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UNCLAS SECTION 01 OF 12 TOKYO 000250 
 
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 01//08 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Diet agenda: 
4) Ruling camp pulls back bridging bill on temporary tax, having 
reached agreement with opposition to resolve tax budget issue by end 
of fiscal year  (Nikkei) 
5) Brief truce between the ruling and opposition camps allows Diet 
deliberations to return to normalcy  (Tokyo Shimbun) 
6) Fukuda administration avoids "March crisis": Markets appreciate 
agreement between ruling and opposition camps on tax bill issue 
(Yomiuri) 
7) Former LDP Secretary General Hidenao Nakagawa: No chance now of 
Diet dissolution in April  (Mainichi) 
 
Economic affairs: 
8) After 8-year hiatus, Japan will host G7 meeting of finance 
ministers and central governors Feb. 9 in Tokyo  (Yomiuri) 
9) G7 agenda to include global financial unrest, with Japan, U.S., 
Britain announcing environment fund  (Yomiuri) 
10) Japan, U.S. Britain working to ready a fund to help development 
countries counter greenhouse-gas emissions  (Asahi) 
 
11) Muto slated to be the next governor of the Bank of Japan 
(Mainichi) 
12) Four of Japan's major banks suffer subprime loan-related losses 
totaling 500 billion yen  (Nikkei) 
13) Private sector members of government's fiscal and economic 
policy panel request front-loading of growth-strategy measures, 
given current environment  (Asahi) 
14) Prime Minister Fukuda asks panel of experts to flesh out 
proposed consumer administration agency  (Nikkei) 
15) Government plans infrastructure-building package of yen loans to 
support Africa's development of an industrial base  (Sankei) 
 
16) China's foreign minister to visit Japan in March  (Mainichi) 
 
17) Defense Ministry as part of reorganized procurement system will 
strengthen checks on cost of imported equipment  (Nikkei) 
 
18) Japanese, Australian foreign ministers to meet to try to iron 
out differences on whaling issues  (Mainichi) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: Sankei: Tokyo Shimbun: 
Ten suffer food poisoning from Chinese dumplings: Pesticide residue 
to blame? Three made seriously ill; JT-affiliate recalls 23 items 
 
Yomiuri: 
Tax-related bills likely to secure Diet approval before end of this 
fiscal year: Stopgap bill withdrawn 
 
Nikkei: 
Provisional gasoline tax rate: Ruling parties withdraw stopgap bill 
following agreement with opposition camp to reach conclusion within 
current fiscal year 
 
TOKYO 00000250  002 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//08 
 
 
Akahata: 
Ruling, opposition parties agree on withdrawal of stopgap bill, 
accepting mediation by Lower House speaker, Upper House president 
 
2) EDITORIALS 
 
Asahi: 
(1) Ruling, opposition parties agree on provisional gasoline tax 
bill: Real discussion has yet to start 
(2) Asahi, Nikkei Yomiuri to launch joint Japanese-language Web 
site, Aratanisu: We want readers to see differences in opinions of 
three leading dailies 
 
Mainichi: 
(1) Ruling, opposition parties reach agreement on gasoline tax bill: 
First step toward responsible Diet 
(2) Iwakuni mayoral election will question government's base 
administration 
 
Yomiuri: 
(1) Mediation by Lower House speaker, Upper House president: DPJ 
should hold vote on provisional gasoline tax bill within this fiscal 
year 
(2) Social security council: Consumption tax rate is central issue 
of discussion 
 
Nikkei: 
(1) Drastically reform special-purpose road construction revenue 
system, making best use of mediation by Lower House speaker, Upper 
House president 
(2) European countries should strengthen ties to stabilize financial 
system 
 
Sankei: 
(1) Stopgap gas tax bill: Establish principles of divided Diet 
(2) Chinese dumplings: Thoroughly examine how poisoning happened and 
come up with preventive measures 
 
Tokyo Shimbun: 
(1)  Stopgap bills killed: What was the furor about? 
(2) Revision of system of reimbursement of medical fees to hospitals 
under medical insurance system: Too much consideration given to 
Japan Medical Association 
 
Akahata: 
(1) Stop mergers and abolition of public hospitals to protect 
people's lives 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, January 30, 2008 
 
NIKKEI (Page 2) (Full) 
January 31, 2008 
 
08:43 
Met Secretary General Ibuki at the Kantei. 
 
12:24 
Met Deputy Chief Cabinet Secretary Futahashi at the Kantei. 
 
 
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14:23 
Met Lower House member Sanae Takaichi. Later, met LDP research 
commission on consumer issues chairman Noda, executive secretary 
Gotoda, and others, joined by Chief Cabinet Secretary Machimura. 
 
15:44 
Met Science and Technology Minister Kishida, Council for Science and 
Technology Policy member Masuo Aizawa, and others. Kishida stayed 
behind. 
 
16:29 
Met Economic and Fiscal Policy Minister Ota and others, joined by 
Assistant Deputy Chief Cabinet Secretary Saka. Ota stayed behind. 
 
17:10 
Met cabinet office's special advisor Okuda. 
 
18:00 
Attended a meeting of the Council for Science and Technology Policy. 
Later, met Beijing University Professor Yu Dan, with Upper House 
member Hiroyuki Arakawa present. 
 
19:27 
Returned to his official residence. 
 
4) Stopgap bill withdrawn 
 
NIKKEI (Top play) (Abridged) 
January 31, 2008 
 
The ruling and opposition parties agreed yesterday to reach a 
"certain conclusion" within the current fiscal year on how to handle 
the rate of provisional taxation on gasoline and other road-related 
tax revenues. The two blocs in the Diet will now try to find common 
ground over the provisional gas tax rate as encouraged by the 
leaders of the two Diet chambers. A bill revising the Special 
Taxation Measures Law to retain the provisional gas tax rate will 
clear the Diet within the current fiscal year, and the tax rate is 
highly likely to be extended beyond its March 31 expiry. The 
governing parties therefore see no need for their lawmaker-sponsored 
gas tax stopgap bill submitted to the Diet in an aim to extend the 
temporary gas tax rate until the end of May. The ruling coalition 
will withdraw the bill today. 
 
The ruling coalition of the Liberal Democratic Party and New Komeito 
had threatened to push through the stopgap bill yesterday in the 
House of Representatives. Even if the House of Councillors refused 
to act, the ruling parties could have taken a second vote on it in 
the House of Representatives within 60 days-just before the current 
fiscal year ends-to extend the temporary gas tax rate up to the end 
of May. The ruling parties had intended to extend the tax rate 
beyond its March 31 expiry. 
 
However, it is also true that a fierce fight between the ruling and 
opposition parties was about to brew in the Diet and that the ruling 
and opposition parties feared public criticism. As a result, the 
ruling and opposition blocs apparently thought twice and chose to 
talk with each other right before taking a vote in a plenary sitting 
of the Diet's lower chamber. 
 
The leaders of the Diet's lower and upper chambers yesterday met 
with representatives from the ruling and opposition parties and 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//08 
 
encouraged them to talk. Premised on this compromise proposal from 
the two top Diet leaders, the ruling and opposition parties agreed 
to reach a conclusion within the current fiscal year on how to 
handle the bill revising the Special Taxation Measures Law. 
 
House of Representatives Speaker Yohei Kono met with secretaries 
general from the ruling and opposition parties. In the meeting, Kono 
said, "Reaching a certain conclusion means following the past 
practice of examining the budget and revenue bills in both houses of 
the Diet." After the meeting, Kono and House of Councillors 
President Satsuki Eda met the press and stated that reaching a 
conclusion is for the House of Councillors to decide on whether or 
not to approve of it within the current fiscal year. Within the 
current fiscal year, the House of Representatives can take a second 
vote with a majority of two-thirds even if the House of Councillors 
votes down the bill revising the Special Taxation Measures Law and 
other legislative measures. The ruling coalition therefore can 
prevent the provisional tax rate from expiring without a bridging 
measure. 
 
5) Ruling and opposition camps call truce for the moment, allowing 
budget deliberations to return to normal; Next hurdle will be the 
appointment of Bank of Japan governor 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
January 31, 2008 
 
With the ruling parties' withdrawal of the bridging bill that would 
have extended briefly the rate of the provisional taxes (including 
the gasoline tax), the Diet today will return to normal, with 
interpellations in the Upper House Budget Committee of the fiscal 
2007 supplementary budget bill. The battle between the ruling and 
opposition camps over the special measures revision bill on taxes 
that includes the provision tax rates has only been put off, but for 
the time being, it appears that budget bill deliberations will 
proceed smoothly. 
 
On the other hand, apart from budget deliberations, the issue of 
appointing a successor to Bank of Japan Governor Toshihiko Fukui, 
whose term comes to an end in March, will reach a climax in late 
February. Appointments of this nature require the approval of the 
Upper House. For the government, obtaining such approval will be "a 
difficult case," as Chief Cabinet Secretary Machimura has said. 
 
6) Fukuda administration averts "March crisis," receives praise from 
market for agreement between ruling and opposition blocs 
 
YOMIURI (Page 2) (Abridged) 
January 31, 2008 
 
The battle between the ruling and opposition parties over the 
provisional tax rate for gasoline was brought to a conclusion 
yesterday by the good offices of the Lower House speaker and the 
Upper House president. The Diet will return to normal today. Now 
that a "March crisis" for the Fukuda administration is most likely 
to be averted, some in the ruling and opposition blocs indicate that 
dissolution of the Lower House for a snap general election will not 
occur before the Group of Eight summit in Lake Toya, Hokkaido in 
July (G8 Toyako Summit). 
 
Diet will return to normal 
 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//08 
 
With the avoidance of a full showdown between the ruling and 
opposition parties, the Upper House will today hold a 
question-and-answer session to discuss the fiscal 2007 supplementary 
budget bill. The ruling bloc is becoming hopeful that debate on the 
fiscal 2008 budget bill, too, which is expected to be discussed from 
early February, will go smoothly. 
 
The number of bills the government plans to submit to the current 
Diet session totals 78. Given the lopsided Diet where the ruling 
bloc controls the Lower House but the Upper House is under the 
opposition bloc's control, the government has reduced the number of 
bills to introduce in the Diet. 
 
Except for the tax system-related bills, major bills are limited, 
for instance, a basic reform bill for the national government 
employees system (tentative name). Some outstanding problems, such 
as the inaccurate records of pension premium payments, still remain 
to be resolved, but a senior member of the ruling Liberal Democratic 
Party (LDP) commented: "The administration appears to be able to 
avoid a crisis until the G8 summit." 
 
As for the selection of a successor to Bank of Japan Governor Fukui, 
which requires approval from the Diet, the government is likely to 
recommend someone sometime in February. 
 
Debate on revisions 
 
Following the agreement reached yesterday between the ruling and 
opposition parties, the focus of debate in the Diet will now shift 
to how to modify the tax system-related bills. 
 
The major opposition Democratic Party of Japan (DPJ) is gearing up 
to continue to call on the government to lower the additional 
portion (25 yen) of the gasoline tax and incorporate the tax 
revenues for road projects into general revenues. 
 
DPJ President Ozawa, speaking of the provisional tax rate for 
gasoline at a meeting yesterday of his party's general meeting of 
the Lower and Upper House Caucus members, stressed: "(Lowering the 
tax rate) would mean a tax cut for the general public." 
 
A senior DPJ member gave this explanation about Ozawa's remarks: "A 
number of ideas are conceivable, for instance, lowering the 
additional portion by 20 yen instead of 25 yen. Revising would help 
the ruling parties, and on our part, as well, we can appeal to the 
public that we could lower the rate." 
 
Japan can retain credibility 
 
With the agreement reached yesterday between the ruling and 
opposition parties on the provisional tax rate for gasoline, it is 
highly likely that the expiration of that tax rate at the end of 
March will be averted. Confusion in the public's daily lives 
accordingly can be expected to be avoided. 
 
Regarding the bill revising the Special Taxation Measures Law, which 
at one point seemed unlikely to be adopted before the end of this 
fiscal year, it contains an extension of the term of All Savers for 
the offshore market where banking institutions procure funds abroad 
and invest them abroad. 
 
Speaking of the agreement between the ruling and opposition blocs, 
 
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Takahide Kiuchi, a chief economist at Nomura Securities, said: 
"There was the fear that if the tax rate expired, the image of the 
Japanese market would worsen and that the flow of money from abroad 
to Japan could stop. We appreciate the settlement this time, in 
addition to an outlook that the budget bill will be approved by the 
end of this fiscal year." 
 
7) Former LDP Secretary General Nakagawa: No chance the Lower House 
will be dissolved in April 
 
MAINICHI (Page 5) (Full) 
January 31, 2008 
 
Hidenao Nakagawa, former secretary general of the ruling Liberal 
Democratic Party (LDP), delivered a speech at a Mainichi 
Shimbun-sponsored forum in Fukuoka. In it, Nakagawa stated: 
 
"The Democratic Party of Japan (DPJ or Minshuto) has said that it 
will force the Prime Minister to dissolve the House of 
Representatives to call a snap election in April. But it is a lax 
way of thinking. Prime Minister Fukuda will never carry out such 
Lower House dissolution." 
 
Referring also to the result of Sunday's Osaka gubernatorial 
election, in which Toru Hashimoto, whom the LDP Osaka chapter 
recommended, defeated the candidates backed by opposition parties, 
Nakagawa emphasized: "The DPJ should consider this the most recent 
will of the people." 
 
8) Focus of attention in Tokyo G-7 likely on strengthening 
restrictions on rating of financial products 
 
YOMIURI (Page 9) (Slightly abridged) 
January 31, 2008 
 
A meeting of Group of Seven (G-7) finance ministers and central bank 
governors will be held on Feb. 9 for the first time in Tokyo in 
eight years. Given that the global economy was sustaining stable 
growth in recent years, the G-7 has been drawing little attention. 
But the upcoming session in Tokyo will be held when financial 
markets across the world are volatile, triggered by the U.S. 
subprime mortgage crisis. World market players are closely watching 
what prescriptions the G-7 will present to deal with the subprime 
problem. 
 
Finance Minister Nukaga, who will chair the G-7 in Tokyo, emphasized 
in a meeting of the House of Representatives Budget Committee on 
Jan. 28: "We must send a message to stabilize global markets and 
economies." 
 
Prior to the meeting, the top leaders of four European countries 
urgently met on Jan. 29. This is quite unusual, showing their great 
expectations on the Tokyo G-7. 
 
The subprime mortgage crisis originated in the U.S., and even 
leading financial institutions in Europe suffered huge losses. Since 
Japanese financial firms' losses are smaller than those in the U.S. 
and Europe, Nukaga, as the chair, will be required to play a 
mediatory role to iron out differences in their views. 
 
Difference in views 
 
 
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When it comes to discussion on specifics, however, it will not be 
easy to iron out differences. For instance, the focus of attention 
in the summit of four European countries was on ways of credit 
rating for financial products. In Europe, many analysts attribute 
the stock market volatility to rating agencies. They claim that 
agencies gave higher ratings to subprime loan-related products than 
their actual status and then lowered the rankings when the problem 
occurred, resulting in accelerating the market turmoil. A joint 
statement issued after the four-party summit also noted that the 
four European countries were ready to strengthen their regulations 
on rating agencies if such firms are found to have not fully 
disclosed information. 
 
But major ranking agencies are mainly in the U.S. A U.S. financial 
authority said: "We are negative about new regulations on rating 
agencies. As it stands, there is a wide gap in views of Europe and 
the U.S. 
 
The reinforcement of regulations on rating agencies is likely to be 
high on the agenda in the Tokyo G-7. 
 
Coordination with emerging countries 
 
Such emerging countries in East Asia as China and South Korea will 
also be invited to the Tokyo G-7. Reflecting the rise in the status 
of emerging powerhouses, the turmoil in the emerging markets, 
triggered by the subprime problem, will also have a negative effect 
on the Japanese, U.S. and European markets. As the U.S. and Europe 
have been calling on China to devalue its currency yuan, there is 
also the issue of the yuan. How to untangle such complicated 
problems facing the world is likely to be another challenge for the 
coming G-7 in Tokyo. 
 
9) Financial anxieties to top agenda of G-7 agenda: Japan, U.S., 
Britain to propose environment fund 
 
YOMIURI (Page 2) (Full) 
January 31, 2008 
 
The outline of topics of discussion at a meeting of finance 
ministers and central bank governors from the Group of Seven nations 
(G-7) to be held in Tokyo on February 9 was revealed yesterday. The 
main theme of the meeting is how to deal with uncertainties in the 
international financial market, including global stock plunges 
stemming from the subprime loan crisis. Participants will confer on 
ways to strengthen the financial supervisory system of their nations 
and how international rating firms, which have been pointed out as 
one factor that has caused the subprime loan crisis, should operate 
in rating credit. 
 
The last G-7 hosted by Japan was held in January 2000. The meeting 
will become a venue for promoting cooperation on international 
financial affairs in the run-up to the Lake Toya Summit (G-8) in 
Hokkaido in July. The G-7 will also focus on environmental issues, 
which will take the center-stage of the G-8. Japan, the U.S. and 
Britain will propose setting up a fund to finance expenses for the 
transfers of environmental technologies from industrialized 
countries to developing countries. 
 
10) Japan, U.S., Britain gearing up for establishing anti-global 
warming fund; World Bank likely to play major role 
 
 
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ASAHI (Page 11) (Excerpts) 
January 31, 2008 
 
There is growing momentum in Japan, the United States, and Britain 
to establish an international fund with the aim of introducing clean 
energy in developing countries as a global warming countermeasure. 
The plan seems to be high on the agenda of the G7 finance ministers 
and central bank governors meeting to be held in Tokyo on Feb. 9. 
 
On Jan. 28, U.S. President George W. Bush unveiled a plan to inject 
2 billion dollars (approximately 200 billion yen) in what is called 
the International Clean Energy Technology Fund. Prime Minister Yasuo 
Fukuda, too, indicated on Jan. 26 that Japan will aim at 
establishing a fund to disseminate environmental technology across 
the world. Britain also plans to contribute hundreds of millions of 
pounds. A senior U.S. Treasury Department official expressed 
eagerness on Jan. 29 for establishing the fund before the end of the 
year. 
 
Greenhouse gas emissions by developing countries are expected to 
increase sharply due to their economic growth. "There have been many 
cases in which advanced clean technology was not used due to a lack 
of funds," a U.S. Treasury Department official noted. According to 
an estimate, a shortfall of funds for developing counties total over 
30 billon dollars (approximately 3 trillion yen). 
 
The dominant plan is to determine how the fund should be used 
centering on the World Bank. The plan is to extend grant aid or 
low-interest-rate loans to developing countries that want to import 
clean technology in power generation, transport, and production. The 
three countries are also considering a framework allowing the fund 
contributor to determine projects and its recipient while preserving 
bilateral nature. In order to encourage the self-help efforts of 
developing counties, there is a plan to let receiving countries to 
make due contributions to the fund. 
 
11) Muto to become BOJ governor; DPJ likely to endorse his 
promotion 
 
MAINICHI (Page 1) (Excerpts) 
January 31, 2008 
 
Final coordination is likely to be made to replace outgoing Bank of 
Japan Governor Toshihiko Fukui, 72, whose term expires on March 19, 
with BOJ Vice-Governor Toshiro Muto, 64. Amid growing economic 
concerns, the government and ruling parties have decided that Muto, 
who has been responsible for financial policy over the last five 
years as BOJ vice governor, is fit for the job. They are expected to 
propose Muto's appointment shortly to the Democratic Party of Japan 
and other opposition parties. The DPJ is expected to endorse the 
promotion of Muto, who is not only well-versed in financial policy 
but also has strong communication channels to the political and 
bureaucratic worlds. 
 
Muto entered the former Finance Ministry after graduating from the 
University of Tokyo in 1966. Left the ministry in January 2003 after 
serving as administrative vice-finance minister; serving as BOJ vice 
governor since March 2003. 
 
12) Subprime losses at 4 major banks expected to total 500 billion 
yen 
 
 
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NIKKEI (Page 1) (Excerpts) 
January 31, 2008 
 
Japanese banks' losses related to U.S. subprime loan mortgages to 
low-income earners are increasing. Losses suffered by four banks of 
the six major banking groups are estimated to total 500 billion yen 
for the period ending March 31, 2008, due to a drop in value of 
securitized products. It will be an increase of 70 PERCENT  from the 
300 billion yen posted on the September interim report, announced in 
November 2007. 
 
The four banks are Mizuho Financial Group Inc., Sumitomo Mitsui 
Financial Group Inc., Mitsubishi UFJ Financial Group Inc., and 
Sumitomo Trust & Banking Co. Mizuho and Mitsubishi UFJ will release 
their April-December 2007 business performance on Jan. 31. 
 
Japanese banks invested primarily in highly rated securitized 
products. But ratings downgrades have cast a pall over the market, 
with prices plunging since November. The resulting turmoil has 
adversely affected other market segments not directly tied to these 
mortgages. 
 
The losses suffered by the four banks are expected to reach a little 
less than 30 PERCENT  of the consolidated net profit (1.9 trillion 
yen) for the current business period. 
 
Mitsubishi UFJ is expected to report roughly 50 billion yen in 
subprime-related losses for the nine months ended Dec. 31. The 
figure could grow to some 90 billon yen for the full year through 
March. 
 
The banking group logged 4 billion yen in such losses in the 
April-September half. In addition to 23 billion yen in valuation 
losses as of Oct. 31, the downgrade of an investment vehicle, in 
which the company invested 80 billion yen, is seen widening losses 
by tens of billions of yen. 
 
Mizuho Securities Co.'s losses from related securitized products 
have also increased. Mizuho Corporate Bank faces several tens of 
billions of yen in losses from its leveraged buyout financing 
operations in Europe. Group-wide subprime losses had been estimated 
at 170 billion yen for fiscal 2007, but the figure could hit 300 
billion yen. 
 
Sumitomo Trust yesterday reported 29.9 billion yen in related losses 
for the April-December period, up from 9 billion yen in the fiscal 
half year that ended Sept. 30. SMFG booked 99 billion yen in such 
losses over the same nine months. The figure had been estimated at 
87 billion yen in November 2007. 
 
13) CEFP private-sector members call for speeding up implementation 
of growth strategy to deal with deteriorating economic environment 
 
ASAHI (Page 11) (Full) 
January 31, 2008 
 
Asahi Shimbun has learned that private-sector members of the 
government's Council on Economic and Fiscal Policy (CEFP) are 
calling on the Fukuda administration to speed up the implementation 
of its economic growth strategy. They will make this proposal at a 
CEFP meeting today. The administration plans to compile the 
envisaged growth strategy in the spring. However, those CEFP members 
 
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have determined that the government needs to speed up the process 
due to the sea change in the economic situation triggered by the 
supbrime loan crisis. As part of such efforts, they will urge 
concerned government agencies to tackle the issue, by listing 
specific measures they can implement before the spring. 
 
Their targets include improving child-rearing services incorporated 
in the strategy to eliminate waiting lists for nursery schools, 
which Prime Minister Fukuda proposed in his policy speech, and 
boosting productivity of the services industry and small- and 
medium-sized businesses. The Financial Services Agency is aiming at 
implementing a financial and capital market competitiveness 
strengthening plan by the first half of 2009. Of proposals 
incorporated in that plan, private-sector members are calling for 
the implementation by this spring of the diversification of 
exchange-traded funds and inclusion of overseas real estate in real 
estate investment trust funds. 
 
In addition, they have also pointed out proposals that should be 
immediately tackled once the growth strategy is mapped out. Such 
proposals include revising the way each company employee contributes 
premiums under the defined-contribution pension plan system, 
consolidating the environment for an increase in inward foreign 
direct investment, including a revision of takeover rules, and 
promoting the use of landing and departure slots late at night and 
early in the morning at Haneda Airport. 
 
14) Fukuda to set up expert panel to give specificity to plan for 
new consumer administrative body 
 
NIKKEI (Page 2) (Excerpt) 
January 31, 2008 
 
Prime Minister Yasuo Fukuda revealed his plan yesterday to set up in 
the Prime Minister's Office (Kantei) an expert panel tasked with 
discussing specifics of a new body to integrate administrative 
functions. He announced this idea in his policy speech on Jan. 18. 
Administrative functions are now split among various government 
offices, so they are expected to put up resistance. Given this, the 
prime minister judged it necessary to push ahead with the plan under 
the lead of the Kantei. He apparently is aiming to underscore his 
stance of giving priority to consumers. 
 
15) Japan to back industrial development in Africa; Infrastructure 
construction planned by yen loans 
 
SANKEI (Page 3) (Abridged) 
January 31, 2008 
 
Japan will use yen loans under its official development assistance 
(ODA) in order to launch a new program of industrial development 
assistance to Africa. The government will announce a package of 
measures to increase assistance to Africa at the upcoming fourth 
Tokyo International Conference on African Development (TICAD) in 
Yokohama City in May. In an effort to put the economy on a growth 
track so as to reduce poverty, Japan aims to raise the general 
economic level of African countries by constructing socioeconomic 
infrastructure, an area Japan is good at. 
 
As a centerpiece of the package, the government is considering 
providing 10 billion yen in yen loans for repair and expansion of 
the international highway Nacala Corridor that links Africa's 
 
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southeastern country Mozambique to Malawi and Zambia. The Japan Bank 
for International Cooperation (JBIC) will hold a seminar for 
government officials in Mozambique's capital city of Maputo on Feb. 
19 for the purpose of industrial development by using the corridor. 
 
In addition to assistance in the area of road construction, Japan 
will also provide know-how necessary to invite private firms, for 
instance, construction of a comprehensive distribution network that 
will link between the corridor and the distribution base Nacala 
Port, establishment of a special economic zone and an industrial 
park, and improvement of the tax system. 
 
The seminar will be joined also by Vietnamese government officials 
and its industrial park-affiliated officials so that the experience 
obtained from assistance to the construction of the East-West 
Corridor that spans the countries in the Mekong River area (Vietnam, 
Laos, Thailand, and Myanmar (Burma)) will be made well use of. 
 
Last year Japan decided to provide 26.7 billion yen in yen loans to 
Africa for a port development project at Mombasa Port in Kenya and 
has assisted the project in the construction of infrastructure. A 
plan being floated now is to rehabilitate another international 
highway besides the Nacala Corridor. 
 
Japan is advancing a strategic use of ODA, but its expansion of aid 
to Africa is also aimed at gaining support for its bid for a 
permanent seat on the United Nations Security, as well as bringing 
about a stable supply of strategic materials, such as rare metals. 
 
16) Coordination underway for visit to Japan by Chinese foreign 
minister in March 
 
MAINICHI (Page 5) (Full) 
January 31, 2008 
 
The Japanese and Chinese governments have launched coordination a 
visit to Japan by Chinese Foreign Minister Yang Jiechi in mid-March 
after the annual session of the National People's Congress. In a 
meeting with Foreign Minister Masahiko Koumura, Yang is expected to 
finalize the visit to Japan in the spring by President Hu Jintao, as 
well as to hold last-ditch negotiations to settle the dispute over 
exploration rights in the East China Sea gas fields. Prior to Yang's 
trip to Tokyo, Chinese State Councilor Tang Jiaxuan is expected to 
come to Tokyo probably on Feb. 20 to meet with Prime Minister Yasuo 
Fukuda and Koumura. 
 
In the Japan-China summit in late last year, President Hu agreed to 
visit Japan around cherry-blossom time. The two governments have 
agreed to achieve an early resolution to the gas exploration issue. 
The planned visits to Japan by influential Chinese government 
officials appear to be an indication that the Chinese government has 
placed importance on the 30th anniversary of the Japan-China 
Friendship Treaty. 
 
17) Defense Ministry to tighten checks of imported equipment prices 
 
NIKKEI (Page 2) (Full) 
January 31, 2008 
 
The Defense Ministry's project team tasked with studying the 
procurement of defense equipment yesterday released a package of 
measures to ensure fair procurement prices for equipment imported 
 
TOKYO 00000250  012 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 01//08 
 
through trading companies. The package includes a measure to add a 
new provision to Defense Ministry contracts with trading firms that 
would have the ministry directly ask foreign equipment manufacturers 
for estimates. As another measure to strengthen the ministry's 
oversight, the package also proposes that trading firms be asked to 
present the prices of products and costs for technical support 
separately. The package also incorporates measures to beef up 
sanctions against padded bills. 
 
18) Japanese-Australian foreign ministerial occurs today; Research 
whaling may become diplomatic issue; Cautious view in government 
prior to G8 summit 
 
MAINICHI (Page 5) (Full) 
January 31, 2008 
 
There is a possibility that Japan's research whaling in the Southern 
Ocean will turn into a serous diplomatic issue with Australia. The 
expectation is that the whaling issue will be on the agenda in a 
meeting of Foreign Minister Masahiko Koumura and his Australian 
counterpart Stephen Smith, who will arrive in Tokyo today. 
Environmental activists from Australia and other countries have 
attempted to disrupt Japan's research whaling. It is difficult to 
find a breakthrough strategy because of cultural differences. 
 
Prime Minister Yasuo Fukuda criticized antiwhaling protests by 
environmental groups in a plenary session on Jan. 23 of the House of 
Councillors: He stated: "Research whaling is a legal activity on the 
high seas. Interference endangers those involved, and it is an 
unforgivable and illegal act." 
 
Komura, who held talks on Jan. 22 with Australian Trade Minister 
Simon Crean, underscored: "An agreement has been reached on the 
point that efforts should be made so that the issue will not have a 
negative impact on a relationship between the two countries." 
However since U.S. and European media have repeatedly broadcasted 
the video images showing bleeding whales, Japanese embassies 
overseas and the Fisheries Agency have received a spate of 
protests. 
 
Of the membership of 78 countries of the International Whaling 
Commission (IWC), 42 are against whaling and 36 favor it. Japan has 
made efforts to expand support for whaling. The Japanese government 
plans to seek an IWC interim meeting in March for calm discussion, 
not emotional argument, which will lead to resource management based 
on scientific data, according to a senior Foreign Ministry official. 
 
 
With the Group of Eight summit at Lake Toya in Hokkaido coming up in 
July, however, there is a view in the government that since major 
countries consider whales a symbol of environmental protection, the 
national interests Japan will lose are too serious, compared to the 
merits of keeping whaling culture. 
 
SCHIEFFER