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UNCLAS SECTION 01 OF 10 TOKYO 005113 
 
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 09/08/06 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Koizumi countdown: 
4) Ambassador Schieffer delivers President Bush's message of thanks 
to Prime Minister Koizumi 
5) Koizumi attendance at ASEM conference in Finland is his last 
diplomatic event 
6) Koizumi tells press he intends to avoid public spotlight after 
leaving office 
 
Political agenda: 
7) Diet to convene for extra session on Sept. 26, electing a new 
prime minister 
8) Public's favorite for next prime minister is Shinzo Abe with 55% 
support in Mainichi poll 
9) Abe certain to be elected next LDP president with over 70% of the 
party vote locked up 
10) Newly released political contribution figures show Abe to be the 
top fundraiser among LDP presidential candidates 
11) Political funding report for 2005 shows big dip in corporate, 
organizational contributions 
 
Foreign relations: 
12) Abe seeking bilateral summit meeting with Chinese Premier Hu at 
APEC forum in November 
13) JCP Chairman Shii says his premier visit to South Korea "opened 
up a major channel" for dialogue 
14) Japan proposes joint survey with South Korea to measure marine 
radiation 
 
Energy policy: 
15) Russia's halting of Sakhalin resource development project due to 
environmental suit perplexed energy-hungry Japan 
16) Japan to join China, US, ROK next month in signing energy 
security pact 
 
17) US Naval Forces commander cites need for Japan to use collective 
self-defense, hopes to see deep debate on Constitution 
 
18) September economic report skips part about deflation being ended 
in Japan, reflecting concern about US economy 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Survey of political funds: Abe's fund-raising doubles over five 
years 
 
Mainichi: 
Suspected killer hangs self after killing classmate 
 
Yomiuri: 
Abe intends to hold a summit with China on sidelines of APEC in 
November 
 
Nihon Keizai: 
 
TOKYO 00005113  002 OF 010 
 
 
METI to take action to expand stockpiles of rare metals for stable 
supply 
 
Sankei: 
Japan Institute of Invention and Innovation to establish three 
licenses aimed at fostering experts for protecting intellectual 
property rights of small and midsize companies 
 
Tokyo Shimbun: 
Political fund report for 2005: Total income at 13.28 billion yen, 
down 3.8% from the previous year; Snap dissolution of Lower House 
blamed for low contributions from firms, organizations 
 
Akahata: 
Political fund report for 2005: Political party subsidies used as 
major financial sources for all political parties but JCP for 
general election, with Minshuto (DPJ) dependent on them 100% and LDP 
80% 
 
2) EDITORIALS 
 
Asahi: 
(1) Abe's remarks: We don't want Abe to throw away the Murayama 
statement 
(2) ASEM: It's time to learn from Europe's experience 
 
Mainichi: 
(1) Political funds: Possible to stay away from corporate 
contributions 
(2) Money lending regulations: Why is much consideration given to 
this industry? 
 
Yomiuri: 
(1) Sakhalin 2 project: Russia's high-handed state control of 
resources 
(2) First trial of architect Aneha: Construction administration and 
construction industry are both in effect on trial 
 
Nihon Keizai: 
(1) Russia's credibility now questioned over Sakhalin 2 project 
(2) Japan should demonstrate its presence at ASEM 
 
Sankei: 
(1) Murayama statement: Rectification after full discussion 
(2) Intelligence-gathering satellites: National security should be 
ensured with own technology 
 
Tokyo Shimbun: 
(1) Political funds: Far from transparent 
(2) Minamata disease: All patients should be provided relief 
 
Akahata: 
Political funds may reflect the way political parties are carrying 
out politics 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, September 7 
 
NIHON KEIZAI (Page 2)  (Full) 
September 8, 2006 
 
 
TOKYO 00005113  003 OF 010 
 
 
10:31 
Met US Ambassador to Japan Schieffer at Kantei. 
 
11:03 
Met MAFF Minister Nakagawa, followed by former MAFF Deputy Vice 
Minister Kinoshita. 
 
16:47 
Departed from Haneda Airport to attend ASEM. 
 
4) US Ambassador Schieffer conveys President Bush's appreciation for 
Prime Minister Koizumi 
 
MAINICHI (Page 5) (Full) 
September 8, 2006 
 
Prime Minister Junichiro Koizumi met yesterday with US Ambassador to 
Japan Thomas Schieffer at the Prime Minister's Official Residence. 
The ambassador conveyed a message from President George W. Bush to 
the prime minister. The president in the message said, "I thank you 
for building an extremely good relationship." After the meeting, 
Schieffer told reporters: "Even after the new cabinet is formed, 
there will be no change in US-Japan relations. The president will be 
eager to meet with the new Japanese prime minister." 
 
5) Koizumi leaves for Finland, his last overseas trip as premier 
 
MAINICHI (Page 5) (Full) 
September 8, 2006 
 
Prime Minister Junichiro Koizumi departed yesterday afternoon for 
Finland to attend the summit of the Asia-Europe Meeting (ASEM) to be 
held in Helsinki. Koizumi will be the first Japanese prime minister 
to visit Finland in 19 years since Prime Minister Yasuhiro Nakasone 
traveled there in 1987. This will be Koizumi's last overseas trip as 
premier. 
 
The ASEM will hold its summit on Sept. 10 -11 to discuss Iran's 
nuclear program and reconciliation in Lebanon. 
 
Koizumi is expected to meet with Finish Prime Minister Matti Taneli 
Vanhanen on the afternoon of Sept. 8. He will return home on the 
12th. 
 
Chinese Prime Minister Wen Jiabao and South Korean President Roh Moo 
Hyun will take part in the summit, but Koizumi will not likely meet 
with them. Prior to his departure, Koizumi told reporters: "I don't 
feel like meeting (Wen and Roh) since they attached a condition (not 
to visit Yasukuni Shrine)." 
 
6) Prime Minister Koizumi intends to avoid media after stepping 
down 
 
ASAHI (Page 4) (Full) 
September 8, 2006 
 
It has been learned that Prime Minister Junichiro Koizumi told 
persons close to him that he would not avoid the media after he 
steps down from office. He will soon move out of the prime 
minister's official residence. Yesterday he bid goodbye to US 
Ambassador to Japan Thomas Schieffer, telling him, "I enjoyed 
working with you." Schieffer called at the Prime Minister's Official 
 
TOKYO 00005113  004 OF 010 
 
 
Residence to convey President George W. Bush's message of 
appreciation to Koizumi. 
 
Although many news companies have asked Koizumi to respond to 
interviews, he reportedly refused to accept their requests, citing, 
"I want to live quietly as just another lawmaker." When he visited 
Central Asia in late August, he told reporters, "I intend to stay in 
the background after I end my presidency of the Liberal Democratic 
Party." He will set up an office besides the one for him in the Diet 
Members' Building. 
 
7) Extra Diet to open on Sept. 26; Battle over education law and 
other bills expected 
 
SANKEI (Page 5) (Excerpts) 
September 8, 2006 
 
Liberal Democratic Party Diet Affairs Committee Chairman Hiroyuki 
Hosoda and his Minshuto (Democratic Party of Japan) counterpart Kozo 
Watanabe reached an agreement yesterday to convene an extraordinary 
Diet session on Sept. 26 to designate the new prime minister 
following the Sept. 20 LDP presidential election. Other parties also 
approved the plan. The ruling coalition intends to get important 
bills, including one to revise the Basic Education Law, approved in 
the extra session before it ends in early December. Minshuto is 
expected to take a clear adversarial stand against the ruling 
coalition with an eye on the Lower House by-election in October. The 
next administration is expected to face difficulties in managing 
Diet affairs immediately after its inauguration. 
 
The government and the ruling coalition plan to launch a new cabinet 
on Sept. 27, the day after the prime ministerial election on Sept. 
26, and have the new prime minister give his Diet policy speech on 
Sept. 29. 
 
They also intend to facilitate deliberations on a bill to extend the 
Antiterrorism Special Measures Law, scheduled to expire in November, 
and a bill to revise the salary law to implement the National 
Personnel Authority's recommendations in August. Further, they plan 
to speedily enact national referendum legislation stipulating a set 
of procedures for amending the Constitution and a bill to revise the 
Basic Education Law. 
 
Establishing a new Constitution and revising the Basic Education Law 
are main campaign pledges of Chief Cabinet Secretary Shinzo Abe, who 
is expected to become the next prime minister. Abe said in the Sept. 
3 LDP Tohoku bloc convention: "We must conduct intensive 
deliberations in the upcoming extraordinary Diet session, which 
would not be long. Above all, it is important to revise the Basic 
Education Law." Abe also plans to give high priority to bills to 
upgrade the Defense Agency to ministry status and conspiracy 
legislation. 
 
The New Komeito, the LDP's coalition partner, is also eager to enact 
controversial defense ministry-related bills in the extra session 
before next year's regular session for the sake of the unified local 
elections and the Upper House election next year. 
 
Meanwhile, Minshuto intends to lock horns severely with the ruling 
coalition by keeping the Lower House Kanagawa Constituency No. 16 
and Osaka Constituency No. 9 by-elections in October in mind. 
 
 
TOKYO 00005113  005 OF 010 
 
 
8) Poll: 55% support Abe in LDP presidential race that will 
officially begins today 
 
MAINICHI (Page 1) (Full) 
September 8, 2006 
 
The Liberal Democratic Party will publicly announce today its 
presidential election slated for Sept. 20, in which Chief Cabinet 
Secretary Shinzo Abe, 51, Foreign Minister Taro Aso, 65, and Finance 
 
SIPDIS 
Minister Sadakazu Tanigaki, 61, have already announced their 
candidacies. The Mainichi Shimbun conducted a nationwide 
interview-based opinion survey on Sept. 1-3 asking who was most fit 
to become the next prime minister. As a result, 55% of all 
respondents, or 74% of LDP supporters, picked Abe, far outdistancing 
the other candidates. Abe's lead seems unshakable, being supported 
by nearly 80% of LDP lawmakers, as well. The focus will be whether 
he can come up with new policy stances in upcoming presidential 
debates on Asia policy, social security, taxes, and other issues 
that sum up five years of the Koizumi reform line. 
 
The LDP will elect a new president, which automatically brings with 
it the post of prime minister, for the first time in five years and 
five months since April 2001. 
 
The party will officially accept applications for 30 minutes 
starting 11:00 a.m. today and those who have thrown their hats in 
the ring will conduct a joint press conference at 2:00 p.m. today. 
The new president will be determined by a total of 703 LDP votes: 
403 lawmaker votes and 300 local party votes. 
 
Abe is expected to garner a majority of votes that would not entail 
a runoff. 
 
In the Mainichi poll, Abe was picked as the most suitable person to 
become the new prime minister with 55%, and Aso and Tanigaki with 6% 
each. The differences with the two widened among LDP supporters with 
Abe marking 74%, Aso 5%, and Tanigaki 3%. 
 
9) Abe certain to assume LDP presidency, with 70% of lawmakers' 
votes 
 
ASAHI (Page 1) (Excerpts) 
September 8, 2006 
 
In the Liberal Democratic Party presidential election, which will be 
officially announced today, the Asahi Shimbun has found through 
interviews that 270 votes, nearly 70% of all the 403 lawmakers' 
votes, are likely to go to Chief Cabinet Secretary Abe. In 
interviews with senior members of LDP prefectural chapters about the 
trend of votes, more than 70% said: "Abe has the lead." It is now 
certain that Abe will be elected new LDP president in the election 
on Sept. 20. 
 
10) Poll on political funds in 2005: Abe's fund-raising ability 
doubles over five years to 300 million yen 
 
ASAHI (Top Play) (Excerpts) 
September 8, 2006 
 
A political group headed by Chief Cabinet Secretary Abe raised 
approximately 295 million yen last year, nearly twice what it did 
five years ago, according to a political fund report released by the 
 
TOKYO 00005113  006 OF 010 
 
 
Internal Affairs and Communications Ministry and another report by 
the election office in his electoral district, Yamaguchi Prefecture. 
Through interviews with firms and individuals offering 
contributions, it has been found that about 30% of them have offered 
political donations to the Abe group since his father was a 
candidate for the Liberal Democratic Party presidency. It has also 
been learned that donations from individuals jumped more than four 
times over the previous year. 
 
Looking at the details of the income in 2005, revenues from 
political fund-raising parties and other events totaled 
approximately 137 million yen, the largest amount on the list. In 
the first fund-raising party after Abe assumed his current post, 
about 52 million yen was collected. 
 
Corporate or group donations totaled 56.6 million yen, nearly 20% of 
the total, while individual donations totaled 29.2 million yen, 
about 10% of the total. 
 
Asked about reasons for offering donations (multiple replies 
acceptable), 54% said: "Since I used to support Mr. Shintaro Abe 
(his father), now I back Mr. Abe," followed by 26% with the reply: 
"for social reasons;" 18% saying, "I was attracted by his 
personality; and 9% answering, "I was attracted by his policies and 
philosophy." Three cited "Abe's response measures to the abduction 
issue." 
 
Immediately after his father, then Foreign Minister Shintaro Abe, 
suddenly passed away in 1991, Abe assumed the chairmanship of his 
core political group. The group raised funds amounting to about 240 
million yen in 1992. Most of the funds came from companies 
supporting his father. In 1993, when Abe ran in the general election 
for the first time and won a seat, the group earned more than 400 
million yen, including nearly 300 million yen raised in fund-raising 
parties. 
 
11) Political funds in 2005: Total income stands at 132.8 billion 
yen, down 3.8%, due to sudden dissolution of Lower House; Donations 
by companies and organizations at a low 
 
TOKYO SHIMBUN (Top Play) (Excerpts) 
September 8, 2006 
 
The Ministry of Internal Affairs and Communications (MIC) in the 
official gazette for Sept. 8 released a political funds income and 
expenditure statement (with the central portion of the report 
covering 3,887 organizations) and a political party subsidies 
expenditure report. The total income of political parties and groups 
was 132.85 billion yen, down 3.8% from the previous year. Of that 
amount, donations made by companies and organizations stood at 3.42 
billion yen, down 7.2% from the preceding year and the lowest level 
since 1976, when statistics became available. Total expenditures 
stood at 135.85 billion yen, down 2.8% from the year before. Both 
income and expenditures stood at an unusually low level for an 
election year. 
 
With a set of postal privatization bills voted down in the Diet, 
Prime Minister Junichiro Koizumi last year dissolved the Lower 
House. 
 
For this reason, political parties and groups were unable to raise 
sufficient funds for the election. The size of expenditures was also 
 
TOKYO 00005113  007 OF 010 
 
 
small due to the short-term battle, which allowed little time for 
preparation. 
 
12) Abe eyes Japan-China summit at APEC in November 
 
YOMIURI (Top play) (Excerpts) 
September 8, 2006 
 
If he becomes prime minister, Chief Cabinet Secretary Shinzo Abe, 
51, intends to hold talks with Chinese President Hu Jintao on the 
sidelines of the Asia-Pacific Economic Cooperation (APEC) forum to 
be held in Hanoi on Nov. 18-19. Abe hopes to resume Japan-China 
summit talks with the establishment of the new administration to 
improve relations between the two countries. Abe is unlikely to 
visit Yasukuni Shrine during the shrine's annual autumn festival in 
October or on any other occasions this year. 
 
Summit talks between the two nations have been stalled since April 
2005 due to China's opposition to Prime Minister Junichiro Koizumi's 
visits to the shrine. The Foreign Ministry has begun setting the 
stage with China in line with Abe's wishes, who is likely to replace 
Koizumi. Beijing is expected to accept a summit with Abe if he does 
not visit the shrine in the fall. 
 
A senior government official said yesterday: "China needs Japan. Our 
two countries are beginning to share the view that both sides have 
to exercise restraint." Thus, he indicated that the environment has 
been improving for the summit talks in November. 
 
13) JCP Chairman Shii: Broad channel has been opened up; Agreement 
reached between Shii and ruling ROK party leaders on historical 
issue 
 
MAINICHI (Page 5) (Excerpts) 
September 8, 2006 
 
Japanese Communist Party (JCP) Chairman Kazuo Shii, now visiting 
South Korea -- a first time for a JCP leader, yesterday completed 
his schedule of planned meetings with leaders of major South Korean 
political parties, including the Uri Party and the Grand National 
Party. At a press conference later, Shii stressed, "A major channel 
has now been opened between Japan and South Korea." Shii and South 
Korean party leaders agreed on the need to resolve the history issue 
between the two countries. He played up the differences in his 
party's diplomatic stances from those of the Koizumi government, 
which has seen relations with South Korea deteriorate due to Prime 
Minister Koizumi's repeated visits to Yasukuni Shrine. 
 
Uri Party leader Kim Geun Tae told Shii on Sept. 7: "If I met you 
before the 1987 democratic declaration, I would have become the 
subject to the National Security Law." 
 
In the past, relations between South Korea, which has taken an 
anti-communist stance from the position of facing off against North 
Korea, and the JCP, which had criticized South Korea for being 
controlled by a government under military dictatorship, were not 
good. The JCP, however, opposed in the prewar period Japan's 
colonial rule of the Korean Peninsula. Regarding this point, "South 
Korea highly values our party," said a JCP International Bureau 
official. The JCP aims to expand exchanges with South Korea. The 
Korean side wants to play up criticism of the Koizumi government for 
its handling of the history issue. The similar aims of the two sides 
 
TOKYO 00005113  008 OF 010 
 
 
seem to have brought Shii to Seoul. 
 
14) Japan proposes to ROK a joint radiation survey around 
Takeshima/Dokdo 
 
TOKYO SHIMBUN (Page 3) (Full) 
September 8, 2006 
 
Kiyoshi Nakamura, Seoul 
 
Japan and South Korea yesterday wrapped up the two-day strategic 
dialogue between Japanese Administrative Vice Foreign Minister 
Shotaro Yachi and South Korean Vice Minister for Foreign Affairs and 
Trade Yu Myung Hwan. The talks had been held at a hotel in Seoul. 
 
During the meeting, Japan proposed establishing a prior notification 
system for scientific surveys in order to prevent unforeseen 
situations in waters around Takeshima/Dokdo, where the two 
countries' exclusive economic zones overlap. But South Korea 
expressed opposition to the proposal. Japan then seemed to offer 
another proposal for a joint radiation survey, which is being 
planned in Japan, as a breakthrough in the stalemate in the talks. 
 
Japan and South Korea conducted joint radiation surveys in 1994 and 
1995 in order to deal with nuclear waste dumped by the former Soviet 
Union. Japan wants to use the joint survey as a framework for 
cooperation in waters around Takeshima/Dokdo. After the talks, Vice 
Minister Yachi mentioned the radiation survey and revealed that 
working-level talks on would continue, saying: "Discussions are 
moving in a good direction for Japan-South Korea relations." 
 
According to a diplomatic source, if South Korea refuses to accept 
Japan's compromise proposal, Japan will conduct the radiation survey 
as initially planned. 
 
15) Russian barriers stand in way of natural resource development: 
Lawsuit filed for suspension of Sakhalin-2 project, citing 
environmental reasons 
 
ASAHI (Page 3) (Excerpts) 
September 8, 2006 
 
The planned oil and natural gas production under the Sakhalin-2 
project, financed by leading Japanese trading firms, is at a 
crossroads. Work to construct pipelines has been halted due to 
environmental issues. In addition, the Russian Federal Service for 
the Supervision of Natural Resources filed a lawsuit calling for a 
suspension of the development. Behind these moves seems to be a 
strategy of the Putin administration, which has strengthen its grip 
over natural resource development in the nation. 
 
Japan concerned about delay in production 
 
In Japan, concerns are growing about a delay in production in the 
project. Exports of liquefied natural gas to Japan and other 
countries are scheduled to begin in the summer of 2008. This is 
already more than one year behind schedule. 
 
The project aims to produce 9.6 million tons of natural gas, of 
which Japanese electric and gas companies expect to purchase more 
than 4 million tons. An employee of Tokyo Gas Co., which plans to 
buy 1.1 million tons, said: "Since there is no official explanation, 
 
TOKYO 00005113  009 OF 010 
 
 
we cannot figure out how much effect this will have." The company, 
which imports about 9 million tons of natural gas from Southeast 
Asia and elsewhere annually, has placed high expectations on the 
Sakhalin-2 project as part of its strategy to diversify suppliers. 
Focusing on its short transport distance, Tokyo Electric Power Co., 
Toho Gas Co., and Kyushu Electric Power Co. also intend to procure 
gas produced under the project. 
 
Few companies believe that the project itself will be suspended. 
Although Russia has certainly attained remarkable economic growth 
recently, the nation is still dependent on foreign investment 
because its technologies to liquefy natural gas and drilling in 
frozen land lag far behind developed countries. 
 
Petroleum and Mining Association of Japan's Planning and Research 
Department Head Taro Shoji commented: 
 
"The aim of Gazprom's participation in the project is to acquire 
technology to liquefy natural gas. Russia does not want the project 
suspended. Its recent moves reflect a national strategy of gathering 
information and authority for the Sakhalin-2 project." 
 
16) Energy security: Japan, China, US, South Korea and India to 
create framework 
 
NIHON KEIZAI (Page 5) (Full) 
September 8, 2006 
 
The Ministry of Economy, Trade and Industry (METI) yesterday 
revealed a plan for energy ministers of Japan, China, the US, South 
Korea and India to meet in Beijing in late October with the aim of 
creating an energy security framework. The participants will discuss 
emergency measures, including energy conservation and oil reserves, 
and the diversification of energy sources. 
 
It is said that these five countries account for approximately 50% 
of the world's energy consumption. This is the first time for 
concerned ministers to meet to discuss the energy issue. 
 
China, whose energy demand is pronouncedly growing, has proposed 
holding such a meeting. Based on its experience with past two oil 
crises, Japan will introduce its efforts to reserve oil and conserve 
energy. Japan and China held a bilateral energy dialogue at METI. 
During this meeting, too, the two countries reassured technical 
cooperation between the two countries. 
 
17) Commander of US Naval Forces Japan says to deepen debate on 
exercise of right to collective self-defense to deal with North 
Korean missiles 
 
TOKYO SHIMBUN (Page 3) (Full) 
September 8, 2006 
 
Rear Admiral James Kelly, commander of US Naval Forces Japan, 
yesterday met the press at the US Fleet Activities Yokosuka at 
Yokosuka City, Kanagawa Prefecture, and said that in order for Japan 
and the United States to work together to deal with North Korean 
ballistic missiles under the missile defense (MD) system, "I hope to 
see debate on constitutional revision deepen here so that (Japan) 
can exercise its right to collective self-defense." 
 
When North Korea test-fired ballistic missiles on July 5, the US 
 
TOKYO 00005113  010 OF 010 
 
 
Navy and the Japanese Maritime Self-Defense Force's (MSDF) Aegis 
ships moved jointly to detect and track the missiles. 
 
Kelly stated, "If MSDF ships come under attack while on duty of this 
kind, the US Navy will defend them, but the MSDF can't do so in the 
opposite case." He thus implied that it is unavoidable to debate the 
question of the right to collective self-defense in order for Japan 
and the US to join hands under the MD system. 
 
Kelly also explained that a North Korean Rodong missile, if it were 
fired toward Japan, could land in the country in less than 10 
minutes, and that it must be intercepted within two minutes and 30 
seconds. Speaking of who will make a final decision to fire Standard 
Missile 3 (SM3) missiles to intercept it during that short period of 
time, he stated, "Who will decide to do so has yet to be decided." 
 
Referring to the right of collective self-defense and the question 
of command and control that are both related to the MD system, Kelly 
told the press that discussions had been launched between Japanese 
and US foreign affairs and defense officials, including uniformed 
officers. And he expressed his hope that Japan and the US would 
build a mechanism for both sides' ships to defend each other during 
the one year of discussions. 
 
18) September economic report will not declare end of deflation due 
to concern over slowdown of US economy 
 
TOKYO SHIMBUN (Page 1) (Excerpts) 
September 8, 2006 
 
The Cabinet Office yesterday decided not to declare the end of 
deflation in the monthly economic report for September to be 
released on Sept. 15. With price-related indexes taking an upward 
turn, calls have been growing for the government to declare the end 
of deflation as an achievement of the Koizumi administration's 
management of the economy. However, the Cabinet Office has judged 
that it is premature to issue such a declaration because of various 
risk factors, including crude oil prices still at a high level and 
concern over the slowdown of the US economy. 
 
The Cabinet Office has judged, based on the July economic report 
that the situation is not such in which prices are falling 
continuously. However, declaring the end of deflation is attached 
with a severe condition that there is no prospect for the return of 
deflation. The Cabinet Office has, therefore, carefully looked into 
whether it is appropriate to issue such a declaration under the 
present economic climate. 
 
SCHIEFFER