DAILY SUMMARY OF JAPANESE PRESS 06/08/06

UNCLAS SECTION 01 OF 07 TOKYO 003170

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 06/08/06


INDEX:

(1) North Korea admits presence of Kim Young Nam, will allows him
to meet his mother

(2) Three scenarios on GSDF withdraw from Iraq

(3) 2006 LDP presidential race: Kochikai seems to be wanting;
Aims to run unified candidate to get support from forces in favor
of Abe

(4) Post-Koizumi race: Researching Yasuo Fukuda (Part 2) "Modest
and reserved person" gradually standing out

(5) Collapse of money game -- arrest of former Murakami Fund
president Murakami: He built a network of classmates graduating
from elite schools during the period called the lost 10 years in
Japan

ARTICLES:

(1) North Korea admits presence of Kim Young Nam, will allows him
to meet his mother

MAINICHI (Top play) (Excerpts)
June 8, 2006

Shoji Nishioka, Beijing; Akiko Horiyama, Seoul

North Korea's Cabinet Counselor Kwon Hu Ung, chief negotiator in
inter-Korea cabinet-level talks, yesterday revealed that he had
sent a notification to his South Korean counterpart, Unification
Minister Lee Jong Seok, telling him that North Korea has now
confirmed the whereabouts of Kim Young Nam, who is believed
likely to be the husband of Japanese abductee Megumi Yokota,
according to the Korean Central News Agency. This is the first
time for the North to admit to the presence of Kim Young Nam.
North Korea stated that it would allow Kim to meet his mother,
Choi Gye Wol, when she comes to North Korea as part of the family
reunion project between North and South Koreans at Kumgangsan
slated for June 19-30.

According to South Korea's Yonhap News, the South Korean
government intends to accept the North Korean proposal. Choi Gye
Wol and her daughter and Kim's elder sister, Kim Yong Ja, praised
North Korea's proposal at a news conference held in Seoul at
11:30 a.m. today and indicated their intention to visit North
Korea. The family reunion is expected to be the first since Kim
Young Nam went missing in August 1978.

The North's notification said: "We have decided to arrange a
meeting, in view of love for our fellow people and taking the
occasion of the sixth anniversary of the June 15 Declaration
(North-South Korea Joint Declaration released on June 15)." At
the same time, it demanded: "South Korea should take responsible
steps not to cause any trouble regarding the planned meeting for
the purposes of a family reunion." Pyongyang thus urged Seoul to
refrain from taking action that would irritate North Korea.

(2) Three scenarios on GSDF withdraw from Iraq

ASAHI (Page 4) (Abridged slightly)
June 8, 2006

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The government is endeavoring to determine a timetable for
pulling Ground Self-Defense Force (GSDF) troops out of the
southern Iraqi city of Samawah. But the Iraqi government is still
devoid of interior and defense ministers. There has been no
progress in the political process -- a condition for Japan's
withdrawal -- and there are no bright prospects for transferring
security duties to Iraq. It is also unclear what British and
Australian troops will do. How is Prime Minister Junichiro
Koizumi going to address the matter in his talks with US
President George W. Bush later this month? Will he be able to
issue a pullout order before stepping down at the end of
September?

A decision by the end of July for completing withdrawal before
Koizumi's term of office expires

Completing a withdrawal by the end of September is the best
scenario for the government. Koizumi wants to put an end to the
Iraq mission before stepping down from office. A withdrawal would
reportedly take two months. In order to pull the 10th GSDF
contingent in Iraq out of the country by the end of September,
Koizumi needs to issue a withdrawal order by the end of July.

But the realization of this scenario is conditioned on: (1)
filling vacant Iraqi cabinet posts, such as interior and defense
ministers; (2) a political decision in June to transfer security
duties in Samawah to Iraqi authorities; and (3) a shift in July
of British troops from Muthanna and other provinces to their base
in Basra.

If all conditions are met, Koizumi will formally announce a
withdrawal before the Japan-US summit talks to allow the defense
chief to issue an order to begin pulling out troops. The
government will also consider sending additional personnel to
help troops in Iraq pack and transport supplies for a speedy
withdrawal.

Once a GSDF pullout comes into sight, the government is likely to
decide on expanded Air Self-Defense Force activities.

On June 4, US Defense Secretary Donald Rumsfeld asked defense
chief Fukushiro Nukaga about the feasibility of an expanded ASDF
airlift mission. Nukaga responded positively, apparently in a bid
to underline Japan's continued commitment to Iraqi reconstruction
even after ground troops leave the country.

In compliance with requests from the US and the United Nations,
the government is considering flying ASDF transport planes
between Kuwait and Baghdad, Arbil and Baghdad, and Arbil and
Kuwait.

Transferring security duties a key to beginning withdrawal during
Koizumi's tenure

What would happen if Japan failed to complete a withdrawal in
Koizumi's tenure? The focus would then shift to whether Japan can
begin pulling out troops from Iraq in his tenure.

The answer to this question hinges largely on the security
situation in Iraq.

In his talks in Singapore with American, British, and Australian

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officials in charge of national defense, Nukaga asked about the
prospects of transferring security duties to Iraq. But they
failed to give him clear-cut answers, with British State Minister
for the Armed Forces Adam Ingram saying: "It is too early to
discuss prospects. Security powers must be transferred at the
right time. There is no need to hurry."

Iraqi Prime Minister Nouri al-Maliki declared a state of
emergency on May 31 following what seemed to be a clash of Shiite
forces in Basra. The situation in Iraq remains unpredictable. A
roadside bomb also exploded on May 31 in Samawah as a GSDF
motorcade passed by. In Baghdad, the death toll for the month of
May was the worst since the end of the Iraq war.

Given that the Iraqi government lacks interior and defense
ministers is unlikely to be able to take on security duties,
Koizumi may not be able to decide to pull out Japanese troops
before stepping down. With its own midterm elections coming up in
November, the US may also refuse an early transfer of security
powers for fear of rushing the withdrawals of multinational
forces.

An announcement on not extending Iraq mission, leaving decision
to Koizumi's successor

A lack of concrete steps for British and Australian troops to
leave Samawah given the chaotic security situation in Iraq would
make it difficult for Koizumi to make a withdrawal announcement
ahead of other countries.

Many government officials still think that Koizumi will pave the
way for a withdrawal in order to reduce the burden on his
successor. Not extending the basic deployment plan beyond
December 14 is also being mentioned. This would allow the
government to effectively decide on a withdrawal.

In this case, two conditions -- a transfer of security powers and
the moves of multinational forces -- may not be met. Koizumi's
successor would also be pressed to determine a timeline for
withdrawal in just two months after assuming office.

(3) 2006 LDP presidential race: Kochikai seems to be wanting;
Aims to run unified candidate to get support from forces in favor
of Abe

ASAHI (Page 4) (Full)
June 7, 2006

Four leaders from the Niwa-Koga and Tanigaki factions and the
Kono group got together on June 6 for the first time in five
years and six months. The three groups are the successors to the
former Miyazawa faction (called Kochikai). The aim of their
meeting was to avoid becoming a hunting ground in the upcoming
presidential election of the Liberal Democratic Party. They also
want to run a unified candidate, who would be supported by forces
not supporting Chief Cabinet Secretary Shinzo Abe, if possible.
However, they are undeniably bitter enemies. Whether the move
will lead to reconstruction of the distinguished Kochikai is
unknown.

Yuya Niwa, co-leader of the Niwa-Koga faction, set up the
meeting. Another co-leader, Makoto Koga, also attended the
session. The four veteran politicians got together for the first

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time after the Kato rebellion in November 2000, in which Koichi
Kato, a former LDP secretary general, called on then Prime
Minister Yoshiro Mori to step down.

Niwa said: "Junior and mid-level lawmakers have often held
meetings in an amicable manner." He indicated that the active
exchanges by the young and mid-level members brought about their
meeting.

The four participants had different motives for the meeting. The
Niwa-Koga faction, which has no potential post-Koizumi contender,
wants to field a unified candidate from "a grand Kochikai," if
possible, to prevent its members from splitting in voting.

Meanwhile, Niwa offered words of encouragement to Foreign
Minister Taro Aso of the Kono group and Finance Minister Sadakazu
Tanigaki, who heads his own faction, saying: "Both of you are
enthusiastic about the fall leadership race. I as a fellow former
faction member want you to do your best." Both Aso and Tanigaki
belong to small factions that have about 10 members. Therefore,
their support rates are low. If the three groups are merged
again, a combined Kochikai will have a membership of about 70.
They have this in mind.

Former Chief Cabinet Secretary Yasuo Fukuda, in second place in
the post-Koizumi race, has yet to clarify his position. So, the
prediction is that a Kochikai candidate will be able to obtain
votes from the anti-Abe members if Fukuda does not run in the
election.

The four leaders have started considering policy objectives. In
the meeting, they shared the view that Asia policy and the
Yasukuni Shrine issue will unavoidably become major campaign
issues in the LDP presidential race.

Koga, who also chairs the Japan Association for the Bereaved
Families of the War Dead, explained his proposal for Class-A war
criminals to be unenshrined from Yasukuni. He told the three
others: "I think a situation under which the Imperial family can
visit should be created."

Kochikai placed importance on Asia diplomacy. Chances are that a
policy outline will be formed with the establishment of a study
group comprising junior and mid-level members of the three
factions and an exchange of views between the four leaders. They
will likely to come up with a policy with Abe's hard-line stance
toward China in mind.

In a meeting of the Tanigaki faction later in the day, one member
said, "Unless Mr. Tanigaki makes clear his policy, he won't be
able to expand his support further, indicating that it would be
difficult for the three groups to field a unified candidate even
if Fukuda does not run.

After the meeting, Aso said, "It was meaningful." Tanigaki
stated, "We have decided to keep in touch."

Koga, who was reluctant to hold a meeting said, "We got together
to discuss a certain issue." The gap in their perspectives was
clear.

(4) Post-Koizumi race: Researching Yasuo Fukuda (Part 2) "Modest
and reserved person" gradually standing out

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NIHON KEIZAI (Page 2) (Abridged slightly)
June 7, 2006

A friend of then Prime Minister Takeo Fukuda asked his young son
Yasuo why he had become his father's private secretary. Yasuo
replied:

"It is important for everyone to decide on one's course of
action. Is there anyone but me who can say to my father that it's
time for him to quit? My role is to make him think about when he
should retire so that his late years will not be left tarnished."
A friend of the late Takeo Fukuda still remembers Yasuo's remark.
He made it because he did not think he ever would want to become
a politician.

Masao Fukuda, the second son of Takeo Fukuda, was considered his
father's successor, but he died in 1994. The second son was
adopted into the Yokote family that runs a distinguished old
Japanese inn in the hot-spring resort of Ikaho in Gunma
Prefecture. Masao, however, became a secretary to Takeo Fukuda
earlier than Yasuo Fukuda.

Dislike politicians

"I hate politicians; politics is third-rate work." Such were the
views of Yasuo Fukuda, then a freshman in high school, when Takeo
Fukuda was elected for the first time to the Diet. He had mixed
feelings about his father becoming a politician. Seeing his
father surrounded by newspaper reporters, he did not feel at all
to be like his father. But after witnessing his father's hard
work and great success, Yasuo gradually became interested in
politics.

In the spring of 1959, Yasuo Fukuda entered Maruzen Oil Co. He
was placed mainly in charge of buying crude oil overseas. He
reportedly found pleasure in occasionally stealing confidential
information from government officials whom he got along with.
After his company experienced the 1973 oil crisis, he keenly
sensed the limits of being in the private sector and the
importance of his country having a foreign policy.

After quitting the oil company, for which he had worked for 17
years, Yasuo Fukuda became a private secretary to his father one
month before Takeo Fukuda assumed the prime minister's post. A
senior member of Takeo Fukuda's support group in Gunma Prefecture
told the new prime minister, "You now have your successor." Takeo
Fukuda stared hard at the senior member for more than a minute.
Realizing finally that the senior member was not just being
polite, the prime minister smiled back at him. In the primary
election for the 1978 Liberal Democratic Party (LDP) presidential
race, Fukuda sought reelection but was defeated by Masayoshi
Ohira, who was backed by Kakuei Tanaka. As a result, he dropped
out of the race and stepped down from office, saying,
"Occasionally, heaven's voice comes from a strange direction." A
person close to Yasuo Fukuda said: "By that, he probably means
Yasuo's voice. He must have secretly advised his father to
resign."

Waiting for all the arrangements

Supported by his son, Takeo Fukuda was easily reelected with the
top vote when he ran in the subsequent Lower House elections. But

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the time for generational change finally arrived. At a meeting in
May 1989 of his father's support group, Yasuo Fukuda announced
that he would run in his father's stead in the Lower House
election.

Local supporters were concerned about Yasuo Fukuda's modest and
reserved personality, compared with his father, who was known for
his combative spirit. Yasuo Fukuda, however, did not change his
style. He refused to allow posters be used in the campaign in
which he was seen as smiling. He was first elected to the Lower
House in 1990 at the age of 50.

Ten years after his Diet debut, Yasuo Fukuda was appointed chief
cabinet secretary of the Mori government. He told his supporters,
who called to congratulate him: "Young people dislike a
roundabout way of saying things. We must speak frankly to them."
His supporters thought the job of government spokesperson had
changed the person.

Supporters of Yasuo Fukuda are now wondering why he is no longer
telling it straight. Perhaps he is waiting for all the pieces to
fall in place.

(5) Collapse of money game -- arrest of former Murakami Fund
president Murakami: He built a network of classmates graduating
from elite schools during the period called the lost 10 years in
Japan

YOMIURI (Page 38) (Full)
June 8, 2006

In the autumn of 1989, Yoshiaki Murakami, 46, was seen kneeling
down on the floor in the reception room of Bungei Shunju
Publisher at Kioicho, Tokyo. He was then 30 years old and in his
seventh year at the Ministry of International Trade and Industry
(MITI: now the Ministry of Economy, Trade and Industry).

"Please do not publish it. Should it be published, I must resign
my post," Murakami said.

Kazuyoshi Hanada, 63, who was then editor in chief of the weekly
magazine Shukan Bunshun, looked bewilderingly at such a Murakami,
murmuring to himself: "I can't believe a young person like him is
kneeling down on the floor before me."

What Murakami begged Hanada not to publish was a 200-page story
entitled, Horobiyuku Nippon (Falling Japan),which he had
written. The main character of the story resembles Murakami
himself. In the story, the hero played an important role in
political circles but was assassinated before fulfilling his
ambition, and this ushered in a period in Japan leading to
political and economic collapse. Murakami at first planned to
publish it as a book but just before deciding to do so, he was
told by his supervisor to kill the manuscript.

Murakami had no intention at the time to leave MITI.

"He is friendly and has a lot of nerve to try various things. He
is good at building a personal network." A former MITI official
who worked together with Murakami at the ministry for 17 years
portrayed Murakami that way.

In order to buy a commuter pass at the lowest price, Murakami

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made every effort to find a cheap commuting route. On the other
hand, when contemporaries at the ministry gathered for drinking,
Murakami often paid for it. "He was spending money absurdly in
order to buy friendship," a former colleague said, looking back
on those days.

Around 1996, Murakami had a hand as a senior researcher at the
MITI Research Institute of International Trade and Industry in
creating legislation to promote mergers and acquisitions among
firms. He intently explained to co-workers: "I want to change the
corporate climate toward stockholders." He was an active
participant in study meetings to learn from corporate executives
and scholars about the corporate systems. Through such study
meetings, Murakami became acquainted with Orix Corp. CEO (now
Chairman) Yoshihiko Miyauchi, 70, who offered a large investment
to Murakami when he founded his fund management business.

Murakami pursued an elite route from the Nada Junior/ Senior High
School to Tokyo University's Law Faculty and then MITI. His
personal network he fostered at each stage has underpinned his
activities afterwards.

Tsuyoshi Maruki, 46, who was a classmate in the junior and senior

SIPDIS
high school, was the right hand of Murakami at the Murakami Fund.
Maruki was an expert on investment at Nomura Securities and
served as deputy chief of that firm's Capital Market Department.
At one point he was on loan to MITI for two years from 1987. In
MITI Maruki was installed at the Industrial Policy Bureau where
Murakami was working. The two renewed their old friendship. Kenya
Takizawa, 45, a key officer in the Murakami Fund who started his
career as a police official and then went on to be a management
consultant and a political advisor at the US Embassy in Tokyo,
was a classmate of Murakami at Tokyo University.

Murakami's classmate network has now extended to include
politicians, for instance, Koji Matsui, 46, a House of Councilor
of the Democratic Party of Japan (Minshuto),who resigned his
post at MITI to become a politician, and Yoshimasa Hayashi, 45, a
House of Councilor belonging to the Liberal Democratic Party
(LDP) who was a classmate at Tokyo University.

One politician revealed: "I got acquainted with Mr. Murakami
through a certain lawmaker and introduced to him a corporate
manager who was willing to invest money in the Murakami Fund."
Murakami began deepening friendship with Hiroshi Mikitani, 42,
president of the Rakuten Internet moll operator through this kind
of gathering with politicians.

The Japanese economy was in a slump in the 1990s, following the
burst of the economic bubble. This decade is called the lost 10
years, during which Murakami fostered his personal network at
MITI and acquired expertise on corporate structures and laws.
Around then stock prices were falling to inconceivably lower
levels, he thought.

"It's the time to buy stocks. A rare chance has come." Looking
back on those days, Murakami so remarked.

Murakami was resolved to resign his post at MITI in his 30s, but
in actually, he left MITI in July 1999, 11 days before his 40th
birthday.

SCHIEFFER