JAPANESE MORNING PRESS HIGHLIGHTS 06/19/06

UNCLAS SECTION 01 OF 13 TOKYO 003368 SIPDIS SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/19/06 Index: 1) Top headlines 2) Editorials Prime Minister's weekend schedule: None Opinion polls: 3) Koizumi Cabinet support rate plunges 9 points to 41% in Mainichi poll 4) ABE support for next prime minister is up 4 points to 42% in Mainichi poll, with rival Fukuda losing ground at 19% 5) ABE pulling ahead of Fukuda even more in Nikkei poll 6) ABE the leading candidate for next premier in poll of LDP lawmakers but half remain undecided 7) 60% of the public positive about the achievements of the Koizumi Cabinet 8) 90% of local LDP party chiefs want to revise the Koizumi reform line North Korea threat: 9) Foreign Minister Aso, Ambassador Schieffer meet to discuss mutual concern over possible North Korea missile launch 10) US, Japan strengthen cooperation to constrain North Korea from launching Taepodong 2 missile 11) If North Korea launches missile, Japan will take issue to the United Nations Security Council 12) Government continues alert status about North Korea missile launch 13) US, Japan concerns about North Korea will be mentioned in joint statement at end of upcoming summit meeting Iraq reconstruction: 14) Government likely to announce on June 21 the pullout of the GSDF from Samawah, Iraq 15) Cabinet ministers to meet today on the Iraq withdrawal issue Defense issues: 16) US, Japan to announce shared values in summit statement but avoid mentioning revision of defense guidelines 17) US military excluded MSDF from communication net during Hawaii-based MD test 18) US, Japan to sign note that MD missile parts will be banned from being used for any other purpose Ozawa power: 19) Minshuto President Ichiro Ozawa to issue policy vision in August 20) Ozawa almost certain to be re-elected Minshuto president, while Komeito likely to choose Ota to replace Kanzaki as party head Articles: 1) TOP HEADLINES �0A;Asahi, Mainichi, Yomiuri, Sankei, and Tokyo Shimbun: Japan draws with Croatia 0-0 in World Cup Sunday; Advancing to the final round difficult Nihon Keizai: Survey: 97% of listed companies to change corporate charters under Corporate Law to open door to email-based board meetings TOKYO 00003368 002 OF 013 and flexible dividend policy 2) EDITORIALS Asahi: (1) North Korea must heed warning (2) Solid medical reform necessary Mainichi: (1) Eliminating gray zone the first step to normalizing money- lending industry (2) Cancer registration system deserved further Diet deliberations Yomiuri: (1) Redouble efforts to solve cancer crisis (2) Shanghai Cooperation Organization a power game in Central Asia Nihon Keizai: (1) Yokosuka's decision to accept nuclear-powered aircraft carrier commendable (2) Shanghai Cooperation Organization: Japan must be prepared against change in power balance Sankei: (1) North Korea must not launch Taepodong missile (2) Workplace must be free from indirect discrimination Tokyo Shimbun: (1) Shanghai Cooperation Organization must not be anti-US alliance (2) Science and Technology White Paper needs specific plans 3) Mainichi poll: Cabinet support rate plummets 9 points to 41%, with few expectations of Koizumi until September, when he steps down MAINICHI (Page 2) (Full) June 19, 2006 In a nationwide opinion poll carried out by this newspaper June 17-18, the support rate for the Koizumi Cabinet plummeted nine points to 41%, compared to the previous survey in May. The non- support rate increased two points to 38%, but those who answered they "had no interest" rose seven points to 20%. The results seemed to indicate that the public has little expectation of Prime Minister Junichiro Koizumi, who has indicated he will step down at the end of his term in September. The most often chosen reason for supporting the Cabinet was as before, "The way politics is being carried out seems to be changing," with a six point increase to 53%. There was an eight- point drop to 9% in those who chose, "I have expectations for new policies," the rating is now half of what it was before. The main reason for not supporting the Cabinet, with 57% choosing it, was, "I cannot feel that the economy has recovered." Regarding party support, the Liberal Democratic Party had 28% (3- point drop),and Minshuto (Democratic Party of Japan) had 21% (up a point). The New Komeito had 5% (down a point),the Japanese Communist Party, 3% (up a point),and the Social Democratic TOKYO 00003368 003 OF 013 Party, 1% (down a point). Those who supported no party rose three points to 38%. 4) ABE rises 4 points to 42% as popular favorite for next prime minister widening gap with Fukuda, who has 19% in Mainichi poll MAINICHI (Page 1) (Excerpts) June 19, 2006 The Mainichi Shimbun carried out a national opinion survey (by telephone) carried out on June 17-18, querying the public about which of the six Liberal Democratic Party (LDP) candidates they favored as the next prime minister. The top favorite was Chief Cabinet Secretary SHINZO ABE with 42%, up four points from the previous poll in May. The next favorite was former Chief Cabinet Secretary Yasuo Fukuda with 19% (down a point since the last SIPDIS time). The gap between the two has widened to 23 points. One factor influencing the number apparently is Fukuda's stance of not making it clear whether he will run in the race or not. Those in the party urging him to declare his candidacy can be expected to strengthen their calls. Other than those two, Foreign Minister Aso received 4% (up one point) and Finance Minister Tanigaki, 2% (down a point),neither changing their rating very much. Among LDP supporters, ABE had 61% support, up 7 points, and Fukuda 15%, down a point. As for the priority policy of the next prime minister, the most chosen answer was "dealing with the low birth rate/aging population crisis," with 25%, followed by "dealing with the social disparity issue," with 17%. 5) Poll: ABE support up to 41% in post-Koizumi race, Fukuda at 17%; Cabinet support slightly down to 47% NIHON KEIZAI (Page 1) (Full) June 19, 2006 Chief Cabinet Secretary SHINZO ABE has risen to 41% as the popular favorite to become the next prime minister, the Nihon Keizai Shimbun found from a public opinion survey conducted June 16-18. The figure is up 8 percentage points from the last survey in May. Yasuo Fukuda, one of Abe's predecessors, ranked second at 17%, down 4 points. The gap between the two post-Koizumi candidates has widened from 12 points to 24 points. Abe has gained more support in the post-Koizumi race. He has now clarified his de facto candidacy for the ruling Liberal Democratic Party's presidential election scheduled for this September and is now coming out with his own policy stance. This appears to have reflected the rise in popularity rating. Foreign Minister Taro Aso was at 3%. Three others-Finance Minister Sadakazu Tanigaki, Economic and Fiscal Policy Minister Kaoru Yosano, and Taro Kono were all at 1%, leveling off from the last survey. There is no change in the trend of public support centering on ABE and Fukuda. The approval rating for the Koizumi cabinet was 47%, down 2 points from the last survey. The disapproval rating rose 2 points to 41%. In the breakdown of public support for political parties, the LDP stood at 42%, down 2 points from the last survey. The leading opposition Democratic Party (DPJ or Minshuto) was at 25%, up 1 point. The DPJ has risen in public support since Ichiro TOKYO 00003368 004 OF 013 Ozawa became DPJ president. In the survey, 54% answered "yes," with 32% saying "no," when asked if they would like to see a change of government between the ruling and opposition parties. The survey was taken by Nikkei Research Inc. over the telephone on a random digit dialing (RDD) basis. For the survey, samples were chosen from among males and females, aged 20 and over, across the nation. A total of 1,505 households with one or more voters were sampled, and answers were obtained from 889 persons (59.1%). 6) Poll of LDP lawmakers; ABE takes lead over Fukuda in presidential race; Half the members have yet to decide who to support SANKEI (Page 4) (Full) June 17, 2006 Kyodo News Agency as of June 16 surveyed the current situation of the Liberal Democratic Party (LDP) regarding post-Koizumi contenders. The survey directly interviewed 403 LDP members of both Diet chambers and found that Chief Cabinet Secretary SHINZO Abe has taken the lead, garnering support of nearly 130 members from the Mori faction, to which he belongs, and from among those who are affiliated with no factions, followed by former Chief Cabinet Secretary Yasuo Fukuda, who has support from about 40 members, although he has not yet declared his candidacy. Chances are that this situation could change with about half the members or about 200 members of both the Upper and Lower House members undecided about which candidate to support. The view is strong that the Tsushima faction (35 members) led by Upper House LDP Caucus chairman Mikio Aoki and the Nikai Group led by Minister of Economy, Trade and Industry (METI) Toshihiro Nikai will act as a body. Their move will, therefore, come into the focus in the later stage of the election race. Among 86 Mori-faction members, to which both ABE and Fukuda belong, more than 40 categorically replied or hinted that they support Abe. The number of those who support Fukuda stood at below 10. About 30 members did not clarify which candidate they support. Among 74 non-faction-affiliated members, mainly those who were first elected in last year's Lower House election, about 40 revealed their support of Abe, while about 30 remain undecided. Only a few cited support of Fukuda. Most of the members of the Tsushima faction and Yamasaki faction in the Lower House have yet to clarify their voting behavior, but among those who have decided whom to support, those who support Abe exceeded those who were in favor of Fukuda. A majority of the Ibuki faction members have yet to decide whom to support, but about 10 declared their support of Abe. There are both ABE and Fukuda supporters in the Komura faction, but the number of those who support ABE topped those who support Fukuda. Supporters of Foreign Minister Taro Aso from the Kono faction, and Sadakazu Tanigaki of the Tanigaki faction, who have expressed their intention to run in the race, numbered less 20, respectively. TOKYO 00003368 005 OF 013 7) Poll: 60% give positive response to Koizumi government's achievements NIHON KEIZAI (Page 2) (Full) June 19, 2006 According to the result of an opinion poll on the achievements of the government of Prime Minister Junichiro Koizumi, 15% "highly valued," and 45% "appreciated to a certain extent." A total of 60% gave positive responses. Twenty-two% said that they did not appreciate to a certain extent and 11% said they did not appreciate the achievements at all. Compared to the outcome of a poll conducted in May, the positive response decreased by 5%age points, while the negative response increased by 9 percentage points. The reason is because the scandal involving the Social Insurance Agency and the Bank of Japan Governor's investment in the scandal-tainted Murakami Fund came to light at the end of the regular session of the Diet. 8) LDP presidential election: Officers of local chapters expect successor to Koizumi to revise his reform policy ASAHI (Top Play) (Excerpts) June 18, 2006 The Asahi Shinbun's interviews with senior officials of local chapters of the Liberal Democratic Party (LDP) found that most of them are calling for the successor to Prime Minister Koizumi to revise his structural reform policy. More than 90% of the surveyed members are calling for a correction of the present reform policy in some form or other. With the Upper House election and simultaneous local elections close at hand in 2007, local LDP members have a strong sense of alarm that it will be difficult for them to win unless the LDP under its new president deals with the gap between urban and regional districts. To a question as to whom they support, 23 chapters cited Chief Cabinet Secretary Abe. SIPDIS In the survey, the Asahi Shimbun directly interviewed secretaries general and other senior officials of 47 prefectures who are regarded as properly representing local LDP members. The daily carried out similar interviews this March, but there have been changes in the members of local chapter officers due to reelections. Regarding a four-option question on what the next LDP president should do about Prime Minister Koizumi's structural reform policy, no pollees replied that it should be continued and expanded. A total of more than 90% sought a revision, with 32 calling for a slight revision in consideration of the situation in regional districts and 12 noting that the policy should be revised extensively. 9) US would impose additional sanctions on North Korea; Foreign Minister Aso, US Ambassador to Japan Schieffer warn Pyongyang to immediately stop preparations for missile launch SANKEI (Top play) (Excerpts) June 18, 2006 Foreign Minister Taro Aso and US Ambassador to Japan Thomas TOKYO 00003368 006 OF 013 Schieffer on the evening of June 17 met at the Foreign Ministry to discuss North Korea's move to test-fire a Taepodong-2 long- range missile, and they confirmed a policy of urging North Korea to immediately put a stop to its preparations for a missile launch and quickly return to the six-party talks. They also revealed that they are warning North Korea against a missile test, noting it will be a grave issue for the international community, and Ambassador Schieffer indicated that the US is ready to impose additional sanctions on Pyongyang. Japanese and US authorities remain on high alert, taking into account the possibility that a serious situation could take place on the afternoon of June 18 or afterwards, as North Korea seems to have completed its preparations for a test launch. According to a government official, the North Korean leadership has instructed its people to fly the national flag at 2:00 p.m. on June 18 and watch a message on TV or other media in the evening. Taking this move as hinting at a possible test-launch of a missile, the government is keeping a close eye on Pyongyang's movements. Foreign Minister Aso in his talks with Ambassador Schieffer expressed concern: "Should North Korea test-fire a missile, that would threaten the peace and stability of our country as well as the international community and would be of grave concern in terms of nonproliferation of weapons of mass destruction." Aso revealed that on June 16, Japan urged North Korea through its embassy in Beijing not to proceed with plans for a missile launch. Schieffer explained that the US had directly conveyed its concern through the United Nations office in New York to North Korea. Both Aso and Schieffer shared the perception that test-firing a missile is an act that would violate the Japan-North Korea Pyongyang Declaration that stipulates a moratorium on missile launches and the Joint Statement of the six-party talks that specifies efforts to contribute to peace and stability in the East Asian region. They also discussed what action should be taken should the North fire a missile. After the meeting, Schieffer criticized North Korea's move, telling reporters: "It's a very provocative act and will isolate it from the international community further." "If the missile is fired, we'll take every possible action," he added, hinting that even UN sanctions are being considered. 10) Japan, US give stronger warning to North Korea for its preparations for missile test; SDF, USFJ now on high alert NIHON KEIZAI (Page 2) (Full) June 18, 2006 The Japanese government is now working in much closer cooperation with the United States on the diplomatic front against North Korea as there is a growing probability that Pyongyang will test- fire a long-range ballistic missile thought to be a Taepodong-2. Meanwhile, the Self-Defense Forces (SDF) and US Forces Japan (USFJ) are on high alert, mobilizing such patrol units as Aegis ships and patrol planes to the Sea of Japan. The meeting on the evening of June 19 between Foreign Minister Taro Aso and US Ambassador to Japan Thomas Schieffer took place TOKYO 00003368 007 OF 013 in response to America's sudden request for a high-level dialogue. Aso, who was outside of Tokyo, quickly returned to meet with the ambassador. Holding this sort of meeting itself can send a political message to North Korea. A careful analysis of North Korea's moves is being made in the government under the leadership of the Ministry of Foreign Affairs (MOFA),the Defense Agency (JDA),and the Cabinet Secretariat. Tokyo will "continue its efforts to urge North Korea SIPDIS to exercise self-restraint," a senior MOFA official said, but the official added there has been no other response than this: "We will convey your request to our home country." Considering this situation, the USFJ has strengthened its monitoring system by putting the observation vessel Observation Island at its Sasebo Base and also deploying the Cobra Ball RC- 135 aircraft to Kadena Air Base from the US mainland. In addition, there is information that Aegis ships have been deployed in the Sea of Japan. In line with these US moves, the SDF dispatched its Chokai Aegis ship based in Sasebo to the Sea of Japan and it also has mobilized the EP-3 multipurpose aircraft for electronic warfare and the reconnaissance aircraft to gather information. On June 17, a senior JDA official pointed out: "We are readying ourselves for a worst-case scenario of a missile launch." A senior Maritime Self-Defense Force official also indicated that the probability of a missile launch is mounting, noting: "We must stay alert." 11) If North Korea fires Taepodong-2 missile, Japan will ask UNSC to discuss sanctions YOMIURI (Page 1) (Excerpts) June 19, 2006 The government decided yesterday that if North Korea test-fired a long-range ballistic missile "Taepodong 2," Japan would ask the United Nations Security Council (UNSC) to convene to discuss economic sanctions against that country, in cooperation with the US and other major powers. Japan will also consider taking its own sanction measures, such as halting the remittance of money from Japan to North Korea, suspending trade activities, and prohibiting North Korean ships from entering Japanese ports. In a TV Asahi news program yesterday, Foreign Minister Aso said that if Pyongyang fires a Taepodong-2 missile, "Japan will strongly protest against the country and apply pressure on it under a UNSC resolution. The US is of the same view." The foreign minister also indicated an intention to discuss the issue at the G-8 foreign ministerial meeting in Moscow on June 29. The Japanese and US governments interpret a Taepodong-2 missile test as a violation of the 2002 Japan-North Korea Pyongyang Declaration, which specifies the freeze of Pyongyang's long-range missile tests, and a 1999 North Korea-US agreement. The two governments have already asked North Korea through diplomatic channels to refrain from test-firing and have also agreed that if Pyongyang ignores their demand, they will have to take a tough stance against that nation. TOKYO 00003368 008 OF 013 12) High alert against Taepodong 2 launch, government making every effort to analyze North Korea's moves YOMIURI (Page 2) (Excerpts) June 19, 2006 On high alert due to North Korea's preparations to launch a Taepodong 2 long-range ballistic missile, senior government officials continued analyzing intelligence yesterday. Assembled at the Defense Agency yesterday afternoon, such key defense officials as Defense Agency Director-General Fukushiro Nukaga, his deputy Taro Kimura, Vice Defense Minister Takemasa Moriya, and SDF Joint Staff Chief Staff Hajime Massaki analyzed North Korea's moves based on intelligence from US Navy and Maritime Self-Defense Force's Aegis vessels. As a result, they agreed to remain on high alert, although chances were slim that the North would fire the missile yesterday. Nukaga told a press conference yesterday evening: "There haven't seen any change in particular. I instructed other members to do their best to gather intelligence." The dominant view in the government is that the North's move is aimed at securing a chance for direct talks with the United States and convince Washington to remove its financial sanctions against Pyongyang, which have been in place since last September. But views are split on whether the North will actually launch the missile. 13) Japanese, US leaders in joint statement to express concern about North Korea's moves over nuclear, missile issues NIHON KEIZAI (Page 1) (Excerpts) June 19, 2006 Hiroshi Maruya, Washington North Korea appears to have completed pumping liquid fuel into a Taepodong-2 missile, according to reports. In reaction, the Japanese and US governments have started coordination to express concern about the moves in a joint statement to be issued when their leaders meet later this month. They plan to specify that if Pyongyang test-fires a long-range ballistic missile ahead of the summit, the two countries will jointly take sanctions, interpreting it as a provocative act against the international community. Prime Minister Junichiro Koizumi and US President Bush are scheduled to meet in Washington on June 29. As the top priority theme for the summit, North Korea's nuclear and missile issues are suddenly coming up. In the event that Pyongyang test-fires a missile, the two leaders will likely discuss such possibilities as referring the problem to the United Nations Security Council and sanctions by Japan, the US, and other countries concerned. Japan and the US have taken it seriously that North Korea, without returning to the six-party talks on its nuclear development programs, is making preparations to test-fire a missile. The two countries have judged it necessary for their leaders to call on North to cooperate with the international community for the sake of peace and stability in the Asia-Pacific TOKYO 00003368 009 OF 013 region. 14) GSDF mission to Samawah; Government coordinating announcement on June 21 of date of withdrawal YOMIURI (Page 2) (Full) June 19, 2006 The government is now coordinating the date of announcing the withdrawal of Ground Self-Defense troops, which are now engaged in reconstruction assistance in Samawah, Iraq. Prime Minister Koizumi will likely announce the decision on June 21 at a press conference. A government source on the 16th revealed this. The transfer of security and administrative authority over Muthana Province, which includes Samawah, from multi-national forces to the new Iraqi government is expected to be formally agreed on as early as the 20th after a decision by the new government. The GOJ has determined that it should announce the withdrawal of GSDF troops as soon as possible and start withdrawal operations. The prime minister's announcement will likely come either on the 20th or the 21st, with the 21st viewed as more likely due to such factors as the time difference with Iraq. Prior to holding that press conference, the prime minister will meet with New Komeito leader Kanzaki to convey the government's decision to pull out GSDF troops from Iraq. He also plans to hold a security meeting to order Defense Agency Director-General Nukaga and Foreign Minister Taro Aso to ensure safety during withdrawal operations. As reasons for withdrawing GSDF troops from Iraq, the prime minister is expected to cite: (1) progress of the political process with the launch of a permanent Iraqi government; (2) stable security in Muthana Province, where GSDF troops are deployed; (3) multinational forces, such as British and Australian troops, engaging in security-keeping operations in Muthana, will end their missions. The prime minister will also stress the continuation of Air Self-Defense Force's Kuwait-based operations to transport supplies to Iraq even after the withdrawal of GSDF troops. Following a request from the UN, the government intends to expand the coverage of transportation to Baghdad. Following the prime minister's announcement of the GSDF withdrawal, Defense Agency Director-General Nukaga will immediately order the withdrawal of the 10th GSDF Iraq reconstruction dispatch group operating in Iraq. He will also order the dispatch of a withdrawal assistance troop consisting of about 100 supply and transport experts. 15) Three cabinet members to discuss GSDF pullout today TOKYO SHIMBUN (Page 2) (Full) June 19, 2006 Foreign Minister Taro Aso revealed on a TV Asahi program yesterday that he would meet with Chief Cabinet Secretary SHINZO Abe and Defense Agency (JDA) Director-General Fukushiro Nukaga at the Prime Minister's Official Residence this morning to discuss when to pull out Ground Self-Defense Force (GSDF) troops from TOKYO 00003368 010 OF 013 Iraq's southern city of Samawah. Samawa is the capital of Muthanna Province. British troops are likely to announce plans for a pullout from the province as early as tomorrow after transferring security control to Iraq. Japan is making arrangements to announce a plan for a pullout of GSDF troops possibly on June 21. When asked whether the pullout would begin by the time of Prime Minister Koizumi's visit to the United States slated for late this month, Aso said: "It may occur if things go smoothly." 16) In summit statement, Japan and US likely to specify shared values but stop short of referring to revision of defense guidelines ASAHI (Page 1) (Excerpts) June 17, 2006 The governments of Japan and the United States have begun arrangements to issue in a meeting between Prime Minister Koizumi and President Bush set for June 29 a joint statement underscoring the importance of the "Japan-US alliance in a global context" to deal with terrorism and other global issues. With an emerging China in mind, the statement will stress that the two countries share a set of values, such as freedom and democracy. The statement is likely to stop short of mentioning the Defense Agency-proposed revision of the guidelines on Japan-US defense cooperation and instead confirm the implementation of the plan for US force realignment in Japan compiled this May. Chief Cabinet Secretary ABE called the last meeting with President Bush for Koizumi, whose term of office as prime minister is to expire late in September, "a wrap-up summit." The statement is likely to highlight the importance of the Japan-US alliance in wide-ranging areas, including security, diplomacy, and economics. 17) MSDF left out of US info loop in missile defense testing off Hawaii; Close cooperation dead TOKYO SHIMBUN (Top play) (Full) June 18, 2006 Japan and the United States have now released a final report of their talks over the realignment of US forces in Japan, incorporating their agreement to "cooperate closely" with each other in missile defense (MD). Nevertheless, the United States does not allow Japan to use its military communication satellites, according to informed sources. North Korea is now preparing to launch a Taepodong-2 ballistic missile. Meanwhile, the US Navy plans to test its sea-based SM-3 intercept missiles late this month with Japan's Maritime Self-Defense Force Aegis- equipped destroyer participating. The MD test, however, will end up with the MSDF being unable to exchange information with its US counterpart. The missile intercept test will be conducted off Hawaii. In this intercept test, the USS Lake Erie, an Aegis cruiser, is to detect an intermediate range ballistic missile mockup to be launched from Kauai, and the USS Shiloh, another Aegis cruiser, is to intercept that projectile with an SM-3 missile. The US Navy will TOKYO 00003368 011 OF 013 share its data with the MSDF about the flight path of a detected ballistic missile through a US military satellite communication system, or MilSat for short. However, the Kirishima, an MSDF Aegis destroyer, will be left out of the US Navy's communication network and will track the missile's path. Japanese and US Aegis ships are loaded with a large-capacity tactical information exchange system called Link 16, which enables them to exchange information online. The US Navy, however, has decided to employ the MilSat system for MD. The Kirishima, for its MilSat exploitation, needs the US Navy's permission. In addition, the MSDF Aegis ship will also have to be loaded with a decoder and a new communication system. However, the US Navy is not expected at all to let the MSDF use the MilSat system. The MSDF Aegis destroyer also cannot expect to mount these new systems on it. In 1998, North Korea launched a Taepodong missile that flew over Japan and landed in waters off Sanriku. At the time, an MSDF Aegis ship detected the projectile. The Kirishima is certain to detect a ballistic missile mockup in the SM-3 test. The MSDF has been participating in a series of US missile intercept tests. However, MD introduction is costly. Other countries therefore remain reluctant to take part in the US MD initiative. So the United States is apparently aiming to play up the MSDF's participation in MD testing. The Kirishima will be staged in waters near the US cruisers but will be left out of the US Navy's information loop. As it stands, the Kirishima's participation in the missile intercept test is a far cry from the "close cooperation" reaffirmed in the final report on the planned realignment of US forces in Japan. When Japan built its Aegis destroyers, the United States provided an Aegis system that excels in fleet air defense. However, the United States banned Japan from joining the integrated broadcast system (IBS) of the US Army, Navy, Air Force, and Marine Corps. In point of fact, the United States restricts its information to Japan in spite of their favorable relations. In the meantime, the United States also has plans to install an X- band radar system at the Air Self-Defense Force's Shariki Detachment base in Aomori Prefecture by this summer, among MD- related equipment and systems incorporated in the final report on the US military realignment. However, there is no knowing how the United States will provide Japan with intelligence detected by the X-band radar. The United States may only use Japan as an outpost convenient to defend the US mainland. 18) Japan, US to exchange notes on MD parts ASAHI (Page 4) (Full) June 17, 2006 The governments of Japan and the United States will exchange notes as early as next week allowing Japan to export missile defense system (MD) interceptor parts to be jointly developed by the two countries. Although the Japanese government regards missile parts as weapons, it defines the joint development and production of the MD system as an exception to its three principles banning weapons exports. The notes prohibit Japan and the US from using MD parts for purposes other than the original TOKYO 00003368 012 OF 013 purposes without each other's prior agreement and shifting them to a third country. The Japanese government plans to make a cabinet decision on the notes next week for Foreign Minister Taro Aso and US Ambassador to Japan Thomas Schieffer to sign them to make them official. Following this process, Japan and the United States will embark on MD development later this month. 19) Minshuto head Ozawa to formulate policy vision possibly in August, focusing on agricultural and employment issues NIHON KEIZAI (Page 2) (Excerpts) June 18, 2006 Minshuto (Democratic Party of Japan) President Ichiro Ozawa plans to compile his own basic policy -- the "Ozawa Vision" -- as early as August. The vision will include measures to improve a safety net for agricultural and employment policies, in addition to steps to promote administrative efficiency by deregulation and decentralization. Ozawa, known as a deregulation advocate, intends to highlight differences with the Koizumi reform policy, stressing a stance of correcting distortion created by the Koizumi policy, including the widening income gap. Taking particular note of the negative effects of the reform drive by Prime Minister Junichiro Koizumi, Ozawa's policy vision will focus on measures for regional revitalization and job security. Ozawa advocated the need for drafting policies without relying on bureaucrats, decentralization and deregulation in his book titled Plan to Remodel Japan, which was published in 1993. Many have noted, however, that it is difficult to see differences in policies between Ozawa and Koizumi, since Koizumi has pushed forward with similar reforms. Ozawa, therefore, aims to dig into supporters of the Liberal Democratic Party (LDP) in regional areas, as well as to gain support from unaffiliated voters. Ozawa's main basic policies Agriculture Liberalize agriculture. Introduce a new system to compensate farmers growing key agricultural products. Create a system supported by farmers and consumers. Employment Create stable employment system under which workers can enjoy both their jobs and private lives. Tax administration Basic part of the social security should be covered by consumption tax revenue. Cut the income tax rate. Abolish the tax reduction system and increase benefits. Slash the administrative expenditures and keep the consumption tax rate at the present 5% for the time being. Decentralization Abolish all subsidies from the central government offices. Local government should collect founding on their own and government should allocate them subsidies as a package. TOKYO 00003368 013 OF 013 Education / nurturing talented people Create a system under which municipalities can freely create their own programs.The state should bear responsibility for compulsory education at the end. Foreign policy/security Under the present Constitution, Japan should actively participate in UN-centered activities to contribute to the internal community. 20) Ozawa likely to be reelected as Minshuto president; Akihiro Ota most likely to be picked as Minshuto leader YOMIURI (Page 1) (Full) June 18, 2006 With the close of the regular Diet session on June 18, Minshuto (Democratic Party of Japan) and the New Komeito have stepped up their intraparty efforts to choose leaders in fall. Minshuto President Ichiro Ozawa, 64, will likely to be reelected as the party's leader in the September presidential election, while New Komeito representative Takenori Kanzaki, 62, is expected to be replaced by Acting Secretary General Akihiro Ota, 60. Ozawa is currently serving out the remainder of former President Seiji Maehara's term, which expires in September. In addition to Ozawa showing his willingness to stay on as party leader, Acting President Naoto Kan and Secretary General Yukio Hatoyama have expressed their intention of supporting him in the election. With an eye on the House of Councillors election next summer, more Minshuto members are pinning hopes on Ozawa's reputation of scoring election victories. As a result, he is highly likely to be reelected without going through an election. Ozawa is expected to announce his policy proposals for the party's basic policy platform prior to the presidential race and has already ready been working on the party management structure on the assumption he will be reelected as its leader. Since the party has been advertising that those who register as party members or supporters can vote in its presidential poll and some members have called for taking a vote, there is a possibility that young lawmakers will run in the race. However, the Kan and Hatoyama groups, and members hailing from the former Social Democratic Party have decided to support Ozawa in the race. The expectation is that Ozawa will easily win the election. Meanwhile, Kanzaki will end his term as new Komeito leader at October's party convention. Kanzaki has said that he will make a final decision after seeing the result of the Liberal Democratic Party presidential election in September. There is a possibility of his remaining in his post, but he is likely to step down since he will have served in the post over eight years. Some members supported Kazuo Kitagawa, minister of land, infrastructure and transport, but it is highly likely that Ota will be Kanzaki's successor. SCHIEFFER