Japan's Prime Minister Junichiro Koizumi pledged on Friday, in probably his last annual policy speech, to continue his structural reform in the administrative area and to develop ties with Asian neighbors.

At the onset of the parliament's 150-day regular session, Koizumi said his government will submit a bill that sets midterm targets including a cut in public payrolls and consolidation of state financing, in order to realize a "small and efficient government."

The premier, who is expected to step down this September, also told the parliament that the government will submit a bill early this year to open a way for women to ascend the throne.

"In order to make sure the imperial throne will have stable succession in the future, I will submit a bill to revise the Imperial House Law in line with the report" issued last November by an advisory panel, Koizumi said.

As to foreign affairs, Koizumi vowed to develop future-oriented relations with China and South Korea.

"Though there may be conflicts on some issues, China and South Korea are very important neighbors," said he, "We will strengthen cooperation from a comprehensive standpoint to construct future- oriented relations based on trust."

Following Koizumi, Foreign Minister Taro Aso said in his speech that strengthening relations with China and South Korea is "an unswerving fundamental policy" of Japan.

Also at the opening of the 164th session of the Diet, Finance Minister Sadakazu Tanigaki said the government will promote " national debate" about revising Japan's tax system, including possible consumption tax hikes, as part of efforts to rebuild the finances.

Source: Xinhua