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Cablegate: Japanese Morning Press Highlights 03//08

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UNCLAS SECTION 01 OF 12 TOKYO 000837

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//08


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Defense and security affairs:
4) Yokosuka seaman in custody says he never rode in the cab of the
slain driver (Yomiuri)
5) Lower House Foreign Affairs Committee starts deliberations on the
special measures bill providing host-nation support to U.S. forces
in Japan (Tokyo Shimbun)
6) DPJ opposition to host-nation support budget will result in a gap
until the bill can be overridden a month after the current budget
expires (Mainichi)
7) LDP lawmaker and defense policy specialist Gen Nakatani comes out
against Defense Minister Ishiba's plan for reforming the Defense
Ministry (Mainichi)
8) Defense Ministry's think-tank sees China acquiring an aircraft
carrier within two years (Sankei)
9) MOD think-tank in report warns against China using defense
exchanges with Japan for own purposes (Yomiuri)
10) Prime Minister Fukuda's remark "retracted" about early enactment
of a permanent SDF dispatch law (Sankei)
11) Papers sent to the prosecutors on ASDF officer who leaked
defense secrets (Mainichi)

Diet in turmoil:
12) Ruling and opposition camps trading charges as Diet remains
stalled over key legislation (Tokyo Shimbun)
13) One month blank can be expected before provision tax laws that
expire at the end of March, can be enacted by a Lower House revote
(Mainichi)
14) Fukuda is filled with alarm about the impossible situation bills
are facing in the Diet where the Upper House is controlled by the
opposition camp (Mainichi)
15) Fukuda seeks to assure the public, particularly local areas
likely to be hit hard by the expiration of the provision taxes
(Yomiuri)
16) Even gasoline stations that will lower pump prices in April
likely to feel the pain of the expiration of provision tax rates
(Mainichi)
17) Some members of the DPJ are uncomfortable with the party's
opposition to the appointment of the LDP-backed head of the National
Personnel Authority (Yomiuri)
18) Infrastructure Development Institute to close doors due to
expiring tax-related law (Mainichi)

19) Justice Ministry panel proposes drastic review of foreign
residency registration procedures (Tokyo Shimbun)

Articles:

1) TOP HEADLINES

Asahi, Sankei & Tokyo Shimbun:
Tokyo Metropolitan Assembly's committee approves 40 billion-yen
bailout for ShinGinko Tokyo

Mainichi:
MLIT found to have used 2.3 trillion yen from special account budget
for road projects to cover personnel expenses since its foundation

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Yomiuri:
Government, ruling bloc intend to put the gasoline tax bill to a
revote if the bill fails to be adopted by the end of the fiscal year
(3/31)

Nikkei:
Nichirei, Ajinomoto, and other major food companies begin reducing
their production of frozen foods 30 PERCENT due to consumers'
hesitant buying in wake of poisonous frozen dumplings

Akahata:
Four opposition parties jointly hold a rally aimed at scrapping a
new medical system for the elderly, which is to be introduced in
April

2) EDITORIALS

Asahi:
(1) Heavy responsibility of Tokyo metropolitan government and
metropolitan assembly for their decision to bailout ShinGinko Tokyo
bank
(2) Mayor should be tough against gangs

Mainichi:
(1) Gasoline tax dispute has yet to be settled
(2) Hakamada murder case: Supreme Court's decision gives us an
opportunity to reconsider death punishment

Yomiuri:
(1) Recording of questioning needs to be tried and tested for
practical use
(2) Bailout for ShinGinko Tokyo questionable

Nikkei:
(1) Tokyoites will eventually pay the price for the bailout of
ShinGinko Tokyo
(2) Political situation in Pakistan still remains murky

Sankei:
(1) Do not create public confusion by allowing expiration of the
provisional tax rates
(2) Land prices: Attention needs to be paid to what impact there
will be on business conditions

Tokyo Shimbun:
(1) Plan to injection additional funds into ShinGinko Tokyo is a
self-righteous act by Gov. Ishihara:
(2) What makes youths kill indiscriminately?

Akahata:
(1) Bailout for ShinGinko Tokyo is an act that goes against public
opinion

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 26

NIKKEI (Page 2) (Full)
March 27, 2008

10:01

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Met Chief Cabinet Secretary Machimura and Deputy Chief Cabinet
Secretary Futahashi at the Kantei.

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10:55
Met LDP Secretary General Ibuki.

12:04
Met Futahashi.

13:01
Met Machimura.

16:10
Met LDP Reform Headquarters chief Takebe.

17:50
Met alpinist Ken Noguchi, Environment Minister Kamoshita and Vice
Environment Minister Tamura. Kamoshita and Tamura stayed on.

19:17
Returned to his official residence.

4) U.S. sailor denies riding in taxi of slain cabbie

YOMIURI (Page 38) (Full)
March 27, 2008

A 22-year-old U.S. Navy seaman apprentice, who is stationed at the
U.S. Navy's Yokosuka base and whose credit card was found inside the
taxicab of a driver found slain in the city of Yokosuka, Kanagawa
Prefecture, has denied his alleged involvement in the murder case by
telling the U.S. Naval Criminal Investigative Service (NCIS) that he
never rode in that taxicab, sources revealed.

An investigative task force set up at the Yokosuka Police Station
has received the U.S. sailor's fingerprints from U.S. Naval Forces
Japan. The police will check the provided fingerprints with those
left on the kitchen knife used for the killing and those left inside
the taxi. In addition, the police are also analyzing images recorded
by security cameras installed near the place where the taxi driver
was slain, and they are now looking into the authenticity of the
sailor's account.

The U.S. sailor, who deserted from the Yokosuka base on March 8, was
detained on March 22. He has since been in custody as a deserter at
the base undergoing NCIS investigation. The Yokosuka police task
force has been exchanging information with the NCIS and will shortly
question the sailor.

According to findings from the police investigation so far, the
61-year-old slain driver, Masaaki Takahashi, picked up a passenger
near JR Shinagawa Station in Tokyo's Minato-ku at around 7:30 p.m.
Mar. 19, and his taxi exited the Yokosuka interchange of the
Yokohama-Yokosuka Highway via the Metropolitan Expressway Yokohane
(Yokohama-Haneda) route and arrived at the place where he was
killed. He was stabbed to death at around 9:15, according to the
police.

5) Lower House Foreign Affairs Committee to initiate deliberations
on sympathy budget

TOKYO SHIMBUN (Page 2) (Full)

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March 27, 2008

The House of Representatives Committee on Foreign Affairs yesterday
launched deliberations on a new accord replacing the special
measures agreement on Japan's host-nation support (or the so-called
sympathy budget) for the U.S. forces stationed in Japan. The current
agreement will expire at the end of this month. The government was
forced to make difficult replies since they were severely pursued
yesterday by both the ruling and opposition parties.

Jiro Ono of the ruling Liberal Democratic Party (LDP) raised a
question about the fact that workers whose salaries are paid by
Japan include employees of such entertainment facilities as bowling
alleys and golf courses in U.S. bases. "The Self-Defense Forces do
not have such people working for them," he said. Foreign Ministry
North American Affairs Bureau Director General Shinichi Nishimiya
responded: "(Those entertainment facilities) will bolster the morale
of U.S. military personnel and maintain their social wellbeing."

Referring to the point that the percentage of Japan's sympathy
budget is higher then other countries that host U.S. forces, Shoichi
Kondo of the main opposition Democratic Party of Japan (DPJ or
Minshuto) asserted: "South Korea does not pay utilities and water
charges. Japan should cut its burden further." Senior Vice Defense
Minister Akinori Eto responded: "When considering Japan's economic
situation, your view should be fully taken into account. We can
discuss such issues as saving costs in negotiating the new
agreement."

6) Blank period in sympathy budget inevitable

MAINICHI (Page 2) (Full)
March 27, 2008

The House of Representatives Foreign Affairs Committee began
yesterday discussing approval for an extension of the special
agreement on Japan's host-nation support (HNS) for stationing U.S.
forces in Japan ("sympathy budget") that expires on March 31. The
major opposition Democratic Party of Japan grilled the government,
asking if it has urged the U.S. side to make efforts to reduce
utility expenses at U.S. military housing. With the ruling and
opposition blocs failing to reach an agreement on a plan for
deliberation, it now seems inevitable that a blank period will be
created in Japan's HNS starting in April.

Foreign Minister Masahiko Koumura commented on the impact of a
possible blank period, "I hear that the U.S. military has postponed
part of its training relocation plan."

A provision specifying the Lower House's superiority applies to the
special measures agreement, which is a kind of treaty. For this
reason, even if the matter is voted down in the Upper House, it will
be automatically enacted 30 days after the Lower House's
endorsement.

7) Former Defense chief Nakatani criticizes Ishiba's defense
ministry reform proposal, arguing, "A clear distinction is essential
between civilian and uniformed officials"

MAINICHI (Page 5) (Full)
March 27, 2008


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Ryuko Tadokoro

Former Defense Agency Director-General Gen Nakatani of the ruling
Liberal Democratic Party (LDP) in a book Daremo Kakenakatta
Bouei-sho no Shinjitsu (The truth about the Ministry of Defense that
no one has ever written) (published by Gentosha) criticized Defense
Minister Shigeru Ishiba's proposal to unify and realign civilian
officials (working in internal bureaus) and uniformed officers
(serving in the Self-Defense Forces (SDF) and the three staff
offices). Nakatani pointed out in the book: "It is wishful thinking
to assume that if (uniformed officers and civilian officials) are
simply mixed together, splendid results would be produced."

Nakatani hails from the Ground Self-Defense Force. He agrees to the
plan to review the entire organization, but he noted: "It is
necessary to make a sharp distinction between civilian and uniformed
officers. Military personnel and the military forces have their
specialized area." Last month Ishiba suggested completely
integrating both civilian bureaus and the three staff offices, but
his proposal has come under criticism inside and outside MOD.

8) China likely to launch flattop in 2 years

SANKEI (Page 5) (Abridged)
March 27, 2008

The National Institute for Defense Studies (NIDS), a think tank of
the Defense Ministry, released yesterday its annual report, East
Asian Strategic Review 2008. Referring to China's ongoing naval
modernization, the NIDS report notes that the Chinese navy is
undoubtedly making a feasibility study to build an aircraft carrier.
"There is no doubt that the Chinese navy will operate outside
Chinese waters," the report says. In August last year, Chinese
Defense Minister Cao Guangchuan visited as a part of defense
exchanges between Japan and China. The report, however, warns: "The
slogan of defense exchanges alone is now a fait accompli with no
confidence building, and China may use this to advertise a
peace-like image of itself."

Last year, Japan and China held intergovernmental talks over gas
field development in the East China Sea, during which Japan hinted
at a prospecting plan. On that occasion, a Chinese official said
China would then send warships. The NIDS report analyzes: "China is
making naval visits for friendship while using its military
deterrent. This is intended to establish China's de facto hegemony
in the East China Sea by promoting a peace and friendship mood so
that Japan will hesitate to reach for the East China Sea."

Meanwhile, the NIDS report also explains that Chinese President Hu
Jintao has consistently prioritized spending on China's naval
buildup. The report indicates that China will complete an aircraft
carrier by 2010 at the earliest. In addition, the report anticipates
that China will switch its naval strategy from coastal defense in
the seas near the Japanese archipelago, Taiwan, and the Philippines
to ocean defense in the seas, including the Indian Ocean. The report
also notes the Chinese navy's training that was conducted in August
last year for underway replenishment. "China is already making
inroads into the oceans," the report concludes.

9) Japan's defense institute says "China may utilize" defense
exchange to "showcase its image as a pacifist state"


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YOMIURI (Page 2) (Full)
March 27, 2008

The National Institute for Defense Studies (NIDS) under the Ministry
of Defense (MOD) yesterday released its annual report "East Asian
Strategic Review 2008," an analysis of the security and military
situation in East Asia. The report expressed alarm at Japan-China
defense exchanges, including port calls by both countries' vessels,
by noting: "With the tacit emergence of Japan-China defense
exchanges as a fait accompli, such exchanges are expected to be
utilized by China to advertise its image as a peaceful state." NIDS
unusually expressed concern about Japan-China defense exchanges,
despite the fact that MOD has attached importance to them.

The report touched on Chinese National Defense Minister Cao
Gangchuan's visit to Japan last August as part of a defense exchange
by pointing out: "(Then) Defense Minister Koumura expressed concern
about China's increased defense spending, but no satisfactory answer
came from the Chinese side. The Chinese defense minister's tour of
Japan can be described as a trip to assuage the argument of China
being a threat that is being voiced in Japan."

Regarding the issue of joint development of gas fields in the East
China Sea, a pending issue between the two countries, the report
said: "The Chinese Navy's friendly visits to Japan are intended to
promote a peaceful and friendly mood between Japan and China so as
to make Japan hesitant to engage in gas exploration in the East
China Sea. By so doing, the Chinese side intends to establish in
effect hegemony in the East China Sea." The report concluded: "China
is trying to secure an advantage over Japan by using both hard and
soft power." Full-scale defense exchanges between the two countries
started in the 1990s. Last November, a Chinese Navy vessel made a
first call at a Japanese port.

10) Fukuda backpedals on permanent law

SANKEI (Page 5) (Abridged)
March 27, 2008

Prime Minister Yasuo Fukuda has now indicated that the government
would submit a bill to the Diet at its current session for permanent
legislation allowing Japan to send the Self-Defense Forces for
overseas missions as needed. "I said it would be better to present
the bill early because the Democratic Party of Japan (Minshuto)
supports this legislation," Fukuda told reporters at his office
yesterday evening. On Mar. 25, Fukuda showed his willingness to
present the bill to the Diet. Fukuda explained that he had met that
day with former Liberal Democratic Party Vice President Taku
Yamasaki and he was only introducing Yamasaki's remarks.

Chief Cabinet Secretary Nobutaka Machimura, meeting the press
yesterday, also said: "We've not made such a judgment. We'd like to
make a comprehensive judgment while seeing developments in the
Diet."

Meanwhile, DPJ President Ichiro Ozawa has been insisting on creating
a permanent law. Fukuda showed his willingness on Mar. 25 to present
a bill at the current Diet session. This also can be taken as a
tactic to shake up the DPJ, which has been toughening its stance
against the ruling coalition in the Diet.

11) GSDF Criminal Investigation Command sends papers on ASDF colonel

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to prosecutors for leaking secrets to Yomiuri reporter

MAINICHI (Page 1) (Full)
March 27, 2008

By Ken Honda

The Defense Ministry announced yesterday that the Ground
Self-Defense Force Criminal Investigation Command has sent to
prosecutors indictment papers on a 50-year-old Air Self-Defense
Force colonel based at the Defense Intelligence Headquarters --
currently attached to the DIH general affairs department -- on
suspicion of leaking defense secrets regarding trends of Chinese
Navy submarines to a Yomiuri Shimbun reporter in violation of the
Self-Defense Forces Law. This is the first case that papers on an
SDF officer have been sent to prosecutors for leaking defense
secrets to the news media. The case is likely to stir up a

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controversy from the viewpoint of the freedom of the press and the
people's right to know.

According to investigations, the colonel is suspected to have leaked
defense secrets regarding submarine movements provided by the U.S.
military. The colonel has reportedly admitted to the charges in
general. The possibility is strong that prosecutors will drop
charges because revealing the highly confidential information in a
public trial would be difficult. Although the SDF Law has a
provision punishing the act of soliciting a person to leak
information, the SDF has apparently not pressed charges against the
reporter, concluding that his act was part of news-gathering
activities.

The problem resulted from the Yomiuri's May 31, 2005, morning
edition that reported that a Chinese Navy submarine had stalled
after causing a fire in the South China Sea. The vessel that caught
on the fire was a Ming-class attack submarine. The submarine's
position was also mentioned in the article. The Criminal
Investigation Command is believed to have concluded that what is
mentioned in the article fall under defense secrets. Although asked
about the charges and reporter's news gathering, a spokesman said,
"I cannot answer."

12) Gasoline: Strategic move to avoid responsibility in event of
confusion; Ruling parties criticizing DPJ as exercising tyranny of
numbers; DPJ stressing stance of responding to talks

TOKYO SHIMBUN (Page 2) (Full)
March 27, 2008

With the possibility of a bill amending the Special Tax Measures Law
failing to secure Diet approval within the current fiscal year, both
the ruling and opposition parties have each begun making strategic
moves in an effort to avoid a situation in which they are called on
to take the blame in the event of confusion reigning. There are
acrimonious exchanges, with the ruling parties criticizing the
opposition of doing nothing that the Democratic Party of Japan (DPJ
or Minshuto) is buying time, by rejecting Diet deliberations, while
the DPJ is rebutting them, saying that it is ready to respond to a
dialogue at any time.

New Komeito Diet Affairs Committee Chairman Yoshio Urushibara after
talks between the Diet affairs chiefs of both the ruling and
opposition camps expressed discontent with the DPJ, "Their approach

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of making an accusation even before starting Diet deliberations and
doing nothing will never be able to gain the public's
understanding."

Since the bill amending the Special Tax Measures Law cleared the
Lower House on February 29, the ruling parties had been calling on
the DPJ to agree to start Diet deliberations by promptly holding a
session to explain the bill and a question-and-answer session.

However, the DPJ has indicated no signs of responding to the LDP's
call, citing the party's circumstance as the reason. The prevailing
view in the ruling parties is that the DPJ would not agree to take a
vote within the current fiscal year, as one senior Upper House
member of the LDP predicted.

For this reason, the ruling camp is now focusing on an approach of
appealing the "tyranny of numbers" by the DPJ, the top party in the
Upper House, to the public, instead of finding a breakthrough
through talks. It is also criticizing the DPJ for its stance of not
responding to its all for talks to revise the bill amending the
Special Tax Measures Law.

The DPJ is also making a frantic effort to get the pubic on its side
as part of a propaganda battle intended to realize cheaper gasoline.
Regarding the LDP-proposed revision talks, DPJ President Ozawa said,
"I would like to hold talks at every opportunity." He appears to be
determined to show a stance of responding to a call for dialogue in
order not to provoke criticism of the public. Though the DPJ has not
respond to a proposal for a meeting of secretaries general made by
the ruling camp, it has offered a counterproposal for talks between
Diet affairs chiefs and officials responsible for policy-making of
the ruling and opposition parties.

The DPJ yesterday compiled its own report on an impact of an
expiration of special measures other than the gasoline tax. Its
strategy is to appeal the seriousness of the situation to the public
with one senior member noting, "It makes no sense that the ruling
parties do not agree on the DPJ's proposal, which exclude taxes
other than the gas tax."

13) One-month blank in provisional tax rates coming; Government,
ruling parties coordinating plan to take second vote on tax-related
bill in late April

MAINICHI (Page 1) (Excerpts)
March 27, 2008

With the prospect that a bill amending the Special Taxation Measures
Law will not be passed by March 31 and that the expiration of the
provisional gasoline tax will be unavoidable, the government and
ruling parties have begun coordinating to put the bill to a second
vote before the end of April in the House of Representatives. The
government and ruling coalition aim to minimize the social impact by
allowing the provisional rates to lapse for just about one month.
They also launched a study of measures to support gasoline stations
and local governments with the expiration of provisional gas tax in
mind. Once the reduced gasoline prices rise to the original prices,
the public may react sharply. Prime Minister Yasuo Fukuda as a
result will explain the situation to the public in late March after
the fiscal 2008 budget and budget-related bills clear the Diet.

The special tax revision bill was passed on Feb. 29 by the Lower

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House and sent to the House of Councillors. But the Upper House has
yet to start deliberations on the legislation. Under the
Constitution, if a bill has not been voted within 60 days after
being sent to the Upper House, the bill is considered as being
rejected and it will be sent back to the Lower House. Therefore, the
lower chamber will be able to readopt it by a two-thirds majority
vote on April 29 or after. Asked by the press that whether a second
vote was one of his options, Fukuda said last evening: "In order to
prevent confusion from occurring on April 1 or later, the issue must
be resolved as early as possible." So, he did not reject that
option.

14) Fukuda, fearing public confusion, to give explanation on tactic
of using revote in lower chamber to reinstate gas tax

MAINICHI (Page 2) (Full)
March 27, 2008

Prime Minister Yasuo Fukuda is considering giving an explanation to
the public on the government's plan to bringing the bill amending
the Special Tax Measures Law back into the House of Representatives
for a revote. He is strongly concerned that a reduction (and then a
rise) in the gasoline price may create confusion in the society.
Even so, the public may react sharply if the price once lowered is
soon raised. An opposition member said: "If the prime minister
announces the policy of using the ruling coalition's two-thirds
lower chamber overriding vote, it will become difficult to hold
talks on revising the bill." The prime minister will make a bitter
decision under difficult conditions.

Speaking before reporters yesterday, Fukuda said: "Since the Diet is
in such a state, the people feel anxious. The issue should be
settled as soon as possible. That is the best way."

15) Government may seek 2nd lower chamber vote on bill for
maintaining provisional gasoline tax rate to avoid effect on local
government finances

YOMIURI (Page 4) (Excerpts)
March 27, 2008

The government and the ruling coalition have decided to pass
tax-related bills, including a bill amending the Special Tax
Measures Law to maintain the current provisional gasoline tax rate,
at the House of Representatives again in late April if the bills are
not made into law by the end of this fiscal year. They will give
priority to minimizing the impact of the expiration of the
provisional tax rates on local government finances and the people's
lives. In such a case, gasoline prices are expected to go up and
rise. To avoid any confusion among the people, Prime Minister
Fukuda's persuasive explanation to the people will play a key role.

The tax-related bills passed the Lower House on Feb. 29, but the
bills have not been debated after they were sent to the House of
Councillors, in which the Democratic Party of Japan (DPJ) has
control.

In a meeting of the ruling and opposition Diet affairs chiefs
yesterday, the ruling side sought that deliberations on the bills be
started an early date, but Kenji Yamaoka of the DPJ did not respond
to the call, insisting: "The budget bill for FY2008 should be
discussed first in accordance with the conventional Diet

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procedures." No prospects are in sight for the start of talks on
revising the bills. The DPJ has proposed establishing a consultative
body composed of each party's policy chief and Diet affairs chief.
But the ruling camp has seen the DPJ's proposal as intended to delay
deliberations.

The bills are unlikely to be put to a vote in the Upper House before
the provisional tax rates expire March 31. Given this, the view that
the bills be brought back into the Lower House for a revote is
gaining dominance in the ruling coalition. In this case, the vote
will be taken in late April under the provision in the Constitution
that if a bill is not put to vote within 60 days after it is sent to
the Upper House, the bill will be regarded as voted down.

In preparations for the expiration of the provisional tax rates,
some local governments have already started putting on hold tenders
for their highway construction projects. Such measures as reducing
the real estate registration license tax will also lose effect if
the bills are not enacted. The government and the ruling parties
have judged it necessary to quickly unsnarl any confusion expected
to arise following the end of these measures.

A senior Liberal Democratic Party member said: "It will serve to
minimize the effect on economic activities if Prime Minister Fukuda
gives a press conference at the end of the fiscal year and reveals
the government plan to use Lower House revote to force through the
bills."

16) Some gas stations to lower prices on April 1 if provisional rate
expires, reflecting fierce competition

MAINICHI (Page 2) (Excerpts)
March 27, 2008

In anticipation that the provisional gasoline tax rate will expire
at the end of March, some gasoline stations have decided to lower
the gasoline price by 25 yen per liter starting on April 1. The
gasoline tax is imposed at the stage of shipment from oil
refineries. So the current higher tax rate is applied to those
purchased or to be purchased by the end of March. If such products
are sold at a lower price on and after April 1, those businesses
will inevitably suffer losses. Major oil companies have called on
gas stations to sell oil at the proper price, but retailers are
under pressure to make a difficult decision amid intensifying
competition.

K.K. Aizu General in Aizu-wakamatsu, Fukushima Prefecture, which
operates 21 shops in Fukushima and Niigata prefectures, has decided
to sell regular gasoline at 120-124 yen per liter, 25 yen lower than
the current level, if the provisional tax rate expires on April 1.
The company intends to minimize the loss by reducing the usual
inventory for seven to 10 days at the end of the month to that for
two to three days.

Sales manager Kazuo Yanaginuma said: "Most customers believe that
the price will come down on April 1. It will be undesirable if we
maintain the current higher price and if customers harbor a sense of
distrust. ... Given the current fierce sales competition, I think
that some other shops will also lower the price starting on the
1st."

The manager of a gasoline station in Saitama Prefecture has decided

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08

to reduce the price if its rivals start selling at a lower price.
The store manager wants to avoid suffering a deficit, but he is
worried that if his shop offers a higher price than other shops, the
disposal of stored goods will be delayed." After checking the prices
offered by its nearby rival shops in the early morning on April 1,
the manager will make a final decision.

A number of gasoline stations are likely to be pressed to move
forward the lowering of the price, fearing that keeping the current
price would lead to reducing customers or overstocking.

17) DPJ may agree to government's reappointment of NPA President
Tani

YOMIURI (Page 4) (Excerpts)
March 27, 2008

The steering committees of the two Diet houses yesterday held
hearings on the reappointment of National Personnel Authority
President Masahito Tani. His reappointment will be decided on the
28th in the plenary sessions of the two chambers of the Diet. The
focus is on whether the main opposition Democratic Party of Japan
(DPJ or Minshuto), which had opposed the appointment of Tani in
2004, will reject or accept the reappointment now. There are
increasing calls in the DPJ for going along with Tani's
reappointment, citing that he made positive remarks in the hearings
about restricting the practice of amakudari or placing retired
senior bureaucrats at high-paying posts at private firms.

In the hearings, Tani said this about the amakudari practice: "The
system that was created at the convenience of ministries should not
exist." Asked about the series of misconducts by public servants,
Tani stressed: "I will do my best to implement the necessary
reform."

A senior DPJ member highly valued Tani's remark yesterday, saying:
"He responded to questions in a polite way. He has changed his
remarks from those he had previously made " The senior DPJ member
also said: "I am concerned that the DPJ would come under criticism
if we disapprove it just as we had rejected the government
nomination for the new governor of Bank of Japan." The largest
opposition party will decide its response today in meetings of the
subcommittee on NPA president appointment and Diet executive
members.

18) IDI to close key overseas offices

MAINICHI (Page 2) (Excerpts)
March 27, 2008

The Infrastructure Development Institute (IDI) announced yesterday
that it would close its offices in Paris and Beijing as a result of
reviewing public-interest corporations by the Ministry of Land,
Infrastructure and Transport. The step seems to reflect the MLIT's
decision not to fund the IDI from the road-related tax revenues
beyond fiscal 2007. The IDI's decision to close its overseas key
research offices is likely to raise questions about the significance
of its own existence.

The IDI announced its decision at yesterday's meeting of the Liberal
Democratic Party Administrative Reform Headquarters committee on
public-interest corporations. The Paris office opened in 1995 and

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08

the Beijing office in 2003. Staffed with about three personnel, both
offices have been engaged in research on public works projects and
international exchanges. They are expected to be closed down before
the end of fiscal 2008.

19) Proposal for reviewing alien registration system: Panel
reporting to justice minister presents final report, calling for
integration of foreign residents control

TOKYO SHIMBUN (Page 2) (Full)
March 27, 2008

The Study Group on Immigration Control Policy (chaired by Takeshi
Kimura, head of the National Institution for Academic Degrees and
University Evaluation) has looked into reform of the foreign
residents control system. The panel yesterday submitted to Justice
Minister Kunio Hatoyama a final report seeking the introduction of a
new foreign residents control system similar to the Basic Resident
Register system applied to Japanese nationals, by revising the
present aliens' registration system. Based on the proposals, the
justice minister will present a set of related bills, including a
bill amending the Immigrant Control and Refugee Recognition Law, to
the regular Diet session next year.

Under the current system, the central government is responsible for
issuing resident permits, while the local governments are in charge
of aliens' registration procedures. The final report calls for
unifying the current dual system so that the central government
controls foreign residents in an integrated way.

The final report includes such proposals as: (1) immigration bureaus
issuing resident cards, an identification card carrying the holder's
name, photograph, nationality and period of stay; (2) mandating
foreign residents to report changes in their place of employment;
and (3) establishing a system allowing the government to ask schools
and companies that accept foreigners to provide information on
them.

While calling for stricter control of foreign residents, the report
also proposes improving the convenience for foreigners who are
legally staying in Japan.

It calls for deregulation, including an extension of the maximum
period of stay from the current three years to five years and a
revision to the reentry system, which requires a prior filing of an
application for permission.

SCHIEFFER

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