DAILY SUMMARY OF JAPANESE PRESS 04/26/06

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 04/26/06


INDEX:

(1) Poll on Koizumi cabinet, political parties, DPJ President
Ichiro Ozawa

(2) Poll on Koizumi cabinet's performance over past 5 years

(3) New round of WTO trade talks gives up basic agreement in
April due to conflicting interests

(4) US force realignment: Lawless says Japan's total share will
run to 3 trillion yen, while US' will be 460 billion yen

(5) US force realignment (Part 1): Accountability not fulfilled;
Government's efforts to convince local communities bound to run
into difficulties

(6) Thoughts on income disparity (Part 2); Deregulation not so
bad; Economic recovery shoring up income level

(7) Thoughts on income disparity (part 3); Do not set the clock
back; Continuing reform, economic growth are royal road to
correcting disparities

(8) Interview with Asian Development Bank Governor Kuroda:
Compatibility necessary for FTAs, negative effect of rising oil
prices a worry

ARTICLES:

(1) Poll on Koizumi cabinet, political parties, DPJ President
Ichiro Ozawa

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

Questions & Answers
(Figures shown in percentage, rounded off. Parentheses denote the
results of the last survey conducted March 18-19, unless
otherwise specified.)

Q: Do you support the Koizumi cabinet?

Yes 50 (46)
No 36 (38)

Q: Why? (One reason only. Left column for those marking "yes" on
previous question, and right for those saying "no." Brackets
denote proportion to all respondents.)

The prime minister is Mr. Koizumi 23(11) 5 (2)
The prime minister is from the Liberal Democratic Party
17 (8) 10 (3)
From the aspect of policies 33(17) 60(22)
Because of the coalition government 7 (3) 14 (5)
No particular reason 18 (9) 9 (3)

Q: What do you think is good or bad about the Koizumi cabinet?
(One choice each. Left = "good," right = "bad." Parentheses
denote the results of a survey conducted April 16-17, 2005.)

The prime minister's political stance 20(17) 10(12)
Administrative, fiscal reforms 23(18) 13(12)

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Economic, employment measures 8 (7) 23(27)
Foreign, defense policies 7 (8) 34(27)
Nothing in particular 39(46) 17(19)

Q: Which political party do you support now?

Liberal Democratic Party (LDP) 38 (39)
Democratic Party of Japan (DPJ or Minshuto) 17 (13)
New Komeito (NK) 3 (3)
Japanese Communist Party (JCP) 2 (3)
Social Democratic Party (SDP or Shaminto) 2 (1)
People's New Party (PNP or Kokumin Shinto) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Liberal League (LL or Jiyu Rengo) 0 (0)
None 34 (36)
No answer + don't know 4 (5)

Q: The DPJ has elected Ichiro Ozawa as its new president. Do you
have hopes for the DPJ under his leadership?

Yes 50
No 43

Q: Is politics more interesting to you with Ozawa becoming DPJ
head?

Yes 33
No 62

Polling methodology: The survey was conducted April 22-23 over
the telephone on a computer-aided random digit dialing (RDD)
basis. This RDD formula chooses persons for the survey from among
all eligible voters throughout the nation on a three-sage random-
sampling basis. Valid answers were obtained from 1,947 persons
(55% ).

(2) Poll on Koizumi cabinet's performance over past 5 years

ASAHI (Page 4) (Full)
April 26, 2006

Questions & Answers
(Figures shown in percentage. Brackets denote proportion to all
respondents. Parentheses denote the results of the last survey
conducted March 18-19.)

Q: The Koizumi cabinet has now been in office for nearly five
years. What's your overall rating of its performance on the whole
over the past five years? In addition, what's your specific
rating of the Koizumi cabinet's economic policy, administrative
reform including postal privatization, social security policy
including pensions, and foreign policy? Mark its specific
performance in each policy area out of 10.

Score
0 1 2 3 4 5 6 7 8 9 10
Overall rating
2 1 2 5 12 32 22 14 7 1 1
Economic policy
2 1 2 8 14 33 20 9 5 1 2
Administrative reform
3 1 3 6 11 21 17 15 13 3 4
Social security policy

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9 3 6 16 22 26 9 4 2 0 1
Foreign policy
7 3 6 14 17 24 12 8 5 1 1

Q: What do you think is Prime Minister Koizumi's appeal? (One
choice only)

Clear-cut 22
Unwavering 15
Clean 6
Friendly 19
Sightly 6
Nothing in particular 30

Q: Is politics more interesting to you than five years ago?

Yes 57
No 39

Q: Then, do you think you are now better off or worse off than
five years ago?

Better off 18
Worse off 42


Q: (Only for those who answered "better off") Do you think that
was because of the Koizumi cabinet's policy measures?

Yes 29 (5)
No 64 (11)

Q: (Only for those who answered "worse off") Do you think that
was because of the Koizumi cabinet's policy measures?

Yes 43 (18)
No 45 (19)

Q: Which media is most informative to you about politics? (One
choice only)

Newspapers 37
Television 55
Magazines 1
Internet 6


Q: To what extent do you think your impression of the Koizumi
cabinet is affected by television?

Very much 22
Somewhat 55
Not very much 17
Not at all 5

Q: Do you have a favorable impression of Prime Minister Koizumi
when he answers questions in the Diet or press interviews?

Yes 47
No 40

Q: Who do you think is appropriate for post-Koizumi premiership?
Pick only one from among those listed below.

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Taro Aso 4 (5)
Shinzo Abe 45 (47)
Sadakazu Tanigaki 3 (4)
Yasuo Fukuda 20 (20)
Other persons 17 (13)

Polling methodology: The survey was conducted April 22-23 over
the telephone on a computer-aided random digit dialing (RDD)
basis. This RDD formula chooses persons for the survey from among
all eligible voters throughout the nation on a three-sage random-
sampling basis. Valid answers were obtained from 1,947 persons
(55% ).

(3) New round of WTO trade talks gives up basic agreement in
April due to conflicting interests

YOMIURI (Page 9) (Full)
April 26, 2006

World Trade Organization (WTO) Director General Pascal Lamy
officially decided to give up on the initial goal of reaching
board agreement on tariff cuts in agriculture and non-agriculture
areas by the end of this month. With this, the new round of WTO
trade talks has entered a new phase. WTO member countries are
still aiming to reach a final agreement by the end of this year,
but they have their respective reasons for being unable to easily
make concessions. In future talks, the focus is on how to draw
out a political judgment that is indispensable for breaking the
impasse in the ongoing talks. To do so, the countries will need
to revamp their strategies in preparations for the upcoming major
international conferences.

By time of World Cup

Lamy said in a press conference on April 24: "The end of July is
too late. We should finish our homework by the time of the June
Soccer World Cup."

A decision has already been made not to set a new deadline for
board agreement. In Geneva as the playing ground of the talks,
however, one-month summer vacation will start in August. Now that
the member countries failed to attain the goal of reaching board
agreement by the end of April, some negotiators see the end of
July as the new deadline. Lamy's remarks indicated a strong
desire to recover lost time, with en eye on reaching a global
trade treaty by the end of this year.

Starting with a meeting of the Trade Negotiations Committee (TNC)
on May 1, WTO negotiations will be resumed. On thorny farm
issues, intensive discussions will be conducted for six weeks
starting from the first week of May.

Respective circumstances

In working-level talks on crucial agricultural issues in April,
no agreement was reached even on themes that should have been
taken up in the ministerial meeting (that had been planned but
was cancelled).

Progress will never be made in farm talks unless the relevant
cabinet ministers make a political judgment. But each nation has
been trapped by their respective domestic circumstances. For

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instance, the US in the run-up to off-year elections in November
finds it difficult to come up with dramatic domestic measures,
such as a large cut in farm subsidies, reflecting a strong
protectionist mood in the Congress.

In the Hong Kong ministerial last December, the European Union
(EU) already played the trump card of scrapping the export
subsidy system in 2013. It is difficult to ask its member
nations, including France preoccupied with dealing with riots, to
make more concessions.

Developing countries are not necessarily unanimous, either.
Brazil is highly interested in exporting agricultural products,
but India is a food-importing nation. Their positions are
somewhat different.

Industrialized countries lowered tariffs to a considerable extent
in the Uruguay Round, so further market liberalization will
inevitably bring about "pain."

Meanwhile, developing countries have deep-seated dissatisfaction
at the widening differences between rich and poor nations. Stormy
negotiations are predicted, with various motives crisscrossing
among 150 WTO member economies.

Conference after conference

A number of international conferences will be held from now,
bringing together leaders and cabinet ministers from
industrialized countries. A meeting of the Council of the
Organization for Economic Cooperation and Development (OECD) will
be held in May, followed by a trade ministerial of the Asia-
Pacific Economic Cooperation (APEC) forum in June, and a major
industrialized countries' summit in July.

The US is saddled with the issue of reducing farm subsidies,
while the EU and Japan are being pressured to open their markets
further. The focus of attention is on how far they will be able
to coordinate domestic views.

Brazil, India and other major developing countries hold the key
in moving the WTO talks forward. But they have indicated an
allergen reaction to the negotiation framework led by
industrialized countries. In the upcoming series of international
conferences, industrialized countries will be required to promote
the new round of talks but also do their best to eliminate the
developing countries' dissatisfaction by skillfully forming a
mechanism that can reflect their views.

Timetable for WTO talks

May 1
WTO Trade negotiations Council meeting (Geneva)
Six weeks of intensive deliberations in farm talks (Geneva)

May 23-24
OECD Council meeting (Paris)

June 1-2
APEC Trade Ministerial meeting (Ho Chi Minh)

July 25-17
Industrialized countries' summit (Saint Petersburg)

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End of July
Deadline for submission of lists of specific tariff rates

Year end
Deadline for a final agreement

End of June, 2007
Deadline of the package trade negotiating right given by the
Congress to the US president.

(4) US force realignment: Lawless says Japan's total share will
run to 3 trillion yen, while US' will be 460 billion yen

ASAHI (Page 1) (Abridged)
Evening, April 26, 2006

Yoshiyuki Komurada, Washington

US Deputy Under Secretary of Defense Richard Lawless held a press
conference at the Pentagon April 25 in which he indicated that
Japan's share of the cost of the realignment of US forces in
Japan would run at least to 26 billion dollars, or 2.98 trillion
yen. As a rough breakdown of the cost, he explained that 20
billion dollars would be required for the realignment of US
troops and facilities in Japan, including Okinawa, and 6 billion
dollars for the relocation of US Marines from Okinawa to Guam.
Lawless referred to the figures as a "modest estimate." Japan's
total share may even exceed 3 trillion yen.

Japan is mainly required to bear the cost of realignment of US
forces in Japan. Lawless is believed to have made the statement
based on coordination between Japan and the US in the past.
However, with the basis for the estimate and the detailed
breakdown remaining unclear, the Japanese government will be
pressed for an explanation.

Lawless also indicated that the total cost of the realignment of
US forces in Japan would run to 30 billion dollars, or 3.4
trillion yen. He also explicitly said that of it, the US share of
the cost of the Guam relocation would be no more than 4 billion
dollars (460 billion yen).

Lawless said, "Many obligations for fiscal disbursements are in
the period through 2012." The US is believed to envisage
disbursements up to 2012, the target year for the realignment of
US forces in Japan. At the same time, citing the relocation of
Futenma Air Station in Ginowan, Okinawa, he said, "It may take
longer than other realignment projects."

Regarding Japan's share of 26 billion dollars, Lawless noted:
"Japan's investment in its ally is huge. Japan will have to spend
a lot of money not only for the relocation of US Marines to
Guam." In order to obtain the understanding of the Congress and
other parties, he is believed to have stressed that Japan would
bear the main part.

(5) US force realignment (Part 1): Accountability not fulfilled;
Government's efforts to convince local communities bound to run
into difficulties

NIHON KEIZAI (Page 2) (Abridged slightly)
April 26, 2006

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On April 25, the day after Japan-US talks on US force realignment
were effectively settled, Mayor Isao Ogawa of Sagamihara,
Kanagawa Prefecture, called on Defense Agency Director General
Fukushiro Nukaga, who had just returned from the United States,
at his agency. The mayor said to the defense chief: "The
responsibility for national security rests exclusively with the
central government, but it's not good for the central government
to impose its decisions on local governments."

Koizumi indisposed to offering explanation

US Army 1st Corps headquarters would move to Camp Zama in
Sagamihara with the realignment of US forces in Japan. If a
conflict were to break out on the Korean Peninsula or in the
Taiwan Strait, Camp Zama would serve as Japan-US combat
operations center.

Local residents are hardly aware of this. Why do Japan and the US
have to enhance military cooperation in the post-Cold War era?
There is a need to clearly explain China's growing military
spending and other factors. Prime Minister Junichiro Koizumi, who
has been conducting one-phrase politics, is most unfit for that
job. The government has yet to fulfill its accountability.

With the US Army likely to return only a small portion of its
Sagami Depot, US force realignment may end up forcing a greater
burden on the residents of Sagamihara.

Ogawa, a former LDP prefectural assemblyman, is not dismissive of
the Japan-US security setup. With the traditional conservatives-
versus-reformists rivalry long gone with the Cold War era, there
is no clear ideology that can suppress the anti-base movement.

Public works projects are declining. The authority of local heads
would grow stronger with the trinity reform to reshape the tax
and financial systems of the central and local governments. The
central government now has few means to elicit support from local
communities for US bases.

On April 23, Katsusuke Ihara won the mayoral race in Iwakuni,
Yamaguchi Prefecture, on a campaign pledge to persistently press
the central government for a withdrawal of a jet relocation plan.
The US Navy is planning to transfer about 60 carrier-based planes
from the Atsugi base in Kanagawa Prefecture to the Iwakuni base,
bringing the total number of US military planes to nearly 120. It
will be greater than that at Kadena Air Base, which is one of the
biggest in the Far East. Ihara called for a plebiscite in March
,DQxs`sb08y complained to Nukaga, saying, "I
might be recalled by the citizens."

TOKYO 00002276 008 OF 012



Shimabukuro's complaint was partly intended to extract a local
economy revitalization package from the central government. The
comment also reflected Shimabukuro's genuine fear of misreading
citizens' wishes, which would endanger his political career.

Clock is ticking

In a press conference yesterday, Nukaga expressed his desire to
submit to the current Diet session a US force realignment
promotion bill, including a new system to extend subsidies to
local communities hosting US bases.

With the current Diet session scheduled to end June 18, questions
remain as to whether such a bill can clear the Diet by then. A
failure would force the government to wait until after the
September LDP presidential election to begin earnestly convincing
local communities.

The Japan-US Security Consultative Committee (two-plus-two) is
scheduled to meet May 2. A final agreement there on the US force
realignment plan would be followed by President Bush's approval
of a final report by the Base Realignment and Closure (BRAC)
Commission. If Congress does not reject it within 45 days, work
to integrate and streamline US bases will begin.

Japan's failure to speedily convince local communities may
seriously strain relations with the US.

Public support is essential for the government to pay the huge
bill for the relocation of US Marines from Okinawa to Guam. There
still remain many unexplained matters. The clock is ticking for
the government.

(6) Thoughts on income disparity (Part 2); Deregulation not so
bad; Economic recovery shoring up income level

NIHON KEIZAI (Page 1) (Excerpts)
April 20, 2006

Taxi companies are now free to increase the number of vehicles
they operate as a result of regulatory reform in 2002. Nihon
Kotsu, a taxi company in Shinagawa Ward that had been strapped
with excessive debts due to the collapse of the bubble economy,
has recovered from the slump thanks to this regulatory reform.

Black taxis become popular

The company introduced black taxis, a black sumptuous sedan that
looks like a limousine but whose fare is the same as that of
ordinary taxis, along with restructuring efforts. Gaining support
from customers, the operation rate of these vehicles for the past
three months has risen 2 points to 47% , compared with the level
a year earlier. President Ichiro Kawanabe said, "Many drivers now
want to drive black taxis, as they bring a larger income."

It has been pointed out that since competition has become fierce
in the taxi business as a result of the deregulation, drivers'
working conditions have deteriorated. The number of vehicles has
increased, but the number of customers remained sluggish. The
daily operating income (national average) per vehicle in fiscal
2004 stood at 28,985 yen, down 10% from fiscal 2000. The reform
indeed turned out to be severe for existing companies and

TOKYO 00002276 009 OF 012


drivers.

However, consumers have benefited from the deregulation, because
services, such as the introduction of black taxis, welfare taxis
that can carry a customer in a wheelchair, and long-distance
services have become available. President Osamu Masuda of Tomato
Kotsu in Fukuoka, which started business in April 2004, pointed
out, "The taxi industry has lacked a sense of being a service
industry."

The taxi industry has absorbed many people who have been forced
out of jobs during the slump. The number of those employed by
taxi companies as drivers increased by 18,000 over the past five
years. Reflecting the recovery of the economy, the operating
income of a taxi registered by Tokyo Musen jumped to 67,000 yen
in the last week of March from about 48,000 yen three years ago.
This higher level is almost on a par with the level seen during
the economic bubble years.

Young people starting over

Another symbol of the protracted economic downturn has been the
emergence of NEETs (not in education, employment, or training)
and so-called freeters (job-hopping part-time workers). People
in the 25-34 age bracket are the victims of limited recruiting by
companies in the 1990s.

In 1997, one-fourth of jobless people belonged to this age
bracket. Japan's poverty rate, an indicator of the ratio of
people whose income is below half the average level, ranks fifth
in the world at 15.3% (2000). Some take the view that young
people have contributed to this high ratio.

However, the upbeat economy is driving up the income of these
people. Fukuoka Bank on April 1 decided to employ its part-time
workers on a permanent basis. Adecco, a temporary job placement
agency located in Minato Ward, Tokyo, said that there has been no
end to its temporary staffers being recruited by companies where
they had been assigned.

Young people around the age of 30, who graduated college in the
midst of a difficult employment environment, often use the words
"revenge job switch." According to a survey by the Ministry of
Internal Affairs and Communications, 410,000 non-permanent
employees, such as temp staff and part-timers, found permanent
jobs in 2005, up 17% from the preceding year.

The problem is how this move can be spread so that "losers" can
try again to find permanent jobs. Kiyoshi Ota, a senior
researcher at the Japan Research Institute, pointed out, "It is
possible to prevent the lower-income bracket from further
expanding if the current economic growth is sustained." Even if
the haves become richer in the process of economic growth,
further widening the disparity, there is no need to fear as long
as the entire income level is pushed up.

(7) Thoughts on income disparity (part 3); Do not set the clock
back; Continuing reform, economic growth are royal road to
correcting disparities

NIHON KEIZAI (Page 1) (Excerpts)
April 21, 2006


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It is necessary to provide losers with opportunities to try again

How to deal with the income disparity issue is a classic and yet
new issue for the government. It is a politically thorny issue,
because the key words - correcting disparities - that are
pleasing to the ear involve the danger of reversing the ongoing
structural reforms.

The general public tends to be receptive to such criticisms as
blaming as the main cause of income disparity the competition
brought about by deregulation or the cuts in public works that
allegedly gave rise to a gap between urban and rural areas. A
political move seeking to revise deregulation policy or to
increase public works on the pretext of correcting the
disparities seems to be emerging in both the ruling and
opposition camps.

However, restructuring efforts by companies, the household
economy, deregulation and structural reforms have all undergirded
the Japanese economy, which at long last is taking an upward turn
after 15 years of sluggishness following the bursting of the
bubble economy. Statistics compiled by the Cabinet Office show
that deregulation in 14 areas, including cargo transport, power
generation and mobile phones, since the 1990s produced economic
effects worth approximately 14.3 trillion yen (about 4% of gross
national income) in fiscal 2002.

This achievement was ascribable to private-sector-led market
competition, propped up by the idea of equal opportunity rather
than equal results through the redistribution of income by the
government.

The issue in the education area is the criticism that children of
families without financial capability tend to be deprived of
opportunities to receive a good education, which could entrench
social disparity. The above principle can be applied in settling
this issue as well. What the government should not do is to
redistribute income so that all children can go to schools, cram
schools or private schools. Its role should be to provide an
educational environment so that children can receive higher
education, by improving their scholarship through public
education available to them all without relying on cram schools
or private schools.

Real safety net urged

Aishin Seiki Co., an auto parts manufacture affiliated with
Toyota Motors, will start parts production in Tomakomai,
Hokkaido. The company, based in Aichi prefecture, has decided to
set up a production base in Hokkaido, judging that it would be
easier to recruit human resources there than in Aichi, where
there is a labor shortage. If private companies grow, employment
opportunities will spread to provincial districts without the
government spending tax money.

Keimei Kaizuka, a professor emeritus at Tokyo University,
stressed at a study group meeting on disparities sponsored by the
Comprehensive Fiscal Policy Research Center, "The problem is not
the existence of people with high income but how to deal with
poverty."

How should the government help those who have tried again and
failed and those without sufficient income because of mental or

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physical handicaps or illness? Bank of Japan Governor Toshihiko
Fukui noted, "Japan has yet to discuss the issue of building a
safety net as an essential civil minimum." In building such a
safety net, it will be necessary to redefine the socially weak in
order to determine who should really be relieved from poverty, by
discarding the fixed idea that elderly people and small and
medium-size businesses are all weak.

Downward pressure tends to work on wages throughout the world due
to the rise of low-wage countries like China and India. The role
of the government in making the global economy and market
function smoothly is to rebuild a safety net intended to relieve
those who are really socially weak. Japan's safety-net policy has
often been criticized as false egalitarianism that lowers
economic efficiency. Setting back the hands of the clock will not
settle the problem.

(8) Interview with Asian Development Bank Governor Kuroda:
Compatibility necessary for FTAs, negative effect of rising oil
prices a worry

YOMIURI (Page 9) (Full)
April 26, 2006

Takashi Kikuchi, Manila

Asian Development Bank (ADB based in Manila) will hold an annual
meeting in India in early May. Prior to the meeting, Governor
Haruhiko Kuroda responded to an interview with the Yomiuri
Shimbun. Kuroda said that ADB ranked indirect assistance for
trade liberalization as its medium to long-term challenge. On
recent favorable economic conditions in Asia, he expressed his
strong concern about the negative impact of surging oil prices on
the economy.

-- How about the focus in the upcoming annual assembly?

"We would like to conduct probing discussions on medium to long-
term economic growth and poverty reduction in Asia. The number of
those who live on less than one dollar a day is rapidly
decreasing, but environmental concerns and income disparity are
emerging as serious problems. We are not sure yet of how to
eliminate poverty. We are now at a crossroads.

-- You have earnestly supported the challenge of cooperation and
economic integration in the region since you assumed the current
post in February of last year, haven't you?

"If countries that are growing remarkably and countries that are
growing slowly are merged, the income differentials may be
narrowed. We have stepped up efforts to promote Mekong basin
development, indirect support for financial cooperation by the
ASEAN + 3 (Association of Southeast Asian Nations plus Japan,
China and South Korea),as well as anti-infection campaigning.

In Asia, few dozens of free trade agreements (FTA) have been or
will be concluded. It is essential to maintain compatibility in
inking such accords. If common rules, such as common rules of
origin, are not introduced, trade procedures will become
complicated. A heavy burden may be imposed particularly on small
corporations. Even compared with the World Bank, which also takes
a prospect of development assistance and poverty reduction, our
voice is weaker on trade issues. We will conduct research with

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help from the outside and would like to offer advice as the need
arises while showing FTAs' trade creating effect."

-- Oil prices are sharply soaring.

"The average growth rate of Asian developing countries is
estimated to be 7.2% this year, but if the current situation
persists, there will unavoidably be a negative impact. Prices
over the level of 70 dollars per barrel are too high. There are
also such risk factors as conspicuous payments imbalances, rising
interest rates, and bird flu, but oil prices are the most serious
matter of concern for now."

DONOVAN