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UNCLAS SECTION 01 OF 13 TOKYO 001577 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST 
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS 
OFFICE; SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY 
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/27/06 
 
Index: 
 
1)   Top headlines 
2)   Editorials 
3)   Prime Minister's daily schedule 
 
Opinion poll: 
4)   Koizumi Cabinet support rate climbing again: Up 3 points to 
  48% in Nikkei poll 
5)   Shinzo Abe still the most popular candidate to succeed 
Koizumi with 40% support in Nikkei poll, followed by Yasuo Fukuda 
with 14% 
6)   38% of public say maintain status quo in US-Japan defense 
cooperation, only 7% support Japan paying big share of Guam move 
 
Defense issues: 
7)   Japan proposes paying $3 billion share of moving Okinawa 
  Marines to Guam, with $2.5 billion of that in loans 
8)   LDP's Taku Yamasaki: Half is the maximum that Japan can pay 
in moving Marines from Okinawa to Guam 
9)   Minshuto head Maehara: Japan should not pay lion's share of 
cost of moving Marines to Guam 
10)  Senior working level talks between US, Japan carry over 
issue of sharing cost of relocating Marines to Guam 
11)  Government proposes to Nago City changing the angle of 
proposed runway 10 degrees at Camp Schwab to avoid flying over 
local homes 
12)  No agreement yet in talks between JDA chief and Nago mayor 
on Camp Schwab runway location issue 
13)  Final coordination this week on revised plan to relocate 
Futenma to Camp Schwab with key to agreement in Nago City's hands 
14)  LDP's Yamasaki sees settlement of Futenma issue by end of 
March 
15)  Government gives up idea of settling USFJ realignment issues 
by end of March as planned 
 
16)  Governors' group that sent out questionnaire on SOFA to US 
  Congress received zero response 
17)  Prime Minister Koizumi attends Coast Guard Academy 
graduation for first time, stresses anti-terror fight in speech 
 
18)  Minshuto Secretary General Hatoyama: Lawmaker Nagata should 
  quit Diet seat over e-mail fiasco 
 
19)  Fiscal 2006 budget to pass the Diet today 
 
20)  Corporate procurement is at its highest level in seven years 
 
21)  Finance Minister Tanigaki meets counterpart in Beijing, 
  discusses the Renminbi and Yasukuni Shrine 
 
22)  At request of friendship groups, China's President Hu will 
  soon deliver a conciliatory speech toward Japan 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Son of patient contradicts surgeon's explanation about 
disconnecting life support 
 
 
TOKYO 00001577  002 OF 013 
 
 
Mainichi, Sankei, and Tokyo Shimbun: 
Saga Prefecture accepts MOX plan 
 
Yomiuri: 
Tens of thousands of marine birds believed to have been killed in 
Shiretoko 
 
Nihon Keizai: 
Japan's economic recovery continues to gather momentum 
 
2) EDITORIALS 
 
Asahi: 
(1)  Airlines must secure the safety of the skies 
(2)  Bill regulating financial products is first step to protect 
consumers 
 
Mainichi: 
(1)  Government, ruling camp should learn from Tottori 
Prefecture's suspension of implementing human rights protection 
ordinance 
(2)  Cuts in public servants would change Japan greatly 
 
Yomiuri: 
(1)  Integrated command to boost SDF's flexibility 
(2)  Exports of literary works help foreigners understand Japan 
 
Nihon Keizai: 
(1)  One-Seg to promote integration of telecommunications and 
broadcasting systems 
 
Sankei: 
(1)  Urgent need of guidelines for disconnecting life support 
(2)  Efforts needed to improve SDF effectiveness with integrated 
command 
 
Tokyo Shimbun: 
(1)  Sales of government's assets would clarify state 
government's nonperforming loans 
(2)  Investigation into abductions: Don't forget to provide 
relief to the victims 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 26 
 
NIHON KEIZAI (Page 2)  (Full) 
March 27, 2006 
 
08:03 
Left Haneda Airport by Japan Coast Guard (JCG) jet plane. 
 
09:28 
Arrived at Hiroshima Airport by JCG's  helicopter. 
 
10:07 
Met with Land, Infrastructure, Transport Minister Kitagawa, JCG 
Director General Ishikawa and JCG Academy President and LDP 
Policy Affairs Research Council Chairman Nakagawa at JCG Academy, 
Kure, Hiroshima Prefecture. Then reviewed the parade of students. 
 
10:49 
 
TOKYO 00001577  003 OF 013 
 
 
Attended the graduation ceremony. 
 
12:00 
Inspected vessel operations. Planted a tree to commemorate the 
visit. Took a ceremonial photo with students. Inspected a 
dormitory. 
 
12:35 
Celebration lunch. Took photos with students. 
 
13:56 
Left the Academy by JCG helicopter. 
 
14:32 
Left Hiroshima Airport by JCG jet plane. 
 
15:40 
Arrived at Haneda Airport. 
 
16:27 
Arrived at the official residence. 
 
4) Poll: Cabinet support rate rises to 48% 
 
NIHON KEIZAI (Page 1) (Abridged) 
March 27, 2006 
 
The approval rating for the Koizumi cabinet reached 48% in a 
public opinion survey conducted by the Nihon Keizai Shimbun on 
March 24-26, a rise of 3 percentage points from the last survey 
taken in February. The disapproval rating was down 3 points to 
40%. In the survey, respondents were asked if they thought the 
leading opposition Democratic Party of Japan (DPJ or Minshuto) 
has handled well the issue of a fake email. In response, those 
who answered "no" accounted for 68%, with "yes" at only 17%. The 
DPJ's drop in its public support is a big blow to the party. 
 
The cabinet support rate was on the rise after the House of 
Representatives was dissolved in August last year. However, it 
fell 14 points in this February's survey in the aftermath of the 
Livedoor scandal and the US beef embargo. The margin between 
approval and disapproval widened from 2 points in the last survey 
to 8 points in the latest survey. Broken down into political 
party supporters, the cabinet support rate was 81% among those in 
support of the ruling Liberal Democratic Party and 26% among 
those with no particular party affiliation. 
 
In the breakdown of public support for political parties, the DPJ 
dropped 3 points to 19%, while the LDP leveled off at 44%. The 
gap between the two parties has increased to 25%. 
 
The survey was taken by Nikkei Research Inc. over the telephone 
on a random digit dialing (RDD) basis. For the survey, samples 
were chosen from among males and females, aged 20 and over, 
across the nation. A total of 1,488 households with one or more 
voters were sampled, and answers were obtained from 846 persons 
(56.9%). 
 
5) Poll: Abe marks 40% in post-Koizumi race, Fukuda at 14% 
 
NIHON KEIZAI (Page 2) (Abridged) 
March 27, 2006 
 
TOKYO 00001577  004 OF 013 
 
 
 
Chief Cabinet Secretary Shinzo Abe, 51, topped all other post- 
Koizumi candidates at 40% in a recent Nihon Keizai Shimbun poll, 
maintaining pole position in the race with a big lead. His 
popularity rose 2 percentage points from the last survey taken in 
February, rebounding to the 40% mark. Former Chief Cabinet 
Secretary Yasuo Fukuda, 69, who doubled in the last survey, rose 
 
SIPDIS 
1 point to 14%. However, Fukuda could not close in on Abe. 
Foreign Minister Taro Aso, 65, and Finance Minister Sadakazu 
Tanigaki, 61, were at single-digit levels. 
 
Abe has overwhelmed all others at around 40% since a survey 
conducted last November, shortly after coming to fill his present 
post. In the latest survey as well, Abe was evenly supported 
regardless of gender, age, and occupation. Among those in support 
of the ruling Liberal Democratic Party in particular, Abe ranked 
first at 53%, with Fukuda in second place at 13%. The lead 
widened further in the survey this time. 
 
In the breakdown of reasons given for picking Abe, his 
personality and image overwhelmed all other reasons at 52%. Among 
other reasons, his diplomatic and security stance scored 22%, and 
his structural reform stance 13%. The public choice of Abe seems 
to be based on their image of him over their evaluation of his 
standpoints or policies. 
 
Among other candidates in the LDP, Foreign Minister Aso stood at 
4%, with Finance Minister Tanigaki and Internal Affairs and 
Communications Minister Heizo Takenaka, 55, respectively at 2%, 
and Taku Yamasaki, 69, at 1%, all leveling off from this 
February's survey. 
 
6) Poll: 38% favor Japan-US defense cooperation 
 
NIHON KEIZAI (Page 2) (Full) 
March 27, 2006 
 
Japan and the United States are now about to enter into the final 
phase of intergovernmental coordination over the realignment of 
US forces in Japan. In the latest public opinion survey conducted 
by the Nihon Keizai Shimbun, respondents were asked what they 
thought Japan should do about its bilateral defense cooperation 
with the United States. In response to this question, public 
opinion was split, with 38% saying Japan should keep up its 
bilateral defense cooperation with the United States at the 
present level, 36% saying Japan should scale back on such defense 
cooperation, and only 11% insisting on the necessity of stepping 
up bilateral defense cooperation. 
 
In the meantime, the Japanese and US governments are now facing 
rough going in their talks about their respective shares of the 
cost of moving US Marines from Okinawa to Guam. Asked about this 
cost sharing, only 7% said Japan should pay the bulk of the 
costs, with 38% saying Japan's share should be less than the 
United States' and 36% urging the United States to pay the bulk 
of the cost. The US government estimates the total cost of the 
relocation at 10 billion dollars and has asked the Japanese 
government to pay 75%. However, the general public is critical of 
imposing such a heavy burden on Japan. 
 
Asked about when to withdraw Ground Self-Defense Force personnel 
currently deployed in the southern Iraqi city of Samawah to help 
 
TOKYO 00001577  005 OF 013 
 
 
with Iraq's reconstruction, 41% answered that the GSDF should 
pull out together with British and other foreign security troops, 
with 37% insisting on an immediate withdrawal, and 7% saying 
Japan should continue its troop deployment until the United 
States pull its troops out of Iraq. As seen from these figures, a 
majority hope to recall the GSDF at an early date. 
 
7) Japan proposes paying 3 billion dollars of cost of relocating 
Marines from Okinawa to Guam, with 2.5 billion dollars to be 
financed by GOJ loans 
 
ASAHI (Page 2) (Excerpts) 
March 25, 2006 
 
Japan and the United States yesterday ended their two days of 
talks of foreign and defense officials at the senior working 
level on the realignment of US forces in Japan. Talks included 
the issue of Japan bearing part of the cost of relocating the US 
Marine Corps from Okinawa to Guam. According to informed sources 
in the Japanese government, Japan proposed that it would defray 3 
billion dollars to finance the construction of housing for troops 
and their families, as well as other base facilities, while the 
US called on Japan to bear 7.5 billion dollars of the 10-billion- 
dollar cost. The talks ended without agreement. Both sides agreed 
to meet again in the US next week. 
 
In a press conference and a meeting of the House of 
Representatives Foreign Affairs Committee held yesterday, Foreign 
Minister Aso revealed plans to finance the construction of 
housing by Japanese government loans. He said: 
 
"About 17,000 troops and their family members will move (to 
Guam). It is necessary for Japan to provide a certain level of 
support. ... We will consider such means as offering loans." 
 
According to the government sources, a Japanese representative 
explained a public private partnership (PPP) under which Japan 
would lend money through a government-affiliated financial 
institution for constructing and managing housing and the US, 
with rents as capital, would pay back with interest. Japan 
proposed to the US that it would provide the US with 
approximately 2.5 billion dollars under this formula as expenses 
for constructing houses for troops and their families. 
 
8) Yamasaki: Japan can pay up to 50% of cost of relocating 
Marines to Guam 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 27, 2006 
 
Appearing on a Fuji TV program yesterday, Taku Yamasaki, former 
vice president of the Liberal Democratic Party (LDP), revealed 
the dominant view in the LDP that Japan would be able to pay up 
to 50% of the cost of relocating US Marines from Okinawa to Guam, 
although the US has been calling on Japan to foot 75% of the 10 
billion dollar bill. Yamasaki said: 
 
"The US request would force us to bear an excessively heavy 
burden. Some LDP officials have said that the maximum Japan can 
pay is half the total cost." 
 
Yamasaki commented on the transfer of 8,000 Marines from Okinawa 
 
TOKYO 00001577  006 OF 013 
 
 
to Guam: 
 
"Since this plan is based on an agreement between Japan and the 
US in line with their determination to reduce the security burden 
on Okinawa, we would like to translate it into action without 
fail." 
 
 Regarding the cost-sharing issue, he said: 
 
"There is discussion on whether to adopt a direct-payment system 
or a loan system. I have conveyed to the US the trend of party 
and public opinion." 
 
9) Minshuto head Maehara opposes Japan's paying large share of 
Marine-relocation cost 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 27, 2006 
 
In reference to cost-sharing for relocating the US Marine Corps 
from Okinawa to Guam, Democratic Party of Japan (Minshuto) head 
Seiji Maehara said yesterday afternoon: "I am opposed to a plan 
that would force a huge financial burden on Japan." The 
opposition leader, though, added in a press conference in 
Kitakata City, Fukushima Prefecture: "We must not allow the US to 
come up with the comment that since Japan does not pay, we will 
drop the relocation plan, the government must remind the US of 
the importance of implementing the plan," stressing the need for 
the Japanese government to continue efforts to have the Marine- 
relocation plan realized without fail. 
 
On Japan's cost burden, Maehara said: 
 
"It is important to push ahead with the (relocation) plan 
smoothly in the process of working out a third way of financing, 
such as a loan arrangement. ... Some take the view that (Marines) 
will be moved out (of Okinawa) in accordance with Japan's 
suggestion, but such a view is unilateral. Unless we interpret 
that the relocation plan is also in line with changes in the US 
strategy, we would be forced to give in to the US." 
 
10) Japan-US senior working-level talks on USFJ realignment 
carries over issue of sharing cost of relocating Marines to Guam 
 
TOKYO (Page 2) (Full) 
March 25, 2006 
 
The Japanese and US governments held senior working-level talks 
of foreign and security affairs officials March 24 in Tokyo on 
the realignment of US forces in Japan.  Although discussions 
focused on the issue of sharing the cost of relocating US Marines 
on Okinawa to Guam, the gap in views between the two sides 
remained wide, and discussion was carried over to Washington 
where talks would resume next week. 
 
The Japanese delegation offered to directly contribute $3 billion 
(approximately 350 billion yen) of the estimated $8 billion 
(approximately 944 billion yen) total cost of relocating the 
Marines. Japan also offered to pay for half of the US share of 
$2.5 billion (approximately 300 billion yen) through loans from a 
Japanese government-related financial institution. 
 
 
TOKYO 00001577  007 OF 013 
 
 
In response, the US delegation stressed that Japan should bear 
75% of an estimated total cost of $10 billion dollars (1.180 
trillion yen). Agreement was not reached. 
 
11) Futenma relocation: Government proposes moving runway out to 
sea and changing its angle 10 degrees 
 
NIHON KEIZAI (Page 2) (Excerpts) 
March 27, 2006 
 
Defense Agency Director General Fukushiro Nukaga held talks with 
mayor Yoshikazu Shimabukuro of Nago, Okinawa Prefecture, for 
about three hours yesterday at the agency to make arrangements 
for the planned relocation of the US Marine Corps' Futenma Air 
Station. In the talks, Nukaga made some proposals, including one 
to turn the angle of the runway to be constructed on the 
coastline of Camp Schwab about 10 degrees counter-clockwise. The 
defense chief also revealed the government's willingness to 
consider moving the plan less than 100 meters further out to sea. 
The government hopes that its compromise plans will help soften 
up the stance of local areas to reach a settlement before the end 
of this month. 
 
Shimabukuro reiterated his request to remove houses in the 
Henoko, Toyohara, and Abu districts from the flight paths of US 
military aircraft. He also insisted on moving the runway over 400 
meters further offshore. Following the Defense Agency's step 
toward making changes to the coastal plan, Shimabukuro will hold 
another round of talks with the defense chief March 29 based on 
talks with the Okinawa prefectural government. 
 
The Defense Agency thinks changing the direction of the runway 
about 10 degrees and moving it less than 100 meters out to sea 
would help reduce noise levels in Henoko and other districts, 
which Shimabukuro fears. The Defense Agency also envisages that 
the expanded reclaimed land would bring economic benefits. The 
option, however, is certain to adversely affect the environment, 
including the habitat of dugongs. Shimabukuro's response will be 
a key. 
 
Prior to his meeting with Shimabukuro, Nukaga held talks with 
Okinawa Gov. Keiichi Inamine yesterday morning at a hotel in 
Tokyo. Inamine said to Nukaga, "We appreciate to a certain extent 
the planned relocation of US Marines and return of some US 
bases." He also said regarding the coastal plan, "I hope the 
government will discuss it thoroughly with affected local areas 
based on past developments." 
 
12) Futenma relocation: Nukaga and Shimabukuro fail to reach 
conclusion; Nago presents new flight paths 
 
ASAHI (Page 1) (Excerpts) 
March 27, 2006 
 
Defense Agency Director General Fukushiro Nukaga held another 
round of talks with Nago Mayor Yoshikazu Shimabukuro yesterday at 
the agency to discuss the planned relocation of the US Marine 
Corps' Futenma Air Station, a focal point in the realignment of 
US forces in Japan. In response to the Defense Agency's proposal 
to change the direction of the planned runway, the Nago mayor 
presented new flight paths to avoid all districts in the city. 
The Defense Agency will study whether to accept Nago's request. 
 
TOKYO 00001577  008 OF 013 
 
 
Nukaga and Shimabukuro agreed to reach a conclusion swiftly and 
hold another round of talks later this week. 
 
13) Futenma coastal plan: Final coordination on minor changes; 
Key to settlement lies in Nago mayor's effort to convince local 
areas 
 
SANKEI (Page 2) (Excerpts) 
March 27, 2006 
 
Talks continued between Defense Agency Director General Fukushiro 
Nukaga and mayor Yoshikazu Shimabukuro of Nago, Okinawa 
Prefecture, yesterday on a plan to relocate the US Marine Corps' 
Futenma Air Station from Ginowan to the coastline of Camp Schwab 
in Nago in the prefecture. As a result, they reached an agreement 
to make final coordination on making minor changes to the coastal 
plan, such as changing the direction of the runway. But the 
situation remains fluid, as there are strong local calls for 
moving the coastal plan further to sea, which involves major 
revision of the plan. 
 
Following March 25, Nukaga and Shimabukuro discussed the issue 
for over three hours yesterday. In making changes to the plan, 
Nukaga pointed out three points the government regards as 
indispensable: (1) the safety of neighboring residents based on 
the coastal plan; (2) environmental matters; and (3) the 
feasibility of the relocation plan. 
 
Out of concern for destroying the marine habitat for dugongs, a 
protected species, and disruption of construction work by 
protests from environmental activists, the Defense Agency has 
attached importance to the environmental problem and the 
feasibility of the relocation plan. The basic plan presented by 
Nukaga reflected the government's intention not to accept Nago's 
call for making major changes to the coastal plan to move it 
further out to sea. 
 
Based on that policy line, Nukaga specifically proposed turning 
the angle of the planned runway about 10 degrees counter- 
clockwise. Local residents are opposed to the original plan that 
is designed to fly US military aircraft over some houses in the 
Toyohara and Henoko districts in Nago. As a result, the 
government has proposed changing the direction of the runway to 
remove those houses from the flight paths. 
 
In response, Shimabukuro asked the government to remove two other 
districts northeast of the coastline of Camp Schwab, such as Abu, 
from the flight paths. 
 
14) Yamasaki predicts settlement of Futenma talks before end of 
this month 
 
SANKEI (Page 2) (Full) 
March 27, 2006 
 
Speaking to the press last night in Naha, Former Liberal 
Democratic Party Vice President Taku Yamasaki indicated that 
talks on making changes to the plan to relocate Futenma Air 
Station would be settled soon, saying, "Talks are centered on 
technical matters, passing through the political phase. It is 
only a matter of time (before an agreement is reached). The issue 
will be settled before the end of this month, at the earliest." 
 
TOKYO 00001577  009 OF 013 
 
 
He also indicated that once an agreement was reached between the 
central government and Nago City, Okinawa Gov. Keiichi Inamine 
would also accept the plan in the end. 
 
At the same time, Yamasaki suggested that it would be physically 
difficult for Japan and the US to produce their final report on 
the realignment of US forces in Japan before the end of this 
month. 
 
15) Realignment of US forces in Japan: Government abandons 
efforts to reach agreement by end of month 
 
ASAHI (Page 1) (Full) 
March 26, 2006 
 
The government yesterday gave up on the idea of reaching a final 
agreement with the US government by the end of March, which was 
in effect made the deadline for the agreement, government sources 
revealed. Behind this move is Tokyo's judgment that given the 
little progress in coordination of views with the US over such 
issues as how to share the cost of relocating troops to Guam, 
Japan could be forced to make broad concessions if it insisted on 
bringing about an early settlement of the issues. The government 
initially intended to reach an agreement by the end of March at 
the Japan-US Security Consultative Committee of foreign and 
defense ministers, or 2+2, but now Japan has decided to aim to 
reach agreement in early April. 
 
The government will hold senior working-level talks of foreign 
and defense officials in the United States on March 30-31 to 
discuss such items as how to share the Guam relocation costs. 
Referring to this, a government official concerned said: "The 
possibility has not been ruled out that an agreement will be 
reached at the upcoming senior-working-level talks, but it's not 
possible to hold a 2+2 meeting, which the Japanese government has 
viewed a forum for both sides to reach a final agreement." 
 
This official also stated: "The US is well aware of Japan's 
desire to hold a 2+2 meeting. We aim to reach accord in early 
April." Another government official also stated: "Even at the 
upcoming senior-working-level talks, or even if we hold a 2+2 
meeting following them, it will not be possible to reach 
agreement." 
 
The focus of local coordination concerning the realignment of US 
forces in Japan is on what will happen to negotiations with Nago 
City over the relocation of the US Futenma Air Station in Ginowan 
City, Okinawa Prefecture. In talks with the US, Japan is 
continuing coordination about how to share the Guam relocation 
cost. 
 
16) Poll of legislators about SOFA: No reply from US lawmakers, 
with responses from only 30% of Japanese lawmakers 
 
TOKYO SHIMBUN (Page 3) (Full) 
March 25, 2006 
 
The Liaison Council of Major Governors on Negotiations, composed 
of 14 prefectures hosting US military bases and chaired by 
Governor of Kanagawa Shigefumi Matsuzawa, yesterday released the 
results of a survey of legislators conducted in both Japan and 
the United States about the Japan-US Status of Forces Agreement 
 
TOKYO 00001577  010 OF 013 
 
 
(SOFA). No response came from the US legislators, while among the 
Japanese legislators the response rate was only 30%. 
 
The questionnaires were sent in early February to 80 legislators 
belonging to Japan's Lower House Committees on Foreign Affairs 
and Security and its Upper House Committee on Foreign Affairs and 
Defense, as well as 90 legislators belonging to the US Senate and 
House Armed Services Committees. Asking them to answer on an 
anonymous basis, the survey inquired about the extent of 
understanding of the SOFA and the need to revise the SOFA. The 
Liaison Council takes issue with the treatment of US servicemen 
suspected of crimes and the restraints on Japanese officials' 
access to US bases, as specified by SOFA. The Liaison Council is 
demanding a review of the SOFA be put in a final report on the 
realignment of US forces in Japan, planned to be released 
possibly by the end of the month. 
 
Gov. Matsuzawa said: "US legislators presumably think it is 
desirable that their troops stationed abroad are protected, so 
they resist revision. They appear reluctant about even touching 
on a revision." Referring to Japanese lawmakers, Matsuzawa 
stated: "I'd like them to be more interested in it." 
 
17) Prime Minister Koizumi attends Coast Guard Academy's 
graduation ceremony for first time 
 
SANKEI (Page 5) (Full) 
March 27, 3006 
 
Prime Minister Junichiro Koizumi yesterday delivered a speech at 
the graduation ceremony of the Japan Coast Guard Academy (in Kure 
City, Hiroshima Prefecture). Koizumi told the graduating cadets: 
He told the graduating cadets: "We must continue to stay on the 
alert to prevent infiltration by terrorists from the sea and to 
guard important facilities such as nuclear reactors and major 
ports." He stressed the importance of coming up with thorough 
measures to fight against terrorism. 
 
Koizumi is the first prime minister to attend the JCGA's 
graduation ceremony. He also told the 41 cadets (including one 
foreign national): "In order to prevent and crack down on 
international crime, Japan needs to boost cooperation with other 
countries in various ways." Although he did not refer to the 
issue of gas exploration in the East China Sea, a government 
official commented that the prime minister's attendance was a 
"message" to show Japan's strong position. 
 
18) Minshuto's Hatoyama urges Nagata to resign voluntarily from 
Diet 
 
SANKEI (Page 5) (Full) 
March 27, 2006 
 
Minshuto (Democratic Party of Japan) Secretary General Yukio 
Hatoyama revealed for the first time his intention to urge House 
of Representatives member Hisayasu Nagata to voluntarily give up 
his Diet seat to take responsibility for creating the e-mail 
uproar. He stated in a speech delivered at the Hiroshima 
Prefectural chapter's convention yesterday afternoon: 
 
"I want him to feel his responsibility for causing a political 
uproar and giving us great concern about the party's survival. 
 
TOKYO 00001577  011 OF 013 
 
 
Apart from the party's punishment, I intend to press him to take 
responsibility." 
 
Hatoyama also said, "I think you, too, feel the party's 
punishment was not enough," after pointing out, "I can't tell him 
to give up his Diet seat just because he asked questions in the 
Diet based on false information." Minshuto suspended Magata's 
party membership for six months. 
 
Hatoyama thought that the main opposition would not be able to 
obtain public understanding without Nagata taking responsibility 
for the email fiasco. 
 
19) Fiscal 2006 budget bill to be enacted today 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 27, 2006 
 
The fiscal 2006 budget bill will be passed during an Upper House 
plenary session this evening by majority approval by the Liberal 
Democratic Party (LDP) and the New Komeito. Following the passage 
of the bill, the focus of the remaining half of the Diet session 
will shift to deliberations on key bills, such as administrative 
reform legislation. 
 
Prior to the plenary session, the Upper House Budget Committee 
will hold intensive deliberations on safety in the morning, 
attended by Prime Minister Koizumi and relevant cabinet 
ministers. The arrangement is that the budget bill will be 
adopted at the Budget Committee meeting after general budget 
deliberations. It will then be promptly presented to the plenary 
session. 
 
The explanation of a set of bills on reform of medical services 
designed to constrain swelling costs and a question and answer 
session on them will likely take place possibly before the end of 
the week, followed by deliberations. A battle between the ruling 
and opposition camps over a schedule for deliberations on those 
bills, as well as the administration reform promotion bill, 
debate on which has already started, will move into high gear. 
Regarding the issue of punishing Lower House member Hisayasu 
Nagata, who has had his membership in Minshuto (Democratic Party 
of Japan = Minshuto) suspended, the Lower House Committee on 
Discipline will aim to adopt a resolution on March 29 to summon 
Takashi Nishioka, the provider of the email in question as a 
witness on April 4. This will bring to an end the uproar over the 
fake email. 
 
20) Issuance of new stocks, corporate bonds likely to hit seven- 
year high of 11 trillion yen in fiscal 2005; Brisk capital 
spending, M&As 
 
NIHON KEIZAI (Top Play) (Excerpts) 
March 26, 2006 
 
Japanese companies' equity finance and corporate bond issuance 
are on the rise. The amount of capital procured through domestic 
and overseas capital markets in fiscal 2005 will likely reach 
11.1 trillion yen in fiscal 2005, up 10% from the previous year. 
This is the highest amount since the 13 trillion yen registered 
in fiscal 1998. As business performance improved, capital demand, 
such as investment in plant and equipment and mergers and 
 
TOKYO 00001577  012 OF 013 
 
 
acquisitions (M&A), has expanded. The rising stock prices and the 
strong anticipation of higher interest rates are prompting 
companies to procure more capital. 
 
Companies' procurement of capital has been continuing on a 
recovery path after bottoming out in fiscal 2002 at 8.8 trillion 
yen and is now expected to top 10 trillion yen for the second- 
consecutive year in fiscal 2005. The increase has been noticeable 
in the domestic market in the current fiscal year, reaching 9.6 
trillion yen, up 21%. The amount is close to the level (9.8 
trillion yen) of fiscal 2000, during the IT bubble. The 
mainspring of the uptrend is a 32% increase in domestic equity 
finance to 2.7 trillion yen, as can be seen in the procurement of 
approximately 200 billion yen by Mitsui & Co. through public 
stock offerings this February for the first time. 
 
The issuance of straight corporate bonds on the domestic market 
is also expected to reach 6.9 trillion yen, up 17%. Sony issued 
straight bonds worth 120 billion yen last September for the first 
time in about four years and another 100 billion yen worth this 
February. Some 29 companies issued straight bonds, including Fuji 
Television Network and Towa Real Estate Development. Amid growing 
anticipation that the Bank of Japan will end its zero interest 
rate policy, an increasing number of companies are now planning 
to issue corporate bonds. 
 
21) Japan-China financial dialogue: Agreement reached to hold 
dialogue once a year; Japan urges China to expand range of yuan 
fluctuation 
 
NIHON KEIZAI (Top Play) (Excerpts) 
March 26, 2006 
 
Finance Minister Sadakazu Tanigaki and Chinese Finance Minister 
Jin Renqing on March 25 held the first bilateral financial 
dialogue to discuss economic and financial issues. They agreed to 
hold a financial dialogue once a year, based on the perception 
that the interdependency of the Japanese and Chinese economies 
was deepening. The dialogue will be held in Tokyo next year. 
During the meeting, the Japanese side urged China to expand the 
range in which the yuan is allowed to fluctuate, but the Chinese 
side simply explained the present state of the reform of its 
exchange system. 
 
Jin criticized Prime Minister Junichiro Koizumi's visits to 
Yasukuni Shrine. He also noted that it was regrettable that Tokyo 
decided to put off a cabinet decision on yen loans to China for 
fiscal 2005 until after April. Commenting on yen loans to China, 
Tanigaki said, "We will consult on the matter under the 
initiative of the Foreign Ministry while taking the current state 
of bilateral relations into account." But he stopped short of 
referring to when a cabinet decision on the matter is made. 
 
22) Chinese premier to avoid reference to Yasukuni, Class-A war 
criminals, emphasize history of friendship instead, according to 
draft of his speech aimed at Japan 
 
ASAHI (Page 1) (Excerpts) 
March 26, 2006 
 
Nobuyoshi Sakajiri, Beijing 
 
 
TOKYO 00001577  013 OF 013 
 
 
An outline of an important speech Chinese President Hu Jintao 
will deliver in a meeting on March 31 with Japanese 
representatives from seven Japan-China friendship organizations 
was revealed. According to it, Hu intends to avoid direct mention 
of Prime Minister Koizumi's continued visits to Yasukuni Shrine 
and Class-A war criminals and emphasize instead why China 
attaches importance to the history issue. This stance comes 
apparently from China's reflection on the past circumstances, 
namely that its continued scathing criticism of Koizumi's shrine 
visits has antagonized the Japanese public. Calling the planned 
speech a message to the Japanese people, China will seek 
understanding at various levels. 
 
This was revealed by more than one source familiar with Japan- 
China relations. The draft speech prepared by Chinese government 
officials has already been handed to Hu to receive his final 
decision. Depending on Hu's own political judgment or the 
immediate situation before the meeting, the draft might be given 
some modifications. 
 
The draft avoids making a direct reference to visits to Yasukuni 
Shrine, which has enshrined Class-A war criminals. 
 
SCHIEFFER