JAPANESE MORNING PRESS HIGHLIGHTS 05/10/06

UNCLAS SECTION 01 OF 13 TOKYO 002519

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 05/10/06

Index:

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

Defense issues:
4) With USFJ realignment settled, JDA pushing alone for a
rewriting of Japan-US security declaration
5) JDA chief Nukaga wants to expedite revision of joint
operations plan
6) Cost of relocating Futenma Air Station to Henoko Point will
be 100 billion yen cheaper than estimated cost of original plan
for runway off shore
7) MSDF Aegis ship to join US' missile defense test for first
time next month

China connection:
8) Japanese business leaders oppose Prime Minister Koizumi's
Yasukuni Shrine visits, propose secular national war monument
9) Ambassador Wang in speech calls for improvement of ties
between China, Japan
10) Gas talks restart between Japan, China as prelude for
normalcy in relations
11) Ambassador Wang wants to see a foreign ministerial meeting
soon between China, Japan

12) Former Chief Cabinet Secretary Yasuo Fukuda is off to visit
the US to build credentials as prime ministerial candidate

13) Japan carrying out spot inspections of US meatpackers in
preparation for restarting beef imports

14) With unsold stocks piling up, Fisheries Agency begins
campaign to get more Japanese to eat whale meat

15) For eight years in a row, suicide rate in Japan rises above
30,000 a sign perhaps of growing social disparity

Diet agenda:
16) With important bills in Diet being delayed, hard line
positions in the LDP to ram them through gaining ground
17) Plan for joint party presentation of national referendum
bill on Constitution withdrawn as Minshuto balks
18) Minshuto President Ozawa reveals that heart condition
prevents him from working immediately after eating

Articles:

1) TOP HEADLINES

Asahi:
Punishment of Chuo-Aoyama Audit Corporation will affect 2,800
companies; Decision to be made today

Mainichi:
Citibank misprocesses 275,000 transactions due to computer glitch

Yomiuri:
Education Ministry survey finds 208 erroneous descriptions in
middle school textbooks


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Nihon Keizai:
Yamato Transport, Nippon Yusen KK to forge business alliance;
Mutual investments by leading companies

Sankei:
Using benefits for elderly people for measures to deal with low
birth rate proposed; Social security panel considering fiscal
resources, including consumption tax hike

Tokyo Shimbun:
National referendum bill: LDP, New Komeito give up presenting
bill jointly with DPJ

2) EDITORIALS

Asahi:
(1) Members of Goto-gumi crime syndicate rounded up: Stem the
spread of underworld's influence
(2) New elections in Thailand will pave way for normalization

Mainichi:
(1) Chuo-Aoyama Audit Corporation to be disciplined: Mechanism
to prevent wrongdoing needed
(2) Reform of tax allocation system: Encouraging
decentralization important

Yomiuri:
(1) Chuo-Aoyama Audit Corporation: Crime and punishment of audit
firm that allowed window dressing
(2) Local allocation tax: Downsizing key to reform

Nihon Keizai:
(1) Speed up efforts to prevent collusive ties between companies
and accountants
(2) End tragedy in Sudan

Sankei:
(1) Punishment of Chuo-Aoyama Audit Corporation: Japanese
Institute of Certified Public Accountants should take
responsibility and carry on with reform
(2) Stem business activities by crime syndicates

Tokyo Shimbun:
(1) Chuo-Aoyama Audit Corporation: Padding accounts of client
firm deplorable
(2) Annual spring wage battle: Small, medium-size companies,
part-timers fought well, but disparities remain

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 9

NIHON KEIZAI (Page 2) (Full)
May 10, 2006

09:01
Attended cabinet meeting in Diet building. Deputy Chief Cabinet
Secretary Nagase remained in the room.

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09:34
Arrived at Kantei.


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10:13
Attended grand cordon personal investiture ceremony at the
Imperial Palace.

10:52
Returned to Kantei.

13:23
Attended award ceremony for the Order of the Rising Sun, Gold and
Silver Star at the Imperial Palace.

15:04
Met US Cherry Blossom Queen Kristina Hillboldt and Japanese
Cherry Blossom Queen Tomoko Miki. Met afterwards with Vice
Finance Minister for International Affairs Watanabe.

16:30
Met with Internal Affairs and Communications Minister Takenaka.

17:12
Met with Financial Affairs Minister Yosano.

19:07
Dined with secretaries at Australian restaurant in Akasaka.

21:21
Returned to his official residence.

4) USFJ realignment up in the air

SANKEI (Page 3) (Full)
May 10, 2006

The realignment of US forces in Japan is up in the air. The
Defense Agency wants to revise the Japan-US Security Joint
Declaration in order to redefine the bilateral alliance. The
agency also wants to renew the Japan-US Defense Cooperation
Guidelines in an aim to clear up bilateral cooperation between
the two countries. However, there are negative views in the
government about that move. In the meantime, the United States
also wants to go ahead with actual joint operations. Tokyo and
Washington will likely continue to jockey for their respective
standpoints ahead of a Japan-US summit slated for late next
month.

"Our bilateral alliance is now about to enter a new phase with
the realignment of US forces in Japan, and we should discuss
ideals and objectives." Defense Agency Director General Fukushiro
Nukaga made this statement before the House of Councillors
Foreign and Defense Affairs Committee in its meeting held
yesterday. With this, Nukaga reiterated his willingness to revise
the security declaration.

The Japanese and US governments released the security declaration
when the two countries' leaders met in 1996. In those days, the
Soviet threat had disappeared after the Cold War. Meanwhile,
North Korea was suspected of developing nuclear weapons.
Factoring in these uncertainties, the joint declaration set forth
the importance of a close partnership between Japan and the
United States in the Asia-Pacific region.

In an aim to revise the joint declaration, Nukaga is laying

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emphasis on his notion of globalizing the Japan-US bilateral
alliance. "We should consider how to define our international
peace cooperation." With this, Nukaga talked about Japan's role
as a US ally.

Following the 1996 security declaration, Japan sent Maritime Self-
Defense Force ships to the Indian Ocean and also dispatched
Ground Self-Defense Force troops to Iraq. Japan's Self-Defense
Forces have been teaming up with US forces in their international
activities. The SDF's role was to back up the war on terror in
order to prevent Iraq and other nations from becoming terrorist
hotbeds in their political and security destabilization.

Reason came after reality. Even so, many in the Defense Agency
are insisting on redefining Japan's role in its international
activities. "We should clear up our bilateral tasks and efforts
for international activities in a revised security declaration,"
a senior official of the agency noted. Satoshi Morimoto, director
of the Institute of World Studies at Takushoku University, has
also suggested the need to revise the security declaration.
"North Korea launched a Taepodong missile, and the September 11
terrorist attacks also took place," Morimoto noted. He added:
"China's military power is also different from that of ten years
ago. In all senses, the security environment has undergone a sea
change."

The Defense Agency wants to have a new security declaration
released at the scheduled summit, and the agency also wants to
have the new security declaration specify a course of action to
renew the defense guidelines. This is the same roadmap as that
for the security declaration issued 10 years ago and the defense
guidelines revised in 1997.

However, such a move was halted. "We won't go so far as to review
the guidelines." This statement came from Foreign Minister Taro
Aso right before the May 1 meeting of the Japan-US Security
Consultative Committee, or SCC for short and known as a "two-plus-
two" meeting of cabinet ministers for foreign and defense
affairs. There are negative views in the government about
revising the security declaration. "We've already declared global
cooperation, though not much has been done about it," a
government source said.

In addition, Aso has also suggested the need to detail the Japan-
US security arrangement to make it function effectively. This
also can be taken as reflecting the US government's standpoint.

Japan and the United States, in their last revised defense
guidelines, clarified their intention to study bilateral defense
planning in anticipation of emergencies in Japan. However, the
two governments have failed to work it out, and Washington's
frustration has been growing. The US government therefore wants
to shape plans for actual combat operations instead of revising
the guidelines over again, according to a defense-related
lawmaker of the ruling Liberal Democratic Party.

5) Defense chief Nukaga: Speed up revising bilateral defense
planning

NIHON KEIZAI (Page 2) (Full)
May 10, 2006


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At a session yesterday of the House of Councillors Committee on
Foreign Affairs and Defense, Defense Agency Director General
Fukushiro Nukaga revealed that his agency would accelerate the
work of revising bilateral defense planning between Japan's Self-
Defense Forces (SDF) and the US military in a contingency
involving Japan. He stated: "The plan should have been revised.
Since we fall behind, we will seed up the work."

6) Construction of Futenma alternative facility will cost over
300 billion yen, 100 billion yen less expensive than Henoko
offshore plan

YOMIURI (Page 1) (Excerpts)
May 10, 2006

An outline of the plan to build an alternative facility for the
US Marine Corps' Futenma Air Station at the coastline of Camp
Schwab in Nago, Okinawa Prefecture, became clear yesterday. The
facility will occupy a total space of 180 hectares. Of it, about
20% will be built on the land portion of the base with the
remaining 80% on reclaimed land. The alternative facility is
expected to be completed by 2014 at a cost of 300 to 350 billion
yen -- l00 billion yen less than the previous Henoko offshore
plan. The government plans to determine the plan in detail by the
summer based on talks with the Okinawa and Nago municipal
governments to begin environment assessment procedures in the
fall.

The US force realignment final report, released on May 1,
specified the construction of two runways in a V shape measuring
600 meters each and 1,800 meters in total including the overruns.

It also became clear that reclamation would cost 200 billion yen
and that the construction of such facilities as the runways,
apron, aircraft hanger, and the relocation of existing facilities
from Camp Schwab to the training range would come to over 200
billion yen.

7) MSDF Aegis ship to participate in US test for 1st time

TOKYO SHIMBUN (Page 3) (Abridged)
May 10, 2006

An Aegis-equipped destroyer of the Maritime Self-Defense Force
will participate in an intercept test to be conducted next month
by the United States for missile defense in waters off Hawaii
with an Aegis ship's SM-3 sea-based intercept missiles, the MSDF
announced yesterday. The MSDF destroyer will radar-track the
target, according to the MSDF.

This is the first time for the MSDF to participate in an
intercept missile test with its Aegis vessel. "We'd like to
improve our interoperability at sea," MSDF Chief of Staff Takashi
Saito said. Japan and the United States will further joint naval
operations including intelligence sharing.

According to the MSDF, participating in the MD test is the
Kirishima, a 7,250-ton destroyer, which was staged in the Arabian
Sea for refueling missions. In the MD test, an Aegis vessel of
the US Navy is to intercept a mockup ballistic missile with an SM-
3 missile. The Kirishima will track the mockup projectile's path
to back up the US Navy.

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8) Japan Association of Corporate Executives urges prime minister
to reconsider his Yasukuni visits; Proposes construction of
secular memorial

ASAHI (Page 1) (Full)
May 10, 2006

The Japan Association of Corporate Executives (JACE or Keizai
Doyukai) yesterday released a set of proposals on the future of
Japan-China relations, which included words dissuading Prime
Minister Koizumi from visiting Yasukuni Shrine. It is unusual for
any economic organization to oppose the prime minister's visits
to Yasukuni in its policy proposals. The report also proposed
that the state construct a secular memorial to offer condolences
to all war victims, including civilians. The JACE noted that the
package was mapped out based on the national memorial project
plan proposed by a private advisory council set up by Yasuo
Fukuda, when he was chief cabinet secretary. The organization's
proposals could affect the Liberal Democratic Party's (LDP)
presidential election in September.

Concerning the present state, which does not permit the holding
of a bilateral summit, the package noted: "Taking any action that
makes Asian countries, such as China, entertain doubts about
Japan, could lead to undermining what has been achieved in the
postwar period. The prime minister should exert self-constraint
on such actions that would not benefit Japan's national
interests." The business leaders thus took the view that the
situation has become extremely serious.

The report also pointed out that Prime Minister Koizumi's
Yasukuni visits are hindering a resumption of summit-level
exchanges. It then urged the prime minister to reconsider his
Yasukuni visits, arguing that a national consensus on visits to
Yasukuni Shrine by a prime minister has yet to be obtained,
questioning whether the shrine is an appropriate place for
renewing a pledge never to fight a war again, and raising doubts
from the perspective of separation of state and religion.

The report also sought China's understanding for Japan's soul-
searching and to recognize its contributions to Asia. It called
on China to promote patriotism in education in an objective and
fair manner.

President Kakutaro Kitashiro, chairman of IBM Japan, told a news
conference: "We issued those proposals from a standpoint that the
propriety of visiting Yasukuni Shrine is an issue that should be
determined at Japan's own judgment. We thought that in Japan's
view, it would be better if the prime minister refrained from
visiting Yasukuni. It is undesirable from a national security
standpoint, too, for the peoples of Japan and China to hold
confrontational feelings toward each other. Such feelings will
also hamper stable economic development."

The business organization discussed the set of proposals at an
executive meeting on April 21. It revealed that among about 270
executives, approximately 70 attended, of whom about 60 favored
the proposal, while 11 or 12 opposed it. The motion was adopted
by a majority. It is unusual for the JACE to take a vote on such
a proposal. It was the first time since Kitashiro became
president.

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9) Chinese ambassador calls for improvement in Japan-China
relations

MAINICHI (Page 2) (Full)
May 10, 2006

Delivering a speech at a lecture sponsored by the Asia Research
Council, chaired by former Ambassador to the US Nobuo Matsunaga,
at a Tokyo hotel yesterday, Chinese Ambassador to Japan Wang Yi
called for improvement in the strained relations between Japan
and China. To do so, Wang stressed the need for both sides to (1)
establish the goal of promoting Asia as a common interest; (2)
share roles and complement each other to pursue common interests;
and (3) shift Japan-China relations from the current vicious
cycle to a virtuous cycle.

The ambassador said:

"Even in view of gross domestic product (GDP) and trade value,
the two countries have a major impact on the Asian region as a
whole, going beyond just the bilateral relationship. Setting the
promotion of Asia as a common interest, both countries should
reach consensus to that end."

Wang also cited the following remarks made by Chinese President
Hu Jintao when he met with seven Japan-China friendship groups:
China (1) will maintain the stance of giving priority to Japan;
(2) will try to deepen mutual understanding by expediting private-
sector exchanges; and (3) is ready to hold a summit if the
Japanese leader promises not to visit Yasukuni Shrine.

The ambassador added: "This message reflects the Chinese
government's willingness to resolve problems pending between the
two countries. How to overcome the (Yasukuni) issue, however, is
Japan's problem in the end."

10) First step toward improving Japan-China relations with
foreign ministerial talks on natural gas exploration likely to
occur shortly, but optimism not allowed

YOMIURI (Page 2) (Excerpts)
May 10, 2006

Through the meeting yesterday of the Japanese and Chinese vice
foreign ministers to discuss comprehensive policy, it has become
likely that Japan-China foreign ministerial talks will take place
by the end of the month. The Japanese government was pleased with
this outcome, noting: "It is significant for the foreign
ministers of the two countries to have a face-to-face meeting
after a lapse of nearly one year." But no optimism is allowed
about whether relations with China will improve, because Prime
Minister Koizumi's visits to Yasukuni Shrine have cast a long
shadow over bilateral ties. In addition, senior officials of
Japan and China are expected to meet next week to discuss natural
gas exploration in the East China Sea, but given the wide gap in
views between the two countries, it is unlikely for both sides to
meet halfway, many observers say.

On a possible meeting between Foreign Minister Aso and his
Chinese counterpart, Li Zhaoxing, Prime Minister Koizumi late
yesterday said firmly: "Doesn't this mean that (China) has given

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importance to the Japan-China friendship as we have expected?
Isn't it that China is realizing that it is strange not to hold a
summit meeting because of one controversial issue (Yasukuni
Shrine)?" Earlier in the day, Chief Cabinet Secretary Abe told
the press: "Japan thinks it is necessary to hold talks. For
China, too, isn't it necessary to hold talks?" Abe thus
emphasized that holding talks would benefit both Japan and China.

Chinese Ambassador to Japan Wang Yi yesterday delivered a speech
in Tokyo, in which he stated: "Holding foreign ministerial talks
is a big push for (Japan-China relations) to move into a virtuous
cycle."

The foreign ministerial talks are expected to occur on the
sidelines of the Asia Cooperation Dialogue (ACD) in Qatar set for
May 23. If realized, they will be the first ones after the ones
held on the sidelines of the Asia-Europe Meeting (ASEM) in Kyoto
last May.

In the talks, Foreign Minister Aso is likely to point out the
importance of continuing political dialogue between Japan and
China. He also intends to discuss such issues as the now
suspended six-party talks on North Korea's nuclear ambitions. But
China's intention appears to be "making a direct criticism of
Prime Minister Koizumi's visits to Yasukuni Shrine," according to
a Japanese government official. A heated discussion between Aso
and his Chinese counterpart is also expected, because Aso often
irritates China by making hawkish remarks, for instance, calling
China a threat.

11) Chinese Ambassador to Japan Wang Yi eager to bring about
Japan-China foreign ministerial discourse

TOKYO SHIMBUN (Page 2) (Excerpts)
May 10, 2006

Chinese Ambassador to Japan Wang Yi yesterday delivered a speech
in Tokyo in which he cited the fact that no foreign ministerial
talks between Japan and China have been held for about a year and
indicated his intention to rectify the situation, noting: "I hope
to see them realized. In order to put (Japan-China relations) in
a virtuous cycle, dialogue at various levels will be essential
for the two countries."

Wang referred to a growing sense of alarm in Japan toward China,
which continues to grow, and asserted: "China has no intention of
becoming the leader of Asia. The premise that Japan and China
will compete for leadership does not exist." Wang emphasized the
need for Japan and China to work together for economic
development in Asia.

12) Former Chief Cabinet Secretary Fukuda to leave for US today;
Aims to call attention to his differences with Koizumi; Growing
expectations for his ability to widen personal network

TOKYO SHIMBUN (Page 2) (Excerpts)
May 10, 2006

By Nakahiro Iwata

Former Chief Cabinet Secretary Yasuo Fukuda, one of the major
contenders to succeed Prime Minister Junichiro Koizumi, will be

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visiting Washington starting May 10. In the United States, Fukuda
intends to sell himself as an expert on diplomacy by holding in-
depth discussions with members of Congress, researchers, and
other leading figures, while minimizing courtesy calls on high-
level government officials.

This part March, Fukuda visited South Korea and met with
President Roh Moo Hyun and other leaders. During the recent
Golden Week holidays, he traveled to Jordan and the United Arab
Emirates and met with key government officials. In the meantime,
he met with US Ambassador to Japan Thomas Schieffer, former US
Secretary of State Henry Kissinger, and others at home and

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exchanged views on Japan-China relations and Japan-US relations.

Fukuda's emphasis on Asia diplomacy is increasing his chances of
criticizing "Koizumi diplomacy." Describing Japan's current
inability to hold top-level talks with China and South Korea as
"abnormal," Fukuda lashes out at the current administration's
attitude regarding historical perceptions, including Prime
Minister Koizumi's visits to Yasukuni Shrine: "Past politicians
were prudent enough not to cause trouble. But these days, even
when someone in the cabinet makes a controversial remark, that
person does not step down."

Fukuda, concerned about this situation in Japan, has stated that
he would reveal a new set of diplomatic guidelines intended to
rebuild Japan's diplomacy toward Asia, keeping in mind the
"Fukuda Doctrine," a basic policy toward Southeast Asia asserted
by his father, the late former Prime Minister Takeo Fukuda, and
envisioning the establishment of an East Asian Community.

Fukuda decided to visit the US out of strong concern that
although Japan-US ties are viewed as being in good shape, their
maintenance depends solely on the personal relationship between
Koizumi and US President Bush.

In addition, during his stay in Washington, where the number of
pro-Japanese members of Congress and government officials are
declining, Fukuda intends to see firsthand how much "differences
in perception" of issues involving Japan exist through exchanges
of views with American leaders.

There are growing calls within the ruling Liberal Democratic
Party, particularly among veteran lawmakers, for Fukuda to lead
other lawmakers in widening Japan's network of contacts with US
leaders, as evidenced by remarks by a former cabinet member as to
when to resume US beef imports and the realignment of US forces
in Japan: "If Japanese and US lawmakers had a broader network of
connections, these issues would be resolved more easily."

13) Japan to carry out spot inspections of meat-processing plants
to ease public concern about US beef

MAINICHI (Page 1) (Excerpts)
May 10, 2006

As measures to allay public concern about the safety of US beef,
the government decided yesterday to dispatch Japanese inspectors
to the US to carry out spot inspections on a regular basis of
meat-processing plants with licenses to ship beef to Japan after
it resumes US beef imports, according to some government sources.
The US has also indicated a willingness to accept Japan's plan.

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By underscoring such an approach, the two governments hope to win
public understanding toward a resumption of trade in US beef.

According to informed sources, inspectors from the Health, Labor,
and Welfare Ministry and the Agriculture, Forestry, and Fisheries
Ministry will join unannounced inspections by the US Agriculture
Department. In public hearings last month between the two
ministries and consumers, some called for this measure. The
government also plans to carry out inspections of meatpackers by
Japanese inspectors before resuming imports and to strengthen
inspections at the border, like airports, even after reopening
its market. The government will shortly present these measures to
the US as preconditions for resuming imports.

14) Fisheries Agency to establish firm to promote more eating of
whale meat

YOMIURI (Page 2) (Abridged)
May 10, 2006

The Fisheries Agency and the Institute of Cetacean Research
announced yesterday that they would jointly establish a company
to promote sales of meat obtained from research whaling. They
plan to develop new customers, such as hospitals, and also target
individuals by using the Internet.

Owing to expanded research whaling, the supply of whale meat has
expanded from 1,700-1,800 tons from the 1990s to 5,500 tons in

2006. However, sales routes have been limited mainly to
traditional whale meat restaurants.

By capitalizing on the low-calories found in whale meat, the new
company intends to develop new customers, such as hospitals,
supermarkets, and restaurant chains.

15) Number of suicides reach 30,000 for eighth consecutive year,
experts cite widening income disparity as major cause

MAINICHI (Page 1) (Excerpts)
May 10, 2006

The number of people who committed suicide in Japan last year is
likely to top 30,000 for the eighth consecutive year. According
to a survey by the National Police Agency (NPA),the number of
suicides was over 30,000 for the seven years in a row from 1998
through 2004. In 2005, 28,240 suicide cases have been reported to
the Ministry of Health, Labor and Welfare (MHLW) as of last
November, 423 more than a year ago. Since MHLW has set a more
limited definition of "suicide" than NPA, the number of suicides
tabulated by NPA is 1,000 to 2,000 more than that of MHLW. Given
this, it is now almost certain that the number statement of
suicides to be announced by NPA will exceed 30,000. Some experts
attribute the growing number of people who commit suicide to the
widening wealth gap in society. The government is likely to be
urged to come up with more effective measures to help prevent
suicides.

NPA targets the nation's overall population (including
foreigners) in working out its statistics and also regards as a
suicide even a case in which the cause of death was unknown when
the body was found but was later concluded to have been a suicide
through investigation. However, MHLW targets only Japanese

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nationals in Japan and includes in its tally only cases in which
the death certificate specifies the cause of death as suicide. As
a result, NPA presented 32,325 as the number of suicides in 2004,
while MHLW came up with 30,247, about 2,000 less than that of
NPA.

16) LDP Upper House members, including Aoki, calling for arm-
twisting approach in reaction to slow Diet deliberations on
important bills

MAINICHI (Page 5) (Abridged slightly)
May 10, 2006

With less than 30 days left for deliberations in the current Diet
session, the hard-line argument is gaining ground in the Liberal
Democratic Party that the lawmakers should speed up deliberations
and railroad important bills, such as a bill to amend the Basic
Education Law, through the Diet. Though a minor extension of the
Diet may be possible, the hardline argument is ascribable to
growing discontent in the Upper House with a delay in
deliberations in the Lower House. But the largest opposition
party, Minshuto (Democratic Party of Japan),is reacting strongly
to such calls.

The LDP held an executive liaison meeting yesterday in which
Upper House executives, beginning with Mikio Aoki, who heads the
LDP caucus in the Upper House, complained about the Lower House's
management of Diet affairs. One said, "(The ruling bloc) should
clearly demonstrate that it holds two-thirds of the Lower House
seats." Secretary General Tsutomu Takebe also subscribed to the
arm-twisting argument, saying to the press after the meeting, "If
deliberations do not go anywhere and things do not move forward
as a result, we should take a vote."

Discontent is growing in the Upper House with the ruling bloc's
failure to set the pace in the Lower House's management of the
Diet. The government submitted 89 bills to the Diet in the
current session. Of them, only 30 bills had cleared the Diet as
of yesterday. Despite the fact that the ruling coalition garnered
a two-thirds of the Lower House seats as a result of the election
last September, the ratio of successful bills remains at 33.7%,
the same as last year's. In addition, deliberations on important
bills are lagging behind schedule, such as a bill to amend the
Basic Education Law and a bill to revise the Organized Crime Law
to make conspiracy a crime.

The Upper House's anxiety was also fueled by Prime Minister
Junichiro Koizumi's rejection of an extension of the Diet session
and Diet Affairs Committee Chairman Hiroyuki Hosoda's adamant
stance to keep harmony with the opposition bloc. LDP Upper House
Secretary General Toranosuke Katayama complained in a press

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conference yesterday, "Because the term of the Diet session is
fixed, a delay in receiving (bills) from the Lower House will
take its toll on our remaining time."

The adoption of any arm-twisting approach by the ruling bloc is
certain to draw a backlash from Minshuto. Minshuto Upper House
Diet affairs chief Kenji Hirata warned the LDP yesterday: "We can
handle anything, including the ruling bloc's attempt to ram a
bill through the Diet. We will not hesitate to boycott
deliberations."


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17) Ruling coalition gives up submitting national referendum to
current Diet session along with Minshuto

TOKYO SHIMBUN (Top Play) (Full)
May 10, 2006

The ruling Liberal Democratic Party (LDP) and its coalition
partner New Komeito yesterday gave up on submitting to the
current Diet session jointly with the main opposition party
Minshuto (Democratic Party of Japan) a national referendum bill
that would set procedures for amending the Constitution.

The ruling coalition has determined that it would be impossible
to continue consultations since Minshuto President Ichiro Ozawa
stated yesterday in a press conference that his party was unable
to approve the idea of introducing the bill together with the two
ruling parties.

The LDP and New Komeito will look for a possibility of handling
the bill in their own way. Since the ongoing session will close
on June 18, many in the two parties are saying that it is not
necessary to submit the bill early. Whether the ruling coalition
will present the bill to the current session remains unknown.

The ruling and opposition camps have been at odds over such
issues as whether other state affairs should be subjected to the
bill and whether the minimum age for granting voting rights
should be lowered to 18. It has been difficult for the three
parties to settle differences of opinions.

Ozawa stressed yesterday that his party had no intention to make
concessions to the ruling camp, stating: "Minshuto has its own
views, and they should be accepted."

In a joint meeting last evening of Minshuto's constitutional
research councils of Upper and Lower House members, a general
agreement was reached that if the ruling coalition submitted its
bill, the party should present its own bill.

18) Minshuto President Ozawa explains reason for abstaining from
Lower House plenary session, saying, "I cannot work soon after
eating because of heart disease"

YOMIURI (Page 4) (Full)
May 10, 2006

At a press conference yesterday, Minshuto (Democratic Party of
Japan) President Ichiro Ozawa explained his absence from a
plenary session of the House of Representatives:

"Since I was hospitalized for heart disease several years ago, my
doctor told me not to work soon after having a meal. So I have
followed my doctor's advice. I want you to understand."

Ozawa was admitted with cardiac angina in June 1999. Since he
assumed the presidency of the largest opposition party in April,
he attended the first plenary session as Minshuto president, but
he has been absent seven times in row, including yesterday's
session.

Ozawa said:


TOKYO 00002519 013 OF 013


"I have declined to attend official breakfast and luncheon
meetings. I participate in important sessions, changing my
schedule. But I have abstained from sessions (Lower House full
sessions starting at 1:00 p.m. and other sessions) that take
place around noon."

A senior Liberal Democratic Party lawmaker made a critical
comment on Ozawa: "Attending plenary sessions is the duty of a
politician. What will he do about luncheons with foreign
dignitaries if he becomes prime minister?"

SCHIEFFER