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UNCLAS SECTION 01 OF 06 TOKYO 001120 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 03/02/06 
 
 
INDEX: 
 
(1) USDA Secretary Johanns on US beef: Would "welcome prior 
inspections by Japan" if means early resumption of imports 
 
(2) Horie e-mail: Three hurdles for DPJ to overcome: Maehara 
vision could bog down; Presidential election likely to be speeded 
up in order to find breakthrough? 
 
(3) Battle going on in government, ruling parties on propriety of 
introducing numerical targets after monetary policy shift 
 
(4) MOFA, MOF at odds over respective rights and interests in 
compiling final report on ODA reform; Focus on revision of JICA 
Law 
 
(5) Japan frets over GSDF pullout in tandem with Britain, 
Australia 
 
ARTICLES: 
 
(1) USDA Secretary Johanns on US beef: Would "welcome prior 
inspections by Japan" if means early resumption of imports 
 
NIHON KEIZAI (Top play) (Excerpt) 
Evening, March 2, 2006 
 
By Tetsuya Minoru in Washington 
 
In an interview with the Nihon Keizai Shimbun on March 1, US 
Secretary of Agriculture Johanns, touching on cautious views in 
 
SIPDIS 
Japan toward resumption of US beef imports, stated: "If we are 
asked for additional measures, we will respond flexibly. We also 
would welcome (prior) inspections by Japanese inspectors." He 
emphasized a stance of making maximum efforts to recover 
confidence in US beef in Japan. In addition, he indicated his 
hopes for an early resumption of imports, stating, "We believe 
that once there is detailed study of our (inspection) system and 
investigative report, there will be a swift decision to resume 
trade." 
 
Secretary Johanns at first expressed regret that beef with 
 
SIPDIS 
backbones attached were shipped in violation of the Japan-US 
agreement, saying, "First, I regret that such an incident 
occurred." At the same time, he stressed that there was no 
problem with the safety of US beef, saying: "The US system is 
superior. (The incident this time) is an issue from the 
standpoint of the US-Japan agreement, but it is not a safety 
problem." 
 
(2) Horie e-mail: Three hurdles for DPJ to overcome: Maehara 
vision could bog down; Presidential election likely to be speeded 
up in order to find breakthrough? 
 
SANKEI (Page 3) (Full) 
March 2, 2006 
 
The Democratic Party of Japan (DPJ) is faced with a serious 
crisis because of a fiasco over the Horie e-mail issue. It has 
been decided that Diet Policy Committee Chairman Yoshihiko Noda 
will step down, but the party is still in a chaotic state, unable 
to pick his successor. Secretary General Yukio Hatoyama still 
appears to be determined to quit. There are three hurdles lying 
 
TOKYO 00001120  002 OF 006 
 
 
ahead for party head Seiji Maehara, including what will happen to 
Hatoyama. 
 
Future course of Hatoyama 
 
Undergoing soul-searching on the e-mail fiasco, Hatoyama 
yesterday decided to set up a verification team intended to 
prevent a recurrence, chaired by Deputy Secretary General 
Koichiro Genba, and to release a report of the outcome by mid- 
month. The press conference held the previous day by Lower House 
member Hisayasu Nagata has fueled the anger of the Liberal 
Democratic Party (LDP), leading to the presentation of an open 
letter. General Coordination Bureau Director General Hirofumi 
Hirano is now tasked with dealing with the letter from the LDP. 
He intends to make Nagata toe the party's line that the e-mail at 
issue was not authentic. 
 
Though Hatoyama is toiling to settle the situation, some suspect 
that he might want to quit as soon as possible, according to his 
aide. That is because Hatoyama noted on Feb. 28, "When the matter 
is settled, I then would like to decide what I will do next." 
 
What action Hatoyama will take is going to be the first hurdle. 
Chances are that he will put an end to the matter, for the time 
being, at a national conference of secretaries general and 
persons responsible for elections to be held on Mar 4, when 
investigation by the verification team will be ended, according 
to a mid-level official. 
 
He may judge the matter as settled if the conference on the 4th 
goes smoothly. 
 
Lower House by-election 
 
Even if Hatoyama stays on, the next possible ordeal is a 
scheduled by-election in the Chiba Constituency No. 7 on Apr. 23, 
for a seat that LDP lawmaker Kazumi Matsumoto vacated. The DPJ 
had hoped to use the by-election as an opportunity to recover its 
power, because the reason for the resignation of Matsumoto quit 
was to take responsibility for election violations by a senior 
official in his election headquarters. However, the Horie e-mail 
fiasco has upset this scenario, the same mid-level official 
noted. 
 
The ruling camp usually displays overwhelming strength in by- 
elections. There have been few by-elections in which the DPJ won. 
The Oct. 2002 by-elections, in which the DPJ won in only one 
constituency out of seven constituencies for the Lower and Upper 
Houses, became the occasion for Hatoyama to lose his power base 
as DPJ head. 
 
Dumping Maehara 
 
The greatest barrier will likely be how to finalize a Maehara 
vision on domestic issues and diplomatic and security policies. 
Maehara has shown eagerness to put out such a paper since he came 
into office as party head. The party leadership is aiming to 
formulate the vision around the Golden Week holiday in early May. 
However, there has been deep-seated internal opposition to 
(Maehara's) visions on diplomatic and security policies from the 
beginning. 
 
When he visited the US and China late last year, Maehara 
 
TOKYO 00001120  003 OF 006 
 
 
expressed strong concern over the military expansion policy of 
the People's Liberation Army of China. Regarding the 
constitutional revision issue, too, he has called for the limited 
use of the right of collective self-defense. However, now that 
the leadership's power base has declined sharply, criticism of 
and discontent with the party's realistic policy might evolve 
into a move to dump Maehara, as the process of formulating the 
Maehara vision begins full scale. 
 
In order to overcome such a setback, some DPJ members have begun 
to discuss the possibility of speeding up the timetable for the 
party presidential election. Maehara noted, "My tenure runs to 
the end of September, time to the expiration of former head 
Katsuya Okada's tenure. I would like to do my utmost to fulfill 
my role." However, a number of members take the view that there 
is no guarantee that Maehara can serve out his tenure," as the 
same mid-level official noted. 
 
Maehara once before looked into the possibility of an early 
presidential election with an eye on the LDP presidential 
election. The party platform stipulates that it is possible to 
elect a leader at a plenary session of members of the both 
chambers of the Diet. Maehara was elected, when Okada stepped 
down last September. The election at the time was held, based on 
a special exception rule adopted by the Standing Executive 
Meeting. Chances are that such a rule or a special exception 
might be looked into, depending on the future situation in the 
party. 
 
(3) Battle going on in government, ruling parties on propriety of 
introducing numerical targets after monetary policy shift 
 
TOKYO SHIMBUN (Page 9) (Full) 
March 1, 2006 
 
The Bank of Japan (BOJ) will lift its ultra-easy monetary policy 
soon. Prior to this, debates are heating up on what targets are 
needed in accordance with the new policy. Responsible officials 
in the government and the ruling parties are actively discussing 
the propriety of introducing numerical targets such as an 
"inflation target." Meanwhile, the BOJ is trying to map out 
effective targets to meet the difficult condition of "making 
policy management more transparent and flexible," according to 
Governor Toshihiko Fukui. 
 
Liberal Democratic Party Policy Research Council Chairman Hidenao 
Nakagawa yesterday reiterated the need to introduce an inflation 
target, saying: 
 
"The Bank of Japan should work out a policy goal that can 
completely beat deflation and is highly transparent." 
 
In a press conference yesterday, State Minister in charge of 
Economic and Fiscal Policy Kaoru Yosano spoke for the BOJ, which 
is negative about introducing numerical targets. Yosano said: 
 
"If a rigid framework is imposed on the Bank of Japan, its 
monetary policy will unavoidably become less flexible and the 
future of Japan will be negatively affected. ... Numerical 
figures tend to develop a life of their own." 
 
Dominant in the government, however, is the view that some 
numerical targets will be necessary after the monetary policy 
 
TOKYO 00001120  004 OF 006 
 
 
shift. A senior economic official commented: "It will be 
undesirable if interest rates fluctuate violently and if there is 
a negative impact on the recent trend of the Japanese economy 
breaking away from deflation." 
 
Numerical targets in Industrialized countries' monetary policies 
have both good and bad aspects. The inflation goal adopted by 
Britain has high transparency but lacks flexibility because 
restrictions are placed on commodity price setting. The message 
formula introduced by the US Federal Reserve Bank (FRB) is highly 
flexible but less transparent, due to such factors as divided 
interpretations of messages among market players. 
 
(4) MOFA, MOF at odds over respective rights and interests in 
compiling final report on ODA reform; Focus on revision of JICA 
Law 
 
ASAHI (Page 4) (Excerpts) 
March 1, 2006 
 
The report - released yesterday by the Study Group o Overseas 
Economic Cooperation - calls on the government to implement 
official development assistance (ODA) policy more strategically 
and effectively. The report features a plan to dissolve the Japan 
Bank for International Cooperation (JBIC), over which the Finance 
Ministry (MOF) has jurisdiction, and then to transfer its 
functions to the Japan International Cooperation Agency (JICA), 
which is under the Foreign Ministry's (MOFA) jurisdiction. In the 
process of compiling the report, however, the two ministries were 
at loggerheads in an attempt to protect their respective rights 
and interests. 
 
Reflecting the Koizumi administration's policy of reduced 
government spending, many officials are calling for measures to 
be taken to cut ODA. Even MOFA has had to accept this view: "The 
age of distributing money lavishly has ended. We now need to work 
out a highly strategic ODA policy in line with the nation's 
foreign policy," said a senior official. Under such 
circumstances, the government has decided to reform the nation's 
ODA policy. 
 
The planned ODA reform is seen as part of the reform of 
government-affiliated financial institutions now underway in 
response to the prime minister's instruction. The Liberal 
Democratic Party (LDP) took the lead in deciding to dissolve the 
JBIC. The decision met strong objections from MOF, which will 
lose a landing place for retired officials, and from business 
circles, which get loans from the JBIC for projects. 
 
Different interpretations 
 
The standoff between MOF and MOFA was reflected in a ministerial 
meeting held on the morning of Feb. 17. According to informed 
sources, Chief Cabinet Secretary Abe said: "The yen-loan section 
will be separated from JBIC and integrated into JICA. I hope the 
ministries concerned will cooperatively manage it." 
 
Hearing Abe's remark, MOF interpreted it as, "JICA will be under 
the joint management of the ministries concerned," while MOFA 
took it as meaning that "MOFA has jurisdiction over JICA, and 
only the yen-loan business will be jointly undertaken." 
 
As a result of consulting with LDP Policy Research Council 
 
TOKYO 00001120  005 OF 006 
 
 
Chairman Hidenao Nakagawa, Abe instructed MOF and MOFA to try to 
reach a settlement. On Feb. 20, the administrative vice ministers 
from the two ministries held a meeting and agreed on a plan for 
MOF, MOFA, and the Ministry of Economy, Trade and Industry to 
jointly undertake the yen-loan program. 
 
In compiling the report, the study group gave consideration to 
the LDP plan, which is close to MOFA views in content. As of Feb. 
24, the report included passages calling for keeping the identity 
of the JBIC, but these parts were deleted in the final version. 
In a press conference yesterday, Akio Harada, chairman of the 
study group, said: "We will now start specific discussion of the 
new system." 
 
Wrangling drags out? 
 
The bureaucracy will take charge of discussing details of the new 
system, including a revision of the JICA Law. A senior MOFA 
official grumbled: "MOF might begin to intervene in all personnel 
actions in JICA, with the yen-loan program as its basis." Harada 
also commented yesterday: "Various problems could occur in the 
separation and integration process." 
 
A senior MOF official was overheard saying: "The revision 
resulted from things not proceeding smoothly under the MOFA 
lead." But there is still no mechanism to verify ODA reform yet. 
 
(5) Japan frets over GSDF pullout in tandem with Britain, 
Australia 
 
SANKEI (Page 3) (Full) 
March 2, 2006 
 
Japan is in the final phase of exploring steps to recall its 
ground troops currently deployed in the southern Iraqi city of 
Samawah. The government, while weighing Japan's bilateral 
relations with the United States, wants to withdraw the Samawah- 
based Ground Self-Defense Force troops along with the British and 
Australian security troops in Samawah. Intensifying religious 
conflict in Iraq is also liable to cloud the government's 
judgment. However, the Foreign Ministry and the Defense Agency 
will decide early next week to withdraw the GSDF troops and will 
then enter into final coordination with the prime minister's 
office. 
 
In the wake of last December's election for Iraq's parliament, 
the government began early this year to consider the GSDF's 
pullout in earnest. The government will make a final decision in 
March to withdraw the GSDF troops and will complete their pullout 
in May. 
 
In Samawah, the GSDF currently deploys a ninth detachment of 
troops dispatched mainly from GSDF garrisons under the command of 
the Eastern Army, which has its headquarters in Tokyo's Nerima, 
to help with Iraq's nation-rebuilding efforts. The GSDF, when 
withdrawing its troops from Iraq, will downsize the Samawah-based 
engineering contingent, which has been tasked with facility 
repair and other services. The GSDF will divert that engineering 
unit's personnel to base security and will strike camp. 
 
The Samawah-based detachment includes about 100 rangers from the 
1st Airborne Brigade, which is the strongest of all GSDF combat 
units, and the rangers are tasked with the security of the GSDF's 
 
TOKYO 00001120  006 OF 006 
 
 
Samawah camp. In addition, the GSDF is also planning to send a 
backup contingent of 100 troops to Kuwait, where they will be 
engaged in the work of sending equipment from the Samawah camp to 
Japan. In order to do so, the government is mulling several 
options, such as: 1) sending more troops; 2) replacing some of 
the detachment; and 3) issuing an order to ready another 
contingent. 
 
"Japan is closely in touch with the United States, Britain, and 
Australia at various levels," Defense Agency Director General 
Fukushiro Nukaga told a news conference on Feb. 28. With this, 
Nukaga stressed Japan's stance of falling in line with these 
three countries. That is because "Japan alone cannot ignore the 
United States to pull out," a senior official of the agency 
explains. Japan, the United States, and Australia will hold a 
security dialogue in Sydney on March 18, and Foreign Minister 
Taro Aso will also attend it. On that occasion, Japan and 
Australia are expected to ask for US Secretary of Rice's 
understanding for their troop pullout. 
 
The United States, however, does not want Japan and Australia to 
pull out. The Bush administration, with an off-year election 
scheduled for this fall, wants both Japan and Australia to 
continue their deployment of ground troops as a symbol of their 
commitment as US allies, according to a government source. When 
Iraq's permanent government comes into being, the US government 
will presumably work on the Iraqi government to ask Japan to 
continue its deployment of GSDF troops in Iraq, the source says. 
 
Meanwhile, Washington has sounded out Tokyo on sending GSDF 
officers to a provincial reconstruction team (PRT), which is made 
up of civilians to assist with Iraq's security maintenance and 
reconstruction. However, the GSDF cannot undertake security 
maintenance. The Japanese government is therefore poised to 
reject the proposal. "That's legally difficult," Nukaga said. 
 
The Japanese government wants to obtain the US government's 
understanding for Japan's troop pullout while offering to expand 
the scope of the Air Self-Defense Force's airlift missions 
between Kuwait and Iraq's southern district. In concrete terms, 
Defense Agency officials mull covering Baghdad in the scope of 
ASDF airlift services, in addition to Qatar, where the US Central 
Command locates headquarters for its troops on the front. 
However, the uniformed staff remains reluctant, with one officer 
pointing to a high risk of being shot down. A tug of war is also 
likely to be activated. 
 
In Iraq, Islamic Shiites and Sunnis have been intensifying their 
conflicts. Such a situation in that country may also affect the 
GSDF's pullout timetable. The government will decide in March to 
pull the GSDF troops out of Iraq. But some government officials 
are raising questions about such a decision-making schedule. "We 
still can't say this and that about the pullout in the current 
situation," one government official noted. Another official 
insists on responding to developments in a flexible way. 
 
SCHIEFFER