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UNCLAS SECTION 01 OF 10 TOKYO 005956 
 
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 10/13/06 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
North Korea nuclear threat: 
4) US, Japan pushing for strong UNSC sanctions on North Korea, 
trying to persuade China, Russia to follow suit 
5) Government plans to speed up introduction of missile-defense 
SM-3s next year 
6) Government considering special law on rear support for US' 
maritime interdictions of North Korea ships 
7) Government under pressure to act in case of maritime interdiction 
 
8) Prime Minister Abe: Only natural for Japan to study notion of 
having enemy-base strike capability 
9) Diet replies on regional contingencies, sanctions on North Korea, 
US-Japan alliance and missile defense 
10) Minshuto (Democratic Party of Japan) split on Diet actions on 
security issues: against extending ant-terror law but would accept 
elevating JDA to a ministry 
11) Abe was preparing in July for additional sanction measures on 
North Korea 
12) Low-interest financing for companies hurt by ban on trade with 
North Korea 
 
13) Current period of steady economic growth is about to become the 
longest in postwar Japan 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Tokyo High Court orders hospital to pay compensation for baby switch 
 
 
Mainichi: 
Wakayama prefectural government involved in bid-rigging scandal: 
Chief cashier and other officials arrested; Osaka prosecutors to 
pursue governor's involvement 
 
Yomiuri: 
Government now discussing feasibility of refueling US vessels tasked 
with ship inspections 
 
Nihon Keizai: 
Fukuoka Bank to acquire Kyushu Shinwa Holdings as subsidiary 
 
Sankei: 
US does not rule out use of armed force in sanctions resolution on 
North Korea likely to be adopted as soon as today 
 
Tokyo Shimbun: 
LDP now discussing law on ship inspections; Government examining the 
applicability of contingency law 
 
Akahata: 
JCP's survey results: Consumer loan firms found to have provided 
19.49 million yen to LDP, New Komeito in 2003-2005; Five current 
cabinet members received money 
 
TOKYO 00005956  002 OF 010 
 
 
 
2) EDITORIALS 
 
Asahi: 
(1) Japan's unilateral sanctions: International unity first 
priority 
(2) Newspaper week: We want to tell the readership about importance 
of facts 
 
Mainichi: 
(1) Japan's unilateral sanctions: Joint action with China, South 
Korea essential to enhance effectiveness 
(2) Tokyo air pollution suit: Settlement needed for early relief of 
victims 
 
Yomiuri: 
(1) Sanctions on North Korea: New legislation needed to prepare for 
current crisis 
(2) Full discharge of debts: We hope for better service from banks 
 
Nihon Keizai: 
(1) Four-year-and-nine-month economic recovery? Britain now in its 
14th year of growth 
(2) Be cautious about oilfield project in Iran 
 
Sankei: 
(1) Japan's unilateral sanctions: We support Abe administration's 
decision 
(2) Return of captain of the boat shot by Russian Coast Guard: This 
is not the end of the story 
 
Tokyo Shimbun: 
(1) Current expansion ties the longest in postwar era 
(2) China's plan to narrow social disparities: Is it possible to 
achieve fairness? 
 
Akahata: 
Mutual relief: It's unacceptable to smash mutual aid associations 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, October 12 
 
NIHON KEIZAI (Page 2)  (Full) 
October 13, 2006 
 
08:01 
Met Deputy Chief Cabinet Secretary Suzuki at the Prime Minister's 
Official Residence (Kantei). 
 
09:00 
Upper House Budget Committee meeting. 
 
11:58 
Arrived at the Kantei. 
 
13:00 
Upper House Budget Committee meeting. 
 
17:04 
Met Cabinet Intelligence Director Mitani. Then meeting of cabinet 
minister related to monthly economic report. 
 
TOKYO 00005956  003 OF 010 
 
 
 
18:28 
Met State Minister for Economic and Fiscal Policy Ota. 
 
19:00 
Received telephone call from Indonesian President Yudohoyono. Chief 
Cabinet Secretary Shiozaki and Special Advisors to the Prime 
Minister Koike and Seko were present. 
 
19:56 
Returned to private residence at Tomigaya. 
 
4) Japan, US launch swift offensive against North Korea at UNSC with 
harsh sanctions 
 
YOMIURI (Page 2) (Excerpts) 
October 13, 2006 
 
Yoshikazu Shirakawa, New York 
 
The United States circulated a final draft resolution calling for 
sanctions against North Korea for its nuclear test to the permanent 
member nations of the United Nations Security Council on Oct. 12. 
The US revised the original draft to reflect the concerns of China 
and Russia. By coming up with a final draft resolution calling for 
harsh sanctions under Chapter 7 of the UN Charter, the US 
demonstrated its determination to bring about powerful, swift action 
from the UNSC. China and Russia now have no excuse for opposing the 
heightening of pressure on North Korea for its provocative act, 
losing ground to the quick offensive taken by Japan and the US. 
 
Speaking to reporters on the evening of Oct. 11, Ambassador to the 
UN John Bolton indicated a willingness to accelerate procedures for 
adopting the resolution, saying, "Although we are ready to respond 
to further discussion, it is necessary to take quick action tomorrow 
(the 12th) in order to have the resolution adopted by the weekend." 
 
The US has constantly taken the initiative at the UNSC in dealing 
with the issue of North Korea's nuclear test. Within 24 hours after 
the North announced it had conducted a nuclear test, the US 
presented a draft resolution calling for sanctions. While China and 
Russia were reserving a reply, the view that "a tough resolution 
should be quickly taken" dominated the UNSC. 
 
The resolution includes wide-ranging measures, such as ship 
inspections, a ban on arms exports, and financial sanctions, in 
addition to measures to prevent the transfer of weapons of mass 
destruction. These measures show that the US had started carefully 
drafting the resolution even from before the North conducted the 
nuclear test. 
 
In the final version, the words "within 30 days" inserted in the 
draft resolution as the deadline for implementing sanctions were 
erased, reflecting the proposals by China and Russia to some 
extent. 
 
5) Gov't to introduce SM-3 missiles next year for 
earlier-than-scheduled deployment 
 
ASAHI (Page 4) (Full) 
October 13, 2006 
 
 
TOKYO 00005956  004 OF 010 
 
 
In the wake of North Korea's proclamation of a nuclear test, the 
government decided yesterday to frontload its planned introduction 
of sea-based Standard Missile 3 (SM-3) missiles for missile defense 
(MD) and will introduce the SM-3 earlier than scheduled within the 
calendar year of 2007, Defense Agency Director General Kyuma stated 
before the House of Councillors Budget Committee in its meeting 
yesterday. Japan's SM-3 introduction was initially scheduled for 
late fiscal 2007. 
 
Asked about MD deployment, Prime Minister Abe vowed to expedite 
Japan's MD deployment. "The budget is limited, but we would like to 
make efforts to push for it in response to such a situation," Abe 
stated in his reply before the committee. Kyuma also stated that the 
government would have to consider moving up the schedule in order to 
remove public anxiety. He then clarified that the Defense Agency 
would introduce the SM-3 within 2007. They were replying to 
questions from Jiro Aichi of the ruling Liberal Democratic Party. 
 
Meanwhile, in response to North Korea's missile launches in July, 
the government has already decided to move up its planned 
acquisition of ground-based Patriot Advanced Capability 3 (PAC-3) 
missiles for earlier-than-scheduled deployment. The government plans 
to purchase PAC-3 missiles in fiscal 2008 and afterward but will 
purchase some of them in fiscal 2007. 
 
6) Government eyes special law for rear support for maritime 
interdictions 
 
ASAHI (Page 1) (Full) 
October 13, 2006 
 
The government yesterday launched a discussion on special 
legislation to enable the Self-Defense Force to offer rear support 
for ship inspections being carried out on vessels traveling to and 
from North Korea. The rear support would focus on fueling and other 
services. The United Nations Security Council will soon adopt a 
resolution calling for sanctions against North Korea because of its 
announced nuclear test. Japan expects the resolution will include a 
ship-inspection measure. The Liberal Democratic Party also asked the 
government yesterday to prepare special legislation to enable 
Japan's rear support for such maritime interdictions. 
 
In a House of Councillors Budget Committee meeting yesterday, Prime 
Minister Abe said, "Assuming various contingencies, we must look 
into what measures Japan will be able to take." An aide to the prime 
minister also admitted that the government started a discussion on 
response measures, including a special law, and said, "The prime 
minister should make a final decision." 
 
Under the current relevant law, the Maritime Self-Defense Force 
(MSDF) is allowed to carry out its own ship searches on the high 
seas on the condition that there is a contingency going on near 
Japan. The government, however, has judged it difficult to come up 
with this definition under the current situation. Regarding 
rear-support fueling services as stipulated in the Regional 
Contingency Law, as well, such services are limited to the US 
military and they must occur in Japan's territorial waters. Given 
this, the government has started mapping out a special law. 
 
In a meeting yesterday of the Policy Research Council to Deal with 
North Korea's Nuclear Test, the LDP also called for legislation to 
be prepared to allow Japan to support maritime interdictions being 
 
TOKYO 00005956  005 OF 010 
 
 
carried out by vessels of other countries. 
 
Defense Agency Director General Kyuma said in the Upper House Budget 
Committee meeting yesterday: 
 
"Nobody knows what would happen when countries begin to take action 
in accordance with the UN resolution. There is even the possibility 
that areas near Japan might fall into a state that can be recognized 
as an emergency." 
 
7) UNSC resolution on maritime inspections: Government forced into 
difficult choice; Recognizing contingency key to support 
 
TOKYO SHIMBUN (Page 2) (Slightly Abridged) 
October 13, 2006 
 
Maritime inspections of ships to ensure enforcement of economic 
sanctions can involve the use of force, such as firing warning shots 
and seizing ships. Though the government has thus far characterized 
such actions an unconstitutional, the United Nations Security 
Council (UNSC) is now discussing inspections of ships to and from 
North Korea. Following these moves, the possibility has emerged that 
the Abe administration will be forced to steel itself for the 
challenge and make a difficult choice. 
 
In the event of the UNSC incorporating maritime ship inspections in 
its resolution, options available to Japan in compliance with the 
existing law will be: (1) carrying out ship inspections; (2) 
providing logistical support; or (3) not taking part in such 
inspections. The circumstances are, however, complex. 
 
International law defines maritime inspections as naval ships 
stopping vessels and checking whether they are transporting banned 
good. If the vessel does not follow the order to stop, warning shots 
might be fired. If banned goods are found, the vessel could be 
seized. 
 
Based on the interpretation that firing warning shots and seizing 
vessels fall under the use of armed force or the threat to do so, 
acts banned under Article 9 of the Constitution, the government has 
thus far taken the position that maritime inspections of ships are 
unconstitutional. 
 
For this reason, Japan has established the Vessels Inspection 
Activities Law, which allows it to board and inspect the vessels of 
third countries in the event of a contingency in an area surrounding 
Japan, thereby positioning such an act as replacing conventional 
naval inspections. 
 
However, doubts have been cast about the efficacy of this kind of 
ship search, because unlike naval inspections, firing warning shots 
is not allowed. They have no power of coercion, either. 
 
That is why the range of options available to Japan includes 
providing logistical support to US military vessels carrying out 
maritime inspections of ships. 
 
However, in both cases the government needs to recognize a 
contingency in an area surrounding Japan before the Maritime 
Self-Defense Force can operate. 
 
The Law Concerning Measures to Ensure the Peace and Security of 
 
TOKYO 00005956  006 OF 010 
 
 
Japan in Situations in Areas Surrounding Japan stipulates a 
contingency in an area surrounding Japan as a situation that could 
lead to a direct armed attack if it is left unheeded. As to whether 
that would include the current situation, the prevailing view in the 
Defense Agency (JDA) was at first that the situation was not that 
serious, according to a senior JDA official. 
 
However, the situation has changed due to sanctions discussions by 
the UNSC. 
 
There are six categories for the recognition of a contingency in an 
area surrounding Japan, including the outbreak of an armed conflict 
or the acts of a specific country being determined by the UNSC to be 
a threat to peace and the subject of economic sanctions. In North 
Korea's case, there is the possibility of that maritime inspections 
of ships could lead to an exchange of fire. There is also a growing 
consensus that the UNSC's sanctions resolution following North 
Korea's announcement that it has carried out a nuclear test falls 
under some of those six categories. 
 
8) Attack on enemy bases: "Considering such a possibility is 
natural," says prime minister; JDA director general remains 
cautious 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
October 13, 2006 
 
Regarding Japan's response in the event of an imminent missile 
launch against Japan, Prime Minister Abe during yesterday's Upper 
House Budget Committee meeting stated, "It is only natural for us to 
always consider and study what should be done in order to defend out 
country." He thus indicated his position supporting study of the 
idea of obtaining the capability to strike enemy bases. 
 
At the same time, Defense Agency Director-General Akio Kyuma 
expressed caution about the use of force, noting: "Our country's 
position has been that it uses a shield but does not possess arms. 
We will, in principle, relegate the job of attacking enemy bases to 
the US military." 
 
9) Abe: Japan to enforce sanctions due to growing threat from North 
Korea; Japan-US alliance's deterrence rock solid 
 
ASAHI (Page 4) (Abridged) 
October 13, 2006 
 
The following is a gist of Diet interpellations from yesterdays' 
House of Councillors Budget Committee session. 
 
Situations in areas surrounding Japan 
 
Keiichiro Asao (Democratic Party of Japan-Minshuto): Does North 
Korea's conduct this time fall under the category of "situations in 
areas surrounding Japan" as a legal grounds for ship inspection? 
 
Prime Minister Abe: The situation is changing every moment, so we 
will have to consider at all times how Japan can respond while 
anticipating every possible situation. 
 
Defense Agency Director-General Kyuma: I don't think the present 
situation falls under the category of situations in areas 
surrounding Japan. However, when various countries are beginning to 
 
TOKYO 00005956  007 OF 010 
 
 
take actions in line with a United Nations resolution, circumstance 
may emerge that require recognition as a situation (i.e., a 
contingency) in areas surrounding Japan. 
 
Abe: Even if the circumstances are recognized as a situation in 
areas surrounding Japan, there are limits to the enforcement of ship 
inspections. At this point, we will need to consider how to respond 
to such a situation in the international community. That's a major 
challenge. 
 
Sanctions 
 
Asao: Japan is asking the United Nations Security Council to adopt a 
resolution, but Japan will not participate (in maritime intercept 
operations). Do you think this will pass muster in the international 
community? 
 
Abe: One may say Japan can't do anything in light of its law, so we 
don't recognize it (as a contingency) and we don't agree (to 
participate in maritime interdictions). That's another problem. Each 
country has its own capability. 
 
Katsutoshi Kaneda (Liberal Democratic Party): Why did the government 
decide to go ahead with unilateral sanctions? 
 
Abe: North Korea has improved its missile capability and proclaimed 
that it conducted a nuclear test. When we think about this, Japan is 
facing a doubly serious threat. It's a threat to the region. At the 
same time, Japan is the very country facing the threat. In such a 
situation, the government decided on severe measures. 
 
Japan-US alliance 
 
Gotaro Yoshimura (LDP): If and when Japan faces an increasing danger 
of a nuclear attack, how will the government respond? 
 
Abe: The United States has declared that an attack on Japan is the 
same as an attack on the United States. The presence of the United 
States and the deterrence of our alliance with the United States are 
rock solid. When I talked with President Bush over the phone, the 
president told me that US deterrence is rock solid. It's a message 
to North Korea and the world. 
 
Missile defense 
 
Jiro Aichi (LDP): We will have to consider destroying missiles as an 
emergency option within the bounds of invoking the right of 
self-defense. 
 
Abe: I take it for granted that we will always discuss and study 
what to do in order to defend our country. We've now already set 
about missile defense. The budget is limited, but I'd like to make 
efforts to push for it in response to such a situation. 
 
Aichi: What about the government's plans for missile defense? 
 
Kyuma: The MD deployment plans have been budgeted since fiscal 2004 
and will be completed in eight years. The SM-3 (sea-based missiles 
to be mounted on Aegis ships) is currently scheduled to be 
introduced in late fiscal 2007, but I'd like to do it within (the 
calendar year of) 2007. 
 
 
TOKYO 00005956  008 OF 010 
 
 
10) Minshuto's security policy now wavering, with opposition to 
extension of Antiterrorism Special Measures Law but favoring 
upgrading JDA to ministerial status 
 
SANKEI (Page 5) (Full) 
October 13, 2006 
 
North Korea's recent announcement that it set off a nuclear test not 
only puts to the test the government's security policy but also 
rocks the Democratic Party of Japan's (Minshuto) security policy. 
Yesterday, the party adopted a policy course of opposing an 
amendment to the Antiterrorism Special Measures Law, but DPJ 
President Ichiro Ozawa supports a bill to upgrade the Defense Agency 
(JDA) to ministry status. The party's Policy Committee to Take the 
Reins of Government held its first meeting yesterday, but it is 
unlikely to reach a decision on basic policy until the end of the 
year, while being forced until then to deal with bills in an ad hoc 
manner. 
 
The Antiterrorism Special Measures Law serves as the legal grounds 
for refueling by the Maritime Self-Defense Force (MSDF) now 
continuing in the Indian Ocean for US and other countries' vessels. 
As that law is due to expire on Nov. 1, the government has submitted 
to the Diet a bill extending the law for another one year. The Lower 
House Steering Committee in its board meeting yesterday decided to 
have the government explain the purpose of the bill and take 
questions at a plenary session today. 
 
Meanwhile, Minshuto in its Foreign and Defense Council meeting 
yesterday confirmed a policy course of opposing the bill, saying 
that continuing to extend it piecemeal and that the GOJ has yet to 
sufficiently explain what the law has accomplished. There is, 
however, deep-rooted sentiment within the party in favor of a 
realistic approach, with one junior lawmaker warning, "That would 
give the impression that our party has turned its back on fighting 
terrorism." 
 
When the same law was amended last year to extend it for one year, 
then DPJ President Seiji Maehara worked to coordinate views in the 
party so as to approve the amendment, but he changed course 
afterward to oppose it in order to preserve harmony within the 
party. The party's stance this time is to save face, with a 
mid-level lawmaker noting: "Given that our party has opposed the 
bill to date, if we now come out in favor of it, our policy 
consistency will be called into question." 
 
At the same time, upgrading the JDA to ministerial status has been 
one of Ozawa's pet arguments continued since he was the president of 
the Liberal Party (Jiyuto). In fact, Ozawa stated on a commercial TV 
program in late September: "It's not a good thing that the agency in 
charge of national defense is under the Cabinet Office and is unable 
to take the initiative in making policy proposals." 
 
Yesterday, the party's Parliamentary Group Aiming to Establish a 
Defense Ministry at an Early Date met yesterday and confirmed that 
the group endorsed upgrading the JDA to a ministerial status. But 
some lawmakers are opposed, citing the bid-rigging scandals 
involving the Defense Facilities Administration Agency and arguing 
that promotion to ministry status would only reward the JDA after 
this malfeasance. So, at the Foreign and Defense Council meeting 
yesterday, the party put off the conclusion. 
 
 
TOKYO 00005956  009 OF 010 
 
 
In response to North Korea's announcement of a nuclear test, Ozawa 
said on Oct. 9: "We must take strict containment measures." Adding, 
"North Korea will react (to the measures taken by the international 
community)," he called on the government to take a resolute 
response. But when the government announced a set of additional 
sanctions on Oct. 11, the party did not issue an official statement. 
Ozawa and his party are now being tested over whether party members 
can unite on security policy. 
 
11) Prime Minister preparing additional sanctions measures against 
North Korea from July, decision given momentum by change in China's 
attitude 
 
YOMIURI (Page 4) (Excerpts) 
October 13, 2006 
 
In the background of the government's decisions to impose on its own 
additional sanctions measures against North Korea only two days 
after that country announced it had carried out a nuclear weapon 
test lies the fierce determination of Prime Minister Abe, who 
decided to take a strong stand as quickly as possible. The Prime 
Minister already in July (before his election) had anticipated such 
a crisis situation, and directed related bureaus to start 
preparations. 
 
"North Korea's next card is likely to be a nuclear test, so I want 
you to start considering our response should that contingency 
occur," Abe, then chief cabinet secretary, directed Deputy Assistant 
Chief Cabinet Secretary Ando, who was in charge of foreign affairs, 
only a few days after North Korea launched missiles on July 5. 
 
12) Government helps domestic firms suffering from embargo against 
North Korea, plans to extend low-interest loans 
 
SANKEI (Page 5) (Full) 
October 13, 2006 
 
At the first meeting yesterday of the government's task force on an 
embargo on North Korea (chaired by Chief Cabinet Secretary Yasuhisa 
Shiozaki) at the Prime Minister's Official Residence (Kantei), the 
government decided to take such measures as extending low-interest 
loans via government-affiliated banking institutions to domestic 
firms suffering an economic blow from a total import ban on North 
Korean products. The government will today decide on assistance 
measures to be taken immediately. 
 
The total import ban on North Korean products is one of Japan's 
additional sanctions. Such measures were announced on Oct. 11 and 
will be put into action tomorrow. In the meeting, Shiozaki stated, 
"They are necessary for the sake of security, but we want to offer 
considerate assistance to firms that have suffered a blow." He 
received reports forecasting the impact as well as suggesting 
assistance measures from relevant ministries and agencies, including 
the Ministry of Agriculture, Forestry, and Fisheries and the 
Ministry of Economy, Trade, and Industry. 
 
Imports from North Korea for fiscal 2005 amounted to some 14.5 
billion yen. Of them, seafood, such as crabs and clams, accounted 
for 28% or so, and matsutake mushrooms and other agricultural 
products accounted for about 12% . 
 
13) Monthly economic report: Period of current expansion stretches 
 
TOKYO 00005956  010 OF 010 
 
 
to 57 months, as long as "Izanagi boom" 
 
SANKEI (Page 1) (Excerpts) 
October 13, 2006 
 
The current economic expansion is equal to the "Izanagi boom" 
(November 1965 - July 1970), and it is almost certain that it will 
be the longest postwar boom next month. State Minister in Charge of 
Economic and Fiscal Policy Hiroko Ota submitted the October economic 
report in a meeting of relevant cabinet ministers yesterday. The 
report left unchanged the government's basic assessment of the 
economy as "being on the recovery track." The current economic 
expansion that began in February 2002 has stretched to 57 months. 
 
SCHIEFFER