DAILY SUMMARY OF JAPANESE PRESS 08/07/06

UNCLAS SECTION 01 OF 07 TOKYO 004431 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: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 (9) Japan-ROK joint poll: No way out of anti-Japanese sentiments in South Korea; Pro-ROK mood cools down in Japan ARTICLES: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern NIHON KEIZAI (Top Play) (Almost full) August 7, 2006 The Nihon Keizai Shimbun has conducted a survey of 100 corporate presidents and compiled the results on August 6. In the poll, 95 PERCENT of respondents replied that they saw the economy as expanding, and 44 PERCENT of them took the view that the economy would continue to expand for more than a year. More than 80 PERCENT of surveyed corporate managers cited the US economy and rising crude oil prices as matters of concern. Nearly 80 PERCENT of respondents were proactive about corporate mergers and acquisitions (M&A),which are increasing throughout the world. The poll was conducted on presidents (including chairmen) of major Japanese companies from late July through early August, and 113 replies were received. To a question on the present state of the economy, the number of pollees who replied, "expanding," dropped 3.7points from the previous survey carried out in March. However, more than 90 PERCENT of corporate pollees still see the economy as robust. Among those who replied that the economy is growing, 93.6 PERCENT replied that the expansionary trend would continue through October 2006 and on to December or beyond. Of these, 44.8 PERCENT thought the trend would continue into the July to September period of 2007. If the current economic expansion continues until November this year, marking 58th months of expansion, it wouldl top the Izanagi boom, the longest period of prosperity and rapid economic expansion in Japan (1965-1970). Most respondents are confident that the current economic expansion will top the Izanagi boom and that the trend will continue. As future matters of concern, rising prices of natural resources, such as crude oil, were cited by 86.5 PERCENT of respondents and the political and economic situations in the US by 85 PERCENT (plural replies were allowed). The number of respondents who singled out rising crude oil prices above other factors rose 37.7 points from the previous survey. The surge in crude oil prices is serving as a downside risk factor to corporate performances in the transportation and petrochemical areas. There is also a growing view that soaring gasoline prices will have an impact on the now solid trend of personal consumption. As countries whose economies are posing concern about a downturn, 77.4 PERCENT cited the US, a jump of 21.5 points from the preceding survey, largely topping Europe, cited by 6.8 PERCENT , and Japan, cited by 4.5 PERCENT . Due to the impact of the belt-tightening policy, which has been in place since 2004, investment in housing TOKYO 00004431 002 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 and personal consumption are slowing in the US. Pollees are concerned about the future of the US economy. Amid the progress of global reorganization in such sectors as steel, 71.4 PERCENT replied that they would consider M&As in a positive manner, if the offer were favorable. A total of 76.75 of respondents, combining 4.5 PERCENT , who replied that they would consider M&A proposals, if they were friendly bids, and 0.8 PERCENT , who replied that they would consider the offer, if necessary, even if they were hostile bids, view M&As in a positive manner. Regarding the aim of accepting M&As, the largest number of 73.5 PERCENT replied, "in order to strengthen weak areas in the main business line or existing businesses," followed by 69.6 PERCENT , who replied, "in order to put new projects or overseas projects on a smooth track in a short period of time." To a question on the lifting of the zero interest rate policy by the Bank of Japan, the largest number of 61.7 PERCENT said, "There will be no major impact." Though interest rates are expected to rise in the future, 84.2 PERCENT of corporate managers said they would carry out their capital investment plans for fiscal 2006 as originally planned. (9) Japan-ROK joint poll: No way out of anti-Japanese sentiments in South Korea; Pro-ROK mood cools down in Japan YOMIURI (Page 12) (Full) August 7, 2006 Questions & Answers (Figures shown in percentage) Q: What's your impression of South Korea? Japan ROK Very good 4.9 --- Good to a certain degree 38.6 --- Bad to a certain degree 39.7 --- Very bad 11.5 --- No answer (N/A ) 5.4 --- Q: What's you impression of Japan? Japan ROK Very good --- 0.2 Good to a certain degree --- 16.9 Bad to a certain degree --- 60.9 Very bad --- 21.2 N/A --- 0.8 Q: What about North Korea? Japan ROK Very good 0.3 1.3 Good to a certain degree 0.1 29.6 Bad to a certain degree 10.0 55.0 TOKYO 00004431 003 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 Very bad 88.2 12.8 N/A 1.4 1.3 Q: Which country or area do you think will pose a military threat to your country? Pick one or more from among those listed below if any. Japan ROK Japan --- 55.2 ROK 10.9 --- U.S. 17.6 32.0 China 44.0 36.0 ASEAN 0.5 0.5 EU 0.5 0.2 Russia 12.7 6.0 Taiwan 0.5 0.4 North Korea 77.7 59.1 India 2.9 0.2 Middle East 7.8 2.8 Oceania 0.3 0.1 Africa 0.3 0.2 Central & South America 0.8 0.1 Other answers (O/A) 0.2 --- Nothing in particular (NIP) 4.3 1.3 N/A 3.3 0.3 Q: Japan has sent Self-Defense Forces personnel to Iraq for humanitarian reconstruction assistance. Would you like Japan to continue its SDF deployment overseas for humanitarian reconstruction assistance? Japan ROK Yes 23.1 5.8 Yes to a certain degree 27.2 36.3 No to a certain degree 23.6 40.5 No 22.3 15.1 N/A 3.8 2.3 Q: The United Nations Security Council is currently made up of five countries-the United Sates, France, Britain, China, and Russia. For Japanese respondents: Do you think Japan should join the UNSC as a permanent member? Japan (1995) Yes 57.3 (47.4) No 17.4 (25.4) Not interested 19.3 (20.3) N/A 6.0 (6.8) For South Korean respondents: Do you think Japan should be seated on the UNSC as a permanent member? ROK (1995) Yes 12.3 (19.1) No 70.3 (48.4) Not interested 15.5 (19.5) TOKYO 00004431 004 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 N/A 1.9 (13.0) Q: The so-called Class-A war criminals, who were held responsible for the past war in the International Military Tribunal for the Far East (Tokyo Trials),are also enshrined at Yasukuni Shrine, where the war dead and others are enshrined. Is this acceptable to you? Japan ROK Yes 23.8 2.8 Yes to a certain degree 22.3 13.2 No to a certain degree 20.8 42.5 No 23.1 39.8 N/A 10.0 1.7 Q: Do you think it all right for a Japanese prime minister to pay homage at Yasukuni Shrine? Japan ROK Yes 59.8 10.0 No 35.4 85.8 N/A 4.8 4.2 Q: Do you think Japan may become a military power in the future, or do you otherwise think Japan is already a military power? Japan ROK Yes 19.0 40.9 No 71.1 37.8 Already a military power 6.4 19.9 N/A 3.5 1.4 Q (in Japan): What's your interest in Japan's relations with China and South Korea? Pick as many as you like from among those listed below. Q (in South Korea): What's your interest in South Korea's relations with Japan? Pick as many as you like from among those listed below. Japan ROK Resume mutual visits between top leaders 33.2 15.8 Yasukuni Shrine homage 37.9 42.8 Territorial row over Senkaku, Takeshima (Dokdo) isles 59.0 88.0 Joint study of history 17.1 32.5 Earth environment 22.4 8.2 Trade, economic exchanges 23.6 24.3 Economic, technological cooperation 16.6 22.9 Accepting workers from China, South Korea to Japan 7.9 5.3 Cultural, human exchanges 23.6 17.7 Sightseeing, shopping 10.6 15.0 O/A+NIP+N/A 8.4 0.5 Q: Do you think the relationship between Japan and South Korea is now in good shape, or in bad shape? TOKYO 00004431 005 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 Japan ROK Very good 3.2 0.1 Good to a certain degree 32.8 12.0 Bad to a certain degree 48.3 73.6 Very bad 11.1 13.6 N/A 4.8 0.7 Q: Do you think South Korea (Japan) is trustworthy? Japan ROK Very trustworthy 4.7 0.4 Somewhat trustworthy 38.7 10.5 Not very trustworthy 37.8 59.2 Not trustworthy at all 13.4 29.4 N/A 5.4 0.5 Q: Do you think what Japanese troops did on the Korean Peninsula or in other Asian countries during World War II still prevents Japan and South Korea from developing their relations? Japan ROK Yes 74.8 75.0 No 19.6 23.5 N/A 5.6 1.5 Q: Do you think it possible to resolve the territorial row over Takeshima (Dokdo) through intergovernmental talks between Japan and South Korea? Japan ROK Yes 12.6 2.7 Yes to a certain degree 17.0 17.9 No to a certain degree 28.2 53.0 No 37.3 25.8 N/A 4.9 0.6 Q: South Korean President Roh Moo Hyun has blamed Japan for its territorial claim to the Takeshima (Dokdo) isles and stands firm against Japan. Do you think such an attitude assumed by the South Korean president is appropriate? Japan ROK Yes 3.1 37.7 Yes to a certain degree 7.0 34.5 No to a certain degree 32.7 22.0 No 51.2 4.7 N/A 5.9 1.1 Q: Do you feel a threat from North Korea's ongoing nuclear development? Pick only one from among those listed below. Japan ROK Yes, very much 55.3 13.6 Yes, somewhat 31.8 45.8 No, not very much 9.6 32.5 No, not at all 1.9 7.8 TOKYO 00004431 006 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 N/A 1.4 0.3 Q: (Only for those who answered "yes" to the foregoing question) What do you think is needed to have North Korea give up on its nuclear development programs? Japan ROK Dialogue 24.2 66.3 Pressure 56.7 20.0 Can't say which 18.0 13.5 N/A 1.1 0.2 Q: Do you think Japan and South Korea should cooperate to resolve the issue of Japanese and South Korean nationals abducted to North Korea? Japan ROK Yes 67.7 16.3 Yes to a certain degree 20.2 52.0 No to a certain degree 5.0 28.7 No 5.2 2.5 N/A 1.9 0.5 Q: Do you think the relationship between Japan and South Korea will change for the better, or change for the worse? Japan ROK Very good 5.1 0.9 Good to a certain extent 32.4 19.7 Unchanged 49.3 61.2 Bad to a certain extent 8.4 16.6 Very bad 1.5 1.0 N/A 3.4 0.6 Q (in Japan): Prime Minister Koizumi's term as his ruling Liberal Democratic Party's president will end in September this year. Do you expect the next prime minister to improve Japan's ties with China and South Korea? Q (in South Korea): Prime Minister Koizumi's term as his ruling Liberal Democratic Party's president will end in September this year. Do you expect the next Japanese prime minister to improve South Korea's ties with Japan? Japan ROK Yes, very much 39.4 2.4 Yes, somewhat 36.4 30.8 No, not very much 16.7 57.1 No, not at all 5.4 5.6 N/A 2.2 4.1 Q (in South Korea only): What's your interest in Japan? Pick as many as you like from among those listed below if any. Japan ROK TV programs --- 8.5 Animations, comics --- 25.6 TOKYO 00004431 007 OF 007 SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 08/07/06 Part-2 INDEX: (8) Poll on 100 corporate presidents: 44 PERCENT says economic expansion will continue for more than a year; 76 PERCENT positive about M&As; US economy, high crude oil prices are matters 0f concern8 Pop music --- 5.8 Movies --- 9.7 Talent --- 3.8 Autos, motorcycles --- 21.1 Home electric appliances --- 43.5 Personal computers --- 5.9 Japanese food --- 17.2 Fashion --- 14.6 Japanese business management --- 11.5 Japanese language --- 12.5 Japanese thinking --- 19.5 TV, PC games --- 8.5 Sumo wrestling, baseball, other sports --- 9.2 Kabuki, other traditional cultures --- 2.4 O/A --- 0.8 NIP+N/A --- 9.7 Polling methodology Japan: The survey was conducted July 8-9 by the Yomiuri Shimbun on the basis of door-to-door visits for face-to-face interviews. For the survey, a total of 3,000 persons were chosen from among the nation's voting population at 250 locations on a stratified two-stage random-sampling basis. Answers were obtained from 1,867 persons (62.2 PERCENT ). In the breakdown of respondents, males accounted for 48.6 PERCENT and females 51.4 PERCENT . ROK: The survey was conducted from June 22 through July 3 by the Hankook Ilbo (Korea Times),a South Korean daily, and its contractor, Millward Brown Media Research Inc., on the basis of door-to-door visits for face-to-face interviews. For the survey, pollees were chosen from among males and females, aged 20 and over, at 106 locations across the nation, on a stratified multi-stage sampling basis. Answers were obtained from a total of 1,000 persons. In their breakdown, males accounted for 49.5 PERCENT and females 50.5 PERCENT . The previous surveys in 1995, 2002, and 2005 were conducted in the same way as the latest survey. The survey in 1996 was conducted in five cities, including Seoul. SCHIEFFER