JAPANESE MORNING PRESS HIGHLIGHTS 07/11/08

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07/11/08

Index:

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

North Korea problem:
4) Six-Party Talks agree to create framework for verification of
North Korea's nuclear declaration (Tokyo Shimbun)
5) Strong dissatisfaction expressed at Six-Party Talks that North
Korea left out nuclear weaponry from its nuclear declaration
(Sankei)
6) Japan at Six-Party Talks demands three items (Nikkei)

7) Canada invites Emperor and Empress to visit next summer (Nikkei)


Defense and security affairs:
8) Government presents proposal to Okinawa Prefecture to create
research body on removing danger of Futenma Air Station (Mainichi)

9) Defense Ministry did not announce schedule of joint U.S., SDF
training for missile defense in July, worried that other countries
would tap information (Tokyo Shimbun)

Political agenda:
10) Prime Minister Fukuda insists that despite rumors, a cabinet
shuffle is a "blank slate" (Mainichi)
11) Talk of Diet dissolution continues in the LDP, with speculation
that it would come at the beginning of the regular Diet session or
after the budget passes (Tokyo Shimbun)
12) Former Chief Cabinet Secretary Yosano rips to shreds the
Democratic Party of Japan's (DPJ) proposals, saying that 30 trillion
yen needed to implement (Asahi)
13) DPJ plans to present a rush of bills to the extraordinary Diet
(Yomiuri)
14) Business organization of top executives plans regular
discussions with LDP, DPJ (Asahi)
15) Yuriko Koike and two other popular female lawmakers present
policy proposals in new jointly authored book (Asahi)

16) Government Regulatory Reform Council's policy presence has
faded: Latest report seen as meaningless (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi:
University of Tokyo professor falsely claimed ethics panel approval
in theses

Mainichi:
Government appeals court decision over opening of Isahaya Bay dike

Yomiuri:
Three MEXT officials fired for taking bribes

Nikkei:
Government, ruling parties eye postponing raising government's share
of basic pension until October 2009 or beyond


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Sankei:
Households suffering from high inflation

Tokyo Shimbun:
Six-party head-of-delegations meeting: Agreement reached to build
framework to verify North Korea's nuclear declaration

2) EDITORIALS

Asahi:
(1) Six-party talks: North Korea's nuclear declaration must be
examined thoroughly
(2) The bottom billion a challenge for industrialized countries
after summit

Mainichi:
(1) North Korean nuclear declaration: Verification system with no
loopholes essential
(2) Country needs four-year basic nursing higher education system

Yomiuri:
(1) No compromising on checking DPRK report
(2) Hiraizumi fails to make World Heritage list

Nikkei:
(1) No loopholes allowed in examining North Korean nuclear report
(2) Dark side of teacher recruitment system

Sankei:
(1) Iran's missile test raises global alarm
(2) Specification of Takeshima in educational guidelines requires no
diplomatic consideration

Tokyo Shimbun:
(1) U.S. financial crisis not over
(2) Harmony essential for Beijing Olympics

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 10

NIKKEI (Page 2) (Full)
July 11, 2008

11:39
Met at Kantei with Canadian Prime Minister Harper.

12:29
Hosted luncheon for Harper.

13:52
Met with Deputy Foreign Ministers Sasae and Kono. Sasae remained.

14:48
Met with NPA Chief Yoshimura.

15:19
Met with Chief Cabinet Secretary Machimura.

16:11
Met with Public Security Investigation Agency Chief Yanagi. Met
afterwards with incoming and outgoing persecutor-general Hiwatari

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and Tadaki, and Justice Vice Minister Ozu.

17:10
Met with LDP Secretary General Ibuki, followed by Deputy Chief
Cabinet Secretary Ono.

18:22
Returned his official residence.

4) Six-party head-of-delegations meeting: Agreement reached to build
framework to verify North Korea's nuclear declaration

TOKYO SHIMBUN (Top play) (Almost full)
July 11, 2008

Yuji Hiraiwa, Nakahiro Iwata, Beijing

A six-party head-of-delegations meeting began on the afternoon of
July 10 at the Diaoyutai State Guesthouse in Beijing. The members
discussed North Korea's denuclearization for three and a half hours
over a working dinner yesterday, the first day of the talks.
According to an informed source, the participants shared the need to
build a framework to verify the contents of North Korea's
declaration of its nuclear programs and a system to monitor the
implementation of what was agreed upon through the six-party talks.
North Korea did not raise any objections.

Abduction issue not discussed

The six-party delegates met for the first time since last
September.

From the morning of July 11, they will aim at a total agreement on
establishing verification and monitoring frameworks. Foreign
Ministry Asian and Oceanian Affairs Bureau Director-General Akitaka
Saiki indicated on the night of July 10 that the participants' views
were headed for a consensus. Saiki's U.S. counterpart, Assistant
Secretary of State Christopher Hill, also indicated that China would
draw up a chairman's statement specifying a verification framework.

According to the source, the delegates hailed the North's
declaration as progress, though it did not meet the deadline. At the
same time, some members called for an early presentation of
information on nuclear weapons, something that was not included in
the North's declaration.

Japan underlined the need for the involvement of the International
Atomic Energy Agency (IAEA) in the verification process with the
participation of the remaining five countries. Japan also expressed
its willingness to join the energy aid program if there is progress
on the abduction issue. The abduction issue was not discussed in the
session. Saiki also briefly exchanged greetings with North Korean
Vice Foreign Minister Kim Kye Gwan.

If a consensus is reached on establishing a verification system and
other matters on July 11, the six countries intend to discuss in the
afternoon how to proceed with economic and energy aid to the North.

Chinese Vice-Foreign Minister Wu Dawei, chair of the six-party
talks, called for the participants' cooperation by saying at the
outset of the meeting: "Our target is to jointly promote the
complete implementation of the second-phase steps (for

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denuclearization) in order to enter the new phase."

5) In resumed six-party talks, Saiki expresses strong
dissatisfaction at no information on nuclear weapons, cites
resolution of abduction issue as precondition for aid to North
Korea

SANKEI (Page 1) (Full)
July 11, 2008

(Jiro Otani, Beijing)

Chief envoys of the six-party talks aimed at denuclearizing North
Korea met at the Diaoyutai State Guesthouse in Beijing on July 10.
The delegates discussed ways to verify the declaration on its
nuclear programs presented by Pyongyang in June and a mechanism to
monitor the state of implementation that each country would be
obliged to carry out. Japan's chief delegate Akitaka Saiki, director
general of the Foreign Ministry's Asian and Oceanian Affairs Bureau,
expressed strong dissatisfaction that the nuclear report provided no
information about the number of nuclear weapons possessed by North
Korea, saying: " Can this really be said to be a complete
declaration?"

But Saiki told reporters after the meeting at a Beijing hotel:
"Discussion of a verification system is moving toward agreement." On
the issue of North Korea's past abductions of Japanese nationals,
Saiki disclosed that he had said in the meeting: "An environment
will be created (for Japan) to offer aid to the North through a
settlement of the abduction issue."

The envoys agreed in the meeting to advance deliberations on these
four agenda items: (1) Ways to verify the North Korean nuclear
report; (2) economic energy aid to North Korea, including heavy oil;
(3) a timetable for a six-party foreign ministerial; and (4) ways to
denuclearize North Korea in the third stage. They also affirmed the
need to swiftly set up a framework to verify the nuclear report and
decided to discuss specific means on July 11. If progress is made
there, the delegates may hold a meeting of the working group on
North Korea's denuclearization the same day.

According sources involved in the six-party talks, Saiki met with
North Korea's Vice Foreign Minister Kim Kye Gwan briefly, but the
two did not discuss such bilateral pending issues as a
reinvestigation of abductee victims. A Japanese delegate told
reporters last night that no decision has been made for the next
round of Japan-North Korea talks.

6) In six-party talks, Japan demands three items, including on-site
inspections of nuclear facilities in North Korea

NIKKEI (Page 3) (Full)
July 11, 2008

(Nagasawa, Beijing)

Chief envoys of the six-party talks over North Korea's nuclear
problem met at the Diaoyutai State Guesthouse in Beijing on the
afternoon of July 10. According to informed sources on the Japanese
side, the participants shared the need to agree on a mechanism to
verify the declaration produced by North Korea in late June on its
nuclear programs. In the meeting, Japan demanded three items that

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Pyongyang should (1) allow on-site inspections of its nuclear
facilities; (2) submit additional nuclear documents; and (3) allow
interviews with North Korean nuclear technicians. The focus of
attention is to what extent North Korea would accept these demands.

The six-party talks were held for the first time in about nine
months since last September. In the meeting, the envoys decided to
discuss (1) a verification regime for North Korea's nuclear
declaration; (2) energy aid to North Korea; (3) a timetable for a
six-party foreign ministerial; and (4) basic policy on the third
stage of North Korea's denuclearization.

Foreign Ministry's Asian and Oceanian Affairs Bureau Director
General Akitaka Saiki, Japan's chief envoy, told reporters last
night that (North Korea) has generally accepted the three items
demanded by Japan, including on-site inspections. He expressed
dissatisfaction at no information on nuclear weapons included in the
nuclear report and also insisted on the need to increase the
effectiveness of inspections by including International Atomic
Energy Agency members in them.

The main aid program for the North in return for its nuclear report
is energy aid equivalent to 850,000 tons of heavy oil by the five
nations. But Japan intends not to take part in economic assistance
if no progress is made on the issue of Japanese nationals abducted
by North Korean agents. According to Saiki, in the meeting on the
10th, there was no scene in which North Korea criticized Japan's
posture.

7) Imperial couple to visit Canada probably next summer

NIKKEI (Page 2) (Abridged)
July 11, 2008

Prime Minister Yasuo Fukuda met yesterday with Canadian Prime
Minister Stephen Harper at the Prime Minister's Office. In the
meeting, the two leaders reached an agreement to push forward with
arrangements on a visit to Canada next summer by the Emperor and
Empress. The Emperor once visited Canada in April 1953 when he was
Crown Prince. The planned visit will be his first trip to Canada as
the Emperor.

Fukuda and Harper affirmed that the two countries would deepen
cooperation in economic and peace-building areas with their 80th
anniversary of the conclusion of a treaty of friendship in mind.

The two leaders shared the perception that cooperation with
developing countries would be important in order to realize global
greenhouse gas emissions cuts. Regarding Canada's peacekeeping
operations in Afghanistan, to which Canada deploys about 2,500
troops, Harper said: "There are improvements in security, governing
and development areas, but there remain many challenges."

The Emperor and Empress met Harper and his wife yesterday at the
Imperial Palace.

8) Gov't mulls danger-free plans for Futenma

MAINICHI (Page 2) (Full)
July 11, 2008

On the issue of relocating the U.S. Marine Corps' Futenma Air

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Station in Okinawa Prefecture's Ginowan City, the government
yesterday entered into final coordination to propose setting up a
body for a joint study with Okinawa Prefecture on how to eliminate
the danger of Futenma airfield. Okinawa Prefecture has been calling
for the airfield's danger to be removed. The government will hold a
Futenma consultative meeting on July 18 with local officials from
Okinawa Prefecture, when the government will propose the idea of
launching this joint study group to look into the airfield's
dangerous aspects.

Japan and the United States have reached an intergovernmental
agreement to relocate the heliport functions of Futenma airfield to
a coastal area of Camp Schwab, a U.S. military base in the island
prefecture's northern coastal city of Nago, by 2014. However,
Okinawa Gov. Hirokazu Nakaima has asked the government to move the
relocation site of an alternative facility for Futenma airfield into
the sea. In order to remove Futenma airfield's danger, Nakaima has
asked the government to take such measures as basically closing down
the airfield within three years and relocating U.S. military
training from the airfield to other locations.

The U.S. government has refused to negotiate the proposed offshore
relocation. However, the U.S. government agreed with the Japanese
government in August last year to review the flight paths of
Futenma-based choppers in order to eliminate danger. However,
Okinawa Prefecture is strongly dissatisfied with the agreement's
specifics. The Futenma base is located in a densely populated area
of the city. As it stands, local residents are concerned about U.S.
military helicopters possibly crashing. In August 2004, a U.S.
military chopper crashed into the campus of Okinawa International
University. This incident gave rise to strong calls for a
danger-free environment. In this April's Futenma consultative
meeting, Nakaima asked the government to set up a working-level
study group to eliminate the airfield's danger.

The government's proposal is in response to the governor's request.
The U.S. government, however, is not agreeable to negotiate the
drastic step of closing down Futenma airfield within three years.
Even if a joint study group is launched, it could end up reaching a
conclusion that is unacceptable to the United States.

9) Defense Ministry mum about MD exercise itinerary

TOKYO SHIMBUN (Page 27) (Abridged)
July 11, 2008

Japan and the United States will conduct bilateral joint training
exercises for their antiballistic missile defense systems in the Sea
of Japan and in the Kanto area, the Joint Staff Office of the
Self-Defense Forces at the Ministry of Defense said yesterday.
However, the JSO only explained that the MD exercises are scheduled
for "one day in July." The Defense Ministry apparently fears that
foreign armed forces would pick up communications between Japan and
the United States if the schedule is unveiled.

Details are unknown about the MD exercises. However, Japanese and
U.S. MD-capable destroyers like the Kongo and the Shiloh will be
staged in the Sea of Japan. The Air Self-Defense Force's airborne
warning and control system (AWACS) aircraft will also participate in
the exercises. Air defense missile units-currently based at Iruma in
Saitama Prefecture, Kasumigaura in Ibaraki Prefecture, Narashino in
Chiba Prefecture, and Takeyama in Kanagawa Prefecture-will

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participate in the exercises with the Patriot Advanced Capability 3
(PAC-3),a ground-to-air guided missile system. They will be on
standby at their respective bases and will not be in town.

10) No plans for cabinet shuffle: Fukuda

MAINICHI (Page 5) (Full)
July 11, 2008

Prime Minister Yasuo Fukuda yesterday met with his ruling Liberal
Democratic Party's Secretary General Bunmei Ibuki at his office and
said anew he still has no plans for a rumored shuffle of his cabinet
before convening an extraordinary session of the Diet. "I have no
plans at all; it is a complete blank slate," he said. Now that the
Group of Eight (G-8) summit at Lake Toya in Hokkaido is over, the
focus is on whether Fukuda will shuffle his cabinet. However, Ibuki
advised Fukuda to consider how to make arrangements for the next
extraordinary Diet session. "It would be better not to listen to
those parties wanting a shuffle and those who would benefit from
it," Ibuki said.

Later in the day, Fukuda said he would fast-track his policy tasks.
"I have nothing on my mind about anything after that," Fukuda told
reporters when asked about whether he would shuffle his cabinet.

11) Calls in LDP one after the other for dissolution of the Diet,
either at the start of the regular Diet session or immediately after
the budget passes

TOKYO SHIMBUN (Page 2) (Excerpts)
July 11, 2008

Views are coming out one after the other in the Liberal Democratic
Party (LDP) that the timing of the dissolution of the House of
Representatives should be either at the start of the next regular
session of the Diet that will be convened in January or immediately
after the fiscal 2009 budget is passed in March or April. Until now
in the party, the overwhelming view was that dissolution should be
put off until the Lower House serves out its term next year in
September. However, the judgment now being made is that Diet
dissolution under the disadvantageous circumstance of being forced
on the party by the opposition Democratic Party of Japan (DPJ)
should be avoided.

The reason influential LDP lawmakers have lined up to call for
putting off as long as possible Lower House dissolution is that such
a decision could produce a severe situation of losing (in the
election to follow) even their majority, let alone the two-thirds
majority the ruling parties hold now. However, former Prime Minister
Koizumi in a Tokyo speech on July 3 referred to the need to speed
matters up, saying, "In case we extend it another six months (until
the full term ends),there would be no leeway and it would become
dissolution that pushed us into a corner."

After Koizumi, former Prime Minister Mori, who has acted as the
prime minister's guardian, and party elections chairman Koga, who
has responsibility for carrying out elections, gave specific times,
such as next January at the start of the regular Diet session, or
March-April, after passage of the budget. One after the other,
suggestions for speeding up Diet dissolution have come out.

12) LDP's Yosano: DPJ's plan requires 30 trillion yen of fiscal

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resources

ASAHI (Page 4) (Full)
July 11, 2008

Appearing on a BS11 (Nippon BS Broadcasting) program recorded
yesterday, former Chief Cabinet Secretary Kaoru Yosano, a member of
the ruling Liberal Democratic Party (LDP) sharply criticized the
Democratic Party of Japan's (DPJ) policies, saying: "The DPJ is an
irresponsible and tax-money wasting party. If their policies were
implemented, 30 trillion yen would be needed." Yosano pointed out
that based on his own calculation method, it would be necessary to
have twice more than the 15.3 trillion yen that the DPJ has asserted
(it needs to carry out its policies).

Yosano said: "If all (basic) pensions are covered by tax revenues,
the consumption tax rate will automatically become 11 percent." He
calculated that there would be needed a total of 30 trillion yen,
which would include 15 trillion yen for pension reform, 3.5 billion
yen for free public high-school education, several trillion yen for
compensation for individual farmers, among other expenses.

In a press conference yesterday, DPJ Deputy President Naoto Kan
rebutted: "(Yosano) should have said that several trillion yen would
be needed after the Finance Ministry makes public how much fiscal
resources it has. I must say that he belongs to the Ministry's
finance-policy clique in the Diet."

13) DPJ plans to submit many bills to upcoming extraordinary Diet
session: Preparation underway to return to Diet deliberations

YOMIURI (Page 4) (Full)
July 11, 2008

The Democratic Party of Japan (DPJ) plans to submit many
lawmaker-initiated bills to the extraordinary Diet session to be
convened in late August. Though it boycotted deliberations following
the adoption of a censure motion against Prime Minister Fukuda in
the Upper House during the recent regular Diet session, it now
intends to use the submission of legislation as a tool for it to
return to deliberations to pursue the government and the ruling
parties.

Policy Research Committee Chair Naoshima at a meeting of the
Confederation of Japan Automobile Workers' Unions held in Tokyo on
July 10 said, "The DPJ wants to make the auto tax and road policy
campaign issues for the next Lower House election. We want to submit
legislation on the tax code and a road-construction policy to the
upcoming extraordinary Diet session." He thus indicated his party's
plan to submit a bill abolishing the provisional rate related to
special-purpose road construction revenues and a bill designed to
drastically reform road administration.

The DPJ is determined to focus during the extraordinary Diet session
on the submission of bills directly related to the daily life of the
public. It will likely respond to deliberations on the fiscal 2008
supplementary budget draft, which incorporates measures to address
soaring crude oil prices and the reconstruction of areas hit by the
Miyagi Inland Earthquake, with Diet Affairs Committee Chair Kenji
Yamaoka saying, "We will deal with countermeasures on natural
disasters and matters closely linked to the daily life of the
public." The DPJ wants to deliberate on lawmaker-sponsored bills

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submitted on a priority basis after the party presidential election
slated for September 21.

However, the party will not take part in deliberations on
government-submitted bills, with Yamaoka saying that it is not
necessary to deliberate on a bill amending the New Antiterrorism
Special Measures Law designed to allow the Maritime Self-Defense
Force to continue its refueling operations in the Indian Ocean. He
also said that the DPJ would not deliberate on that bill under a
prime minister that has been censured, suggesting there would by a
way of choosing bills to be deliberated.

14) Japan Association of Corporate Executives to hold regular
meetings with LDP and DPJ

ASAHI (Page 7) (Excerpts)
July 11, 2008

The Japan Association of Corporate Executives (Keizai Doyukai),
chaired by Masamitsu Sakurai, has launched a policy round-table
designed to regularly exchange views with lawmakers of the Liberal
Democratic Party (LDP) and the Democratic Party of Japan (DPJ or
Minshuto). The Keizai Doyukai intends to have its policy proposals
reflected in deliberations in the divided Diet through the promotion
of dialogue on such issues as energy and food with lawmakers
crossing party lines.

It held the first meetings with DPJ members on July 8 and with LDP
members on July 10 at Tokyo hotels. The meetings focused on a
variety of topics, including administrative reform,
decentralization, economic diplomacy, food issues, and the tax code.
Such meetings will be held once a month. This is the first time for
the Keizai Doyukai to hold a policy dialogue on a regular basis.

Participants from the Keizai Doyukai include Chairman Sakurai, Vice
Chairman and Senior Director Kunio Kojima, Vice Chairman and
Chairman of the Political Affairs Committee Yasufumi Kanemaru, who
is the chairman of Future Architect, and others. About 10 lawmakers
from each party attended the meetings. Former LDP Secretary General
Hidenao Nakagawa and DPJ Vice President Seiji Maehara reportedly
chose participants from the stance that participants should be
future-oriented and be able to display leadership in Japan.

15) Three female LDP lawmakers hold book party to promote policy
proposals

ASAHI (Page 4) (Full)
July 11, 2008

Three female House of Representatives members belonging to the
ruling Liberal Democratic Party (LDP) -- Yuriko Koike, Kuniko
Inoguchi, and Yukari Sato, who have formed a policy-making unit,
which they call the Tokyo Projects Of, By, and For Ladies (TPL) --
yesterday held a book party in Tokyo to celebrate the publication of
their joint work. The three woman lawmakers held the book party to
promote policy proposals in their specialized fields such as the
environment, declining birthrate, and financial issue. Their
political bases are in Tokyo.

Invited to the party, former Prime Minister Junichiro Koizumi gave a
speech, in which he said: "These three women are very special. When
they come together, they get things done. They say that jealousy is

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a woman's trait, but that is not so. Men are jealous, too." He made
the remark because of the presence of former Defense Minister Koike,
whose name has been mentioned as a potential candidate to succeed
Prime Minister Yasuo Fukuda.

Koike said: "We will make efforts so that women's ideas will become
the main stream. We are glad that you realize women's ideas are
necessary to change society."

16) Regulatory Reform and Privatization Promotion Council losing
policy presence; Interim report has few original ideas

YOMIURI (Page 4) (Full)
July 11, 2008

The government's Regulatory Reform and Privatization Promotion
Council, chaired by Nippon Yusen K.K. Chairman Takao Kusakari, is
losing its policy presence. The panel compiled an interim report in
July in preparation for a third recommendation report to be issued
at the year's end. The interim report, however, has few original
ideals. This is presumably because the government's and the ruling
parties' desire to implement deregulation has weakened, receiving
criticism that deregulatory measures taken in the past have widened
income disparities.

The interim report incorporates a proposal for liberalizing, in
principle, a mixed medical services system allowing hospitals to
operate two different systems for medical bills -- one with medical
insurance and the other without it. It also includes a number of old
items for deregulation. There are few new proposals. One such is a
call for a revision to the system under which the state controls the
fixed number of students in medical departments of state-run
universities. The report seems to lack eye-catching proposals.

The panel will start discussions next week in the run-up to the
issuance of a third recommendation report. However, moves to
strengthen protective regulations are becoming active recently, as
can be seen in that the Ministry of Land, Infrastructure and
Transport has come up with a policy of reinstating a restriction on
new entries into the taxi business and increases in vehicles, and
that the ruling parties have adopted a plan to review the labor
dispatch system that would ban the dispatch of day workers.

Observers have the impression that compared with the deregulation
efforts made during the Koizumi period, the deregulation policy line
has changed and there is now little progress being achieved in the
reform process.

Chairman Kusakari sought to check those voices, noting, "The
bureaucracy is trying to recover from a setback with the
determination to strengthen regulations, but we reject such
criticism." The raison d'etre of the panel will likely be called
into question in terms of to what extent it can come up with
effective regulatory reform.

SCHIEFFER