VZCZCXRO7158
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1349/01 0870416
ZNR UUUUU ZZH
P 280416Z MAR 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 2098
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 2890
RUEHFK/AMCONSUL FUKUOKA 0427
RUEHOK/AMCONSUL OSAKA KOBE 3942
RUEHNAG/AMCONSUL NAGOYA 9772
RUEHKSO/AMCONSUL SAPPORO 1373
RUEHBJ/AMEMBASSY BEIJING 6333
RUEHUL/AMEMBASSY SEOUL 2410
RUCNDT/USMISSION USUN NEW YORK 3721

UNCLAS SECTION 01 OF 11 TOKYO 001349 
 
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 03/28/07 
 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Prime Minister Abe in action: 
4) Prime Minister Abe does not rule out another Yasukuni visit 
5) Abe considering second trip to China 
6) National referendum bill on constitutional reform readied for the 
Diet by LDP, Komeito but opposed by Minshuto (Democratic Party of 
Japan) 
7) Many important bills in the Diet but their order of priority is a 
jumble. 
8) LDP, Minshuto agree on passing basic maritime legislation this 
term 
9) Abe may shuffle Cabinet but after the Upper House election 
 
US relations: 
10) Comfort-women issue continues to smolder in the US 
11) Bush foreign policy rapidly changing toward pragmatic line 
 
Defense issues: 
12) Six GSDF officers being sent for PKO in Nepal in support of 
UNMIN 
13) Defense Minister Kyuma: May be delay in drafting final plan for 
reversion of six US facilities on Okinawa 
14) Transfer of US Marines to Guam: Japan's expected shared of cost 
burden may rise 
15) LDP members criticize lack of comprehensiveness in special 
measures' law extension 
16) One of the four spy satellites is out of commission 
 
17) Finance Ministry plans to ease restriction on foreign capital 
from participating in triangular mergers 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
National broadcasters group to oust Kansai TV over fabricated 
program; President stops short of defining his attitude 
 
Mainichi: Sankei: Tokyo Shimbun: 
Lawsuit over ownership of Kyoto student dormitory: Supreme Court 
overturn lower court ruling in favor of Taiwan 
 
Yomiuri: 
Human resources bank for bureaucrats: Unified control within three 
years after establishment; Prime minister orders starting of 
operation in fiscal 2011 
 
Nihon Keizai: 
Matsushita Electric Industrial Co. to adopt telework system for 
voluntary white-collar workers: Once or twice a week 
 
Akahata: 
Ruling parties submits national referendum bill for procedures for 
amending Constitution 
 
2) EDITORIALS 
 
Asahi: 
 
TOKYO 00001349  002 OF 011 
 
 
(1) "Discover? Aruaru Encyclopedia II" issue: Can Kansai TV be 
revitalized through expulsion from national broadcasters group? 
(2) Shimomura statement over wartime comfort women issue utterly 
spoils prime minister's apology 
 
Mainichi: 
(1) National referendum bill: Aim at consensus without using 
political situation 
(2) Concern about reform of public servant system being watered 
down 
 
Yomiuri: 
(1) Job placement for retired bureaucrats: Avoid reaching hasty 
conclusion on establishment of new human resources bank 
(2) Nishiyama case: Time to withdraw claim that there was no secret 
agreement with US 
 
Nihon Keizai: 
(1) Can Japan become gateway for Asia? 
(2) Sustainability of prosperity of Hong Kong to be put to test 
 
Sankei: 
(1) Regulation on golden parachute practice by bureaucrats: Take 
every measure to secure efficacy 
(2) National referendum bill: Time to clear barrier to amend 
Constitutions 
 
Tokyo Shimbun: 
(1) Secret agreement on Okinawa: Court decision on Nishiyama case is 
against what happened 
(2) Amakudari practice: Signs of government proposal for placing ban 
on practice becoming watered down already appearing 
 
Akahata: 
(1) Balancing work and family: JAL should fulfill its social 
responsibility 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 27 
 
NIHON KEIZAI (Page 2)  (Full) 
March 28, 2007 
 
07:47 
Attended a cabinet meeting. Education Minister Ibuki stayed behind. 
Followed by Land, Infrastructure and Transport Minister Fuyushiba. 
 
09:52 
Met New Komeito President Ota, Diet Affairs Committee Chairman 
Urushibara, and others. 
 
10:04 
Met Economic and Fiscal Policy Minister Ota, joined by Special 
Advisor Nemoto and others. Nemoto stayed behind. Later met Economy, 
Trade and Industry Vice Minister Yamamoto. 
 
11:02 
Issued official appointments to incoming GSDF Chief of Staff Oriki, 
ASDF Chief of Staff Tomogami, and others. 
 
11:20 
 
TOKYO 00001349  003 OF 011 
 
 
Met Chief Cabinet Secretary Shiozaki, and deputy chief cabinet 
secretaries Shimomura, Suzuki and Matoba. 
 
SIPDIS 
 
12:58 
Met Lower House member Tadamori Oshima. Followed by National Policy 
Agency Director General Uruma. 
 
13:25 
Met Cabinet Intelligence Director Mitani and Cabinet Satellite 
Information Center Head Oda. 
 
14:30 
Gave a press conference. 
 
15:12 
Met Chilean Foreign Minister Foxley. 
 
15:33 
Met Public Information Head Nita and Public Information Bureau 
Director General Katayama at party headquarters. Posed for the LDP's 
commercial film. 
 
16:32 
Met Secretary General Nakagawa. 
 
16:54 
Met Lower House member Seiichi Ota at the Kantei. Later, attended a 
meeting of the Council on Economic and Fiscal Policy. 
 
19:05 
Attended a dinner party with his wife held by Swedish King Gustaf 
and his wife at the Hotel Okura. 
 
23:24 
Returned to his official residence. 
 
4) Prime minister leaves implication he might visit Yasukuni Shrine 
 
SANKEI (Page 5) (Full) 
March 28, 2007 
 
In a press conference held yesterday following the passage of the 
budget bill for FY2007, Prime Minister Shinzo Abe said, "I would 
like to continue to have respect to those who fought for the sake of 
our country." He thus implied that he might visit Yasukuni Shrine. 
Abe added, "Since the prime minister's visit to the shrine itself 
actually becomes a diplomatic issue, I have no intention to say if I 
will visit the shrine or not." 
 
5) Abe mulls another visit to China 
 
TOKYO (Page 2) (Abridged) 
March 28, 2007 
 
Prime Minister Shinzo Abe met the press yesterday afternoon with the 
Diet having approved the budget for fiscal 2007. Chinese Prime 
Minister Wen Jiabao's visit to Japan has now been formally scheduled 
for April 11-13. In this connection, Abe clarified that he would 
consider making a second visit to China as prime minister. "In order 
to develop Japan-China relations further, it is a plus, of course, 
for the leaders of our two countries to make frequent visits to each 
other," Abe said. 
 
TOKYO 00001349  004 OF 011 
 
 
 
The Chinese side has invited Abe to visit China late this year. 
Based on the results of Wen's visit to Japan, Abe is expected to 
enter into coordination to schedule his visit to China. 
 
To a question if Abe would visit Yasukuni Shrine, he reiterated that 
he would not mention when he plans to visit the shrine or whether he 
will visit the shrine. "A (prime minister's) visit to the shrine 
will become a diplomatic issue in itself as a matter of fact, so I 
will not say whether I will pay homage at the shrine," Abe said. 
 
In addition, Abe also ruled out the possibility of shuffling his 
cabinet before this summer's election for the House of Councillors. 
Meanwhile, former Prime Minister Junichiro Koizumi, who is Abe's 
predecessor, upheld "one cabinet, one minister." With this in mind, 
Abe referred to the possibility of shuffling his cabinet in the 
future, saying: "I have not said that I would do so. I'd like to 
utilize human resources needed at each time." 
 
6) LDP, New Komeito presents a national referendum revision plan 
aiming to its enactment in current Diet session; Minshuto to oppose 
it 
 
YOMIURI (Page 2) (Excerpts) 
March 28, 2007 
 
The ruling Liberal Democratic Party and the New Komeito yesterday 
submitted to the Lower House Special Research Committee on the 
Constitution a revision to a bill outlining procedures for a 
national referendum that partially reflect the major opposition 
Minshuto's (Democratic Party of Japan) standpoints, such as setting 
the voting age at 18. The ruling block eyes Lower House approval on 
April 13 to enact it during the ongoing Diet session. Minshuto has 
begun coordination to oppose it. 
 
The ruling camp originally presented the Diet with a national 
referendum bill last May. In the revised bill, the voting age has 
been lowered from 20 to "18 in principle." A supplementary provision 
notes, however, that the clause pertaining to the voting age shall 
go into effect in three years and that until then the voting age 
shall be set at 20. The object of a national referendum is also 
identified as a topic under consideration in the additional clause. 
 
Former Justice Minister Okiharu Yasuoka of the LDP, who had taken 
the initiative in drawing up the revisions, indicated that making 
amendments to the Public Offices Election Law and relevant Civil Law 
provisions would be a prerequisite for setting the voting age at 
¶18. 
 
The Lower House Special Research Committee on the Constitution will 
hear the ruling parties' explanation on their revision plan and hold 
a question-and-answer session on March 29. The ruling camp plans to 
take a vote on the plan at the committee meeting on April 12 and at 
a plenary session on the 13th even without the Minshuto's 
concurrence. 
 
7) Diet deliberations on Key bills: Priority order has yet to be 
determined due to tight Diet session schedule; Stormy process 
likely 
 
MAINICHI (Page 5) (Full) 
March 28, 2007 
 
TOKYO 00001349  005 OF 011 
 
 
 
Following the passage of the fiscal 2007 budget, the focus of Diet 
deliberations has shifted to the fate of key bills, which Prime 
Minister Shinzo Abe wants to push through the Diet. The government 
and the ruling bloc are determined to prioritize a national 
referendum bill stipulating procedures for amending the 
Constitution, a set of education-related bills and an extension of 
the Iraq Reconstruction Assistance Special Measures Law. However, 
the order of deliberations on so many key bills has not necessarily 
been fixed due to the delay in the submission of bills related to 
reform of the public servant system. Since the last half of the Diet 
session is tight with unified local elections and the Upper House 
election coming before and after it, it could encounter 
complications, depending on the development of such issues as 
Agriculture Toshikatsu Matsuoka's utility and water expenses issue. 
 
An amendment to the national referendum bill, submitted to the Diet 
on Mar. 27, is likely to obtain Diet approval within May. However, 
the prime minister, who wants to place his distinct policy color on 
legislation, is strongly commited to passage of three 
education-related bills. The ruling camp is now looking into a way 
to enable deliberations on those bills regardless of the fixed 
deliberation schedule, by setting up a special committee, to ensure 
their passage by the end of the Diet. However, the establishment of 
a special committee will make it easier for the opposition camp to 
demand attendance of Chief Cabinet Secretary Shiozaki, which could 
affect deliberations on such bills as an amendment to the Iraq 
Reconstruction Special Measures Law, which requires participation of 
Shiozaki. Realizing passage of the bill amending the Iraqi 
Reconstruction Special Measures Law and the US Forces in Japan 
Reorganization bill during the current Diet session is equal to top 
agenda items, if the Japan-US alliance is taken into account. 
 
Many other cabinet ministers than Shiozaki have more than one key 
bill to deal with. Defense Minister Kyuma has the USFJ realignment 
special measures law and the Iraq bill and a bill amending the 
Security Council Establishment Law designed to set up a Japanese 
equivalent of the US National Security Council. 
 
A senior ruling party member in the Upper House noted, "We want to 
deal with key bills in the order of the national referendum bill, 
education-related bills and the Iraq bill." He is also agonizing 
over how to handle bills that have a strong nature of being a 
measure on the Upper House election. Regarding a bill related to 
reform of the Social Insurance Agency, legislation submitted with 
the aim of shaking government trade union bodies, which are 
supporting the Democratic Party of Japan (DPJ or Minshuto), and 
labor reform-related bills, which have strong relations with the 
prime minister's second-challenge policy, some senior ruling party 
members noted that it would be advantageous to secure Diet approval 
for those bills as well, if the upcoming Upper House election is 
taken into consideration. 
 
Though the situation is such that a possibility of extending the 
Diet session should be looked into in ordinary circumstance, with 
the summer Upper House election close at hand, the latest possible 
end of the session is June 23, as is so set now. It is, therefore, 
impossible to pass all bills through the Diet, as a senior Diet 
Policy Committee member put it. LDP Secretary General Hidenao 
Nakagawa yesterday conferred on the matter with Deputy Chief Cabinet 
Secretary Hakubun Shimomura, but they did not reach any conclusion. 
 
SIPDIS 
 
 
TOKYO 00001349  006 OF 011 
 
 
8) LDP, Minshuto agree to enact basic marine law in current Diet 
session 
 
YOMIURI (Page 2) (Full) 
March 28, 2007 
 
The Diet Affairs Committee chairmen of the ruling Liberal Democratic 
Party and the opposition Minshuto (Democratic Party of Japan) 
reached an agreement yesterday to enact a basic maritime law in the 
ongoing Diet session in collaboration with the New Komeito. They 
plan to submit a bill to the Lower House Committee on Land, 
Infrastructure and Transport in early April in the name of the 
chairman that does not require committee deliberations. 
 
The bill is chiefly intended to establish prime minister-headed 
marine policy headquarters in the Cabinet Secretariat to allow a 
team of specialists led by a marine policy minister to plan and 
coordinate cross-agency policies. Based on Japan's bitter lessons 
from its slow responses to disputes with neighboring countries over 
marine interests, such as China's development of gas fields in the 
East China Sea, the parties eye a system to exclusively implement 
marine policies. 
 
In order to secure safety in developing gas fields in Japan's 
exclusive economic zone, the parties also have decided to submit a 
bill on safe waters for marine buildings and structures, drawn up by 
the ruling camp, to aim at its enactment at the same time. 
 
9) Prime Minister Abe implies a possible cabinet shuffle after Upper 
House elections 
 
MAINICHI (Page 2) (Full) 
March 28, 2007 
 
Takashi Tanigawa 
 
Prime Minister Shinzo Abe yesterday afternoon held a press 
conference at the Prime Minister's Official Residence (Kantei), 
following the passage of the fiscal 2007 budget bill in the Diet on 
the previous day. When asked about the possibility of shuffling his 
cabinet before the Upper House elections in summer, an idea now 
being floated by some of the ruling Liberal Democratic Party (LDP) 
in a bid to deal with the falling cabinet support ratings, Abe 
denied it: "I have no intention to do that at present." But he 
implied a cabinet shuffle might take place after the Upper House 
elections, noting: "I have never mentioned such a thing as (one 
cabinet with one cabinet lineup). I'd like to make good use of human 
resources who meet the needs of the day." 
 
In response to questions asking about the target seats of the LDP in 
the Upper House elections and how to take responsibility if the 
ruling parties fail to win a majority of seats, Abe avoided 
answering and said, "It's too early to refer to such things," and 
added: "By implementing policies steadily and accumulating results, 
I will create an environment for us to win in the Upper House 
elections." 
 
Referring to Chinese Premier Wen Jiabao's upcoming visit to Japan on 
April 11-13, Abe stressed: "Since my visit to China (in last 
October), both countries have worked in close cooperation to resolve 
the abduction issue as well. I hope to move this relationship one 
step forward in order to build strategic, reciprocal relations." On 
 
TOKYO 00001349  007 OF 011 
 
 
the question of Japan's bid for a permanent seat on the United 
Nations Security Council, Abe indicated his intention to seek 
cooperation from Wen during talks with him, noting: "I'll make 
efforts to obtain his backing." When asked whether he will visit 
China within this year, Abe said: "I'd like to consider it while 
examining my political calendar." 
 
10) Smoldering criticism of Japan in US over comfort-women issue 
smoldering, with some pointing to difference in Japan's enthusiasm 
about resolving abduction issue; Issue linked to human rights 
 
NIHON KEIZAI (Page 2) (Full) 
March 28, 2007 
 
Hiroshi Maruya, Washington 
 
Criticism in the United States of the Japanese government's handling 
of the so-called wartime comfort-women issue that involved the 
former Japanese Imperial Army continues to smolder. Although the 
Department of State lauded Prime Minister Shinzo Abe for his apology 
(to comfort women), a spokesman at the same time urged Tokyo to 
respond to the issue in a way to "give consideration to promoting 
good relations with neighboring countries," and asked Japan to 
minimize frictions with South Korea and other countries. Since 
American politicians tend to attach importance to human-rights 
issues, many see the comfort women and the abduction issues in the 
same context as violations of human rights. There is no sign that 
the criticism of Japan will fade away. 
 
The US House of Representatives is debating a resolution calling on 
the Japanese government to apologize for the comfort-women issue. 
Because the House decided not to take a vote on the resolution 
before Abe's planned visit to the US in late April, the resolution 
appeared to be losing steam. 
 
However, the Washington Post in an editorial on March 24 wrote: "If 
Mr. Abe seeks international support in learning the fate of Japan's 
kidnapped citizens, he should straightforwardly accept 
responsibility for Japan's own crimes -- and apologize to the 
victims he has slandered." 
 
On March 26, Abe rebutted: "The abduction issue is an ongoing 
violation of human rights." But one State Department official cited 
the need to resolve the issue in a "direct and responsible manner." 
With the number of the co-sponsors of the House resolution having 
increased to 50 at present, the US Congress could toughen its 
position in the wake of the daily's criticism and Abe's most recent 
remarks. 
 
The strong concern shared among Japan experts and others 
knowledgeable about Japan-US relations is that Republicans and 
Democrats are equally sensitive to human-rights issues. The State 
Department's response asking Tokyo to consider relations with 
neighbor countries signifies the possibility that such a concern is 
being translated into reality. The Japanese government is now under 
pressure to steer a difficult course to resolve this situation. 
 
11) Bush foreign policy has changed from hard-line stance to 
pragmatic line with compromise toward North Korea and direct 
dialogue with Iran 
 
SANKEI (Page 6) (Excerpt) 
 
TOKYO 00001349  008 OF 011 
 
 
March 28, 2007 
 
The Bush Administration in the United States has made a decision to 
essentially remove all financial sanctions on North Korea. There is 
rising concern in Japan, which has given priority to coordinating 
sanctions against North Korea with the United States. Although the 
US government stresses that "there is no wavering in our policy 
line," the move to achieve visible foreign-policy results has 
accelerated not only in North Korea policy but also in the US' 
Middle East policy. Senior officials in the Bush administration who 
had sustained the hard-line policy, such as in launching the Iraq 
war, have resigned one after the other, and there has been a shift 
toward a "pragmatic diplomacy," under Secretary of State Rice and 
others. 
 
12) Cabinet decision made to dispatch GSDF officials to Nepal 
 
SANKEI (Page 5) (Full) 
March 28, 2007 
 
In a cabinet meeting yesterday, the government adopted an action 
plan to dispatch military monitoring personnel to the United Nations 
Mission in Nepal (UNMIN), based on the UN Peacekeeping Operation 
(PKO) Cooperation Law. Six unarmed Ground Self-Defense Force (GSDF) 
officials will monitor over the year the process of disarmament by 
the Nepalese National Army and the Nepal Communist Party Maoists' 
group, a former anti-government organization. The officials will 
leave Japan on March 30 and stay in Nepal until the end of March of 
next year. This will be the first overseas dispatch since SDF 
troops' overseas activities were designated as a main mission. 
 
13) Kyuma: Drafting of plans to return six US military facilities in 
Okinawa to Japan delayed 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 28, 2007 
 
The US military is supposed to draw up specific plans before the end 
of this month to return to Japan its six military facilities south 
of Kadena Air Base, including Futenma Air Station, as part of the 
realignment of US forces in Okinawa. Defense Minister Fumio Kyuma 
indicated before the Lower House Committee on Security yesterday 
that the production of plans would slip to April or later, saying: 
"The plan is being delayed. The United States says that it needs 
more time." 
 
14) Budget for relocating US Marines to Guam not yet secured; 
Possibility of increased burden on Japan 
 
AKAHATA (Page 2) (Excerpt) 
March 28, 2007 
 
In spite of the expected rise in annual expenditures for the US 
Marines accompanying the relocation from Okinawa to Guam of 8000 
troops and their 9,000 family members, the US Marine Corps Command 
has not taken the budgetary steps needed for the move, it was 
learned from a US government report. It is likely that this will 
result in an expected request to Japan to increase its share of the 
burden, and it could have a great impact on the timetable for 
relocation the Marines to Guam that is expected to be complete in 
¶2014. 
 
 
TOKYO 00001349  009 OF 011 
 
 
The report, "Plan for Annual Outlays and Increases in Force 
Structural Changes in the US Pacific Forces" and was released by 
Department of Defense inspectors on March 12 but deleted from the 
Pentagon's home page several days later. According to the report, in 
the relocation of US Marines to Guam "it is estimated that there 
will be a annual budget increases to $464.79 million (approximately 
54.85 billion yen, with $1 = 118 yen). In spite of that, it was 
pointed out, "The necessary budgetary plan has not yet been 
submitted." Moreover, the report stated: "At this rate, there will 
be an impact on the living standard of the Marines and their 
families living in Guam, as well as on the readiness of the units." 
 
15) LDP execs critical of extending Iraq law; "US, UK owned up to 
mistake" 
 
TOKYO (Page 2) (Full) 
March 28, 2007 
 
The ruling Liberal Democratic Party yesterday approved a draft bill 
revising the Iraq Special Measures Law to extend the Self-Defense 
Forces' current mission in Iraq for two years. The New Komeito also 
approved the bill yesterday. The two ruling parties have now gone 
through their internal procedures to present the bill to the Diet. 
The LDP held a meeting of its executive board yesterday to approve 
the bill. In the meeting, however, there were critical views from 
among the LDP's executive board members about extending the SDF's 
Iraq deployment without summing up the Iraq war. There are also 
concerns within the LDP about negative repercussions on this 
summer's election for the House of Councillors. 
 
In the LDP executive board meeting, former LDP Secretary General 
Koichi Kato, who is negative about the Iraq war, noted: "The Bush 
administration made a serious misjudgment. Ambassador to the United 
Nations Bolton (who led the Iraq war) was not retained, and he was 
dismissed. But (in Japan), no one took responsibility." 
 
Former Home Affairs Minister Takeshi Noda also raised an objection, 
saying: "Both US President Bush and British Prime Minister Blair 
said it was a mistake, but Japan alone is saying it was not a 
mistake. I feel it's strange." 
 
Both Kato and Noda did not oppose extending the SDF's Iraq mission. 
In the meeting, Yuya Niwa, chair of the LDP's executive board, said 
he would convey their views to the government. With this, Niwa 
obtained their consent to the bill. 
 
However, their remarks mirror dissatisfaction smoldering within the 
LDP about extending the SDF's Iraq deployment without clarifying 
responsibility for Japan's support for the Iraq war. 
 
The LDP held a meeting of its national defense division on March 20. 
In that meeting as well, one noted the government's lack of 
accountability, saying: "The Iraq issue is a matter of high concern 
to the public. Why two years? It's hard to explain it (to the 
people)." 
 
16) Spy satellite in trouble 
 
TOKYO (Page 2) (Full) 
March 28, 2007 
 
Japan's first intelligence-gathering satellite, which was orbited in 
 
TOKYO 00001349  010 OF 011 
 
 
March 2003, has not been operational since March 25 due to internal 
trouble, the Cabinet Satellite Intelligence Center announced 
yesterday. The satellite's power system seems to be malfunctioning 
due to aging degradation. The government is now hurrying to recover 
the troubled system, but it cannot predict when the satellite will 
become operational again, according to the CSIC. 
 
In February this year, Japan launched a second radar satellite to 
complete a full lineup of four intelligence-gathering 
satellites-consisting of two radar satellites and two optical 
satellites- ready to photograph anywhere on the globe once or more 
often around the clock. However, Japan's four-satellite readiness is 
now already in trouble. 
 
The second radar satellite was initially expected to go operational 
this summer. However, the CSIC is now thinking of frontloading its 
full-fledged operation earlier than scheduled. 
 
According to the CSIC, the first radar satellite remains unable to 
photograph even after it is commanded from its ground station. Its 
designed life is five years. However, the troubled satellite is now 
highly likely to discontinue its operation without working for five 
years. Its manufacturing cost was approximately 42 billion yen. 
 
"The satellite was trouble free for four years," a CSIC official 
said. "It's likely that a satellite goes wrong one year before its 
designed life ends," the official added. The government plans to 
lift off a third radar satellite in fiscal 2011, so Japan will be 
again with three satellites until then if the troubled satellite is 
not back to normal. 
 
17) Finance Ministry to approve tax deferral for "preparatory 
companies" of foreign company planning triangular merger 
 
NIHON KEIZAI (Page 1) (Excerpts) 
March 28, 2007 
 
Prior to the removal in May of a ban on triangular mergers, in which 
a foreign company acquires a Japanese company with its own shares, 
the Finance Ministry has decided to approve tax deferral for a 
"preparatory company" set up in Japan by the foreign company and 
engaged in advertisement and other activities. By making this 
measure applicable to preparatory companies and not for paper 
companies, the ministry will pave the way for foreign companies with 
no production line or sales network in Japan to be able to acquire 
Japanese firms through triangular merger deals. 
 
The Finance Ministry will announce related ministry ordinances in 
mid-April. Prior to the planned removal of the ban on triangular 
mergers, the government pushed ahead with systemic arrangements, 
such as the expansion of the requirement on foreign companies to 
disclose information for the sake of protecting shareholders. With 
the approval of tax deferral, the systemic arrangements have been 
completed. 
 
Under the triangular merger formula, a foreign company mergers with 
a Japanese company via its Japanese subsidiary through stock swaps. 
The shareholders of the acquired company receive not cash but the 
parent company's shares in exchange for their shares. In this case, 
if tax deferral is not allowed, the shareholders of the acquired 
company have to prepare cash to pay taxes. 
 
 
TOKYO 00001349  011 OF 011 
 
 
In this light, foreign companies considering merger plans in Japan 
have insisted that unless tax deferral is approved, triangular 
mergers will be impossible in effect. 
 
In merger cases between Japanese companies, tax deferral is allowed 
if the listed conditions are met, such as that they have some 
business relation. 
 
SCHIEFFER