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Cablegate: Japanese Morning Press Highlights 04/01/08

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ZNR UUUUU ZZH
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FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
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RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
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RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
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RUEHUL/AMEMBASSY SEOUL 8564
RUCNDT/USMISSION USUN NEW YORK 9112

UNCLAS SECTION 01 OF 11 TOKYO 000881

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 04/01/08

Index:

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

Defense and security affairs:
4) Yokosuka deserter starts to hint at involvement in cab drive
slaying during U.S. Navy questioning
5) Sailor now under Navy custody was picked up by security cameras
at Shinagawa JR Station and Yokosuka bar street on night of cabbie
slaying (Mainichi)
6) Host-nation support for U.S. forces in Japan runs out of money,
for a while (Sankei)
7) Defense Minister Ishiba plans Washington trip during early May
holidays (Nikkei)
8) China's top brass making plans to come to Japan later this year
(Nikkei)

Asian affairs:
9) China's President Hu arrives in Japan May 6 for visit (Yomiuri)
10) Dalai Lama plans to visit Japan, with government taking a
wait-and-see stance (Sankei)
11) North Korean who fled to Laos and sought refuge in Japanese
embassy wants to go to Japan (Nikkei)
Diet affairs:
12) Prime Minister Fukuda plans a revote this month on the provision
tax rate bill (Asahi)
13) Fukuda apologizes in press conference to the public for the
gasoline tax mess (Yomiuri)
14) One by one road construction projects being frozen, with
governors angry at Tokyo for causing the situation (Yomiuri)
15) Cost in lost revenues will run 6 billion yen a day due to
gasoline tax bill's not being passed (Mainichi)
16) Diet in turmoil in April as ruling and opposition camps struggle
to take the lead on key issues (Nikkei)
17) Democratic Party of Japan head Ozawa expects Diet dissolution
and general election in May (Mainichi)
18) Fiscal 2008 economic outlook being revised downward from current
forecast of 2.1 PERCENT to the 1-percent level (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Tokyo Shimbun & Akahata :
Provisional gasoline tax expired; Fukuda apologizes for political
failure; Gasoline prices falling

Nikkei:
Nikkei Average drops by 27.5 PERCENT in fiscal 2007, affected by
concern about dollar

Sankei:
Fukuda now on offensive, cutting off retreat, by announcing road
specific tax revenues will be moved into general account

2) EDITORIALS

Asahi:
(1) How to resolve political stalemate?


TOKYO 00000881 002 OF 011


Mainichi:
(1) Divided Diet: Voters can change it; Prime Minister Fukuda should
not avoid dissolving the Lower House

Yomiuri:
(1) Provisional gas tax expires: Don't hesitate to take revote
(2) Amendment to Labor Law on Part-Timers: Removal of unreasonable
gaps in treatment indispensable

Nikkei:
(1) Take revote to implement pledge that road-specific tax revenues
will be moved into general account
(2) Be patient to learn how to work

Sankei:
(1) Confusion in April: Politics needs to return to normal; Revote
necessary to resolve confusion

Tokyo Shimbun:
(1) Gasoline price cut: Every measure needs to be taken to contain
confusion
(2) Fabricated report on materials used for construction of
expressway: Public trust again lost

Akahata:
(1) Start of new fiscal year: Discriminatory medical care system
must be suspended or abolished

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 31

NIKKEI (Page 2) (Full)
April 1, 2008

08:55
Met Chief Cabinet Secretary Machimura at his official residence.

10:07
Met LDP Election Strategy Council Chairman Koga and Deputy Chairman
Suga at the Kantei.

13:20
Met LDP Reform Headquarters chief Chuma.

14:32
Met Machimura.

15:00
Met Economic and Fiscal Policy Minister Ota and others. Ota stayed
on. Afterward met Vice Foreign Minister Yabunaka.

16:12
Met Vice Health, Labor and Welfare Minister Erikawa and Insurance
Bureau Director-General Mizuta.

16:57 Attended an LDP executive meeting held in the Diet building.

17:23
Met New Komeito Representative Ota in the presence of LDP Secretary
General Ibuki and his New Komeito counterpart Kitagawa and
Machimura.

TOKYO 00000881 003 OF 011

18:00
Held a press conference at the Kantei.

18:44
Returned to his official residence.

4) U.S. sailor hints at killing cabbie

NIKKEI (Page 43) (Full)
April 1, 2008

A 22-year-old Nigerian American U.S. serviceman detained by the U.S.
Navy on a charge of desertion hinted at his involvement in the
killing of a taxicab driver in Yokosuka, Kanagawa Prefecture,
sources said yesterday.

The U.S. sailor used to visit a female acquaintance at her home in
Tokyo, sources said. The woman has explained that the 20-centimeter
kitchen knife used to kill the 61-year-old taxi driver, Masaaki
Takahashi, looks like a kitchen knife that disappeared from her
home.

A task force of Kanagawa prefectural police's Yokosuka police
station strongly suspects that the sailor was involved in the
murder. The police will now compare fingerprints found on the
kitchen knife with those of the sailor's as well as DNA microscopic
analysis. At the same time, the police will shortly ask the U.S.
Navy for cooperation and will question the sailor.

If the serviceman is found to have been involved in the murder, the
task force will obtain an arrest warrant for him and will ask the
U.S. military to turn him over before his indictment under an
agreement to improve the Japan-U.S. Status of Forces Agreement's
implementation.

According to investigative sources, the serviceman had earlier
denied his involvement in the incident by telling U.S. Navy
investigative authorities that he was at a bar on the evening of the
day when the murder took place and that he had lost his credit card
and had never ridden in Takahashi's taxi. However, the sailor later
began implying he had been involved in the murder, the sources
said.

The task force has now found from its investigation so far that the
serviceman's credit card was discovered inside the taxi, that he
called a male acquaintance of his from a place close to the site of
the incident right after that and implied his involvement in the
incident, and that a man who resembled the serviceman was caught by
a security camera set up near Tokyo's Shinagawa station where
Takahashi took on his last customer.

The task force investigated call logs of the sailor's mobile phone
and contacts and is currently proceeding to compare his fingerprints
with those sampled from the kitchen knife and the DNA analysis of
his oral mucosal tissue sample provided by the U.S. Navy.

5) Taxi driver murder: U.S. sailor caught by security cameras?

MAINICHI (Page 31) (Full)
April 1, 2008


TOKYO 00000881 004 OF 011


Masaaki Takahashi, a 61-year-old taxi driver, was found stabbed to
death in the city of Yokosuka, Kanagawa Prefecture, on the evening
of Mar. 19. In this connection, a man bearing a close resemblance to
a 22-year-old U.S. serviceman, currently detained by the U.S. Navy
on a charge of desertion, was caught that evening by security
cameras set up at Tokyo's Shinagawa Station and along a street of
eateries near the site of the crime. The man was not caught by any
of the security cameras set up at railway stations near the site of
the incident. Kanagawa prefectural police therefore take this as a
sort of material evidence showing that the U.S. serviceman rode in
Takahashi's taxi.

According to investigative sources, Takahashi picked up his last
customer near Shinagawa Station at 7:30 p.m. Mar. 19. Shortly before
that, a man looking like the U.S. serviceman came out of a ticket
gate at the station, the sources said. A little after 9:20 p.m.,
when Takahashi was slain, a man believed to be the same one was also
caught by security cameras set up along Yokosuka City's eatery
district known as "Dobuita Dori," which is several hundred meters
from the crime scene. Meanwhile, this man was not caught by any of
the security cameras at Keihin Kyuko Shioiri Station or other
railway stations. The U.S. serviceman has denied his involvement in
the incident by telling U.S. Navy investigative authorities that he
was at an eatery in the Dobuita Dori street when the incident took
place. However, the police take it as a sort of material evidence
that contradicts his statement.

6) Sympathy budget expires

SANKEI (Page 5) (Full)
April 1, 2008

With the expiration on March 31 of the Japan-U.S. special measures
agreement on the country's host-nation support for the costs of
stationing U.S. forces in Japan (sympathy budget), a vacuum period
in the execution of the budget has now been created starting on
April 1. During this period, the United States will pay for
utilities and other expenses in place of Japan. The government
intends to get Diet approval for a new agreement by mid-April "in
order to minimize its negative effects on Japan-U.S. relations," as
a senior Foreign Ministry official put it. In a press conference
yesterday, Administrative Vice-Foreign Minister Mitoji Yabunaka
highlighted the need for the new agreement to obtain Diet approval
early, saying, "It is indispensable for the smooth operation of the
Japan-U.S. security setup."

The ruling and opposition camps have agreed to let the House of
Representatives Foreign Affairs Committee to take a vote on the new
agreement on April 2. Although the ruling camp intends to adopt the
agreement in a Lower House plenary session as early as April 3 to
send it to the opposition-controlled House of Councillors, the
Democratic Party of Japan has yet to determine its response.

7) Ishiba to visit U.S. during Golden Week

NIKKEI (Page 2) (Full)
April 1, 2008

Defense Minister Shigeru Ishiba yesterday began coordination for
visiting the United States during the Golden Week holiday period
from late April. During his stay in the United States, Ishiba plans
to hold talks with Secretary of Defense Robert Gates and others to

TOKYO 00000881 005 OF 011


exchange views on the promotion of realignment of U.S. forces in
Japan, including the relocation and return of Futenma Air Station,
and the moves of China, which is rapidly modernizing its military.
The planned visit to the United States will be Ishiba's first
overseas trip since assuming office. A meeting between the defense
chiefs of Japan and the United States will take place for the first
time since Gates' visit to Japan last November.

8) Agreement reached for top Chinese Navy, Air Force leaders to
visit Japan this year and study cooperation on PKOs

NIKKEI (Page 2) (Full)
April 1, 2008

The governments of Japan and China held vice-defense-minister-level
talks in Beijing on March 31 and reached an agreement to expand
defense exchanges, including visits to Japan by top Chinese Navy and
Air Force leaders later this year. The two sides also agreed to
study Japan-China cooperation in UN peacekeeping operations (PKO).
Additionally, they agreed to hold a first working-level meeting in
April to build an emergency communication system between defense
authorities of the two countries. They also confirmed that Defense
Minister Shigeru Ishiba will visit China before the end of the
year.

From Japan, Vice-Defense Minister Kohei Masuda and from China,
Deputy Chief of the General Staff of the People's Liberation Army Ma
Xiaotian and others attended the meeting. Touching on riots in
Lhasa, the capital of the Tibet Autonomous Region, Masuda said, "We
strongly hope for a peaceful settlement." In response, Ma said: "The
Tibetan issue is not a religious matter but a political issue
orchestrated by the Dalai Lama. The Chinese government has the
ability and responsibility to maintain social order."

9) Chinese President Hu to visit Japan on May 6

YOMIURI (Page 2) (Full)
April 1, 2008

It has been set that Chinese President Hu Jintao will visit Japan as
a state guest, starting on May 6. He is expected to visit Nara
Prefecture as well as Tokyo. Tokyo and Beijing are now coordinating
his schedule with the possibility of his staying in Japan for six
days. This will be the first visit of a Chinese president to Japan
since Jiang Zemin came in November 1998. The governments of both
countries are now considering formally releasing a schedule for Hu's
Japan visit when Foreign Minister Yang Jiechi comes to Japan on
April 17.

10) Dalai Lama to stop over in Japan; Government to calmly watch
situation

SANKEI (Page 5) (Full)
April 1, 2008

It became clear yesterday that the 14th Dalai Lama of the Tibetan
Buddhism supreme leader will stop over in Japan on April 10 in
transit to the United States amid riots in Tibet. The Japanese
government intends to watch it calmly, with a high-ranking
government official saying, "Transit will not cause any problem."

According to a person concerned, the 14th Dalai Lama will stop by at

TOKYO 00000881 006 OF 011


Narita Airport on his way to Seattle to attend an event there in
April. During his several hours of stay in Japan, the Tibetan
Buddhism leader is scheduled to meet with supporters of the Tibetan
government in exile but not with lawmakers. The Dalai Lama last
visited Japan last November during which time he met with Democratic
Party of Japan Secretary General Yukio Hatoyama and others in Tokyo.
This was followed by a statement by the Chinese Embassy in Japan
condemning the DPJ.

11) North Korean refugee at Japanese Embassy in Laos seeking to go
to Japan; Government fretting over how to handle case

NIKKEI (Page 2) (Full)
April 1, 2008

It was learned yesterday that a North Korean refugee who had taken
asylum at the Japanese Embassy in Laos is seeking to go to Japan. A
government official confirmed the fact. The North Korean male has
reportedly said his mother is a Japanese citizen who had married a
Korean in Japan and later settled in the North. Although the
Japanese government will make a decision on whether it will allow
him to enter Japan after considering his relations with Japan, it
will likely have a hard time coping with the matter as it is
difficult to secure accurate information about him.

Administrative Vice Foreign Minister Mitoji Yabunaka said at a press
conference yesterday: "The Japanese government cannot make any
comment because of the nature of the matter" when asked about
whether the Japanese Embassy was taking the North Korean under
asylum. According to a South Korean news agency, the North Korean
man is in his twenties and that he rushed into the Japanese Embassy
on the morning of March 27.

It appears that the individual has been taken into protective
custody at the Japanese Embassy. A government official said that the
Japanese government has been gathering information on whether the
North Korean man is really the son of a Japanese woman, but it has
yet to confirm it.

The Japanese government allows North Korean refugees who have
Japanese nationality to enter Japan under protective custody.
Regarding North Korean refugees who do not have Japanese
nationality, the government has taken a policy of making a decision
on each case after examining the facts. The focus of the asylum case
this time is whether his mother is really Japanese. Confirming that
may be difficult.

12) Gasoline prices to be lowered from today: Lower House to hold
second vote on road-related taxes by end of April; Prime minister
apologizes for political buck-passing

ASAHI (Top Play) (Excerpts)
April 1, 2008

The provisional tax rate for special-purpose road construction
revenues, including the gasoline tax, expired yesterday. The
government and the ruling parties are determined to reinstate the
provisionally higher tax rate by holding a second vote on the bill
amending the Special Tax Measures Law aimed at maintaining the
provisional rate. They will also look into measures to assist oil
suppliers and ways to deal with local governments that will face
revenue shortages.

TOKYO 00000881 007 OF 011

Prime Minister Fukuda yesterday evening held a press conference and
offered an apology for the expiration of the provisional tax rate,
noting: "Expiration of the provisional gas tax rate will disrupt
people's lives and create a fiscal mess for local governments. I
regret that the government was unable to prevent such confusion from
occurring." He then indicated his strong resolve to reinstate the
provisional tax rate, saying, "Revenue shortfalls will pass the buck
to future generations. I would like to reinstate the provisional tax
rate for the sake of the future of this country and children."

The prime minister also said that chances are high that the level of
the gas tax, including the provisional rate, will be maintained next
year as well, citing that it is not appropriate to cut gasoline
prices at a time when importance should be attached to environmental
issues and that the abolition of the provisional gas tax rate will
bring about a loss of 2.6 trillion yen in tax revenues, affecting
administrative services by the central and local governments.

Revenue deficits as a result of the expiration of the provisional
gas tax rate are expected to reach 120 billion yen a month for the
central government and 60 billion yen for local governments. The
government will for the time being single out project items with
urgency in implementing the road budget and decide what to do about
them, after determining when the provisional tax rate can be
reinstated.

13) Prime Minister Fukuda apologizes to the public

YOMIURI (Page 1) (Full)
April 1, 2008

At a press conference last night, Prime Minister Yasuo Fukuda
apologized to the public over the expiration of the provisional
gasoline tax rate at a press conference at the Prime Minister's
Office. He stated:

"If we politicians had been really serous about the matter, we could
have avoided it. I apologize from the bottom of my heart for the
fact that the people have to pay for failure in politics."

Fukuda also said:

"The more the tax rates are cut, the bigger the hole in public
finances becomes. Issuing government deficit bonds is a way to cover
that revenue shortfall, but it is not the time to be doing that
given the current financial situation."

Fukuda indicated in his remarks that he would revive the provisional
gas tax by readopting the tax-related bills, including a bill
amending the Special Taxation Measures Law, in the House of
Representatives. The House of Councillors will launch deliberations
on the tax-related bills tomorrow.

Asked about the possibility of talks with Ichiro Ozawa, president of
the main opposition Democratic Party of Japan (DPJ or Minshuto),
Fukuda said: "I want to propose talks, but I also have to consider
what we really have to talk about."

Meanwhile, Ozawa told reporters in Shizuoka: "Leaving the amount of
money normally paid in extra taxes in taxpayer's pockets will be an
effective economic measure, particularly in rural areas." As to the

TOKYO 00000881 008 OF 011


possibility of talks with Fukuda, he said: "I am ready to accept an
offer anytime, but we think it best to leave the provisional tax in
taxpayers' hands," suggesting it would be difficult for Fukuda to
expect a breakthrough in any such talks.

The government plans to extend financial help to gasoline stations.

14) Road-construction projects being frozen one by one; Governors
angry at central legislators for causing turmoil

YOMIURI (Page 2) (Full)
April 1, 2008

Following the expiration of the provisional gasoline tax rate on
March 31, one local government after another has decided to freeze
road-related projects planned for FY2008. Internal Affairs Minister
Masuda said that the government needs to implement appropriate
financial measures to help local governments to cover a shortfall of
their annual tax revenue, but a number of prefectures have revealed
plans to put projects planned for April on hold for the time being.

Prefectural governments were busy yesterday announcing their policy
lines or holding emergency meetings to discuss response measures.

The Kanagawa prefectural government held an emergency meeting by
executive members last evening and decided to freeze a new
highway-construction project worth approximately 47.9 billion yen.
The Ishikawa prefectural government also held a meeting by Governor
Masanori Tanimoto and other assembly members and agreed to freeze
the use of the 7.2 billion yen set aside for highway-construction
projects. Okinawa Prefecture announced that it would freeze
highway-related projects for the time being, with the exception of
minimum necessary projects.

Governors voiced discontent at central government legislators for
their failure in reaching an agreement on the issue. Miyazaki
Governor Yoshihiro Murai told reporters: "I had not anticipated that
the ruling and opposition parties would fail to reach an agreement
by the 31st. We must map out measures in accordance with the
worst-case scenario (in which the provisional tax rates lapse)."

Tochigi Governor Tomikazu Fukuda claimed: "Discussion on the issue
should have been started one year ago, taking enough time and in a
serious manner."

Mie Governor Akihiko Noro revealed in a prefectural assembly plenary
session yesterday a plan to set up a task force headed by the
governor on April 1, in preparation of the expiration of the
provisional tax rates. The panel will discuss how to respond to
inquiries from prefectural citizens and the possibility of freezing
planned highway-construction projects.

The Fukui prefectural government is conducting a fact-finding
inquiry on municipal governments to fix an order of priority for
projects on the drawing board. It intends to put some of them on
hold as it will lose 450 million yen in tax revenues in April
alone.

15) Central and local governments to lose 6 billion yen in tax
revenues a day

MAINICHI (Page 2) (Excerpts)

TOKYO 00000881 009 OF 011


April 1, 2008

In a press conference last night, Finance Minister Fukushiro Nukaga
said in a strong tone: "The central and local governments will lose
4 billion yen and 2 billion yen in tax revenues a day, respectively.
We must make utmost efforts to enact (the amendment bill) as soon as
possible." Calls for reviving the provisional tax rates are also
coming from a number of local government heads. Administrative
officers harbor a strong sense of alarm at the current situation.

The amounts of reduced revenues will differ, depending on how long
the gap lasts. If the provisional tax rates are brought back in a
month or so by means of the ruling coalition using its two-thirds
majority in the lower chamber for an override, the amount of reduced
revenues of national taxes (gasoline and other taxes) will be about
120 billion yen, and the amount of reduced local tax revenues (from
light oil transactions and other taxes) will stay at about 60
billion yen.

National tax revenues are different every year in units from several
hundreds billion yen to a trillion yen in accordance with changes in
economic trends. The level of about 180 billion yen, the combined
amount of reduced revenues both for the central and local
governments, is within the level of annual fluctuations.

Even so, the decrease in tax revenues will deal a serious blow to
local governments with a weak financial basis. Given this, many
local government heads are calling for financial measures to cover
their losses. In the press conference, Nukaga indicated a
willingness to help local governments with special subsidies,
saying: "It would not be proper to do nothing. The government would
like to map out appropriate financial measures in accordance with
its responsibility."

16) Turmoil in Diet may foment distrust of politics; Ruling and
opposition blocs engaged in struggle for leadership with no progress
on debate on selection of new BOJ governor, legislation for rescuing
hepatitis patients

NIKKEI (Page 2) (Full)
April 1, 2008

In the divided Diet, where the ruling bloc controls the Lower House
but the Upper House is under the opposition bloc's control, the
policy-making process seems stalled. There has been no progress on
policy discussion with the ruling and opposition partied engaged in
a struggle for leadership over such issues as the provisional
gasoline tax rate, which expired yesterday, and the selection of a
new Bank of Japan (BOJ) governor, and a bill intended to set
fundamental steps to help hepatitis patients. It is also unclear
what will happen to key bills planned to be dealt with in the latter
half of the current session of the Diet after the budget bill for
fiscal 2008 is approved. The current dysfunctional Diet may
facilitate the public's distrust of politics.

"It is regrettable to see that no debate has occurred on important
occasions. I'll patiently continue my efforts." This remark came out
from Prime Minister Yasuo Fukuda at a news conference held late
yesterday. Fukuda expressed a sense of helplessness over the current
situation in the Diet, where discussion between the ruling and
opposition parties has made no headway. When asked about the
lopsided Diet, where the policy-making process has been stalled,

TOKYO 00000881 010 OF 011


Fukuda revealed a sense of crisis, telling reporters: "We need to
pay attention to how other countries look at us."

An amendment to the Special Taxation Measures Law, which includes
the maintenance of the current provisional tax rate for gasoline,
has not been debated even once before the start of the new fiscal
year today in the Upper House, where the opposition bloc holds a
majority of seats.

At the end of January, the ruling and opposition parties agreed by
the good offices of the Lower House speaker and the Upper House
president that they would reach a certain degree of conclusion by
the end of the fiscal year 2007 (meaning by the end of March 31).
Criticism heard in the ruling camp is that the Liberal Democratic
Party's (LDP) executives, who apparently had felt relieved at the
agreement, failed to take any action until March. Meanwhile, the
major opposition Democratic Party of Japan (DPJ) has just reiterated
that the ruling bloc railroaded the budget bill through the Lower
House at the end of February and brushed aside policy talks. Both
sides undeniably have wasted time.

A new BOJ governor has yet to be chosen with no prospect for a new
governor yet in sight. As a result of coordination made until now,
many in the government and the ruling bloc take the view that it
will be difficult to choose some from the private sector. The
government will eventually choose someone from among those hailing
from the Ministry of Finance or the BOJ.

Major policy tasks in the Diet and progress

Policy tasks Progress
Bills related to tax revenues for road projects Debate on an
amendment to the Special Taxation Measures Law is to start in the
Upper House on April 2. When discussion of a bill revising the Law
for Financial Resources on Road Construction will begin has yet to
be decided. When the ruling and opposition parties will negotiate
changes to the bill has yet to be in sight.
Selection of a new BOJ governor The secretaries general of the LDP
and the DPJ agreed to choose a new governor swiftly. When the
government will come up with a candidate for the post is unknown.
Bills for rescuing hepatitis patients The ruling bloc-sponsored
bill and the DPJ-sponsored bill have been both left in limbo in the
Lower House and the Upper House respectively.
Bill for overseas dispatch of the Self-Defense Forces (permanent law
for overseas dispatch of SDF) The prime minister instructed his
staff to submit the bill to the current Diet session. Coordination
is underway in the ruling bloc.
Bill for reform of the civil servant system Coordination is underway
in the government and the ruling camp. The government and the ruling
bloc aim to get approval for the bill at a cabinet meeting early
this month.

17) DPJ President Ozawa: Lower House election may occur in May

MAINICHI (Page 1) (Full)
April 1, 2008

Ichiro Ozawa, president of the Democratic Party of Japan (DPJ or
Minshuto), attended a meeting yesterday of the Japan Trade Union
Confederation in Shizuoka City, in which he said:

"There is a possibility that a Lower House election will be held in

TOKYO 00000881 011 OF 011


May or June. I'm sure that a general election will take place at
least before the end of this year. The number of seats our party has
to secure is at least 150 of the 300 seats."

With the expiration of the provisional gasoline tax rate, his remark
underlined his view that the Fukuda government will soon reach a
dead end.

18) BOJ to revise down projection for growth rate in fiscal 2008 GDP
from 2.1 PERCENT to around 1.5 PERCENT

YOMIURI (Page 2) (Full)
April 1, 2008

It was learned yesterday that the Bank of Japan (BOJ) will likely
revise down its projection for real GDP growth in fiscal 2008 from
2.1 PERCENT to around 1.5 PERCENT . Its judgment is that production
and personal consumption will inevitably dampen in fiscal 2008 given
the slowdown of the U.S. economy, the rapid appreciation of the yen
against the dollar, and the sharp rise in crude oil prices.

There is now a stronger possibility of the BOJ leaving the interest
rate unchanged at the present level of 0.5 PERCENT , taking the
stand that it is necessary to determine the future of the economy
even more cautiously, following the downward revision of the GDP
projection.

The monthly economic report for March released by the government
indicated a view that the Japanese economy has entered a temporary
lull, with the future course of the economy remaining unclear. The
BOJ's "tankan" survey of business confidence to be released on April
1 will most likely report a decline in the present conditions and
future outlook for corporate performance, compared with the previous
survey carried out in December last year.

The prevailing view of the future of the economy in the BOJ is
severe, with Policy Board member Miyako Suda in a speech given on
March 27 noting, "There is now a stronger possibility of the growth
rate in fiscal 2008 dropping to a level on a par with the potential
growth rate (between the mid- and upper 1 PERCENT range)."

SCHIEFFER

© Scoop Media

 
 
 
 
 
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