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UNCLAS SECTION 01 OF 06 TOKYO 004151 
 
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 07/26/06 
Part-1 
Index: 
1) Top headlines 
 
 
2) Editorials 
 
3) Prime Minister's daily schedule 
 
4) LDP presidential contender Shinzo Abe to leave Mori faction to 
broaden his party appeal prior to start of election campaign    4 
5) Difficult for LDP factions to organize around a single candidate 
to go up against frontrunner Abe in the LDP presidential race 
 
6) LDP faction leader Mori explains to Prime Minister Koizumi why 
Yasuo Fukuda suddenly dropped out of presidential race 
 
7) JDA chief Nukaga is cautious about entering the LDP presidential 
race 
 
8) MOF Minister Tanigaki campaigning in LDP race by promising to 
raise consumption tax 
 
9) Opposition Minshuto (Democratic Party of Japan) will attack LDP 
candidate Abe on perceived weakness of diplomacy 
 
10) Prime Minister Koizumi on visiting Yasukuni Shrine: Plans trip 
to Mongolia around August 10 but says "must be in Japan on August 
15" 
 
Articles: 
1) TOP HEADLINES 
 
Asahi: 
South Korean government admits involvement in kidnapping of Kim Dae 
Jung by KCIA; Reports to be made public soon 
 
Mainichi and Tokyo Shimbun: 
Nihon Keizai employee arrested over insider trading 
 
Yomiuri: 
Amazon to join Internet shopping mall market before year's end 
 
Nihon Keizai: 
Major steelmakers to increase production capabilities by 10 PERCENT 
-20 PERCENT  to increase profitability in anticipation of 
realignment 
 
Sankei: 
Judicial reform: Speedy trial system to be implemented in October 
 
Akahata: 
Akita right-to-life group demands improved welfare administration, 
claiming 37-year-old man killed himself in protest 
 
2) EDITORIALS 
 
Asahi: 
(1)Make every effort to resume WTO talks 
(2)Nihon Keizai employee arrested over insider trading 
 
Mainichi: 
(1)WTO trade talks frozen 
(2)Postal administration plan must adhere to reform line 
 
TOKYO 00004151  002 OF 006 
 
 
 
Yomiuri: 
(1)WTO talks: future bleak 
(2)Nikkei Shimbun lax with privileged data 
 
Nihon Keizai: 
(1)Company will return to starting point to recover public trust 
(2)Is free trade dead? 
 
Sankei: 
(1)Nihon Keizai loses public trust due to employee's insider 
trading 
(2)Find alternatives to live organ transplants 
 
Tokyo Shimbun: 
(1)Free trade must go on despite failed Doha Round 
(2)30 years after Lockheed scandal: Public's participation in 
politics essential 
 
Akahata: 
(1)Structural reform expanded social inequality 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 25 
 
NIHON KEIZAI (Page 2)  (Full) 
July 26, 2006 
 
09:32: 
Attended LDP executive meeting at party headquarters. 
10:01: 
Attended cabinet meeting at Kantei. Met with Defense Agency Director 
General Nukaga. 
11:10: 
Interviewed by elementary and junior high school students from 
Okinawa and Hakodate. 
11:32: 
Met with Kobe University Prof. Makoto Iokibe, who has been named 
president of National Defense Academy, and Nukaga. 
14:10: 
Met with Lower House member Tateo Kawamura and Japan-Brazil 21st 
Century members. Had commemorative photograph taken. 
15:00: 
Met with Internal Affairs and Communications Minister Takenaka. 
18:00: 
Met at his official residence with AU Chairman Konare. 
19:02: 
Held joint press conference with Konare regarding the establishment 
of Hideo Noguchi Africa Award worth 100 million yen. Attended dinner 
party together with Konare and former Prime Minister Mori. Met later 
with Mori. 
 
4) Abe to leave Mori faction before LDP presidential race to obtain 
wide-ranging support 
 
YOMIURI (Page 1) (Full) 
July 26, 2006 
 
 
TOKYO 00004151  003 OF 006 
 
 
Chief Cabinet Secretary Shinzo Abe has decided to leave the Mori 
faction in the Liberal Democratic Party (LDP) before the Sept. 20 
LDP presidential election and not to return to the faction after the 
presidential race. He intends to declare his decision to leave the 
faction when he announces his candidacy for the party leadership 
race in late August and to submit a letter of his withdrawal from 
the membership to the Mori faction in early September at the time 
when the LDP announces the official campaign for its presidential 
election on Sept. 20. The purpose of his decision is to obtain 
support from a broad range of forces, while weakening the impression 
of his being a Mori faction member. 
 
Since former Chief Cabinet Secretary Yasuo Fukuda has decided not to 
run in the election, the Mori faction is expected to field Abe alone 
in the race. 
 
According to an aide, Abe has judged that the LDP will lose support 
from the public unless it conducts a leadership-focused election in 
which debate on policy issues would be carried out, eschewing a 
numbers tallying game. 
 
Some aides to Abe are concerned that if the Mori faction takes the 
lead in supporting Abe in the election, other factions will be 
unhappy, and as a result, Abe would not boost support from other 
forces. A mid-level Mori faction member said yesterday, "We will 
establish a multi-tiered, cross-factional campaign setup for Mr. 
Abe." 
 
The expectation is that the Parliamentary League to Support a Second 
Chance, which is made up of junior and mid-level lawmakers 
supporting Abe, will become the core of groups supporting Abe's 
presidential campaign. 
 
Abe intends reveal his administrative vision when he announces his 
candidacy, which includes: not accepting recommendations from the 
factions in picking new cabinet members and LDP executives; a stance 
of succeeding Prime Minister Junichiro Koizumi's policy line of 
eliminating factional influence; and choosing cabinet members and 
party executives from among veteran, mid-level and junior members in 
view of forming a unanimous party arrangement. 
 
5) 2006 LDP presidential race: Uniting anti-Abe forces difficult; 
Faction split over fielding Nukaga 
 
MAINICHI (Page 2) (Abridged) 
July 26, 2006 
 
With former Chief Cabinet Secretary Yasuo Fukuda's announcement that 
he will not run in the Liberal Democratic Party presidential race, 
the focus has now shifted whether the forces that have kept their 
distances from Chief Cabinet Secretary Shinzo Abe, the front-runner, 
can field a single candidate in place of Fukuda. Although the 
activities of Defense Agency Director-General Fukushiro Nukaga of 
the Tsushima faction, the second largest in the party, are drawing 
attention, there are arguments pro and con in the faction about 
fielding the defense chief. Other factions with no prospective 
candidates are increasingly leaning toward supporting Abe. 
Difficulty in uniting anti-Abe forces is now evident. 
 
 
TOKYO 00004151  004 OF 006 
 
 
Nukaga discussed measures yesterday with Mikio Aoki and Toranosuke 
Katayama, who are chairman and secretary general of the LDP's Upper 
House caucus, respectively, of the Tsushima faction. Former Science 
and Technology Minister Toshimitsu Motegi and others are eager to 
field Nukaga, fearing that unless the faction produces its own 
candidate, the faction would turn into a hunting ground. The aim is 
to secure the second place in the election and win major posts under 
the new prime minister for the sake of the race after the next. 
 
In contrast, General Council Chairman Fumio Kyuma of the Tsushima 
faction expressed a negative view about fielding Nukaga by saying to 
Senior Vice Cabinet Minister Taimei Yamaguchi: "Victory is 
everything in an election." The faction's mid-level members, 
including Yamaguchi and Yoshitaka Sakurada, are increasingly eager 
to back Abe. Nukaga met last night with Motegi, Yamaguchi, and 
Sakurada. But they simply agreed to take concerted action. Aoki's 
decision holds the key. 
 
Winning "Fukuda votes" is equally critical for Foreign Minister Taro 
Aso and Finance Minister Sadakazu Tanigaki, who have expressed their 
intentions to run. But the view is prevalent that because Tanigaki 
and Aso are incumbent cabinet ministers and not anti-Koizumi, their 
abilities to absorb Fukuda votes are limited. Financial Affairs, 
Economic, and Fiscal Policy Minister Kaoru Yosano, another possible 
candidate, remains cautious about joining the race. 
 
Many in the factions with no prospective candidates, such as the 
Niwa-Koga faction and the Ibuki faction, are visibly pro-Abe 
regardless of the wishes of the factional leaders. Given the 
situation, former Secretary General Makoto Koga, who has been 
searching for ways to form an anti-Koizumi and anti-Abe framework 
for fielding Fukuda, commented: "Having many candidates is not 
always good." Ibuki also noted: "The Ibuki faction has generally 
decided to support Mr. Abe." 
 
6) Mori explains Koizumi reasons why Fukuda decides not to run in 
LDP presidential race 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 26, 2006 
 
Former Prime Minister Yoshiro Mori, who heads the Mori faction in 
the Liberal Democratic Party (LDP), met last night with Prime 
Minister Junichiro Koizumi at the Prime Minister's Official 
Residence. He explained to Koizumi the reason why former Chief 
Cabinet Secretary Yasuo Fukuda, a Mori faction member, had decided 
not to run for the LDP presidential election. The two then agreed to 
watch calmly the situation until the lineup of candidates are put 
forward. 
 
7) Nukaga cautious about joining LDP presidential race 
 
YOMIURI (Page 4) (Full) 
July 26, 2006 
 
Defense Agency Director-General Nukaga and Liberal Democratic Party 
(LDP) caucus head Aoki in the House of Councillors, both members of 
the Tsushima faction, and House of Councillors Secretary General 
Katayama met in Tokyo for about one hour yesterday to discuss their 
 
TOKYO 00004151  005 OF 006 
 
 
approach to the LDP presidential race. 
 
According to an informed source, Nukaga "took a neutral attitude" on 
whether he would run in the LDP presidential election, and Aoki and 
Katayama also suggested he should make a decision while watching the 
situation within the party. The three shared the view that if they 
allowed Chief Cabinet Secretary Abe to continue to hold a big lead, 
people might lose interest in the election. 
 
Meanwhile, Yoshitaka Sakurada and Senior Vice Minister Taimei 
Yamaguchi, who are members of the Tsushima faction and support Abe, 
met with Nukaga in Tokyo last night and tacitly attempted to 
dissuade Nukaga from entering the race, remarking: "Of the 300 party 
member votes, 200 are certain to go to Mr. Abe." 
 
8) Tanigaki to include consumption tax hike in LDP presidential 
election campaign pledges 
 
YOMIURI (Page 4) (Full) 
July 26, 2006 
 
A gist of the pledges Finance Minister Tanigaki will bring forth in 
his campaign for the September Liberal Democratic Party (LDP) 
presidential election was unveiled yesterday. He will set forth as 
tasks to tackle on a priority basis (1) a consumption tax hike; (2) 
a review of Asia diplomacy; and (3) reform of local tax resources. 
Tanigaki will release the pledges when he announces his candidacy 
tomorrow. 
 
Regarding a consumption tax hike, Tanigaki will give a specific 
margin. He aims to underscore the stance of squarely facing 
difficult challenges by stressing the need for painful policy 
measures. Arrangements are now being made to set the margin at 
around 5 percent. 
 
9) Minshuto readies for an Abe administration 
 
SANKEI (Page 5) (Excerpts) 
July 26, 2006 
 
In the wake of former Chief Cabinet Secretary Yasuo Fukuda's 
decision not to run in the Liberal Democratic Party (DP) 
presidential election in September, the main opposition party 
Minshuto (Democratic Party of Japan) has started making policy 
measures with an eye on the birth of a government led by Shinzo Abe. 
The largest opposition party thinks that it will be able to clearly 
show differences in Asia policy between it and Chief Cabinet 
Secretary Shinzo Abe, who has supported Prime Minister Junichiro 
 
SIPDIS 
Koizumi's foreign policy. The opposition party is, however, 
concerned about Abe's high public support. Thinking that attacks on 
him would backfire, the party intends to refrain from criticizing 
him for the time being. It will then accelerate a policy course of 
making a clear distinction between its position and Abe. 
 
Party head Ichiro Ozawa stressed in a press conference yesterday: 
"We don't care who (becomes LDP president). What our party is 
concerned about is whether the public will entrust us with the reins 
of government. The first thing to do is to show the public clear and 
simple basic policies." 
 
TOKYO 00004151  006 OF 006 
 
 
 
In a meeting yesterday of senior party officials, the LDP 
presidential election was the hot topic of discussion. Ozawa, Acting 
President Naoto Kan, and Secretary General Yukio Hatoyama shared the 
view that Abe would be elected LDP president and prime minister. 
 
Some Minshuto members have presumed that the more experienced Ozawa 
would have an easier time dealing with Abe. One party executive 
member, however, pointed out: "Abe's high level of support cannot be 
discounted." Ozawa, Kan, and Hatoyama reportedly confirmed that they 
would maintain a troika setup to face off against a government led 
by Abe. 
 
10) Prime Minister Koizumi: I must in Japan on Aug. 15 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 26, 2006 
 
Referring to his planned visit to Mongolia around August 10, Prime 
Minister Junichiro Koizumi said in a meeting yesterday of the 
Liberal Democratic Party (LDP) executives, "I have to be in Japan on 
August 15 (anniversary of the end of World War II)." Since Koizumi 
attends every year a memorial ceremony for all the war dead, which 
takes place in Nippon Budokan Hall, he apparently meant this." 
 
However, Mikio Aoki, who heads the LDP caucus in the Upper House, 
scolded Koizumi, because all eyes are now focused on whether the 
prime minister will visit Yasukuni Shrine on Aug. 15, saying, "When 
you say you have to be in Japan on Aug. 15, voters may think you 
will be here to pay homage at the shrine." 
 
SCHIEFFER