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UNCLAS SECTION 01 OF 10 TOKYO 003789 
 
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 07/07/06 
 
Index: 
1) Top headlines 
 
2) Editorials 
 
3) Prime Minister's daily schedule 
 
4) North Korea's Taepodong-2 missile that failed was aimed at waters 
off Hawaii 
 
5) US confirms that North Korea readying another Taepodong missile 
launch 
 
6) Government on alert as North Korea prepares another missile 
launch 
 
7) President Bush, Prime Minister Koizumi to seek at G8 summit 
statement of concern about North Korean missiles 
 
8) China, Russia balking at UNSC imposing sanctions on North Korea 
for missile caper 
 
9) LDP's Yamasaki in Jakarta asks Indonesia's president to pass 
along Koizumi message to North Korea on missiles, 6-party talks 
 
10) Exports to North Korea that have military-use possibility to 
require licensing under revised law 
 
11) Hawks in LDP plan to use additional measures against North Korea 
as a "pressure card" 
 
12) Prime Minister Koizumi: Good thing the Taepodong launch did not 
happen when I visited Presley home 
 
13) Chief Cabinet Secretary Abe: Pyongyang planned missile launch as 
tactic to force US into a dialogue 
 
14) Minshuto's Hatoyama: China, Russia's reluctance to sanction 
North Korea on missile launch reveals weakness of Koizumi diplomacy 
 
 
15) JCP's Shii denounces North Korea for using missile threat 
 
16) JDA chief Nukaga confirms speeding up of missile defense 
deployment 
 
17) Abe calls for strategic dialogues with US, Australia, India 
 
18) Minshuto President Ozawa in Beijing meets possible successor to 
President Hu 
 
19) LDP's Koga wants Yasukuni Shrine turned into secular war 
memorial 
 
20) Economic forecast revised upward to 2 PERCENT  real growth 
 
Contents: 
1) TOP HEADLINES 
 
Asahi: 
Missile launches by North Korea: China, Russia cautious about 
slapping sanctions 
 
TOKYO 00003789  002 OF 010 
 
 
 
Mainichi: 
Taepodong-2 missile damaged soon after launching; Debris fall into 
nearby area; Japan, US confirm failure 
 
Yomiuri: 
St. Petersburg Summit chairman's summary statement to mention 
concern over North Korea's missiles in response to proposal by Japan 
and US; Leaders from major nations to call for missile-launch 
moratorium 
 
Nihon Keizai: 
Government alert to another launch of Taepodong-2 missile; "The 
launching of such a missile is fully possible," says deputy JDA 
director general 
 
Sankei: 
Taeopodong-2 missile aimed at waters near Hawaii; US hardens its 
stance; Likely to apply pressure for sanctions resolution 
 
Tokyo Shimbun: 
Government to call on G-8 Summit to issue statement condemning North 
Korea over its missile launches with eye on pressuring that country 
 
2) EDITORIALS 
 
Asahi: 
(1)UN resolution on North Korea's missile launches: Solidarity and 
speed are essential 
(2)The Korean Residents Union in Japan, the pro-Seoul Korean 
residents group in Japan and the pro-Pyongyang General Association 
of Korean Residents in Japan (Chongryon); Historic reconciliation 
turned out to be fragile 
 
Mainichi: 
(1)UN resolution on North Korea's missile launches: China and Russia 
should be aware of their heavy responsibility 
(2)Press conference by Kim Young Nam: Do not be misled by North 
Korea's intelligence tactics 
 
Yomiuri: 
(1)North Korea's missile launches: Adopting resolution at UNSC is 
not the goal 
(2)Bank of Japan's internal regulations: Setting up strict rules is 
a step toward regaining trust 
 
Nihon Keizai: 
(1)China and Russia should act carefully in order not to incur 
misunderstanding by North Korea 
(2)WTO talks: Share the sense of emergency 
 
Sankei: 
(1)North Korea's missile launches: UNSC resolution with force behind 
it is urged 
(2)South Korean vessels carrying out investigation in the confusion 
at the moment 
 
Tokyo Shimbun: 
(1)Ozawa's visit to China: Even though he was able to show areas of 
contention 
(2)Arresting wrong person: There is no excuse 
 
 
TOKYO 00003789  003 OF 010 
 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 6 
 
NIHON KEIZAI (Page 2)  (Full) 
July 7, 2006 
 
09:25 
Talked on the phone with US President Bush at Kantei, with Foreign 
Ministry's Foreign Policy Bureau Director General Kono, Asian and 
Oceanian Affairs Bureau Director General Sasae, North American 
Affairs Bureau Director General Kawai present. 
10:15 
Met METI Industry, Technology and Environment Bureau Director 
General Koezuka and Environment Ministry's Global Environment Bureau 
Director General Kobayashi. 
11:03 
Met WTO Secretary General Lamy with Ambassador of Japan to the UN 
and Other International Organizations in Geneva Fujisaki. 
12:00 
Met at party headquarters with members of the "Association of 
Independent Fresh Lawmakers," Secretary General Takebe, Policy 
Research Council Chairman Nakagawa, and Executive Council Chairman 
Kyuma. 
13:18 
Arrived at Kantei. 
14:00 
Met Special Envoy for Middle East Peace Arima, Deputy Foreign 
Minister Nishida, Middle Eastern and African Affairs Bureau Director 
General Yoshikawa and others. 
15:00 
Met Cabinet Intelligence Director Mitani, JDA Defense Bureau 
Director General Ofuru, and Defense Intelligence Headquarters chief 
Mukunoki. Followed by Economic, Fiscal and Financial Policy Minister 
Yosano. 
16:03 
Met with Foreign Ministry's deputy foreign ministers Nishida and 
Yabunaka, Economic Affairs Bureau Director General Ishikawa, 
Economic and Industry Deputy Director General Hinoshita, and 
others. 
17:00 
Attended a Fiscal and Economic Reform Council meeting. Later met 
with Foreign Vice Minister Yachi. 
18:43 
Met Deputy Chief Cabinet Secretary Futahashi. 
19:00 
Met at his official residence with Secretary General Takebe, Upper 
House LDP caucus head Aoki. 
 
4) Taepodong missile targeted to reach Hawaii offshore area 
 
SANKEI (Top play) (Full) 
July 7, 2006 
 
A long-range Taepodong-2 ballistic missile launched by North Korea 
on the morning of July 5 was targeted to hit waters offshore from 
Hawaii, Japanese and US government sources revealed yesterday. North 
Korea possibly aimed to force the United States to lift its 
financial sanctions imposed on it. Meanwhile, the United States has 
further hardened its attitude because American territory was 
targeted. The US government is expected to intensify international 
pressure on North Korea in order for the United Nations Security 
 
TOKYO 00003789  004 OF 010 
 
 
Council to resolve to impose sanctions on North Korea. 
 
The Taepodong-2 missile was fired at 4:59 a.m. on July 5 from 
Musudan-ri in North Korea's northeastern district. The missile 
stalled after 40 seconds and landed in the Sea of Japan several 
hundred kilometers away. According to Japanese and US government 
sources, the Defense Agency and US Forces Japan (USFJ) analyzed the 
Taepodong-2's path based on data collected by Aegis-equipped ships 
and an airborne RC-135S electronic intelligence platform tasked with 
tracking ballistic missiles. They concluded that the Taepodong-2 
missile had been targeted at a Hawaii offshore area, judging from 
its warhead's angle, altitude, and other factors found from their 
analysis of data. 
 
Hawaii is situated about 7,000 kilometers away from North Korea. The 
Taepodong-2 had been believed to have a range of 3,500-6,000 
kilometers. However, its actual range might be considerably longer 
than that. 
 
There is no knowing why North Korea had targeted the Taepodong-2 
missile at waters near Hawaii. However, one of the government's 
informed sources cites some possible reasons: 1) North Korea wanted 
to demonstrate that the United States is within range; 2) Hawaii is 
where the US Navy's Pacific Fleet headquarters is located; and 3) 
the Taepodong-2 missile's targeting accuracy is low, so the missile 
could have landed on land if it had been launched in the direction 
of Alaska. 
 
5) 2nd Taepodong-2 missile confirmed 
 
SANKEI (Page 1) (Abridged) 
July 7, 2006 
 
WASHINGTON- Traffic and other activities are still going on at a 
missile test facility in North Korea's northeastern district for 
long-range Taepodong-2 ballistic missiles, following its recent 
launch of the first Taepodong-2 missile, Japanese and US 
intelligence officials confirmed yesterday. North Korea is presumed 
to be readying to test-fire another Taepodong-2 missile because the 
first one failed. In the meantime, North Korea is also believed to 
be making a demonstration with an eye on future negotiations at the 
United Nations or elsewhere. 
 
6) Gov't on alert expecting another Taepodong missile launch 
 
NIHON KEIZAI (Top play) (Abridged) 
July 7, 2006 
 
The government is now on the alert against North Korea's possible 
launch of another long-range Taepodong-2 ballistic missile, 
officials said yesterday. The government deems that North Korea 
might be making preparations to fire a second long-range ballistic 
missile that is believed to be a Taepodong-2 missile. The government 
will tighten security at atomic power plants and other vital 
facilities at home, as well as the nation's densely populated areas, 
in cooperation with local governments. Japan is applying diplomatic 
pressure on North Korea with the United Nations Security Council 
adopting a resolution denouncing North Korea, in an aim to stop 
North Korea from firing a second ballistic missile. In the meantime, 
the Self-Defense Forces (SDF) and US Forces Japan (USFJ) have been 
intensifying their warning and surveillance activities. 
 
 
TOKYO 00003789  005 OF 010 
 
 
North Korea has released its foreign ministry's statement claiming 
it will continue its missile testing. "Including the missile 
launches this time, it is well conceivable that they will take 
action," Defense Agency Administrative Deputy Director General 
Takemasa Moriya told a press conference yesterday. With this, the 
vice defense minister implied that North Korea could fire a second 
Taepodong-2 missile. 
 
SDF Joint Staff Chief Hajime Massaki has also ruled out the 
possibility of another Taepodong-2 missile launch. "There's no 
information to deny it," the top brass officer said. Meanwhile, 
North Korea might be assembling another Taepodong-2 missile. 
Touching on this possibility, he declared that the SDF would remain 
on the alert. 
 
7) Japan, US to jointly propose at G8 summit that chair's statement 
express concerns about North Korea's missile launches, call for 
freeze 
 
YOMIURI (Top play) (Excerpts) 
July 7, 2006 
 
The Group of Eight (G8) industrialized countries summit conference 
that will start at St. Petersburg in Russia on July 15 is likely to 
express in the G8 chairman's summary statement grave concerns about 
North Korea's missile launches and urge that country to exercise 
self-restraint. This was confirmed yesterday by some G8 members. 
Prime Minister Koizumi and US President Bush will propose the 
language at the G8 summit conference for  endorsed by other leaders. 
A statement on nuclear nonproliferation that the summit conference 
will adopt will also urge North Korea to freeze missile-launching 
indefinitely and to urge nonproliferation of nuclear weapons and 
missiles. 
 
On July 5, Prime Minister Koizumi called Deputy Foreign Minister 
Mitoji Yabunaka to the Prime Minister's Official Residence and 
instructed him to coordinate views with other countries so that 
North Korea's missile launches will be put on agenda for the G8 
summit and the chairman's summary statement will clearly mention the 
missile issue. 
 
8) Missile launches by North Korea: China, Russia cautious about 
slapping sanctions 
 
ASAHI (Top Play) (Lead para.) 
July 7, 2006 
 
A North Korean Foreign Ministry spokesman yesterday officially 
admitted that the barrage of missile launches was part of its 
military training and indicated the nation's intention to continue 
missile-launching exercises. Chinese and Russian leaders, who had 
showed understanding toward the position of North Korea, made 
statements seeking self-restraint from Pyongyang. They also took a 
cautious position about the idea of imposing sanctions on the North, 
underscoring the difference in their stance from that of Japan and 
the US, which are calling for sanctions. Gaps in views on the issue 
are now seen among the major countries. 
 
9) Koizumi sends message to North Korea via Indonesia, calling for 
it to halt missile launches, return to six-party talks 
 
NIHON KEIZAI (Page 2) (Full) 
 
TOKYO 00003789  006 OF 010 
 
 
July 7, 2006 
 
Taku Yamasaki, a former vice president of the Liberal Democratic 
Party, met in Jakarta on July 6 with Indonesian President Susilo 
Bambang Yudhoyono, who is scheduled to visit North Korea on July 18. 
In the talks, Yamasaki entrusted Yudhoyono with Prime Minister 
Junichiro Koizumi's message urging North Korea to halt missile 
launches and return swiftly to the six-party talks. In response, 
Yudhoyono expressed his eagerness to contribute to Asia's stability. 
The Koizumi message stated: (1) Launching missiles was a serious 
violation of the Japan-DPRK Pyongyang Declaration, and North Korea 
must exercise self-control; and (2) North Korea must swiftly return 
to the six-party talks to discuss the nuclear and missile issues. 
 
10) Government to revise Foreign Exchange and Foreign Trade Control 
Law to make all military-adaptable North Korea-bound products 
subject to trade minister's authorization 
 
YOMIURI (Page 2) (Full) 
July 7, 2006 
 
The government decided yesterday to tighten regulations on all North 
Korea-bound exports that might be used in the production of weapons 
of mass destruction. At present, the economy, trade and industry 
minister's approval (kyoka) is required for exporting such products 
as computers and telecommunications peripheral devices in excess of 
50,000 yen, which can be used for military applications, to North 
Korea, Iran, Iraq, and Libya. The government will make products 
worth less than 50,000 yen also subject to the minister's 
authorization by revising the Foreign Exchange and Foreign Trade 
Control Law this fall. 
 
Behind the decision lies the situation where an increasing number of 
products priced below 50,000 yen are now military-adaptable. 
Code-processing chips used to cost over 50,000 yen, but today they 
are being traded for less than 5,000 yen. Last year, there were 
12,000 applications for exporting designated products last year, but 
none was for North Korea. 
 
11) LDP's hard-liners intend to speed up preparations for 
"retaliatory cards" against North Korea 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
July 7, 2006 
 
By Yuji Shinogase 
 
The Liberal Democratic Party's (LDP) simulation team on economic 
sanctions against North Korea, chaired by Ichita Yamamoto, a member 
of the House of Councilors, gathered together yesterday. In order to 
respond to North Korea's missile launches, the group decided to 
submit an emergency measures bill intended to impose financial 
sanctions on North Korea, such as a full suspension of financial 
transactions and a strict application of money laundering 
regulations, to the upcoming extraordinary Diet session in the fall 
instead of the regular Diet session of next year in order to swiftly 
enact the bill. 
 
Chairman Yamamoto stressed the need for Japan to prepare a new set 
of "retaliatory cards" against North Korea as quickly as possible, 
telling this reporter: "The special measures law banning certain 
vessels from entering Japanese ports -- legislation initiated by 
 
TOKYO 00003789  007 OF 010 
 
 
lawmakers -- was enacted in 2004. This law has now enabled Japan to 
take economic sanction measures against North Korea in response to 
its missile launches. The government is responsible for determining 
the details of retaliatory actions, but we in the ruling camp need 
to prepare for a 'tool' for retaliation." 
 
The LDP, backed by the simulation team, has prepared such laws aimed 
at putting pressure on North Korea as the amendment to the Foreign 
Exchange Control Law, the Special Measures Law Banning Specified 
Vessels from Entering Japanese Ports, and the North Korea Human 
Rights Law. Diet members initiated all these laws. In dealing with 
the missile launches, the government has already decided to apply 
the special measures law banning certain vessels from entering 
Japanese ports to North Korea's vessel Man Gyong Bong-92 and is 
considering applying the amendment to the foreign exchange control 
law. 
 
In the belief that North Korea will not move unless it is pushed, 
the simulation team aims to enact the financial sanction bill. Some 
LDP lawmakers take the view that the indirect reason for the 
realization of the second Japan-North Korea summit meeting in May 
2004 was that the amendment to the foreign exchange control law came 
into effect in February of that year. Given this, hard-liners in the 
party think that the situation will not make progress unless Japan 
takes a tough stand. 
 
12) Prime Minister Koizumi: I'm glad that North Korea did not fire 
missiles when I was visiting Presley's mansion 
 
ASAHI (Page 4) (Full) 
July 7, 2006 
 
"I'm glad that a Taepodong missile was not fired when I was touring 
Presley's mansion," said Koizumi during dinner last night with 
Liberal Democratic Party (LDP) Secretary General Tsutomu Takebe and 
other officials. One participant said, "Your are lucky." More than 
one participant revealed this comment. Koizumi on June 30 visited 
Presley's Graceland mansion along with President George W. Bush and 
his wife. He was thrilled by his tour of Graceland, singing Elvis' 
song and imitating Elvis. 
 
13) Chief Cabinet Secretary Abe: North Korea planned missile 
launches to force dialogue with US; Armitage: Launches were North 
Korean leader Kim's policy 
 
ASAHI (Page 2) (Full) 
July 7, 2006 
 
Referring in a speech yesterday in Tokyo on the aim of North Korea 
in test firing its missiles, Chief Cabinet Secretary Shinzo Abe 
said, "The common-sense view is that Pyongyang is seeking a dialogue 
with Washington." Touching on the fact that most missiles fell into 
a certain area, Abe stated: "The missile launches were not 
arbitrarily conducted in an uncontrolled manner. They were well 
planned." He indicated that the test-fires were carried out under 
the control of North Korean leader Kim Jong Il. 
 
Abe also said that the sharing of intelligence between Japan and the 
United States has improved compared to 1998, when the North launched 
a Taepodong missile. He stressed: "We did not give North Korea any 
opening to take advantage of. We have reaffirmed how crucial the 
alliance is." 
 
TOKYO 00003789  008 OF 010 
 
 
 
Former Deputy Secretary of State Richard Armitage, who delivered a 
speech before Abe, stated: "Kim Jong Il calculated that Japan and 
the US would not be able to add further sanctions, and that China 
and Russia would not impose sanctions. This was his method." He then 
added: "North Korea will probably launch more missiles. It is not 
true that North Korea's military has control; the missile launches 
were Kim Jong Il's policy." He denied the view that Kim Jong Il has 
lost control of the military. 
 
14) Hatoyama: Reluctance of China, Russia to adopt UN resolution 
exposes vulnerability of Koizumi diplomacy 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 7, 2006 
 
In a press conference yesterday, Minshuto (Democratic Party of 
Japan) Secretary General Yukio Hatoyama denounced Prime Minister 
Koizumi's diplomatic stance in reference to the opposition of China 
and Russia to adopting a resolution at the United Nations Security 
Council calling for sanctions against North Korea for missile 
launches. Hatoyama said: "The vulnerability of Japan's pragmatic 
foreign policy has been exposed. Japan's relations with Russia and 
China have encountered difficulties since the Koizumi administration 
was launched. Such circumstances are behind those countries' refusal 
to take joint steps with Japan." 
 
Citing that Minshuto head Ichiro Ozawa has exchanged views on North 
Korea's missile problem with high-ranking Chinese government 
officials in China, Hatoyama commented: "It is impossible to 
promptly rectify the weakness of Koizumi diplomacy. Japan and China 
are not necessarily taking the same stance." 
 
15) JCP chairman blasts North Korea: Using the threat of armed force 
is an unforgivable act 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
July 7, 2006 
 
In the second plenary meeting of the Japanese Communist Party's 
(JCP) Central Committee yesterday, JCP Chairman Kazuo Shii lashed 
out at North Korea for firing missiles, saying: 
 
"That nation is trying to force its demands by using the threat of 
armed force. Such a brinkmanship approach is an unforgivable act 
that threatens the peace and stability of Northeast Asia." 
 
Shii urged North Korea to "abide by the international rules and the 
Japan-North Korea Pyongyang Declaration." 
 
16) Government to introduce MD system earlier than originally 
planned; Nukaga reveals plan to deploy PAC-3 missiles before year's 
end 
 
NIHON KEIZAI (Page 2) (Excerpts) 
July 7, 2006 
 
In the wake of the launch of a ballistic missile by North Korea, the 
government will introduce a missile defense (MD) system to detect 
and intercept incoming ballistic missiles ahead of the original 
timetable. In cooperation with the US military, the government will 
deploy Patriot Advanced Capability-3 (PAC-3) ground-to-air missiles 
 
TOKYO 00003789  009 OF 010 
 
 
before year's end and increase the capability to detect missiles' 
trajectories by using electronic surveillance aircraft and radars. 
 
Defense Agency Director General Fukushiro Nukaga, in yesterday's 
Lower House Security Committee meeting, announced a plan to begin 
deploying PAC-3 missiles before year's end instead of the originally 
planned fiscal 2007, to put them into operation gradually. 
 
Envisaging more missile launches by the North, Nukaga said: "In 
collaboration with the United States, we want to build a missile 
intercept system and surveillance radar networks as early as 
possible." 
 
The PAC-3-centered MD system is designed to detect and intercept 
enemy ballistic missiles before the terminal phase. More 
specifically, it is designed to intercept missiles flying outside 
the atmosphere with sea-based Standard Missile-3 interceptors and 
missed targets with ground-based PAC-3 missiles. 
 
The US military plans to deploy PAC-3 missiles first at its Kadena 
Air Base in Okinawa. Coinciding with the US plan, the Air 
Self-Defense Force intends to gradually deploy PAC-3 missiles at its 
Iruma base in Saitama, Hamamatsu base in Shizuoka, and other bases. 
 
17) Chief Cabinet Secretary Abe proposes strategic dialogue among 
US, Australia, India, Japan at Yomiuri Shimbun symposium 
 
YOMIURI (Page 1) (Excerpt) 
July 7, 2006 
 
In a speech yesterday at a special session of the Yomiuri 
International Economic Symposium (YIES) held at the Tokyo Kaikan 
Hall at Marunouchi, Tokyo, Chief Cabinet Secretary Abe spoke of 
Japan's Asia diplomacy and proposed a four-party dialogue concept 
involving Japan, the United States, Australia, and India, saying: 
"India is a country that shares such values as freedom, democracy, 
and human rights. I think it is a good idea to create a forum for 
Japan, the US, Australia, and India to hold strategic 
consultations." Abe made this proposal, apparently having in mind a 
growing call to emphasize diplomacy toward Asia ahead of the Liberal 
Democratic Party's presidential election in September. 
 
18) Minshuto head Ozawa meets with likely successor to President Hu 
in China 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
July 7, 2006 
 
Shohei Yoshida, Shenyang 
 
Minshuto (Democratic Party of Japan) President Ichiro Ozawa, 
currently in China, visited Shenyang, the capital of Liaoning 
Province, on the afternoon of July 6 where he met with Chinese 
Communist Party Liaoning Province Committee General Secretary Li 
Keqiang at the State Guest House. Li is viewed as a likely candidate 
to succeed President Hu Jintao. 
 
Li was born in 1955 and comes from the Chinese Communist Youth 
Organization, like Hu. When he visited Japan in 1992 as a member of 
the youth organization, he stayed Ozawa's home in Iwate Prefecture. 
 
In the meeting with Ozawa, Li expressed eagerness to develop trade 
 
TOKYO 00003789  010 OF 010 
 
 
between Japan and Liaoning Province, which has a flourishing heavy 
industry. Ozawa replied: "I am happy to see my old friend attain 
greatness (as a senior member of the Chinese Communist Party). 
 
19) LDP's Koga wants Yasukuni Shrine to be secular facility 
 
ASAHI (Page 4) (Full) 
July 7, 2006 
 
Former Liberal Democratic Party (LDP) Secretary General Makoto Koga, 
chairman of the Japan Association of the Bereaved Families of the 
War Dead, stated yesterday in a meeting of the Niwa-Koga faction in 
the LDP: 
 
"I want to move ahead with debate on Yasukuni Shrine, including the 
possibility of building a facility unconnected with any religious 
faith, and whether the state will sponsor such a secular facility." 
 
Koga has proposed a study of disenshrinement of Class-A war 
criminals from Yasukuni Shrine. He also suggested in his remarks 
that Yasukuni Shrine be a secular facility under state control. 
 
Koga said: "Debate on Yasukuni Shrine have been conducted at a 
faster pace than I expected. I am not budging on my view that 
Yasukuni should be the only war memorial in Japan." He sought to 
check the views in the LDP that a national war memorial should be 
built and that the Chidorigafuchi war memorial should be expanded. 
 
20) Outlook for real economic growth rate for this fiscal year to be 
upgraded to 2.1 PERCENT ; Government certain of economy's emergence 
from deflationary period 
 
NIHON KEIZAI (Page 1) (Excerpts) 
July 7, 2006 
 
The Cabinet Office yesterday decided to revise upward the outlook 
for the economic growth rate for fiscal 2006 to 2.1 PERCENT  in real 
terms, which excludes the impact of fluctuations in prices, and to 
2.2 PERCENT  in nominal terms, up 0.2 points respectively from the 
government outlook adopted by the cabinet in January. 
 
The Cabinet Office will present the revised figures to the Council 
on Economic and Fiscal Policy, which is to meet today. From now on, 
these figures will become the government's official outlook for 
economic growth. 
 
The revised growth rate in nominal terms will top the revised real 
growth rate for the first time in nine years, as it did in the 
original outlook. Having stood firm on the initial outlook for six 
months ago, the government will come up with a view that the 
Japanese economy will definitely emerge from the deflationary spiral 
before the end of the year. The Cabinet Office's presumption that 
the economy will emerge from the deflationary period will set 
another condition for the Bank of Japan to lift its zero interest 
rate policy. 
 
SCHIEFFER