DAILY SUMMARY OF JAPANESE PRESS 02/09/06

UNCLAS SECTION 01 OF 10 TOKYO 000727

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 02/09/06


INDEX:

(1) US rejects civilian AIRCRAFT facility inside Iwakuni Air
Station; Plan to bring them in by fiscal 2009 may be delayed

(2) JDA chief Nukaga indicates plan to set up councils on US
force realignment in local communities

(3) Scanner column: Japan forced to reshape strategy on abduction
issue with ending of Japan-DPRK talks

(4) Minshuto suddenly moving away from LDP, New Komeito regarding
referendum bill, giving priority to drawing clear line with
ruling camp

(5) Proposals on constitutional revision: Interviews with
chairmen of constitution commissions of LDP, New Komeito and
Minshuto

(6) Japanese economy gaining momentum four years after emerging
from recession; Potential growth once again takes upward turn

(7) Editorial: US defense strategy review - need for improvement
in efficacy of Japan-US alliance

(8) Tyson Foods demands withdrawal of report by Minshuto
delegation that points out insufficiency of anti-BSE measures

ARTICLES:

(1) US rejects civilian AIRCRAFT facility inside Iwakuni Air
Station; Plan to bring them in by fiscal 2009 may be delayed

YOMIURI (Page 1) (Full)
Evening, February 9, 2006

It was learned today that the United States in connection with
the extending of civilian AIRCRAFT services at the US Marine
Corps Air Station Iwakuni (Yamaguchi Prefecture),as agreed by
the Japanese and US governments in US force realignment talks,
the US side has refused to allow the construction of a terminal
on base for use by civilian aircraft, citing the need to give
priority to the military facility. If the terminal is built
outside the base, there is growing concern that the plan to put a
civilian airport in operation by fiscal 2009, as aimed at by the
local community, will be delayed.

The Japanese and US governments have agreed to a plan to move 57
carrier-borne jets and approximately 1,600 military personnel
from the US Navy's Atsugi Naval Air Station (Kanagawa Prefecture)
to the Iwakuni base. There also was agreement in October 2005, as
part of a local package to accompany the relocation of the
carrier-based jets, to allow civilian AIRCRAFT to provide flight
service of a maximum four takeoffs and landings a day from the
base runway, as desired by the local community.

The new runway (2,400 meters) being built off the coast of
Iwakuni Air Station will be completed in fiscal 2008. The
Japanese side has hoped to see a terminal built for passengers to
board civilian AIRCRAFT on the current runway that will become
unused space.

However, the US side in senior working-level talks on Feb. 1

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refused to allow construction of a terminal inside the base
proper, citing the need to build a military facility on a part of
the current runway for such use as hangers for the carrier-based
jets to use.

In case the terminal is constructed on civilian land outside the
base, not only would the timetable for service by civilian
aircraft be delayed, the following negative aspects have also
been pointed out: 1) inconvenience for users; and 2) increased
construction costs.

(2) JDA chief Nukaga indicates plan to set up councils on US
force realignment in local communities

MAINICHI (Page 1) (Full)
Evening, February 9, 2006

Defense Agency Director General Fukushiro Nukaga stated in a
meeting of the House of Representatives Budget Committee this
morning: "We would like to set up councils that include governors
and heads of local municipalities" to discuss US force
realignment plans. The remark was in response to a question by
Liberal Democratic Party member Kozaburo Nishime. The liaison
council of the governors of 14 prefectures housing US military
bases have so far engaged in negotiations on US force realignment
with the central government. In his Diet reply, Nukaga indicated
plans to set up new discussion panels that would include local
government heads.

(3) Scanner column: Japan forced to reshape strategy on abduction
issue with ending of Japan-DPRK talks

YOMIURI (Page 3) (Full)
February 9, 2006

Takaharu Yoshiyama, Beijing

Japan and North Korea wound up their official round of talks
yesterday. The two nations confirmed they would continue the
dialogue, but this round made it clear that there are the great
differences in views between the two governments. Especially on
the abduction issue, a senior Foreign Ministry official
criticized the results, calling them "not a zero reply but a
minus reply," meaning worse than no reply. Japan is being forced
to reshape its strategy. But this time, there is a subtle change
being felt in Japan, particularly since calls for tough economic
sanctions, for instance, from the Liberal Democratic Party (LDP),
are not rising.

Subtle change in government, LDP; More calls for a cool-headed
response than calls for sanctions

They threw us a curve

"That's out of the question. Are they working in good faith to
resolve the abduction issue?" Such was the strong response from
Kunio Umeda, deputy director-general of the Foreign Ministry's
Asian and Oceanian Affairs Bureau during the meeting on the
abduction issue on Feb. 7. This remark came out when the North
Korean delegates demanded Japan hand over some members of Japan's
nongovernmental organizations supporting North Korean defectors.
The demand came in response to Japan's calls for 1) returning
abductees now living in North Korea to Japan, 2) shedding light

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on the truth of the abductions; and 3) handing over North Korean
abductors to Japan.

The recent round of talks were held in a way to allow three
subjects to be discussed in parallel: abductions, security issues
including nuclear and missile development, and normalization of
diplomatic ties. A total of 11 hours were devoted to discussions
on the abduction issue held on Feb. 5 and Feb. 7. But no positive
responses ever came from the North Korean delegation.

Instead, North Korean delegates threw their Japanese counterparts
a "curve" at one point by demanding the handover of some of
Japan's NGO members, and at another, they appeared to be trying
to admonish Japan.

The North Korean Foreign Ministry's Asian Bureau Deputy Director
Kim Chol Ho raised doubts about Japan's DNA analysis of the ashes
North Korea provided to Japan as Megumi Yokota's and quoted a
Korean saying: "A Korean proverb says, 'Doubts are equivalent to
illness." He meant, "Doubts know no bounds."

Verbal battle

The negotiations on the normalization of diplomatic relations,
held for the first time in three years and three months, saw a
perceptions gap over the 2002 Japan-North Korea Pyongyang
Declaration come to the fore.

On settling past accounts, the Japanese team offered an economic
cooperation formula consisting of two approaches: 1) Both sides
mutually would waive claims on property and agree that claims for
cash compensation relating to Japan's colonial rule of Korea,
including military comfort women and Koreans forced to come to
Japan have been legally settled; and 2) Japan would offer
economic cooperation. The Japanese team emphasized this economic
cooperation formula as the only pragmatic way for settlement.

This formula stems from the method Japan and South Korea adopted
when the two countries normalized relations in 1965.

However, the North Koreans insisted that the "formula is not
sufficient." They suggested subtly they would still want
compensation for the military comfort women and forced laborers
in Japan.

The North apparently wished to resolve the issue with more
favorable conditions than those South Korea obtained.

Preparations for bills now underway

"A lack of tangible progress on the abduction issue would put the
Japanese public in an extremely severe mood," warned Ambassador
for Japan-North Korea Diplomatic Normalization Koichi Haraguchi
to his North Korean counterpart Song Il Ho during a plenary
session on Feb. 8.

In fact, some in Japan want to put pressure on North Korea due to
its "minus reply."

The LDP are preparing two bills to submit to the Diet: one
specifying the requirements need to impose economic sanctions and
another on the human rights of the North Korean people that calls
on Pyongyang to improve such rights. The party's Foreign Affairs

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Division chief Ichita Yamamoto and other party members are
planning to draft the bills possibly today based on the results
of the bilateral talks.

On Feb. 2, the Fukuoka High Court decided that reduced tax rates
and exemption to the fixed property tax of facilities owned by
the General Association of Korean Residents in Japan (Chongryun)
is a violation of the law. This ruling is seen as a "kind of
pressure" on the North, a government source said.

At a press briefing yesterday, Ambassador Song, referring to how
his country would respond if Japan intensified its pressure on
his country, hinted at retaliation, noting: "Newton's law of
motion -- for every action there is a reaction -- would be
applied."

Yet, it is not safe to say that calls for sanctions are growing
stronger in Japan as the stalemate continues in the bilateral
talks.

Many in the government remain cautious. One government official
remarked: "Even if we get angry, I don't think it is a wise
policy to close the door to dialogue, because a resolution of the
abduction issue would then become more remote. A cool-headed
response is necessary." Many also take the view that if Japan
imposed sanctions unilaterally, the impact would be small.

At a press briefing yesterday, Chief Cabinet Secretary Abe went
no further than to say: "We will decide how to pressure that
country after carefully listening to the results of the
negotiations." Abe once insisted on imposing economic sanctions
swiftly, but perhaps because he is a member of the cabinet now,
he may find it difficult to lead advocates of sanctions. In
addition, some hawkish members, including former Minister of
Economy, Trade and Industry Takeo Hiranuma, have left the party,
placing a damper on the moves of sanctions advocates.

(4) Minshuto suddenly moving away from LDP, New Komeito regarding
referendum bill, giving priority to drawing clear line with
ruling camp

ASAHI (Page 4) (Full)
February 9, 2006

The ruling Liberal Democratic Party (LDP),its coalition partner
New Komeito, and the main opposition party Minshuto (Democratic
Party of Japan) decided at the end of last year to aim at
submitting to the regular Diet session a bill to set up national
referendum procedures for amending the Constitution. The three
parties, however, will likely have trouble drafting a bill since
there is strong reluctance in Minshuto to conduct discussion with
the ruling camp on drafting a bill since the two camps are
clashing in the Diet over such issues as the Livedoor scandal.
The ruling coalition has a scenario that the Diet would start
debate on a joint referendum bill soon after the fiscal 2006
budget is approved, but such a scenario will not now be realized.

In a meeting yesterday of their secretaries general and policy
chiefs, the LDP and New Komeito agreed to set up a deliberative
body and work on Minshuto. The ruling camp plans to hold a first
meeting before the end of this week. Since the ruling bloc has
already drafted a bill, they are waiting for Minshuto to enter
discussion.

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Minshuto Constitutional Research Commission Chairman Yukio Edano
turned around and said, "We are not happy with the move the
ruling camp alone is proceeding with. It is difficult for us to
cooperate with such a move."

The ruling parties envisioned that they along with Minshuto would
start early this year discussion on their own bill and one
drafted by Minshuto and then come up with a joint bill around the
end of March. They expected that the bill would be submitted to
the Diet and the Diet would initiate in April debate and pass it
before the end of the current Diet session.

However since the ruling and opposition camps from the outset of
the current Diet session have been seriously at odds over the
Livedoor scandal and other issues, they have yet to set up a
deliberative organ of the three parties. Moreover, some Minshuto
members have called for bringing the Social Democratic Party
(SDP) and the Japanese Communist Party (JCP) into the planned
deliberative body.

One senior LDP Constitutional Research Commission member said
with a tone of resignation, "Under the present Diet situation, it
is difficult to move ahead with three-party consultations on the
issue of drafting a referendum bill."

During hearings of the House of Representatives Special Committee
on the Constitution in the special Diet session last year, the
ruling and opposition parties held three free-discussion sessions
on the issue of drafting a national referendum bill, but they
have so far made no concrete moves in the current Diet session.
House of Councillors members of the LDP and Minshuto, who are
more passive about drafting a referendum bill, have not yet set
up a deliberative body, which would be equivalent to the special
constitutional committee in the Lower House. The Minshuto caucus
in the Upper House, which has many former SDP-affiliated members,
who call for protection of the Constitution, has finally decided
to launch a study session on the formulation of its own bill. At
present, therefore, the ruling coalition and Minshuto cannot
discuss the contents of their own bills.

A senior LDP member said: "Since amendments to the Constitution
must be endorsed by a two-thirds majority in both houses, we need
Minshuto's cooperation. So, we cannot lock horns with it at the
preparatory stage."

If the present situation continues, some ruling coalition members
may strengthen their view that since the ruling parties have a
majority of the Lower House seats, they alone should get their
own bill passed through the Diet.

(5) Proposals on constitutional revision: Interviews with
chairmen of constitution commissions of LDP, New Komeito and
Minshuto

YOMIURI (Page 4) (Full)
February 9, 2006

Gen Funada of Liberal Democratic Party (LDP)

In a move to revise the Constitution, we aim at having a national
referendum bill passed by the current Diet session and paving the
way for government-level talks in the latter half of this year.

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We would like to start full-fledged deliberations next year and
to ask the prime minister to announce (a specific constitutional
reform plan) when agreement is reached in outline. I think this
is the best scenario.

I hope that executive members, including former Justice Minister
Okiharu Yasuoka, president of the House of Councillors'
Constitution Research Special Committee, will take the lead in
promoting constitutional debate. Although it is impossible to
amend the Constitution if only the LDP makes efforts to that end,
our party wants to serve as a "sherpa" in the talks.

We would appreciate it if Minshuto (Democratic Party of Japan)
and the New Komeito could swiftly submit their views in
preparation for the talks. Particularly, we would like Minshuto
to unify views in their party as much as possible. The New
Komeito has insisted on the need to add new provisions or rights
for the people in the Constitution, but we expect the New Komeito
will decide what should be added in the Constitution at an early
date.

Akihiro Ota of New Komeito

The revised constitution drafted by the LDP is similar in form to
ours calling for adding public rights. All parties, including our
party, have already come up with their draft proposals on
revising the Constitution, so we should start discussion on which
plan should be adopted and what parts in the Constitution should
be changed. I believe that common views will be found through
debates among the parties. I think the first referendum will be
held on items on which each party share the same views.

If the LDP decides to delete Clause 2 (renunciation of war) of
Article 9, it means that the LDP has recognized the right to
collective self-defense. Based on the stance of not approving the
right to collective self-defense, we take the view that clauses 1
and 2 of Article 9 should be retained.

Debates on the Constitution are heating up to some extent in the
Diet, but people seem to have no major interest in this issue. It
is very important to inform the public of the details of
discussed matters in the Diet in an understandable way and spark
up a national debate.

Yukio Edano of Minshuto

Progress in constitutional debate depends on public opinion. If a
majority of the people say, "Make it quick," we will speed up the
pace. We intend to hold discussion with the people, but future
development depends on what response the public will make.

Constitutional debate should not be affected by such political
schedules as a Minshuto or LDP presidential race and a New
Komeito convention. Those who aim to use the Constitution for
political bargaining do not understand at all what the
Constitution should be, because revising it will be impossible
unless agreement is reached among the three parties.

The Constitution should not be made a campaign issue. If it
becomes a major election issue, it will become impossible for the
three parties to reach an agreement and accordingly to amend the
Constitution for the time being. In my view, the New Komeito now
understands this point considerably, and half of the LDP members

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are aware of this. But the remaining half do not take a modest
stance and totally support the current Constitution. I hope the
members with good sense will continue to stand fast on their
stance.

(6) Japanese economy gaining momentum four years after emerging
from recession; Potential growth once again takes upward turn

NIHON KEIZAI (Page 1) (Excerpts)
February 9, 2006

The recovery of the economy is picking up speed. Companies are
highly motivated by the desire to increase capital investment,
boosted by upbeat business showings. Personal consumption, which
has been slow to recover, is now showing clear signs of recovery.
The Japanese economy is about to start on a stable growth track,
though there are some factors causing uncertainty, such as high
crude oil prices and developments in overseas economies.

Benchmark surpassed

It has been four years since the economy began its upward turn.
Experiencing two slumps during the course, the pace of the
recovery has not been smooth. But the uptrend is now picking up
steam. Index of industrial and mining production (base of 100 for
2000) set a record high last December at 105.0. The index
exceeded 104, a mark that was not surpassed even in the bubble
era.

Companies have strengthened their financial standing over the
past four years. Though the labor distribution share (the
proportion of the added value created by a company that is
distributed to workers) is beginning to stop falling, the ratio
in the most recent July-September quarter of last year stood at
63%, down six points over the past four years. In the corporate
sector, excesses in employment, debt, plant, and facilities have
been generally resolved. The ratio of operating income to net
sales, which stood at 2.5% four years ago, went up to 3.9%,
exceeding the level of the bubble era.

The operating income of listed companies increased by double
digits in the term ending in Mar. 2005 for the third consecutive
quarter. It had been estimated that operating income would
increase only slightly in the term ending in Mar. 2006 due to a
rise in the prices of raw materials. However, Honda Motors
achieved record profits due in part to the weak yen, though it
had projected a fall in profits at the beginning of the term.
Takashimaya Department Store had projected a decline in income
and an increase in profits, but now both income and profits are
expected to increase for the first time in four years.

The upward trend in business showings is spurring companies to
invest. Kubota will boost investment in the machinery business,
such as the production of construction and agricultural
machinery, in fiscal 2006 to 14 billion yen, double the level of
this fiscal year. This is the first time in eight years for the
company to make investments exceeding 10 billion yen.

Increase in new investment

Competitive investment in relation to flat-screen television
sets, led by Sharp, is also spreading. Based on the judgment that
global demand for polarizing film used in LCD sets will increase

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by 30% a year, Kuraray plans to invest 20 billion yen.

The Cabinet Office has projected that the capital stock of
manufacturing companies in fiscal 2005 would exceed the previous
year's level for the first time in eight years with new
investments topping the depreciation and scrapping of existing
facilities and equipment. Companies are thus beginning to emerge
from a mentality of retrenching.

Yasuo Goto, chief researcher at the Mitsubishi Research Center,
observed: "The potential growth of the Japanese economy, which
has been firmed by structural adjustment, has increased." He
noted that the Japanese economy's potential growth stood over 3%
in the bubble era and then slipped to 1.3% in fiscal 2000, but it
has now rebounded to over the 1.5% level. If the economy
continues to expand while potential growth increases, it will
likely continue to experience favorable conditions over the long
term without overheating.

Cause for concern still remains, though. The US economy is
saddled with high crude oil prices and a speculative bubble in
the housing sector. The fallout of the Livedoor incident is still
being felt. Even so, the Japanese economy is "in an excellent
state of balance," according to Bank of Japan Governor Toshihiko
Fukui. Chances are that the Japanese economy will maintain
sustained growth barring an unexpected external shock.

(7) Editorial: US defense strategy review - need for improvement
in efficacy of Japan-US alliance

SANKEI (Page 2) (Full)
February 7, 2006

The US Department of Defense unveiled its Quadrennial Defense
Review (QDR) report recently. The report comes up with guidelines
to follow, for example, in dealing with the war on terrorism. It
also raises a fundamental question about the role of the security
alliance with Japan.

The report positions the war on terrorism as a long-term
conflict, projecting an image of a US military capable of
responding swiftly and flexibly to any attacks.

One feature of the report is that in expresses concern about the
Chinese military, describing China as the country that holds the
highest potential of becoming a military competitor. The report
essentially regards China as a threat, explaining that its
military buildup since 1996 has put the military balance in the
region in danger.

According to the QDR report, the United States will shift its
emphasis in naval strength to the Pacific and deploy, for
instance, six or more AIRCRAFT carriers there on a regular basis.
The aim is presumably to enhance deterrent force in the so-called
arc of instability extending from the Middle East to the Korean
Peninsula, including China and a number of other countries.

It is worth noting that the report cites Japan, Australia, and
South Korea in this order as allies in the Pacific and
appreciates bilateral ties, such as those with Japan, as
maintaining world peace and security. Moreover, the report
stresses that the Pentagon cannot deal with the complex
challenges of today single-handedly and that it needs to work in

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close cooperation with allies and friends.

How to deal with the arc of instability is a national challenge
facing Japan, because its own peace and security hang in the
balance. It is safe to say that the only possible approach is for
Japan and the US to work together to counter international
terrorism and defeat groups that threaten peace in the region.

In the Security Consultative Committee (SCC) meeting last
February, Japan and the US released a joint statement urging
China to resolve the tensions across the Taiwan Strait in a
peaceful manner. With this, Japan as well has made clear its
position that it will not condone the use of force against
Taiwan.

Japan therefore has a greater responsibility than the US to
enhance the efficacy of the Japan-US alliance. But joint defense
is a mirage so long as the government adheres to the present
constitutional interpretation of the right to collective defense,
namely that Japan possesses the right but cannot exercise it.
Even if terrorists attack friendly forces, Japan's Self-Defense
Forces cannot deal with them. The moment this flaw is exposed,
the alliance will face a crisis.

There is an agreement between Japan and the US that they will
come up with a final report in March on the realignment of US
forces in Japan. In compiling that report, it is imperative to
have the perspective of strengthening deterrent force. Japan
should be flexible enough to review its defense capability in
terms of whether it can counter threats.

(8) Tyson Foods demands withdrawal of report by Minshuto
delegation that points out insufficiency of anti-BSE measures

NIHON KEIZAI (Page 2) (Full)
Evening, February 9, 2006

The Democratic Party of Japan (Minshuto) delegation, including
House of Representatives member Kenji Yamaoka, recently visited a
plant owned by Tyson Foods and later announced: "Its anti-BSE
measures are insufficient." The largest meatpacker of the US has
fiercely reacted to the delegation's report.

The Minshuto delegation visited the meat-processing facility of
Tyson Foods in Kansas in late January. Later, the delegation
announced to reporters that the removal of specified risk
materials (SRM) had been carried out in a sloppy way, for
instance, broken pieces of the spinal cord had splattered over
the meat during the slaughtering process.

Tyson Foods President Bond sent a letter dated Feb. 2 to the
delegation, in which he assailed that the party's announcement
was inaccurate and "will hurt our company's reputation." The
company demanded that the delegation "offer an apology and
retract its statement." The letter stressed that the Minshuto
delegation had not expressed concern about the safety of removal
of SRM while visiting the facility and "had indicated even its
approval and confidence in our operation of the facility."

A spokesman of Tyson in response to an inquiry by the Nihon
Keizai Shimbun yesterday said: "We have yet to receive any reply
from the Minshuto delegation." The official was doubtful that
political motives might lie behind the opposition party's moves.

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An LDP delegation of five members will also leave for the US
today to visit the same facilities the Minshuto delegation had
visited.

SCHIEFFER