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UNCLAS SECTION 01 OF 09 TOKYO 007136 
 
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 12/27/06 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
4) Administrative Reform Minister Sata likely to resign over 
political fund abuse charges 
 
5) Government's counterintelligence council meets for first time, 
will set unified standards to prevent intelligence leaks 
 
6) Yasukuni Shrine to revise display on China at Yushukan war museum 
 
 
7) ODA white paper focuses on promotion of private sector activities 
in developing countries through economic cooperation 
 
8) Yomiuri opinion poll finds 78% of public do not feel the economy 
has recovered 
 
Economic agenda: 
9) Cabinet Office simulation of national and regional incomes 
predicts country's finances will move into black, eliminating need 
for tax hikes 
10) Prime Minister Abe appoints respected senior economist Kosai to 
head recently vacated government tax council post 
11) Ministry of Health and Labor to prevent part-time employees from 
discriminatory treatment 
 
12) Health and agricultural ministries after investigation will 
allow US packer that mistakenly sent unauthorized byproduct to Japan 
to resume exports of beef 
 
13) Japanese diplomat, formerly in Yemen embassy and now in Honolulu 
consulate, to be charged with absentee vote violation in Diet 
election 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Death sentence for ex-Iraqi President Saddam Hussein finalized, to 
be executed within 30 days 
 
Mainichi: 
Cabinet Office predicts surplus in primary balance of state and 
local governments to return to black by FY2011 without consumption 
tax hike 
 
Yomiuri: 
Comsn suspected of excessively claiming nursing-care benefits under 
nursing-care system; Tokyo government investigate 50 offices 
 
Nihon Keizai: 
Toyota chairman meets Ford CEO over possible tie-up 
 
Sankei: 
Administrative Reform Minister Sato to resign over false political 
fund reports 
 
 
TOKYO 00007136  002 OF 009 
 
 
Tokyo Shimbun: 
Aneha handed five years in prison for fabricating 
earthquake-resistance data 
 
Akahata: 
Administrative Reform Minister Sata's political organ submitted 
false political fund reports claiming 78 million yen in expenses for 
office that did not exist 
 
2) EDITORIALS 
 
Asahi: 
(1) Man convicted of killing five people with poisoned wine deserves 
benefit of the doubt 
(2) Two years after quake off Sumatra: Real recovery lies ahead 
 
Mainichi: 
(1) Poisoned wine murder case: Credibility of confession in question 
after 45 years 
(2) Strengthening order to collect defective goods is needed to 
protect people (senior writer Keita Koizumi) 
 
Yomiuri: 
(1) Regulatory reform plan: Consideration needed also for adverse 
effects 
(2) Aneha sentenced to five years in prison: Victims' anger will not 
be eased 
 
Nihon Keizai: 
(1) Strong expectations for new Tax Commission Chairman Kosai 
(2) Tokyo District Court condemns Aneha's concealing of 
quake-resistance data falsification 
 
Sankei: 
(1) Aneha handed prison term: Long way for architects to regain 
public confidence 
(2) Nabari (poisoned wine) murder case: The same court reverses 
decision 
 
Tokyo Shimbun: 
(1) Poisoned wine murder case: Look at the course of events 
(2) Court sentences Aneha to five-years: High professional ethics 
required 
 
Akahata: 
(1) University budget cuts: Abe government unqualified to talk about 
"education reform" 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, December 26 
 
NIHON KEIZAI (Page 2)  (Full) 
December 27, 2006 
 
10:04 
Attended a cabinet meeting at Kantei. Met Japan Tobacco President 
Hiroshi Kimura and former President Katsuhiko Honda. Later attended 
a meeting of the taskforce to deal with heavily indebted persons. 
 
10:52 
Met Deputy Foreign Minister Yabunaka and European Affairs Bureau 
 
TOKYO 00007136  003 OF 009 
 
 
Director General Harada. 
 
12:35 
Met Chief Cabinet Secretary Shiozaki, deputy chief cabinet 
secretaries Shimomura, Suzuki, and Matoba, and special advisors, 
 
SIPDIS 
including Koike. 
 
13:21 
Former Education Minister Nakasone and former Agriculture Minister 
Shimomura. 
 
14:05 
Attended a meeting of the Council on Economic and Fiscal Policy. 
 
15:00 
Met special advisor Nemoto. Followed by New Komeito President Ota 
and others. Later, met Policy Research Council Chairman Nakagawa. 
 
17:30 
Met Cabinet Office International Peace Cooperation Office 
Secretariat Chief Ozawa, and assistant deputy chief cabinet 
 
SIPDIS 
secretaries Ando and Yanagisawa. 
 
SIPDIS 
 
18:54 
Enjoy the musical "Girlfriends" with his wife, Akie, at the 
Hakuhinkan Hall, Ginza. 
 
21:51 
Returned to his official residence. 
 
4) Administrative Reform Minister Sata likely to resign to take 
responsibility for false political fund reports amid growing 
criticism in ruling coalition 
 
SANKEI (Top Play) Full) 
December 27, 2006 
 
A political organization for State Minister in charge of 
Administrative Reform Genichiro Sata, 54, representing the Gunma No. 
1 electoral district, submitted false political fund reports 
claiming expenses for an office that did not exist, according to 
allegations. Amid growing calls in the ruling coalition questioning 
Sata's moral responsibility for the alleged violations, Sata himself 
appears to have decided yesterday to step down from his post. Aides 
to Prime Minister Shinzo Abe have begun looking for his replacement. 
The dominant view among Abe's aides is that the prime minister has 
no choice but to remove him from the cabinet post in a bid to 
minimize the negative impact on the Abe administration. 
 
Abe revealed last night to reporters that he had told Sata to 
explain the reports to him quickly, saying, "I told Mr. Sata to 
thoroughly investigate the reports and that political funds must be 
properly reported. I also told him that politicians must act 
properly." 
 
With this regard, a high government official made this comment: "The 
results of the investigations must be submitted by Dec. 28 at the 
latest. It is too late to submit them next year." If the murky 
situation continues, Abe's responsibility for appointing him might 
be called into question. 
 
In his press conference on Dec. 19, Sata severely criticized former 
 
TOKYO 00007136  004 OF 009 
 
 
Tax Commission Chairman Masaaki Honma for having lived in a 
government-paid apartment without authorization, saying, "I want him 
to make a decision on his own and act properly." 
 
Sata in a press briefing yesterday, however, would not admit to the 
allegations, reiterating: "I learned them for the first time 
thorough media reports. I will explain after investigating them." He 
and his secretaries have sequestered themselves since yesterday 
afternoon, canceling all official duties. 
 
Opposition parties, meanwhile, made it clear they wanted his 
resignation, with Minshuto (Democratic Party of Japan) Secretary 
General Yukio Hatoyama saying, "If the allegations are true, he must 
resign. The prime minister has responsibility for appointing him." 
 
Criticism is gaining impetus in the ruling coalition.  A senior New 
Komeito member noted: "The amount of political money involved is too 
large. It is not a matter that can be resolved by saying a secretary 
did it." An LDP member said, "He will be able to make a decision in 
one or two days after learning the results of the investigation." As 
a result, it appears that Sata has no choice but to resign. 
 
5) Gov't to work out info guidelines for leak prevention 
 
YOMIURI (Page 4) (Full) 
December 27, 2006 
 
The Counterintelligence Promotion Council, a government panel 
chaired by Deputy Chief Cabinet Secretary Junzo Matoba, held its 
first meeting yesterday at the prime minister's office. In the 
meeting, the panel decided to formulate guidelines for the 
government to prevent intelligence leaks. The guidelines will 
incorporate regulations for government officials handling classified 
information. 
 
The government will set up a working group under the panel. The 
working group, which will be made of officials at the division 
director level from various ministries and agencies, will study 
intelligence leakage cases in the past, such as the suicide of a 
Japanese diplomat posted at the Consulate General of Japan in 
Shanghai, China. This diplomat committed suicide with a note 
reportedly saying he was coerced by Chinese intelligence authorities 
into providing classified information. 
 
6) Yasukuni Shrine museum to retouch China exhibits, soften 
offensive descriptions 
 
ASAHI (Page 26) (Full) 
December 27, 2006 
 
Yasukuni Shrine yesterday began retouching the historical 
descriptions of panels exhibited at its war museum, Yushukan. The 
shrine, with Toshiaki Nanbu as its chief priest, will modify panel 
descriptions over the outbreak of war between Japan and the United 
States as planned. In addition, the shrine will also change 
China-related exhibits, such as the Manchurian Incident and the 
Sino-Japanese War of 1937-45. The museum will be temporarily closed 
until the end of the year and will be reopened to the public on Jan. 
¶1. 
 
The Yushukan museum will replace seven panels headlined 
"Russo-Japanese War to Manchurian Incident," "Manchurian History," 
 
TOKYO 00007136  005 OF 009 
 
 
"China Incident," "Hitler," Stalin," Roosevelt," and "Japan-US 
negotiations." 
 
One of the seven panels is about the outbreak of Japan-US war on 
Dec. 8, 1941, saying that US President Roosevelt "drove Japan, a 
resourceless country, into a corner with an embargo and compelled 
Japan to open war." The museum will delete this description, which 
stresses the United States' responsibility. Instead, the museum will 
exhibit replacements, including a diary of US War Secretary Stimson, 
to indicate that the United States had an "intention" to open war. 
 
In addition, the museum will exhibit the "Imperial edict to open 
war" with an English translation for foreign visitors to deepen 
their understanding of Japan's position in those days. The United 
States was also critical about the current description of war 
between Japan and the United States. 
 
The museum is reviewing its exhibits and retouching their panel 
descriptions under the supervision of Taro Nagae, former chief 
researcher at the National Institute for Defense Studies, a think 
tank of the Defense Agency. "Historical documents will be in place 
so as not to cause misunderstanding," Nagae says. 
 
Yushukan will also modify the China-related descriptions of its 
exhibits, but Yasukuni Shrine's public information division says it 
cannot disclose any of their changes until the museum is reopened to 
the public. "Yushukan's exhibition was intended to cope with a 
masochistic view of history," a shrine official said. "But," this 
official added, "there were also excessively offensive expressions 
against other countries, so we'd like to soften that point." 
However, the shrine will not recognize the Sino-Japanese war as a 
"war of aggression." 
 
Yushukan is a war memorial to praise fallen soldiers, and it was 
rebuilt and opened in July 2002. It will mark its fifth anniversary 
next year and will continue to review and retouch its exhibition. 
 
7) Promote private-sector activities through economic cooperation, 
ODA White Paper notes 
 
TOKYO SHIMBUN (Page 2) (Full) 
December 27, 2006 
 
Foreign Minister Taro Aso presented the Official Development 
Assistance (ODA) White Paper for fiscal 2006 at a cabinet meeting 
yesterday. According to the report, the total amount of ODA (yen 
terms) extended in fiscal 2005 went up approximately 50% from the 
previous year's level, reaching approximately 1.4474 trillion yen 
due to special elements, including debt relief for Iraq and 
assistance for the major earthquake off Sumatra and the accompanying 
tsunami. If such elements were excluded, the total amount of ODA 
 
SIPDIS 
would be approximately 942.1 billion yen, down approximately 4% 
compared with the preceding year. 
 
As new objectives of ODA, the report cited promotion of 
private-sector activities through economic cooperation and securing 
energy resources through strengthened relations with natural 
resource-rich nations. As specific measures to promote economic 
activities, the report gave protection of intellectual property 
rights and assistance for the signing of economic partnership 
agreements. 
 
 
TOKYO 00007136  006 OF 009 
 
 
8) Poll: 78% don't feel economic recovery 
 
YOMIURI (Page 2) (Full) 
December 27, 2006 
 
The Yomiuri Shimbun found from its recent a face-to-face nationwide 
public opinion survey conducted Dec. 9-10 that a total of 78% did 
not actually feel economic recovery or did not feel it very much, 
even though the government has declared that the economy has been 
recovering. In the survey, respondents were also asked if they 
thought the nation's social divide-such as the income gap-has 
widened. In response to this question, "yes" and "yes to a certain 
degree" totaled 74%. Japan is said to be currently in the postwar 
longest phase of economic expansion. However, the survey shows that 
the general public does not actually feel such a declared economic 
upbeat. 
 
The total proportion of those actually feeling economic recovery 
increased 4 percentage points from a survey taken in January this 
year. Those not actually feeling it totaled only 21%. 
 
Respondents were asked how their livelihood has changed over the 
past year. In response, 69% said there was no change, topping all 
other answers. To a question asking if they have held down their 
spending, "very much" and "somewhat" totaled 63%. 
 
Asked about the nation's social divide, more than 70% answered that 
it has widened, with 22% saying it remains unchanged and only 3% 
saying it has narrowed. In addition, a total of 67% answered that 
there was economic disparity between urban and rural districts. 
 
The survey also asked respondents about their living standard. To 
this question, a total of 46% answered that it was average, topping 
all other answers. However, the figure dropped 6 points from a 
survey in December 2005. The proportion of those thinking of 
themselves as "lower middle" class marked an all-time high of 33%, 
up 6 points. The "lower" class also increased 6 points to 7%. 
 
9) Primary balance of national and local governments can be brought 
into black without tax hike: Cabinet Office; Necessary amount can be 
reduced by 7 trillion yen 
 
MAINICHI (Top Play) (Full) 
December 27, 2006 
 
The Cabinet Office yesterday released its estimate of the amount 
needed to achieve the government target of moving the primary 
balance of the central and local governments into the black in 
fiscal 2011. It calculated that the necessary fiscal sources can be 
reduced from the initially estimated 16.5 trillion yen to 9.5 
trillion yen due to an increase in tax revenues as a result of the 
economic recovery. If the maximum target for spending cuts to be 
achieved by fiscal 2011 as indicated in the basic policy guidelines 
on economic and fiscal management and structural reforms for the 
fiscal 2006 national budget is accomplished, it would be possible in 
sheer numbers to move the primary balance into the black without a 
tax hike. The estimate will likely spark a trend to block 
discussions calling for a hike in the consumption tax. 
 
The report was presented yesterday at a meeting of the Council on 
Economic and Fiscal Policy chaired by Prime Minister Abe. 
 
 
TOKYO 00007136  007 OF 009 
 
 
The basic policy guidelines for the fiscal 2006 estimated that 16.5 
trillion yen in fiscal sources would be needed to move the primary 
balance into the black. According to this estimate, the government 
decided to reduce this number by 11.4-14.3 trillion yen over five 
years from fiscal 2007 through fiscal 2011 through spending cuts and 
cover the remaining amount with increased revenues. The Cabinet 
Office has calculated that if the effects of increased revenues of 
3.5 trillion yen and efforts to cut expenditures worth 3.5 trillion 
yen in the fiscal 2007 draft budget are taken into account, the 
amount of fiscal resources needed to bring the primary balance into 
the black can be extensively reduced. The primary balance can be 
shifted into the black without hiking the consumption tax, if 
7.9-10.8 trillion yen, the amount worked out by deducting the 
spending cut target for fiscal 2007 from the total target for 
spending cuts, can be cut over four years. 
 
Some government officials take the view that it is necessary to set 
a new target for the surplus needed to move forward the time when 
the primary balance will shift into the black and to reduce the 
amount of outstanding debt. However, State Minister for Economic and 
Fiscal Policy Hiroko Ota told a news conference, "The necessary 
amount of fiscal sources will change, depending on future tax 
revenues." She categorically said that the government has no 
intention of changing its policy in the basic policy guidelines for 
fiscal 2007. However, chances are high that if the present 
government target is kept as is, an optimistic view toward fiscal 
reconstruction could prevail, generating an argument in the ruling 
camp that it is not necessary to raise the consumption tax. 
 
10) Economic think-tank adviser Kosai tapped as tax panel head, 
expected to follow economic expansion policy 
 
ASAHI (Page 1) (Full) 
December 27, 2006 
 
Prime Minister Abe announced yesterday that he would install Yutaka 
Kosai, senior adviser at the Japan Center for Economic Research, to 
the post of chairman for the government's Tax Commission to succeed 
Masaaki Honma, who resigned over a scandal. Kosai, former Cabinet 
Office's Economic Society Comprehensive Research Institute head, 
will be formally appointed chairman of the tax council at a plenary 
session in January, after becoming a panel member as early as 
today. 
 
The prime minister told reporters at the Kantei last night: 
 
"Since Mr. Kosai is highly knowledgeable about the financial and tax 
systems, I have great respect for him. I hope he will work out a 
well-balanced tax system." 
 
In the government and the ruling camp, the name of Motoshige Ito, 
professor at the University of Tokyo, was once floated, but Ito 
declined the offer. Chief Cabinet Secretary Shiozaki, under the 
instruction of the prime minister, asked Kosai yesterday to assume 
the chairmanship. 
 
Kosai spoke of his aspirations before reporters in Tokyo last 
night: 
 
"If the economy grows even slightly, it will be easier for problems 
to be resolved in order to restore the nation's finances. In this 
context, the role of the tax system is important." 
 
TOKYO 00007136  008 OF 009 
 
 
 
Kosai used to be an official at the former Economic Planning Agency. 
He later served as Economic Research Institute chief research 
officer and Tokyo Institute of Technology professor. In 2002, Kosai 
mapped out a package of measures to dispose of nonperforming bank 
loans as chairman of the project team on emergency response strategy 
in the financial sector under Financial Services Minister Takenaka. 
In 2005, as chairman of an expert research panel of the Council on 
Economic and Fiscal Policy under State Minister in Charge of 
Economic and Fiscal Policy Takenaka he produced a report titled, 
"Japan's vision for the 21st century," which presented necessary 
reform challenges for Japan in order to maintain its economic 
strength. 
 
The vision pointed out the possibility of raising the nation's real 
economic growth rate by improving productivity and other means. This 
view is close to Prime Minister Abe's policy of giving priority to 
economic growth. Kosai is expected to succeed the former chairman's 
stance of pursuing tax reform, focusing on revitalizing the Japanese 
economy. 
 
11) Ban on discriminatory treatment of part-timers: MHLW to submit 
bill amending law 
 
YOMIURI (Page 2) (Excerpts) 
December 27, 2007 
 
The Ministry of Health, Labor and Welfare (MHLW) yesterday decided 
to incorporate a clause that bans a discriminatory treatment of 
part-timers whose working conditions are the same as those of 
fulltime employees in a bill amending the part-time labor law, which 
is to be submitted to the regular Diet session next year. The Labor 
Policy Council's Equal Employment Taskforce, which met yesterday, 
compiled a report on measures for part-timers and submitted it to 
MHLW Minister Yanagisawa. 
 
The government has discussed possible amendments to the law as part 
of its policy of correcting disparities between permanent and 
non-permanent workers. The panel report noted that discriminatory 
treatment of part-timers who have been under employment for a long 
period of time and who work under the same conditions as those of 
permanent employees in terms of, for instance, working hours and 
assignments, should be banned. The bill also mandates employers to 
issue a paper that stipulates working conditions, such as pay 
raises, bonuses and retirement benefits. It also notes that 
penalties will be imposed on employees, who failed in their 
obligation and neglected the duty even after guidance and 
recommendations are given. The legislation also obligates employees 
to introduce a system of switching part-timers to permanent 
employees in order to promote corporate efforts to employ 
part-timers as permanent workers. 
 
12) Eight US plants authorized to resume beef imports, with no 
problems found in on-site inspections 
 
ASAHI (Page 10) (Full) 
December 27, 2006 
 
The Ministry of Health, Labor and Welfare and the Ministry of 
Agriculture, Forestry and Fisheries released the results of their 
on-site inspections of eight US plants with licenses to ship beef to 
Japan from Nov. 26 through Dec. 13. The two ministries announced 
 
TOKYO 00007136  009 OF 009 
 
 
that there were no problems, as the plants have complied with the 
beef export procedures agreed on between Japan and the US, such as 
the removal of specified risk materials. 
 
An inspection was also conducted at the Swift Gregory plant in 
Colorado, in whose shipment ineligible sweetbread was found in 
October. The audit found that the cause of the violation was as 
explained by the US side and that improvement measures have been 
implemented. Based on this result, the two ministries will resume 
import procedures for the beef shipped from Gregory starting today. 
 
13) Former secretary at embassy in Yemen to be charged with 
violation in absentee vote in 2003 Lower House election 
 
NIHON KEIZAI (Page 39) (Excerpts) 
December 27, 2007 
 
It was found yesterday that the Metropolitan Police Department has 
sent papers to prosecutors on a diplomat who was a second secretary 
at the embassy in Yemen and now a consul in Honolulu on suspicion of 
having filled in ballots prior to the voting period for the House of 
Representatives election in November 2003 and having other embassy 
staffer treat the ballots as valid votes. 
 
The Foreign Ministry yesterday took disciplinary action against the 
diplomat and another, including a salary cut of one-tenth of their 
monthly pay for three months, and also punished two of their 
superiors. 
 
The illegal act was discovered due to a report from within the 
embassy around the fall of last year. The Foreign Ministry accused 
the diplomat of violating the Public Office Election Law in late 
November of this year. 
 
DONOVAN