traffic ban in East China Sea, despite JCG having
grasped it late last month; Foreign Ministry slow to make
inquiries about it

SANKEI (Page 1) (Excerpts)
April 18, 2006

The Japan Coast Guard (JCG) grasped late last month that the
Chinese government, which is exploring oil and gas fields in the
East China Sea, had posted a ban on sea traffic by general ships
in the waters around the Japan-China median line in the East
China Sea, but the Prime Minister's Official Residence (Kantei)
did not receive any notice about the matter before April 14.
Several government officials revealed this information. The
Foreign Ministry likewise did not take action before April 14 to
make inquiries about the matter. Questions are now again raised
about the government's crisis management system.

The widespread view is that because informal consultations among
representatives to the six-party talks on North Korea's nuclear
programs, including Chinese Vice Foreign Minister Wu Dawei, were
held in Tokyo April 9-12, Japan might have avoided bringing up

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the matter during that time.

According to a source concerned, the JCG found a notice about sea
traffic ban on the website of the Chinese Maritime Bureau late
March and immediately asked China about it via mail, but China
did not reply for one week. Later, China sent the JCG a mail
denying the construction work of expanding its Pinghu gas field.
With no proper response made by China to Japan's inquiries, the
JCG reportedly ended up failing to confirm all the facts about
the matter.

8) Yokosuka mayor to accept US nuclear CARRIER deployment
premised on safety

ASAHI (Page 3) (Full)
April 18, 2006

The US government yesterday submitted a document to the city of
Yokosuka, Kanagawa Prefecture, regarding the US Navy's plan to
deploy the USS George Washington, a nuclear-powered AIRCRAFT
carrier, to its Yokosuka base. The document, provided to Yokosuka
Mayor Ryoichi Kabaya through the Foreign Ministry, explains the
safety of nuclear-powered warships, including their architecture
and operations. In response, Kabaya told a press conference that
he cannot find out any reason to oppose the carrier's deployment
to the base if the document is reliable. With this, the mayor
clarified that he would accept a nuclear CARRIER if its safety is
confirmed.

At present, the Yokosuka base is home to the USS Kitty Hawk, an
oil-fueled conventional AIRCRAFT carrier. The city has objected
to the planned deployment of a nuclear-powered AIRCRAFT CARRIER
to the base and has asked the Japanese and US governments to
continue to deploy a conventional CARRIER even after the Kitty
Hawk is mothballed.

Kabaya received a briefing yesterday on the document from the
Foreign Ministry's Japan-US Security Treaty Division Director
Junji Shimada. In his press remarks, the mayor gave a positive
evaluation of the document, saying, "It's more specific and
detailed than expected, and it's not perfunctory." The mayor also
said, "I've asked for a conventional ship, and the bottom line is
safety." He added: "There are still problems, such as disaster
prevention measures, but I think I will accept the planned
deployment of a nuclear CARRIER (if its safety is confirmed.) I
will have no reason to oppose it."

9) US envoy briefs Aso on nuclear warship safety

ASAHI (Page 3) (Full)
April 18, 2006

US Ambassador to Japan Schieffer met with Foreign Minister Aso
yesterday in Tokyo and handed a document to Aso, explaining the
safety of US nuclear-powered warships from the perspective of
their architecture, operations, and safeguards in connection with
the US Navy's plan to deploy the USS George Washington to its
Yokosuka base in Kanagawa Prefecture in 2008.

The document describes the designs and workings of US Navy
nuclear reactors in detail, and it also details radiological
dosages on crewmen. "We will cooperate with the (Japanese)

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government in an effort to meet concerns expressed by the
Japanese people, particularly by (Yokosuka City's) local
residents," Schieffer said. Aso gave a positive evaluation of the
presented document, saying: "The Japanese government has
consistently believed in the safety of US nuclear-powered
warships during their port calls, and this document endorses that
judgment."

10) US Marines to use 2 ASDF bases in Kyushu as hubs

NIHON KEIZAI (Page 1) (Full)
April 18, 2006

Japan will prepare two Air Self-Defense Force (ASDF) bases at
Tsuiki in Fukuoka Prefecture and at Nyutabaru in Miyazaki

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Prefecture as relay hubs for the US Marine Corps in the event of
emergencies near Japan, sources said yesterday. The government
outlay several ten billion yen to build training facilities,
aprons for transport planes and helicopters, hangars, and billets
for emergency use at the two ASDF bases. This will be
incorporated in a final report to be released in early April on
the realignment of US forces in Japan.

Japan and the United States held a two-day session of
intergovernmental working-level consultations in Tokyo on April
13-14, with senior officials attending. On that occasion, the
Japanese and US governments basically agreed to prepare the two
ASDF bases as hubs for the US Marines.

The US Marine Corps, currently deploying about 18,000 troops on
Japan's southernmost island prefecture of Okinawa, will move
8,000 of them to Guam in the process of realigning the US
military in Japan. Japan and the United States have been seeking
to consolidate military cooperation in order to prepare for
conflicts on the Korean Peninsula or in the East China Sea. The
two governments have agreed to share the two ASDF bases that are
situated geographically close to the region. The Tsuiki base has
a 2,400-meter runway, and the Nyutabaru base has a 2,700-meter
base.

The government deems it possible to lessen Okinawa's base-hosting
burden and to maintain deterrence for Japan's national security.

The US Marine Corps believes that its use of staging bases, other
than those in Okinawa, will help it respond to ballistic missile
attacks and other events. The two ASDF bases are expected to
function as rear-echelon outposts readied with logistics
including supplies. In addition, the two bases will also serve as
training sites for fighter jets deployed to Kadena airbase in
Okinawa.

11) US force realignment: Japan, US agree to focus on convincing
Iwakuni; US makes concession ahead of mayoral election

SANKEI (Page 5) (Excerpts)
April 18, 2006

Japan and the United States have outlined a final agreement on
the US Marine Corps' Iwakuni Air Station in Yamaguchi Prefecture,
an outstanding issue along with the cost of relocating US Marines
from Okinawa to Guam as part of the realignment of US forces in
Japan. The two countries agreed to transfer carrier-based

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aircraft and aerial refueling planes to the Iwakuni base. At the
same time, the US compromised on relocating large helicopters to
Guam to reduce Iwakuni's burden. With the Iwakuni mayoral
election coming up on April 23, the two countries' intentions to
focus on persuading Iwakuni residents following Okinawa coincided
with each other.

"In order to constrain the noise level, we will move the
helicopters from Iwakuni to Guam," Chief Cabinet Secretary Shinzo
Abe said April 16 in Iwakuni, where he visited for stumping for
the LDP candidate running in the Iwakuni mayoral race. Abe
underscored the government's efforts to strike a balance for the
Iwakuni base.

Through the April 13-14 senior working-level talks, Japan and the
US reached an agreement on: (1) transferring 12 KC-130 air
tankers from Futenma Air Station in Okinawa to the Iwakuni base
and splitting training to the Kanoya base in Kagoshima and Guam;
(2) moving eight CH53D large transport helicopters from Iwakuni
to Guam; and (3) building a civilian air terminal at the Iwakuni
base.

When the two countries produced an interim report last October,
they had envisaged the Kanoya base as the relocation site for the
air tankers. But they have changed the plan and picked the
Iwakuni in the end due to the difficulty to build facilities.
Local residents may take the decision as an additional burden. In
a plebiscite in March, Iwakuni citizens said "no" to the plan to
relocate carrier-based AIRCRAFT from Atsugi Naval Base in
Kanagawa to the base in the city.

Looking back on the process leading up to the bilateral
agreement, a Japan-US negotiation source commented, "The United
States made a major concession for realizing the plan to relocate
aerial refueling planes to Iwakuni." Specifically, the US agreed
to split training to Iwakuni, Kanoya, and Guam, and to relocate
all the eight large transport helicopters from Iwakuni to Guam.
Moving the helicopters that have been operated along with
helicopters in Okinawa would be disadvantageous to the US
military. But Washington has recently proposed such an option,
according to the negotiation source. The bilateral agreement on
building a civilian air terminal has paved the way for the
military-civilian use of the Iwakuni base, which has long been a
dream for local residents.

12) Abe expresses eagerness to review government's interpretation
of right to collective self-defense

SANKEI (Page 5) (Full)
April 18, 2006

In a meeting of the House of Representatives' Special Committee
on Iraq Reconstruction Assistance yesterday, Chief Cabinet
Secretary Shinzo Abe stated regarding the government's

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interpretation of the right to collective self-defense: "It is
important to always examine and look into what is possible under
constitutional constraints as times change, and we will have to
do so." The government's interpretation is that "Japan has the
right under international law but is not allowed to use it under
the Constitution." Abe's remark indicates the necessity of
reviewing this interpretation.


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Prime Minister Junichiro Koizumi also expressed a similar view in
a press conference just after he assumed the current post. Abe,
who is viewed as the most likely candidate to succeed Koizumi,
expressed an eagerness to tackle the challenge being left undone
by Prime Minister Koizumi.

Abe made the above remark in response to a question by Democratic
Party of Japan member Akihisa Nagashima. He emphasized no change
in the government's current interpretation but commented: "The
position based on this interpretation is quite uncommon, even in
rest of the world." He then stressed the necessity of examining
and studying the present interpretation, saying: "We must not
allow some problem to occur when Self-Defense Force members are
engaged in operations with troops dispatched from other countries
in the international community. It is also necessary to prevent
SDF troops from getting left in the lurch."

In a Lower House Budget Committee meeting in 2004, when he was
serving as Liberal Democratic Party secretary general, Abe said:
"It might be possible to look into the possibility of allowing
SDF troops to exercise (the right of collective self-defense)?"

13) Prime Minister states, "I will not extend the Diet session";
Is he more serious than people had thought?; Ruling parties
perplexed; Timeframe for passing bill amending Basic Education
Law likely to be affected, if not extended

NIHON KEIZAI (Page 2) (Excerpts)
April 18, 2006

Prime Minister Junichiro Koizumi stated that he had no intention
of extending the current Diet session, which is to be adjourned
on June 18. The statement is giving rise to speculation among
ruling party members. At first, many thought he made that
statement in order to cut off the possibility of retreat so as to
facilitate deliberations on such legislation as the
administrative reform promotion bill. However, some are now
beginning to suspect that the prime minister made that statement
more seriously than people had thought. It may be possible to
present bills, including the amendment to the Basic Education
Law, that would likely take time to reach an agreement in the
ruling parties on, to the Diet, but it will be difficult to pass
them into law without extending the session. Ruling party members
are perplexed, unable to fathom the true intention of the prime
minister.

Referring to the handling of various bills, including the
amendment to the Basic Education Law, the prime minister during
yesterday's liaison council meeting between the government and
the ruling parties gave this order: "I would like both the Lower
House and the Upper House to discuss how to deal with the bills,
based on the premise that the Diet session will not be extended."
The prime minister's order has made party members wonder there
may be something more than principle in his statement.

Closely related to LDP presidential election

One reason why various speculation has been floated is that how
the current session ends is closely related to the LDP
presidential election in September. Among Koizumi's potential
successors, Shinzo Abe, Taro Aso, and Sadakazu Tanigaki are
cabinet ministers. As long as the Diet is session, they may

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hesitate to overtly declare their candidacies. As a result, they
may get off to a slow start.

If the Diet is not extended, political circles will be caught up
in speculation for the remaining three months on who will succeed
Koizumi. LDP Secretary General Tsutomu Takebe, who favors Abe, is
considering a way to allow the public to take part in the party
presidential race, by holding gatherings across the country at
which all the candidates would give speeches. If the prime
minister were to give the green light to Takebe's idea, it would
be advantageous to Abe.

The Democratic Party of Japan (DPJ or Minshuto) has been gaining
momentum since Ichiro Ozawa became the new president. Some are of
the view, therefore, that Koizumi's statement was intended to
contain Ozawa's maneuvering by boosting the atmosphere for the
presidential race.

14) Passage of bill amending the Basic Education Law during
current Diet session uncertain; Government, ruling camp want to
avoid confrontation with Minshuto

MAINICHI (Page 5) (Excerpts)
April 18, 2006

The ruling Liberal Democratic Party (LDP) and the New Komeito
have agreed on amendments to the Basic Education Law. However,
the government and ruling coalition have failed to reach an
agreement on when to submit a bill to the ongoing session. Prime
Minister Junichiro Koizumi has reiterated, "I would like to see
the Diet situation before making a decision." Since some ruling
camp members have predicted that the bill will be carried over to
the next Diet session, whether the bill will clear the Diet is
uncertain. The reasons seem to be that an extension of the
session would be necessary in order to pass the bill during the
current session and that the government and ruling bloc want to
avoid an unnecessary confrontation with Minshuto (Democratic
Party of Japan) President Ichiro Ozawa.

Koizumi took a cautious stance about the timing of submitting a
bill amending the education law, telling reporters last night:

"A bill promoting administrative reforms and a set of bills on
reform of the medical system are now being deliberated. We should
ascertain the course of deliberations on various bills."

15) Minshuto President Ozawa begins regular press briefings today

MAINICHI (Page 5) (Excerpts)
April 18, 2006

Minshuto (Democratic Party of Japan) President Ichiro Ozawa will
hold a press conference once a week, starting today. During his
tenure as secretary general of the now defunct Shinseito (Japan
Renewal Party) in 1993, he suspended regular press briefings,
arguing, "I have no obligation (to meet the press); that's a
service." Because he is known as "media-phobic," some members in
the main opposition party will have to keep an eye on Ozawa,
wondering how long he will continue to meet the press.

It has been the practice for Minshuto to hold a press briefing
Tuesday afternoon. Ozawa had been reluctant to meet the press,

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but he will follow the party's practice since he pledged in the
party presidential race that he would change.

16) Environment Minister Koike: Women feel more fatigue than men
as we work 10 times harder than they do

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

Environment Minister Yuriko Koike returned to her official duties
yesterday for the first time in 19 days after being hospitalized
for acute pneumonia. She explained to reporters the reason for
her extreme fatigue, saying, "In order to prove ourselves to
society, women work 10 times harder than men. So we often
overwork."

17) Overseas production of Japanese vehicles exceeds 10 million
units last year; Production in China expected to expand in 2006

NIHON KEIZAI (Page 1) (Excerpts)
April 18, 2006

Overseas production by Japanese automakers topped 10 million
units in 2005. Prospects have now become strong that overseas
production will outpace domestic production in 2006. Japanese
automakers first made inroads into Europe and North America, and
their production bases have now spread to China and India. Output
at overseas has increased by double-digits for four consecutive
years, exceeding domestic production, which is increasingly only
slightly. Fifty years have passed since Japanese auto
manufacturers started overseas production. They are now going to
shift to a global management system with eye on overseas markets
both for production and sales.

The number of vehicles Toyota Motor and seven other car
manufacturers produced at their overseas production plants
reached 9.96 million units (excluding those produced under the
knock-down system with local contents below 40%) in 2005. If
vehicles manufactured abroad by Isuzu Motors and other truck
makers (410,000 units) are added, the number of Japanese vehicles
produced overseas tops 10 million units, which is on a par with
the scale of domestic production (10.8 million units).

Toyota will start operating a plant with a production capacity of
100,000 units in Guangzhou, China, and another with production
capacity of 200,000 units in Texas. Nissan and Honda have also
come up with a plan to increase production in China. Overseas
production by Japanese automakers is expected to exceed domestic
production in 2006.

SCHIEFFER