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UNCLAS SECTION 01 OF 11 TOKYO 000752 
 
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 02/22/07 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Visit of Vice President Cheney: 
4) Vice President Cheney, Prime Minister Abe confirm close 
cooperation on North Korea, Iraq issues 
5) Cheney tells Abe that abduction issue is common challenge for 
both governments 
6) Cheney and Abe make joint appeal about the importance of the 
US-Japan alliance 
7) Hardliners like Cheney, Abe finding policy support base crumbling 
 
 
8) US Deputy Secretary of State Negroponte coming to Japan next 
month 
 
North Korea problem: 
9) Foreign Ministry negotiator Sasae on six-party agreement: 
Disabling North Korean nuclear facilities was next-best step 
10) Foreign Minister Aso: Japan may apply even harsher sanctions on 
North Korea 
11) Aso to seek correction of wording in released US document that 
misstates Japan's position on returned remains of abductees from 
North Korea 
 
12) Japan wants Russia to enrich its uranium for nuclear power 
plants 
 
Defense issues: 
13) Government plans to sign pact with US to protect military 
secrets 
 
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14) Defense Minister Kyuma mum when asked about leaked military 
secrets, citing that case is still under investigation 
 
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15) Environmental assessment at Futenma relocation site to start in 
April 
 
Economic agenda: 
16) Bank of Japan suddenly raises interest rate, receives mixed 
reviews 
17) Former State Minister Takenaka critical of BOJ's interest-rate 
hike 
 
18) Ruling coalition raises doubts about Ozawa's explanation about 
acquiring real estate 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: Nihon Keizai: Sankei: Tokyo Shimbun: 
Bank of Japan's Policy Board decides to hike key interest rate to 
0.5% based on rise in personal consumption; Vice Governor Iwata 
opposed; "Unsecured overnight call rate of 0.5% still low," says 
Governor Fukui 
 
Yomiuri: 
Carbon monoxide death toll caused by Matsushita's gas water heaters 
reaches 48; 27 cases in 20 years not made public 
 
 
TOKYO 00000752  002 OF 011 
 
 
Akahata: 
Fiscal 2007 budget: Japanese Communist Party proposes changing 
expenditures to find breakthrough in poverty and social disparity 
issues: General Secretary Ichita releases emergency key requests 
 
2) EDITORIALS 
 
Asahi: 
(1) Make interest rate hike lead to sustainable economic growth 
(2) US vice president: Why didn't he talk to Japanese public? 
 
Mainichi: 
(1) Bank of Japan (BOJ) raises interest rate: Steps to normalize 
interest rate will continue 
(2) Local governments' practice of hoarding slush funds should be 
rooted out 
 
Yomiuri: 
(1) Interest rate hike: It is necessary to continue to monitor 
consumption, price trends 
(2) Scandals at TV stations: Effective measures to prevent 
recurrence urged 
 
Nihon Keizai: 
(1) Interest rate should be normalized with eye on the real state of 
the economy 
 
Sankei: 
(1) Interest rate hike: Steady step toward normalization of interest 
rate needed 
(2) Japan-US talks: We welcome Vice President Cheney's statement 
regarding abduction issue as common agenda item 
 
Tokyo Shimbun: 
(1) Will interest rate hike keep economy on track for full 
recovery? 
(2) MIC excessively interfering with broadcasting 
 
Akahata: 
(1) Japanese Communist Party demands changes in fiscal 2007 budget: 
Opt for finding breakthrough in poverty issue 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, February 21 
 
NIHON KEIZAI (Page 2)  (Full) 
February 22, 2007 
 
10:30 
Met Special Advisor Nemoto at the Kantei. 
 
11:00 
Met Vice Foreign Minister Yachi. 
 
13:20 
Made a thank-you call to a 5th grader at Yamaga Elementary School in 
Kumamoto for receiving rice. 
 
13:34 
Met State Minister in Charge of Administrative Reform Watanabe. 
Followed by Deputy Chief Cabinet Secretary Matoba. Later, met Vice 
 
TOKYO 00000752  003 OF 011 
 
 
Health, Labor and Welfare Minister Tsuji and others. 
 
14:59 
Met Upper House member Shin Sakurai. 
 
15:28 
Attended funeral service for former Tokyu Agency President Maeno at 
Aoyama funeral home. 
 
16:23 
Met Vice Internal Affairs and Communications Minister Ono. 
 
16:34 
Met Special Advisor Yamatani. Joined by Lower House member Hideo 
Usui. 
 
17:34 
Met former Cabinet Security Affairs Office head Sasa, who was 
awarded the Seiron Grand Prize at the Akasaka Prince Hotel, and 
others. 
 
18:03 
Met US Vice President Cheney at the Kantei, with Chief Cabinet 
Secretary Shiozaki, US Ambassador Schieffer and others. 
 
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19:18 
Hosted a banquet with the vice president at his official residence. 
 
4) Cheney-Abe meeting: Japan, US to cooperate on North Korea, Iraq 
 
ASAHI (Page 1) (Full) 
February 22, 2007 
 
Prime Minister Abe yesterday met with visiting US Vice President 
Cheney at his office. The two confirmed that Japan and the United 
States would continue to cooperate at the six-party talks over the 
issue of North Korea's nuclear weapons programs. In addition, Cheney 
also stressed that the United States would cooperate with Japan on 
the issue of Japanese nationals abducted to North Korea, saying, 
"It's a common challenge to resolve the tragedy of Japanese 
abductees." Cheney also appreciated Japan's cooperation with the 
United States in its war on terror. Abe clarified that Japan would 
continue to support the United States. 
 
"Japan and the United States are values-sharing partners," Abe told 
Cheney in the meeting. Abe also noted that Japan-US relations are 
"rocksolid and irreplaceable," saying, "Our bilateral alliance is 
for Asia and the world." He then noted the importance of steadily 
realigning US forces in Japan and accelerating bilateral cooperation 
on missile defense. 
 
Cheney stressed the importance of global fighting against terrorism 
and sought Japan's understanding on the United States' policy, such 
as sending US reinforcements to Iraq. Abe replied that Japan would 
shore up the United States through the Air Self-Defense Force's 
activities (in Iraq) and the Japanese government's official 
development assistance (ODA) programs for developing countries. 
 
Abe also explained that Japan is now coordinating to work with a 
military-civilian provincial reconstruction team (PRT) that is 
developing activities in Afghanistan under the initiative of North 
Atlantic Treaty Organization (NATO) member nations. 
 
TOKYO 00000752  004 OF 011 
 
 
 
Meanwhile, referring to the issue of North Korea's nuclear arsenal, 
Cheney said Japan was an "important partner" of the United States at 
the six-party talks. Abe stressed the gravity of the abduction 
issue, and Cheney showed "deep understanding." This can be taken as 
indicating the United States' understanding on Japan's stance of not 
providing energy aid to North Korea without seeing progress in the 
abduction issue. 
 
In addition, Abe and Cheney voiced concerns about China's "unclear, 
sudden military expansion," and they agreed to keep tabs on China's 
future improvements in its capability of carrying out space 
operations, such as its recent destruction of a satellite in a 
test. 
 
Earlier in the day, Foreign Minister Aso also met with Cheney. In 
the meeting, Aso asked the United States to continue its sanctions 
on North Korea, suggesting the need to continue pressuring North 
Korea for specific steps to denuclearize North Korea. 
 
5) Cheney, Abe reconfirm cooperation to convince North Korea to 
renounce nuclear programs; Define resolving abduction issue as 
common task 
 
YOMIURI (Page 2) (Full) 
February 22, 2007 
 
Prime Minister Abe reconfirmed with United States Vice President 
Cheney at the Prime Minister's Official Residence yesterday that 
Japan and the US would work together to convince North Korea to 
renounce its nuclear weapons and programs. Cheney expressed his 
understanding over Japan's stance over the issue of North Korea's 
past abductions of Japanese citizens. Abe said, "We would like to 
affirm the importance of the Japan-US alliance and boost it for the 
sake of the world and Asia." The vice president replied, "I assure 
you that the US commitment is staunch." Cheney and Abe then agreed 
on the importance of strengthening cooperation among the US, Japan 
and Australia in the Asia-Pacific region. 
 
On the abduction issue, Vice President Cheney reiterated that the US 
would cooperate to resolve the issue as "a common task of Japan and 
the US." Specifying the six-party agreement over North Korea's 
nuclear issue as "a step forward in the right direction," Cheney 
indicated that the key lies in what response North Korea will make. 
 
Cheney extended his thanks to Japan's contributions to the US-led 
fight against terrorism. In response, Abe indicated a positive 
stance about having Self-Defense Force troops participate in 
provincial reconstruction teams (PRT) in Afghanistan. 
 
6) Japan, US play up importance of bilateral alliance 
 
YOMIURI (Page 2) (Full) 
February 22, 2007 
 
In US Vice President Dick Cheney's meetings with Prime Minister 
Shinzo Abe, Foreign Minister Taro Aso and other government 
officials, much time was spent on the North Korean issue, to which 
the Abe government has attached high priority. Both sides were eager 
to play up the importance of the Japan-US alliance, which has been 
somewhat strained by Defense Minister Fumio Kyuma's remarks critical 
of the US government's policy. 
 
TOKYO 00000752  005 OF 011 
 
 
 
Cheney pledged anew US support for Japan on the North Korea 
abductions, and he refrained from referring to the Iraq issue. Ahead 
of his departure this morning for Australia, the vice president will 
meet the parents of Yokota Megumi, a Japanese abducted to North 
Korea. Some observers see Cheney's Japan visit indirect support for 
Abe, as well as a possible warning against conciliatory moves toward 
Pyongyang in the United States. 
 
It is viewed that Cheney, who has backed the Bush administration as 
a key representative of the conservative group, is critical of the 
agreement reached at the recent six-party talks to provide energy 
aid to North Korea. The vice president's move to join hands with the 
prime minister seems likely to be aiming at throwing a wet blanket 
over policy moves in the State Department, which is desperate for 
diplomatic results on North Korea in order to make up for the policy 
failure in Iraq. 
 
Meantime, some Japanese government officials were initially 
concerned that the six-party agreement stipulated that the US would 
start the process of removing North Korea from its list of 
terror-sponsoring states. Tokyo was also concerned that a meeting 
between the vice president and the defense minister was not carried 
out. Japanese government officials are now praising the remarks in 
meetings by Cheney, who also serves as president of the Senate and 
is now traveling to Japan and Australia during the congressional 
recess. "Relations between the US and Japan have never been better 
than they are today," Cheney reiterated. 
 
7) Meeting between prime minister, US vice president: Footings of 
Japan, US hardliners crumbling, buffeted by Iraq, North Korea 
issues; Seek way out by playing up honeymoon aspect of relations 
 
ASAHI (Page 3) (Excerpts) 
February 22, 2007 
 
"The US-Japan alliance is in its best shape ever," stressed US Vice 
President Cheney, a representative hardliner in the Bush 
administration, while standing on the deck of the US Navy carrier 
Kitty Hawk at Yokosuka Navy Base. His words sought to further 
strengthen bilateral alliance ties. Prime Minister Abe, as well, in 
his first meeting with Cheney in two years, played up the unshakable 
aspects of the alliance relationship, and the words of the two 
hardliners resounded against each other. However, the hard-line 
stances on Iraq policy and the North Korea issue have begun to show 
signs of faltering. The reunion of the two leaders could not mask 
the uncertainty about their respective policy footing. 
 
Vice President Cheney at the start of his meeting with Prime 
Minister Abe repeated the words "alliance relationship" six times. 
The meeting started with words of praise from the two leaders for 
the alliance. 
 
The vice president supported Japan's position on the abduction 
issue. Prior to the meeting, the prime minister stressed to the 
press corps, "I would like to explain well how important the 
abduction issue is in my cabinet." The vice president backed his 
thinking. He will meet this morning with Shigeru Yokota, the 
representative of the family association of abducted victims, in an 
effort to wipe away any remaining concerns in Japan about the US' 
diplomacy toward North Korea. The vice president, who rejects the 
notion of direct dialogue between the US and North Korea, seems to 
 
TOKYO 00000752  006 OF 011 
 
 
be skeptical about the six-party agreement. He found commonality 
with the prime minister, who chose the option of not providing 
energy aid to North Korea unless there is progress on the abduction 
front. 
 
8) US Deputy Secretary of State Negroponte to come to Japan next 
month 
 
MAINICHI (Page 2) (Full) 
February 22, 2007 
 
Hiroaki Wada, Washington 
 
A spokesman of the United States Department announced on Feb. 21 
that new Deputy Secretary of State Negroponte would tour Japan, 
China, and South Korea on March 1-3 to discuss North Korea's nuclear 
programs and other issues. Negroponte will make an overseas trip for 
the first time after assuming the current post. It was reported that 
the deputy secretary would visit North Korea, but the spokesman 
strongly denied the report. 
 
9) Sasae: Disabling North Korean nuclear facilities was next-best 
step 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
February 22, 2007 
 
The consensus document adopted in the latest six-party talks 
obligating North Korea to disable its nuclear facilities was the 
"second-best" step taken under Pyongyang's pressure for 
concessions. 
 
Foreign Ministry Asian and Oceanian Affairs Bureau chief Kenichiro 
Sasae, Japan's chief negotiator in the six-party talks revealed this 
before the Lower House Foreign Committee yesterday. 
 
About the North Korean nuclear facilities, Sasae said: 
 
"It is clear that the 'dismantlement' is the final accord in the 
(September 2005) joint statement. North Korea did not agree to total 
denuclearization, and we had to agree to disabling the nuclear 
facilities as the next-best step, thought it is an interim 
measure." 
 
In 1994, Washington and Pyongyang adopted the Agreed Framework 
obligating North Korea to freeze its nuclear facilities. Despite 
that, North Korea has resumed nuclear development. 
 
Learning bitter lessons from this, the US in the latest six-party 
talks strongly opposed to "freezing" nuclear facilities, which might 
be lifted. As a result, the parties adopted the joint statement 
mandating the North to shut down and seal its nuclear facilities in 
Yongbyon within 60 days. As the next step, the statement also 
obligated the North to disable its facilities. 
 
Sasae's statement indicated that the agreement reached in the last 
six-party talks was a product of compromises by both the US, which 
sought a step stricter than freezing the nuclear facilities, and 
North Korea, which opposed to dismantlement. 
 
"Disabling" has no set definition in the area of nuclear 
nonproliferation. As such, Sasae said: "We will have to determine 
 
TOKYO 00000752  007 OF 011 
 
 
what 'disabling' specifically means." 
 
North Korea regards the promised provision of 1 million tons of 
heavy fuel oil as an incentive in return for temporarily disabling 
its nuclear facilities. The next round of the six-party talks 
planned for March is expected to run into difficulties over the 
definition of "disabling." 
 
10) Aso suggests additional sanctions on North Korea depending on 
progress on abduction issue 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 22, 2007 
 
Foreign Minister Taro Aso suggested yesterday that Japan might take 
additional sanction measures depending on how North Korea responds 
to the abduction issue, saying, "Japan might as well take additional 
sanction measures against the North if it failed to exhibit 
sincerity (in dealing with the issue of Japanese abducted by that 
country)." Aso was speaking before the Lower House Foreign Affairs 
Committee about the establishment of a Japan-North Korea working 
group, which was agreed upon in the previous six-party talks. 
 
Aso also said: "North Korea might show sincerity. In that case, we 
might soften (the sanctions)." 
 
Meanwhile, Prime Minister Shinzo Abe told the press corps at his 
official residence: "We will make efforts to bring progress to the 
abduction issue through the working group. Unless there is progress, 
North Korea's situation will not become better." 
 
11) Aso to urge US to correct its report on "controversy between 
Japan, North Korea over remains" 
 
SANKEI (Page 5) (Abridged slightly) 
February 22, 2007 
 
A US State Department document on the issue of Japanese nationals 
abducted by North Korea reads: "Although North Korea has returned 
remains of two Japanese nationals to Japan, controversy remains." 
Foreign Minister Taro Aso revealed a plan before the Lower House 
Foreign Affairs Committee yesterday to urge the United States to 
revise this statement. In 2004, North Korea presented Japan with 
purported remains of Megumi Yokota and another abductee. However, 
the Japanese government has concluded from subsequent DNA testing 
that the remains were not authentic. Tokyo's position is that there 
is no controversy over the remains. 
 
The document in question is the US annual report titled "Patterns of 
Global Terrorism" that came out last April. It is an official US 
report identifying North Korea as a state sponsor of terrorism, 
citing the abduction of Japanese nationals as a reason. 
 
In the committee session, Minshuto (Democratic Party of Japan) 
lawmaker Akihisa Nagashima criticized the report, saying, "(The 
annual report) reads as if Japan and North Korea were locking horns 
over the fake remains." The report also says that five abductees 
returned to Japan in 2003 instead of October 2002. Nagashima 
referred to this as a simple factual errir. 
 
In response, Aso said: "I saw the document for the first time. We 
will deal with the matter properly." 
 
TOKYO 00000752  008 OF 011 
 
 
 
12) Japanese government negotiating with Russia to consign uranium 
enrichment 
 
MAINICHI (Page 2) (Full) 
February 22, 2007 
 
The Japanese government has launched negotiations with the Russian 
government to consign to Russia the enrichment of uranium that was 
recovered from spent fuel rods, according to informed sources 
yesterday. Enriched uranium will be used as fuel in nuclear power 
plants in Japan. Since enriched uranium could be used to produce 
nuclear weapons, Japan has proposed, as the condition for reaching a 
deal, to sign a bilateral nonproliferation accord, including an 
inspection by the International Atomic Energy Agency (IAEA). But 
Russia has indicated disapproval. It is to be seen whether an 
agreement can be reached in the negotiations. 
 
To produce nuclear fuel for nuclear power plants, enriching natural 
or recovered uranium is necessary. Because Japanese facilities do 
not have enough capacity to enrich uranium, more than 90% of total 
domestic demand has been consigned to plants overseas. Since Japan 
has given priority to enriching natural uranium, about 6,500 tons of 
recovered uranium has been stored in Britain. 
 
13) Gov't eyes military info security pact with US 
 
YOMIURI (Page 2) (Abridged) 
February 22, 2007 
 
The government decided yesterday to enter into a general security of 
military information agreement (GSOMIA) with the United States. The 
GSOMIA is a comprehensive arrangement intended to protect defense 
secrets. This will make it possible for Japan to exchange highly 
 
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confidential intelligence with the United States. The two countries 
 
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are expected to reach a substantive agreement in a two-plus-two 
foreign and defense ministerial meeting of their intergovernmental 
security consultative committee in March and sign a GSOMIA pact 
within the year. 
 
14) Kyuma remains mum about probe into info leakage 
 
YOMIURI (Page 2) (Full) 
February 22, 2007 
 
Defense Minister Kyuma, sitting in on the House of Representatives 
Special Committee on Iraqi Reconstruction Assistance in its meeting 
yesterday, stated that he could not clarify anything about the issue 
of an Air Self-Defense Force colonel's alleged leakage of 
information. In this case, the ASDF colonel, once posted to the 
Defense Intelligence Headquarters at the Defense Ministry, is 
alleged to have leaked in-house information to a Yomiuri Shimbun 
reporter. The colonel is suspected of having violated the 
Self-Defense Forces Law, and SDF Police Command authorities are now 
looking into the case. "This matter is under investigation, so I 
cannot reveal anything about the investigation," Kyuma stated before 
the committee. "If the defense minister judges that something should 
be classified, there may be an arbitrary manipulation of 
information," a committee member asked. In response to this 
question, Kyuma replied: "I'm not saying we will make a secret of 
everything. The defense minister is not the only one to classify 
(defense secrets). The defense minister is to classify information 
 
TOKYO 00000752  009 OF 011 
 
 
after consulting with the Self-Defense Forces and the Defense 
Ministry's internal bureaus, so I'd like to ask you to trust us." 
With this, Kyuma sought understanding. 
 
15) Research on environment around Camp Schwab to start in April; 
Local residents' backlash inevitable 
 
YOMIURI (Page 4) (Full) 
February 22, 2007 
 
In order to break the impasse in negotiations on the relocation of 
the US Marine Corps' Futenma Air Station to the coast of Camp 
Schwab, the government has decided to begin in April research on the 
present environment of the costal area even without the consent of 
local municipalities. The local governments' reaction against the 
central government will unavoidably become stronger. Therefore the 
negotiations on the base relocation will likely be thrown into 
confusion. 
 
The main agenda in the negotiations is whether to change the 
government plan to build V-shaped runways on the coast of Camp 
Schwab. The government has made efforts to seek understanding for 
the implementation of an environmental impact assessment through 
meetings between the government, Okinawa Prefecture, and four 
affected municipalities. The talks between the government and 
Okinawa have encountered difficulties. A senior Okinawa Government 
official commented: "We cannot accept an environmental impact 
assessment that is premised on the government plan." 
 
The central government has taken a tough position, as seen in a 
remark by a senior Defense Ministry official: "There is no reason to 
change the government plan, since the agreement has been made with 
the United States and local governments." 
 
Okinawa Gov. Hirokazu Nakaima, who is increasingly alarmed by the 
government's tough stance, on Feb. 18 secretly came to Tokyo to meet 
with Defense Minister Fumio Kyuma. However, the government and 
Okinawa have yet to find common ground. Some Okinawa officials have 
an optimistic view that the government plan will be changed through 
a political decision eventually. 
 
The government has, however, the bitter memory that although Futenma 
relocation was agreed upon in 1996, it has yet to be implemented. A 
senior Defense Ministry official quipped: "The government should not 
take a lax response to Okinawa. The issue will not be resolved 
unless the government takes a firm stance in dealing with the 
issue." 
 
16) Interest rate hike causes stir: BOJ heavily responsible for its 
results: Price rise remains sluggish; Dialogue with market 
insufficient 
 
YOMIURI (Page 9) (Excerpts) 
February 22, 2007 
 
The Bank of Japan (BOJ) yesterday decided to raise the key interest 
rate at its Policy Board meeting. What turned the interest rate hike 
into a concrete deal, despite resistance from within from Deputy 
Governor Kazumasa Iwata, was Governor Toshihiko Fukui's desperate 
efforts to normalize the interest rate. However, given the consumer 
price index and other economic indicators, it cannot be said that 
the Japanese economy has climbed out from its ills. Fukui will be 
 
TOKYO 00000752  010 OF 011 
 
 
held accountable to the public and the market for his decision to 
raise the interest rate at this timing. He will also be responsible 
for what the hike will bring about. 
 
A news conference was held at 3:30 p.m. in a large conference room 
on the 9th floor of the BOJ head office in Nihonbashi, Tokyo. Fukui 
told more than 100 reporters the reason for his decision to raise 
the interest rate to a news conference held: "It is all right for 
you to take that while the BOJ is using the term 'will maintain an 
extremely low interest rate level,' there is still room for 
normalizing the interest rate." He thus categorically indicated his 
intention to raise the interest rate gradually. 
 
Fukui is eager to raise the interest rate out of the concern that 
the adoption of the ultra-low interest rate over too long a period 
of time could bring about excessive capital investment. 
 
The BOJ in its economic and price outlook report released last April 
also pointed out the need for an interest rate hike, noting: 
"Increased stimulus effects from the financial policy front will 
lead to volatile economic activities, which could in turn cause a 
risk of volatile fluctuations in the rate of price increases." 
 
However, many market players feel that the accounts Fukui has 
repeatedly given on the interest rate hike this time are 
insufficient. 
 
17) Heizo Takenaka, professor at Keio University, former internal 
affairs minister: Deflation was not taken into account 
 
YOMIURI (Page 9) (Full) 
February 22, 2007 
 
"The Bank of Japan (BOJ) is carrying out a financial policy for its 
own sake. It has raised the key interest rate, saying that the low 
interest rate is unreasonable. It has not taken people's life and 
deflation into account at all. It is regrettable that it has made 
the decision without giving sufficient accounts in the midst of a 
rising concern as to whether the 2% target for nominal growth can be 
achieved. Japan has begun to show high potential growth like the US 
in the 1990s. The US has realized high growth through flexible 
financial policy, but the BOJ has ruled out such a possibility by 
hiking the interest rate this time. The government, which is 
pursuing high growth, should have exercised its right to demand the 
BOJ to postpone its decision." 
 
18) Ruling coalition raises doubt about Ozawa's acquiring real 
estate 
 
YOMIURI (Page 4) (Full) 
February 22, 2007 
 
In a compliance subcommittee meeting yesterday of the party's reform 
implementation headquarters, Liberal Democratic Party (LDP) Acting 
Secretary General Nobuteru Ishihara criticized Minshuto (Democratic 
 
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Party of Japan) President Ichiro Ozawa for having acquired real 
estate properties and including the assets in fund management 
group's office expenses. Ishihara stated: 'I have a question that 
why he had to use political funds to buy real estate." He cited the 
following questionable points: It is unclear where and how he got 
the money that was used to purchase the real estate; and should not 
he have reported the properties as his income in terms of law? 
 
TOKYO 00000752  011 OF 011 
 
 
 
LDP Secretary General Hidenao Nakagawa stressed in a meeting Tokyo: 
"Mr. Ozawa needs to explain the reason why the purchase of real 
estate does not violate the Political Funds Control Law that 
regulates the use of political funds." 
 
Meanwhile, three opposition parties Minshuto, the Social Democratic 
Party (SDP) and the People's New Party yesterday reached an 
agreement to call on senior ruling coalition members to disclose the 
details of office expenses. 
 
SCHIEFFER