JAPANESE MORNING PRESS HIGHLIGHTS 07/05/06

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07/05/06 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule Opinion polls: 4) 65% of Japanese public see North Korea as threat to Japan's peace and security, 75% appreciate US-Japan security pact 5) Fuji-Sankei poll shows CCS ABE leads Fukuda in post-Koizumi race DPJ's Ozawa in Beijing: 6) Chinese President Hu avoids touching on Yasukuni issue in meeting with DPJ President Ozawa 7) Ozawa advocates Japan-US-China 'equilateral triangle' relations 8) Gist of Ozawa-Hu talks 9) China ready to improve relations in earnest 10) Ozawa meets with ex-Foreign Minister, State Councillor Tang Jiaxuan China, DPRK issues: 11) CCS ABE urges China to correct anti-Japanese education, implies pressure on North Korea 12) Prime Minister Koizumi upset at China's setting of guidelines for Yasukuni Shrine visits Political, economic, foreign topics: 13) Prime Minister Koizumi tells President Bush why he will leave office this year 14) Prime Minister Koizumi praises CCS ABE 15) GOJ to apologize to Dominican Republic emigrants 16) Many challenges left behind for GOJ spending plan 17) Tokyo Gov. Ishihara likens Beijing Olympics to Hitler's 18) BOJ likely to end zero-interest policy shortly Articles: 1) TOP HEADLINES Asahi: Government to issue prime minister's statement expressing apology to emigrants for hardships in Dominica Mainichi: Among contracts Japan Racing Association conclude with 12 family firms in which retired officials land lucrative jobs, 94% are found private ones Yomiuri & Tokyo Shimbun: Yagi gets life for killing girl; Judge: He should atone for his crimes for rest of his life, calling for careful examination when authorities consider whether he should be released on parole Nihon Keizai: BOJ rules to be reviewed to totally ban on share transactions by executives Sankei: Education and Science Ministry to give priority to assistance for research activities by doubling subsidy TOKYO 00003717 002 OF 011 2) EDITORIALS Asahi: (1) Minshuto head Ozawa expected to show persuasive policy toward China (2) In case of killing girl in Hiroshima, were deliberations conducted thoroughly? Mainichi: (1) Economic and Fiscal Policy Guideline for 2006: A host of tasks likely to be left to Koizumi successor (2) Ruling on girl-killing case: We must squarely look at mean incident Yomiuri: (1) Improvement in quality should come after cuts in number of public servants (2) In meeting with Minshuto Ozawa, Chinese President avoids Yasukuni issue Nihon Keizai: (1) Fiscal reform plans must be implemented Sankei: (1) Ozawa-Hu meeting: Japan welcomes dialogue, but ... (2) In girl-killing case, avoidance of death penalty unreasonable Tokyo Shimbun: (1) Public service reform law: private firms must be aware of need to maintain quality, be responsible for the public (2) Trials of Pol Pot faction leaders must shed light on massacre madness 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, July 3 NIHON KEIZAI (Page 2) (Full) July 4, 2006 10:15 Made a return home report at the Imperial Palace. 10:31 Handed a certificate of recommendation to a candidate-to-be for the Kagawa gubernatorial election at LDP headquarters, joined by LDP General Council Chairman Kyuma. 11:05 Attended an award ceremony for those who performed meritorious safety services at Kantei. Afterwards, met MOFA's Consular Affairs Bureau Director General Tanizaki and others. Later, met Financial Affairs Minister Yosano and others. Then met with Finance Minister Tanigaki and others. 11:50 Met with Chief Cabinet Secretary Abe. 13:28 Met with LDP Policy Affairs Research Council Chairman Nakagawa, its Deputy Chairman Amari and others. TOKYO 00003717 003 OF 011 14:23 Met with Dominican President Fernandez and others. 15:00 Met with Kyodo News Service's Senior Director Yasutaka Takeda, its Editorial Bureau Director Kenji Goto and others. 16:00 Met with Rengo (Japan Trade Union Confederation) Chairman Tsuyoshi Takagi and others, joined by Health Minister Kawasaki, Deputy Chief Cabinet Secretary Nagase, Chief Cabinet Secretary ABE and others. 16:35 Met with Urban Revitalization Headquarters' Secretariat Chief Sawai, Assistant Officer Makino and others. 17:03 Attended a meeting of the Council on Economic and Fiscal Policy. 18:16 Met with Minister for Administrative Reform Chuma. 19:02 Dined at a Hotel Okura restaurant with former Defense Agency Directors-General Taku Yamasaki, and Shigeru Ishiba, and JDA Director-General Fukushiro Nukaga and others. 21:30 Arrived at his official residence. Prime Minister's schedule, July 4 NIHON KEIZAI (Page 2) (Full) July 5, 2006 09:31 Attended a staff meeting at LDP headquarters. 10:02 Attended a cabinet meeting at Kantei, and later, attended a meeting of the Urban Revitalization Headquarters. 10:39 Made a report to the Emperor in private. 11:45 Met with incoming and outgoing Public Prosecutors-General Tadashigi and Matsuo. 13:45 Met with Chief Cabinet Secretary Abe. 14:50 Met Deputy Foreign Minister Nishida. Afterwards, met with Deputy Foreign Minister Yabunaka. 15:30 Met with Foreign Minister Aso and MOFA's Foreign Policy Bureau Director General Kono. Later, met with Securities Dealers Association of Japan Chairman Koshida. Afterwards, met with Vice Finance Minister Hosokawa and Budget Bureau Director General Fujii. TOKYO 00003717 004 OF 011 16:42 Attended a tea ceremony at the Imperial Palace. 17:58 Arrived at Kantei. 19:08 Met with leaders of Japanese media companies, such as Sankei Shimbun Chairman Takehiko Kiyohara. 20:44 Arrived at his official residence. 4) Poll: 65% see North Korea as the largest threat for Japan, 75% deem Japan-US Security Treaty as useful YOMIURI (Page 2) (Full) July 5, 2006 The Yomiuri Shimbun conducted a nationwide survey (by interview on June 17-18) asking which countries or regions, or international circumstances are perceived as the most serious threat to Japan's peace and security, with multiple replies acceptable. Of the respondents, 65% cited North Korea, followed by 43% listing activities by international terrorist groups, 37% naming China, and 33% citing the proliferation of weapons of mass destruction like nuclear weapons. Those who said the Japan-US Security Treaty has been of help for the maintenance of Japan's peace and security accounted for 75%,overtaking those who gave a negative reply with 20%. The survey results show an increasing number of people take the view that the alliance with the US is indispensable for Japan's security. Asked about a possible attack on Japan by foreign countries in the near future, 56% said it would be conceivable, while 40% denied the possibility. In a survey conducted in July 1999, 57% said yes, while 39% said no. To a question about the possibility that large-scale terrorist attacks, like the ones in the US in September 2001, could take place in Japan, 64% said they were worried, while 34% replied they didn't. In a similar survey in November 2005, 15%age points more respondents said they were worried, and those who said they weren't worried were 16 points less than in the latest survey. 5) Poll: Abe's lead over Fukuda widens in LDP presidential race; 70% call for BOJ Governor's resignation SANKEI (Page1) (Lead paragraph) July 4, 2006 The Sankei Shimbun conducted an opinion poll on politics jointly with Fuji News Network (FNN) on July1-2. The poll results showed that those who favored Chief Cabinet Secretary SHINZO Abe, 51, as Koizumi's successor increased to 44.4%,while those for former Chief Cabinet Secretary Yasuo Fukuda, 69, dropped to 19.1%. Asked if Bank of Japan Governor Toshihiko Fukui, 70, should resign over his 10-million-yen investment in the Murakami Fund, 69.5% of respondents said "yes." TOKYO 00003717 005 OF 011 6) Chinese president does not mention Yasukuni issue in meeting with DPJ head Ozawa YOMIURI (Page 1) (Full) July 5, 2006 Ryota Akatsu, Beijing The Democratic Party of Japan's (Minshuto) President Ichiro Ozawa yesterday evening met with Chinese President Hu Jintao at the Great Hall of the People in Beijing and the two agreed to establish an exchange consultative organ (tentative name) as a forum for Minshuto and the Chinese Communist Party to meet on a regular basis. According to Minshuto, Hu did not directly refer to such specific issues involving the two countries as visits to Yasukuni Shrine. While no summit has been held between Japan and China for more than one year, Hu met with a Japanese politician now again, following the one in March with former Prime Minister Hashimoto and former Foreign Minister Masahiko Komura, when the two visited China as representatives of Japan-China friendship organizations. During the talks with Ozawa, Hu stated: "China-Japan relations have stalled over the issue of historical views, but the two countries are located close to each other geographically, and the two can make up for each other in the economic area. I hope to expand friendly and cooperative relations in various areas although difficulties have yet to be removed." Ozawa told Hu: "Given differences between the two countries as well as the national traits, at times obstacles could emerge, but both of us should work together to resolve them." Ozawa also pointed out: "Promoting economic cooperation is a very good thing, but the bond relying solely on economic interests would not be strong. Japan-China relations will not be on a true course unless trust between the peoples and the leaders of the two countries are at the basis of the relationship." The meeting lasted for 45 minutes, joined by Minshuto Vice President Naoto Kan and Secretary General Yukio Hatoyama. 7) Ozawa calls for Japan-US-China equilateral triangle SANKEI (Page 1) (Excerpts) July 5, 2006 Shortly before departing for China, Minshuto (Democratic Party of Japan) President Ichiro Ozawa said, "An equilateral triangle should be formed by Japan, the United States, and China." This prompted Foreign Minister Taro Aso and Chief Cabinet Secretary SHINZO ABE to raise an objection that China is not Japan's ally. Given strained relations between Japan and China, the equilateral triangle argument has suddenly emerged mostly from anti-Koizumi forces. Appearing on a television talk show on July 2, Ozawa said: "There are no relations of trust between Japanese and Chinese lawmakers. (Japan, the United States, and China) must form an equilateral triangle with Japan serving as its pivot." On July 4, Aso criticized Ozawa's statement, saying: "Japan shares universal values only with the United States. An isosceles triangle could be possible but not an equilateral triangle." ABE also raised TOKYO 00003717 006 OF 011 an objection, saying: "Relations with China are important, but China is not Japan's ally. Japan's foreign policy is based on its alliance with the United States. An equilateral triangle is different fundamentally." 8) Main points of Ozawa-Hu talks YOMIURI (Page 4) (Full) July 5, 2006 Ryota Akatsu, Beijing The following are the main points of the meeting yesterday between Ichiro Ozawa, head of the Democratic Party of Japan (Minshuto),and Chinese President Hu Jintao. Views of Japan-China relations Ozawa: It is essential for Japan and China to keep friendly relations for Asia as well as the rest of the world. The two countries can make contributions to be noted in the history of humankind if both work together. Hu: The peoples of China and Japan suffered a great deal of causalities from (Japan's) prewar militarism. China-Japan relations have stalled over the issue of history perceptions, but geographically, the two countries are located next door to each other, and both can make up for each other in the economic area. I hope both sides will endeavor to remove political obstacles as quickly as possible and put bilateral ties on the normal track of healthy and stable development. Ozawa: Given differences between the two countries and the national traits, both sides would at times encounter obstacles. But we should resolve them by mutual efforts. Interparty exchanges Hu: China and Japan should build multidirectional, multifaceted, and multi-level relations. Ozawa: Ordinary peoples as well as politicians of the two countries need to discuss frankly and candidly. I propose establishing an exchange consultative organ (tentative name) as a forum for political leaders of the Chinese Communist Party and Minshuto to meet on a regular basis. Hu: Not only the governments of the two countries but also political parties and politicians need to make great efforts. I will promote exchanges actively and without restraint. I will assign Wang Jiarui, director for the Communist Party's external liaison affairs, as an official in charge. 9) China to get down to mending relations with Japan TOKYO SHIMBUN (Page 3) (Full) July 5, 2006 Chinese President Hu Jintao during his meeting with Ichiro Ozawa, chief of the Democratic Party of Japan (DPJ = Minshuto),noted the importance of Japan-China relations: "Japan and China must cooperate with each other. It is our duty and responsibility to do so, and it TOKYO 00003717 007 OF 011 is possible." When Hu invited delegates of seven organizations friendly to China in late March this year, he criticized Prime Minister Koizumi's visits to Yasukuni Shrine, but at the same time, he sought further assistance from Japan, frankly saying, "We would like Japan to help us so that we can further move forward." According to a source familiar with Japan-China relations, realizing that last April's anti-Japanese demonstrations were in fact anti-government activities, the Chinese leadership has begun desperately seeking ways to improve China's relations with Japan. The source also indicated: "They have also realized that they must cooperate with Japan not only in the economic field but also for the sake of its serious environmental and energy-conserving issues." China is most concerned that Koizumi's possible visit to Yasukuni in August could strongly irritate China's public opinion and rekindle anti-Japanese demonstrations. For this reason, it is making every effort to reduce the possibility of Koizumi visiting Yasukuni. Hu's accepting Minshuto delegation, including leader Ozawa, is part of such an effort. In addition, China apparently wanted to once again send a clear message to Japan that it wants to improve its relations with Japan. 10) Ozawa holds talks with Tang in Beijing YOMIURI (Page 2) (Abridged slightly) July 4, 2006 Ryota Akatsu, Beijing Minshuto (Democratic Party of Japan) President Ichiro Ozawa held talks with Chinese State Councilor and former foreign minister Tang Jiaxuan at the Diaoyutai State Guesthouse in Beijing on the night of July 3. At the outset of the meeting, Tang welcomed the leader of Japan's largest opposition party, saying, "(Ozawa's China visit) indicates that his party puts high priority on relations between China and Japan." In response, Ozawa said, "Minshuto, including myself, is aware of the importance of relations between the two countries." Acting Minshuto President Naoto Kan, who was also present at the Ozawa-Tang meeting, urged China to exercise a good influence on North Korea in connection with the six-party talks over the North's nuclear issue. In response, Tang indicated that China would deal with the matter positively, saying, "We would like to denuclearize North Korea and push ahead with the six-party talks with a resolute belief." Ozawa held talks with Wang Jiarui, head of the International Department of the Communist Party's Central Committee, on the evening of July 3. At the outset of the meeting, Wang told Ozawa that Chinese President Hu Jintao would see him on the afternoon of July 4. Wang also indicated that the Chinese Communist Party would promote exchanges with Minshuto, saying, "Exchanging views for removing obstacles to relations between China and Japan would lead to the smooth development of bilateral relations." Ozawa said in response, "We must continue developing cooperative relations based on the history of Japan's long friendly relations with China." Ozawa, who assumed the Minshuto presidency in April, chose China for TOKYO 00003717 008 OF 011 his first foreign trip as Minshuto head. 11) Chief Cabinet Secretary ABE says, "China needs to rectify anti-Japanese education," hinting at increasing pressure on North Korea NIHON KEIZAI (Page 2) (Full) July 5, 2006 In a speech yesterday at the Liberal Democratic Party's headquarters, Chief Cabinet Secretary ABE referred to China's continued refusal to hold a summit with Japan because of Prime Minister Junichiro Koizumi's repeated visits to Yasukuni Shrine, noting: "The Chinese Communist Party is trying to keep in place its current attitude with its economic growth and patriotic education. The issue won't be resolved unless the fundamental structure underlying anti-Japanese education is dealt with." ABE thus called on China to rectify its anti-Japanese education. Speaking of North Korea, ABE implied that Japan would step up pressure on it, saying: "It's not possible to negotiate with it, expecting its goodwill." "The Taepodong missile could reach America's mainland. North Korea must be well aware that (test-launching a missile) will take a very great risk," ABE added. 12) Prime Minister Koizumi: Everybody is free to visit Yasukuni Shrine YOMIURI (Page 4) (Full) July 5, 2006 Prime Minister Junichiro Koizumi expressed his annoyance with Chinese Vice Foreign Minster Wu Dawei's indication that China would go along with visits to Yasukuni Shrine by Diet members, excluding the prime minister, foreign minister and chief cabinet secretary. Koizumi told reporters last night, "Everybody is free (to visit the shrine)." Asked if he meant that China has no right to say that, Koizumi replied: "That's right. It is only natural that China should accept Yasukuni visits by Japanese lawmakers (including the prime minister)." 13) Bush asked Koizumi, "Why do you have to resign as prime minister?" MAINICHI (Page 5) (Abridged slightly) July 5, 2006 "Why are you going to quit as prime minister?" "Because my term of office will expire." Prime Minister Junichiro Koizumi introduced the above conversation he had had with President George W. Bush during his recent visit to the United States when he met a group of members representing media companies in Tokyo last night. Koizumi also quoted Bush as saying, "You can (extend your term) if you want to, can't you?" But Koizumi told him that such would not be possible. An attendee asked regarding Chief Cabinet Secretary SHINZO Abe, who is regarded as the top post-Koizumi contender, "Will he really grow TOKYO 00003717 009 OF 011 with your forcing culture-like approach?" In response, Koizumi said, "People grow with posts. He has markedly grown." Regarding former Chief Cabinet Secretary Yasuo Fukuda, who remains mum about his candidacy, the attendee also quoted Koizumi as saying, "It's good that (his true intention) is not known." Koizumi also reiterated his intention to reveal the name of a person he would support after the LDP formally announces its presidential election on September 8. 14) Prime Minister Koizumi praises ABE ASAHI (Page 4) (Full) July 5, 2006 Prime Minister Junichiro Koizumi dined last night at a Tokyo hotel with senior media company officials. Koizumi was quoted as telling them that Chief Cabinet Secretary SHINZO ABE has greatly grown up. According to one participant, Koizumi, referring to former Chief Cabinet Secretary Yasuo Fukuda, who has gained support as a post-Koizumi contender, said: "We don't know (if Fukuda will run in the race). I think that's good for now." Koizumi expressed anew that he would reveal whom he would support as his successor after the Liberal Democratic Party announces its presidential election. Regarding his serving in the prime minister's post for more than five years, Koizumi said: "I was lucky. Nobody thought this would happen and neither did I. I think common sense wins." 15) Prime Minister Koizumi to apologize in statement for Japanese emigrants to Dominica ASAHI (Top Play) (Lead para.) July 5, 2006 The government, sued by a group of Japanese emigrants to the Dominican Republic, won the lawsuit in June, but the Tokyo District Court pointed out that the then government's emigration policy was unconstitutional. Taking the court's indication seriously, the government has now started a study to release a statement by Prime Minister Koizumi expressing an apology to the emigrants. In addition to the government's apology, the statement would stipulate relief measures, including a gift of money in token of the government's sympathy up to 2 million yen. If the government obtains the emigrants' understanding, the cabinet will decide to release the statement as early as July 21 in order to put an end to the lawsuit issue. 16) Government, ruling camp adopt draft basic policy guidelines on economic and fiscal management and structural reforms, leaving unfinished tasks, including, USFJ realignment cost, social security expenses, cuts in local finances, for future MAINICHI (Page 3) (Lead paragraph) July 4, 2006 The government on July 3 adopted draft basic policy guidelines on economic and fiscal management and structural reforms, which included spending cuts up to 14.3 trillion yen for reform of revenues and expenditures, but left out the tax hike issue. The TOKYO 00003717 010 OF 011 package does not indicate specific policies for many areas, including a budget for USFJ realignment-related expenses and social security spending cuts. Since it clearly seeks to burden individuals and local governments further for fiscal reconstruction, the agenda for the post-Koizumi administration is to what extent it can persuade the people. 17) Tokyo governor in speech: "2008 Beijing Olympics seems similar to the one held by Hitler" ASAHI (Page 33) (Full) July 5, 2006 In a speech in Tokyo yesterday, Tokyo Governor Shintaro Ishihara in criticizing China commented: "The Beijing Olympics in 2008 seems similar to the political Olympics carried out in Berlin by Hitler." The theme of the speech was the joint development of medium and small jetliners with Asian countries. Touching on China in the speech, Ishihara said: "The average income (per capita) will never reach one-20th of Japan's level even 10 years from now. ... Many people suggest me not to speak ill of China because Beijing would oppose (Tokyo's possible bid to host the 2016 Olympics),but I have to speak against it. ... People there cannot drink city water because waterworks have yet to be done." 18) Government increasingly in favor of early lifting of zero interest rate policy; BOJ to judge, while monitoring stock prices NIHON KEIZAI (Page 1) (Full) July 5, 2006 An increasing number of government officials yesterday indicated a view in favor of supporting an early lifting of the zero interest rate policy by the Bank of Japan's (BOJ). Following the Bank of Japan's quarterly business survey results, released on July 3, which reported a clear uptrend of the economy, a number of officials indicated the view that conditions for removing the zero interest rate policy are beginning to be met. State Minister for Economic and Fiscal Policy Kaoru Yosano yesterday told a news conference: "It is the role of the BOJ to make such a judgment, whether it comes in July or August. I believe it will reach a judgment on its own responsibility and with insight." Commenting on cautious views voiced by some cabinet ministers, Prime Minister Junichiro Koizumi on the evening of the same day noted, "I do not think there is much difference between the two opposing views. I think it is just a matter of nuance." The government is empowered to call on the BOJ to postpone the adoption of its policy change proposal until the next policy-setting meeting. However, the outlook is that if the BOJ makes such a proposal, the government will not call on the BOJ to put on hold the proposal. In response to a growing mood among government officials for approving the removal of the zero interest rate policy, the BOJ plans to discuss the propriety of lifting such a policy at the meeting. It will monitor the movements of the US economy and stocks, and cautiously judge other conditions, including the possibility of the economy returning to a deflationary trend. TOKYO 00003717 011 OF 011 SCHIEFFER