JAPANESE MORNING PRESS HIGHLIGHTS 12/29/06

UNCLAS SECTION 01 OF 10 TOKYO 007188

SIPDIS

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 12/29/06

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Defense and security issues:
4) JDA acknowledges that it is considering revising the plan to
relocate Futenma Air Station to the shores of Camp Schwab
5) Okinawa Governor Nakaima would accept plan to relocate Futenma,
conditioned on certain revisions
6) Relocation of training of F-15s stationed at Kadena Air Base to
SDF bases will be at US expense
7) US, Japan to strengthen the protection of military secrets by
signing a GSOMIA, but seen as further speeding up the "unification"
of US forces, SDF
8) Government to extend the Iraq Special Measures Law up to two
years to allow continued service by ASDF

Political agenda:
9) Prime Minister Abe's selection of Watanabe to replace Sata as
administrative reform minister is a gamble
10) LDP comes out with 2007 political action plan, centered on
passage of constitutional referendum bill
11) LDP action plan for 2007 has strong imprint of Abe's policy
agenda
12) Prime Minister annoyed at reporter's questions about Yasukuni
visits

Articles:

1) TOP HEADLINES

Asahi:
Japan, US to strengthen security administration of military secrets
and expand scope of penalty application by concluding GSOMIA

Mainichi:
Okinawa governor intends to accept the coastal plan for Futenma
relocation but with condition of adding revisions to the plan

Yomiuri:
Poll of 47 prefectures and 15 government-designated cities about
public bid on public works projects: 50% of those surveyed say the
successful bidders offered more than 90% of the planned prices;
Differences seen in public bidding reform

Nihon Keizai:
Japanese firms' M&A amounts to 15 trillion yen for 2006, a 30% up a
year

Sankei:
Kirin Brewery Co. reveals a plan to produce biofuel from byproducts
of beers

Tokyo Shimbun:
Poll of child abuse in Tokyo and 6 prefectures: Child consultation
centers troubled about increased cases of child abuse; 50% of the
centers surveyed say "We take action within 48 hours after receiving
child abuse information"; Heavy burden with 84 cases put in the
hands of one social welfare consultant


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Akahata:
Plans for relocation of US military drills found; Training planned
in 6 locations for next fiscal year; Noise pollution and dangers to
spread across the country

2) EDITORIALS

Asahi:
(1) Court ruling on fake quake-resistance data case: We still fear
(2) Fabricated research papers: Need to create rules for
transparency

Mainichi:
(1) Live organ transplant: Creating rules essential
(2) Economic growth not felt by the general public likely to
continue

Yomiuri:
Looking back on 2006: The world becomes more unstable

Nihon Keizai:
Japan appalled by North Korea's nuclear weapons, while its reform
line shadowed

Sankei:
(1) Drunken drivers: It's time to change awareness
(2) While-collar exemption: Still room for debate

Tokyo Shimbun:
(1) No drunken drivers: It's time to part with easy-going awareness
(2) Iraq situation: Decision on execution should be made
cool-headedly

Akahata:
Soccer lottery: Scrapping it is the way to promotion of sports

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 28

NIHON KEIZAI (Page 2) (Full)
December 29, 2006

09:28
Met Minister of Internal Affairs and Communications Suga at Kantei.
Later met Ambassador to Russia Saito and Foreign Ministry European
Affairs Bureau Director General Harada. Followed by Cabinet
Intelligence Director Mitani.

10:27
Met Cabinet Office Senior Vice Minister Yoshimi Watanabe, with Chief
Cabinet Secretary Shiozaki. Followed by Deputy Foreign Minister
Yabunaka and Asian and Oceanian Affairs Bureau Director General
Sasae, with Deputy Chief Cabinet Secretary Suzuki and Special
Advisor Seko.

11:35
Met JETRO President Osamu Watanabe.

12:13
Met with the heads of Cabinet Office Press Club member companies.


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14:29
Arrived at the Imperial Palace to attend a ceremony to formally
appoint Yoshimi Watanabe as a new cabinet member and then an
attestation ceremony for Lower House member Hideaki Omura to be
Cabinet Office senior vice minister.

15:23
Handed an official appointment to Watanabe at Kantei. Gives
instructions to Omura. Later posed for a photo shot. Later, met
Shiozaki.

16:08
Held informal talks with Cabinet Press Club members.

17:12
Attended a gathering marking the last business day of the year.
Later met New Komeito head Ota and Lower House member Takayoshi
Taniguchi.

18:15
Returned to his official residence.

4) JDA studying revision of relocation plan for Futenma Air Station

TOKYO (Page 2) (Full)
December 29, 2006

On the issue of relocation the US forces' Futenma Air Station in
Okinawa Prefecture, It was learned on Dec. 28 that the Defense
Agency (JDA) is considering revising the current plan to construct a
V-shaped runway on the shores of Camp Schwab (Nago City). A top
official at JDA yesterday told the press corps: "I ordered
(administrative officials) to flexibly consider such."

Specifically, JDA is studying such possibilities as: 1) moving the
location of the runway dozens of meters seaward from its current
position in the plan in order to lessen the noise factor and danger;
and 2) changing the configuration of the V-shaped runway. The
affected local governments have been informed of the study.

However, this May, the Japanese and US governments reached a final
agreement on the current relocation plan, so it is unclear whether
the US will accept the revisions or not.

5) Okinawa governor intends to accept shore plan for relocation of
Futenma Air Station, conditioned on revisions

MAINICHI (Top play) (Abridged)
December 29, 2006

In connection with the relocation of the US forces' Futenma Air
Station (Ginowan City) to the shoreline of Camp Schwab (Nago City),
Okinawa Governor Hirokazu Nakaima has made up his mind to basically
accept the move, conditioned on revision of the plan. This means a
switch in policy stance in effect by the prefecture, which has been
consistently opposed to the shoreline plan since the interim report
on realignment of US forces was agreed on between the governments of
Japan and the United States last October. With this, the possibility
has emerged of the USFJ realignment process being speeded up.

According to an informed source, Governor Nakaima has informed the
group of promoters in the prefecture of the relocation, "I would

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like you to wait until around spring (for the decision)." In
addition, in a press conference on Dec. 27, he took a
forward-looking stance toward relocation, conditioned on revisions,
saying: "It is better to relocate quickly. (The shoreline plan)
cannot be ignored. I wonder how much it can be changed." Even on the
meaning of the condition he set going into the relocation talks, "a
state of closure of Futenma," the hurdle has been lowered when he
said, "If the government just said so, it would be fine. After that,
it would be a trust relationship."

In addition, the prefecture also has been secretly sounding out the
Defense Agency (JDA) about the possibility of minor revisions of the
shoreline plan. In reaction, JDA has been studying revising the
plan, and continuing to set the groundwork for an agreement centered
on a revised shoreline plan.

However, the US side has consistently insisted that it will not
budge on not responding to a revision of the shoreline plan, so
there would seem to be many twists and turns ahead.

6) US basically agrees to bear partial cost of relocating F-15
fighter training at Kadena

TOKYO SHIMBUN (Page 1) (Full)
December 29, 2006

The governments of Japan and the United States have basically reach
an agreement in a dispute over cost sharing for relocating part of
F-15 fighter training at the US Kadena Air Base (in Okinawa) and
other training to six bases of the Self-Defense Force (SDF).
According to sources connected to Japan-US relations, training will
be gradually transferred starting around next February.

Japan and the US will officially sign an agreement in a Joint
Committee meeting scheduled for the middle of January. The Japanese
government has already earmarked necessary expenses in the
supplementary budget for this fiscal year and in next fiscal year's
budget. The two countries plan to carry out joint training two or
three times at each of the six bases next fiscal year. This
development will move ahead military unification between Japan and
the US.

The US insisted that Japan should bear the total cost of relocating
training, on the grounds that the transfer is mainly aimed to
"reduce the burden on Okinawa," while Japan asserted that the US
should also bear partial cost. But the US agreed in the end to foot
part of the bill, based on the judgment that joint training with the
SDF will lead to improving interoperability between the US military
and the SDF.

The Japanese and US governments agreed in the final report on US
force realignment out this May to transfer part of the training at
the US military's Kadena, Misawa (Aomori Prefecture),and Iwakuni
(Yamaguchi) bases to the SDF's Chitose (Hokkaido),Misawa, Hyakuri
(Ibaraki),Komatsu (Ishikawa),Tsuiki (Fukuoka),and Nyutabaru
(Miyazaki).

Two types of joint training will be carried out: Training (1) by 1
- 5 five planes each of the US military and the SDF for 1 - 7 days;
and (2) by six to 12 planes for 8 - 14 days. The training will need
costs for transporting training planes and mechanics, fuel,
accommodation, food, and heating and electricity.

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The US will pay transport and fuel costs for the type-1 training to
be relocated from Misawa and Iwakuni. To bear the remaining costs,
Japan has allocated approximately 370 million yen in next fiscal
year's budget.

7) Japan, US to strengthen protection of military secrets and expand
scope of penalties by concluding GSOMIA

ASAHI (Top play) (Excerpts)
December 29, 2006

The Japanese government has decided to respond to the US request to
sign a General Security of Military Information Agreement (GSOMIA),
a pact that comprehensively sets regulations to protect defense
secrets. GSOMIA will enable Japan and the US to share highly

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classified military information, and as a consequence, repairs to US
vessels will be more frequently commissioned to Japanese firms. On
the other hand, the scope of penalties will expand with such things
as operations, drills, and weapons technology, expected to be
subject to the secrecy protection. The concern is that with even
more integration of military activities between Japan and the US,
the Japanese people's right to know may be restricted.

Japan has already reached a general agreement with the US government
in working-level talks. Defense Agency (JDA) Director-General Fumio
Kyuma will announce this policy at a meeting of the Japan-US
Security Consultative Committee (SCC or 2+2) expected to take place
in Washington possibly in January of next year. Tokyo intends to
formally sign a GSOMIA as early as the first half of next year and
obtain Diet approval during the ordinary session.

The current system for protecting classified information between
Japan and the US is limited. Matters subject to the Espionage Law
under the Japan-US Mutual Defense Assistance Agreement (MDA) are
restricted to equipment information. Under the Self-Defense Forces
(SDF) Law, the JDA, the SDF, and relevant equipment suppliers and
other firms are obligated to protect secrecy. In advancing the
Japan-US joint development of the missile defense (MD) system, the
two countries concluded a memorandum of understanding (MOU) on each
project for the protection of secrets.

In contrast, GSOMIA is a comprehensive framework to prohibit leaks
of secret information and obligates both the governments and
private-sector firms of the two countries to keep and protect
military secrets. Matters subject to GSOMIA include information on
operations, training, and weapons technology.

Once the system to protect secrets is established, Japanese firms
will be more often commissioned by US firms to repair US vessels
deployed in Japan by the US forces. In the case of highly classified
US vessels, most until now have been repaired by US firms on the US
mainland, and there have been only a few such vessels commissioned
to Japanese firms for repair.

Concluding GSOMIA is the first priority for Japan now. So, Japan has
no plan to enact a new law regarding how to punish those who leak
secrets. Japan intends to apply the existing penalty system.

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However, the scope of punishment is likely to expand because more
Japanese firms and more ministries and agencies will be involved as
a result.


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Commentary: Military integration will accelerate

Masahiro Tsuruoka

Lying behind the move for Japan to sign GSOMIA is the US request for
improving the efficiency of the US force deployment and sharing more
intelligence with the SDF. Japanese business circles also have a
strong interest in the defense industry as the Japan-US alliance has
been strengthened by the Koizumi administration and then the Abe
administration. But the question of strengthening the secrecy
protection framework that will further step up military integration
between Japan and the US must be discussed in a cautious manner,
given that legislation on leaking secrets has been on the backburner
in view of the people's right to know.

The US has asked Japan since the 1980s to conclude GSOMIA. In 1985,
the ruling Liberal Democratic Party (LDP) submitted to the Diet am
anti-espionage bill on state secrets was scrapped because of
objections from opposition parties arguing: "Even
information-gathering activities by journalists will be subject to
punishment. The bill will restrict the freedom of press that
guarantee the public's right to know."

But America has heightened its request for strengthening the
bilateral alliance in the process of reaching a final agreement on
the US force realignment and with North Korea's nuclear and missile
programs becoming serious issues. Prime Minister Abe launched a task
force aimed at prevention of the leakage of state secrets, and he
indicated a plan to create unified standards applicable to every
ministry and agency. Military integration and protection of state
secrets are moving speedily ahead.

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The reason why the government has decided to delay enacting a new
law for stricter punishment is because "cautious discussion is
necessary before confidentiality by civilians and punishment are
reinforced," a senior Foreign Ministry official said. Behind this is
the government's intention to decide what response it will make upon
seeing public reaction after prioritizing the concluding of a
GSOMIA. But once the pact is signed, areas subject to secrecy
protection will expand, which may bring about a gap with the current
penalty rules. In addition, the US, insisting on the need for the
same measures to protect intelligence, may call on Japan to enact a
new law.

During Diet deliberations to seek approval for the signing of
GSOMIA, the prime minister and government leaders need to give a
full and proper account for all those matters and answer the
question of whether the public's right to know will be restricted.

8) Government to extend Iraq special law to continue ASDF mission,
focusing on two-year extension

YOMIURI (Page 1) (Excerpts)
December 29, 2006

The government decided yesterday to submit to the regular Diet
session next year a bill to extend the Iraq Humanitarian
Reconstruction Support Special Measures Law, which is to expire on
July 31, 2007. The decision stems from the judgment that the ongoing
airlift activities by the Air Self-Defense Force (ASDF) should be
continued in response to requests from the United States military
and the United Nations. Coordination will be carried out, focusing

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on two-year extension.

Many government officials anticipate, given the unstable situation
in Iraq, that (1) reconstruction support activities by US-led
coalition forces are likely to continue after July next year; and
(2) support activities by the US military would last at least by the
spring in 2008, based on a report by the Iraq study groups in the US
Federal Congress noting, "It may be possible for combat troops to
leave that nation by March 2008."

The Japanese has dispatched about 210 ASDF members and three C-130
transport planes to Iraq. They are engaged in transporting US
military and UN personnel and goods to Baghdad and other airports in
Iraq, with Kuwait as the base.

The Iraq legislation is a law with a four-year period of validity.
It is possible to extend the law up to four years.

The government intends to coordinate views with the ruling camp on a
plan to extend the law for two years. In the ruling bloc, there also
is a call for a one-year extension.

9) Prime minister gambling on appointment of Watanabe; Success or
failure of reform of public servant system is of primary concern

ASAHI (Page 14) (Excerpts)
December 29, 2006

Yoshimi Watanabe, officially became state minister for
administrative reform, held a press conference yesterday. He told
reporters, "I will aim for structural reforms out of love." In the
run-up for the Upper house election next summer, the Liberal
Democratic Party (LDP) is touting reforms of education, the Social
Insurance Agency and the public servant system. The party appears to
be determined to press ahead with those reforms by containing
opposition from bureaucrats over the reform of their golden
parachute practices, the primary concern. Prime Minister Abe has
appointed Watanabe to replace Sata at a time when the power base of
his administration is declining, in the hope of finding a
breakthrough if his reform drive succeeds. However, Abe's gamble
could backfire on himself.

Watanabe during the press conference stressed the need for personnel
exchanges between the government and the private sector, noting, "It
is necessary to promote and activate personnel exchanges between the
government and the private sector, though it may be difficult to do
so to the extent of the US."

The government will submit a bill amending the National Civil
Service Law to the regular Diet session. The bill backs public
servants' post-retirement employment in the private sector, as can
be seen in the proposal for switching to an ex post facto
regulation, such as strengthening penalties and monitoring
functions, instead of scrapping the advance regulation, which bans
golden parachute practices by retired public servants for two years
after retirement.

The government proposal includes a measure to maintain the two-year
ban on golden parachute practices for a certain set period in
compliance with the wishes of Sata. This measure was taken in
consideration of opposition from the Democratic Party of Japan (DPJ
= Minshuto). Watanabe indicated a cautious stance toward this

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measure, saying, "This has not been finally decided."

This statement by Watanabe was apparently made in compliance with
the wishes of Abe. The model of strengthened functions of the Prime
Minister's Official Residence (Kantei) as advocated by the prime
minister is the White House of the US, where personnel exchanges
between the government and the private sector are active. However,
the two-year ban on golden parachute practices could block
realization of such exchanges. Abe stated during a Diet session in
November, "It is necessary to recruit competent personnel from
bureaucracy and the private sector and promote personnel
exchanges."

Watanabe and the prime minister have been in contact with each other
since both of them were playing background roles, according to
Watanabe -- both served as secretaries to former Foreign Ministers
Michio Watanabe and Shintaro Abe. They were quick to show that they
have an understanding with each other regarding reform of the public
servant system. Abe has thus left his imprint on the appointment of
Watanabe, new policy breed like Chief Cabinet Secretary Shiozaki and
Acting LDP Secretary General Nobuteru Ishihara.

10) Passage of national referendum bill at early date: LDP action
program for 2007 includes 35 key policy items

YOMIURI (Page 2) (Full)
December 29, 2006

The Liberal Democratic Party's (LDP) action plan for 2007 was
unveiled yesterday. The first policy statement compiled under the
leadership of President Abe (prime minister) touted an economy full
of vitality backed by a growth strategy and a society that gives a
second chance through measures to assist those who seek such. The
aim is to create a "beautiful country," a goal that the prime
minister advocates. As key policy items, the action plan listed 35
items, including early passage of a national referendum bill
containing procedures for amending the Constitution, and the
enactment of a basic maritime law.

The party will formally adopt it at its party convention on January

17.

The policy platform titled "Toward a Beautiful Country" stressed the
party's policy of accelerating the reform drive, noting that with
the birth of the Abe administration, the torch of reform carried out
by the Koizumi administration, whose buzzword was "There will be no
growth without reform," has been handed on to the Abe
administration, whose policy catchphrase is "There will no future
for Japan without growth." On the policy front, the statement noted
that national debate on enactment of a new constitution should be
generated, calling for an early establishment of the national
referendum bill.

Regarding administrative reform, the party will submit a bill for
reforming the public servant system, including the imposition of
criminal punishments regarding influence peddling by retired public
servants who landed jobs at private companies in hope of deepening
debate on the possibility of further reorganization of government
agencies.

For educational reform, the program proposed nationwide activities
by the Association of Local Assembly Members for Revitalization of

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Education in order to raise educational strength in local regions.
It also included enactment of a basic marine law for consolidating a
marine policy under the initiative of the state.

For reform of the party, the following approaches were stressed: (1)
measures to prevent the same municipality chiefs from being elected
many times; (2) expand a public offering system and (3) enhance a
party base by discovering and nurturing human resources.

11) LDP places Abe's imprint on action plan

YOMIURI (Page 29) (Full)
December 29, 2006

The Liberal Democratic Party has placed Prime Minister Abe's imprint
on its 2007 action plan incorporating many buzzwords he used during
the campaign for the party presidential election, such as "second
challenge" and "beautiful country Japan," while at the same time
advocating the continuance of the Koizumi reform initiative.

The policy statement underscored that importance will be attached to
historical investigation and education, based on the principle that
what should be protected, such as family ties, culture, traditions
and local communities, will be maintained.

However, it included no specific measures to implement the appealing
catchphrases, such as revitalization of public education and
realization of a state and society with dignity.

The action plan also characterized next year as an election year,
because unified local lections and the Upper House election are to
take place.

However, given the recent decline in approval ratings for the Abe
administration, it can hardly be said that his reform stance has
reached the public. Abe's and the LDP's ability to implement reform
will be put to the test during the regular Diet session next year.

12) Reporter to Prime Minister on Yasukuni: "Isn't it now impossible
for you to visit the shrine secretly?" Abe replies: "That is a rude
question to ask"

MAINICHI (Page 5) (Full)
December 29, 2006

Bringing up the issue of Prime Minister Shinzo Abe's visit to
Yasukuni Shrine, a reporter yesterday at the Prime Minister's
Official Residence (Kantei) charged: "Isn't it now impossible for
you as prime minister to visit Yasukuni Shrine secretly out of sight
of the public as you did when you were chief cabinet secretary?" The
Prime Minister, visibly upset, replied, "Saying 'secretly' is a
little bit rude, isn't it?"

The prime minister secretly visited Yasukuni Shrine this April, when
he was chief cabinet secretary. However, he has continued to reply,
"I have no intention of saying whether I will visit it or not or I
have visited it or not." When reporters asked him whether he intends
to visit the shrine during New Year's Holidays, he replied, "My
answer is the same as given thus far." He indicated his intention to
maintain his usual stance of not revealing whether he would visit
the shrine or not.


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