JAPANESE MORNING PRESS HIGHLIGHTS 06/02/06

UNCLAS SECTION 01 OF 09 TOKYO 003025

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/02/06


Index:

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

4) Prime Minister Koizumi refuses to give speech before US
Congress

5) Government may provide "weapons" to Indonesia under ODA
program

6) KEDO laid to rest but Japan stuck with $400 million cost of
its failure

7) Foreign Minister Aso lays out news Central Asian policy

Defense issues:
8) Three suspects arrested in Samawah in connection with the
roadside bombing of GSDF convoy
9) Bill raising JDA's status to a ministry to go to the Diet on
June 9

Political agenda:
10) Strong disgruntlement in the LDP due to no Diet extension
and backlog of important bills
11) Bill to make conspiracy a crime now likely to pass the Diet
as LDP swallows Minshuto revisions
12) Mindan refuses to join Chosen Soren ceremony, causing
suspicion the groups' reconciliation may derail
13) Takenaka panel on NTT reform going nowhere in discussions
due to LDP intransigence

14) Government starts public hearings on US beef imports

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, and Nihon Keizai:
Tokyo District Public Prosecutors Office investigating Murakami
Fund suspecting insider trading of Nippon Broadcasting System
shares in violation of Securities Exchange Law

Sankei:
Book on Pingtien case to be published in Japan; Two politburo
members many have ordered discontinuation of publication; Chinese
Communist Party attempted to minimize impact overseas

Tokyo Shimbun:
Conspiracy legislation to clear Lower House today following
ruling coalition's total acceptance of Minshuto plan

2) EDITORIALS

Asahi:
(1) Fertility rate 1.25: New work styles necessary
(2) Buraku Liberation League must return to the starting point

Mainichi:
(1) Preventing suicide a national challenge
(2) Uri Party's setback: Solid North Korea diplomacy still

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essential

Yomiuri:
(1) Birthrate drops to 1.25: Shocking figure must be taken
seriously
(2) Uri's poll defeat a sign of popular discontent

Nihon Keizai:
(1) Birthrate 1.25 critical
(2) Roh administration losing momentum

Sankei:
(1) South Korean local polls: Critical decision made on Roh Moo
Hyun administration
(2) SDF team to Indonesia: Peace cooperation a top priority

Tokyo Shimbun:
(1) Stopgap measures no longer effective to rectify disparities
in relative value of votes
(2) Food safety: Stop wasting food

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 1

NIHON KEIZAI (Page 2) (Full)
June 2, 2006

08:10
Arrived at Kantei.

08:15
Met Deputy Chief Cabinet Secretary Nagase.

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

12:09
Arrived at Kantei.

12:33
Returned to his official residence.

14:03
Met at Kantei with Antigua and Barbuda Prime Minister Spencer,
with Foreign Ministry Latin American and Caribbean Affairs Bureau
Director General Sakaba and others present.

15:05
Met Science and Technology Minister Matsuda and Hitachi President
Kazuo Furukawa.

16:00
Met Senior Agriculture and Fisheries Vice Minister Miura,
Forestry Agency Director General Kawamura, and Deputy Chief
Cabinet Secretary Suzuki.

16:35
Met former Prime Minister Kaifu, former Foreign Minister
Machimura and others who once served as education minister.


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17:00
Met Cabinet Intelligence Director Mitani. Later visited the IT
Strategy Headquarters.

19:04
Had a hair cut at a barbershop in the Capital Tokyu Hotel.

20:00
Returned to his official residence.

4) Prime Minister refuses to give speech before the US Congress,
even though requested by the US; Reason for turning it down is
not clear

NIHON KEIZAI (Page 2) (Full)
Evening, June 1, 2006

It was learned today that although Prime Minister Junichiro
Koizumi was asked by the US government to give a speech before
the US Congress during his late June visit to Washington, he has
turned the offer down. A speech before a joint session of the
Congress is considered in US political circles as a formal
occasion, and there is no precedent of a Japanese prime minister
ever having given one. The Foreign Ministry is puzzled as to the
Prime Minister's motive for not accepting such an honored role.

According to a source connected to Japan-US relations, the US
government has urged him to give the speech several times, as "an
opportunity that hardly ever comes." One of the approaches came
directly from Ambassador Schieffer himself.

Reportedly, the Prime Minister has not clarified his reason for
turning the speech down. There was the case of House of
Representatives Foreign Affairs Committee Chairman Hyde
(Republican) sending a letter to Speaker Hastert expressing
concern about the Prime Minister's visit to the US while he
continues to visit Yasukuni Shrine. Some in the Japanese
government take the view that the Prime Minister "gave heed to
such moves in the US Congress."

Only three Japanese prime ministers have given speeches before
the US Congress in the postwar period: Shigeru Yoshida, Nobusuke
Kishi, and Hayato Ikeda. But there is no precedence for any prime
minister addressing a joint session of both chambers.

5) Government to provide Indonesia with "weapons" under ODA
program: three patrol boats to counter terrorism

TOKYO SHIMBUN (Page 1) (Full)
June 2, 2006

The government decided yesterday to provide Indonesia with three
patrol boats to counter terrorism and piracy. The decision was
reported to the ruling coalition's security project team. A
formal decision will be made with the approval of the ruling
coalition.

The government has categorized the three patrol boats equipped
with bulletproof glasses -- sturdier than regular vessels -- as
"weapons."

It will be the first case to provide a foreign country with

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"weapons" under the official development assistance (ODA)
program.

Japan's three weapons-export principles effectively prohibit
weapons exports. The government has reached an agreement with
Indonesia on the following conditions: (1) the patrol boats will
be used only for cracking down on terrorism and piracy and other
purposes; and (2) the boats will not be shifted to a third
country without Japan's concurrence.

In 2004, the chief cabinet secretary released a statement on the
joint development and production of missile defense saying that
the three weapons-export principles would be considered on a case-
by-case basis. The two conditions have already been applied to
cases in which Japan provided other countries with equipment to
dispose of mines and abandoned chemical weapons.

6) Issue of which country should bear 400-million-dollar loss
emerging with KEDO decision to scrap light-water project

NIHON KEIZAI (Page 2) (Full)
June 2, 2006

The Korean Energy Development Organization (KEDO) has officially
decided to scrap its light-water reactor construction project in
North Korea. Following the decision, the Japanese government will
soon launch discussion on what to do with the approximately 400-
million-dollar loss (about 45 billion yen) in funds extended to
KEDO through the Japan Bank for International Cooperation (JBIC).
Keeping in mind the extremely small possibility that Pyongyang
will make up for the loss, some officials have indicated that the
loss should be covered by taxpayers' money. Relevant government
agencies, however, are being slow to take action.

In a press conference yesterday, Senior Vice Foreign Minister
Yasuhisa Shiozaki stressed the need for the government to ask
North Korea to return the money extended to KEDO by JBIC, saying:
"It is rational to return something borrowed."

Based on a basic agreement between the US and the North in 1994,
KEDO started a project to construct two light-water reactors for
North Korea in return for its freeze of its nuclear development
programs. Japan, the US, South Korea, and Europe have joined the
project, which will cost approximately 4.6 billion dollars. South
Korea has also extended 1.135 billion dollars.

The government has attributed the cancellation of the KEDO
project to Pyongyang's breach of the basic agreement with the US.
But since the government has guaranteed the repayment of the
loans, there will be no other means but to cover the loss by
disbursing funds from the general account.

A JBIC official said: "The government has stated it would take
every possible measure, so we will establish some framework with
the Foreign Ministry and other relevant government agencies." But
the Finance Ministry remains cautious about using taxpayers'
money. With an eye on possible normalization of diplomatic
relations between Japan and North Korea sometime in the future,
some government officials suggest an idea of disposing of the
loss under arrangements for economic cooperation with the North.
A senior Foreign Ministry official commented yesterday: "A high-
level political judgment is necessary for fiscal disbursements.

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There is no need to hurry."

7) Foreign Minister Aso reveals plan to draw up promotion
measures for Central Asia

ASAHI (Page 4) (Full)
June 2, 2006

Foreign Minister Aso yesterday held a news briefing at the Japan
National Press Club and revealed that he would form the first
action plan that would include promotion measures centering on
regional cooperation in Central Asia. After consulting on this
plan at a foreign ministerial meeting of Japan, four Central
Asian nations, and Afghanistan in Tokyo set for June 5, Aso will
announce the plan.

Aso stated: "Central Asia is rich in underground natural
resources. There are clashes of interests among various forces.
Japan would like to play the role of catalyst for open regional
cooperation." Aso's plan is likely to overlap with the Shanghai
Cooperation Organization, a group consisting of Russia, China,
and four Central Asian nations, but Aso said: "There's nothing
that would cause trouble."

The plan will include measures to prevent proliferation of
terrorism and narcotics, promotion of afforestation in areas
around the Aral Sea, and improvement in transportation access
from nearby areas.

8) Iraqi authorities arrest three suspects in connection with
GSDF attack; Connection with al-Sadr suspected

YOMIURI (Page 2) (Full)
June 2, 2006

Ryoji Yanagisawa, Cairo

Iraqi security authorities have arrested three suspects in
connection with the May 31 bomb attack on a convoy composed of
Ground Self-Defense Force and Australian military vehicles in the
southern Iraqi city of Samawah, a local security source revealed
on June 1. One of them was found to have ties to hard-line Shiite
leader Muqtada al-Sadr.

The British military, which is responsible for security in
Muthanna Province (Provincial capital: Samawah),arrested another
suspect after searching houses in the eastern suburb of Samawah
in connection with the May 11 bomb attack on a vehicle contracted
by the GSDF. British commander Brown revealed the information in
a press conference on June1.

9) LDP intends to get cabinet approval of bill to upgrade JDA to
ministry status at cabinet meeting on June 9

ASAHI (Page 4) (Full)
June 2, 2006

The governing Liberal Democratic Party (LDP) and its junior
coalition partner New Komeito yesterday held a meeting of the
Project Team on Security Affairs headed by Taku Yamasaki in the
Diet. In the meeting, the LDP explained its plan to get cabinet
approval of the bill to upgrade the Defense Agency (JDA) to

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ministry status during a cabinet meeting on June 9. The New
Komeito told the LDP that it would make efforts to come up with a
conclusion about the bill in line with that schedule. Following
this move, the government intends to submit the bill to the
current Diet session, but it seems difficult to enact the bill
into law while the Diet is in session.

10) LDP unhappy with decision to carry over bills; Koizumi's
interference in Diet session "inappropriate"

YOMIURI (Page 4) (Excerpts)
June 2, 2006

With Prime Minister Junichiro Koizumi strong determination not to
extend the current Diet session, the ruling camp has now decided
that contentious bills will be carried over to the next session.
In this regard, criticism erupted yesterday in the Liberal
Democratic Party (LDP). It is extremely unusual for the prime
minister to interfere to this extent in the affairs of a Diet
session. Speculation is therefore rampant over Koizumi's
motivation.

Legislature has the right of Diet management

In a meeting yesterday afternoon of the LDP House of
Representatives members, Fumiaki Matsumoto of the Mori faction to
which Koizumi belongs, turned upon the executive, arguing: "It's
strange that the session will not be expended when important
bills are about to clear the Diet. The legislature has the right
of Diet management" All the more because successive prime
ministers said that the ruling party would decide on whether to
extend Diet sessions, Secretary General Tsutomu Takebe said, "We
accept the prime minister's view, but we will look for our own
position, as well."

In the meetings of other factions, too, many lawmakers criticized
Koizumi's move. Yuya Niwa, co-leader of the Niwa-Koga faction,
said, "I think you are unhappy since extremely important bills
have been carried over. I assume the decision was made in
consideration of the presidential election."

Six former education ministers, including former Prime Minister
Toshiki Kaifu, called yesterday at the Prime Minister's Official
Residence, to urge Koizumi to extend the session in order to pass
a bill to revise the Basic Education Law, but Koizumi turned them
down, responding: "The bills to be carried over would be able to
pass through the Diet during the next session. We should deal
with the bills with passion."

Reporters asked Koizumi last night, "Don't you think the next
government will have heavy responsibility for so many key bills?"
He just responded, "They should not take it as a burden. If the
bills are enacted, they will be seen as the achievements of the
next government."

11) Conspiracy bill to be enacted into law, with governing
parties' acceptance of revisions called for by opposition
Minshuto; Bill to clear Lower House possibly today; International
crimes to come under new legislation

TOKYO SHIMBUN (Top play) (Excerpts)
June 2, 2006

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During a directors' meeting yesterday afternoon of the Lower
House Committee on Judicial Affairs, the governing Liberal
Democratic Party (LDP) and its junior coalition New Komeito
announced that they would wholly accept the revisions called for
by the main opposition Minshuto (Democratic Party of Japan)
regarding an amendment to the Law for Punishing Organized Crimes,
commonly known as the "conspiracy bill." The amendment makes
conspiracy a crime punishable by law. The ruling parties intend
to adopt the Minshuto-initiated revisions to the conspiracy bill
by a majority from the ruling camp and Minshuto at a meeting of
the same committee today. The ruling parties gave up on enacting
the bill at one point, but the bill is now likely to be enacted
into law during the current Diet session.

Minshuto, after listening to the government's explanation
regarding the conspiracy bill at a committee meeting today, will
decide on its attitude toward the bill, including whether to
approve it or not. The government's explanation is expected to
somewhat satisfy Minshuto.

In discussing the government's conspiracy bill, the ruling
coalition and Minshuto have submitted their respective revisions.
Some have said that the government's bill and the ruling bloc's
revisions apply the crime of conspiracy too broadly. Minshuto's
revisions to the bill include: 1) Crimes subject to the law
should warrant at least five years in prison at hard labor, as
opposed to the four years stipulated by the government version,
and 2) crimes subject to this legislation should be limited to
those with international implications.

The United Nations Convention Against Transnational Organized
Crime, which aims to make conspiracy a crime, was adopted by the
UN in 2000. Japan has signed the convention, which states that
the crimes subject to punishment should not be limited to
transnational offenses.

But Minshuto claims that limiting the legislation to
international crimes would not go against the purpose and aim of
the convention. The party insists that it is possible for Japan
to indicate that some provisions will not apply to it. But the
government and the ruling parties have until recently criticized
Minshuto's position.

Analysis: Politically-motivated move with Upper House election in
mind

By Kei Sato

It became likely yesterday that the tug-of-war over the
establishment of a conspiracy bill between the ruling and
opposition parties would end in the ruling camp would wholly
accepting Minshuto's revisions to the bill, although the ruling
bloc at one point had given up on enacting the bill during the
current Diet session. The reason why the ruling parties have now
decided to wholly accept Minshuto's revisions at this point is
because they want to put a stop to Minshuto's move to continue
the battle over the conspiracy bill until the Upper House
election slated for summer of next year.

The ruling parties were gearing up to force the bill through the
Lower House Committee on Judicial Affairs during their meeting on

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May 19, but Prime Minister Junichiro Koizumi and his staff
expressed concern over the possible impact on Diet deliberations.
The ruling bloc eventually deferred taking a vote on the bill,
accepting Lower House Speaker Yohei Kono's mediation. At this
point, the option of ramming the bill through was taken off the
table.

The ruling bloc thus has no choice but to somehow reach an
agreement with Minshuto on revisions to the bill. But the problem
with Minshuto's revisions is that crimes regarded as conspiracy
are limited to organized crimes with international implications.
On this point, the ruling parties have been unable to yield, as
the United Nations Convention Against Transnational Organized
Crime says that conspiracy should not be limited to transnational
crimes.

12) Mindan passes on June 15 ceremony; Dark clouds over
reconciliation with Chongryun

ASAHI (Page 39) (Excerpts)
June 2, 2006

The pro-Seoul Korean Residents Union in Japan (Mindan) decided
yesterday to forgo taking part in the June 15 Unification
Ceremony, which will be held in Gwangju, South Korea, from June
14, to cerebrate the sixth anniversary of the summit between the
leaders of North and South Korea in 2000. Mindan made this
decision following strong objections from its regional bureaus.
The participation in the ceremony was one of the main features in
the agreement reached in the first meeting of the top leaders of
Mindan and the pro-Pyongyang General Association of Korean
Residents in Japan (Chongryun). The decision will likely have a
serious impact on the development of the two groups'
reconciliation efforts.

Yesterday, Mindan held a meeting at its central headquarters in
Minato Ward, Tokyo. Senior members of the central executive
committee and local bureaus attended the meeting. They discussed
whether the organization would take part in the June 15 Joint
Declaration Executive Japan Committee.

The memorial ceremony will be conducted jointly by the committee
made up of North and South Koreans and the committee in Japan,
which is composed of Chongryun and other organizations. Mindan
was asked at the end of April to take part. Following this, the
pro-Seoul group wrote in the May 17 joint statement that it would
attend the ceremony as a representative of the committee in
Japan.

However, objections were raised in its central committee meeting
yesterday. In the meeting, criticism focused on the fact that a
senior member of the pro-Seoul Association of Korean Unification
in Japan, which Mindan regards as "an enemy organization," chairs
the ceremonial committee in Japan. Therefore Mindan was unable to
obtain approval.

Commentary

The joint statement released by Mindan and Chongryun states that
the two groups will proactively join the ethnic movement to
realize the June 15 South and North Korea Declaration. However,
participation in the ceremony, a possible starting point for the

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reconciliation, was rejected due to internal conflict within
Mindan.

Soon after the agreement on the reconciliation was reached, the
Niigata prefectural bureau expressed displeasure, saying that it
was unbelievable. Some regional bureaus have called for a
withdrawal of the joint declaration.

13) Takenaka panel comes up with no specific plan for NTT reform
in face of LDP reaction

ASAHI (Page 11) (Excerpts)
June 2, 2006

The Telecommunications and Broadcasting Committee had indicated a
strong determination to carry out NTT reform, saying that it
would not regard anything as a taboo. But the panel now has
failed to come up with any specific measures. In the face of a
strong reaction from the Liberal Democratic Party and NTT, the
panel is likely to put the matter on hold. The organization of
NTT, though, has been strained, as remarkable technical
renovation is going on in the telecommunications industry. Under
such a situation, NTT reform debate, which was started after NTT
was privatized in 1985, is unlikely to die down.

Presenting four plans three weeks ago, including one for
completely splitting the organization, the Takenaka panel came up
with this conclusion: "It is necessary at least to separate the
function of access networks (local phone circuits) from the
organization."

14) Government starts public hearings on US beef imports

ASAHI (Page 4) (Slightly abridged)
June 2, 2006

On the issue of whether to resume US beef imports, the government
started public hearings with consumers, with one in Sendai
yesterday. Japan imposed a second ban on US beef imports this
January,. The ban has left some of imported beef stored in
freezers or refrigerators at port facilities in the nation. If
Japan decides to resume US beef imports and finds no problem with
the stored product in inspections, the government will approve
their import, too. According to an industrial association, more
than 1,000 tons of beef are in storage, and that beef is expected
to be the first shipment of imports.

In the hearing, the government explained additional safeguard
measures, such as a strengthened quarantine system to have
Japanese inspectors to check products at meat-processing
facilities in the US based on a provided list of export-
authorized products.

According the US government's re-inspections, however, no faults
were found only in 10 out of the 35 plants with licenses to ship
beef. The government also disclosed this fact to consumers.

SCHIEFFER