Koizumi has visited the controversial Yasukuni shrine again. I am compiling articles I find on it at my wiki at ChinaJapan.org. I wrote about an earlier visit here. Great collection of articles on the topic at Sina.com (in Chinese).
The response is still ongoing but I would say relatively muted compared to some other recent events. I think Koizumi and the Japanese government have calculated that the annual visits (this is to be the only one this year, says Koizumi), will always generate a response but never anything with any real consequences. That being the case, Koizumi’s own desire to visit the shrine and the political benefits domestically (from veterans groups and the right wing) are presumably judged to override any diplomatic fallout.
My feeling, however, is that this is a mistake in the long run. Despite a growing amount of contact between the countries, I don’t think the “sentiment” issue is getting better as a result. I believe that this will translate into trouble in the future as public opinion in China has a growing influence on policy making.