DAILY SUMMARY OF JAPANESE PRESS 05/26/06

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/26/06


INDEX:

(1) Prime minister's US visit to start on July 27 2

(2) Government to delete specifics from its draft plan for a
cabinet decision for implementing US-Japan final agreement on
USFJ realignment in consideration of Okinawa 2

(3) Administrative reform promotion bill to be enacted today;
Koizumi imprint shunted into background; Abe now focuses on
social divide 3

(4) Sharp showdown between Abe and Fukuda in LDP presidential
race 5

(5) What underlies relations between Abe and Fukuda as rivals for
LDP presidency (Part 1) 6

(6) What underlies relations between Abe and Fukuda as rivals for
LDP presidency (Part 2): Largest faction's moves unlikely to
determine trend for LDP presidential race 8

ARTICLES:

(1) Prime minister's US visit to start on July 27

SANKEI (Page 3) (Full)
May 26, 2006

US aims to underscore difference in treatment to Japan, China

Prime Minister Junichiro Koizumi will visit Canada and the US
from June 27 through July 1, according to an official
announcement by Chief Cabinet Secretary Shinzo Abe in a press
conference yesterday. In his last tour of the US before leaving
office in September, the prime minister wants to highlight the
Japan-US alliance in a global context.

President George W. Bush and Koizumi are expected to exchange
views in their meeting on June 29 on reconstruction assistance
for Iraq, where the security situation is still looking grim
despite the inauguration of a full-scale government. The two
leaders are also likely to discuss North Korea's nuclear and
abduction issues.

Prior to the US visit, the prime minister will also visit Canada
to meet Prime Minister Stephen Harper - the first since Harper
took office - in Ottawa on June 28.

Ahead of the G-8 summit (Sankt Peterburg Summit) in Russia in mid-
July, the prime minister will coordinate views with the US and
Canadian leaders on various issues facing the international
community.

US likely to treat Koizumi as state guest

Takashi Arimoto, Washington

Prime Minister Junichiro Koizumi is not the chief of state, so
the upcoming US tour is an "official visit," as said by
Presidential spokesperson Snow. But the US is likely to treat
Koizumi as a de facto state guest by arranging a banquet for him.
When Chinese President Hu Jintao visited the US in April, the US

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held only a luncheon. According to a US government source,
Washington's red-carpet treatment, unlike the one to the Chinese
leader, "is also intended to demonstrate the close alliance
between Japan and the US."

Snow said: "The Japan-US alliance is based on common values and
agenda items," adding that the two leaders are expected to
discuss antiterrorism, the protection of freedom and democracy,
the promotion of security and prosperity in Asia, and other
issues.

President Bush has rarely held a banquet since assuming the
presidency, but he did hold one for Australian Prime Minister
John Howard on May 16. Australia has also dispatched troops to
Iraq, like Japan.

Bush has highly appreciated Japan and Australia for the
cooperation they have extended in fighting terrorism in
Afghanistan and Iraq since the terrorist attacks on the US in
September 2001.

Washington's treatment of Prime Minister Koizumi also reflects
the President's desire to "offer highest-level hospitality"
before he leaves office in September, in order to convey his
personal appreciation for his cooperation for Iraq
reconstruction.

(2) Government to delete specifics from its draft plan for a
cabinet decision for implementing US-Japan final agreement on
USFJ realignment in consideration of Okinawa

OKINAWA TIMES (Page 1) (Full)
May 25, 2006

The government decided on May 24 to delete the "attached paper,"
which stipulates specific descriptions on the removing of the US
Marine Corps Futenma Air Station to the coast of Camp Schwab in
Nago City, from its draft plan for a cabinet decision, which will
be made on based on the Japan-US final agreement on the
realignment of US forces in Japan.

The attached paper stipulates that a plan to construct an
alternate base for the Futenma Air Station would be formulated by
October and that the relocation site for the Futenma base would
be constructed on "waters connecting Cape Henoko, Oura Bay, and
Henoko Bay." Therefore, Okinawa Prefecture, which has yet to go
along with the government's draft plan, reacted negatively. No
prospect for an agreement was in sight, therefore. The government
intends to prioritize an early cabinet decision by revising its
draft plan in line with Okinawa's requests.

The draft plan describes the government policy of implementing
the contents of the final agreement on the USFJ realignment. It
is composed of the main body describing the realignment of US
forces across Japan and the attached paper focusing on the
relocation of Futenma Air Station.

The main part describes that it is necessary to steadily
implement the relocation of Futenma Air Station to Camp Schwab,
but it does not specify the relocation site, and the number and
length of runaways.

Given that, the possibility is strong that if the government

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presents a draft plan from which the attached paper is deleted,
Okinawa will agree with it.

The government initially decided that Okinawa Prefecture would
accept the contents of the attached paper since Gov. Kenichi
Inamine agreed to the basic confirmation document.

Senior officials from the Defense Agency and the Defense
Facilities Administration Agency visited Okinawa last week to
discuss the draft plan for a cabinet decision, including the
attached paper with senior Okinawa government officials.

However, the talks failed to arrive at a compromise due to a big
gap between the government and Okinawa. A senior prefectural
government official said, "We cannot accept a cabinet decision
that is based on the government's draft plan."

Defense Agency Director General Fukushiro Nukaga agreed on May 23
with Yuriko Koike, state minister in charge of the Okinawa issue,
and Deputy Chief Cabinet Secretary Masahiro Futahashi on a policy
of giving priority to coordination with local communities.

(3) Administrative reform promotion bill to be enacted today;
Koizumi imprint shunted into background; Abe now focuses on
social divide

ASAHI (Page 2) (Excerpts)
May 26, 2006

The administrative reform promotion bill, prepared under the
initiative of Prime Minister Koizumi, is expected to be passed
and enacted today at the plenary session of the Upper House. The
prime minister, who has declared that he would step down in
September, had originally aimed to urge his successor to take
over his reform policy. However, even Chief Cabinet Secretary
Abe, who has decided to run in the LDP presidential race, has
hinted at his intention to slightly adjust the Koizumi reform
plan. The ruling camp and various government agencies have begun
moving to hamstring his reform policy. Ironically, what has
emerged after more than two months of Diet deliberations is not
the continuation but the correction of the Koizumi reform policy.

The administrative reform promotion bill was adopted at the
meeting of the Upper House Special Committee on Administrative
Reform yesterday. During the meeting, Abe, who has propped up the
Koizumi reform drive, stressed a stance of shedding light on the
dark side of the reform drive. Abe stressed, "We must not let
winners remain as winners and losers as losers." He thus
explained his policy of offering a second chance for losers to
try again, which he advocates in the run-up to the LDP
presidential election.

The aim of the administrative reform promotion legislation was to
legally bind policy implementation by the post-Koizumi
administration, as LDP Policy Research Council Chairman Hidenao
Nakagawa put it.

Nakagawa and Internal Affairs and Communications Minister
Takenaka proposed the bill, emboldened by the LDP's landslide
victory in the general election last fall. The aim was to
characterize the current Diet session as an administrative reform
Diet, assuming Abe as succeeding Koizumi, and pass along the
reform policy to the next administration.

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However, the atmosphere has changed completely when the new year
began. The Livedoor incident in January has upset the prediction
that the ruling camp would be able to dictate the pace of the
regular Diet session, as focus has shifted to the social divide.
Criticism of the Koizumi reform drive has mounted rapidly. New
Komeito leader Kanzaki has also begun to say, "The bipolarization
between the rich and the poor is widening."

Abe was quick to shift his stance to correcting the Koizumi
policy, though the prime minister did not admit the widening
disparities. In March, he established the Second Challenge
Promotion Council to consider ways to give a second chance to
those whose business failed or who were unable to find jobs.

The turning point came on April 26, when the Koizumi
administration marked the fifth anniversary of inauguration. At a
meeting of the Upper House Special Committee on Administrative
Reform, Abe noted: "The words 'small government' have the
possibility of causing misunderstanding that it may mean less
burden and less benefits regarding social security. I will use
the term simple but efficient government so as to avoid causing
such a misunderstanding. It was a major change from this
statement, he made in March in front of reporters, "I will make a
small government, based on this law."

However, Abe cannot reject the Koizumi policy right in his face.
He defended the position of the prime minister during a speech
given on May 24: "There cannot be a world with no disparity at
all. It is a problem to make an issue over disparity alone." The
prime minister is the greatest backer of Abe. Persons close to
him said, "Mr. Abe must act in unity with the prime minister."

Ruling party members also against specific reform proposals

Abe is not the only person who wants to revise Koizumi's policy.
Ryosei Akazawa, a first-time lawmaker of the LDP, said at the
Prime Minister's Official Residence (Kantei): "I want to build
roads that should be built so that Japan will not be left behind
European countries and the US." The Group to Discuss Local
Regions consisting of like-minded members of the Group 83, a
group of lawmakers elected last year, mapped out a set of
proposals for consolidating the road system and submitted it to
Deputy Chief Cabinet Secretary Nagase.

The package noted that it is essential to construct necessary
roads. Roads were the symbol of the Koizumi reform drive, but the
so-called Koizumi's protgs elected to the Diet last year hinted
at their opposition to the Koizumi reform policy.

In the move to abolish or integrate government-affiliated
d
financial institutions, based on the prime minister's policy of
integrating them into one, if possible, the commerce and industry
policy clique of the LDP and New Komeito members repeatedly asked
questions to Economy, Trade and Industry Minister Nikai, saying,
"We have heard anxious views from small and medium-size business
operators throughout the country." They strongly called for
maintaining financial functions for small and medium-size
businesses and government involvement in the privatization of the
Central Bank for Commercial and Industrial Associations.

In the end, the additional resolution adopted at the Upper House

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committee meeting on May 25 included such items as "securing
employment in reducing the number of public servants in net
terms" and "meeting a demand for capital from small and medium-
size businesses in a proper manner." The resolution included
items that connote opposition to specific reform proposals.

Behind such moves is the circumstance that all lawmakers are on
the move with an eye on the Upper House election next summer, as
a mid-level LDP lawmaker put it.

During a meeting of the Council on Unified Reform of Fiscal and
Financial Systems, which was held to discuss specific measures to
cut expenditures, Upper House LDP Secretary General Mikio Aoki
made requests regarding cuts in public works projects and social
security expenses, noting, "We'll have the Upper House election
next year. I would like you to give consideration to this."

Yesterday evening, when the Upper House adopted the
administrative reform promotion bill, LDP Secretary General
Tsutomu Takebe made a speech at a party held by construction

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companies: "The building of infrastructure is still insufficient.
We must secure the necessary budget funds for it."

(4) Sharp showdown between Abe and Fukuda in LDP presidential
race

TOKYO SHIMBUN (Page 2) (Abridged slightly)
May 26, 2006

Fukuda's "wait-and-see strategy" effective to display political
identity

Chief Cabinet Secretary Shinzo Abe, who enjoys high support
rating in opinion polls as a successor to Prime Minister Koizumi,
revealed that he would formally announce after the mid-July G-8
summit in St. Petersburg his candidacy for the September Liberal
Democratic Party (LDP) presidential election. With Abe's
revelation, the groups of possible post-Koizumi contenders have
vigorously thrown themselves into political activities. The focus
is now on moves by former Chief Cabinet Secretary Yasuo Fukuda
who has second-highest popularity in opinion polls following Abe.
It has now become clear that Abe and Fukuda, both from the Mori
faction in the LDP, will have a showdown.

Asked about his impression of Abe's remarks, Fukuda said on May
25, "No biological reaction." He confused reporters. He attended
a meeting of the parliamentary group to promote research on
continental shelves, which he chairs, later in the day.

It was desirable for Fukuda that both he and Abe would not
formally announce their candidacies for the election to the last.

It would be ideal for Fukuda to win after making efforts until
the very last minutes. Then, at that point, Abe would support
Fukuda.

However, Abe's remarks forced Fukuda to change his strategy.
Prospects for Fukuda are not necessarily that dark since his
popularity has climbed in opinion polls.

A veteran lawmaker supporting Fukuda said, "Mr. Fukuda has gained
support, meeting business leaders almost everyday. His efforts
have paid back."

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Seishiro Eto, who regards himself as an aide to Fukuda, spoke for
Fukuda, "Mr. Fukuda will probably begin moving after the end of
the current Diet session. (Abe remarks) will have no impact on
him."

Abe starts taking action, breaking his silence feeling sense of
crisis

"I did not say I would run in the election," Abe told former
Prime Minister Yoshiro Mori, how heads the Mori faction in the
LDP.

Mori then responded, "When you read well the contents of your
speech, what you said is right." They shared the view that they
should prevent the presidential race from overheating rapidly.

Abe had refrain from mentioning the presidential election
determining that he would put his mind on his duty as chief
cabinet secretary.

Abe is concerned that his remarks could intensify moves over the
presidential race and stall Diet debate, dampening the finish of
the Koizumi reform drive.

Given the situation, Abe's decision to announce his candidacy for
the presidency is apparently the expression of his concern about
a rapid surge in Fukuda's popularity.

Fukuda played up his enthusiasm for the prime minister's post
during his visit to the United State during the Golden Week
holiday period. He then gained public support.

Abe, meanwhile, has accelerated the pace of crafting a policy of
supporting jobless workers, job-hoppers, employment of baby
boomers who will soon retire, and entrepreneurs. Since some LDP
members have insisted that the Koizumi reform drive has widened
an income disparity, Abe will have to correct the reform policy
line and display his own political identity.

Profiles of Abe and Fukuda

Abe Fukuda
Age 51 69

Number of times elected to the Diet
Abe: 5 times(Yamaguchi No.4 district)
Fukuda: 6 times(Gunma No.4 district)

Political career

Abe: Chief cabinet secretaryLDP secretary generalDeputy chief
cabinet secretary general
Fukuda: Chief cabinet secretaryParliamentary vice minister for
foreign affairsLDP Treasury Bureau chief

(5) What underlies relations between Abe and Fukuda as rivals for
LDP presidency (Part 1)

MAINICHI (Page 1 & 2) (Slightly abridged)
May 25, 2006

Fukuda's request for "cancellation of another visit to North

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Korea" turns to be declaration of breaking off relations with
prime minister

William Breer, director of the Office of Japanese Affairs at the
Center for Strategic and International Studies (CSIS),met with
former Chief Cabinet Secretary Yasuo Fukuda on April 14 in Tokyo
during his recent visit to Japan. According to informed sources,
they discussed mainly the Liberal Democratic Party presidential
election set for September. Breer said: "You are steadily winning
popularity, aren't you?" In response, Fukuda smilingly said: "I
have never said I will run in the election." But he added: "Even
so, I feel good. I will enjoy it for a while."

Chief Cabinet Secretary Shinzo Abe and Fukuda are now the top two
public choices for next prime minister. But their relations with
the prime minister are contradictory. There was a decisive scene
when the prime minister suggested another visit to North Korea
two years ago. In his official residence (Kantei) on the evening
of April 28 in 2004, Prime Minister Koizumi was with Fukuda and
Foreign Ministry's Deputy Foreign Minister (then) Hitoshi Tanaka.
Koizumi said: "I am thinking about another visit to North Korea.
I heard that Pyongyang has indicated a willingness to allow eight
abductees and their family members to go back to Japan."

The Foreign Ministry heard that Isao Iijima, a secretary to the
prime minister, was working to break the impasse in relations
with North Korea by using his personal ties with a senior member
of the General Federation of Korean Residents in Japan (Chosen
Soren). The senior member reportedly was winning North Korean
chief Kim Jong Il's confidence.

Fukuda, who placed emphasis on a formal route through the Foreign
Ministry, asked the prime minister: "What route are you going to
use?" But the prime minister's reply was that "disclosing it is
impossible." This reply was humiliating for Fukuda. He repeatedly
asked Koizumi to cancel the planned second visit to North Korea.

On May 7, Fukuda suddenly left the post of chief cabinet
secretary for his failure in having paid into the mandatory state

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pension plan. On May 22, the prime minister visited Pyongyang,
and Fukuda's remark turned to be a declaration of breaking off
his relationship with the prime minister.

Meanwhile, the prime minister has begun to reveal his favor of
supporting Abe as his successor since he appointed Abe as chief
cabinet secretary in the cabinet reshuffle last October. On the
even of the reshuffle, the prime minister made a phone call to
LDP Acting Chief Cabinet Secretary Abe, saying: "You visited
South Korea, didn't you? I would like you to come to Kantei at
10:00 am tomorrow to report on the tour."

The prime minister explained to Abe, who arrived at Kantei, about
his plan to award the post of chief cabinet secretary to him. A
close aide to the prime minister said: "Keeping him close at
hand, the prime minister intends to have Mr. Abe learn how the
prime minister should perform."

Yasukuni issue triggered discord between Koizumi, Fukuda

Relations between Prime Minister Junichiro Koizumi and former
Chief Cabinet Secretary Yasuo Fukuda have cooled down since
Koizumi's visit to Yasukuni Shrine. It was Koizumi, however, who
paved the way for Fukuda to assume office as chief cabinet

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secretary in the Mori administration.

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Following the demise of his father, Koizumi ran in the House of
Representatives election in 1969 but failed to win a seat. Until
he was elected for the first time in 1972, he had commuted to
former Prime Minister Takeo Fukuda's residence in Nozawa, Tokyo,
as his secretary. Koizumi and his son, Yasuo Fukuda, were on
first-name terms. When Hidenao Nakagawa resigned as chief cabinet
secretary in the Mori cabinet, Koizumi as chairman of the Mori

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faction recommended Prime Minister Mori to pick Fukuda as
successor to Nakagawa.

Relations between the two, however, began to cool, set off by
Prime Minister Koizumi's first visit to Yasukuni Shrine in 2001.
In the election campaigning in April of the same year, Koizumi
put up "paying homage at Yasukuni Shrine on August 15" as a
campaign pledge.

China, however, fiercely reacted to the prime minister's plan to
visit Yasukuni Shrine on Aug. 15. Seriously taking a report from
Ambassador to China Koreshige Anami noting: "If he is determined
to pay homage, he should go sometime other than Aug. 15;
otherwise, relations between Japan and China will inevitably be
affected seriously."

Anami added in the letter: "Should the prime minister visit the
shrine on Aug. 15, his administration might collapse. The prime
minister will no longer be unable to carry out reforms, including
the privatization of postal services and the reform of the Japan
Highway Public Corporation. All his reform plans will be dashed."
But the prime minister's determination was firm.

Then Lower House Speaker Tamisuke Watanuki also tried to find way
out of the impasse. The prime minister later ousted Watanuki from
the LDP over the issue of postal privatization, but their
relations were in good shape at that time. Watanuki made the
following advice to Fukuda over the phone: "In the spring and
autumn annual celebrations, cleyera japonica is dedicated in
front of the main shrine. I want you to convey to Junchan
(Junichiro) that there is the way of providing Japanese sake in
front of cleyera japonica without entering the main chamber."

Later, though, secretary Isao Iijima called Fukuda and conveyed
the prime minister's reply that he would visit the shrine on Aug.

13. Remembering this, Watanuki grumbled: "Mr. Fukuda must have
felt dissatisfied at the reply from the prime minister's
secretary."

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The prime minister visited Yasukuni Shrine on Aug. 13, but "a
statement by the prime minister" - issued on that occasion under
Fukuda's initiative - included a plan to set up a panel to
discuss a construction of a new war-dead memorial. But the prime
minister ignored the plan, and a private advisory panel was set
up under Fukuda.

Meanwhile, Deputy Chief Cabinet Secretary Abe insisted that the
prime minister should visit the shrine on Aug. 15 and opposed
establishing a discussion panel for a new memorial facility.

The advisory panel to Fukuda worked out a plan to set up a war-
dead memorial facility, but the plan fizzled out in the end.

The presidential election will be held after a lapse of five

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years. Former LDP Secretary General Makoto Koga suggested on May
18 that a plan to separate Class-A war criminals from the
millions of war dead should be discussed. Arguments for making
Asia policy a central issue in the presidential election
campaigning can be taken as expressing support for Fukuda.

The prime minister strongly criticizes such moves, claiming: "The
government should not be in a position of being involved in the
issue." Abe also asserted: "If the Yasukuni issue is discussed as
a campaign issue for the presidential rate, the issue will be
further politicized."

(6) What underlies relations between Abe and Fukuda as rivals for
LDP presidency (Part 2): Largest faction's moves unlikely to
determine trend for LDP presidential race

MAINICHI (Page 2) (Slightly abridged)
May 26, 2006

Prime Minister Junichiro Koizumi held a meeting with Mikio Aoki,
head of the Liberal Democratic Party (LDP) caucus in the House of
Council, on the evening of May 8, after a party executive meeting
in the Diet building. In response to Aoki's remark: "I want you
to fully discuss this matter with Mr. Mori (former Prime Minister
Yoshiro Mori)," Koizumi replied: "I know. I am scheduled to visit
Kanazawa (Mori's electoral district) shortly. Once there, I am
going to talk with him about it." Later, the prime minister
invited Mori on the phone to dine with him, but they were unable
to adjust their schedules.

The Mori faction (chaired by Yoshiro Mori),in which Koizumi was
a member, is the LDP's largest faction with 86 members. But only
a few take the view that its moves will determine the trend for
the LDP presidential election in September, because the prime
minister speaking to reporters in Ghana on May 2 rejected the
notion of fielding a unified candidate from the faction.

Mori said he was willing to field either Chief Cabinet Secretary
Shinzo Abe or former Chief Cabinet Secretary Yasuo Fukuda, out of
concern that rivalry between Abe and Fukuda could split his
faction. In response to the prime minister's suggestion, however,
Mori decided to give up the idea of fielding a unified candidate.

The predecessor of Mori's faction is the Kishi faction set up by
Nobusuke Kishi before the LDP presidential election in 1956, when
he became prime minister. However, Mori publicly insists even
now: "Seiwakai (= Mori faction) is the Fukuda faction." Mori
thinks that the late Takeo Fukuda, Yasuo's father, is the real
founder his faction.

After Prime Minister Kishi stepped down in 1960, the Kishi
faction split into several factions, including the Fukuda
faction. Shintaro Abe, Shinzo's father, succeeded to Fukuda as
the head of the faction in 1986, which was then in its 24th year,
but Abe died in 1991. Shinzo Abe, the son, is 51 years old, while
Fukuda is 69 years old. Mori has judged it desirable to have Abe
give up his candidacy this time to keep him as an ace in the
hole.

Fukuda's recent moves seem to represent his love for his father.
He expressed eagerness on April 25 to work out a new doctrine
with Asia diplomacy as the theme. He was keeping in mind the
Fukuda doctrine that his father, Prime Minister Fukuda issued in

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1977 while reflecting on the deterioration of relations between
Japan and China in the days of the (Kakuei) Tanaka
administration.

Some LDP members, though, have reacted coolly to Fukuda's relying
on his father's name like that. Setting aside veteran politicians
who once associated with Takeo Fukuda, including Mori, many
medium-ranking or junior LDP members feel close to Abe. A senior
LDP member said: "Only a handful of members, including former
Defense Agency Director General Seishiro Eto, support Mr.
Fukuda." Abe has independently started preparations to run for
the election, saying: "It is impossible for the faction to be
united firmly."

Former Finance Minister Masajuro Shiokawa cited the conflict
between Takeo Fukuda and former Prime Minister Kakuei Tanaka in
the 1972 presidential race to succeed Eisaku Sato. At that time,
Fukuda continued to tell Shiokawa and others: "Don't move,"
expecting Sato to exert his influence. But Tanaka defeated Fukuda
by his strategy of drawing many votes from other factions.

Political analyst Hirotada Asakawa, who knows Yasuo Fukuda well,
said: "Yasuo might be expecting that the faction will field a
unified candidate through talks." On May 24, Abe expressed his
eagerness to run in the presidential election. For Fukuda, is the
option of fighting Abe now in the cards?

SCHIEFFER