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Viewing cable 06TOKYO3717, JAPANESE MORNING PRESS HIGHLIGHTS 07/05/06

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Reference ID Created Released Classification Origin
06TOKYO3717 2006-07-05 01:38 2011-08-25 00:00 UNCLASSIFIED Embassy Tokyo
VZCZCXRO8664
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3717/01 1860138
ZNR UUUUU ZZH
P 050138Z JUL 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3953
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//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 9637
RUEHFK/AMCONSUL FUKUOKA 7025
RUEHOK/AMCONSUL OSAKA KOBE 0313
RUEHNAG/AMCONSUL NAGOYA 6919
RUEHKSO/AMCONSUL SAPPORO 8181
RUEHBJ/AMEMBASSY BEIJING 3098
RUEHUL/AMEMBASSY SEOUL 9243
RUCNDT/USMISSION USUN NEW YORK 0992
UNCLAS SECTION 01 OF 11 TOKYO 003717 
 
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 07/05/06 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Opinion polls: 
4) 65% of Japanese public see North Korea as threat to Japan's peace 
and security, 75% appreciate US-Japan security pact 
5) Fuji-Sankei poll shows CCS Abe leads Fukuda in post-Koizumi race 
 
 
DPJ's Ozawa in Beijing: 
6) Chinese President Hu avoids touching on Yasukuni issue in meeting 
with DPJ President Ozawa 
7) Ozawa advocates Japan-US-China 'equilateral triangle' relations 
 
8) Gist of Ozawa-Hu talks 
9) China ready to improve relations in earnest 
10) Ozawa meets with ex-Foreign Minister, State Councillor Tang 
Jiaxuan 
 
China, DPRK issues: 
11) CCS Abe urges China to correct anti-Japanese education, implies 
pressure on North Korea 
12) Prime Minister Koizumi upset at China's setting of guidelines 
for Yasukuni Shrine visits 
 
Political, economic, foreign topics: 
13) Prime Minister Koizumi tells President Bush why he will leave 
office this year 
14) Prime Minister Koizumi praises CCS Abe 
15) GOJ to apologize to Dominican Republic emigrants 
16) Many challenges left behind for GOJ spending plan 
17) Tokyo Gov. Ishihara likens Beijing Olympics to Hitler's 
18) BOJ likely to end zero-interest policy shortly 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Government to issue prime minister's statement expressing apology to 
emigrants for hardships in Dominica 
 
Mainichi: 
Among contracts Japan Racing Association conclude with 12 family 
firms in which retired officials land lucrative jobs, 94% are found 
private ones 
 
Yomiuri & Tokyo Shimbun: 
Yagi gets life for killing girl; Judge: He should atone for his 
crimes for rest of his life, calling for careful examination when 
authorities consider whether he should be released on parole 
 
Nihon Keizai: 
BOJ rules to be reviewed to totally ban on share transactions by 
executives 
 
Sankei: 
Education and Science Ministry to give priority to assistance for 
research activities by doubling subsidy 
 
TOKYO 00003717  002 OF 011 
 
 
 
2) EDITORIALS 
 
Asahi: 
(1) Minshuto head Ozawa expected to show persuasive policy toward 
China 
(2) In case of killing girl in Hiroshima, were deliberations 
conducted thoroughly? 
 
Mainichi: 
(1) Economic and Fiscal Policy Guideline for 2006: A host of tasks 
likely to be left to Koizumi successor 
(2) Ruling on girl-killing case: We must squarely look at mean 
incident 
 
Yomiuri: 
(1) Improvement in quality should come after cuts in number of 
public servants 
(2) In meeting with Minshuto Ozawa, Chinese President avoids 
Yasukuni issue 
 
Nihon Keizai: 
(1) Fiscal reform plans must be implemented 
 
Sankei: 
(1) Ozawa-Hu meeting: Japan welcomes dialogue, but ... 
(2) In girl-killing case, avoidance of death penalty unreasonable 
 
Tokyo Shimbun: 
(1) Public service reform law: private firms must be aware of need 
to maintain quality, be responsible for the public 
(2) Trials of Pol Pot faction leaders must shed light on massacre 
madness 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 3 
 
NIHON KEIZAI (Page 2)  (Full) 
July 4, 2006 
 
10:15 
Made a return home report at the Imperial Palace. 
 
10:31 
Handed a certificate of recommendation to a candidate-to-be for the 
Kagawa gubernatorial election at LDP headquarters, joined by LDP 
General Council Chairman Kyuma. 
 
11:05 
Attended an award ceremony for those who performed meritorious 
safety services at Kantei. Afterwards, met MOFA's Consular Affairs 
Bureau Director General Tanizaki and others. Later, met Financial 
Affairs Minister Yosano and others. Then met with Finance Minister 
Tanigaki and others. 
 
11:50 
Met with Chief Cabinet Secretary Abe. 
 
13:28 
Met with LDP Policy Affairs Research Council Chairman Nakagawa, its 
Deputy Chairman Amari and others. 
 
TOKYO 00003717  003 OF 011 
 
 
 
14:23 
Met with Dominican President Fernandez and others. 
 
15:00 
Met with Kyodo News Service's Senior Director Yasutaka Takeda, its 
Editorial Bureau Director Kenji Goto and others. 
 
16:00 
Met with Rengo (Japan Trade Union Confederation) Chairman Tsuyoshi 
Takagi and others, joined by Health Minister Kawasaki, Deputy Chief 
Cabinet Secretary Nagase, Chief Cabinet Secretary Abe and others. 
 
16:35 
Met with Urban Revitalization Headquarters' Secretariat Chief Sawai, 
Assistant Officer Makino and others. 
 
17:03 
Attended a meeting of the Council on Economic and Fiscal Policy. 
 
18:16 
Met with Minister for Administrative Reform Chuma. 
 
19:02 
Dined at a Hotel Okura restaurant with former Defense Agency 
Directors-General Taku Yamasaki, and Shigeru Ishiba, and JDA 
Director-General Fukushiro Nukaga and others. 
 
21:30 
Arrived at his official residence. 
 
Prime Minister's schedule, July 4 
 
NIHON KEIZAI (Page 2)  (Full) 
July 5, 2006 
 
09:31 
Attended a staff meeting at LDP headquarters. 
 
10:02 
Attended a cabinet meeting at Kantei, and later, attended a meeting 
of the Urban Revitalization Headquarters. 
 
10:39 
Made a report to the Emperor in private. 
 
11:45 
Met with incoming and outgoing Public Prosecutors-General Tadashigi 
and Matsuo. 
 
13:45 
Met with Chief Cabinet Secretary Abe. 
 
14:50 
Met Deputy Foreign Minister Nishida. Afterwards, met with Deputy 
Foreign Minister Yabunaka. 
 
15:30 
Met with Foreign Minister Aso and MOFA's Foreign Policy Bureau 
Director General Kono. Later, met with Securities Dealers 
Association of Japan Chairman Koshida. Afterwards, met with Vice 
Finance Minister Hosokawa and Budget Bureau Director General Fujii. 
 
TOKYO 00003717  004 OF 011 
 
 
 
16:42 
Attended a tea ceremony at the Imperial Palace. 
 
17:58 
Arrived at Kantei. 
 
19:08 
Met with leaders of Japanese media companies, such as Sankei Shimbun 
Chairman Takehiko Kiyohara. 
 
20:44 
Arrived at his official residence. 
 
4) Poll: 65% see North Korea as the largest threat for Japan, 75% 
deem Japan-US Security Treaty as useful 
 
YOMIURI (Page 2) (Full) 
July 5, 2006 
 
The Yomiuri Shimbun conducted a nationwide survey (by interview on 
June 17-18) asking which countries or regions, or international 
circumstances are perceived as the most serious threat to Japan's 
peace and security, with multiple replies acceptable. Of the 
respondents, 65% cited North Korea, followed by 43% listing 
activities by international terrorist groups, 37% naming China, and 
33% citing the proliferation of weapons of mass destruction like 
nuclear weapons. 
 
Those who said the Japan-US Security Treaty has been of help for the 
maintenance of Japan's peace and security accounted for 
75%,overtaking those who gave a negative reply with 20%. The survey 
results show an increasing number of people take the view that the 
alliance with the US is indispensable for Japan's security. 
 
Asked about a possible attack on Japan by foreign countries in the 
near future, 56% said it would be conceivable, while 40% denied the 
possibility. In a survey conducted in July 1999, 57% said yes, while 
39% said no. 
 
To a question about the possibility that large-scale terrorist 
attacks, like the ones in the US in September 2001, could take place 
in Japan, 64% said they were worried, while 34% replied they didn't. 
In a similar survey in November 2005, 15%age points more respondents 
said they were worried, and those who said they weren't worried were 
16 points less than in the latest survey. 
 
5) Poll: Abe's lead over Fukuda widens in LDP presidential race; 70% 
call for BOJ Governor's resignation 
 
SANKEI (Page1) (Lead paragraph) 
July 4, 2006 
 
The Sankei Shimbun conducted an opinion poll on politics jointly 
with Fuji News Network (FNN) on July1-2. The poll results showed 
that those who favored Chief Cabinet Secretary Shinzo Abe, 51, as 
Koizumi's successor increased to 44.4%,while those for former Chief 
Cabinet Secretary Yasuo Fukuda, 69, dropped to 19.1%. Asked if Bank 
of Japan Governor Toshihiko Fukui, 70, should resign over his 
10-million-yen investment in the Murakami Fund, 69.5% of respondents 
said "yes." 
 
 
TOKYO 00003717  005 OF 011 
 
 
6) Chinese president does not mention Yasukuni issue in meeting with 
DPJ head Ozawa 
 
YOMIURI (Page 1) (Full) 
July 5, 2006 
 
Ryota Akatsu, Beijing 
 
The Democratic Party of Japan's (Minshuto) President Ichiro Ozawa 
yesterday evening met with Chinese President Hu Jintao at the Great 
Hall of the People in Beijing and the two agreed to establish an 
exchange consultative organ (tentative name) as a forum for Minshuto 
and the Chinese Communist Party to meet on a regular basis. 
According to Minshuto, Hu did not directly refer to such specific 
issues involving the two countries as visits to Yasukuni Shrine. 
 
While no summit has been held between Japan and China for more than 
one year, Hu met with a Japanese politician now again, following the 
one in March with former Prime Minister Hashimoto and former Foreign 
Minister Masahiko Komura, when the two visited China as 
representatives of Japan-China friendship organizations. 
 
During the talks with Ozawa, Hu stated: "China-Japan relations have 
stalled over the issue of historical views, but the two countries 
are located close to each other geographically, and the two can make 
up for each other in the economic area. I hope to expand friendly 
and cooperative relations in various areas although difficulties 
have yet to be removed." Ozawa told Hu: "Given differences between 
the two countries as well as the national traits, at times obstacles 
could emerge, but both of us should work together to resolve them." 
 
Ozawa also pointed out: "Promoting economic cooperation is a very 
good thing, but the bond relying solely on economic interests would 
not be strong. Japan-China relations will not be on a true course 
unless trust between the peoples and the leaders of the two 
countries are at the basis of the relationship." 
 
The meeting lasted for 45 minutes, joined by Minshuto Vice President 
Naoto Kan and Secretary General Yukio Hatoyama. 
 
7) Ozawa calls for Japan-US-China equilateral triangle 
 
SANKEI (Page 1) (Excerpts) 
July 5, 2006 
 
Shortly before departing for China, Minshuto (Democratic Party of 
Japan) President Ichiro Ozawa said, "An equilateral triangle should 
be formed by Japan, the United States, and China." This prompted 
Foreign Minister Taro Aso and Chief Cabinet Secretary Shinzo Abe to 
raise an objection that China is not Japan's ally. Given strained 
relations between Japan and China, the equilateral triangle argument 
has suddenly emerged mostly from anti-Koizumi forces. 
 
Appearing on a television talk show on July 2, Ozawa said: 
 
"There are no relations of trust between Japanese and Chinese 
lawmakers. (Japan, the United States, and China) must form an 
equilateral triangle with Japan serving as its pivot." 
 
On July 4, Aso criticized Ozawa's statement, saying: "Japan shares 
universal values only with the United States. An isosceles triangle 
could be possible but not an equilateral triangle." Abe also raised 
 
TOKYO 00003717  006 OF 011 
 
 
an objection, saying: "Relations with China are important, but China 
is not Japan's ally. Japan's foreign policy is based on its alliance 
with the United States. An equilateral triangle is different 
fundamentally." 
 
8) Main points of Ozawa-Hu talks 
 
YOMIURI (Page 4) (Full) 
July 5, 2006 
 
Ryota Akatsu, Beijing 
 
The following are the main points of the meeting yesterday between 
Ichiro Ozawa, head of the Democratic Party of Japan (Minshuto), and 
Chinese President Hu Jintao. 
 
Views of Japan-China relations 
 
Ozawa: It is essential for Japan and China to keep friendly 
relations for Asia as well as the rest of the world. The two 
countries can make contributions to be noted in the history of 
humankind if both work together. 
 
Hu: The peoples of China and Japan suffered a great deal of 
causalities from (Japan's) prewar militarism. China-Japan relations 
have stalled over the issue of history perceptions, but 
geographically, the two countries are located next door to each 
other, and both can make up for each other in the economic area. I 
hope both sides will endeavor to remove political obstacles as 
quickly as possible and put bilateral ties on the normal track of 
healthy and stable development. 
 
Ozawa: Given differences between the two countries and the national 
traits, both sides would at times encounter obstacles. But we should 
resolve them by mutual efforts. 
 
Interparty exchanges 
 
Hu: China and Japan should build multidirectional, multifaceted, and 
multi-level relations. 
 
Ozawa: Ordinary peoples as well as politicians of the two countries 
need to discuss frankly and candidly. I propose establishing an 
exchange consultative organ (tentative name) as a forum for 
political leaders of the Chinese Communist Party and Minshuto to 
meet on a regular basis. 
 
Hu: Not only the governments of the two countries but also political 
parties and politicians need to make great efforts. I will promote 
exchanges actively and without restraint. I will assign Wang Jiarui, 
director for the Communist Party's external liaison affairs, as an 
official in charge. 
 
9) China to get down to mending relations with Japan 
 
TOKYO SHIMBUN (Page 3) (Full) 
July 5, 2006 
 
Chinese President Hu Jintao during his meeting with Ichiro Ozawa, 
chief of the Democratic Party of Japan (DPJ = Minshuto), noted the 
importance of Japan-China relations: "Japan and China must cooperate 
with each other. It is our duty and responsibility to do so, and it 
 
TOKYO 00003717  007 OF 011 
 
 
is possible." 
 
When Hu invited delegates of seven organizations friendly to China 
in late March this year, he criticized Prime Minister Koizumi's 
visits to Yasukuni Shrine, but at the same time, he sought further 
assistance from Japan, frankly saying, "We would like Japan to help 
us so that we can further move forward." 
 
According to a source familiar with Japan-China relations, realizing 
that last April's anti-Japanese demonstrations were in fact 
anti-government activities, the Chinese leadership has begun 
desperately seeking ways to improve China's relations with Japan. 
The source also indicated: "They have also realized that they must 
cooperate with Japan not only in the economic field but also for the 
sake of its serious environmental and energy-conserving issues." 
 
China is most concerned that Koizumi's possible visit to Yasukuni in 
August could strongly irritate China's public opinion and rekindle 
anti-Japanese demonstrations. For this reason, it is making every 
effort to reduce the possibility of Koizumi visiting Yasukuni. 
 
Hu's accepting Minshuto delegation, including leader Ozawa, is part 
of such an effort. In addition, China apparently wanted to once 
again send a clear message to Japan that it wants to improve its 
relations with Japan. 
 
10) Ozawa holds talks with Tang in Beijing 
 
YOMIURI (Page 2) (Abridged slightly) 
July 4, 2006 
 
Ryota Akatsu, Beijing 
 
Minshuto (Democratic Party of Japan) President Ichiro Ozawa held 
talks with Chinese State Councilor and former foreign minister Tang 
Jiaxuan at the Diaoyutai State Guesthouse in Beijing on the night of 
July 3. At the outset of the meeting, Tang welcomed the leader of 
Japan's largest opposition party, saying, "(Ozawa's China visit) 
indicates that his party puts high priority on relations between 
China and Japan." In response, Ozawa said, "Minshuto, including 
myself, is aware of the importance of relations between the two 
countries." 
 
Acting Minshuto President Naoto Kan, who was also present at the 
Ozawa-Tang meeting, urged China to exercise a good influence on 
North Korea in connection with the six-party talks over the North's 
nuclear issue. In response, Tang indicated that China would deal 
with the matter positively, saying, "We would like to denuclearize 
North Korea and push ahead with the six-party talks with a resolute 
belief." 
 
Ozawa held talks with Wang Jiarui, head of the International 
Department of the Communist Party's Central Committee, on the 
evening of July 3. At the outset of the meeting, Wang told Ozawa 
that Chinese President Hu Jintao would see him on the afternoon of 
July 4. Wang also indicated that the Chinese Communist Party would 
promote exchanges with Minshuto, saying, "Exchanging views for 
removing obstacles to relations between China and Japan would lead 
to the smooth development of bilateral relations." Ozawa said in 
response, "We must continue developing cooperative relations based 
on the history of Japan's long friendly relations with China." 
Ozawa, who assumed the Minshuto presidency in April, chose China for 
 
TOKYO 00003717  008 OF 011 
 
 
his first foreign trip as Minshuto head. 
 
11) Chief Cabinet Secretary Abe says, "China needs to rectify 
anti-Japanese education," hinting at increasing pressure on North 
Korea 
 
NIHON KEIZAI (Page 2) (Full) 
July 5, 2006 
 
In a speech yesterday at the Liberal Democratic Party's 
headquarters, Chief Cabinet Secretary Abe referred to China's 
continued refusal to hold a summit with Japan because of Prime 
Minister Junichiro Koizumi's repeated visits to Yasukuni Shrine, 
noting: "The Chinese Communist Party is trying to keep in place its 
current attitude with its economic growth and patriotic education. 
The issue won't be resolved unless the fundamental structure 
underlying anti-Japanese education is dealt with." Abe thus called 
on China to rectify its anti-Japanese education. 
 
Speaking of North Korea, Abe implied that Japan would step up 
pressure on it, saying: "It's not possible to negotiate with it, 
expecting its goodwill." "The Taepodong missile could reach 
America's mainland. North Korea must be well aware that 
(test-launching a missile) will take a very great risk," Abe added. 
 
12) Prime Minister Koizumi: Everybody is free to visit Yasukuni 
Shrine 
 
YOMIURI (Page 4) (Full) 
July 5, 2006 
 
Prime Minister Junichiro Koizumi expressed his annoyance with 
Chinese Vice Foreign Minster Wu Dawei's indication that China would 
go along with visits to Yasukuni Shrine by Diet members, excluding 
the prime minister, foreign minister and chief cabinet secretary. 
Koizumi told reporters last night, "Everybody is free (to visit the 
shrine)." Asked if he meant that China has no right to say that, 
Koizumi replied: "That's right. It is only natural that China should 
accept Yasukuni visits by Japanese lawmakers (including the prime 
minister)." 
 
13) Bush asked Koizumi, "Why do you have to resign as prime 
minister?" 
 
MAINICHI (Page 5) (Abridged slightly) 
July 5, 2006 
 
"Why are you going to quit as prime minister?" 
 
"Because my term of office will expire." 
 
Prime Minister Junichiro Koizumi introduced the above conversation 
he had had with President George W. Bush during his recent visit to 
the United States when he met a group of members representing media 
companies in Tokyo last night. 
 
Koizumi also quoted Bush as saying, "You can (extend your term) if 
you want to, can't you?" But Koizumi told him that such would not be 
possible. 
 
An attendee asked regarding Chief Cabinet Secretary Shinzo Abe, who 
is regarded as the top post-Koizumi contender, "Will he really grow 
 
TOKYO 00003717  009 OF 011 
 
 
with your forcing culture-like approach?" In response, Koizumi said, 
"People grow with posts. He has markedly grown." 
 
Regarding former Chief Cabinet Secretary Yasuo Fukuda, who remains 
mum about his candidacy, the attendee also quoted Koizumi as saying, 
"It's good that (his true intention) is not known." 
 
Koizumi also reiterated his intention to reveal the name of a person 
he would support after the LDP formally announces its presidential 
election on September 8. 
 
14) Prime Minister Koizumi praises Abe 
 
ASAHI (Page 4) (Full) 
July 5, 2006 
 
Prime Minister Junichiro Koizumi dined last night at a Tokyo hotel 
with senior media company officials. Koizumi was quoted as telling 
them that Chief Cabinet Secretary Shinzo Abe has greatly grown up. 
According to one participant, Koizumi, referring to former Chief 
Cabinet Secretary Yasuo Fukuda, who has gained support as a 
post-Koizumi contender, said: "We don't know (if Fukuda will run in 
the race). I think that's good for now." 
 
Koizumi expressed anew that he would reveal whom he would support as 
his successor after the Liberal Democratic Party announces its 
presidential election. Regarding his serving in the prime minister's 
post for more than five years, Koizumi said: "I was lucky. Nobody 
thought this would happen and neither did I. I think common sense 
wins." 
 
15) Prime Minister Koizumi to apologize in statement for Japanese 
emigrants to Dominica 
 
ASAHI (Top Play) (Lead para.) 
July 5, 2006 
 
The government, sued by a group of Japanese emigrants to the 
Dominican Republic, won the lawsuit in June, but the Tokyo District 
Court pointed out that the then government's emigration policy was 
unconstitutional. Taking the court's indication seriously, the 
government has now started a study to release a statement by Prime 
Minister Koizumi expressing an apology to the emigrants. In addition 
to the government's apology, the statement would stipulate relief 
measures, including a gift of money in token of the government's 
sympathy up to 2 million yen. If the government obtains the 
emigrants' understanding, the cabinet will decide to release the 
statement as early as July 21 in order to put an end to the lawsuit 
issue. 
 
16) Government, ruling camp adopt draft basic policy guidelines on 
economic and fiscal management and structural reforms, leaving 
unfinished tasks, including, USFJ realignment cost, social security 
expenses, cuts in local finances, for future 
 
MAINICHI (Page 3) (Lead paragraph) 
July 4, 2006 
 
The government on July 3 adopted draft basic policy guidelines on 
economic and fiscal management and structural reforms, which 
included spending cuts up to 14.3 trillion yen for reform of 
revenues and expenditures, but left out the tax hike issue. The 
 
TOKYO 00003717  010 OF 011 
 
 
package does not indicate specific policies for many areas, 
including a budget for USFJ realignment-related expenses and social 
security spending cuts. Since it clearly seeks to burden individuals 
and local governments further for fiscal reconstruction, the agenda 
for the post-Koizumi administration is to what extent it can 
persuade the people. 
 
17) Tokyo governor in speech: "2008 Beijing Olympics seems similar 
to the one held by Hitler" 
 
ASAHI (Page 33) (Full) 
July 5, 2006 
 
In a speech in Tokyo yesterday, Tokyo Governor Shintaro Ishihara in 
criticizing China commented: "The Beijing Olympics in 2008 seems 
similar to the political Olympics carried out in Berlin by Hitler." 
 
The theme of the speech was the joint development of medium and 
small jetliners with Asian countries. Touching on China in the 
speech, Ishihara said: 
 
"The average income (per capita) will never reach one-20th of 
Japan's level even 10 years from now. ... Many people suggest me not 
to speak ill of China because Beijing would oppose (Tokyo's possible 
bid to host the 2016 Olympics), but I have to speak against it. ... 
People there cannot drink city water because waterworks have yet to 
be done." 
 
18) Government increasingly in favor of early lifting of zero 
interest rate policy; BOJ to judge, while monitoring stock prices 
 
NIHON KEIZAI (Page 1) (Full) 
July 5, 2006 
 
An increasing number of government officials yesterday indicated a 
view in favor of supporting an early lifting of the zero interest 
rate policy by the Bank of Japan's (BOJ). Following the Bank of 
Japan's quarterly business survey results, released on July 3, which 
reported a clear uptrend of the economy, a number of officials 
indicated the view that conditions for removing the zero interest 
rate policy are beginning to be met. State Minister for Economic and 
Fiscal Policy Kaoru Yosano yesterday told a news conference: "It is 
the role of the BOJ to make such a judgment, whether it comes in 
July or August. I believe it will reach a judgment on its own 
responsibility and with insight." Commenting on cautious views 
voiced by some cabinet ministers, Prime Minister Junichiro Koizumi 
on the evening of the same day noted, "I do not think there is much 
difference between the two opposing views. I think it is just a 
matter of nuance." 
 
The government is empowered to call on the BOJ to postpone the 
adoption of its policy change proposal until the next policy-setting 
meeting. However, the outlook is that if the BOJ makes such a 
proposal, the government will not call on the BOJ to put on hold the 
proposal. 
 
In response to a growing mood among government officials for 
approving the removal of the zero interest rate policy, the BOJ 
plans to discuss the propriety of lifting such a policy at the 
meeting. It will monitor the movements of the US economy and stocks, 
and cautiously judge other conditions, including the possibility of 
the economy returning to a deflationary trend. 
 
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SCHIEFFER