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UNCLAS SECTION 01 OF 08 TOKYO 000377 
 
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 01/24/06 
 
INDEX: 
 
(1)  Prime minister's replies in interpellation session 
 
(2)  Missile data leak exposes North Korea's continued spy 
activities in Japan to collect intelligence 
 
(3)  Livedoor loses main pillar with arrest of President Horie3 
 
(4)  With Shimabukuro elected as Nago mayor, government to start 
Futenma talks full-scale 
 
(5)  Japanese companies eager to launch overseas projects to 
reduce CO2 to acquire emission rights in return; Nippon Steel 
wins China's approval as first case in industry; Richo provides 
energy saving assistance in India 
 
(6)  Editorial: Nago mayoral election; Don't misread the popular 
will 
 
ARTICLES: 
(1)  Prime minister's replies in interpellation session 
 
YOMIURI (Page 13) (Excerpts) 
January 24, 2006 
 
(US beef) 
 
The US must abide by the rules agreed on between Japan and the 
US. Japan has asked the US government to probe into the cause of 
the incident and come up with preventive measures. Regarding a 
measure to mandate keeping the track records of imported beef, 
such a requirement might become a problem in terms of 
international agreement, so we will fully discuss the matter in a 
cautious manner. 
 
(Asia diplomacy) 
 
Establishing an affluent and stabilized Asia is indispensable for 
the safety and prosperity of Japan. We will aim at creating an 
open Asia that respects freedom and democracy while recognizes 
its diversity. 
 
(Japan-China, Japan-South Korea relations) 
 
China and South Korea are important neighbors for our country, 
and Japan is willing establish a future-oriented relationship 
with these countries based on mutual understanding and trust by 
deepening bilateral cooperation from an overall perspective, 
although we certainly have different perceptions on some issues. 
 
(Japan-North Korea talks) 
 
We will take up various issues, including abduction, security, 
and diplomatic normalization, in a drive to improve overall 
relations between Japan and North Korea. On the abduction issue - 
Japan's top diplomatic priority, the government will do its 
utmost to settle the issue, while urging Pyongyang to send 
Japanese abductees still in the North back to Japan, uncover the 
details of each case, and to hand over suspects  to Japanese 
authorities. 
 
(Japan-North Korea normalization talks) 
 
TOKYO 00000377  002 OF 008 
 
 
 
The government still stands fast on the position of never 
establishing diplomatic ties with North Korea unless a 
comprehensive settlement is reached on the abduction issue, and 
the issue of North Korea's nuclear and missile development 
programs. Based on this policy stance, Japan will engage in talks 
with North Korea. 
 
(Japan-US alliance) 
 
The Japanese and US governments, in cooperation with many 
countries in the world, will jointly address various issues 
facing the international community. In last fall's summit, we 
agreed on the need to strengthen the Japan-US alliance in a 
global context. 
 
(Suicide of diplomat at Consulate General in Shanghai) 
 
The government has protested to the Chinese government and urged 
it to investigate the facts in the case. We are determined to 
find out the truth, while discussing this issue in the Diet. 
 
(US force realignment in Okinawa) 
 
The current plan to realign the US forces in Japan was put 
together based on the judgment that it was the best for 
maintaining the current level of deterrence and lightening the 
security burden on Japan. In an effort to reduce the burden on 
Okinawa, relevant cabinet ministers have visited potential 
candidate sites and given explanations to local communities on 
the contents and direction of the plan. The government will 
continue to make efforts to obtain local understanding and 
cooperation in order to spur Okinawa development. 
 
(2)  Missile data leak exposes North Korea's continued spy 
activities in Japan to collect intelligence 
 
SANKEI (Page 30) (Full) 
January 24, 2006 
 
Another case illustrating North Korea's illicit activities to 
collect Japan's defense intelligence has come to light. The 
Korean Association of Science and Technology in Japan (KAST) has 
obtained research data on the development of a new missile 
system, sources said yesterday. North Korean spy cases cracked by 
police authorities have testified to the fact that collecting 
intelligence on Japan's defense capability has been one of the 
important duties for North Korean agents, according to a police 
source. 
 
Many spy cases involving North Korean agents have come to light 
since 1975, such as the Fuse case (cracked in 1976 by the Osaka 
Prefectural Police), Toyoshima case (1977, Tokyo Metropolitan 
Police Department), and Hyuga case (1981, Miyazaki Prefectural 
Police). They revealed that the mission of North Korean spies in 
Japan is to collect intelligence on the Self-Defense Forces. 
 
In March 1985, the Metropolitan Police Department also cracked 
the Nishiarai case in which a North Korean spy named Pak had 
carried out activities for 15 years under the guise of a Japanese 
citizen to recruit spies for North Korea, run a spy base in the 
Far East Asia, and collect intelligence on Japan's defense 
capability. Repatriated abductee Kaoru Hasuike, 48, has also 
 
TOKYO 00000377  003 OF 008 
 
 
indicated that a group of North Korean agents including "Pak" had 
abducted him to the North. 
 
The acquisition of the Ground Self-Defense Force's new surface-to- 
air missile system by KAST under the pro-Pyongyang General 
Association of Korean Residents in Japan can easily be regarded 
as part of North Korea's long term efforts to collect Japan's 
defense intelligence. 
 
A source familiar with defense affairs noted: 
 
"Ballistic missiles typified by the Rodong are vital strategic 
weapons to North Korea. Collecting technical data on Japan's 
defense equipment against ballistic missiles, such as the Aegis 
system and a successor to the medium-range surface-to-air (SAM) 
missile system, is expected to remain as a vital activity for 
North Korea." 
 
(3)  Livedoor loses main pillar with arrest of President Horie 
 
ASAHI (Page 2) (Excerpts) 
January 24, 2006 
 
The special investigation squad of the Tokyo Public Prosecutors 
Office yesterday arrested Livedoor Co. President Takafumi Horie. 
With the arrest of its president, the Livedoor group, which has 
run businesses beyond its real strength based on the value of its 
shares, has now lost its main pillar. The arrest of Horie, who 
has led the group as a kind of billboard, and of three other 
company executives on suspicion of violating the Securities and 
Exchange Law will rock the company to its foundation. The ruling 
Liberal Democratic Party (LDP), which was involved in Horie's 
candidacy in last September's House of Representatives election, 
appears shocked by his arrest. Dark clouds have now begun to 
gather over Prime Minister Koizumi's structural reform 
initiative. 
 
Koizumi government shaken 
 
"If they really violated the law, I think it is only natural that 
they are being thoroughly investigated," Koizumi told reporters 
last night. 
 
Asked whether he felt a sense of apprehension about his policy of 
economic vitalization through free market competition after 
learning of the Livedoor scandal, Koizumi flatly responded, "They 
are two different matters." 
 
The LDP unofficially backed Horie in last year's Lower House 
general election. Last August then LDP Acting Secretary General 
Shinzo Abe characterized Horie as a symbol of Koizumi's 
structural reform drive, stating, "New businesses have been 
created by the Koizumi structural reform initiative." On the 
first day of the official campaign for the Lower House election, 
Heizo Takenaka, then minister in charge of economic and fiscal 
policy, stated, "Prime Minister Koizumi, Mr. Horie and I will 
band together." Secretary General Tsutomu Takebe praised Horie 
last September, saying, "Mr. Horie and Prime Minister Koizumi are 
like a father and son. (The prime minister) is like my brother 
and (Mr. Horie) is like my son." 
 
Last night, however, Takebe released this comment on the arrest 
of Horie: "If the charges against him are proved, misleading the 
 
TOKYO 00000377  004 OF 008 
 
 
market and investors is serious. His arrest is regrettable 
because I expected much of him as a manager in a new era." New 
Komeito Secretary General Tetsuzo Fuyushiba told reporters: "I 
think you in the mass media gave him much praise. What do you 
think about him now?" 
 
The scandal has now become a major issue at the ongoing Diet 
session. The opposition camp is stepping up its offense. Minshuto 
(Democratic Party of Japan) President Seiji Maehara last night 
stated: "The LDP bears grave responsibility for its support for 
him in the election. I intend to pursue thoroughly the LDP's 
moral responsibility." The Japanese Communist Party released a 
comment that went: "The Koizumi Cabinet has pressed forward with 
deregulatory measures encouraging a money game." The Social 
Democratic Party released a statement: "The government and LDP 
should make efforts to shed light on the scandal and prevent a 
recurrence, summoning those involved to testify to the Diet." 
 
A former cabinet member of the ruling camp said, "The LDP cannot 
evade its moral responsibility." An aide to the prime minister 
claimed: "No negative impact will be on the prime minister 
because he did not go to the electoral district and the LDP did 
not endorse (Horie). But Mr. Takebe and Mr. Takenaka feel 
embarrassed." 
 
Another former cabinet minister said: "Support rates for the LDP 
have begun to decline gradually. The party will suffer a body 
blow (with the Horie scandal)." 
 
(4)  With Shimabukuro elected as Nago mayor, government to start 
Futenma talks full-scale 
 
NIHON KEIZAI (Page 2) (Full) 
January 23, 2006 
 
Yoshikazu Shimabukuro won the mayoral election in Nago City, 
Okinawa Prefecture, yesterday. Shimabukuro is more flexible than 
the other two candidates toward holding talks with the government 
on the issue of relocating the US Marine Corps Futenma Air 
Station. Following his election, the government will step up 
efforts to persuade local communities to accept the government's 
plan to transfer the heliport functions to their city. Although 
Shimabukuro is calling for overhauling the plan, the government 
intends to try to gain local support by presenting economic 
rehabilitation measures, based on the judgment that "it is 
impossible to revamp the agreement reached between Japan and the 
US." Since there is no time to waste, no one can predict whether 
the impasse will actually be broken on the Futenma relocation 
issue. 
 
 
 
Government to present economic promotion measures to have local 
communities host US bases 
 
"We understand that the government's base realignment proposals 
have been accepted," said Chief Cabinet Secretary Shinzo Abe in a 
statement issued last night welcoming the outcome of the Nago 
mayoral election. Defense Agency (JDA) Director General Fukushiro 
Nukaga also expressed in a statement his expectation for local 
communities' acceptance of the government plan, saying: "I would 
like to give explanations with sincerity and conduct discussion 
in a construction manner now." 
 
TOKYO 00000377  005 OF 008 
 
 
 
But although Shimabukuro was elected, it is unlikely that 
prospects for a settlement of the Futenma issue will immediately 
brighten. Shimabukuro has indicated that he would hold talks with 
the government if an amendment plan is submitted, but it remains 
unknown what revisions he is willing to accept. Under the present 
situation, the Japanese and US governments will be able to 
slightly alter the direction of the runway in order to somewhat 
change flight courses," according to a senior JDA official. 
 
In order to get local agreement for its plan, what the central 
government can do now is to emphasize the presence of US bases 
for the nation's security interests. Given this, the government 
intends to come up with economic rehabilitation measures. The 
government will hurriedly look into large-scale infrastructure 
projects, such an extension of express highways and the monorail 
line, as well as an expansion of Naha Airport. 
 
Even if Nago City accept the government plan, however, Governor 
Keiichi Inamine's approval will be necessary. The construction 
period is said to be about five years. In order to complete the 
construction work by fiscal 2012 as requested by the US, it is 
necessary to launch a feasibility study regarding environmental 
protection and other matters as soon as possible. Inamine is 
unlikely to run in the gubernatorial election in November, but 
the governor of each prefecture has authority to authorize the 
use of public waters, so approval from the governor will become 
necessary while Inamine stays in office. 
 
In the government, some take an optimistic view, with one 
official saying: "Should Nago give the nod, the governor may find 
it difficult to decline the plan." It is also conceivable, 
though, that the governor may hold fast to an agreement reached 
between the central and Okinawa governments to build a military- 
civilian airport on reclaimed land to the last. In such a case, 
it would become necessary for the government to enact special 
legislation to shift the reclamation right now given to governors 
from them to the central government. 
 
The government plans to submit bills related to US force 
realignment in Japan to the Diet in April. It will be pressed to 
make a decision on whether to incorporate the legislation on 
reclamation authority in the bills. 
 
(5)  Japanese companies eager to launch overseas projects to 
reduce CO2 to acquire emission rights in return; Nippon Steel 
wins China's approval as first case in industry; Richo provides 
energy saving assistance in India 
 
NIHON KEIZAI (Page 11) (Abridged) 
January 21, 2006 
 
Japanese corporations, such as Nippon Steel Corp. and Richo 
Company, Ltd., have actively been launching overseas projects to 
reduce greenhouse gas emissions. As a country ratified the Kyoto 
Protocol, Japan is required to reduce greenhouse gas emissions, 
but the country is finding it increasingly difficult to meet its 
targets, given the economy which has finally begun picking up. As 
a result, an increasing number of Japanese companies from trading 
firms to power companies to manufacturers have begun turning 
their eyes to foreign countries to find a way out. The government 
approved 23 such overseas projects last year, about four times 
the number recorded in 2004. 
 
TOKYO 00000377  006 OF 008 
 
 
 
Last year, Japanese firms received government approval to launch 
overseas projects that would allow them to have the right to emit 
gases equivalent to an annualized 28 million tons of carbon 
dioxide (CO2), which corresponds to 37 percent of the country's 
annual reduction target. The government started allowing Japanese 
companies to embark on overseas greenhouse reduction projects in 
¶2002. In 2004, the government gave the go ahead to six projects. 
An increasing number of firms are applying for government 
approval with an eye on the reduction period between 2008 and 
¶2012. 
 
Manufacturing firms have particularly been eager to launch 
foreign projects, as their efforts to reduce emissions of CO2 in 
Japan have been less than satisfactory due to the construction of 
new plants and other factors. The greenhouse gas reduction 
business has traditionally been limited to trading firms and 
power companies in anticipation of greater demand for energy. 
Last year, Japan Steel obtained approval in China as the first 
Japanese steel steelmaker. 
 
Richo has also won the emission right overseas as the first case 
in the precision industry with a view to greater production of 
high-definition toners in Japan. The government has also approved 
a project by a firm operating a greenhouse gas reduction fund 
financed by 33 companies, including Toyota Motor, Sony, and 
Sharp. 
 
Earlier this year, the government decided to entrust Japan Steel 
to assist India's Tata Steel in reducing CO2. The steel industry 
accounts for 41.9 percent of greenhouse gases emitted by Japan's 
industrial and energy sectors. Although emissions were on the 
decline in the past, growing plans to increase high-grade steel 
products have made it difficult to reduce emissions. The JFE 
Group is also likely to make a move to win emission rights. 
 
Matsushita Electric, which has decided to build an additional 
plasma display panel plant in Japan, is planning to win emission 
rights by saving energy at its Malaysia plant. 
 
Under the Kyoto Protocol, Japan is required to reduce between 
2008 and 2012 the collective emissions of greenhouse gases by six 
percent from the 1990 levels. But in 2004, Japan's total 
emissions of gases from industries and households grew 7.4 
percent from the 1990 levels. Although Japanese companies are 
endeavoring to cut back on gas emissions voluntarily, the 
government may press Japanese industries harder to control 
emissions. 
 
Projects offering emission rights to Japanese corporations 
 
CompanyCountryProject 
Nippon Steel Corp., Mitsubishi Corp.ChinaCollecting and degrading 
hydrochlorofluorocarbon 
Richo Co.IndiaReducing CO2 
Richo Co.El SalvadorReducing CO2 
Japan Carbon Finance, Ltd.South AfricaCollecting and burning 
methane 
JMDChinaCollecting and degrading hydrochlorofluorocarbon 
Shimizu Corp.ArmeniaCollecting methane for power generation 
 
Note: Japan Carbon Finance is the company operating the Japan 
Greenhouse Gas Reduction Fund financed by 33 Japanese companies, 
 
TOKYO 00000377  007 OF 008 
 
 
including Toyota Motor and Sharp. JMD is a company financed by 
JGC Corp. and Marubeni Co. 
 
 
Overseas projects less costly 
 
An increasing number of Japanese manufacturers are trying to 
obtain emission rights by cutting back on greenhouse gas 
emissions abroad in view of playability. Although their Japanese 
plants have taken various measures to increase production 
efficiency and introduce energy-saving equipment, investments in 
such efforts are sometimes too costly. In contrast, costs for 
acquiring emission rights in other countries are cheaper, 
allowing Japanese firms to export energy-saving technologies, as 
well. Each company's strategy to reduce greenhouse gases is 
likely to affect their competitiveness in the long run. 
 
A Nihon Keizai Shimbun survey showed that reducing one ton of 
greenhouse gases costs 90,000 yen in Japan, an advanced country 
in energy saving. The cost for acquiring emission rights is 5 to 
10 dollars. Although the price may go up with an intensifying 
race for emission rights between industrialized countries, the 
price is still low at present. 
 
METI: 11 industries acquired or studying acquiring emission 
rights 
 
The number of industries acquired or considering acquiring 
greenhouse gas emission rights has increased from six last year 
to 11, the Ministry of Economy, Trade and Industry (METI) 
announced Jan. 20. Industries began considering acquiring rights 
include industrial machinery, machine tool, and bearing. The METI 
announcement testified to growing interest in emission rights by 
manufacturers, in addition to the electrical and electronics 
industries, which have already acquired some rights. 
 
(6)  Editorial: Nago mayoral election; Don't misread the popular 
will 
 
TOKYO SHIMBUN (Page 5) (Full) 
January 24, 2006 
 
In the latest Nago mayoral election, the center of contention was 
whether to approve hosting an alternate base for the US Marine 
Corps' Futenma Air Station. Yoshikazu Shimabukuro, who has 
indicated a readiness to hold talks with the government on the 
issue, was elected. Shimabukuro, though, is also opposed to the 
current relocation plan. We hope that the government will reach a 
settlement that reflects the popular will. 
 
"All the three candidates are opposed to the coastal plan," said 
Okinawa Governor Keiichi Inamine when he met Defense Agency 
Director General Fukushiro Nukaga and other officials in Tokyo on 
Jan. 23, the day after the mayoral election. 
 
Inamine implied that the victory of Shimabukuro would not 
necessarily lead to the Nago government's approval of the current 
plan agreed on by the Japanese and US governments last fall to 
relocate Futenma airfield's heliport functions to a coastal area 
of Camp Schwab in the Henoko district of Nago. Inamine apparently 
tried to apply pressure to future moves by the government. 
 
The two other candidates were Munehiro Gakiya and Yoshitmi 
 
TOKYO 00000377  008 OF 008 
 
 
Oshiro. Both were against the plan. Shimabukuro said: "If the 
government presents a modified plan that can convince the local 
community, I will hold talks with the government." Since he made 
this remark, the focus of attention was focused on policy 
approaches to the Futenma relocation issue. As said by Governor 
Inamine, the three candidates all opposed the coastal plan in the 
election campaigning, and this fact carries heavy meaning. 
 
Shimabukuro, though, took the strategy of underlining the need to 
promote the local economy, without referring to the base issue in 
his first statement on the day of official announcement of the 
election. He proudly raised the daruma (good luck doll) given him 
by Chief Cabinet Secretary Shinzo Abe. 
 
Some observers harbor concern that Shimabukuro might accept the 
coastal plan even if the government fails to revise the current 
plan or present additional economic promotion measures. 
 
Shimabukuro has voiced opposition to the coastal plan. If the 
government does not to come up with a bold revision plan without 
taking into consideration such factors as residents' safety, 
noise control engineering, and environmental protection, he 
should never give the plan the nod. 
 
On the other hand, the government should not take the election 
outcome as the public's consent to the coastal plan. If that is 
the case, it will misjudge the public's will. The government 
should brace up to address the difficult task of revamping the 
current plan. 
 
The Japanese and US governments mapped out the current coastal 
plan after hard efforts because no progress was made in 
construction work off the Henoko district in accordance with the 
initial plan due to strong protests by residents. The plan was 
initially designated as an interim report. Despite this, the US 
has no intention to alter it. 
 
In the earlier Japan-US defense summit, Defense Agency Director 
General Nukaga asked at the outset: "Concessions from the US are 
necessary in order to make realignment talks successful," but no 
reply came from the US side. He thus failed to get new materials 
to persuade local communities. 
 
The government first must seriously consider why local 
communities are opposed to the coastal plan and what measures 
will be able to convince them. The government then should work 
out a revision plan and present it to the US. There is no need to 
hang onto the March 31 deadline for a final report. 
 
The Futenma Air Station - surrounded by densely populated 
residential areas - has continued to threaten the safety of 
residents. It is an urgent task to stop using Futenma, but if a 
second Futenma is built, it would be a meaningless move. 
 
SCHIEFFER