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UNCLAS SECTION 01 OF 07 TOKYO 001489 
 
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 04/05/07-2 
 
 
11) Government to establish food panel to plan long-range 
agricultural policy 
 
12) Survey shows 95% of Japan's direct foreign investments over 10 
billion yen are mergers and acquisitions 
 
13) Science and technology report: Japan is world leader in physics 
 
 
Political agenda: 
14) New Komeito protests educational ministry's expunging 
high-school textbooks to remove military factor from Okinawa's 
end-of-war mass suicides 
15) Minshuto readies 10 bills to counter-submit to Diet against 
ruling camp's key legislation 
16) LDP foot-dragging in closing loopholes in political funds law by 
adding new restrictions 
17) Okinawa, Fukushima by-elections to be announced today, with 
ruling, opposition camps, eyeing Upper House election, going into 
overdrive to win 
18) Tanigaki faction teams with new YKK political group to form 
anti-Abe force in the LDP 
19) LDP is now effectively split into two competing power-seeking 
groups 
 
Articles: 
 
11) Government to establish a food council to discuss long-term 
agricultural policy 
 
YOMIURI (Page 11) (Full) 
April 5, 2007 
 
The government's Headquarters on the Promotion of Policies for Food, 
Agriculture and Rural Areas (headed by Prime Minister Abe) yesterday 
adopted "the 21st century's new agricultural policy 2007 (NAP 
2007)," the main elements of which include establishing a "national 
food council (tentative name)" to discuss agricultural policy from a 
long-term perspective due to changes in the food situation, 
including global warming. 
 
The new council will consist mainly of experts. The government has 
set the goal of raising Japan's food self-sufficiency ratio to 45% 
by fiscal 2015, and in addition to that, the government will discuss 
such items as a long-term goal of the food self-sufficiency ratio, 
(according to the new agricultural policy 2007). Another item for 
discussion is how to prepare a food stockpile system in preparation 
for the disruption of transportation due to disputes. 
 
Moreover, the NAP2007 includes a plan to combine 70% or so of the 
scattered farm acreage (3,150,000-3,600,000 hectares) operated by 
certain level of farmers in 2015. In order to boost the safe 
management system for agricultural products, the NAP2007 comes up 
with a plan to introduce a good agriculture practice (GAP) so that 
fertilizer and agricultural chemicals will be used in line with 
standards in 2,000 major growing districts across the country. 
 
12) Over 95% of FDI of more than 10 billion yen aimed at M&A last 
year 
 
NIHON KEIZAI (Page 5) (Full) 
April 5, 2007 
 
TOKYO 00001489  002 OF 007 
 
 
 
According to the Bank of Japan (BOJ), in 2006, over 95% of 
large-scale foreign direct investment (FDI) cases of more than 10 
billion yen each were for the purpose of mergers and acquisitions 
(M&A). The ratio of FDIs aimed at establishing a new company or 
plants -- green-field investments -- to total cases dropped off. 
Behind this trend seems to be active moves by foreign investment 
funds to merge with or otherwise acquire Japanese firms. 
 
The total value of FDI in 2006 was 5.2661 trillion yen. The BOJ 
conducted a survey of large-scale FDI cases worth more than 10 
billion yen each (68.2% of the total) to assess their purposes. 
 
The purposes were classified into three types: (1) M&A types aimed 
at equity participation in Japanese firms; (2) green-field type 
aimed at acquiring fixed assets, such as establishing a new company 
or plants; and (3) fiscal-improvement type aimed at discharging 
debts held by the investment destination. 
 
The survey found that the ratio of M&A-type cases to the total had 
increased nearly 20 percentage points since two years ago to 95.9%. 
Green-field type investments were  only 0.5% of the total. The ratio 
of fiscal improvement-type cases was over 20% two years ago, but the 
figure decreased to 1.9% in 2006. 
 
13) Japan leads world in physics, according to Education and Science 
Ministry's report 
 
YOMIURI (Page 2) (Full) 
April 5, 2007 
 
There are many cases in scientific theses by Japanese researchers 
take the world's lead in such fields as physics and material 
science, but when it comes to the engineering and environment areas, 
Japanese researchers' papers are somewhat inconspicuous. The Science 
and Technology Policy Research Institute of the Education, Culture, 
Sports, Science and Technology made the above evaluation in its 
report released yesterday. 
 
Using the database possessed by an American research company, the 
research institute analyzed about 10,000 important theses that were 
quoted many times among those issued from the 1999 - 2004 period. 
The institute found that of the 10,000 papers, Japanese researchers' 
theses accounted for 9% and ranked 4th, following the United States 
(61% ), Germany (13% ), and Britain (12% ). France (7% ) and China 
(3% ) were fifth and sixth, respectively. 
 
By sector, Japan held more than 9% in the areas of physics, 
chemistry, material science, zoology, and botany. In specific 
superconductivity, in particular, papers from Japan made up about 
60%. In the interdisciplinary field, such as elucidation of the 
functions of biologic molecule and developing of new materials, as 
well, Japan's shares were at a high level. 
 
14) New Komeito Okinawa chapter to protest to education minister 
over textbook screening to change "mass suicide" description 
 
ASAHI (Page 4) (Full) 
April 5, 2007 
 
The New Komeito Okinawa chapter will present a letter of protest to 
Education, Science and Technology Minister Bunmei Ibuki over the 
 
TOKYO 00001489  003 OF 007 
 
 
ministry 's opinion reached in the process of screening textbooks 
for fiscal 2006 that publishers should revise descriptions on the 
Imperial Japanese Army's involvement in the mass suicide during the 
Battle of Okinawa. It is rare for a branch of the New Komeito, a 
ruling party, to present a cabinet minister with a letter of 
protest. Criticism is also strong in Soka Gakkai, a lay Buddhist 
organization serving as the party's largest support base. The 
decision also reflects the party's concern about the April 22 Upper 
House Okinawa by-election that will be officially announced today. 
 
According to a source familiar with the party, Okinawa chapter 
representatives and others are scheduled to meet Ibuki shortly. A 
senior New Komeito lawmaker said: "Okinawa voters are angry. Unless 
we demonstrate that we have protested to the education minister, we 
won't be able to fight in the election." 
 
15) Minshuto to submit 10 counterproposals to ruling bloc-presented 
important bills, envisioning joint efforts with other opposition 
parties 
 
NIHON KEIZAI (Page 2) (Abridged) 
April 5, 2007 
 
The major opposition party Minshuto (Democratic Party of Japan) is 
eager to present counterproposals to the important bills presented 
by the ruling coalition in the second half of the ongoing Diet 
session. The party intends to submit 10 bills, including one to 
establish a revenue agency to counter the ruling coalition's bill to 
reform the Social Insurance Agency. Reversing its past 
counterproposal strategy of reflecting its standpoints in bills 
presented by the government and the ruling coalition through 
revision talks with them, Minshuto intends to present bills that 
clearly reflect the party's originality. In a bid to make a clear 
distinction with the Abe administration with a view to joining 
efforts with other opposition parties in the Upper House election in 
July, the largest opposition party will go on the offensive on the 
policy front. 
 
Of all Minshuto counterproposals, only the one outlining procedures 
for a national referendum for constitutional revision implies the 
party's willingness to have revision talks with the ruling bloc. 
Starting with a bill to abolish the Iraq Reconstruction Support 
Special Measures Law, all other Minshuto counterproposals conflict 
with bills presented by the government and the ruling parties. 
 
The party intends to keep its adversarial stand even if it does not 
present counterproposals. The party decided yesterday to oppose the 
US force realignment special measures bill. Only a few bills, 
including the one to establish a basic maritime law, will require 
joint efforts with the ruling bloc. 
 
The party intends to draft a plan amending its own national 
referendum bill based on its past talks with the ruling coalition. 
Given the party's unwillingness to dilute its originality, the 
ruling bloc, which aims at Lower House approval on April 13, is 
likely to find it difficult to elicit a concession from Minshuto on 
the national referendum legislation. 
 
16) Scope column: Stalled talks in ruling camp on reform of status 
of office expenses, with LDP insisting "Attaching receipts will only 
make the process complicated" and New Komeito asserting "Why don't 
they envision the possibility of an uphill battle in elections" 
 
TOKYO 00001489  004 OF 007 
 
 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
April 5, 2007 
 
Ryuji Watanabe 
 
In order to deal with the problem of huge office expenses posted in 
political fund reports formed by cabinet members and senior members 
of the ruling and opposition parties, the ruling bloc established a 
political fund reform project team (PT) aimed at reviewing the items 
now categorized as the office expenses. But discussions in the PT 
have been stalled, primarily because of the deep-rooted cautious 
view in the ruling Liberal Democratic Party (LDP) of obligating 
lawmakers to attach receipts to their political fund reports, an 
idea floated in connection with revisions to the Political Fund 
Control Law. The junior ruling coalition partner New Komeito, which 
does not want to delay the process of revising the law, is growing 
irritable at the delay. 
 
"The LDP remains slow to act. The ball is now in the LDP's court, 
but the party appears unwilling to throw it back to our court," a 
certain senior New Komeito member spewed frustration after the first 
PT meeting on March 27. 
 
Following the revelation of the office-expense scandals involving 
Education Minister Bunmei Ibuki and Agriculture Minister Toshiaki 
Matsuoka, the LDP and the New Komeito began discussing measures 
separately to deal with the office-expense problem.  Based on the 
results of their respective discussions, the ruling parties were 
supposed to form a bill revising the Political Fun Control Law at a 
PT meeting. 
 
In the first PT meeting, the New Komeito outlined its own revision 
bill and insisted: "The law must be amended during the current Diet 
session." 
 
In contrast, the LDP reported only on how internal discussions were 
going on, saying, "We've not drawn together various opinions." The 
first PT meeting ended without dealing with specific items. No 
timetable for the second PT meeting has been set yet now. This may 
be partly because unified local elections started. 
 
Why is the LDP slow to act? One reason is that many in the party are 
cautious about revising the law, noting, "Revisions will obstruct 
the freedom of political activities." If the executives try to push 
hard revisions against objections in the party, the party will be 
thrown into confusion. An idea of obligating lawmakers to attach 
receipts if the cost of one item exceeds 50,000 yen is particularly 
meeting with objections from many lawmakers. A veteran Upper House 
member grumbled: "It will only make our administrative work 
complicated." 
 
On the other hand, the New Komeito is becoming increasingly alarmed 
by this situation in the LDP, with one senior member saying: "If we 
fail to take action now, we will suffer a uphill battle in 
elections. Why can't they understand this?" The large opposition 
party Democratic Party of Japan (Minshuto) has already introduced 
its own bill revising the law in the Diet. If the New Komeito falls 
in step with the LDP, it will be obvious that it will come under 
fire from the Minshuto in the upcoming Upper House elections. 
 
"The law must be revised," New Komeito Representative Akihiro Ota 
 
TOKYO 00001489  005 OF 007 
 
 
told Prime Minister Shinzo Abe when he met with Abe at Kantei on 
March 23, and urged Abe to demonstrate his leadership. 
 
17) Proclamation of Okinawa and Fukushima by-elections today: 
Ruling, opposition parties ready to fight with concerted efforts, 
with eye on Upper House election 
 
YOMIURI (Page 3) (Excerpts) 
April 5, 2007 
 
The ruling and opposition parties are ready to fight with concerted 
efforts in the Okinawa and Fukushima by-elections, positioning them 
as a skirmish for the House of Councillors election this summer. In 
the Upper House election, 121 seats (73 seats in constituencies, 48 
proportional representation seats) are up for reelection. It order 
for the ruling camp, which holds 57 seats that do not come up for 
election, to hold a majority, it needs to win 65 seats. Since 
opposition members were holding the two seats in Okinawa and 
Fukushima, if the ruling camp wins a victory in the two prefectures, 
the required number of seats will be reduced to 63. 
 
Liberal Democratic Party Secretary General Nakagawa said in a 
gathering with various groups in Iwaki City, Fukushima Prefecture: 
"The by-election is a crucial battle. It will be an election to 
select Prime Minister Abe or Minshuto (Democratic Party of Japan) 
President Ozawa." 
 
The LDP have stationed several party staff members in both electoral 
districts since early March. On the day of announcement today, 
Nakagawa, New Komeito Secretary General Kitagawa will go to Okinawa, 
while LDP Upper House Secretary General Katayama and New Komeito 
Deputy Head Yoshihisa Inoue will visit Fukushima for election 
campaigning. Prime Minister Abe and New Komeito President Ota are 
also scheduled to visit Okinawa and Fukushima. 
 
Meanwhile, Minshuto Acting President Kan said in a press conference 
yesterday: "In order to realize the reversal of the positions of 
ruling and opposition parties in the Upper House election, the 
outcome of the Okinawa and Fukushima by-elections will become 
crucial." Keeping in mind its lowest position among all prefectures 
in terms of income per capita, Minshuto intends to reiterate the 
need to rectify the existing social disparities in Okinawa. Today, 
Ozawa and Kan will visit Okinawa, while Secretary General Hatoyama 
will visit Fukushima. 
 
18) LDP's Tanigaki faction hopes to form encircling net of Abe in 
cooperation with new YKK trio 
 
SANKEI (Page 5) (Excerpts) 
April 5, 2007 
 
A faction headed by former Finance Minister Sadakazu Tanigaki, who 
ran in the last presidential election in the ruling Liberal 
Democratic Party (LDP), is now gradually taking an anti-Abe stand. 
In a meeting on the night of April 3 with former LDP Vice President 
Taku Yamasaki, Tanigaki severely criticized the stances of Prime 
Minister Shinzo Abe, who has pushed forward with his policy line of 
"emerging from Japan's postwar regime." Tanigaki hopes to build an 
encircling net around Abe in cooperation with Yamasaki, Koichi Kato, 
and Makoto Koga, who have now formed the new YKK trio. 
 
Attending the meeting on April 3 were five Tanigaki faction members, 
 
TOKYO 00001489  006 OF 007 
 
 
including Tanigaki, former welfare minister Jiro Kawasaki, and 
former defense chief Gen Nakatani; and four Yamasaki faction 
members, including Yamasaki, former home affairs minister Takeshi 
Noda, and former justice minister Okiharu Yasuoka. All the more 
because the participants were members who had cooperated in the 
so-called "Kato rebellion" in 2000 in which Kato called on then 
Prime Minister Mori to step down, the gathering warmed up and 
Tanigaki was unusually talkative. 
 
Tanigaki: "The present government is leaning too far to the right. 
The LDP needs a broader wing that allows inclusion of various 
views." 
 
Yamasaki: "In order also not to be defeated in the Upper House 
election, we should build an anti-Abe force." 
 
The participants also referred to the notion of creating a grand 
Kochi-kai composed of three factions affiliated with the former 
Miyazawa faction (Kochi-kai). Kawasaki proposed an idea of a merger 
of the Tanigaki and Koga factions before the July Upper House 
election. Yamasaki was quoted as saying, "We want you to make 
efforts to pave the way for it." 
 
Last November, Foreign Minister Taro Aso proposed to Tanigaki a plan 
to merge the Tanigaki and Aso factions. He at one point agreed to 
Aso's plan, but since he later revealed he had had a secret meeting 
with Aso, his relationship with Aso quickly deteriorated. Since then 
Tanigaki has improved ties with Kato and has taken a stronger 
anti-Abe stance, criticizing the prime minister's policy line of 
always following the United States' policy lead. 
 
In the meeting, an agreement was reached that the Tanigaki and 
Yamasaki factions would aim to cooperate with factions, including 
the one headed by Yuji Tsushima, which are unhappy with the Abe 
administration. 
 
19) Split in LDP evident: Tanigaki, Yamasaki factions concerned 
about administration's tilt toward right, junior lawmakers back 
diplomatic efforts 
 
YOMIURI (Page 4) (Excerpts) 
April 5, 2007 
 
In the Liberal Democratic Party, an "anti-Abe group" who are keeping 
their distance from Prime Minister Shinzo Abe and a "pro-Abe group" 
eager to support the prime minister are making active moves in 
foreign policy and other affairs. Speculation is afoot that the 
split in the party will grow wider after the Upper House election 
this summer. 
 
Tanigaki faction leaders, such as former Finance Minister Sadakazu 
Tanigaki and former Health, Labor and Welfare Minister Jiro 
Kawasaki, and Yamasaki faction executives, such as former LDP vice 
president Taku Yamasaki and former Justice Minister Okiharu Yasuoka, 
held a meeting at a Tokyo restaurant on the night of April 3. The 
Tanigaki faction urged the members to be ready to join hands with 
other factions in anticipation of a volatile political situation 
after the Upper House election. 
 
Tanigaki also expressed concern about the future course of the 
Abe-led LDP, saying: "The LDP used to be a political party that 
absorbed diverse views, but it is now leaning toward the right." 
 
TOKYO 00001489  007 OF 007 
 
 
Yamasaki followed suit, saying: "In the past, I was called a hawk. 
But now I am labeled a liberal despite the fact that my views have 
not changed. That's because the current administration has shifted 
toward the right." 
 
Yamasaki, former Secretary General Koichi Kato, and others have 
launched a group named the Asia Policy and Security Vision Study 
Group. Yamasaki has also repeatedly held "new YKK" meetings with 
Kato and Niwa-Koga faction chairman Makoto Koga. "We want to combine 
non-Abe forces comparable to the Machimura faction (89 members)," a 
senior Yamasaki faction member noted. But in reality, being a 
mainstream faction that has produced four cabinet ministers, the 
Niwa-Koga faction finds it difficult to make a hostile move toward 
the prime minister. 
 
Meanwhile, mid-level and junior members supporting Abe are set to 
launch what is called the Group of Lawmakers to Promote 
Value-Oriented Diplomacy once the Golden Week holiday period in 
early May is over. Former Senior Vice METI Minister Keiji Furuya, 
who has actively addressed the abduction issue with the prime 
minister, and Policy Research Council Chairman Shoichi Nakagawa are 
expected to become the group's chairman and advisor, respectively. 
 
SCHIEFFER