JAPANESE MORNING PRESS HIGHLIGHTS 09/19/06

UNCLAS SECTION 01 OF 10 TOKYO 005339

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09/19/06


Index:
1) Top headlines

2) Editorials

3) Prime Minister's daily schedule: None, the 18th was a national
holiday

4) Customers happy when Yoshinoya features US beef on menu after 2
years, 7 months absence

5) Poll: Shinzo Abe favored as next prime minister by 36 percent of
public a day before the LDP election, but Taro Aso's support
suddenly rises to 20 PERCENT

6) Abe has 70 percent of LDP votes locked up one eve of LDP
presidential election

7) LDP presidential candidates Abe, Tanigaki spar in campaign over
historical views

8) Minshuto's Naoto Kan criticizes Abe's views of history as
affecting Japan's relations with the US

9) US media brand prime ministerial candidate Abe as a "nationalist"


10) Time, Newsweek magazines take up Abe's candidacy in cover
stories

11) Aso may stay on as foreign minister if "prime minister" Abe so
wishes

12) Minshuto's (Democratic Party of Japan) Ozawa, Kan, not wanting
to witness the birth of Abe administration will fly to Iwo Jima
tomorrow

13) Major Japanese banks to constrain transactions with Iran,
following US lead

14) Finance Minister Tanigaki discusses China's currency, Iran
sanctions with US Treasury Secretary

15) JDA to create a "strategic planning office" in anticipation of
it being raised to ministry status

16) Futenma relocation site: New wrinkle with plan for unannounced
land reclamation in waters near Schwab to secure work area

17) JDA to establish office in US that would be separate from the
Japanese Embassy

18) US unhappy with JDA's report on North Korea's missile launch

Articles:
1) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Nihon Keizai:
Average land prices in three major cities rise for first time in 16
years; Residential and commercial land prices drop in 90 percent of
outlying areas


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Sankei:
Russia orders suspension of two Sakhalin projects; Japan's natural
gas procurement bound to be affected

Tokyo Shimbun:
Transfer of Futenma functions; Previous plan included unannounced
coastal reclamation plan to secure working site; Such a site still
needed

Akahata:
Chairman Shii meets with Pakistani prime minister; Agrees on need to
maintain peace and order in the world and eliminate terrorism and
nuclear weapons

2) EDITORIALS

Asahi:
(1)Loopholes remain in money-lending regulation
(2)New Komeito: Party head Kanzaki to step down without leaving a
policy imprint

Mainichi:
(1)Taking a second look at amakudrai will heighten public distrust
(2)Return of postal rebels to LDP is too opportunistic

Yomiuri:
(1)Re-creation of Nihonbashi Bridge a model for urban renewal
(2)Mixi listed on Tokyo Stock Exchange's Mothers section; Emergence
of new champion in IT industry?

Nihon Keizai:
(1)Questions on policy in 2006 LDP presidential election: Seriously
tackle decentralization issue, including introduction of doshu
system

Sankei:
(1)Social divide and LDP presidential election: It is regrettable
that discussion remains shallow
(2)Children's morality: Parents behind problem children

Tokyo Shimbun:
(1)North Korea's nuclear arms will only protract sanctions
(2)Conference on biodiversity expected to serve as occasion to take
second look at value of life

Akahata:
(1)Conference of Heads of States and Chiefs of Non-Aligned Nations
confirms effort to strengthen activities to create peaceful and fair
world

3) Prime Minister's daily schedule: None, the 18th was a national
holiday


4) Gyudon returns to menu at Yoshinoya

ASAHI (Page 34) (Slightly abridged)
September 19, 2006

Fast-food chain Yoshinoya D&D Co. resumed serving its popular gyudon
(beef bowl) using US beef for the first time in two years and seven
months yesterday. Since imports of US beef remain low, the company

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has no plans to serve the dish on any other day this month. Most of
the one million orders prepared at 1,000 shops yesterday were sold
out before the evening. While many welcomed the resumption, others
still voiced concerns about the safety of US beef.

Just before 11:00 a.m. in front of the Yoshinoya restaurant in
Yurakucho, Tokyo, which is tops in terms of sales volume among all
its shops, the manager and other members welcomed the customers, who
applauded.

Takanori Umeki, 24, a graduate school student in Bunkyo Ward who had
waited for nearly 12 hours, said after eating a beef bowl priced at
380 yen, 100 yen higher than that before the ban was imposed on US
beef imports: "The amount is just right, and the beef is juicy.
Yoshinoya's gyudon is the best."

Misuzu Nakano, 27, a company employee in Hamura City, Tokyo, said:
"I came here at my family members' request." At this shop, about
2,000 orders were sold in just four hours.

Meanwhile, a female company employee in her forties from Toyoshima
Ward, Tokyo, interviewed on street said: "There is little
information saying that US beef is safe. I have no intention of
eating it until its safety is guaranteed."

Yoshinoya plans a limited sale of one million orders of gyudon a day
on October 1-5 and November 1-5.

US Ambassador Schieffer, enjoying large order of gyudon, says:
"Today is a day of celebration."

United States Ambassador to Japan Thomas Schieffer and his wife
Susanne visited a Yoshinoya restaurant in Toranomon, located near
the US Embassy in Tokyo, just after the shop opened at 11:00 a.m.
yesterday. While eating a large order of gyudon, he gave a thumbs up
sign.

The ambassador said with satisfaction: "Today is a day of
celebration for the return of US beef to Japan. It was worth waiting
more than two years," adding: "The resumption of US beef after both
sides successfully dealt with differences is wonderful for both
Japan and the US." He also emphatically said: "US beef is safe and
healthy food."

5) Net polling on LDP race: Abe keeps pole position with 36 percent
support

NIHON KEIZAI (Page 2) (Abridged)
September 19, 2006

The Nihon Keizai Shimbun conducted its third Internet-based public
opinion survey on Sept. 15-17 about the ruling Liberal Democratic
Party's presidential election. In the survey, respondents were asked
to name an appropriate person to be the next prime minister, and
Shinzo Abe maintained a substantial lead at 36 percent over all
other candidates, although he was down 3 points from the second
survey. Taro Aso ranked second at 20 percent, up 5 points from the
last survey. Sadakazu Tanigaki leveled off at 13 percent.

Among LDP supporters, the rate of public support for Abe was 62
percent, down 4 points. However, Abe still enjoys high popularity.
Aso stood at 19 percent, up 4 points, and Tanigaki at 9 percent, up

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2 points. Aso and Tanigaki, however, have yet to close the gap with
Abe.

6) Abe has 70 percent of votes locked up in LDP presidential
election that occurs tomorrow; Aso in second place

TOKYO (Page 1) (Excerpt)
September 19, 2006

Voting will take place in the Liberal Democratic Party (LDP)
presidential election on Sept. 20, the winner being the combined
tally of the votes of party members and lawmakers. This newspaper
has confirmed through news gathering and analyzing the votes in each
camp that Chief Cabinet Secretary Shinzo Abe will receive
approximately 500 votes or 70 percent of the combined votes of the
party members and lawmakers. Continuing to vie for second place is
Foreign Minister Taro Aso and Finance Minister Sadakazu Tanigaki,
with Aso having a slight lead in the regional party votes.

7) Noticeable difference in views of history between Abe, Tanigaki

YOMIURI (Page 4) (Excerpts)
September 19, 2006

During debates in the Liberal Democratic Party (LDP) presidential
campaign, Chief Cabinet Secretary Abe and Finance Minister Tanigaki
have locked horns over their historical views of World War II. Abe
is trying to avoid making historical views a point at issue in the
presidential campaign, noting, "Historical issues should be left in
the hands of historians," while Tanigaki has emphasized the need to
give consideration to Japan's neighbors in talking about war
responsibility.

In a public speech in Tokyo yesterday, Tanigaki appealed to the
audience: "It's a fact that Japan sent troops to China and that many
Chinese people died. We must respect the sentiments of our
neighbors." With Asia diplomacy now a campaign issue, Tanigaki is
trying to win votes of those not committed to Abe by differentiating
his stance from Abe's.

At the panel discussion on Sept. 11 hosted by the Japan National
Press Club, Tanigaki questioned Abe about his view on the Chinese
government's position that the war was caused by Japan's militarists
and that the Japanese public as well were the victims. Tanigaki
tried to stir up controversy with Abe over the issue. Abe rebutted:
"There was no such a document (of agreement) left (at the time of
the normalization of diplomatic relations between Japan and China).
Dividing the Japanese people into two groups is a notion stemming
from the class-conscious awareness of history."

Abe stressed on a TV-Asahi program on Sept. 17: "It's true that
China came up with the perception of separating militarists from the
general public, but Japan has not agreed to that." When asked about
making clear who were responsible for the war, Abe questioned
instead: "Do you think I as a politician can judge this person was
guilty and that person was not guilty as if I were a sort of god?"

When asked about Prime Minister Murayama's statement released in
1995 in which Murayama expressed remorse and apology over (Japan's)
past colonial rule and invasion, Abe went no further to say, "I'll
inherit its spirit," but Tanigaki said clearly, "I agree."


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8) DPJ's Kan implies that Abe's historical views would affect
Japan-US relations

TOKYO SHIMBUN (Page 2) (Full)
September 19, 2006

In a public speech in Ibaraki City, Osaka, yesterday afternoon, the
Democratic Party of Japan (Minshuto) Acting President Naoto Kan
referred to the Liberal Democratic Party (LDP) presidential campaign
and stated: "If a person who has the same view as that of Yasukuni
Shrine's history museum, Yushukan, becomes prime minister, Japan-US
relations will worsen." This is an implicit criticism of Chief
Cabinet Secretary Abe, who is certain to take office as prime
minister shortly.

Kan expressed concern that Abe's historical views would affect
diplomatic ties with the US, saying, "We are at an historic
crossroads in terms of whether issues will be moving toward
resolution or heading toward danger after (Mr. Abe) has been in
power for three to five years."

The way Yushukan displays war-related items has now come under
criticism in the US, as well. For instance, some in the US Congress
have called for revisions to a caption that describes the former
Imperial Japanese Army as "liberators" in the Asia-Pacific region.

Later in the day, in a speech delivered in Nara City, Kan cast
doubts on Abe's campaign slogan, "Toward a beautiful country,"
arguing: "When a politician plans to rebuild a country into a
beautiful one, who decides (what that means)? Will (Mr. Abe base
this on) his own sense of aesthetics and his way of life?"

9) Abe described by US media as nationalist

SANKEI (Page 2) (Full)
September 19, 2006

Takashi Arimoto, Washington

With the Liberal Democratic Party presidential election coming up on
Sept. 20, the US Congress and media are showing interest in who
might succeed Prime Minister Junichiro Koizumi, who has built
honeymoon-like personal ties with President George W. Bush. At the
same time, the media, including the New York Times, have a tendency
to link Japan's growing nationalism to Koizumi's successor,
describing Chief Cabinet Secretary Shinzo Abe as a nationalist. But
some experts have faulted the media for shedding the same light on
Abe as prewar nationalism. In addition to the New York Times, the
Washington Post and the Los Angeles Times have referred to Abe as
"nationalist."

The New York Times has introduced Abe as "right-wing nationalist"
and a "hawkish leader of the younger generation" since it first
labeled him "conservative nationalist" in May 2005.

In a Sept. 14 public hearing on Japan and neighboring countries,
held by the US House International Relations Committee, some
witnesses ascribed strained Japan-China relations to growing
nationalism in Japan. However, former White House National Security
Council Senior Asian Director Green Michael Green testified: "An
argument that Japan would return to its prewar bellicose attitude is
irrelevant."

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Georgetown University Department of East Asian Languages and
Cultures Chair Prof. Kevin Doak also took this view about comparing
Japan's rising nationalism today to its prewar period:

"There is no tendency for Japan to return to the ethnic nationalism
of the 1930s. Mr. Abe has clearly rejected such a nationalism.
Rather, he appears to be a nationalist who is trying to raise the
public's awareness and their sense of participation in the
country."

10) Foreign media paying close attention to "hawkish Abe"

MAINICHI (Page 2) (Full)
September 19, 2006

The overseas media, including the Chinese and US media, have been
paying close attention to Chief Cabinet Secretary Shinzo Abe, who is
certain to be elected the new LDP president on Sept. 20. Abe made
the covers of the Asian versions of Newsweek and Time that went on
sale last week. All in all, the foreign media are critical of Abe,
expressing concern over strained relations with China and South
Korea, citing Abe's diplomatic and security policies tinged with
hawkish overtones and raising questions about the continuation of
Koizumi's economic and fiscal reform policy line.

Newsweek portrayed Abe as a mysterious person, saying that although
he has a short track record, he is already putting neighboring
countries on alert, citing his two major goals: (1) revising the
country's pacifist Constitution; and (2) rivalry with China. Time
critically described Abe as a dangerous nationalist on one hand and
introduced him as a potential strong leader on the other, with a
watchful eye on whether or not he would continue visiting Yasukuni
Shrine after becoming prime minister.

Abe's perception of history has also drawn fire from other foreign
media. For instance, German magazine Spiegel compared Abe to Iranian
President Ahmadi-Nejad, who had denied the Holocaust. Singapore's
Straits Times reported: "Abe is more conservative than Prime
Minister Koizumi and has rejected the legitimacy of the
International Military Tribunal for the Far East."

Many articles expressed concern over Abe's "lack of experience" as a
successor to Koizumi, whose reform policy line has won high marks
overseas. The September issue of the US publication Far Eastern
Economic Review wrote: "Unlike Koizumi, who gave many posts to
people in the private sector, Abe is surrounded only by bureaucrats
and lawmakers. Japan will depart from the reform line."

11) Aso willing to serve as foreign minister under Abe

MAINICHI (Page 2) (Full)
September 19, 2006

Foreign Minister Taro Aso, appearing on an NTV program yesterday,
indicated that if Chief Cabinet Secretary Shinzo Abe becomes the
next prime minister and asks him to stay on, he will accept Abe's
offer. Asked, "Are you willing to serve as foreign minister under
Abe?" Aso said, "I will do my best to meet his expectations."

12) Minshuto's Ozawa, Kan to visit Iwo Jima tomorrow


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MAINICHI (Page 2) (Full)
September 19, 2006

Minshuto (Democratic Party of Japan) President Ichiro Ozawa and
Deputy Director General Naoto Kan will visit Iwo Jima, which was the
site of a fierce battle in WWII, on Sept. 20-21. They plan to have a
firsthand look at places from which remains were collected and the
ruins of air-raid shelters.

The aim is to demonstrate their eagerness to tackle the issue of war
responsibility, but Ozawa's absence from Nagata-cho is intended to
indicate a lack of interest in the Liberal Democratic Party
presidential election on Sept. 20.

On Iwo Jima, about 22,000 Japanese soldiers died in February-March
1945, but the remains of only 8,510, less than 40 percent of the
total, have been collected.

Kan decided to independently visit the island out of the idea that
"people have forgotten the tragedy of war." But Ozawa, who was
reelected as party head on Sept. 12, also decided to join him out of
a desire to "hide himself until (the extraordinary party convention)
on Sept. 25 in order to avoid an expected uproar over personnel
appointments in the party."

13) Leading Japanese banks to voluntarily refrain from business
transactions with Iran's national bank; Mitsubishi-Tokyo-UFJ,
Sumitomo-Mitsui to fall in step with US measure

NIHON KEIZAI (Page 1) (Full)
Evening, September 16, 2006

Leading Japanese banks, such as Bank of Tokyo-Mitsubishi UFJ and
Sumitomo-Mitsui Banking Corp. have revealed plans to voluntarily
refrain from business transactions with Bank Saderat, Iran's major
state-run bank. The US government has imposed a complete ban on
business transactions with that bank for sending money to
terrorists. These Japanese banks have decided to withhold trade with
Saderat in line with the US government's policy.

Tokyo-Mitsubishi UFJ and Sumitomo-Mitsui will refrain from
transferring dollars to Saderat from their domestic and overseas
branches. Mizuho Corporate Bank intends to follow suit. As Japan and
Iran have crude-oil business, Japanese banks have business relations
with Bank Saderat to pay for crude oil. It is concerned that if the
settlement of trade accounts were suspended, Japan's oil-related
companies and leading trading houses would be affected.

This is not the first time for Japan's leading banks to refrain from
trading with foreign banks based on a political decision. The
voluntary restraint this time is presumably based on the judgment
that if they continue business with that bank against Washington's
wishes, their business activities in the US might be affected.

14) Japanese, US finance ministers urge reform of Chinese yuan
during meeting to discuss sanctions on Iran

NIHON KEIZAI (Page 1) (Excerpts)
Evening, September 16, 2006

Finance Minister Sadakazu Tanigaki and US Secretary of the Treasury
Henry Paulson on the morning of Sept. 16 met in Singapore ahead of a

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meeting of the Group of Seven (G-7) finance ministers and central
bankers. They agreed that further efforts would be needed to reform
China's yuan. With possible financial sanctions on Iran, which is
continuing its nuclear development program, in mind, Paulson called
on Japan to work out concrete cooperative measures.

This is the first time for them to meet since Paulson took office in
July.

15) Defense Agency to set up strategic planning office

YOMIURI (Page 4) (Full)
September 19, 2006

The Defense Agency will launch a strategic planning office next
fiscal year to study mid- to long-term defense policies. The new
office will be set up in the Defense Policy Division of the Defense
Policy Bureau. The Defense Agency wants the Diet to pass bills
within the year in connection with its bid to upgrade its status to
a ministry. Along with this, the agency is aiming to consolidate its
policy planning functions in order for Japan to respond flexibly on
its own to international terrorism, WMD proliferation, North Korea's
nuclear ambitions and missiles, and various other issues.

For the time being, the strategic planning office will study; 1)
deterrence in the new security environment; 2) international peace
cooperation activities and exchange programs for the Self-Defense
Forces with various countries; 3) maritime policy regarding natural
resources in the East China Sea and teamwork with the Japan Coast
Guard for territorial defense; and 4) space policy and Japan's
national defense.

16) Unannounced landfill planned for Futenma relocation

TOKYO SHIMBUN (Top play) (Abridged)
September 19, 2006

The central government and the Okinawa prefectural government once
agreed in 2002 to relocate the heliport functions of the US Marine
Corps' Futenma Air Station in Okinawa Prefecture to a site in waters
off the Henoko district of the island prefecture's northern coastal
city of Nago. On this issue, Tokyo had planned a vast expanse of
on-site landfill-covering a total area of approximately 34
hectares-in the city's Oura Bay to build a concrete foundation
consisting of pontoon-type caissons needed to reclaim land from the
sea, sources revealed yesterday. In May this year, Japan and the
United States wound up their intergovernmental talks over the
realignment of US forces in Japan, incorporating an agreement to
relocate Futenma airfield to a coastal area of Camp Schwab. However,
there is no change in the fact that an on-site scaffolding landfill
is needed. The government will likely be saddled another issue of
land reclamation, in addition to laying down a Futenma alternative.

The government has so far remained mum about the necessity of such a
landfill.

The Henoko offshore heliport plan was to reclaim land from the sea
and install a facility of 184 hectares within the offing of Nago's
Henoko district. The government conducted a geological survey of the
seabed and then had to stop the survey as it faced local
opposition.


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According to Defense Facilities Administration Agency officials, the
government had planned to sink a number of gigantic caissons-about
20 meters long and wide each-in the sea to build a foundation for
the offshore facility. In this connection, the government then
planned to construct a caisson-manufacturing yard and a
land-stockpiling site at sea.

The government initially listed three candidate sites, including
Kushi Bay and Oura Bay, which are situated near Henoko. The other
candidate location was Nakagusuku Bay. At the time, a private
developer had a plan to reclaim land from the sea in the northern
part of Oura Bay to create a yacht harbor. This project became a
decisive factor for the government to decide informally on its
initial blueprint to lay down the Futenma alternative in Oura Bay.
The DFAA planned to create an on-site landfill covering a total area
of about 34 hectares and to offer it to local communities for
nothing after the Futenma alternative is completed. The DFAA sounded
out only a handful of Nago City officials on those plans so as not
to spill the beans. "We didn't go so far as to reclaim land from the
sea, so we didn't make it public," one of the DFAA officials said.

17) JDA to establish office in US

MAINICHI (Page 1) (Full)
September 17, 2006

Yoso Furumoto

The Defense Agency (JDA) has decided to establish in Washington, DC,
an intelligence liaison office, which will function separately from
the Japanese Embassy in the United States. The objective is to step
up cooperation with US intelligence agencies. In order to prepare
for the establishment of the office, the JDA will within the year
send a senior official from its Defense Policy Bureau to Washington
and aim to put the office into full operation from early next year.

In the past, as well, the JDA has exchanged intelligence with US
intelligence agencies. For instance, when North Korea launched
ballistic missiles in July, the JDA shared such information as
satellite photos and records of communications.

But America's analytical methods are highly specialized, so some in
the government have pointed out that simply sharing intelligence as
part of crisis management when something happens is insufficient.
Also, under the current sectionalism-based system taken by the
Japanese Embassy in the US, there have been a noticeable number of
cases where it has been difficult for Japan to work together with
the US. So the JDA deemed it necessary to have a liaison office of
military intelligence experts on a regular basis.

The JDA has assumed the US Defense Department's Defense Intelligence
Agency (DIA) to be its liaison office's counterpart. DIA specializes
in physical and chemical analysis, has the function of a spy agency,
and is tasked with coordinating intelligence offices under the
Pentagon's control. In addition, the JDA plans to cooperate with the
National Security Agency (NSA),which is in charge of signal
intelligence, and the National Geospatial-Intelligence Agency (NGA),
which is in charge of photographic intelligence.

18) US reluctant to reveal analysis of North Korean missiles

MAINICHI (Page 2) (Full)

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September 19, 2006

The United States' reluctance to allow the Defense Agency to release
a detailed report on the test-launches of ballistic missiles on July
5 by North Korea has forced defense chief Fukushiro Nukaga to
announce the results of the analysis only orally in a press
conference. The Defense Agency released a report in the wake of the
North's firing of a Taepodong-1 missile in 1998. Although a senior
defense official had expressed eagerness to "fulfill the agency's
accountability," Tokyo had to respect Washington's wishes, as a
large part of the data necessary for the analysis came from the
United States.

SCHIEFFER