JAPANESE MORNING PRESS HIGHLIGHTS 04/28/06

UNCLAS SECTION 01 OF 10 TOKYO 002322

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 04/28/06


Index:

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

Abductee kin on Capitol Hill:
4) Abductee Megumi Yokota's mother asks Congress for help
5) President Bush to meet with abductee kin

USFJ realignment:
6) JDA sets ceiling at 2.8 billion dollars in Japan's cost
sharing for Marine relocation to Guam
7) Japan to outlay 6 billion dollars in 6 years for Guam
relocation
8) USMC to move Okinawa-based troops to Guam in 6 years
9) Ruling, opposition parties upset about Japan's 3-trillion-
yen force realignment cost
10) Boos, woes over 3 trillion yen
11) Diet to debate 3 trillion yen cost

Political topics, etc.:
12) Prime Minister Koizumi to go on African trek, China on his
mind
13) Prime Minister Koizumi declines retirement money, urges
local governors to give up as well
14) JDA to disband DFAA
15) GOJ, ruling coalition to work out growth strategy
16) Japan hesitant about "more kids": GOJ poll

Articles:

1) TOP HEADLINES

Asahi:
Health, Labor, and Welfare Ministry-affiliated company provides
money to ministry officials under mask of manuscript fees,
regional taxation bureau discovers

Mainichi: Sankei:
Sales of derivatives by Sumitomo-Mitsui Bank suspended; Financial
Services Agency criticizes former executives

Yomiuri:
Special private corporation under Health, Labor, and Welfare
Ministry's jurisdiction reports false purchases of stocks worth
300 million yen, also hides income in profitable businesses; 25
officials, including former vice minister, disciplined

Nihon Keizai:
FSA considering injecting public money into Howa Bank; First case
since reimposition of cap on deposit insurance

Tokyo Shimbun:
Sakie Yokota speaks in US House of Representative public hearing;
Seeks cooperation from US

2) EDITORIALS

Asahi:
(1) Conspiracy bill: Do not leave room for abuse
(2) Protect greenery: Ways to revitalize forest industry

TOKYO 00002322 002 OF 010



Mainichi:
(1) Japan to pay 3 trillion yen in USFJ relocation: Do not let
figures take on a life on their own
(2) Unification of public pension systems: No change in
preferential treatment of bureaucrats

Yomiuri:
(1) Unification of public pension systems: Is the government
ready to drastically reform the pension system?
(2) Nepal now has to make democratization effort from scratch

Nihon Keizai:
(1) Fifty years of Minamata disease: Government must keep tragic
memory from fading
(2) Prime minister should show presence in African diplomacy

Sankei:
(1) Takeshima islets issue: We want South Korea to keep its
pledge
(2) Sumitomo-Mitsui Bank should treat its customers right

Tokyo Shimbun:
(1) Unification of public pension systems rendered toothless due
to opposition from bureaucracy
(2) New Iraq administration: Overcome religious and ethnic
conflicts

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 27

NIHON KEIZAI (Page 2) (Full)
April 28, 2006

09:56
Met Vice Foreign Minister Yachi at Kantei.

10:35
Met Deputy Minister for Foreign Affairs Nishida, European Affairs
Bureau Director General Harada, and others.

11:00
Met Thai Prime Minister Thaksin

13:51
Attended the spring garden party at the Akasaka Imperial Palace.

15:16
Met Secretary General Takebe at Kantei. Followed by METI Minister
Nikai, METI Trade Policy Bureau Director General Kitamura, and
Energy Agency Director General Kodaira

16:12
Met Chief Judge Machida. Later met National Public Safety
Commission Chairman Kutsukake, Deputy Chief Cabinet Secretary for
Crisis Management Noda, and National Police Agency Director
General Uruma. Followed by Director of Cabinet Intelligence
Mitani, JDA Defense Bureau Director General Ookuchi, and Defense
Intelligence Headquarters head Mukunoki.

17:00

TOKYO 00002322 003 OF 010


Met Minister of Internal Affairs and Communications/State
Minister for Postal Services Privatization Takenaka. Attended a
meeting of the Council on Economic and Fiscal Policy.

19:24
Had a hair cut at Muragi Barbershop in the Capital Tokyo Hotel.

20:26
Returned to his official residence.

4) Japanese abductee's mother calls for US help in US Congress

TOKYO SHIMBUN (Top Play) (Excerpts)
April 28, 2006

Takashi Matsukawa, Washington

Sakie Yokota, 70, the mother of Megumi Yokota, who was abducted
by North Korean agents when she was 13 years old, testified in a
US congressional hearing on April 27. She called for US
cooperation to resolve the issue, speaking with emotion of how
she has been feeling as a mother since her daughter was abducted.
Yokota is the first relative of Japanese abductees to testify
before Congress.

Yokota attended the second session of hearings with Fukui
Prefecture University Professor Yoichi Shimada, vice chairman of
the National Association for the Rescuing of Japanese Kidnapped
by North Korea.

Yokota explained how her daughter was kidnapped and frankly
expressed her feeling as the mother of an abductee. She said: "It
saddens me profoundly and I feel so humiliated whenever I think
about why we cannot rescue her. . . . We must rescue those people
from 12 countries who were victimized by outrageous state
terrorism."

Yokota then called for tough steps to be taken against North
Korea, saying: "I plead for all countries to join us in saying
that we will never forgive the abductions and that all the
victims must be returned immediately or we will impose economic
sanctions." Professor Shimada disclosed that North Korea had also
abducted citizens of Lebanon, France, and Thailand.

5) President Bush to meet Sakie Yokota

TOKYO SHIMBUN (Page 1) (Full)
April 28, 2006

Takashi Matsukawa, Washington

The White House announced on April 27 that President Bush would
meet Sakie Yokota, 70, and other members of the Association of
the Families of Victims Kidnapped by North Korea at 11:00 am on
April 28, local time.

South Korean abduction victims who testified before Congress on
April 27 will also attend the meeting with the president.

6) Guam relocation; Ceiling for fiscal spending set at 2.8
billion dollars; Japan-US agree on USFJ realignment; Relocation
will be completed in fiscal 2012, says JDA

TOKYO 00002322 004 OF 010



YOMIURI (Page 2) (Full)
April 28, 2006

The Defense Agency (JDA) yesterday revealed that Japan and the US
had agreed that the ceiling of government spending from the
general account, so-called real water spending, to cover the cost
of relocating US Marines from Okinawa to Guam as part of USFJ
realignment be set at 2.8 billion dollars or 310.8 billion yen in
terms of the exchange rate adopted in the fiscal 2006 budget,
even if the total amount increases in future calculations by the
US side. It was also agreed during the talks that the relocation
be completed in fiscal 2012.

The JDA explained that since the US has yet to finalize a plan to
consolidate a Guam base, the total amount of 10.27 billion
dollars, or 1.14 trillion yen, could change. The Japanese side
has limited any increase in its fiscal spending by setting the
ceiling on it. There is a possibility that the 3.29 billion
dollars, or 365.2 billion yen, for investment and loans could
increase.

The US side reportedly did not reveal the cost of building such
facilities as a headquarters, training grounds, barracks, and
school buildings, saying, "Estimates for such costs could change
in the future."

The construction of those facilities is expected to begin in late
2007 after an environmental assessment and completed over the
next five years.

Of 2.55 billion dollars, or 283 billion yen, in the cost of
housing for families of Marines to be paid by Japan, 1.5 billion
dollars, or 166.5 billion yen, paid from the national treasury
will be provided as interest-free loans. Loans worth 1.37 billion
dollars, or 152.1 billion yen, to cover the construction of
family housing, power generation, water supply, and sewage
systems on the base will be with interest. It is assumed that
complete repayment by the US would take 30 to 35 years.

For family housing, the US will provide land at a low price, and
a special-purpose company to be set up by the Japanese side will
rent houses to US servicemen.

7) Guam relocation; Outlay of 6 billion dollars over six years;
1.5 billion dollars as interest free government loans

MAINICHI (Page 2) (Slightly abridged)
April 28, 2006

The Defense Agency yesterday released a plan for the relocation
of a US Marine Corps Command from Okinawa to Guam as part of USFJ
realignment. According to the plan, the relocation will take six
years. The construction work will start late next year and the
relocation will be over in 2012. Japan and the US have recently
agreed that of the total relocation cost of 10.27 billion
dollars, or approximately 1.19 trillion yen, Japan will bear 59%,
or 6.09 billion dollars (approximately 710 billion yen). Japan
will start paying its share, including loans, from the next
fiscal year.

For the cost of constructing base-related facilities, such as a

TOKYO 00002322 005 OF 010


headquarters building and barracks, up to 2.8 billion dollars, or
approximately 325 billion yen, in grants will be disbursed from
the general account. The cost of constructing family housing and
on-base infrastructure will be covered in the form of investment
and loans.

In constructing family housing, the government will set up a
special-purpose company (SPI),by investing 1.5 billion dollars,
or approximately 175 billion yen, through the Japan Bank for
International Cooperation (JBIC). Banks and construction
companies will also invest in this plan.

The SPC will construct and manage housing facilities, receiving
another 1.05 billion dollars, or approximately 122 billion yen,
in loans from the JBIC. It will collect rent from US military
servicemen to recover the investment.

Government loans will be interest free. Interest-free loans and
loans with interest total 2.55 billion dollars, or approximately
296 billion yen. The JDA explained that the construction work
will be efficient with the participation of private companies,
saving about 420 million dollars, or approximately 49 billion
yen, in construction costs.

Another SPI will be established for the consolidation of on-base
infrastructure, such as power generation, water supply, and
sewage systems. The company will construct and manage power-
generation facilities, using approximately 740 million, or
approximately 86 billion yen, in loans through the JBIC. The
contract will be concluded with the US Navy. The company will
collect the invested money via monthly electricity, water, and
sewage expenses added with a portion of the construction cost.

8) Japan, US in accord on completing Guam relocation in six years

NIHON KEIZAI (Page 2) (Full)
April 28, 2006

The Defense Agency explained yesterday that an agreement has been
reached between Japan and the United States to complete
relocating Okinawa-based US Marines to Guam by 2012, as was
announced by US Deputy Defense Under Secretary Richard Lawless.
For the Guam relocation, Japan aims to begin environmental
surveys in the current fiscal year and construction work in the
second half of 2007.

The Defense Agency, however, maintains that there is no clear
agreement on deadlines for completion of other realignment
projects, such as the relocation of Futenma Air Station to Camp
Schwab. The agency thinks the Futenma relocation will take eight
to ten years.

The government will begin coordination with the United States. It
is unclear if the two countries can reach an agreement easily on
relocating US Marines to Guam in six years and Futenma Air
Station in eight to ten years. The US is certain to be on alert
against Japan prioritizing the Guam relocation alone.

9) Ruling and opposition blocs dissatisfied with Japan's share of
3 trillion yen for US force realignment

NIHON KEIZAI (Page 2) (Abridged)

TOKYO 00002322 006 OF 010


April 28, 2006

The US presentation of Japan's share totaling 2.6 billion
dollars, or 3 trillion yen, for the realignment of US forces in
Japan, has sent shockwaves through the country's political
community. The figure came as a surprise for Japan, although it
had also informally estimated the realignment cost. Ambiguous
factors also remain about the realignment completion deadline of
2012, except for the relocation of Okinawa-based US Marines to
Guam. With the presentation of US force realignment promotion
legislation and local coordination coming up, the opposition bloc
is set to pursue the issue.

Asked about the grounds for US Deputy Defense Under Secretary
Richard Lawless's estimate of Japan's share of 3 trillion yen,
Chief Cabinet Secretary Shinzo Abe told a press conference
yesterday: "Concerned government offices will first discuss the
matter thoroughly and then finalize details with the US."

As early as March, a person connected with the government
revealed that Japan's total share would run to 3 trillion yen.
Speculation is afoot that the government kept the figure secret
for over a month in order to avert a strong public backlash in
the process of bilateral talks.

The dominant view about Lawless's announcement is that he
underlined the enormous amount of Japan's share to downplay
America's share.

Although Japan's share is huge, 3 trillion yen would not
necessarily require new fiscal resources. The Defense Agency is
considering such means as dissolving the SACO framework and using
Japan's host nation support. The agency aims to prevent the 3
trillion yen from taking a toll on other defense-related outlays.
Some government and ruling party members have also come up with
such ideas as using the Okinawa promotion budget and the Land,
Infrastructure, and Transport Ministry's public works spending.

In a press conference yesterday, Minshuto (Democratic Party of
Japan) Deputy President Naoto Kan criticized the government's
response, saying, "It's a problem that we learned about Japan's 3-
trillion-yen share from the United States." Perhaps due to a lack
of spadework, even ruling party members are complaining, "We have
no idea about what 3 trillion yen signifies."

In the meantime, Prime Minister Junichiro Koizumi told reporters
last night, "We are going to have many discussions on Japan's
share. It'll take time."

The government aims to submit to the current Diet session a US
force realignment promotion bill incorporating a plan to create a
system to extend subsidies to base-hosting municipalities. The
opposition bloc, on the other hand, intends to grill the ruling
coalition on the ambiguous basis for the estimate. It could
trigger a new clash between the two blocs.

10) Cabinet ministers also voice questions about 3 trillion yen
in Japan's cost sharing for USFJ realignment

MAINICHI (Page 2) (Full)
April 28, 2006


TOKYO 00002322 007 OF 010


US Deputy Under Secretary of Defense Lawless has clarified an
estimate of approximately 3 trillion yen in Japan's cost sharing
for the realignment of US forces in Japan. This estimate,
however, is not based on the Japanese government's calculation,
Defense Agency Director General Fukushiro Nukaga explained in
yesterday's meeting of the House of Councillors Foreign and
Defense Affairs Committee. "I think the deputy under secretary
showed a rough estimate in his mind," Nukaga stated before the
committee. "But," Nukaga went on, "we've yet to work out a
detailed estimate of the cost in Japan." He also stated, "After
reaching a final agreement, we will have to make a clear-cut
estimate of our own to show in public." With this, Nukaga
indicated that the Defense Agency is ready to make public its
estimate in concrete terms after reaching a final agreement with
its US counterpart.

In the meantime, Finance Minister Sadakazu Tanigaki raised a
question about the Pentagon-estimated amount in a general meeting
of his faction in the ruling Liberal Democratic Party yesterday.
"We will have to scrutinize the estimated cost," Tanigaki said.
Japan and the United States have now agreed to move US Marines
from Okinawa to Guam. "We'll have to back up Guam relocation, but
there's a big figure from them," Tanigaki said, adding: "I think
it might be something for their own accountability at home." With
this, he noted that the Pentagon might have overestimated Japan's
share of the realignment cost out of consideration for public
opinion in the United States.

11) US estimate of Japan's overall share at 3 trillion for US
force realignment likely to take center stage in latter half of
Diet session

MAINICHI (Page 5) (Full)
April 28, 2006

US Deputy Defense Under Secretary Richard Lawless recently
announced that the US estimates Japan's share of the US force
realignment cost at about 3 trillion yen. In reference to the
announcement, Minshuto (Democratic Party of Japan) Acting
President Naoto Kan sharply criticized the government in a press
conference yesterday, saying: "The estimated amount of money
Japan should pay was shown by the US. This represents a lack of
accountability by the (Japanese) government and is a serious
problem. We will strongly criticize the government for such a
stance." He then called for intensive deliberations at the
current Diet session. The Japanese Communist Party (JCP) and the
Social Democratic Party (SDP) are also gearing up to sharply
attack the government. The cost-sharing issue is thus likely to
take center stage in the latter half of the Diet session.

In a meeting yesterday of Minshuto's foreign and defense
departments, many participants reiterated the need for the
government to disclose the basis for the cost estimate. One
senior member of the Policy Research Council claimed: "It remains
unclear how much money will be needed to reduce the current base
burden on Okinawa. The presence of Marines has almost nothing to
do with protecting Japan," implying that the US is trying to
imposed a heavy burden on Japan without any adequate
justification.

Japan and the US have agreed that Japan will pay 6.09 billion
dollars, or about 710 billion yen, of the total cost of

TOKYO 00002322 008 OF 010


relocating Okinawa-based Marines to Guam. On this agreement, as
well, SDP Secretary General Seiji Mataichi said: "We cannot
understand why Japan has to finance part of the cost for the US
military to construct a base in the US." JCP Secretary General
Tadayoshi Ichida also said: "The US should pick up the full tab."
The Lawless statement has added fuel to their criticism. Minshuto
President Ichiro Ozawa said in a press conference yesterday:
"Giving priority to the US military strategy, the Koizumi
administration is about to use taxpayer money in response to US
demands. Its approach is questionable." He indicated his
readiness to grill the Koizumi administration over this issue
while focusing also on its stance of blindly following the US.

12) Prime Minister Koizumi off for Africa tomorrow

TOKYO SHIMBUN (Page 2) (Excerpts)
April 28, 2006

Prime Minister Junichiro Koizumi will leave tomorrow for a seven-
day trip to Ethiopia, Ghana, and Sweden. Koizumi will be the
second Japanese prime minister, following then Prime Minister
Yoshiro Mori, to visit sub-Saharan Africa without attending an
international conference. The aim is to counter China, which has
carried out active diplomacy in Africa for the purpose of gaining
their support to prevent Japan from securing a permanent United
Nations Security Council seat, as well as for purchasing
resources.

In Ethiopia, Koizumi is expected to meet with Prime Minister
Meles Zenawi and African Union Commission Chairman Alpha Oumar
Konare. He plans to hold talks with Ghana's President John
Agyehum Kufuor. He will explain to these African leaders Japan's
positive stance of supporting African countries' efforts for
economic development and for measures against infectious
diseases.

A government official said, "(The purpose of the prime minister's
trip to Africa) is to strengthen Japan's diplomatic base, by
deepening relations with the AU, which is made up of 53
countries, more than one-fourth of the UN membership."

However, Koizumi is apparently aware of China.

13) Prime Minister Koizumi: "I don't need retirement payment.
Governors, too, should decline"

TOKYO SHIMBUN (Page 2) (Full)
April 28, 2006

"Retirement payments for governors and mayors are too much. I
don't need it. So why don't we ask them to give them up?" Koizumi
asked this at a meeting yesterday of the Council on Economic and
Policy. He proposed a plan to abolish retirement benefits for the
heads of local municipalities. He seems to be thinking that those
retirement payments are no longer sacred given the financial
difficulties of the central and local governments.

Governors and mayors receive a retirement payment at the end of
every term. If they serve several terms, they can get several
hundred million yen. Some local governments decided this year to
scrap such a system.


TOKYO 00002322 009 OF 010


Koizumi will receive 6-7 million yen if he steps down from office
this fall.

14) Defense Agency produces basic policy to dismantle Defense
Facilities Administration Agency; Services to be split among
Defense Agency internal bureau and new organs

TOKYO SHIMBUN (Page 3) (Excerpts)
April 28, 2006

The Defense Agency announced yesterday its basic policy of
dissolving the Defense Facilities Administration Agency (DFAA) in
the wake of a bid-rigging scandal to reform the organization, a
set of issues for discussion, and an outline of its final report
on a set of measures for preventing a similar incident. The plan
is mainly designed to split the DFAA into a Defense Agency
internal bureau and a new organization and establish a totally
independent inspection organ directly under the defense chief. As
a means of preventing amakudari (golden parachuting),the outline
also calls for an immediate halt to measures promoting early
retirement of senior DFAA officials.

A study panel on organizational reform chaired by Defense Agency
Director General Fukushiro Nukaga yesterday presented the basic
policy and a set of issues for discussion. Based on them, the
Defense Agency intends to draft a concrete reform plan by late
June to reflect it in its fiscal 2007 budgetary request in
August.

The plan is designed to: (1) allow an Defense Agency internal
bureau to absorb the DFAA's general affairs departments, such as
personnel affairs and accounting; (2) establish a new bureau in
the Defense Agency that will be responsible for planning on
matters directly connected with local governments and the public,
such as incidents and accidents and base issues; and (3)
establish a new organ responsible for procurement services for
the US military, such as land, goods, and services, except for
planning.

15) Government, ruling camp to compile growth strategy outline as
early as next month; Specific plan to include reform of tax
system

NIHON KEIZAI (Page 2) (Full)
April 28, 2006

The government and the ruling camp yesterday decided to map out
an economic growth strategy outline intended to achieve a high
economic growth rate. They will come up with a specific plan that
will involve reform of various systems, including the tax system
in wide-ranging areas, such as tourism and welfare services. The
government will incorporate the outline in the 2006 basic policy
guidelines on economic and fiscal management and structural
reforms for the fiscal 2007 national budget.

Liberal Democratic Party (LDP) Policy Research Council Chairman
Hidenao Nakagawa proposed the plan during a meeting with Minister
of Economy, Trade, and Industry Toshihiro Nikai. Since an
agreement had already been reached with State Minister for
Economic and Fiscal Policy Yosano, the three ministers will map
out the outline in cooperation.


TOKYO 00002322 010 OF 010


In March, METI compiled a strategy of aiming for a real growth
rate of 2.2%. The envisaged outline will be a package of policy
proposals covering not only areas under METI's jurisdiction but
also areas under other agencies' jurisdiction, such as
agriculture and education. The package will mention mid- to long-
term policies, including timetables for implementing them, as
well as specific plans to be included in the fiscal 2007 budget.

Nakagawa has indicated his intention to minimize tax hikes with a
view to increasing tax revenue through thorough spending cuts and
the realization of nominal growth of 4%. He wants to ensure an
outlook for high economic growth through the joint drafting of
the outline between the government and the ruling parties.

16) Five-country survey on child-rearing: Only 40% of Japanese
respondents -- lowest rate among five countries -- say they want
to have more children

MAINICHI (Page 1) (Full)
April 28, 2006

The Cabinet Office conducted a survey in five countries -- Japan,
the United States, South Korea, France, and Sweden -- to obtain
data that will help the countries tackle their falling
birthrates. The survey found that about 40% of Japanese
respondents -- the lowest among the five countries -- said that
they wanted to have more children. The figures are half the 80%
in Sweden. In Japan and South Korea, more than half of the
respondents said they did not want any more children because too
much money is needed to raise an educate them. The survey points
out to a severe situation in the two countries, with people
regarding children as a financial burden.

To the question of whether they want to have more children, 42.6%
of the Japanese pollees said yes and 53.1 said no. In South
Korea, 43.7% said yes. Of the Japanese and South Koreans who said
no, 56.0% of the Japanese and nearly 70% of the South Koreans
cited financial difficulties.

Meanwhile, 81.1% of Swedish respondents said that they wanted to
have more children; in the United States, 81.0% said yes; and in
France, 69.3% said yes. The Cabinet Office noted that those three
countries provide sufficient daycare services and tax breaks, as
well as financial support for raising children, which have
boosted birthrates.

Asked if they think husbands should work while wives stay at
home, 57.1% of Japanese respondents said yes, the highest among
the five countries. In Sweden, only 8.6% said yes.

Asked whether they find it easy to have children in their
countries, 47.6% of Japanese pollees were positive. In South
Korea, 18% -- the lowest rate -- said yes.

The survey was conducted between October and December in 2005 on
1,000 men and women aged 20 to 49.

DONOVAN