JAPANESE MORNING PRESS HIGHLIGHTS 07/13/06

UNCLAS SECTION 01 OF 08 TOKYO 003911

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 07/13/06
Part-1
Index:
1) Top headlines

2) Editorials

3) Prime Minister's daily schedule

4) 68 PERCENT of public recognize SDF contributions to Iraq, 59
PERCENT appreciate the dispatches in Yomiuri poll
5) Mainichi survey of 158 companies finds 37 favoring Shinzo Abe,
17 favoring Yasuo Fukuda for next prime minister

6) Prime Minister Koizumi unveils new peace-supporting initiative
during Middle East tour

7) China comes up with own draft UNSC resolution critical of North
Korea, seeks compromise from US, Japan

8) Alarm in Japan that effort in the UN Security Council to slap
North Korea for missile launches going along at China's pace

9) Japan feels sense of stalemate on North Korea sanctions issue

10) Government gives a certain amount of credit to China for efforts
on North Korea, scrutinizing its draft UNSC resolution

ARTICLES:
1) TOP HEADLINES

Asahi, Mainichi, and Yomiuri:
China, Russia to circulate draft resolution on North Korea at UNSC

Nihon Keizai:
Bank of Japan to end zero-interest-rate policy tomorrow

Sankei:
Japan rejects France's proposal of "two-step approach" to North
Korea

Tokyo Shimbun:
Former Mizutani Kensetsu Co. chairman arrested

2) EDITORIALS

Asahi:
(1)Didn't Toyota neglect safety?
(2)Growing superpower India suffering from terrorist attacks

Mainichi:
(1)Presidents of four postal services companies decided: Political
responsibility is still grave
(2)Has Prime Minister Koizumi lost political energy?

Yomiuri:
(1)North Korea will be puffed up with delay in adoption of UNSC
resolution
(2)Competitive tender bid should be breakthrough to review
"government jobs"

Nihon Keizai:
(1)Japan should show its presence through Middle East diplomacy
(2)Terrorist attack on the core of India's economy

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Sankei:
(1)Adoption of UNSC resolution needed
(2)Government should support four postal corporation presidents
responsibly

Tokyo Shimbun:
(1)Toyota ignored defects: Safety important above anything else
(2)India-Pakistan relations should be improved without yielding to
terrorism

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 11

NIHON KEIZAI (Page 2) (Full)
July 13, 2006

Night:
Arrived at Ben Gurion Airport in Tel Aviv, Israel. Spent an
overnight at the David Citadel Hotel.

July 12

Morning:
Toured the Holocaust Memorial.
Attended a welcome reception at the prime minister's office. Held
talks with Prime Minister Ehud Olmert.
Afterward held a joint press conference at the prime minister's
official residence
Noon:
Attended a luncheon meeting hosted by Prime Minister Olmert.
Afternoon:
Held talks with Israeli and Palestinian youths at the David Citadel
Hotel.
Evening:
Met President Moshe Katzav at his office.
Met Foreign Minister Tzipi Livni and persons familiar with
Japan-Israel relations at the David Citadel Hotel.

4) Poll: 68 PERCENT see SDF as helpful to Iraq reconstruction, 59
PERCENT positive about deployment

YOMIURI (Page 2) (Abridged)
July 13, 2006

The Yomiuri Shimbun conducted a face-to-face nationwide public
opinion survey on July 8-9, in which respondents were asked if they
thought the Self-Defense Forces' activities in Iraq contributed to
Iraq's reconstruction. In response to this question, "yes,"
including "very much" and "somewhat," totaled 68 PERCENT , with "no"
reaching 28 PERCENT . As seen from the figures, positive answers
markedly outnumbered negative ones. In the survey, respondents were
also asked about the Koizumi cabinet's sending of SDF troops to
Iraq. In response, positive answers accounted for 59 PERCENT ,
showing an increase of 8 percentage points over the 51 PERCENT
rating in this April's survey.

Questions & Answers

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(Figures shown in percentage.)

Q: The government has decided to withdraw Ground Self-Defense Force
personnel engaged in humanitarian assistance activities in Iraq. In
addition, the government has also decided to continue and expand the
scope of the Air Self-Defense Force's backup activities including
airlift missions. Do you support the Koizumi cabinet's sending of
SDF members to Iraq for humanitarian reconstruction assistance?

Very much 19.0
Somewhat 39.9
Not very much 23.7
Not at all 13.9
No answer (N/A) 3.4

Q: How much do you think the SDF has contributed to Iraq's
reconstruction?

Very much 14.6
Somewhat 53.0
Not very much 22.1
Not at all 5.5
N/A 4.9

Q: Japan has deployed SDF members in Iraq for humanitarian
reconstruction assistance. Do you support Japan's continued sending
of SDF members overseas for humanitarian reconstruction assistance?

Yes 23.1
Yes to a certain degree 27.2
No to a certain degree 23.6
No 22.3
N/A 3.8

Polling methodology
Date of survey: July 8-9.
Subjects of survey: 3,000 persons chosen from among all eligible
voters throughout the country (at 250 locations on a stratified
two-stage random sampling basis).
Method of implementation: Door-to-door visits for face-to-face
interviews.
Number of valid respondents: 1,867 persons (62.2 PERCENT ).

5) 37 firms pick Abe, 17 firms prefer Fukuda for next premiership

MAINICHI (Page 1) (Abridged)
July 13, 2006

The Mainichi Shimbun conducted a questionnaire survey of 158 leading
companies' top executives and asked them to give the name of the
politician they thought would be appropriate for the next prime
minister. In response to this question, 37 companies picked Chief
Cabinet Secretary Shinzo Abe, with 17 companies choosing Yasuo
Fukuda, one of Abe's predecessors in the CCS post.

The survey was conducted from late June through early July, and
answers were obtained from 144 companies. Abe ranked top in the
survey's popularity rating. In the business community, an increasing
number of top executives are also pinning their hopes on Abe, who

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has been leading all other post-Koizumi candidates in various public
opinion surveys. Among other politicians, three companies favored
Economic and Fiscal Minister Kaoru Yosano, with two companies naming
Finance Minister Sadakazu Tanigaki. No companies picked Foreign
Minister Taro Aso, former Liberal Democratic Party Vice President
Taku Yamasaki, or Senior Vice Justice Minister Taro Kono. Among the
responding companies, however, 80 companies withheld their answers,
apparently assuming a wait-and-see attitude.

6) Koizumi to make new Middle East peace proposal to Israeli
counterpart

TOKYO SHIMBUN (Page 1) (Full)
July 13, 2006

Mutsumi Aoki, Jerusalem

Prime Minister Junichiro Koizumi, currently visiting Israel, met
with Prime Minister Ehud Olmert on the morning of July 12, local
time, at the Prime Minister's Office and proposed creating a
"corridor to peace and prosperity" as a medium- to long-term
challenge for Japan to bring about peace in the Middle East. He then
proposed that Japan, Israel, the Palestinian Authority, and Jordan
set up a four-party council. Koizumi also urged Israel to make
efforts to reach a peace accord with the Palestinian Authority.

Koizumi stated in reference to the recent clash between the Israeli
military and Palestinian armed insurgents in the Gaza Strip: "I am
concerned about the deteriorated situation. A chain of hatred will
benefit neither Israel nor the Palestinian authority. I hope both
sides will exercise the utmost self-restraint with the aim of
co-existence and co-prosperity."

Prime Minister Olmert adamantly replied: "Israel takes a firm
position. I understand such a stance brings pain."

The "corridor to peace and prosperity" is to show Japan's
willingness to earnestly cooperate in attaining peace in the Middle
East. The concept will lead to confidence building among the
countries concerned through the promotion of economic development
that would have people enjoy the "dividend of peace."

Under this concept, the four-party council would be established and
an agricultural complex would be built on the western side of the
Jordan Valley with Japan's official development assistance (ODA)
funds. Farm products grown there would be shipped to various
places.

After meeting with Olmert, Koizumi emphasized that the concept is to
support the Middle East in a different way from that of the US and
Europe. He said that Olmert agreed to the concept, but under the
tense situation in the Middle East, it is likely to take time for it
to take shape.

Prime Minister Koizumi plans to explain this concept to Palestinian
leader Abbas and Jordan King Abdallah II, whom he will meet on July

13.

7) China to submit to UNSC its own draft resolution on North Korean

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missile launches, moving closer to Japan, US

YOMIURI (Top Play) (Almost Full)
July 13, 2006

New York, Yoshikazu Shirakawa

Chinese Ambassador to the UN Wang Guangya on the morning of July 12
(midnight on the same day, Japan time) told reporters that China
would introduce a draft resolution on North Korea's missile launches
to the UN Security Council (UNSC). The specifics of the resolution
have yet to be unveiled, but it appears to be based on the draft
presidential statement, which it had already introduced. China has
apparently been pressed to make further concessions, facing the
hard-line stance of Japan and the US, which are determined not to
accept the presidential statement proposal, and the Chinese mission
having difficulty in persuading North Korea.

Possibility of not referring to sanctions

UNSC resolutions are binding and carry more weight than presidential
statements. US Ambassador to the UN John Bolton underscored to
reporters his government's policy of aiming to adopt the sanctions
resolution sponsored by Japan, the US, and other countries. He also
praised China's move to introduce a draft resolution as a new step
forward. He noted, "If China has agreed that the UNSC needed a
resolution, it is progress."

However, Wang has thus far opposed a binding resolution that invokes
Chapter VII of the UN Charter. As such, there is a strong
possibility that the draft resolution sponsored by China does not
refer to Chapter VII, and therefore it is in fact a condemnation
resolution. The focus will now move to how to find a settlement in
line with the sanctions resolution presented by Japan, the US and
other countries, which invokes Chapter VII.

The UNSC adopts a Chapter VII resolution when it recognizes the
situation as a threat to international peace and security. The
British and French ambassadors to the UN, which are trying to find a
compromise between Japan and the US, and China and Russia, hold that
the resolution should at least define the missile launches by
Pyongyang as a threat.

8) Scope column - Japan wary about China's move over Japan-sponsored
resolution against North Korea

TOKYO SHIMBUN (Page 2) (Full)
July 13, 2006

Time goes on, leaving the fate of the resolution submitted by Japan
and some other countries to the United Nations Security Council
(UNSC) unclear. Most UNSC members still wait to see the outcome of
China's efforts to persuade North Korea, so Japan's call for an
early vote on the resolution seems unlikely to draw attention. The
Japanese government is increasingly wary about Japan losing momentum
to China, which is opposed to the resolution.

Undermining solidarity


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"This must be settled as swiftly as possible. We need to make a
decision at some point to put the resolution to a vote." This remark
came from Chief Cabinet Secretary Shinzo Abe during at a press
conference yesterday, in which he emphasized the necessity of
putting the sanctions-based resolution against North Korea to a vote
as quickly as possibly.

A vote on this resolution had been initially set for late at night
on July 10, Japan time. But China called on the UNSC to postpone
voting, citing its efforts to persuade North Korea. Many UNSC
members then thought it would be wise to wait to see what will
happen to China-North Korea negotiations; as a result, voting has
been postponed. Abe had explained: "Such talks would be given at
least 48 hours."

China-North Korea talks have run into difficulties, and their fate
still remains unknown. UNSC members aside from Japan and the United
States are beginning to look for ways to avoid voting instead of
taking a vote.

What the Japanese government is most worried about is, according to
a high-level government official, "China's moves to undermine the
solidarity of UNSC members." The resolution has been endorsed by 13
of the 15 UNSC member nations, but China wants to replace it with a
less binding chairman's statement, and it is reportedly approaching
Middle Eastern and African UNSC members in trying to undermine their
solidarity with other UNSC members. Some in the Japanese government
take the view that China-North Korea negotiations are merely a tool
to buy time to undermine that solidarity. Late last night, the news
came to the government that China would submit an alternative
resolution without binding force.

At the same time, France, which holds the UNSC presidency, on July
11 proposed a two-stage action to adopt first a tough chairman's
statement before a resolution on sanctions. Britain came around to
France's idea. Their move is apparently intended to avoid a split in
the UNSC, but it has become another cause for concern for Japan.

Close coordination confirmed

The government aims to get the resolution adopted before the Group
of Eight (G8) industrialized nations summit at St. Petersburg (St.
Petersburg Summit) starts on July 15. It continues "working on other
UNSC member nations in Tokyo and at various levels," according to
Abe.

Yesterday evening, Abe invited US Ambassador to Japan Thomas
Schieffer to the Prime Minister's Official Residence, and
afterwards, Foreign Minister Taro Aso talked to US Secretary of
State Condoleezza Rice on the phone. They have reaffirmed that Japan
and the United States would work in close cooperation for a vote on
the resolution.

Yesterday afternoon, Aso held a teleconference with French Foreign
Minister Philippe Douste-Blay and asked him to take a vote on the
resolution immediately if China-North Korea talks failed. But
Douste-Blay went no further than to say: "In order to prevent North
Korea from repeating another provocative action, it's important for
the UNSC to stand together and take a specific action." There seems

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to be no wild card available for now.

Some in the government are becoming less optimistic about an early
vote on the resolution, as a senior Foreign Ministry official said,
"(A chairman's statement) is not necessarily something
meaningless."

9) Japan unable to find an effective move over sanctions-based
resolution on North Korea, relies on US for negotiations with China,
North Korea

MAINICHI (Page 2) (Excerpts)
July 13, 2006

Nobutake Yamashita

The Japanese government appears to be at a stalemate in dealing with
North Korea's missiles. Now that diplomatic maneuvering among the
United States, China, and North Korea has begun aiming at resuming
the six-party talks, all Japan can do now is to call for an early
vote on the sanctions-based resolution against North Korea at the
United Nations Security Council (UNSC) while working in close
coordination with the US, given that Japan has difficulties in
holding direct talks with China and North Korea. At the UNSC,
France, which chairs the council, has proposed a two-stage scheme to
issue first a chairman's statement and then discuss the resolution.
China is likely to couterpropose a resolution condemning North Korea
without sanctions on the afternoon of July 12, local time. The
Japanese government is increasingly frustrated at the current
situation.

Foreign Minister Taro Aso late last night talked with US Secretary
of State Condoleezza Rice on the phone. Referring to slow progress
in China-North Korea negotiations, Aso indicated his intention to
call for a vote on the resolution before the Group of Eight (G8)
summit in St. Petersburg, Russia, which will start on July 15. But
Rice did not shift her stance of watching China's diplomatic efforts
and hinted at the possibility of making modifications to the
resolution.

Afterwards, Aso, when asked by reporters about the two-stage
proposal, dismissed it, noting, "We won't support it." All Japan can
do for now is call for an early vote on the resolution but not to
force it and work in close coordination with the United States,
which is waiting for China-North Korea talks to bear fruit.

"It's all right even if China uses its veto," someone said at a
Ministry of Foreign Affairs (MOFA) staff meeting on July 7. MOFA
then decided to aim to put the resolution to a vote on July 8, even
though China opposes it. This decision came, following the
determination that it would become more difficult to get the
resolution adopted as time passes. But later the US turned around to
wait for the outcome of China's efforts to persuade North Korea.
Japan then accepted the postponement of a vote on the resolution.

10) China proposes submission of own draft proposal; Government to
closely examine contents

YOMIURI (Page 2) (Full)

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July 13, 2006

China has indicated that it would present to the United Nations
Security Council (UNSC) its own draft resolution to impose sanctions
on North Korea for its recent missile launches. The Japanese
government now intends to closely examine its contents and then to
decide whether or not to support the Chinese resolution.

A senior Foreign Ministry official praised China's proposal to some
extent early this morning, remarking: "Given that North Korea has
not responded to China's efforts to bring it back to the six-party
talks, China might have come closer to Japan's call by upgrading a
chairman's statement to a resolution."

The government remained unwavering in its stance to seek a binding
UNSC resolution even after France came up with a proposal for a
"two-step approach." Prime Minister Junichiro Koizumi emphatically
stated in a meeting with Israeli Prime Minister Ehud Olmert
yesterday: "I hope the resolution (submitted by the United States,
Japan and other countries) will be adopted as soon as possible."
Chief Cabinet Secretary Shinzo Abe also said in a press briefing
yesterday: "Japan will continue to work with other countries
concerned to have the international community's message be expressed
in the form of a resolution."

Foreign Minister Taro Aso held a telephone conference with French
Foreign Minister Philippe Douste-Blazy last evening, in which Aso
said: "If China's diplomatic efforts end in failure, Japan will
promptly resume the process to adopt the resolution." His French
counterpart indicated a negative view about the idea of adopting the
resolution without support from China and Russia, remarking: "It is
important for the UNSC to unite in taking action."

The governments of Japan and the US agreed with China engaged in
negotiations with North Korea to put off a vote on the condition
that Pyongyang accept these three terms: North Korea should (1)
freeze missile tests; (2) unconditionally return to the negotiating
table; and (3) abide by the joint statement issued in the six-party
talks last September. The Japanese government intends to seek the
UNSC adopting the resolution if North Korea does not meet the three
conditions, based on the judgment that "North Korea will never take
a forward-looking stance unless the international community apply
pressure to it by adopting a legally binding resolution," according
to a government source.

SCHIEFFER