JAPANESE MORNING PRESS HIGHLIGHTS 05/25/06

UNCLAS SECTION 01 OF 10 TOKYO 002875

SIPDIS

SIPDIS

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 05/25/06


Index:

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

Ambassador's diplomacy:
4) Sakie Yokota thanks Ambassador Schieffer for opportunity to
meet President Bush
5) Ambassador Schieffer nixes US interference in Yasukuni issue

Political agenda:
6) Yamasaki faction favors removal of Class-A war criminals
from Yasukuni Shrine
7) Chairman of Bereaved Family Association Koga of the LDP
rejects idea of turning Yasukuni Shrine into a state-run facility
8) In Diet deliberations on amendments to Basic Education Law,
government's replies cautious about issue of inculcating
patriotism in kids
9) LDP putting off hike in consumption tax with future election
in mind
10) Minshuto (Democratic Party of Japan) lines up new set of
four issues to pursue ruling camp in Diet
11) LDP's Kyuma: Diet extension of a week or so will only be
needed
12) Chief Cabinet Secretary Abe will announce his candidacy for
LDP president in July after the G-8 summit
13) Politicians squandering taxpayers' money with lavish meals
at posh restaurants: Asahi investigation

14) Friendly mood seems to be slowly returning to Japan-China
relations with meeting of foreign ministers after a year's hiatus

Defense issues:
15) Cabinet decision on USFJ realignment process put off until
after the Pacific Islands Summit
16) Commander US forces Japan asks that the entirety of USFJ
realignment be looked at in assessing whether the cost is high or
not

17) Japan to call for a new forum to discuss commercial whaling
outside the IWC

18) New Keidanren chief stresses need for Japan to develop own
technologies

Articles:

1) TOP HEADLINES

Asahi:
In FY2002, 2003, 50 million yen used for wining and dining in
funds for lawmakers' state affairs

Mainichi:
Pension fund federation to oppose renewal of audit contract with
ChuoAoyama

Yomiuri:
National Examination Center scored tests despite erroneous
entries for 23 years


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Nihon Keizai:
LDP likely to forgo inclusion of consumption tax hike in fiscal
2007 tax reform proposal

Sankei:
Abe to announce candidacy for LDP presidential race after G-8

Tokyo Shimbun:
Japan Post books 1.9 trillion yen in profit in business year
ending in March 2006

2) EDITORIALS

Asahi:
(1) Japan-China foreign ministerial: Importance of bilateral
ties underscored through one year of diplomatic vacuum
(2) Deliberations on Basic Law on Education: Minshuto plan also
contains problems

Mainichi:
(1) Is it impossible to restore relations with neighbors under
Koizumi administration?
(2) Banks' earnings reports: Priority must be given to
customers' benefits

Yomiuri:
(1) Dialogue necessary to resolve pending issues with China,
South Korea
(2) Social Insurance Agency must correct lax system

Nihon Keizai:
(1) Mitarai should lead Keidanren based on principles
(2) Hoping for improved relations with China, South Korea

Sankei:
(1) Foreign ministerials with China, South Korea: Recognizing
differences is important
(2) Social Insurance Agency must rectify bad practices

Tokyo Shimbun:
(1) Japan-China foreign ministerial a turning point for
improving bilateral ties
(2) New Keidanren Chairman Mitarai expected to demonstrate bold,
clear-cut posture

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 24

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

08:07
Met Deputy Chief Cabinet Secretary Nagase at Kantei.

09:00
Attended a meeting of the Lower House Special Committee on the
Basic Education Law.

14:14
Met with Malaysian Prime Minister Abdullah at Kantei.


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15:02
Met with Indonesian Vice President Kalla.

15:53
Attended the 5th regular general meeting of Nippon Keidanren
(Japan Business Federation)) at Keidanren Hall in Otemachi,
Tokyo.

16:07
Attended a tea ceremony at the Imperial Palace, along with the
Emperor, the Empress, and visitors from Singapore and Thailand.

17:34
Met at Kantei with members of Japan-ROK and ROK-Japan businessmen
conferences, including the ROK-Japan Businessmen Conference
chairman. Later, met Secretary General Takebe.

18:37
Attended a Central Institute of Politics seminar 2006 at LDP
headquarters.

18:53
Arrived at residence.

4) Sakie Yokota to US ambassador to Japan: "I'd like to thank you
for arranging a meeting with the US president"

YOMIURI (Page 37) (Full)
May 25, 2006

Sakie Yokota, mother of abductee Megumi Yokota, yesterday called
on US Ambassador to Japan Thomas Schieffer, who played a key role
behind the scenes in arranging a meeting between Sakie and US
President Bush in April, and expressed her gratitude to the
ambassador. Attending a lecture meeting in Tokyo where the
ambassador delivered a speech, Sakie said to Shieffer: "I can't
thank you enough for our having had an opportunity to convey our
sorrows to President Bush."

Schieffer told Yokota, "As a longtime friend of President Bush, I
was sure the president would be moved by Mrs. Yokota's story,"
indicating a rising interest in the abduction issue in the US
government.

It is said that the meeting between President Bush and Sakie was
realized largely because of Schieffer's advice to the president.
Schieffer and Bush have been close friends since before Bush went
into politics. Schieffer has been actively addressing the
abduction issue. For instance, this March he was the first US
government official to inspect the scene of Megumi's abduction in
Niigata City.

5) US will not meddle in shrine visit issue, US ambassador to
Japan says

SANKEI (Page 3) (Full)
May 25, 2006

US Ambassador to Japan Schieffer, attending a meeting yesterday
of the Japan-US Forum of the International Friendship Exchange
Council, emphasized that his country's conventional stance of not
interfering in the issue of Prime Minister Junichiro Koizumi's

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visits to Yasukuni Shrine had not changed. "Whether or not to
visit the shrine is a matter for Japan will decide and not a
matter for the United States and others to say do as I tell you,"
he stated.

Schieffer noted: "East Asia has seen the emergence of the
unprecedented phenomenon of two major powers (Japan and China)
standing side by side. Even without the Yasukuni issue,
apprehensions and tensions could rise." He then stressed the
importance of the Japan-US alliance contributing to bringing
stability to the region.

The Ambassador added: "While Japan-US relations are in remarkably
good shape, US-China relations have also improved. It's incorrect
to say that improving diplomatic ties with a certain country
comes about at the expense of relations with another country."
6) Koga calls for separate enshrinement at Yamasaki faction
meeting, possibly with cooperation with Yamasaki in mind

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

The Yamasaki faction of the Liberal Democratic Party held a
policy study meeting yesterday by inviting former Secretary
General Makoto Koga, who is also head of the Niwa-Koga faction.

Explaining his policy proposal for unenshrining Class-A war
criminals from Yasukuni Shrine, Koga said: "In order to allow
people to pay homage at Yasukuni Shrine comfortably, we cannot
avoid the question of separate enshrinement."

Some Yamasaki faction members, including Lower House member
Katsuei Hirasawa, said, "In reality, it is difficult to
unenshrine them." But Koga sought their understanding, saying: "I
believe the advancement of this idea will help spread the concept
among the people."

Former LDP Vice President and Yamasaki faction head Taku Yamasaki
and Koga intend to put high priority on Asia diplomacy with the
LDP presidential election in September in mind. Some observers
regard the move as part of cooperation between Yamasaki and Koga
for the presidential race.

7) Bereaved Families Association Chairman Koga opposes state
support of Yasukuni Shrine

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

Bereaved Families Association Chairman Makoto Koga, a former
secretary general of the Liberal Democratic Party, attended a

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meeting yesterday of a policy study group of the Yamasaki faction
of the same party. He there expressed his view opposing thinking
in the party of placing Yasukuni Shrine under "state protection,"
under which it would lose its credentials as a religious
institution. He said: "As a member of a bereaved family that lost
loved ones in battle, I cannot approve of such thinking. It would
remain as Yasukuni Shrine."

8) Education reform bill: Government carefully answers to
question about patriotism, "Assessing children's minds is not
purpose of revision"

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MAINICHI (Page 2) (Excerpts)
May 25, 2006

The House of Representatives Special Committee on the Basic
Education Law started yesterday deliberations on bills revising
the education law, centering on the description of "patriotism,"
as well as effects on schools. Opposition parties expressed
concern that teaching students to take an attitude of loving the
nation and homeland, which is included in the government-
sponsored bill, might infringe on the freedom of thought. Kenji
Kosaka, minister of education, culture, sports, science and
technology, responded cautiously, "Assessing whether students
have patriotism is not the purpose of revising the law."

9) LDP likely to forgo inclusion of consumption tax-hike plan in
fiscal 2007 tax reform proposal, out of concern about impact on
Upper House election next year

NIHON KEIZAI (Top Play (Excerpts)
May 25, 2006

The Liberal Democratic Party's Tax System Research Commission,
chaired by Hakuo Yanagisawa, is likely to stop short of
stipulating a hike of the consumption tax rate in its fiscal 2007
tax reform proposal. In the ruling party, many have voiced
concern about the negative effect of a tax hike on the House of
Councillors election slated for July of next year. In addition,
some members have also suggested that the best timing for the tax
should be worked out for the first time after the panel paves the
way for revenue and spending reforms. The possibility is now
strong that the tax-hike decision will be made in the summer of
next year or after.

The LDP tax panel noted in its tax reform proposal for fiscal
2006 released late last year: "The nation's tax system, including
the consumption tax, will be boldly reformed in fiscal 2007." In
line with debates on revenue and spending reform in the
government and the ruling camp, the panel has engaged in
discussing how to promote the sweeping reform of the tax system.

However, Fumiaki Ibuki, chairman of a subcommittee of the LDP
panel, told reporters yesterday: "(Fiscal 2007) takes on meaning
if we show a timetable for implementing reform plans." He thus
referred to the possibility that the commission will only discuss
a timetable for future reform plans without stepping into the
margin of tax hike in debates on a fiscal 2007 tax reform
proposal due out late this year.

10) Minshuto to turn up the heat on ruling coalition with new set
of four issues

SANKEI (Page 5) (Excerpts)
May 25, 2006

For the main opposition party, Minshuto (Democratic Party of
Japan) the issue of illegal handling of national pension premiums
payments by a social security office has now become a new weapon
to attack the government and ruling coalition. At a Lower House
Health, Labor, and Welfare Committee session yesterday, Minshuto
posed questions about this issue alone. At the second half of the
current Diet session, the party intends to attack the government

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and ruling camp with a set of four issues: making "conspiracy a
crime; education reform, national referendum for constitutional
reform, and illegal pension payments.

At the committee session yesterday, Kazunori Yamanoi pursued
Social Insurance Agency Director General Seiji Murase's
responsibility, arguing, "Don't you think the target of (rate of
pension premium payments) was impossible?"

Murase responded, "I don't think I ordered my staff to ignore
statutes." However, Jiro Kawasaki, the minister of health, labor
and welfare, has admitted that the wrongdoing was practiced with
the consent of the social insurance office. He then said that a
new Social Insurance Agency, which will be established after the
present agency is abolished, would not hire malicious officials.
The Health, Labor and Welfare Ministry intends to put an end to
the scandal by coming up with measures to prevent a recurrence
such as personnel changes across the nation before the
establishment of the new organization.

It is true that this scandal has become a good tool to attack the
government and ruling camp.

11) Kyuma: "Diet session will be extended for about a week"

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

Liberal Democratic Party General Council Chairman Fumio Kyuma
delivered a speech in Fukuoka yesterday in which he said
regarding the ongoing Diet session: "Considering the prime
minister's diplomatic schedule (US visit),the session may not be
extended substantially." Kyuma thus predicted that the Diet
session would be extended for a week at most.

12) Abe to announce candidacy for LDP presidential race probably
in July

YOMIURI (Page 1) (Excerpts)
May 25, 2006

Chief Cabinet Secretary Shinzo Abe indicated yesterday in a
speech that he would announce his candidacy for the September
Liberal Democratic Party (LDP) presidential election after the
Group of Eight summit that takes place in St. Petersburg, Russia,
in mid-July.

He stated:

"I will continue to fulfill my duty as chief cabinet secretary,
and then decide what I should do next. The Diet is now in session
and the G8 summit will be held. I will have to think about when
to announce (my candidacy) sometime in the future."

Asked how he felt about his high rating in opinion polls as a
possible candidate to succeed Prime Minister Junichiro Koizumi,
Abe said, "I feel honored and I would like to achieve results
that meet everyone's expectations." Citing constitutional
revision as a future political task, he said, "I have no doubt
that that will become a major challenge for the next cabinet."

Abe has already told his aides he intends to run in the LDP

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leadership race. After a series of political events -- the
drafting in June of " big-boned reform policy guidelines" for
economic and fiscal policy and structural reform, Prime Minister
Koizumi's visit to the United States, and the G8 summit -- he
intends to announce his candidacy, pledging that he will continue
the Koizumi reforms.

13) Lawmakers held meetings at restaurants, drawing 50 million
yen from national administration research expenses; Lower House
data for fiscal 2002 and 2003 unveiled for first time; Chief
secretariat returned part of money he spent

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ASAHI (Top Play) (Excerpts)
May 25, 2006

National administration research expenses are funded by tax
revenues for use by lawmakers when they conduct research on
national politics. Data obtained by the Asahi Shimbun through
access to official files found that the Lower House disbursed a
total of approximately 100 million yen to lawmakers in fiscal
2002 and 2003 to be used for their meetings and about half that
mount was used for wining and dining at posh traditional Japanese-
style restaurants or snack bars. The current Information
Disclosure Law does not cover the Diet, because it limits
information subject to disclosure to such held by administrative
organizations. The Asahi Shimbun asked the Board of Audit to
disclose expenditure-related documents received from the Lower
House. This is the first time that the overall use of expenses
for national administration research was unveiled.

In an interview with the Asahi Shimbun, Yoshihiro Komasaki, chief
of the Secretariat of the Lower House, said, "We are fully aware
that it is absolutely impossible to obtain an understanding of
this." He revealed that he last weekend voluntarily returned
940,000 yen disbursed from national administration research
expenses, which he made settlement himself after taking office in
November 2003 and used for wining and dining outside the Lower
House.

According to the Finance Ministry, as national politics research
expenses the Lower House paid out 2.87477 billion yen in fiscal
2002 and 2.67854 billion yen in fiscal 2003.

The data the Asahi Shimbun obtained unveiled that of those
amounts, the Lower House disbursed 45.1 million yen in fiscal
2002 and 49.87 million yen in fiscal 2003 for wining and dining.
The above money was used for meals provided during committee
meetings as well, but 23.17 million yen and 30.69 million yen
were used in fiscal 2002 and fiscal 2003 respectively for
meetings, which involved wining and dining.

Meetings that involved wining and dining took place 71 times at
hotels, 23 times at Japanese restaurants, including high-class
traditional Japanese-style restaurants, and 20 times at snack
bars.

Hefty bills included one for 210,000 yen for wining and dining
for three persons with 65,000 yen for each at a Japanese
restaurant at Shinbashi, Tokyo. This "meeting" was held in
October 2002 on the pretext of the speaker's meeting with the
vice speaker and the former Die Steering Committee chairman.


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In March 2003, the Lower House paid a total of 450,000 yen for
wining and dining, which cost 55,000 yen per person, to a
Japanese restaurant at Akasaka. The "meeting" was held on the
pretext of a meeting between the speaker and the vice speaker.

A total of 960,000 yen was paid for wining and dining during
meetings held at snack bars to exchange information with Diet
policy committee members of various political parties. Expensive
meals, such as top-grade sushi or finest broiled eel on rice
(unaju),were often served at various committee meetings.

A Lower House source said that the speaker or the chairmen of
various committees have the discretion on what types of meals
should be served at meetings. Officials in charge take orders
from lawmakers attending such meetings, places such orders with
restaurants and sends bills to the account division for
settlement.

14) Friendly mood played up in Japan-China foreign ministerial
meeting, but no prospect in sight for resumption of summit
meetings

YOMIURI (Page 2) (Excerpts)
May 25, 2006

Tetsu Okazaki, Doha; Hiroyuki Sugiyama, Beijing

Japan and China held a foreign ministerial meeting yesterday for
the first time in a year. "A friendly atmosphere never seen in
the past several years prevailed at the meeting," a Foreign
Ministry source noted. Both countries agreed to improve relations
by expanding dialogues and to avoid any more clashes. But on the
issue of Prime Minister Koizumi's visits to Yasukuni Shrine, all
the two foreign ministers did in the meeting was to exchange
statements of their respective principles, leaving open when to
resume summit meetings. A friendly mood was displayed but it
lacked a solid base.

Talks held in a third country

"We are neighbors, so it's not necessary for us to meet in a
place far away from our countries...." Foreign Minister Aso made
this remark to his Chinese counterpart Li Zhaoxing and drew
laughs from both sides. Li told Aso, "Japan and China can enjoy
more benefits if we two countries get along well, but both of us
will be injured if both have a quarrel." The two foreign
ministers confirmed that Japan and China would expand dialogues,
such as on security and defense. After the meeting, Aso
emphasized to the reporters: "A trend of improvement in Japan's
ties with China is forming."

China, however, conveyed this position to Japan in the process of
arranging the meeting: "It's still difficult for the foreign
ministers to visit each other, but it's possible to have a
foreign ministerial in a third country." Thus, a foreign
ministerial would not have been realized if it had not occurred
in a third country.

Yesterday, Aso explained to the reporters why China responded to
the foreign ministerial meeting this time: "Our country's
investments in China are starting to show negative growth, and
this could have a great impact on (China's) economic growth.

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China therefore thinks it is wise to (improve relations) with
Japan. That country's sense of value is whether there is money to
be made or not."

15) Government postpones cabinet approval of US force
realignment; bills' enactment difficult

ASAHI (Page 2) (Excerpts)
May 25, 2006

The government has decided to postpone giving cabinet approval to
the government's plan to implement US force realignment until
after the 4th Pacific Islands Summit that will begin in Okinawa
on May 26. The postponement is ascribable to Okinawa's strong
resistance to the Defense Agency-drafted implementation plan.
"The Pacific Islands Summit, which Prime Minister Junichiro
Koizumi will also attend, may end up exposing the confrontation
between the government and Okinawa," a Cabinet Office official
said. This would make it extremely difficult for US force
realignment bills regarding Japan's share in relocating Okinawa-
based US Marines to Guam and other matters to clear the Diet
unless the session is extended substantially.

Koizumi has already told Defense Agency Director General
Fukushiro Nukaga, "We don't have to give cabinet approval before
leaving for Okinawa." Regarding a timeline for a cabinet decision
in a press conference yesterday, Chief Cabinet Secretary Shinzo
Abe said, "Nothing has been decided." Asked about if Koizumi
would hold talks with the Okinawa governor on the sidelines of
the Islands Summit, Abe also said, "A meeting is not scheduled,
as far as I know."

Calculating the Diet timetable backwards, the Defense Agency
until now has intended to seek cabinet approval of the US force
realignment-related bills before the Islands Summit. The agency
has also been seeking Okinawa's understanding, presenting it with
the draft plan for a cabinet decision.

The draft plan defines the relocation site for Futenma Air
Station as "waters connecting Cape Henoko, Oura Bay, and Henoko
Bay," instead of specifying the construction of two runways in a
V shape. The description reflects the government's consideration
to Okinawa, which is reluctant to specify a "V shape." The
government has decided to compile a construction plan by October,
it has also decided to allow a consultative panel involving
Okinawa and Nago officials to study the matter.

But Okinawa, which is calling for a temporary heliport at Cape
Henoko, reacted strongly to such a plan. On May 22, Vice Governor
Hirotaka Makino conveyed Okinawa's views again to Deputy Chief
Cabinet Secretary Masahiro Futahashi.

16) USFJ Commander Wright: Look at the entire picture in
considering the burden of US force realignment in Japan

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

Commander of US Forces Japan Lt. Gen. Bruce Wright in a press
conference in Tokyo yesterday stressed that in assessing Japan's
share of the total cost of US force realignment in Japan which is
estimated as 3 trillion yen, "You should look at the entire

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picture of the burden on both countries before boiling it down to
one number." He pointed out: "You should not just pay attention
to such burdens as the construction costs in Guam, but also turn
your eyes to the total burden placed on both governments in
maintaining the US-Japan alliance, including personnel costs and
training expenditures (for protecting Japan)."

17) Government to propose establishing new framework outside IWC
with aim of resuming commercial whaling

MAINICHI (Page 3) (Full)
May 25, 2006

The government yesterday decided to set up outside the
International Whaling Commission (IWC) a new framework consisting
of countries that support the resumption of commercial whaling.
It will release the plan at the annual plenary session of the IWC
to be held St. Christopher & Nevis in the Caribbean Sea starting
on June 16. The aim is to have the outcome of discussions on the
proposal reflected in the IWC's stance. A senior Fisheries Agency
official said, "We want to break the rigid situation in the IWC."

The new framework will aim to complete the revised management
system (RMS),which outlines procedures for catching whales
without decreasing such number. Commercial whaling has been under
temporary suspension since 1986. Discussions on the RMS have been
continuing since the 1990s, but no breakthrough has been found
due to oppositions from anti-whaling countries, such as
Australia. Under such circumstances, the government has judged
that little progress can be hoped for even if discussions under
the IWC continue. The RMS can be initiated by a three-fourths
majority or more.

The government plans to hold a meeting of concerned countries to
discuss specific ways to hold a meeting of such a group during
the plenary session of the IWC. Some on the domestic front had
taken the view from way back that Japan should opt out of the IWC
or another international organization is necessary. Chances are
that anti-whaling countries might toughen their opposition to
Japan's move, arguing that it could lead to the establishment of
a new organization.

18) Mitarai, successor to Keidanren Chairman Okuda, aims at
making Japan a science-oriented nation

TOKYO SHIMBUN (Page 1) (Excerpt)
May 25, 2006

The Japan Business Federation (Nippon Keidanren) formally
appointed Canon Inc. Chairman Fujio Mitarai, 70, as its new
chairman to replace Hiroshi Okuda, 73, at a general meeting in
Tokyo yesterday. He is the first chairman of the business lobby
from the precision equipment industry. In an inaugural press
conference, Mitarai said: "In order to make Japan an attractive,
hopeful country for the people inside and outside Japan, I will
make utmost efforts." He reiterated his determination to continue
the reform line pushed ahead by Okuda.

SCHIEFFER