JAPANESE MORNING PRESS HIGHLIGHTS 04/25/06

UNCLAS SECTION 01 OF 10 TOKYO 002224

SIPDIS

SIPDIS

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 04/25/06

Index:

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

Agreement on Guam relocation cost sharing:
4) JDA chief Nukaga told Prime Minister Koizumi prior to US
trip that negotiations would aim at Japan picking up 60% of Guam
relocation cost
5) Compromise settlement on Guam relocation issue led by
Defense Agency, with US Ambassador Schieffer playing intermediary
role
6) Opposition camp all critical of US-Japan agreement on
sharing cost of Guam relocation
7) Minshuto wants "thorough probe" into the Guam relocation
cost during current Diet session

8) Government allocates 4.3 billion yen for extension of MSDF
refueling service in Indian Ocean

Political situation:
9) Shock wave still rolls across LDP after loss to Minshuto in
Sunday's by-election, with doubts growing about supporting Abe as
Koizumi successor
10) Asahi poll: Koizumi cabinet support rate, public
expectations of Ichiro Ozawa both at 50%

Aftermath of Takeshima survey standoff:
11) Vice Foreign Minister Yachi sees possibility of Japan
resuming maritime survey near Takeshima depending on ROK moves
12) Japan to propose joint survey with South Korea of Takeshima
waters to come up with common names for ocean bed features
13) Criticism wells regarding government's handling of row with
ROK over maritime survey near Takeshima isles

14) Prime Minister Koizumi, EU leaders have meeting of minds on
issue of Iran's nuclear program

15) Ten public hearings show deep-seated resistance to US beef
by Japanese consumers; Governments hopes for settlement of import
issue in June

Articles:

1) TOP HEADLINES

Asahi: Mainichi:
Police to arrest 10 persons involved in earthquake-resistance
data scam tomorrow

Yomiuri:
Outline of final report on USFJ realignment: Four facilities in
Okinawa to be returned within eight years; Disbursement law to be
established to cover Guam relocation cost

Nihon Keizai:
Buyouts of Japanese companies by foreign firms: Government
mulling consolidation of tax system for stock swaps; Taxation on
stockholders to be deferred

Sankei:

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JR Yamanote Line stops for five and a half hours: Tracks found to
have risen; Overconfidence in new engineering method to blame?

Tokyo Shimbun:
Tokyo District Court rules that reporters can refuse to answer
questions indirectly relating to the identification of sources;
Decision widens applicable scope

2) EDITORIALS

Asahi:
(1) Guam relocation cost: Will taxpayers agree?
(2) Integration of public servants' pension systems: Little hope
for elimination of gap with private-sector pension system

Mainichi:
(1) Cost of relocating US Marines to Guam: Did Japanese side say
what it should say?
(2) Chernobyl: No end to aftermath of accident

Yomiuri:
(1) Cost of relocating US Marines to Guam: Accountability needed
for Japan to pay "due share"
(2) Merger of Hankyu Holdings and Hanshin Electric Railway

Nihon Keizai:
(1) Guam relocation cost: Political judgment intended to reduce
burden of Okinawa
(2) Proposal for integrating public servants' pension systems
still leaves gap between public and private sectors

Sankei:
(1) Guam relocation cost: Cost of protecting peace
(2) JR West Japan accident: Mountain of problems still remain
unsettled

Tokyo Shimbun:
(1) Guam relocation cost: We want to see details
(2) Global economy: Imbalances should not be left unattended

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 24, 2006

NIHON KEIZAI (Page 2) (Full)
April 25, 2006

09:49
Met Finance Minister Tanigaki at Kantei. Followed by Deputy Chief
Cabinet Secretary Suzuki.

11:01
Attended an Upper House plenary session.

12:31
Arrived at Kantei.

13:59
Met Secretary General Takebe.

15:02
Met Austrian Chancellor Schuessel.

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16:03
Met students of the international school Horizon Academic in
Tsurumi-ku, Yokohama. Met Japan Coast Guard head Ishikawa.

SIPDIS

17:00
Attended an executive meeting in the Diet building.

17:17
Arrived at Kantei.

17:45
Held a meeting with EU Committee Chairman Barroso and Schuessel
at his official residence.

19:07
Held a joint press conference at Kantei. Later, enjoyed
performance of the Vienna Boy's Choir. Presented a kesho mawashi
to sumo wrestler Kotooshu. Later, dined with the EU leaders.

21:33
Returned to his official residence.

4) JDA chief Nukaga told Prime Minister before trip to US that he
would aim in negotiations for a 60% share of cost of Guam
relocation

TOKYO (Page 3) (Abridged)
April 25, 2006

Prior to his trip to the United States in connection with the
issue of Japan's share of the cost of relocating US Marines now
on Okinawa to Guam, Defense Agency (JDA) Director General
Fukushiro Nukaga met with Prime Minister Koizumi and told him of
his plan to aim in the negotiations for Japan to bear a 60% share
of the cost. "I am hoping for Japan to pay 30% (in fiscal
expenditures from the General Account budget),and 30% (in
reimbursable loans)." This was revealed by a government source on
April 24.

The agreement between the Japanese and US governments has Japan
paying a 59% share of the cost, or $6.19 billion, out of a total
of approximately $10.27 billion.

According to the government source, Foreign Minister Taro Aso on
April 21 during a meeting of relevant cabinet ministers proposed
the 30 % -30% solution and Nukaga accepted it. He informed the
Prime Minister that he would negotiate with the US according to
the Aso proposal and the Prime Minister accepted the plan.

5) Cost sharing issue settled under Defense Agency's lead with US
ambassador serving as intermediary; Koizumi left matter entirely
to Nukaga

NIHON KEIZAI (Page 2) (Abridged slightly)
April 25, 2006

Hiroshi Maruya, Washington

The US force realignment issue has been settled owning to the
initiative displayed by the Prime Minister's Official Residence
(Kantei) and the Defense Agency with US Ambassador to Japan

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Thomas Schieffer, who enjoys the confidence of US President
George W. Bush, acting as an intermediary between Japan and the
US Defense Department. The article takes a look at what took
place behind the Japan-US talks.

Finance Ministry also gives a push

On the night of April 23, Defense Agency Director General
Fukushiro Nukaga stood before television cameras in front of the
Defense Department along with Defense Secretary Donald Rumsfeld,
who had not received Nukaga when he arrived in the US, to brief
on the results of their talks. Nukaga hailed the results of his
talks with Rumsfeld, saying, "With this agreement, the two
countries will continue to be extremely close and important
allies."

Nukaga had left Japan for the US with no fixed timetable for his
talks with Rumsfeld. As a result, he had to change his hotel from
one in downtown Washington to another near the Defense
Department. Nukaga prepared himself for his talks with Rumsfeld
by postponing his departure from the US until Sunday night to be
ready for a cabinet meeting back in Japan on Tuesday.

Cabinet talks usually end with an accord based on groundwork laid
out by government offices. But this time around, Nukaga had to
take his chances, though he was armed with full authority given
by Kantei and channels for direct talks with the US government.

On March 21, shortly after the Pentagon revealed that it had
asked Japan to bear 75% of the total cost, Prime Minister
Junichiro Koizumi essentially gave Nukaga full power to negotiate
with the US on all aspects, including finances. In the past, this
sort of matter would have been handled under the Foreign
Ministry's lead, but this time it was entrusted to the Defense
Agency led by Nukaga and Administrative Defense Vice Minister
Takemasa Moriya. Koizumi's decision gave birth to a setup in
which the Kantei and Defense Agency took the lead and were backed
up on fiscal matters by the Ministry of Finance.

A week later, Koizumi and Nukaga had dinner with LDP Security
Research Commission Chairman Taku Yamasaki. Koizumi told Yamasaki
that the Defense Agency would take the lead, thus cutting off the
LDP from realignment talks.

On April 5, Nukaga learned that senior working-level talks in
Washington ended in failure. This prompted him to make up his
mind to seek a political settlement. On April 13, visiting US
Deputy Under Secretary of Defense Richard Lawless thanked Nukaga
for a plan to build two runways in a V-shape to replace Futenma
Air Station. But chances were slim that the US would concede on
the relocation cost.

One hour before leaving the US

Around that time, US Ambassador to Japan Schieffer visited the
Kantei and got involved in the negotiations. Schieffer had been
exhibiting a flexible stance all along by suggesting some fine-
tuning to the Futenma relocation plan.

Nukaga had been in close contact with Schieffer to feel out
Washington's intention. Nukaga briefed Koizumi on April 17 and

20. Koizumi said: "Japan's annual host nation support is 600

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billion yen. It's not proper to separate the Guam relocation cost
alone from HNS." Koizumi and Nukaga confined the need to come up
with a figure that was convincing to the public. Nukaga then left
for the US.

"Nukaga-san," Schieffer called on the Japanese defense chief as
he received him at the US Defense Department. In his talks with
Nukaga that lasted over three hours, Rumsfeld even said at one
point, "If Japan cannot finance it, we can call off the Marine
relocation plan." Looking back on his talks with Rumsfeld, Nukaga
said at the press conference, "The talks encountered a number of
difficulties, but we managed to reach an agreement after three
breaks." It was only one hour before his flight back to Japan via
Europe.

6) Opposition parties criticize Japan-US agreement on sharing US
Marines relocation cost as "unprecedented"

ASAHI (Page 4) (Full)
April 25, 2006

Commenting on an agreement reached between Japan and the United
states on sharing the cost of relocating US Marines from Okinawa
to Guam, the main opposition party Minshuto (Democratic Party of
Japan) released yesterday a statement in the names of foreign
minister and defense chief of its "Next Cabinet" that went:

"It is internationally unprecedented to spend money from the
national treasury on relocating the military facilities of an
allied country. The government might implement the agreement
without letting the public know the breakdown of the cost that
Japan will share. We would like to thoroughly examine it."

The Japanese Communist Party's Head of the Secretariat Tadayoshi
Ichida made a critical comment on the bilateral accord at a press
conference yesterday:

"It is only natural for the United States to pay the whole cost.
The United States will relocate Marines from Okinawa to Guam for
the time being in order to realize its global strategy. It is not
for reducing Okinawa's burden."

Social Democratic Party Secretary General Seiji Mataichi released
a statement that went: "We cannot accept that Japan will share
the cost of building US military facilities in the United States.
Such would go against Japan's fiscal reconstruction efforts."

7) Ruling camp praises but Minshuto calls for "thorough probe"
into US-Japan agreement on cost-sharing of Guam relocation; Issue
to be debated in latter half of Diet session

NIHON KEIZAI (Page 2) (Excerpt)
April 25, 2006

Voices of approval yesterday came in succession from the
government and ruling parties for the settlement of the issue of
relocating Okinawa Marines to Guam. However, Minshuto (Democratic
Party of Japan) is taking a stance calling for severe scrutiny of
the contents of the agreement. The issue is likely to become a
focus for debate in the latter half of the current Diet session.

Minshuto yesterday issued a statement that read: "Even though an

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agreement has been reached between the Japanese and US
governments, since Japan is a democratic state, the agreement
needs to be strictly checked and approved by the Diet. I would
like to see a thorough probe into the agreement."

8) Government to disburse 4.3 billion yen to finance plan for
extended MSDF deployment in Indian Ocean

MAINICHI (Page 5) (Full)
April 25, 2006

The government decided in its administrative vice ministerial
conference yesterday that it would disburse 4.384 billion yen
from the reserve fund for fiscal 2006 to finance its plan to
extend through Nov. 1 the deployment of the Maritime Self-Defense
Force (MSDF) in the Indian Ocean based on the Special
Antiterrorism Law. The balance of the fund will be 45.392 billion
yen.

9) Defeat in Lower House by-election creating commotion in LDP;
Dark clouds threatening Abe's lead in LDP presidential race

ASAHI (Page 3) (Excerpts)
April 25, 2006

"We could not win the election even though we fully took
advantage of Mr. Abe's popularity," said a Liberal Democratic
Party (LDP) member yesterday a day after the LDP candidate was
defeated in a House of Representatives election for the Chiba No.
7 district. The defeat in the by-election is now causing
controversy over the choice of a successor to Koizumi as LDP
president. Although the view is strong among LDP members that
Chief Cabinet Secretary Shinzo Abe, who enjoys high popularity,
should succeed Prime Minister Junichiro Koizumi, some members
distancing themselves from Abe have now stressed that policies
are more important than popularity. They seem to have obtained an
excuse to create an anti-Abe mood.

Abe, the leading contender to succeed Koizumi as LDP president,
stood out in supporting the campaign of the LDP candidate in
Sunday's Lower House by-election. He went to the candidate's
constituency three times to deliver speeches. Three other post-
Koizumi contenders -- Foreign Minister Taro Aso, Finance Minister
Sadakazu Tanigaki, and former Chief Cabinet Secretary Yasuo
Fukuda -- visited only once each.

Even so, the LDP was unable to win the election. Former Prime
Minister Yoshiro Mori stated in Kobe City yesterday: "We receive
the feelings of voters thorough an election. Since voters have
their own opinions, they cast their votes for the candidate they
believe in regardless of Mr. Abe and Mr. Fukuda."

All the more because Prime Minister Koizumi also went to the
constituency to give a speech, a senior LDP Upper House member
said, "We have now learned that we should not rely on the prime
minister's high popularity."

An aide to Abe, however, took a bullish attitude, saying:

"We will need to field a person who can compete with Minshuto
(Democratic Party of Japan) President Ichiro Ozawa in the next
prime ministerial race. In that case, voices calling for Mr. Abe

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to run in the race will become stronger."

Koizumi told reporters yesterday, "I think anyone who becomes LDP
president would be capable of doing the job."

A mid-level lawmaker from the Shimazu faction in the LDP,
however, predicted:

"There was a move looking for a possibility that factions,
excluding the Mori faction, would cooperate in order to fight
against Abe and the Mori faction. Such a move cannot be ruled
out."

10) Poll: Cabinet support rate recovers to 50%; 50% have
expectations of Minshuto head Ozawa

ASAHI (Page 3) (Excerpts)
April 25, 2006

The Asahi Shimbun conducted a nationwide opinion poll on April 22-

23. The survey found that approval rating for the cabinet of
Prime Minister Junichiro Koizumi was 50%, up from 46% in the
March poll. The major reason for the boost was increased support
from women and young people. Meanwhile, 50% of respondents said
that they had hopes for Minshuto (Democratic Party of Japan)
President Ichiro Ozawa. This is the highest such rate for a new
party leader, which reflects people's need for a strong political
party capable of standing up to the LDP.

Some 38%, nearly unchanged from the previous survey, favored the
LDP, and 17% supported Minshuto, recovering to the percentage it
registered in the survey conducted last October from 13% in the
previous poll.

11) Vice Foreign Minister Yachi: "Japan could conduct maritime
survey near Takeshima depending on South Korea's moves"

ASAHI (Page 2) (Full)
April 25, 2006

Speaking to the press yesterday, Administrative Vice Foreign
Minister Shotaro Yachi said regarding Japan's maritime survey in
its exclusive economic zone (EEZ) near Takeshima, a group of
disputed islets known as Dokdo in South Korea: "Theoretically
speaking, we could conduct a survey if the South Korean side
again makes another move, as this is our legitimate right." Tokyo
and Seoul reached an agreement that South Korea would not propose
new names for seafloor topographical features at an international
conference in June and that Japan would call off the maritime
survey. Yachi indicated, however, that Japan could resume the
planned maritime survey depending on South Korea's steps.

Foreign Ministry Asian and Oceanian Affairs Bureau Director
General Kenichiro Sasae also said before the LDP Maritime Policy
Special Committee yesterday: "There is no agreement on what to do
in June and beyond. Theoretically, Japan could resume the
maritime survey."

12) Japan to propose joint survey, common names for underwater
topography around Takeshima

MAINICHI (page 5) (Full)

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April 25, 2006

Administrative Vice Foreign Minister Shotaro Yachi indicated in a
press conference yesterday that Japan would propose common names
for underwater topography in waters around the Takeshima (Dokdo)
islets, over which both Japan and South Korea claim sovereignty.
Yachi said: "It is desirable (for the two countries) to conduct a
joint survey, share information, and establish international
names through bilateral talks." Japan and South Korea have agreed
to resume talks in May on demarcating an exclusive economic zone
(EEZ) in waters around Takeshima. In the talks, Japan intends to
make the proposal, but South Korea is unlikely to agree to it.

Yachi stated regarding Japan's planned maritime survey near
Takeshima: "It is theoretically possible that if further moves by
South Korea are discovered, Japan will start a survey."

13) Foreign Ministry details Japan-South Korea negotiations on
maritime survey in LDP panel; Government's responses come under
fire

YOMIURI (Page 4) (Full)
April 25, 2006

In a meeting of the Liberal Democratic Party's Special Committee
on Maritime Affairs (chaired by Keizo Takemi) yesterday, the
Foreign Ministry's Asian and Oceanian Affairs Bureau Director
General Kenichiro Sasae reported on the details of the
negotiations between Japan and South Korea over a Japanese
maritime survey in waters around the Takeshima (Dokdo) islets.

In the meeting, many participants welcomed the fact that both
sides managed to avert a clash. But one member complained: "Japan
said that it would not conduct the survey although South Korea
still says that it will move (to propose Korean names for
underwater topography). Isn't that a problem?" Another suggested:
"Japan should make arrangements to bring the issue to the
International Court of Justice."

Many also criticized the government's response and setup for
sharing information since the Japan Coast Guard learned of South
Korea's move to propose Korean names late last year.

Vice Foreign Minister Shotaro Yachi said in a press conference
yesterday:

"Japan will call off the planned maritime survey. It is
theoretically possible that if further moves by South Korea are
discovered, Japan will start a survey, based on its legitimate
right."

14) Prime Minister at Japan-EU summit discusses Iran's uranium
enrichment

YOMIURI (age 4) (Full)
April 25, 2006

Prime Minister Koizumi held a regular Japan-EU summit yesterday
with Chancellor Schuessel of Austria, which holds the presidency
of the European Union (EU),and European Committee Chairman
Barroso. They issued a joint statement expressing strong
misgivings over Iran's uranium enrichment activities and calling

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on North Korea to completely abandon its nuclear programs.

The statement criticized Iran's uranium enrichment activities as
"going against the resolution adopted by the International Atomic
Energy Agency's (IAEA) executive board, as well as the demand in
the United Nations Security Council chairman's statement." Toward
North Korea, the statement called for the UN to implement the
resolution critical of human rights problems in that nation
adopted by the General Assembly last December.

In the meeting, Koizumi renewed his opposition to a removal an
end to the EU arms embargo on China. The EU side just replied:
"We understand Japan's concern."

15) Consumers show strong aversion to US beef at town meetings at
10 venues; Government aims to settle import resumption issue in
June

MAINICHI (Page 11) (Excerpts)
April 25, 2006

The Ministry of Agriculture, Forestry, and Fisheries (MAFF) and
the Ministry of Health, Labor, and Welfare (MHLW) have completed
10 town meetings with consumers throughout the country over the
US beef import ban following the finding of vertebral columns in
a US beef shipment, with the last meeting in Takamatsu yesterday.
At all meetings consumers voiced views cautious about the idea of
lifting the ban, indicating that they have deep-seated aversion
to US beef. The government intends to settle the issue before
Prime Minister Junichiro Koizumi visits the US possibly in late
June. The reliability of measures to prevent a recurrence to be
worked out between Japan and the US will determine the fate of
beef trade.

Opinions voiced at town meetings were apparently based on
skepticism about safety and distrust of the US government.

"The import ban should not be removed until the US carries out
blanket testing." (Sapporo)
"The inclusion of vertebral columns is not a unique case. It is a
structural problem." (Osaka)
"The government may be holding town meetings just for the sake of
formality with a view to resuming the beef trade." (Takamatsu)

Only a few called for an early resumption of imports. Since
bilateral talks have thus far focused on how the vertebral
columns were included, explanations provided by the government
during town meetings did not cover safety measures. In this
regard, a gap was seen in exchanges of views with consumers.

However, procedures to reinstate the beef trade have now
undoubtedly taken a step forward. The US Department of
Agriculture will shortly reinspect 37 meat-processing plants that
had been authorized to export products to Japan. It has also come
up with a proposal to retrain inspectors and improve its
mechanisms for sharing information internally. The governments of
the two countries will look into whether additional measures are
necessary. They are expected to reach an agreement in principle
on a resumption of US beef imports possibly in May.

At that point, the government will hold another round of similar
town meetings and formally decide to reinstate the beef trade, if

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it determines that it has obtained consumer understanding. The
process following the decision will likely be that the Japanese
side will conduct prior inspection and the US will authorize meat
packers that have cleared such inspections to ship products to
Japan.

DONOVAN