JAPANESE MORNING PRESS HIGHLIGHTS 01/25/06

UNCLAS SECTION 01 OF 07 TOKYO 000381

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 01/25/06
Part-2
Index:


11) USDA Penn's comparing auto accidents to beef safety rubs
consumers the wrong way

12) Minshuto head Maehara protests US beef incident in meeting
with USDA's Penn

13) Japanese food industry, supermarkets stuck with stocks of un-
sellable beef, seek to return it to US

14) Prime Minister's Diet replies on beef, USFJ realignment,
diplomacy, Constitution, and ODA

15) Prime Minister Koizumi denies responsibility for backing
candidate in last election who was arrested for stock scams

16) Prime Minister Koizumi corrects earlier statement about
responsibility for backing arrested Livedoor president in last
year's election

17) Opposition's Maehara attacks Minister Takenaka for
campaigning last year on behalf of Livedoor President Horie, now
under arrest for stock scams

18) LDP planning to crack down on stock market loopholes leading
to scams

19) JDA official responsible for USFJ realignment negotiations
suddenly transferred from post

20) New Naha DFAB chief Sato will tackle USFJ realignment
coordination

Articles:

11) "BSE risk lower than getting into an auto accident", says US
Under Secretary of Agriculture Penn, but remark rubs consumers
wrong way

YOMIURI (Page 2) (Full)
January 25, 2006

US Under Secretary of Agriculture J.B. Penn, who is in Japan for
bureau-chief level talks on the issue of the ban on US beef
imports, made this remark during a press conference at the US
Embassy: "The risk of catching BSE is far lower than getting into
an auto accident. I believe that Japanese consumers will make the
right decision."

Just at the time when sloppy handling of exports of beef with
attached backbones, a specified risk material, was discovered,
Under Secretary Penn in his briefing compared BSE to the risk of
an auto accident, which has nothing to do with food safety. His
remark is likely to provoke a strong reaction from Japanese
consumers, whose sensitivities have been rubbed the wrong way.

In the press briefing, Penn said: "I hear that Japan has already
discovered 22 cows with BSE. There have only been two found in
the US," explaining that the incidents of infected cattle in the
US was much less than that in Japan. He stressed the safety of US
beef by saying, "Although Americans consume a huge volume of

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beef, there have been no incidents of harm to their health."

12) Minshuto Maehara protests to US Under Secretary of
Agriculture over beef issue

NIHON KEIZAI (Page 2) (Full)
January 25, 2006

Minshuto (Democratic Party of Japan) head Seiji Maehara met with
US Under Secretary of Agriculture Penn at party headquarters
yesterday and criticized the mixture of specified risk materials
in a US beef shipment as "betraying Japanese people's confidence
(in US beef)."

13) Food industry annoyed with un-sellable stocks of beef,
following re-imposition of ban on US beef imports

MAINICHI (Page 8) (Slightly abridged)
January 25, 2006

Following Japan's re-imposition of a ban on the import of US
beef, supermarket chains and food processers have been
overwhelmed with over-stocked US beef. Amid growing distrust
among consumers, they find it extremely difficult to sell it
under the current situation.

Supermarkets

CGC Japan Co. (Shinjuku-ku, Tokyo),a cooperative buying company
joined by 217 supermarket chains and other companies, signed
contracts with US food processors that have a process line used
exclusively for cattle bound for Japan, The company has already
imported about 13 tons of beef and also planned to import about
13 tons weekly to put such beef on shelves at 25 supermarkets,
some of which had put on sale on a trial basis. But the company
retrieved all their inventories. A company member expressed
concern of consumers turning away from US beef, saying: "Even if
the ban is lifted, consumers' psychological hurdle is now high."

Marunaka, a food supermarket chain operating 114 outlets in
Takamatsu and other cities, resumed the sale of US beef starting
on Dec. 26. The company received 6 tons of US beef late last year
and 8 tons early this year. Imported beef was in great demand.
But the product was removed from the shelves on Jan. 21, the day
after the government's decision to embargo US beef.

Processors

Since Japan lifted its ban on US beef imports last December,
Nippon Meat Packers Inc. has purchased 70-80 tons of beef from
the US, some of which it has already delivered to its clients.
The company is now perplexed, an executive grumbling: "There is
no way but to wait an instruction from the government." Itoham
Foods Inc. has purchased 1 ton for testing sale, but a sales
representative regrettably said: "We will have to dump it."

Beef barbecue restaurants

Zenshoku, a chain operator of about 70 beef barbecue restaurants
in the Kanto and Kansai districts, is now engaged in negotiations

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so that the 2 tons of imported beef it has purchased will be
taken back by the US through an importing agent. A spokesman of
the National Beef Barbecue Restaurant Association joined by 1,500
restaurants across the nation apparently expressed his anger at
the US blunder, saying: "The issue concerns the safety and
security of food. The US must be more serious."

14) Prime Minister Koizumi's answers to questions at plenary
sessions of both houses

MAINICHI (Page 10) (Excerpts)
January 25, 2006

The following are main points from Prime Minister Junichiro
Koizumi's answers to questions posed by each party representative
at the question-and-answer sessions yesterday of both Diet
chambers.

US beef issue

We decided on the resumption of US beef imports based on a report
compiled by the Food Safety Commission after conducting
exhaustive discussions from the scientific point of view and
hearing public views. The criticism that the decision was made
with priority given to Japan-US relations is not true. In order
to prevent a recurrence of similar incidents as well as to ensure
the people's food safety and reassure them, we have asked the
United States to investigate into the cause of the incident and
take preventive measures against a recurrence.

Realignment of US forces in Japan

On the relocation cost from Japan to Guam, no specific measures
have yet been decided at this point in time. But in terms of
maintaining a deterrent force as well as reducing the base burden
on base-hosting municipalities, I hope to see personnel based at
the US Marine Corps headquarters in Okinawa transferred to Guam
as swiftly as possible. To this end, I intend to examine
financial and other measures in cooperation with the US
government.

Asia diplomacy

In relations with South Korea, we have been conducting the joint
research on history in an effort to promote mutual understanding
about historical facts and perceptions. In relations with China,
as well, we have been discussing a plan for joint studies of
history. I will continue my effort to enhance exchanges with
(South Korea) so as to build a future-oriented relationship based
on mutual understanding and confidence.

As for relations with China, there are the differences of views
and clashes over some issues, but from a broad perspective, I
will strengthen cooperation with that country in order to build a
future-oriented relationship. I have from the start until now
indicated that I am ready to meet the top leader of that country
at anytime. It is strange, from a common-sense viewpoint, that
that country is reluctant to hold a summit meeting because of
some issues.


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Regarding the suicide of a diplomat at the Consulate in Shanghai,
following the news reports on the incident, I received reports
describing the outline of the incident and our country's
responses through the secretary and other officials. As a result
of the investigation, it has been confirmed that there were no
signs of leakage of confidential information. I will take all
possible measures for the system for preservation of
confidentiality at our diplomatic missions abroad.

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Prime minister's visits to Yasukuni Shrine

I have paid homage at Yasukuni Shrine so as to pay respect and
gratitude to all the war dead who in our country's history since
the Meiji Restoration, died for the nation against their will, as
well as out of the feeling that we must not fight a war again.

The construction cost for a new memorial facility (for the war
dead) was not earmarked in the fiscal 2006, but I am looking
forward to a heated discussion on a plan for the construction of
such a facility.

I know a variety of views exist in the US. But I have never
received criticism of my shrine visits from President Bush. I
think the US government has understood the true meaning of my
shrine visits. I will make efforts to get other countries'
understanding toward my shrine visits.

Constitutional revision

Pacifism is the basic philosophy of our Constitution. We must
firmly maintain it in the future, as well. There are various
arguments over Article 9 of the Constitution and the existence of
the Self-Defense Forces (SDF). But it is becoming international
understanding that based on pacifism, our country has played an
active part for the peace of the international community as well
as for the securing of security. On constitutional revision, my
party, Liberal Democratic Party drafted revisions to the
Constitution last November. Discussions of constitutional
revisions are going on at each party as well as in the Diet.
Through these discussions, I hope to see a national debate
enlivened and deepened on the question of what is an appropriate
Constitution in the new age.

ODA reform

International confidence and appreciation of our country stem
from our contributions of official development assistance (ODA)
to the international community. It is highly important to offer
aid in a visible manner. I will endeavor to get a deep
understanding about the meaning and importance of ODA on a
bilateral basis. I take your question as hinting that strategic
thinking is more necessary than ever in examining how to offer
ODA. I, too, agree with your indication that it is critically
important to provide assistance effectively by enhancing the
efficiency of ODA through cost reduction and also using non-
governmental organizations more often.

15) Prime Minister Koizumi: I don't mind the criticism; Denies
LDP president's responsibility for supporting suspect Horie in
Lower House election

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TOKYO SHIMBUN (Page 1) (Full)
January 25, 2006

When asked by reporters about his view on the question of whether
the Liberal Democratic Party (LDP) should bear responsibility for
supporting former Livedoor Co. President Takafumi Horie, who has
been arrested on suspicion of violating the Securities and
Exchange Law, Prime Minister Junichiro Koizumi stated yesterday
evening: "It is difficult to know all personalities of a person.
I don't mind the criticism of my view."

Koizumi, however, denied again the view that he should take
responsibility as LDP president. He stated, "I believe that the
arrest of (suspect Horie) and the Koizumi reform drive are two
separate matters."

He also said to the press corps:

"What about the fact that media treated him like a hero of the
times? (Suspect Horie) ran the election as an independent
candidate and he was not elected. Don't you think the voters were
calmer than the media?"

16) Prime Minister Koizumi says, "I bear criticism" for
supporting Horie, correcting his earlier remarks

YOMIURI (Page 2) (Full)
January 25, 2006

Asked by reporters about the fact that his ruling Liberal
Democratic Party (LDP) supported former Livedoor Co. President
Takafumi Horie in last fall's House of Representatives election,
Prime Minister Junichiro Koizumi stated yesterday: "It is
difficult to find out whether a candidate has problems or not. I
will bear criticism if some say what I said was unclear." Koizumi
had insisted that the LDP bears no moral responsibility, saying,
"The (scandal) and support of Mr. Horie by senior LDP members are
separate matters." He, however, corrected his earlier remarks in
consideration of the growing criticism of the LDP leadership.

Koizumi also stated: "What about the media that treated (suspect
Horie) as a hero of the times? Minshuto (Democratic Party of
Japan) candidates, who won Lower House seats, engaged in
misconduct. One of the party's newcomers was arrested for
possessing stimulant drugs. I think the arrest of (Horie) and the
Koizumi reform drive are separate matters." He then denied the
view that the Horie scandal would adversely affect on the Koizumi
reform initiative, which places emphasis on a market-driven
economy.

17) Minshuto to attack Takenaka at Diet session

MAINICHI (Page 5) (Full)
January 25, 2006

The ruling Liberal Democratic Party (LDP) is now trying to have
Secretary General Tsutomu Takebe alone take responsibility for

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its support of Takafumi Horie, who has been arrested, in last
year's House Representatives general election. The main

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opposition party Minshuto (Democratic Party of Japan),therefore,
intends to pursue thoroughly the LDP's relationship with Horie,
claiming that they were united as one, while grilling Heizo
Takenaka, internal affairs and communications minister, at
question-and-answer sessions regarding a supplementary budget
bill, which will begin tomorrow. Minshuto sees favorably the
LDP's decision to take countermeasures against its head Seiji
Maehara, who recently described the LDP's landslide victory as
"window-dressing."

Minshuto's taskforce on the Livedoor scandal held its first
meeting yesterday and the panel decided to grill Prime Minister
Junichiro Koizumi, Takenaka, Chief Cabinet Secretary Shinzo Abe,
who was acting secretary general at the time, and Takebe, who
supported suspect Horie in last September Lower House election,
at Lower House Budget committee session, which will start on Jan.
26 and other occasions.

In an attempt to link the scandal not only to the issue of LDP's
support of Horie but also to "criticism of the Koizumi reform
drive," the largest opposition party intends to target its attack
on Takenaka. Maehara stated at a press conference yesterday:

"Mr. Takenaka has played a leading role in stock affairs,
including liberalization of the securities market, since he was
minister in charged of financial affairs. Distortion in his
policy led to the scandal this time."

Maehara indicated the perception that the Livedoor scandal is a
distortion of the Takenaka policy line.

18) LDP to hurriedly strengthen market-monitoring system

NIHON KEIZAI (Page 2) (Excerpts)
January 25, 2006

The Liberal Democratic Party (LDP) will hold a meeting of the
Corporate Governance Committee today to discuss specific measures
to prevent a recurrence of the Livedoor incident and to
strengthen the nation's market-monitoring system. The party is
planning to increase the number of members of the Securities and
Exchange Surveillance Commission (SESC) and to introduce
regulations on investment liability partnerships offering bond
issues privately.

Secretary General Tsutomu Takebe said in an executive liaison

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meeting yesterday: "We should make utmost efforts to set up a
necessary system to make the market fair and transparent." He
thus indicated that the task of significantly strengthening the
function of the surveillance commission would be put on the
agenda.

In today's meeting, discussion was conducted on whether there are
not defects in the rules on merger and acquisition (M&A),as well
as on measures to increase the number of SESC members and future
options for the monitoring section of the Tokyo Stock Exchange.

The Financial Research Commission will also hold a meeting on
Jan. 27 to work out regulatory measures for investment liability
partnerships.

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19) Defense policy bureau deputy chief to be replaced

MAINICHI (Page 2) (Full)
January 25, 2006

The Defense Agency yesterday announced informally that it would
transfer Defense Policy Bureau Deputy Director General Chisato
Yamauchi to the post of National Defense Medical College vice
president. Yamauchi has been in charge of negotiations with the
US government over the realignment of US forces in Japan. The
transfer is seen as a de facto personnel replacement action.
Press Secretary Hironori Kanazawa will be Sato's successor.

Defense Agency Director General Fukushiro Nukaga had once made up
his mind to appoint Yamauchi to the post of Defense Facilities
Administration Agency Naha bureau director general in order to
push ahead with coordination with US forces and local governments
hosting US military bases. However, Nukaga took back the decision
because there is strong dissatisfaction among Defense Agency
officials over Yamauchi's way of negotiating and communicating.

20) Sato to become DFAA Naha bureau chief

ASAHI (Page 4) (Full)
January 25, 2006

Tsutomu Sato, a facilities investigation officer of the Defense

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Facilities Administration Agency, will be appointed to the post
of DFAA Naha bureau director general as the successor to the
incumbent, Masanori Nishi, officials said yesterday. His
appointment will shortly be announced. The Japanese and US
governments are expected to release a final report in March on
the planned realignment of US forces. With this timetable
scheduled ahead, the Defense Agency will enter into full-fledged
coordination with local governments hosting US military bases.
Sato is a noncareer official and once was long assigned to the
DFAA Naha bureau. Sato also has a large network of contacts in
Okinawa Prefecture. The agency therefore judged that he is
competent enough and is the right person for the post, according
to a senior official of the agency.

SCHIEFFER