JAPANESE MORNING PRESS HIGHLIGHTS 06/13/07

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/13/07 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule Political agenda: 4) Latest in Asahi Internet poll on upcoming Upper House election shows exodus of voters in 20s and 30s away from Prime Minister ABE 5) Former Prime Minister Koizumi's private secretary Iijima predicts a huge loss for the LDP in the Upper House election, possibly only taking 40 seats 6) Minshuto President Ozawa, slammed for using political funds to buy real estate, is considering selling the property 7) North Korea-affiliated Chosen Soren sold headquarters to company owned by former head of government's Public Security Information Agency (PSIA) 8) ABE unhappy with sale of Chosen Soren property to company owned by former PSIA director general 6 9) Governor Ishihara sounds out for post of deputy governor author Inose, a well-known advisor to then Prime Minister Koizumi on highway policy reform 10) SIA bombarded with 470,000 calls in 24 hours inquiring about pension issue but could only handle 17,000 Defense and security affairs: 11) Defense Minister Kyuma: SDF, operating with US warships on the high seas, may use individual right of self-defense to respond to enemy if US attacked 12) Japan restarts defense exchanges with China in September, with possibility of ship visit in October 13) Japan to restart economic assistance to Palestinian Authority 14) Talks between US, Japan for easing beef-import restrictions focusing on changing age limit from 20 months to 30 months Economic policy: 15) Draft economic policy guidelines contain controversial "hometown tax" 16) Governors of four major metropolitan cities protest new hometown tax 17) WTO negotiations start next month, but Japan fears it may be left out of the loop by EU, US 18) Founder of US fund: Japan is the worst place in the world in terms of measures to protect corporate acquisitions 11 TOKYO 00002655 002 OF 011 Articles: 1) TOP HEADLINES Asahi, Mainichi, and Yomiuri: State eyes settling damages suits by ex-tunnel workers suffering pneumoconiosis Nihon Keizai: Honda to debut clean, fuel-saving diesel cars in Japan by 2009 Sankei: Social Insurance Agency making recordkeeping errors since 50 years ago Tokyo Shimbun: 20,000 people have more than two insurance policy numbers Akahata: Ogata grills defense minister over SDF's surveillance of civilians 2) EDITORIALS Asahi: (1) People's participation essential for flood control (2) Growing suicides a serious problem Mainichi: (1) Weak yen and low interest rates don't suit growing economy (2) Flood summit held Yomiuri: (1) Proceed carefully on civil service reform (2) New World Bank president must restore international trust and review system Nihon Keizai: (1) Basic Policies for Economic and Fiscal Management and Structural Reform must be free from pork-barrel largesse (2) Mitsubishi-UFJ scandals undermine public trust of banks Sankei: (1) Former Public Security Intelligence Agency chief must clarify events leading up to acquisition of Chongryon headquarters (2) Revision of Private Information Protection Law requires probing discussion Tokyo Shimbun: (1) Mitsubishi-UFJ must go back to the basics (2) Rising land prices Akahata: (1) LDP, New Komeito must not put end to office expense issue by revising Political Funds Control Law 3) Prime Minister's schedule, June 12 NIHON KEIZAI (Page 2) (Full) June 13, 2007 08:45 Attended a meeting of the Postal Privatization Promotion TOKYO 00002655 003 OF 011 Headquarters in the Diet building. Followed by a cabinet meeting. Health, Labor and Welfare Minister Yanagisawa and Chief Cabinet Secretary Shiozaki stayed behind. SIPDIS 09:27 Met Shiozaki and Deputy Chief Cabinet Secretary Matoba. 09:49 Posed for photos for the Upper House election at the Dentsu Photo Studio in Higashi Shinbashi, with LDP Public Information Bureau Director General Katayama present. Joined by Public Information Department Head Futada. 14:06 Met at the Kantei with Matoba. Followed by Foreign Vice Minister Yachi. 14:58 Met members of the New Japan-China Friendship 21st Century Committee, including Fuji Xerox Supreme Advisor Yotaro Kobayashi, chairman of the Japanese side. 15:56 Attended ceremony marking the 13th anniversary of Takeo Fukuda's death at the Grand Prince Hotel Akasaka. 17:09 Met members of the association of nationwide crime victims "Asu no Kai" at the Kantei, with Lower House members Yoko Kamikawa and Yasufumi Tanahashi. Attended a meeting of the Council on Economic and Fiscal Policy. 18:06 Met Policy Research Council Chairman Nakagawa, Policy Research Council Acting Chairman Kawamura, Upper House Policy Deliberation Council Chairman Masuzoe, and others. Nakagawa stayed behind. 19:19 Dined with Sankei Shimbun President Takehiko Kiyohara and others at a French restaurant in Nishi-Azabu. 21:26 Returned to his official residence. 4) Young people distant from ABE in online poll ASAHI (Page 1) (Abridged) June 13, 2007 People in their 20s and 30s are said to have shored up former Prime Minister Koizumi's high popularity. How will they move now in the run-up to this summer's election for the House of Councillors? The Asahi Shimbun conducted an online poll of these younger voters over the past five weeks from mid-May. Among them, the nonsupport rate for the ABE cabinet is almost twice the support rate. The ABE cabinet's support rate is now even lower. In the popularity rating of political parties, the ruling Liberal Democratic Party is down, and the leading opposition Democratic Party of Japan (Minshuto) is up. However, 54% still predict that the LDP will win in the election, while 25% pick the DPJ. The figures show that their critical views of the ABE cabinet have yet to affect the election. TOKYO 00002655 004 OF 011 In 2005, Prime Minister Koizumi dissolved the House of Representatives for a general election over his initiative to privatize state-run postal services. At that time, a large number of voters in their 20s and 30s are said to have backed the LDP. The LDP also sees them as holding the key in campaigning for the House of Councillors election. It is difficult for telephone-based and face-to-face surveys to grasp the opinions of people in these generations. The Asahi Shimbun therefore conducted an online poll for the first time. Given the peculiarities of online polling, which lends itself to extreme results, the Asahi Shimbun analyzed trends in serial polling. In the first poll, the ABE cabinet's support rate was 28%, far below its nonsupport rate at 50%. In the fifth poll, the support rate was down to 16%, with its nonsupport rate up to 67%. In mid-May, when public opinion surveys showed steady support for the ABE cabinet, those in their 20s and 30s were already distancing themselves from Abe. The figures show that the ABE cabinet has further lost public support in the wake of the Social Insurance Agency's pension record-keeping flaws and Agriculture, Forestry and Fisheries Minister Matsuoka's suicide. Respondents were also asked which political party or which political party's candidate they would vote for in the upcoming House of Councillors election. In response to this question, the LDP stood at 23%, 22%, 22%, 20%, and 18% for its candidates in electoral districts. The DPJ was at 23%, 25%, 27%, 30%, and 29%. A similar trend was shown for proportional representation as well. In the first poll, 16% were "very interested" in the House of Councillors election. In the fifth poll, the figure was up slightly to 20%. However, it remains low on the whole. The response of those "very interested" is noteworthy. Among them, 47% picked the DPJ while 37% chose the LDP when the fifth poll asked them which political party they thought would win the election. 5) Former Koizumi secretary Iijima fears LDP will be suffer major defeat in Upper House election, ending up with 40 seats TOKYO (Page 2) (Excerpt) June 13, 2007 Kaoru Iijima, who served as private secretary to Prime Minister Junichiro Koizumi when he was in office, commented in a speech in Tokyo yesterday on the Upper House election that will take place on July 22: "Looking at the issues, such as pensions, I see (the ruling parties) falling into a terrible situation, ending up with 12 or 13 seats below a majority." He revealed his outlook that the Liberal Democratic Party (LDP) will suffer a major defeat, ending up with about 40 seats. For the ruling parties to maintain their majority in the Upper House, adding the seats that are not up for election this time, they need to win 64 seats. Iijima said that the New Komeito would "perhaps win about 11 seats," expressing his view it would be difficult for the party to hold on to its current 13 seats. 6) DPJ's Ozawa considering selling properties SANKEI (Page 5) (Full) June 13, 2007 TOKYO 00002655 005 OF 011 At a press conference in Kanazawa City yesterday, Ichiro Ozawa, president of the major opposition Democratic Party of Japan (Minshuto or DPJ),referred to the real estate his fund managing organization had purchased and that is registered under his name: "If that is viewed as a problem, I'll sell it anytime." He indicated his intention to consider selling it if needed. His fund management organization "Rikuzankai" purchased 12 properties in Tokyo, Iwate Prefecture and other places, the assessed value of which amounts to 1.019 billion yen. Ozawa, however, did not make any specific reference to when, how, and which of the real estate holdings would be sold. 7) Chongryon sold its headquarters to company headed by ex-PSIA chief SANKEI (Page 1) (Excerpts) June 13, 2007 The pro-Pyongyang General Association of Korean Residents in Japan (Chosen Soren or Chongryon) had sold its headquarters -- land and building -- at Fujimi in Chiyoda Ward, Tokyo to a Tokyo-based investment management company at the end of May, sources revealed. The background of this deal is drawing attention as the investment company is headed by the former director-general of the Public Security Intelligence Agency (PSIA),a government body tasked with investigating the movements of such organizations as Chongryon. According to the registers for land and buildings, the headquarters' land that was some 2,390 square meters and its 10-story concrete building with two basement levels with the total floor space of 11,700 square meters were sold. The purchase price is unknown, but given the local government tax on the headquarters' property, the assessed value of fixed assets is likely to be 3 or so billion yen. The deal was completed on May 31. The new owner of the property is Harvest Toshikomon K.K. (Harvest Investment Management Company),which was founded in September 2006 in Chuo Ward, Tokyo, for such business purposes as investment management and money lending. The initial representative director of the company was a man living in Bunkyo Ward, Tokyo, but this past April, he was replaced by former PSIA Director-General Shigetaka Ogata (73). The address of the company also was transferred to that of Ogata's residence in Meguro Ward. Ogawa became PSIA director-general in July 1993 after serving as such posts as prosecutor at the Supreme Public Prosecutors' Office and director of the Supreme Public Prosecutors' Offices' Public Safety Department. Afterwards, he served as chief public prosecutor at the Sendai High Public Prosecutors' Office and the Hiroshima High Public Prosecutors' Office, and in June 1997, he retired from the post. He still works as a lawyer. Chongryon operates in the same place even after the sale of its headquarters. Reportedly, it obtained approval of its parent country North Korea for this deal. 8) Prime Minister ABE expresses displeasure with the deal SANKEI (Page 1) (Full) June 13, 2007 TOKYO 00002655 006 OF 011 Prime Minister SHINZO ABE yesterday expressed displeasure with this sales transaction of the pro-Pyongyang General Association of Korean Residents in Japan's (Chongryon) headquarters land and building. He said, "I'd like (the former director-general of the Public Security Intelligence Agency (PSIA) to be fully aware of his past career, even though he now works at a private company." "It has become evident that Chongryon's members were engaged in crimes, including abductions," ABE continued. He was replying to questions by reporters at the Prime Minister's Official Residence. 9) Tokyo governor sounds out Naoki Inose on vice governor's post ASAHI (Page 1) (Full) June 13, 2007 It has been leaned that the Tokyo Metropolitan Government began coordination to appoint Naoki Inose, 60, a writer, as vice governor. Gov. Shintaro Ishihara plans to pick a person from the private sector to serve the vice governor's post. Inose's stance of having dealt with administrative reforms, including reform of public highway corporations, appears to be highly valued. Ishihara has said, "Private sector's intellectual power is needed" for the post of vice governor. According to those involved, Gov. Ishihara has already approached Inose to serve in the post. Inose is known for his aggressive calls for abolishing and privatizing special public corporations. He was appointed in 2002 by Prime Minister Junichiro Koizumi as a member of the committee to promote privatization of four public highway-related corporations. He proposed reform of public-interest corporations at the administrative implementation council, which chaired by then Administrative Reform Minister Nobuteru Ishihara, the eldest son of Gov. Ishihara. He now serves as a member of the government's Tax Commission and a member of the Decentralization Promotion Committee. 10) Telephone counseling on pension fiasco: Although there are 470,000 calls in 24 hours, SIA responds to only 17,000 calls ASAHI (Page 1) (Excerpts) June 13, 2007 The Social Insurance Agency (SIA) announced yesterday that its new toll-free telephone service and the hitherto telephone service were flooded with 469,448 calls asking about pension premium records for 24 hours from 8:30 a.m. on June 11 to 8:30 a.m. on June 12. Of the 469,448 calls, the SIA was able to respond to only 16,979 or one-28th. At Prime Minister SHINZO Abe's instruction, the agency hastily increased the number of manpower to respond to calls from 530 to 830. It will mull increasing more the number of manpower to respond inquiries. According to the SIA, there were about 20,000 calls in an hour and the number of calls during the nighttime and the daytime was almost the same. But many people seem to have called several since their calls did not get through. The number of calls on June 8, Friday, was the largest of 262,000, and the calls decreased to 55,000 on the 9th and 36,000 on the 10th. The reason for the flood of calls appears to be the SIA's lack of publicity that it provides the telephone services on weekends as well. TOKYO 00002655 007 OF 011 11) Individual self-defense right applicable for SDF vessels to defend US warships on the open seas, even if far off from each other: Kyuma SANKEI (Page 5) (Full) June 13, 2007 Defense Minister Fumio Kyuma, meeting the press yesterday, referred to a Self-Defense Forces vessel's act of fighting back if and when a US warship came under attack on the high seas. "These two ships may be far off from each other, but if one of the two ships were attacked when they are working together, it's possible to take it that the attack is the same as an attack on the other." With this, Kyuma indicated that an SDF vessel would be allowed to defend a US naval vessel-even if the two ships are far off from each other-with an expanded concept of individual self-defense, instead of exercising the right of collective self-defense. Kyuma also said, "I think we can do something more in other cases as well with the concept of individual self-defense." Meanwhile, a government advisory panel of experts met on June 11 to study cases that allow Japan to exercise the right of collective self-defense. In the meeting, the panel took the position that the SDF would be allowed to "use weapons in order to protect weaponry, etc.," as stipulated in SDF Law Article 95, if and when these two vessels are close to each other at sea under normal circumstances. However, the question is what to do if a US naval vessel comes under attack when it is separated from an SDF vessel. In this case, the panel mostly opined that the SDF's counteraction in that event should be interpreted as act under the right of collective self-defense, not under the right of individual self-defense. Kyuma appears to have raised an objection to that panel's view. 12) Japan, China to resume defense exchanges NIHON KEIZAI (NIKKEI) (Page 1) (Full) June 13, 2007 The governments of Japan and China are now in the final stage of coordination for a visit to Japan by Chinese Defense Minister Cao Gangchuan in September. If realized, the Chinese defense minister will visit Japan for the first time in nine and a half years since Chi Haotian in February 1998. Coordination is also underway for the first visit to Japan in October by a naval vessel of the People's Liberation Army (PLA). Tokyo and Beijing intend to strengthen Japan-China relations by resuming defense exchanges, which have been postponed due to visits to Yasukuni Shrine by former Prime Minister Junichiro Koizumi and other factors. During the Asia Security Conference, held in Singapore in earlier this month, Chinese authorities informally conveyed to Japan Beijing's desire to realize Cao's Japan visit between July and September. In view of the upcoming House of Councillors election and the mid-August Bon holiday break in Japan, Cao is likely to visit Japan in September. A PLA naval vessel is expected to visit Japan after Cao's visit, according to a senior Defense Ministry official. The Maritime Self-Defense Force plans to send its vessel to China next year in return. Through exchanges of defense leaders, Tokyo is expected to urge Beijing to increase transparency in China's growing defense spending TOKYO 00002655 008 OF 011 and explain that the ongoing Japan-US missile defense development project is not against any specific countries. The government eyes greater regional stability through efforts to build relations of trust between defense authorities of the two countries. 13) Japan to resume aid to Palestinian government YOMIURI (Page 4) (Full) June 13, 2007 Foreign Minister Aso late yesterday held cabinet-level political talks with Palestinian Foreign Minister Abu Amr at the Iikura State Guesthouse in Tokyo. Aso told the Palestinian foreign minister that Japan was considering resuming the now-suspended official development assistance to the Palestinian government. 14) US beef-exporting facilities, system confirmed; Japan, US to hold talks on easing import condition to 30 month age limit NIHON KEIZAI (NIKKEI) (Page 5) (Abridged slightly) June 13, 2007 The Agriculture, Forestry and Fisheries Ministry and the Health, Labor and Welfare Ministry will make public possibly today the results of their inspections of beef-exporting facilities in the United States. The report says that although the manual contained some inappropriate points, the system is capable of meeting Japanese import conditions, such as removal of specified risk materials. Tokyo plans to resume talks with Washington as early as July on easing import conditions after explaining the results to the public and notifying the US of the results. The two ministries inspected eight US facilities late last year. Inspected this May were the remaining 27 facilities of the 35 plans authorized to export beef to Japan, plus one that is expected to join the US list of beef-exporting plants. In the wake of the World Organization for Animal Health's (OIE) designation of the US as a country allowed to export beef irrespective of cattle age, Washington has been urging Tokyo to remove the 20-month age limit from its import conditions. But in view of successive cases suspected to have violated the import conditions since resuming imports last July, the government is skeptical that the US request for removing the import condition would obtain consumer understanding. Tokyo is expected to conduct talks with Washington centering on easing the condition to the international standard of cattle up to 30 months old. 15) Draft guidelines on economic and fiscal policy propose hometown tax, boosting labor productivity MAINICHI (Page 1) (Excerpts) June 13, 2007 The government's Council on Economic and Fiscal Policy, chaired by Prime Minister SHINZO Abe, held a meeting yesterday, in which the draft 2007 guidelines for economic and fiscal policy were unveiled. The first guidelines under the ABE administration take over the challenge of administrative and fiscal reforms from the Koizumi administration. They also include considerable measures from the TOKYO 00002655 009 OF 011 viewpoint of spurring the economy. In the run-up to the House of Councillors election, the guidelines will be the ABE cabinet's campaign pledge in effect. Main points in the (draft) 2007 economic and fiscal policy guidelines 7 Initiate radical tax system reform, including the consumption tax, this fall or later. 7 Reduce expenditures in the central and local government budgets as much as possible in fiscal 2008. 7 Map out a reorganization and streamlining plan for all independent administrative corporations. 7 Work out a new tax to enable contributions to hometowns. 7 Try to build consensus between the government, labor and management on raising the minimum wage. 7 Study creating a regional revitalization organ. 7 Start reviewing the distribution of subsidies for managing national university corporations. 7 Promote preparations for starting negotiations on economic partnership agreements. 7 Aim at eliminating idle farmland. 7 Look into early introduction of daylight savings time. 16) Four major governors oppose "hometown tax payment" MAINICHI (Page 5) (Full) June 13, 2007 The governors of Tokyo, Kanagawa, Osaka, and Aichi Prefectures yesterday got together in the Metropolitan Government Office. The four governors adopted an emergency appeal calling for a review of the government's plan to distribute the local tax revenues of large cities to local governments, which it calls a "hometown tax payment." The four governors asserted that the system would ignore the principle of people paying taxes to the locality in which they are the beneficiary of public services. They will present the appeal to the government as early as June 18. At the request of Tokyo Gov. Shintaro Ishihara, Osaka Gov. Fusae Ota, Aichi Gov. Masaaki Kanda, and Kanagawa Gov. Shigefumi Matsuzawa attended the meeting. The four governors opposed the government's plan, saying that the central government is switching the issue of decentralization to the redistribution of tax revenue sources from larges cities to local governments. They demanded the expansion of tax subsidies allocated to local governments, and the transfer of tax collection authority to local governments. 17) WTO talks to enter home stretch next week under G-4 lead, with Japan left out of loop TOKYO SHIMBUN (Page 9) (Excerpts) June 13, 2007 TOKYO 00002655 010 OF 011 The new round of global trade talks (Doha Round) under the World Trade Organization (WTO) will enter the home stretch early next week. In recent talks, the United States, the European Union (EU), Brazil, and India (G-4) have taken the initiative. Japan, while being left out of the loop, may be forced to make concessions in agriculture and other areas. Agriculture, Forestry and Fisheries Minister Norihiko Akagi and other officials involved are endeavoring to recover from the setback. The Doha Round started in November 2001. Although the round was initially scheduled to end in 2005, it has been extended for more than two years with no agreement reached. This time, there is a pressing circumstance for the US. The Trade Promotion Authority (TPA) the Congress has given to the president is to expire at the end of June. Unless a board agreement is reached in the Doha Round, the extension of the president's authority is likely to be carried over to sometime after January 2009, beyond the presidential election. Given this, many persons concerned take this view: "If negotiators fail to come up with some solution to the present impasse in June, the round may end in failure or be frozen." WTO Director General Pascal Lamy has envisioned a scenario in which major countries and regions first reach a broad agreement and then an accord, to be sealed in multilateral negotiations joined by all the 150 members. In this case, a G-4 meeting to be held around June 19 will be a key stage, and Japan may be pressed with the contents of an agreement to be reached by the G-4 group. Minister of Economy, Trade and Industry Akira Amari said, "We would like to jump into the G-4 meeting," indicating a desire to hold a G-6 meeting including Japan and Australia, besides the G-4 countries. In the farm sector, a reduction in tariffs will deal a serious blow to domestic farmers. In an effort to make up for lost time due to the sudden death of his predecessor Toshikatsu Matsuoka, Akagi has held teleconferences with his counterparts of the US, India, Australia, and other countries day after day since assuming office. He has called for a G-6 meeting, stressing the need of balance between food exporting countries and food importing countries in negotiations. 18) Co-founder of Steel Partners: "Japan's anti-takeover defenses are the worst in the world" MAINICHI (page 1) (Full) June 13, 2007 Warren Lichtenstein, co-founder of Steel Partners, gave a press conference in Tokyo yesterday. Steel Partners has launched an offensive on Japanese companies, as represented by a proposal to take over Sapporo Holdings. This reportedly was his first press conference abroad. He severely criticized the anti-takeover defenses that Japanese companies have taken in succession, saying: "Japan's preemptive anti-takeover defenses are the worst measures in the world." He also expressed opposition to the countermeasures taken by Bull-Dog Sauce Co., indicating a stance of confrontation. TOKYO 00002655 011 OF 011 SCHIEFFER