JAPANESE MORNING PRESS HIGHLIGHTS 06//06

UNCLAS SECTION 01 OF 10 TOKYO 003491 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//06 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule Korean Peninsula issues: 4) President Roh stresses need for ROK defense capability against Japan 5) Taepodong-2 missile crisis could be prolonged 6) NPA says must assume that Taepodong-2 missile might drop on Japan Defense and security issues: 7) 50% of public positively evaluate USFJ realignment, 38% do not in Yomiuri poll 8) Defense white paper for 2006 stresses concern about North Korean missiles, China's rapid military buildup 9) LDP project team proposes Japanese-style CIA 10) LDP team proposes Cabinet-level intelligence council Iraq contributions: 11) Prime Minister Koizumi thanked by Iraq's prime minister for GSDF's contributions 12) Chief Cabinet Secretary ABE lists three conditions for eventual pullout of ASDF in Iraq 13) GSDF member who served in Iraq recounts lessons learned Foreign aid: 14) LDP expenditures reform team seeks to trim ODA outlays by 100 billion yen, cut 3 trillion yen from local public works projects 15) Foreign Minister Aso says slicing ODA program violates Prime Minister Koizumi's international commitment Political agenda: 16) Survey of 100 major companies shows preference for Yasuo Fukuda over SHINZO ABE as next prime minister 17) New Komeito to speed up party convention to September, mindful of extra Diet session in fall, by-election 18) Foreign Minister Aso stresses that prime ministerial visits to Yasukuni Shrine is a domestic issue 19) Hitachi, GE to jointly build nuclear power plant in US, the first new facility in 30 years Articles: 1) TOP HEADLINES Asahi, Mainichi, Yomiuri, Sankei & Tokyo Shimbun: 16-year-old boy arrested on suspicion of arson and killing his mother, brother, sister Nihon Keizai: Hitachi, GE receive order for construction of nuclear plant in US; first construction in 30 years 2) EDITORIALS Asahi: (1) Anniversary of the end of the battle of Okinawa: Remembering the tragedy and madness TOKYO 00003491 002 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 (2) Financial Affairs Agency: What action it will take after punishing one while giving a warning to hundreds? Mainichi: (1) Falsified quake-resistance data: Investigations do not ensure safety (2) Promotion of new entry into mail delivery service: Ideas necessary for maintenance of uniform services Yomiuri: (1) Mitsui Sumitomo Insurance: Fundamentals of insurance forgotten (2) Ruling on murder of mother and child: Special treatment for juvenile killer not permitted Nihon Keizai: (1) Taxi business needs to break away from trying to match supply and demand (2) Reliability of insurance wavering Sankei: (1) Punishment of Mitsui Sumitomo Insurance: Insurance sector needs to review its problems (2) Cloned human embryos: Difficulties must be overcome for regenerative medicine Tokyo Shimbun: (1) Mitsui Sumitomo Insurance: It's outrageous to disregard clients (2) Takamatsuzuka mural: Plan to dismantle stone chamber should be dropped 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, June 22 NIHON KEIZAI (Page 2) (Full) June 23, 2006 10:08 Met at Kantei with Economy, Trade and Industry Minister Nikai, followed by Vice METI Minister Sugiyama, and Resources and Energy Agency Director General Kodaira. 11:00 Met LDP Secretary General Takebe. 12:30 Met over lunch with BOJ Governor Fukui, Vice Governor Iwata, Finance Minister Tanigaki, Economic and Fiscal Policy Minister Yosano, and Chief Cabinet Secretary Abe. 14:29 Met Administrative Reform Minister Chuma. 15:00 Met Ambassador to the US Kato, Deputy Foreign Minister Nishida and North American Affairs Bureau chief Kawai. 16:04 Met Rotary International President Stenhammar and others. 16:33 Attended a cabinet meeting. Afterward met Foreign Minister Aso, TOKYO 00003491 003 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 Tanigaki, Nikai, Agriculture, Forestry and Fisheries Minister Nakagawa, and others. 17:33 Attended a meeting of the Council on Economic and Fiscal Policy. 18:55 Received a telephone call from Iraqi Prime Minister Maliki in the presence of MOFA Middle Eastern and African Affairs Bureau chief Yoshikawa and Defense Agency Defense Operations Bureau chief Yamazaki. 19:23 Returned to his residence. 4) Takeshima/Dokdo issue: ROK president emphasizes need for enhancement of defense capability, noting, "We need to ready ourselves for Japan's provocation" ASAHI (Page 7) (Full) June 23, 2006 Tadahisa Takatsuki, Seoul During a meeting yesterday with senior officials of the National Maritime Police Agency and others, South Korean President Roh Moo Hyun emphasized the importance of improving his country's deterrent capability in preparation for a possible clash with Japan in waters around Takeshima, referring to his country's response to the sovereignty issue over Takeshima/Dokdo islets claimed by both Japan and South Korea. The president said: "I think it's important for us to have the defensive capability to make the other side think there would be more harm than benefit in taking a provocative act." According to Blue House officials, the president noted, "We have a strong enough defensive capability to make Japan give up on the idea of taking a provocative act," adding, "What I mean is not that we will build combat capability strong enough to defeat Japan, but we will instead build military strength strong enough to deal with an unforeseen incident in the East Sea (the Sea of Japan),and if things go beyond that, politics will handle them." 5) Crisis over North Korea's Taepodong-2 could be protracted SANKEI (Page 2) (Excerpts) June 23, 2006 Ruriko Kubota, Seoul Media have reported that North Korea is preparing to launch a long-range Taepodong-2 missile. Amid the United States refusing to hold bilateral talks with North Korea, it is feared that the "missile crisis" may be protracted, as Pyongyang has begun to send, though indirectly, a message that the missile launch may come in one month or in one year. The test-firing of a missile is North Korea's most effective diplomatic leverage toward the US. Some observers take the view that North Korea may not easily use its ace in the hole. Chosen Ilbo, the organ newspaper of the General Federation of Korean Residents in Japan (Chongryon),on June 21 carried an article titled, "The story of a Taepodong-2 test-firing is a US TOKYO 00003491 004 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 fabrication." The article stated: "The US and Japan fabricated the Taepodong story with the aim of winning over world opinion to their hostile feelings (toward North Korea)." The article claimed that what everyone is watching is actually the transport rocket Baekdusan-2 and the satellite Kwangmyongsong-2. It argued that North Korea, as an autonomous country that possesses satellites, "can launch them at any time, even one month or one year later," without interference from other countries. 6) National Police Agency director general: Measures being worked out on assumption of missile debris falling on Japan SANKEI (Page 2) (Full) June 23, 2006 In connection with media reports that North Korea could be ready to test-fire a ballistic missile, National Police Agency Director General Iwao Uruma said in a press conference yesterday: "We will hammer out response measures on the assumption of a worst case involving debris or a warhead falling on Japan." Uruma remarked: "If the warhead or debris falls on Japanese territory and damage is caused, we will engage in rescue operations. In the event of such pieces falling in the mountains, it will be necessary to check for nuclear, biological, or chemical reactions. We are working out countermeasures, assuming that that the missile-launch news could cause the public to panic." 7) Poll: 50% appreciate USFJ realignment accord YOMIURI (Page 2) (Full) June 23, 2006 An estimated 50% of the Japanese public positively evaluate the Japanese and US governments for reaching agreement to realign US forces in Japan, the Yomiuri Shimbun found from its recent face-to-face nationwide public opinion survey conducted June 17-18. Negative answers accounted for 38%. The agreed realignment of US forces in Japan includes relocating Futenma airfield in Okinawa Prefecture to another location in the prefecture and redeploying US Marine Corps troops from Okinawa to Guam. In the survey, respondents were asked if they thought these realignment steps would alleviate Okinawa's base-hosting burden. In response to this question, 52% answered "no," with 36% saying "yes." As seen from these figures, negative views outnumbered positive ones. In the realignment process, Japan will pay in part for the redeployment of US Marines to Guam. Japan will also build new facilities for US military use at its own expense. In the survey, respondents were asked if they thought the government has given sufficient explanation to the public about Japan's cost sharing. Those who picked "no" totaled 87%, showing that the general public does not feel the government has fulfilled its accountability. "Yes" accounted for only 8%. 8) Defense white paper expresses concern about North Korean missiles, warns of China's military expansion TOKYO 00003491 005 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 NIOHN KEIZAI (Page 2) (Full) June 23, 2006 The Defense Agency will publish its defense white paper for 2006 in July. According to the outline released yesterday, the white paper expresses concern about North Korea's nuclear and missile development programs. North Korea is reportedly making preparations to launch a Taepodong-2 long-range ballistic missile. The white paper also warns of China's increased defense spending and military modernization and calls for China to ensure transparency. In addition, it also stresses the importance of strengthening Japan's relations with India. The white paper has a new section about "strengthening Japan-US security arrangements" that is aimed at promoting the upholding of favorable Japan-US relations. In this section, the white paper underscores the significance of realigning US forces in Japan, specifying the planned relocation of Futenma airfield to a coastal area of Camp Schwab. With North Korea and the Taiwan Straits in mind, the white paper upholds "regional stability" and plays up the US military presence. In connection with a bill to upgrade the Defense Agency to the status of a ministry, the white paper says Japan will step up its readiness for emergencies and will make positive efforts to contribute to peace and stability in the international community. 9) LDP team proposes establishment of Japanese-version of CIA to strengthen intelligence functions TOKYO SHIMBUN (Page 3) (Full) June 23, 2006 The Liberal Democratic Party's study team on enhanced national intelligence functions, chaired by former Foreign Minister Nobutaka Machimura, produced a set of proposals yesterday calling for the establishment of an external intelligence body under the Cabinet Secretariat similar to America's Central Intelligence Agency (CIA) SIPDIS or Britain's Military Intelligence 6 (MI6). The team will make the proposal to the government shortly. Based on the slaying of Japanese nationals in Iraq, the suicide of a Japanese diplomat at the Consulate General in Shanghai, and other incidents, the proposal says: "Japan's intelligence functions are weak and insufficient. Enhancing external intelligence functions is imperative." Aimed at building cooperative relations with foreign intelligence organizations, such as the CIA, the proposal calls for raising the status of the cabinet intelligence director to the level of the deputy chief cabinet secretary to place the new organ under him. Personnel form the Foreign Ministry, Cabinet Intelligence and Research Office, National Police Agency, and Defense Agency will be fostered into a group of intelligence experts. The proposal also calls for improving the law to establish the post of intelligence assistance to comprehensively evaluate intelligence under the cabinet intelligence director and to mandate the personnel to keep national secrets. 10) LDP proposes setting up cabinet-level intelligence council, training counterintelligence professionals YOMIURI (Page 2) (Full) TOKYO 00003491 006 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 June 23, 2006 The ruling Liberal Democratic Party yesterday held a meeting of its study group on Japan's consolidation of its intelligence functions. The study group, with former Foreign Minister Nobutaka Machimura presiding, worked out a report of recommendations featuring proposals to set up a cabinet-level intelligence council, which will set the direction for intelligence-gathering, and to establish an external intelligence service in the Cabinet Information Research Office. The report suggests the need for the proposed external intelligence service to be staffed with trained experts on counterintelligence and counterterrorism. The LDP will call on Prime Minister Koizumi and his successor to translate the recommendations into action. In addition, the report proposes upgrading the cabinet information officer, who heads the CIRO, to the status of a deputy chief cabinet secretary. The report also calls for the CIRO to have information SIPDIS assistant officers from other government offices and private circles collect and analyze information. In addition, the report proposes setting up an intelligence committee in both Diet chambers to oversee government intelligence activities. Committee members are required to protect secrets. Main points from LDP proposals -- Set up a cabinet-level intelligence council, including the prime minister, the foreign minister, the Defense Agency director general, and the Public Security Investigation Agency director general. -- Upgrade the Cabinet Information Officer to the status of a deputy chief cabinet secretary. The CIO briefs the prime minister and the chief cabinet secretary on intelligence-gathering activities. -- Set up an external intelligence service, which is to be staffed with trained experts, under the CIO. -- Create a common set of information security guidelines for all government ministries and agencies and establish a law requiring confidentiality. SIPDIS 11) In teleconference, Iraqi prime minister expresses gratitude to Prime Minister Koizumi for GSDF reconstruction assistance MAINICHI (Page 3) (Full) June 23, 2006 Prime Minister Junichiro Koizumi yesterday talked on the phone with Iraqi Prime Minister Maliki. Maliki expressed gratitude for Japan's reconstruction assistance via its Ground Self-Defense Force (GSDF) troops, whose pullout from Iraq has been decided on. Maliki noted, "They have left the Iraqi people with a good impression of Japan," adding, "I hope the two countries will now strengthen relations in the political, economic, and particularly investment areas, in addition to reconstruction." In response, Koizumi emphasized, "I'd like to continue assistance in a way in which the Iraqi people will appreciate that Japan helped Iraq during a difficult time via airlifting by the Air Self-Defense Force." Koizumi invited Maliki to visit Japan. 12) ABE lays down three conditions for timing of ASDF withdrawal from Iraq ASAHI (Page 4) (Full) TOKYO 00003491 007 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 June 23, 2006 Chief Cabinet Secretary SHINZO ABE yesterday made this remark about the timing of the withdrawal from Iraq of the Air Self-Defense Force (ASDF),which will expand its airlift operations in that country following the pullout of the Ground Self-Defense Force (GSDF): "We would like to properly judge and then decide based on such conditions: the state of public security, the situation involving the multinational force's efforts; and the situation involving the country's reconstruction. He indicated that in his view three of the four conditions applied to the GSDF's withdrawal applied to the ASDF's pullout, the fourth condition being progress in the political process (which has already happened). He was replying to a question from Minshuto (Democratic Party of Japan) lawmaker Kazunori Yamai in closed session of the Lower House Iraq Reconstruction Assistance Special Committee. 13) GSDF's Iraq mission of two years and a half: Interviews with returned senior GSDF officers ASAHI (Page 37) (Abridged) June 23, 2006 The Japanese government has sent a total of 5,500 Ground Self-Defense Force troops to the southern Iraqi city of Samawah on their mission in Iraq that lasted two years and a half. What the SDF troops experienced and learned from the country's first dispatch of troops to a country in combat? Should Japan continue such an overseas mission? The Asahi Shimbun asked returned senior GSDF officials and others about their experiences in Iraq. Colonel Masato Taura served as the leader of the second reconstruction support team in Samawah for seven months from August 2004 through January 2005. Sovereignty was transferred to the provisional Iraqi administration in June 2004. Battles between US forces and Islamic Shiite militants were intensifying in Najaf in August. During Taura's mission in Samawah, there were seven attacks on the GSDF camp. A shell penetrated a storage container once. One of the major duties was to negotiate with regional and tribal chiefs to fairly allot school and road repair work. Taura often presented pictures to explain priority projects, but regional chiefs always insisted that their communities should take precedence. It was not clear if attacks on the GSDF camp were directly connected to local discontent. But the day after an attack, a local came over to the camp to offer his assistance to protect the camp. But as the GSDF turned down the offer, the man simply left the camp, sneering. It remains unknown if he was the one who actually fired a shell at the GSDF camp. The GSDF contingent called it the "shell-firing business." Taura had to discuss projects with people of different culture amid the roar of artillery. What he experienced in Samawah was completely different from that of peacekeeping operations under the United Nations. He has also acquired the proper skills to handle weapons. It is critical to determine the right timing to shoot at an armed militant approaching. Taura said: "We cannot learn the right timing from papers alone. The contingent was composed of troops from across Japan and standards were established training, and that's our TOKYO 00003491 008 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 asset." Japanese troops have not fired at anyone. But should Japan continue sending troops to areas involving great risks. Taura simply said: "As an SDF officer, I cannot discuss that. We must be ready for anything in compliance with the government's order." Colonel Yuki Imaura stayed in Samawah between June and August 2004 as the leader of the second reconstruction support group. During that period, grenades landed in the GSDF camp on four occasions. Imaura noted: "The Iraq mission has opened a new door for the SDF. What we experienced in Iraq gives us confidence." 14) LDP reform panel proposes slashing spending on local public works projects by 3 trillion yen, ODA outlays by 100 billion yen YOMIURI (Page 2) (Full) June 23, 2006 The Liberal Democratic Party's Expenditure Reform Project Team started arrangements yesterday to cut the government's disbursements to local governments for their independent projects by 3 trillion yen over the five years until FY2011. In FY2006, about 23.6 trillion yen has been set aside for local independent projects based on local fiscal plans, so outlays for local projects will be reduced by 13% over five years. The amount of tax subsidies allocated to local governments in FY2011 will be set at the same level as in FY2006. In the FY2006 budget, about 760 billion yen has been earmarked for official development assistance (ODA). The LDP panel also plans to trim the ODA budget by about 100 billion yen over five years, with about a 2.8% annual drop. The average margin of reduction in the ODA budget over the past five years was 5.6%. This fiscal year's drop is half that. In a press conference yesterday, Foreign Minister Aso rapped the LDP panel's proposal, saying: "Setting negative growth for the ODA budget over the coming five years goes against the international pledge made by the prime minister." Financial aid to private educational institutions totals about 435 billion yen in the FY2006 budget. The LDP panel proposes a 1% yearly cut in the budget. 15) ODA cut plan runs contrary to the prime minister's pledge, cautions Foreign Minister Aso TOKYO SHIMBUN (Page 2) (Full) June 23, 2006 The Liberal Democratic Party's (LDP) Expenditure Reform Project Team is now looking into the possibility of cutting the government's official development assistance (ODA) budget. Commenting on the move, Foreign Minister Taro Aso during yesterday's press briefing called for a cautious approach, noting: "Prime Minister Koizumi has pledged to increase Japan's ODA by 10 billion dollars over five years and double the amount provided to Africa over three years. If Japan cuts the ODA budget, it would be sending a message contrary to what has been pledged." 16) Asahi survey of 100 major companies finds Fukuda favored over TOKYO 00003491 009 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 Abe for the next prime minister; Major companies: 15 to 12; regional business leaders: 22 to 17 ASAHI (Page 1) (Excerpt) June 23, 2006 In a questionnaire sent by the Asahi Shimbun to the top officers of 100 major companies across the nation, one of the questions asked was whom did they think was the appropriate person to be prime minister after Junichiro Koizumi. Out of the 31 companies that put down a specific name, 15 favored former Chief Cabinet Secretary Yasuo Fukuda and 12 opted for current Chief Cabinet Secretary SHINZO Abe. In a parallel survey sent to the leadership of 94 business associations, such as the chambers of commerce in 47 prefectures and regional financial institutions, of the 50 that put down a specific name, 22 chose Fukuda and 17 picked Abe. Although many companies and organizations avoided picking a specific name, it was clear that business circles have a strong preference for Fukuda, despite the high rate of public preference for ABE in opinion polls. The survey of 100 companies was carried out during June 1-16, and the regional survey during June 1-20. 17) New Komeito to speed up party convention to September to start new leadership early with eye on extraordinary Diet session, by-election ASAHI (Page 4) (Excerpt) June 23, 2006 The New Komeito at a meeting of party central executives decided to speed up the timing of its party convention that occurs once every two years to September instead of the originally scheduled October ¶14. It was judged a wise policy to allow its new executive lineup an early start given the high probability that an extraordinary Diet session will be convened at the end of September in order to deal with the many important bills now under continuing deliberation. In addition, a unified by-election will be proclaimed on October 10. 18) Prime minister's Yasukuni visits are domestic affair, says Foreign Minister Aso TOKYO SHIMBUN (Page 2) (Full) June 23, 2006 Foreign Minister Taro Aso yesterday gave a speech at the Asia Strategy Study Council led by the Niwa-Koga faction, Tanigaki faction and former Kono faction. Commenting on the prime minister's visits to Yasukuni Shrine, Aso noted: "The prime minister's Yasukuni visits are a domestic affair. I do not think that they are an international issue. I told the same thing to China." He thus stressed his thinking that the Yasukuni issue should not be made a diplomatic issue. He underscored that Japan-China relations are improving, noting: "I suggested a meeting to Foreign Minister Li Zhaoxing. He immediately agreed to do so. We will meet again next month." He took an optimistic outlook: "Since the bilateral relationship has become complicated over the past several years, it cannot be repaired immediately. However, exchange is making progress. The tensions will disappear over the mid-to long-term." TOKYO 00003491 010 OF 010 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 19) Hitachi, GE receive order to construct nuclear power plants in US; First such project in 30 years; Operation to start in 2014; Project to cost 600 billion yen NIHON KEIZAI (Top Play) (Excerpts) June 23, 2006 Hitachi will construct nuclear plants in Texas in cooperation with General Electric. The total project cost will amount to 5.2 billion dollars (approximately 600 billion yen). Construction work will likely start in 2009 and operation in 2014. Amid the prospects for an expansion of the nuclear power plant market due to the rise in crude oil prices and a subsequent trend toward revising energy policy, Toshiba purchased Westinghouse, a leading US nuclear energy company. Hitachi has strengthened ties with GE to go on the offensive in the global energy market. Since the Three Mile Island accident in 1979, no nuclear power plants have been built in the US. The one planned for Texas is going to be the first of a series, following construction authorization after a hiatus of 30 years. Hitachi and GE will receive an order for the construction of two plants, which NRG Energy, a leading US power generating and wholesaling company, plans to build in a suburb of Houston, Texas. On June 19, NRG Energy formally conveyed its plan to build nuclear power plants to the Nuclear Power Regulatory Commission, which is in charge of setting US nuclear power policy. On receiving an application for the construction of such plants with a detailed plan next year, the panel will screen the safety and feasibility of the project. The plants are a modified version of the boiling water reactor (BWR). Hitachi has a track record of having built seven units of this type of reactor (including one now under construction) in Japan, etc. Its power output per unit is 1.35 million kilowatts. Hitachi has informally received an order from NRG Energy. A formal signing of a contract for the project will likely take place next year. The two companies will work out their respective roles. Hitachi will be responsible for manufacturing and installing reactor vessels and steam turbines, the main equipment of the nuclear power plant. Since GE has become a service and engineering company in the nuclear energy business, it is expected to be responsible for negotiations with the government to obtain authorization for the project and for procuring fuel. Hitachi has supplied equipment to GE in the past, but those projects were carried out under the leadership of GE in terms of receiving orders and constructing plants. Hitachi has constructed a total of 23 nuclear power plants in Japan and Taiwan. It has a sales record of 200 billion yen a year in the nuclear-energy-related business. SCHIEFFER