JAPANESE MORNING PRESS HIGHLIGHTS 01/05/07

UNCLAS SECTION 01 OF 09 TOKYO 000016

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01/05/07


Index:

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

Abe in charge:
4) Prime Minister Abe's New Year's press conference tinged with his
own political ideas
5) Text of prime minister's New Year's news conference

6) Former vice minister of land, transport ministry running for
Upper House seat solicited political funds from scandal-ridden
bridge-construction circles

7) Abe beefing up his prime ministerial assistants by adding
authority

8) New Komeito head Ota to travel to China, meet President Hu Jintao
on Jan. 8 in effort to pave way for Hu's visit to Japan

Defense and security affairs:
9) JDA chief Kyuma orders agency study of proposed Futenma
relocation to seaweed beds off Camp Schwab, premised on one runway
being built
10) US, Japan cooperating to evacuate American, Japanese civilians
from Korean Peninsula in event of a contingency
11) Government predicts that a Korean Peninsula contingency would
bring over 100,000 North Korean refugees into Japan, far more than
can be handled
12) LDP studying possible easing of three no-weapons-export
principles to allow weapons development for countries other than the
US

Articles:

1) TOP HEADLINES

Asahi:
Former land and transport vice minister scheduled to run in Upper
House election asked bridge industry to purchase party tickets to
raise funds

Mainichi:
LDP considering relaxing three principles banning weapons exports to
allow country to develop weapons with countries other than US

Yomiuri:
Japan, US to cooperate in evacuating 110,000 Japanese, American
nationals in South Korea in time of Korean Peninsula contingency by
using US aircraft, vessels

Nihon Keizai:
Environment Ministry to require major retailers in Tokyo, Osaka, and
Nagoya to reduce exhaust

Sankei:
Factory Location Law: METI to relax greenery regulations to
revitalize local economies

Tokyo Shimbun:
Kantei team to be established later this month to make Haneda

TOKYO 00000016 002 OF 009


Airport operational around the clock

Akahata:
Third Central Committee meeting held on Jan. 4; Victories in two
major elections vowed

2) EDITORIALS

Asahi:
(1) Minshuto needs solid election strategy
(2) Future of science: Young scientists urged to follow in Nobel
laureate Yukawa's footsteps

Mainichi:
(1) Japanese economy needs sense of urgency

Yomiuri:
(1) Caution keyword for global economy in 2007

Nihon Keizai:
(1) No growth without liberalization (Part 4): Attractive regions
are investment magnet

Sankei:
(1) Abe's New Year's press conference: Paint national image with
constitutional revision
(2) Keidanren vision lacks boldness for country of hope

Tokyo Shimbun:
(1) Thoughts at beginning of year: Japan needs vigor

Akahata:
(1) Public must play central role

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, January 4

NIHON KEIZAI (Page 2) (Full)
January 5, 2007

10:00
First news conference this year at Kantei.

10:53
Left JR Tokyo Station aboard Nozomi 181. Met with Deputy Chief
Cabinet Secretary Suzuki and Minister of Internal Affairs and
Communications Suga on train.

12:36
Arrived at JR Nagoya Station. Met with Aichi Gov. Kanda, Tokyo Motor
Chairman Fujio Cho, JR TOKAI Chairman Toshiyuki Kasai and others at
the VIP room in the station.

13:02
Met with Suga, Agriculture Minister Matsuoka, METI Minister Amari,
and Environment Minister Wakabayashi at the VIP room.

13:10
Left the station by a Kintetsu express. Met with Special Advisor
Yamatani on train.


TOKYO 00000016 003 OF 009


14:33
Arrived at the Kintetsu Uji Yamada Station.

14:40
Arrived at Ise Shrine in Ise City, Mie Prefecture. Visited the Outer
Shrine.

15:11
Visited the Inner Shrine. Afterwards, Received flowers from the 7th
Ise Team of the Boy Scout Association of Japan and the 1st Mie
Prefecture Team of the Girl Scout Association of Japan at the Board
for Ise Grand Shrine.

16:15
Left the Kintetsu Uji Yamada Station by a Kintetsu express. Met with
Wakabayashi on train.

17:36
Arrived at the Kintetsu Nagoya station.

17:41
Met with Suga and others at the VIP room at the JR Nagoya station.

17:53
Left the station aboard Nozomi 34. Met with Deputy Chief Cabinet
Secretary Shimomura, later Amari.

SIPDIS

19:31
Arrived at the JR Tokyo Station.

19:46
Returned to the residence in Kantei.

4) Abe's New Year's press conference tinged with his own policy
ideas as effort to increase support ratings

YOMIURI (Page 4) (Excerpts)
January 5, 2007

Prime Minister Shinzo Abe held a New Year's press conference
yesterday in which he played up his resolve to display strong
leadership, stating: "I am determined to move in a straight line
without flinching toward (making Japan into) a beautiful country."

Abe also referred to constitutional revision -- a foundation for his
goal of breaking away from the postwar regime -- as a top priority
in the upcoming Upper House election. Abe apparently intends to
reenlist public support by highlighting his posture of bravely
challenging one of the largest postwar political issues.

But constitutional revision requires not only the concurrence of the
ruling parties but also the main opposition Minshuto (Democratic
Party of Japan). Following Abe's press conference, Liberal
Democratic Party Secretary General Hidenao Nakagawa urged Minshuto
to begin talks on constitutional revision. In response, Minshuto
President Ichiro Ozawa indicated that his party would prioritize
everyday life issues over constitutional revision. Ozawa seems to
have the pension issue and the like in mind specifically. In
addition, it is still uncertain as to whether a national referendum
bill governing procedures for constitutional revision can clear the
Diet before the Upper House election.


TOKYO 00000016 004 OF 009


5) Gist of Prime Minister Abe's New Year's press conference

YOMIURI (Page 4) (Full)
January 5, 2007

Constitutional revision

This year marks the 60th anniversary since the Constitution took
effect. We must clarify our wishes to create a constitution suitable
for the new age. The LDP has drafted a new constitution. I would
like to see the LDP conduct talks with other parties. I also want to
see deepened discussions on a national referendum bill between the
ruling and opposition blocs. I will appeal to voters during Upper
House election campaigning about my goal of revising the
Constitution during my administration.

Upper House election

As the LDP president and the prime minister, I will face elections
with the mettle to achieve victories at all times. Given such a
responsibility, I have been making efforts ceaselessly as the top
political leader of the nation. I am not thinking at all about
holding simultaneous elections (for both chambers) at present.

Domestic affairs
Reforming education and rebuilding the public educational system are
top priorities. We will revise laws as necessary in the next regular
Diet session without fail. The government will proceed with
necessary legislation in order to transform the Social Insurance
Agency into a trustworthy entity. I will come up with a full-fledged
strategy to counter the declining birthrate. The year 2007 must
become the first year of nation- building to make Japan into a
beautiful country.

Diplomacy, security

I will conduct "assertive diplomacy" from a strategic perspective.
The Japan-US alliance must be further strengthened. My
administration will rebuild the legal foundation for national
security that befits the times. We will continue studying specific
cases, including the question of exercising the right to collective
self-defense, as part of adjusting the relationship (of security)
with the Constitution.

6) Former Land, Infrastructure and Transport vice minister found to
have asked bridge construction companies for funds donation; 12
companies indicted for bid-rigging purchase fund-raising party
tickets

ASAHI (Top Play) (Excerpts)
January 5, 2007

It has been learned that the supporters' association of Nobuaki Sato
(59),former land, infrastructure and transport (MLIT) vice
minister, who is expected to run for proportional representation in
the Upper House election to take place this summer on the Liberal
Democratic Party's (LDP) ticket, had asked bridge constructors,
including 26 companies that were prosecuted for bid-rigging over
bridge construction projects, to purchase fund-raising party
tickets. Twelve companies out of the 26 have admitted to buying such
tickets. Some companies noted that they did so at the request of
former MLIT officials. MLIT is harshly dealing with bid-rigging

TOKYO 00000016 005 OF 009


practices, as can be seen in that it has banned bidding among
designated companies and charges penalties against companies that
violate the rule. The former vice minister solicited election funds
amid such a move. The incident has brought into bold relief the
pattern of bureaucracy depending on the private sector.

The party in question was held at a Tokyo hotel last December,
attended by approximately 2,000 guests, including former MLIT
officials, incumbent senior officials and sources persons with the
construction industry.

According his supporters' association, they started asking for
purchases of party tickets -- 20,000 yen per ticket -- around last
October. Directors of the supporters' association played a leading
role in the activities. Most of the 100 or so executive directors
throughout the nation are former MLIT officials. They are
responsible for industries where they landed jobs after retiring
from the MLIT and districts where their companies are located. They
encouraged them to purchase party tickets and join Sato's
supporters' organization.

In the bridge-construction industry, former MLIT officials who
landed jobs at bridge constructors allegedly asked most of companies
that belong to the Japan Bridge Construction Association, an
industrial association with a membership of about 60 companies, to
buy party tickets.

Sato took office as vice minister in August 2005, three months after
public prosecutors started investigations into those 26 companies.
Before assuming this post, he was a vice minister for engineering
affairs, the top post for engineering officials. He compiled
measures to prevent bid-rigging practices as an acting chairman of a
committee within the ministry, set up to prevent a recurrence of
bid-rigging practices.

7) Authority of special advisors to the prime minister to be
strengthened to enable them to give orders to bureaucrats: Related
laws to be revised to establish Kantei leadership

NIHON KEIZAI (Page 1) (Slightly abridged)
January 5, 2007

The outline of legislation intended to strengthen the functions of
the Prime Minister's Official Residence, which the government wants
to submit to the regular Diet session, has been revealed. The bill
is designed to strengthen the authority of special advisors to the
prime minister -- now their role is just to give advice to the prime
minister -- and give them the authority to give orders to officials
of the Cabinet Secretariat. Other features of the legislation
include the adoption of a political appointment system in principle
for the selection of senior officials of the Cabinet Secretariat and
the establishment of a Japanese equivalent of the National Security
Council of the US.

Strengthening the Kantei's functions is one area for which Prime
Minister Abe has shown a desire. The government is now looking into
the possibility of revising the National Civil Service Law. Abe is
aiming for a policy-setting mechanism led by the Kantei by
appointing the maximum possible number of five special advisors, and
having them take charge of national security, economic and fiscal
policies, the abduction issue, educational revitalization and public
affairs.

TOKYO 00000016 006 OF 009



However, under the existing law, special advisors to the prime
minister are no more than advisors who can just give advice or state
opinions to the prime minister. There is no system that allows them
to use bureaucrats. A point has also been made that related
government agencies do not provide special advisors key information.
The government will obligate the staff of the Cabinet Secretariat to
report to special advisors and grant authority equivalent to that
given to deputy chief cabinet secretaries.

An experts' council, chaired by the prime minister, is now
considering the specific mechanism of the Japanese equivalent of the
NSC. The envisaged organization will likely be granted with the
authority to propose diplomatic and security policies. Provided that
the consideration process delays, the submission of a set of bills,
including other areas, might be delayed until the second half of
this year or later.

8) New Komeito head Ota to visit China, meeting with President Hu on
the 8th to pave way for his Japan visit

MAINICHI (Page 5) (Full)
January 5, 2007

New Komeito head Akihiro Ota will make a three-day visit to China
starting on January 7. He is expected to meet with President Hu
Jintao on the afternoon of the 8th. He also will meet with other key
Chinese government officials, including State Councilor Tang
Jiaxuan, former foreign minister. The objective of his China visit
is in part to pave the way for visits to Japan by Hu and Premier Wen
Jiabao in the run-up for the 35th anniversary of the normalization
of Japan-China relations.

Ota during a New Year executive meeting of the New Komeito on Jan. 4
underscored the meaning of his visit to China, noting: "Japan-China
relations have markedly improved since Prime Minister Abe visited
China last fall. My China visit will have the important role of
developing that trend in a specific way." Ota wants to boil down
specific items for cooperation in order to facilitate strategic and
reciprocal relations between the two countries, a policy which Prime
Minister and Hu agreed on during their meeting last October. Another
aim is to elicit from Hu a clear indication of his intention to
visit Japan at the end of the year, as a senior party official put
it.

Ota on Dec. 26 last year met wit Abe. They agreed that the Liberal
Democratic Party and the New Komeito cooperate to improve
Japan-China relations. Ota has determined that the shift from the
dogmatic Koizumi administration to the harmony-oriented Abe
administration is a good opportunity for the New Komeito to gain a
greater voice, as a senior party official put it. In particular, the
party sees that diplomacy is an area in which it can display
influence.

9) Futenma relocation: JDA chief orders study of moving facility to
seaweed beds (off Camp Schwab),premised on construction of single
runway

ASAHI (Page 3) (Excerpts)
January 5, 2007

It was learned yesterday that in connection with the issue of

TOKYO 00000016 007.2 OF 009


relocating Futenma Air Station (Ginowan City, Okinawa Prefecture) as
part of the realignment of US forces in Japan, Defense Agency (JDA)
Director General Fumio Kyuma has instructed JDA to study fostering
another place than the one planned. This would be the seaweed beds
in shallow waters off Henoko district. Kyuma has indicated that he
is thinking of shifting the runway site into the shallow waters and
building a single runway instead of the V-shaped one. So the premise
for moving the site to shallow waters is on the construction of a
single runway. However, it is not completely clear whether this can
be carried out, since this would be a complete revision of the final
agreement on the relocation reached by the Japanese and US
governments last May.

Kyuma's ordering of a study of moving the site to the seaweed beds
where dugongs feed is an attempt to avoid the facility relocation
from being derailed by protest movements from environmental
protection groups and the like. Shifting the runway site moves the
project closer to the shallow waters plan that the US had advocated
prior to the interim agreement reached in Oct. 2005.

However, there is spreading perplexity about the new proposal in the
government as well as in Okinawa Prefecture, as one government
source put it, "Making it into one runway is Kyuma's personal
opinion." Even if the government and Okinawa agree, it is not
certain that the US will go along with it or not. A Foreign Ministry
source pointed out: "The US finds the dual runways more convenient
for take offs and landings and may not be amenable to giving up the
V-shaped runway plan." The view in the ministry is that it will be
difficult to re-coordinate the plan with the US side.

On the other hand, there is a mixture of belief and disbelief in the
prefecture, as well. The governor on Jan. 4 was appreciative that
there was flexibility in the stance, calling it, "A very good thing
to hear." However, the governor's aides and senior prefectural
officials have raised doubts about the possibility of realizing
Kyuma's plan, one saying, "Broad changes will require a
renegotiation between Japan and the US, and the construction plan
and environmental assessment would have to be redone." There also
reportedly was a message sent from a senior JDA official to the
prefecture Jan. 4 that "working-level officials are not involved (in
the director general's initiative)."

Nago City Mayor Yoshikazu Shimabukuro also remarked, "I don't know
what the true intent is. Although I would like to welcome it if the
runway can be built in the sea, I wonder if aircraft flying above
the village can be avoided. Can the US also be convinced?"

10) Japan, US to cooperate in evacuating civilians from South Korea
-- an estimated 110,000 -- in event of Korean Peninsula contingency,
using US military aircraft, ships; Revised plan ready by the Fall

YOMIURI (Top play) (Excerpt)
January 5, 2007

The Japanese and US governments have begun to work on drafting a
plan to evacuate Japanese and American civilians living in South
Korea in the event of a Korean Peninsula contingency, and to create
an arrangement for mutual cooperation (to implement the plan).
Coordination is going on so that Americans evacuated would be
received by Japan briefly, and that US military aircraft and ships
would transport Japanese citizens to their home country. An
agreement is expected in the Fall. In addition, in order to raise

TOKYO 00000016 008 OF 009


the level of implementation of a Self Defense Forces and US forces
joint plan, drafted in 2002, for responding to a Korean Peninsula
contingency, the plan will be basically revised by the Fall to
reflect the evacuation plan for civilians. The plan will designate
specific civilian airports and ports in Japan to be used by US
forces during a contingency. The aim also is to strengthen
preparations for an emergency by setting the means for joint
response under missile defense.

11) Japan's simulation of crisis on Korean Peninsula: 100,000 North
Korean refugees could arrive in Japan, beyond its housing capacity

ASAHI (Page 1) (Full)
January 5, 2007

It was learned yesterday that the Japanese government has made a
prediction that in the event that a crisis occurs on the Korean
Peninsula, 100,000-150,000 North Korean refugees will arrive in
Japan. This figure was estimated by a relevant office in the
Security Council under the Cabinet Office. Also, in the process of a
joint operation plan the Japanese and US governments have pursued
since last December, measures for refugees are one key item for
consideration. Based on that figure and other data, specific steps
for refugees will be discussed.

The estimate was made by an experts' committee to deal with the
situation, a panel assisting the Security Council, after a one-year
study from 2003. The panel consists of bureau-director-level
officials from relevant ministries and agencies, including the
Foreign Ministry and the Defense Agency. According to South Korean
experts, however, they estimate that if North Korea is thrown into a
state of anarchy, 2-4 million North Koreans will flee the country as
refugees. The Japanese government's estimate about the number of
North Korean refugees who may arrive in Japan came out for the first
time.

According to an official concerned, Japan conducted a survey of such
ports as Wonsan and Chongjin on the east coast of North Korea and
such things as the number of vessels possessed by the North Koreans.
Based on the results of the survey, the panel estimated that there
is the possibility that 100,000-150,000 North Koreans will arrive in
Japan, mainly in Kyushu and Chugoku. It was also estimated that
Japan's housing capacity, even including the use of such facilities
that will not bring about any trouble in daily administrative
activities as gymnasiums and community halls, will be "tens of
thousands," the official said. The panel's conclusion is that
because the number of such refugees may exceed Japan's housing
capacity, Japan will need to discuss the transportation of a portion
of the refugees. Japan's estimate does not include refugees from
South Korea.

The US has also drawn up some scenarios on the possible collapse of
the North Korean regime, assuming such cases as the death of General
Secretary Kim Jong Il, a large disaster, or massive rioting.

SIPDIS
Reportedly, the US, too, is conducting research. In the process of
shaping a joint operation plan, both Japan and the US are expected
to examine their respective estimates and include countermeasures in
the plan.

12) LDP mulling easing 3 principles on arms exports, envisioning
possible weapons development with countries other than US


TOKYO 00000016 009 OF 009


MAINICHI (Top play) (Excerpts)
January 5, 2007

Yoso Furumoto

The governing Liberal Democratic Party (LDP) has begun considering
easing the restrictions on joint development of weapons under the
"three principles on arms exports," a policy prohibiting Japan's
exports of weapons, so that Japan can take part in joint development
of weapons with countries other than the United States. The purpose
of this easing is to curtail the development costs as pressure to
cut defense spending is growing stronger now, while unit prices of
equipment are on the upward trend on the other. The relaxation of
the "three principles" has been already progressing. In the LDP,
many are tolerant of easing (the restrictions on multilateral
development of weapons) on the premise of setting some kind of
criteria, but the move may encounter criticism that participation in
multilateral development will lead to removing the ban on weapons
exports in piecemeal fashion.

In the past, the "three principles" were applied so strictly that
every export of weaponry, as well as every joint development of
weapons, was prohibited. In recent years, though, Japan has
gradually eased the principles, though limiting cases of weapons
exports and joint development to those with its ally, the US. In
fact, Japan in a statement released in the name of the chief cabinet
secretary in December 2004 declared that joint development and

SIPDIS
production with the US regarding the missile defense (MD) system
should be made an exception. On the questions of (1) whether to
allow joint development and production with the US in areas other
than the MD system and (2) whether to allow exports of weapons to be
used as measures against terrorism and piracy, the statement
proclaimed that each individual case of those kinds should be
discussed. But Japan's participation in joint development and
production with countries other than the US has been still
prohibited to date.

Recently, however, the prices of weapons, such as fighters, have
been on the upward trend with the advancement of high technology,
and also the licensing fees, which domestic firms pay in their
license production of weapons developed by the US, have been rising.
Given this, the LDP's national defense policy clique in the Diet
deemed it essential for Japan to take part in international joint
development projects in which one or more countries participate, a
framework "that has taken root in the international community as a
means to restrain the development costs," a clique member said. The
LDP started discussion on the easing of the three principles, the
basis for Japan to voluntarily restrict joint development with other
countries, envisioning European nations.

On the other hand, many in the LDP still assert that Japan should
retain the philosophy as a pacifist nation. In order to brush aside
criticism that the ban on (joint development with other countries)
is on the verge of being lifted in a piecemeal manner, the
discussion is likely to be focused on how to form criteria on: (1)
partners for joint development, (2) areas allowed for joint
development, and (3) control over exports to third countries.

DONOVAN