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Cablegate: Japanese Morning Press Highlights 04/10/08

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UNCLAS SECTION 01 OF 11 TOKYO 000979

SIPDIS

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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 04/10/08


Index:

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

Diet affairs:
4) Prime Minister Fukuda, in party-heads debate, accuses DPJ
President Ozawa of "misusing power" by refusing BOJ candidates one
after the other (Mainichi)
5) Democratic Party of Japan (DPJ) starting to rebel against Ozawa's
top-down method, with seven lawmakers bucking party line on vote on
BOJ slate (Mainichi)
6) New BOJ President Shirawaka vows to fulfill mission (Asahi)

North Korea problem:
7) Assistant Secretary Hill: "Will take time to reach a resolution"
with North Korea (Nikkei)
8) Japan alarmed that U.S. will remove North Korea from
terror-sponsor list if progress reached on nuclear front (Nikkei)
9) Mrs. Abe to meet the Dalai Lama (Sankei)
10) Prime Minister on Tibet issue: China bears responsibility
(Yomiuri)

Defense affairs:
11) Defense Minister Ishiba cancels trip to Washington (Asahi)

12) Futenma council meeting between central government and Okinawa
governments makes little progress (Mainichi)
13) -Futenma council considering working-level talks (Yomiuri)
14) Futenma council considering Okinawa request for discussion of
specific themes (Asahi)

Economic affairs:
15) - Government and ruling camp agree on Fukuda's proposed
integration of road-related tax revenues into general account budget
from fiscal 2009 (Yomiuri)
16) With tax removed, price of gasoline at the pump drops 27.1 yen
per liter (Yomiuri)
17) Japan-related mergers and acquisitions dropped 30 PERCENT in
fiscal 2007 due to sub-prime loan mess (Mainichi)

18) Former U.S Ambassador to U.S. Ryozo Kato to become baseball
commissioner in Japan (Yomiuri)

19) Potential candidate to be next prime minister Yosano writes book
setting up his political agenda (Sankei)

Articles:

1) TOP HEADLINES

Asahi & Mainichi:
Fukuda criticizes DPJ as abusing power over BOJ personnel issue in
one-on-one debate with Ozawa

Yomiuri:
Government eyes prohibiting return of victims of new flu strains
from overseas

Nikkei:
G-7 finance chiefs to seek financial institutions' cooperation to

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avoid financial crisis

Sankei:
Who are the people in the Chinese "blue man group"? Actions of
Olympic torch guards being criticized

Tokyo Shimbun:
MLIT subsidies for development plans in FY2008 estimated at one
trillion yen

Akahata:
Niigata farmers pin hopes on JCP's efforts to revive agriculture

2) EDITORIALS

Asahi:
(1) Public should determine outcome of debate between Fukuda, Ozawa
(2) Medical system for very old patients: Be aware of elderly
persons' concerns

Mainichi:
(1) New BOJ Governor Shirakawa also tasked with recovering damaged
authority
(2) Party leaders finally becoming serious

Yomiuri:
(1) Though party head debate heats up, more constructive talks
needed
(2) Heavy tasks lie ahead before new BOJ governor

Nikkei:
(1) Reform restriction-ridden BOJ structure now
(2) Party head talks start at last

Sankei:
(1) DPJ suspected of pressuring members to reject BOJ deputy
governor: Party must clear up truth about political pressure
(2) Six-party talks: Don't be drawn into North Korea's strategy

Tokyo Shimbun:
(1) Fukuda, Ozawa should discuss specifics and seek public judgment
(2) New BOJ governor needs to take prompt, shrewd economic measures

Akahata:
(1) New BOJ governor should keep weight of public opinion in mind

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 9

NIKKEI (Page 2) (Full)
April 10, 2008

Morning
Stayed at Kantei residence.

12:16
Met with Deputy Chief Cabinet Secretary Futahashi at Kantei.

13:42
Met with Chief Cabinet Secretary Machimura.


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15:00
Had a one-on-one debate in Diet.

16:18
Met with Chairperson Sata of the ruling bloc's project team on
reform of public cooperation under the control of the Ministry of
Land, Infrastructure and Transportation, and LDP Policy Research
Council Chairperson Tanigaki and junior coalition New Komeito's
Policy Research Council Chairperson Saito. Tanigaki and Saito
remained. Afterwards, met with Futahashi.

17:09
Met with Minister of Internal Affairs and Communications Masuda,
Secretary General Miyawaki of the Committee on Promotion of

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Decentralization of Authority, and Deputy Assistant Chief Cabinet
Secretary Saka, joined by Secretary General Nakajima of the Office

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for Revitalization of Local Areas.

17:38
Met with BOJ Governor Shirakawa. Issued a letter of appointment to
National Personnel Authority President Tani with Machimura and
Finance Minister Nukaga and others also present. Afterwards, met
with State Minister in Charge of Economic and Fiscal Policy Ota.

18:40
Dined with Nippon Keidanren Chairperson Mitarai, and its Vice
Chairpersons Kusakari and Cho at "Le Trianon" at Grand Prince Hotel
Akasaka.

20:14
Arrived at Kantei residence.

4) Fukuda blasts DPJ as "abusing power" in one-on-one Diet debate
session

MAINICHI (Top Play) (Full)
April 10, 2008

Prime Minister Yasuo Fukuda and Democratic Party of Japan (DPJ)
leader Ichiro Ozawa held their first one-on-one debate session in
the current Diet session yesterday. Taking up the DPJ's rejection of
the government's nomination of Hitotsubashi University Professor
Hiroshi Watanabe, a former vice finance minister for international
affairs, for the post of the Bank of Japan (BOJ) deputy governor,
Fukuda criticized the main opposition party as "abusing power."
Ozawa refuted: "We must end the practice of reserving (senior BOJ
posts) for the Finance Ministry."

Although there was no question on it from Ozawa, Fukuda brought up
the central bank personnel issue. He said: "Is it totally
unacceptable for former bureaucrats to assume the posts?" He went on
to say: "It is in accordance with the Diet personnel appointment
system to approve the government's nominations as long as they are
not improper."

Ozawa replied: "Among the BOJ top posts, there is one set aside for
the Finance Ministry. We must change such a structure based on
vested interests." In response to Fukuda's criticism of the party as
"abusing power," Ozawa said: "You are not fully aware of what
happened in the (House of Councillors) election last year."

In reference to the prime minister's proposal for shifting

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road-related tax revenues to the general budget starting in FY2009,
Ozawa said: "We cannot discuss the proposal before the government
and the ruling coalition formally endorse it," calling for proper
procedures to be taken in the party before the ruling and opposition
camps start negotiations.

Although Fukuda emphasized: "The party has also agreed on the
proposal," he indicated his willingness to form an agreement by the
government and the ruling parties, remarking: "As you insist that
the government and the ruling camp form an agreement, I will do that
as soon as possible."

Fukuda also questioned Ozawa's leadership in the DPJ, saying: "Who
is the trustful person to whom I can talk?"

5) Seven DPJ lawmakers defy party policy, as sparks fly over Ozawa's
management of party affairs; Rebellion against Ozawa growing

MAINICHI (Page 2) (Full)
April 10, 2008

The government's plan to appoint Hiroshi Watanabe, a former
vice-foreign minister for international affairs, as a Bank of Japan
deputy governor failed to win the House of Councillors' approval
yesterday, with the opposition camp voting down the government's
nomination for the third consecutive time. The fight over the
government's nomination s also exposed discontent in the Democratic
Party of Japan (DPJ) toward President Ichiro Ozawa, with seven DPJ
members defying the party's decision or abstaining from the vote. If
one DPJ-affiliated independent lawmaker is included, a total of
eight, twice the number defied party policy than in the previous
vote. One lawmaker criticized the party policy as a decision that
only focused on forcing Lower House dissolution. The growing
rebellion against President Ozawa, the sole determiner of DPJ
policy, has created a difficult challenge for his management of
party affairs.

Yasuhiro Oe, who voted in favor of Watanabe's appointment, later
told the press: "The party decision is strange. President Ozawa is
fixated on something." Hideo Watanabe, too, insisted that the policy
would not lead to Ozawa's goal of taking power, saying, "Questions
will emerge about entrusting the DPJ with the helm of government."

This was the third time for a vote to be taken on BOJ posts in the
ongoing Diet session. In addition to the growing number of DPJ
rebels, the gap between approval and disapproval votes has been
shrinking because the People's New Party, which forms a joint
parliamentary group with the DPJ, has supported the government's
nomination since the second vote.

Seiji Maehara, who followed the party line in voting, also noted,
"In my heart, I wanted to vote for the candidate. The party has
decided to oppose (the government plan) in defiance of the
predominant view in the party to endorse it. I think this has
resulted in strong discontent in the party."

Ozawa rebutted such a view in a press conference yesterday: "An
organization exists to iron out differences in opinion. It is
natural to make a decision through an organizational process." At
the same time, a lawmaker, who had abstained from the vote, noted,
"Huge damage has been done. The situation is not good this time
around."

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6) New BOJ Governor Shirakawa: "I'll endeavor to fulfill my
mission"

ASAHI (Page 1) (Full)
April 10, 2008

Masaaki Shirakawa (58), deputy governor of the Bank of Japan (BOJ),
was approved as the 30th BOJ governor yesterday. At his inaugural
press conference late yesterday, Shirakawa said: "As the
international monetary market has been wavering since last summer,
I'd like to pay close attention to it. I want to have more occasions
to closely exchange views with leaders of banking institutions."

Shirakawa was unusually promoted from the deputy governor after
serving in the post for 21 days to the top BOJ post. He was the
third candidate nominated by the government after the government's
first and second candidates were both rejected in the Diet. At the
press conference, Shirakawa said, "It is an unexpected honor to be
appointed to this post. I am perplexed by the rapidly changing
situation," and went on to say. "I will devote myself to fulfilling
the Bank of Japan's mission of keeping prices stable and maintaining
orderly credit conditions."

The BOJ's policy board consists of nine members, but two posts are
vacant, as one deputy governor and one council member have yet to be
appointed. Speaking of this situation, Shirakawa noted: "This is an
unusual situation. I hope those who are suitable for the posts will
be appointed swiftly. It is my responsibility to stem any negative
effect of these vacancies on the BOJ's operations."

Shirakawa will make his debut at the upcoming Group of Seven (G-7)
Finance Ministers and Central Bank Governors meeting in Washington
slated for tomorrow. High on the agenda for that conference is how
to deal with the currently chaotic international monetary market.
Shirakasa said: "I have no silver bullet, but I'd like to explain my
experience (for I as a senior BOJ official tackled Japan's banking
crisis) on the side of the supply of liquidity."

7) Coordination underway in six-party talks for breaking stalemate;
U.S. Assistant Secretary of State Hill says, "More time is necessary
for final resolution"

NIKKEI (Page 8) (Excerpts)
April 10, 2008

Ken Sato, Beijing

The member nations of the six-party talks on the North Korean
nuclear issue yesterday undertook coordination in Beijing to break
the stalemate in the second stage of nuclear abandonment. They
seemed to have coordinated the differences of opinions with the U.S.
and North Korean chief delegates to the multilateral talks on April
8 reaching a compromise on the contents of a nuclear program
declaration, which has been set as the feature of the second stage.
U.S. Assistant Secretary of State Christopher Hill, chief negotiator
in the six-party talks, highlighted progress in the situation, but
he told reporters at the same time: "It will take time before we
reach a final settlement."

Hill met separately with his Japanese, Chinese, and South Korean
counterparts in the six-party talks in Beijing. He briefed them on

TOKYO 00000979 006 OF 011


the results of his meeting with North Korean Vice Foreign Minister
Kim Kye Gwan, North Korea's chief delegate to the six-party talks.
Hill told them: "(U.S.-North Korea talks) made progress." Speaking
of future developments, Hill hinted that some kind of announcement
might be made "in a few days," but he added: "I am reluctant to say
we made a big breakthrough." The same day, U.S. White House Press
Secretary Dana Perino indicated that the U.S. would carefully

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proceed with coordination," telling the press, "I'd like you to
refer you to Mr. Hill's remarks."

8) Tokyo alarmed by possibility of Washington's delisting DPRK as
state sponsor of terrorism, keeps tab on what decision Washington
will make

NIKKEI (Page 8) (Full)
April 10, 2008

The government, having been briefed on the results of the April 8
U.S.-North Korea talks, intends to carefully examine whether the
expected nuclear program declaration will be complete and accurate.
But Japan has decided to extend the currently-imposed economic
sanctions against North Korea, which are to expire on April 13, for
another half year as scheduled because there has been no progress
seen on the abduction issue. Japan, however, is wary of Washington's
accelerating the move to delist North Korea as a state sponsor of
terrorism and intends to watch carefully what decision the U.S. will
make.

At a news conference yesterday, Ministry of Foreign Affairs' (MOFA)
Press Secretary Kazuo Kodama, when asked about the contents of a
nuclear program declaration, made this comment: "We will judge after
carefully examining it (about whether it is commendable)." MOFA
Asian and Oceanian Affairs Bureau Director-General Akitaka Saiki,
who returned home (from Beijing) yesterday, is likely to make a
report to the Prime Minister's Official Residence possibly today on
the results of the Beijing meeting.

On the question of whether to remove North Korea from the list of
state sponsors of terrorism, Japan so far has asked the United
States not to delist it as long as there is no progress on the
abduction issue. MOFA will carefully watch what decision the U.S.
will make as it positively thinks that the U.S. has understood fully
Japan's position, as Saiki put it.

9) Former Prime Minister Abe's wife, Akie to meet Dalai Lama today

SANKEI (Page 5) (Excerpts)
April 10, 2008

It was learned yesterday that former Prime Minister Shinzo Abe's
wife, Akie, will meet today the 14 Dalai Lama, who is on his way to
the United Stares. Meanwhile, in consideration of China, which has
criticized Tibet's exiled spiritual leader for riots in Tibet,
Foreign Ministry spokesman Kazuo Kodama stated: "The government on
its part has no plan to have any contact with him." The planned
meeting between the former First Lady and the Dalai Lama appears to
be appealing Japan's position of not playing down the human rights
issue to the world.

The meeting reportedly was arranged through the government of India
where the Dalai Lama has been living in exile. It was not arranged
by the Japanese government. Referring to the Tibetan riots in his

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meeting on March 18 with Pema Gyalpo, professor at Toin University
of Yokohama, who served as the first Liaison Officer of H.H. the
Dalai Lama for Japan, former Prime Minister Abe indicated his
intention to work on the Chinese side, saying: "I want to make
efforts so that the human rights of the Tibetan people will be
secured."

10) Fukuda: China bears the most responsibility for Tibet issue

YOMIURI (Page 2) Full)
April 10, 2008

In the party-heads debate yesterday, Prime Minister Fukuda,
referring to the Tibetan issue said: "I think that China bears the
most responsibility, but I hope the nation will peacefully settle
the issue by talks in a cool-headed manner." This was the first time
for the prime minister to criticize China for its response measures
over the Tibet issue. A number of countries have announced they
would boycott the opening ceremony of the Beijing Olympics. On this,
Fukuda said: "The Chinese government should make efforts so that all
athletes will be able to take part without any trouble."

11) Ishiba gives up U.S. visit

ASAHI (Page 4) (Full)
April 10, 2008

Defense Minister Ishiba has given up his plan to visit the United
States and meet with U.S. Secretary of Defense Gates in early May,
sources revealed yesterday. It is unusual that a defense chief's
U.S. visit itself has been called off in spite of an almost
determined schedule. Ishiba is believed to have decided to cancel
the visit primarily because the Japanese and U.S. governments
differed on what to take up in their meeting.

Ishiba chose the United States as the first foreign country to visit
after becoming defense minister, according to sources familiar with
Japan-U.S. relations. His meeting with Gates had been set to take
place in Washington on the afternoon of May 5 through
intergovernmental coordination. Tokyo and Washington made
behind-the-scenes arrangements on what to take up for the meeting.
Tokyo proposed discussing an outline of the bilateral security
alliance, such as the big picture of U.S. force realignment in Japan
and the future of bilateral security arrangements. However,
Washington proposed discussing specific issues regarding the
realignment of U.S. forces in Japan, such as the planned relocation
of Futenma airfield and the planned relocation of 8,000 Marines from
Okinawa to Guam.

On the issue of Futenma relocation, Okinawa has been calling for
Futenma airfield to be relocated to an offshore site, while the
government plans to build a land-based facility. Meanwhile, the
Defense Ministry's environmental impact assessment has been delayed.
Futenma relocation is set for 2014. This timetable, however, is now
uncertain. The Pentagon wants to see concrete progress during the
Bush administration's term. The Defense Ministry became increasingly
negative about Ishiba's U.S. visit. "Even if he visits the United
States now, it looks like he will have to receive a warning over
there," one of the ministry's senior officials said.

"The Diet schedule is tight," a top-level official of the Defense
Ministry noted. "In addition," the official said, "there was an

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Aegis ship accident, so our crisis management ability is now being
called into question." The official added, "We need to consider how
much we can expect when he visits the United States."

12) Futenma relocation: Gov't shelves problems, progress played up

MAINICHI (Page 5) (Full)
April 10, 2008

The government held a consultative meeting yesterday at the prime
minister's office with officials from Okinawa's prefectural and
municipal governments to discuss the pending issue of relocating the
U.S. Marine Corps' Futenma Air Station to a coastal area of Camp
Schwab in Okinawa Prefecture's northern coastal city of Nago. The
meeting, however, was ceremonial in a way to 'stage-manage' a show
of progress in the government's stalemated consultations with
Okinawa while shelving Okinawa's call for revising the alternative
facility plan.

Public sentiment has gone from bad to worse due to a recent sequence
of incidents brought about by U.S. military personnel. Meanwhile,
the House of Councillors in the Diet has now disapproved a
government-proposed special agreement on Japan's burden sharing of
costs for the stationing of U.S. forces in Japan (omoiyari yosan or
literally "sympathy budget"). As a result, the government cannot
execute the sympathy budget for the first time. The bilateral
alliance is now in a deteriorated environment. As it stands, the
government is becoming nervous since it does not want the planned
realignment of U.S. forces in Japan to hit the snag.

In yesterday's meeting, the government appreciated Okinawa for its
stance of cooperating on an environmental impact assessment of the
relocation site and its environs. "We will have to coordinate the
framework of consultations," Okinawa Gov. Hirokazu Nakaima said,
suggesting the need for the government and Okinawa to set up a panel
of working-level officials. However, the government avoided giving a
definite answer.

The biggest bottleneck to Futenma relocation is the government's
authority over sea reclamation. Nakaima is expected to be urged to
make a decision around the summer of next year on whether he will
actually approve the government's reclamation plan. For the time
being, all the government can do is to keep up its consultations
with Okinawa while avoiding confrontation with Okinawa's
base-hosting localities.

13) Nakaima calls for working-level venue to revise Futenma plan

YOMIURI (Page 4) (Full)
April 10, 2008

The consultative council to discuss the planned relocation of
Futenma Air Station between the government, Okinawa, and four
affected municipalities met for the seventh time at the Prime
Minister's Office (Kantei) yesterday. In the session, the Okinawa
side called for establishment of a working-level venue for revising
the government's relocation plan. In response, Chief Cabinet
Secretary Nobutaka Machimura indicated that the government would

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consider it positively, saying: "We would like to consider it
thoroughly. We would like to make efforts in order to realize the
relocation at an early time."


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14) Nakaima calls for theme-specific discussions on Futenma
relocation

ASAHI (Page 4) (Full)
April 10, 2008

The consultative council between the government and relevant
municipalities in Okinawa to discuss the planned relocation of
Futenma Air Station met at the Prime Minister's Office (Kantei)
yesterday. In the session, the Okinawa side renewed its call to move
the planned replacement base in the Henoko district in Nago further
offshore. No conclusion was reached.

Governor Hirokazu Nakaima called for the creation of venues to
deepen discussion by theme, such as moving the replacement facility
further offshore and eliminating the dangerous nature of Futenma Air
Station, saying: "Clear directions must be shown for realizing a
variety of requests, such as moving the planned base further
offshore."

In response, Minister of State for Okinawa and Northern Territories
Fumio Kishida showed understanding, but Chief Cabinet Secretary
Nobutaka Machimura simply said, "We would like to consider it for
the next meeting."

15) Gas prices drop by 21.7 yen over a week since end of March

YOMIURI (Page 2) (Full)
April 10, 2008

The Oil Information Center (OIC) on April 9 released the average
price of regular gasoline at the pump as of the 7th. The price of
regular gasoline per liter dropped to 131.2 yen, down 21.7 yen,
compared with the level on March 31 before the expiry of the
provisional gas tax rate. Compared with the level of the 3rd, when a
special price survey was conducted, there was a drop by 3.1 yen.
Looking at prices by region, Shikoku saw the largest margin of a
drop per liter, compared with the level of March 31. The margin of a
drop expanded to 23.9 yen on the 7th.

The gas tax is imposed when products are shipped from oil factories.
Many gas stations had stocks of gasoline shipped in March with the
old tax rate imposed. However, according to the OIC, many gas
stations as of the 7th found it easier to lower gas prices with
those stockpiles sold out. Regarding future prices, the OIC has
predicted that there is the possibility of gas prices further
falling in Saitama and Chiba, where price competition is usually
fierce.

16) Government, ruling parties agree to comply with DPJ's request to
adopt reallocation of special-purpose road construction revenues to
general account as their consensus

YOMIURI (Page 2) (Full)
April 10, 2008

The government and the ruling parties yesterday decided to formally
adopt on April 11 Prime Minister Fukuda's proposal, made on March
27, for shifting special-purpose road construction revenues to the
general account as a consensus between them. They made the decision
in order to respond to the Democratic Party of Japan's (DPJ or
Minshuto) call on the government and the ruling parties to make a

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clear-cut decision on the matter as a premise for it to enter into
talks between the ruling and opposition camps on road funds.

DPJ President Ozawa during a press conference on the 9th noted, "If
a cabinet decision and a party decision are reached on this issue,
we would enter into talks. There will be no talks, if the government
and the ruling parties do not make that decision."

Prime Minister Fukuda yesterday evening told reporters at the Prime
Minister's Office (Kantei), "It is possible for the government and
the ruling parties to reach a consensus, after each ruling party
reaches a party decision. It would not take much time to do so."

The government has indicated that there would be no cabinet decision
on the matter for the time being with one noting, "The prime
minister's proposal is a rough outline. It is not a bill." However,
if the situation remains unattended, the DPJ would not respond to
its call for talks. The government and the ruling parties have,
therefore, decided to announce that the decision to adopt the prime
minister's proposal as their consensus is their formal policy.

However, Election Committee Chairman Koga, a coordinator of the
Liberal Democratic Party's (LDP) road policy clique in the Diet,
sought a cautious approach from Secretary General Ibuki, noting, "If
we go any further on the issue, those who have supported the
administration will turn against it." As such, a plan to reach the
decision at a meeting of related cabinet ministers or senior ruling
party officials without going through intraparty procedures has been
floated.

17) Total amount of M&As in fiscal 2007 involving Japanese companies
drop 30 PERCENT due to subprime mortgage crisis

MAINICHI (Page 8) (Full)
April 10, 2008

A survey conducted by Recof, an M&A service company, has found that
the total amount of mergers and acquisitions (M&As) in fiscal 2007
involving Japanese companies stood at 10.1099 trillion yen, down
28.2 PERCENT , compared with the previous year. A decline in money
terms is the first in five years. The reason for the drop is
ascribable to such factors as companies finding it difficult to
procure capital to carry out an M&A, since banks have become
cautious about extending loans following the turmoil in the
financial market caused by the subprime mortgage fiasco.

Recof explained that though the amount increased in the first half
of fiscal 2007 at a pace faster than the preceding year, it dropped
more than 45 PERCENT in the second half of the year. The number of
M&As in that year stood at 2,616, down 4.3 PERCENT , compared with
the year before.

It had been expected that M&As in fiscal 2007 would increase,
following the lifting of a ban on triangular mergers, a method of
foreign companies acquiring Japanese companies through share swaps
using their parent companies' stocks. However, an increasing number
of companies switched to a cautious stance in managing their
companies with the escalation of the subprime mortgage crisis
compounded by uncertain economic prospects.

The M&A involving the largest amount of money in fiscal 2007 was the
acquisition of MGI Pharma, a pharmaceutical company listed on the

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U.S. NASDAQ, by Eizai with 433.7 billion yen. The second largest
case was the purchase of Kyowa Hakko Kogyo by Kirin Holdings with
415.8 billion yen.

18) Ambassador to U.S. Kato to become baseball commissioner

YOMIURI (Page 1) (Slightly abridged)
April 10, 2008

It has now become certain that Ryozo Kato, 66, who will soon resign
as ambassador to the United States, will become the Nippon
Professional Baseball commissioner. The NPB has singled Kato out for
the commissioner's post because he knows so much about U.S. Major
League Baseball and Japanese baseball. He is expected to assume the
post after his nomination is approved in an executive committee
meeting and owners' conference in June. Acting Commissioner
Yasuchika Negoro, 75, will step down from his current post on June
30. Kato is expected to take the position on July 1.

Kato threw out the opening ball at a game between the Yankees and
the Mariners in May 2004. Hideki Matsui and Ichiro were playing in
the game. In January 2006 immediately before the World Baseball
Classic, Kato invited Japanese Team Manager Sadaharu Oh and the
all-time home run champion Hank Aaron to the Japanese Embassy.

19) Kaoru Yosano to publish book for first time

SANKEI (Page 5) (Full)
April 10, 2008

Former Chief Cabinet Secretary Kaoru Yosano, 69, a member of the
ruling Liberal Democratic Party, will publish next week his first
book, titled "Proud Politics (Dodotaru Seiji) (Published by Shincho
Shinsho). In the book, Yosano emphasizes that politicians' job is to
make big decisions at risk of their lives and that he no longer
needs to court public favor. He also mentions many times in the book
the need for a consumption tax hike, which is his pet argument.
There is a rumor in the capital district of Nagatacho that the book
may be a set of campaign pledges for the election to pick a
successor to Prime Minister Yasuo Fukuda.

Meantime, Yosano writes that former LDP Secretary General Hidenao
Nakagawa's assertion that revenues should be increased by economic
growth is a cowardly stance and a prime example of evasive politics.
Referring to those who promoted "a small government," including
former Internal Affairs and Communications Minister Heizo Takenaka,
Yosano says that labeling those having a different national policy
as "forces of resistance" is shameful. He advocates that he will
push forward with "warm reforms" combined with promotion of
increased competitiveness and the "bringing the country together."

MESERVE

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