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UNCLAS SECTION 01 OF 11 TOKYO 000713 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03/18/08 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Opinion poll: 
4) Cabinet support slips 4.8 points to 33.9 PERCENT  in Yomiuri 
poll, with non-support rate at 54 PERCENT ; Most people critical of 
DPJ's handling of BOJ governor issue  (Yomiuri) 
5) LDP Secretary General Ibuki attributes cabinet's low support 
rates to perception of lack of leadership  (Tokyo Shimbun) 
 
Diet in chaos: 
6) Host nation support budget also being affected by gridlock in the 
Diet between ruling and opposition camps  (Yomiuri) 
7) Chaos reigns in the Diet as Prime Minister Fukuda finds his hands 
tied on finding a new candidate for Bank of Japan governor 
(Mainichi) 
8) Government to delay submission of name of candidate for BOJ 
governor's post  (Asahi) 
9) Likely now that the post of BOJ governor will be vacant for a 
while  (Mainichi) 
10) Shirakawa may become the acting BOJ governor for a while 
(Nikkei) 
11) Anxiety rises in the Fukuda administration, which is finding it 
impossible to steer policy due to Democratic Party of Japan 
intransigence on every issue  (Yomiuri) 
12) LDP finding it difficult to submit revised tax-related bills, 
unable to see DPJ's area of compromise  (Mainichi) 
 
13) Unlikely that revised tax bills will be passed by end of fiscal 
year at end of March  (Nikkei) 
 
14) Tibetan riots not likely to affect Chinese President Hu's visit 
to Japan  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Financial crisis from U.S. (Part 1): U.S. economy remains tense 
 
Mainichi & Yomiuri 
With government unable to name new BOJ governor, BOJ governor post 
likely to be left vacant 
 
Nikkei: 
Nippon Oil to acquire 7th-ranked wholesaler Kyushu Oil possibly in 
October 
 
Sankei & Akahata: 
Dollar briefly drops to 95 yen over credit fears; Nikkei index 
closes below 12,000 
 
Tokyo Shimbun: 
Highway construction projects questioned (Part 1): Isolated villages 
put on backburner 
 
2) EDITORIALS 
 
 
TOKYO 00000713  002 OF 011 
 
 
Asahi: 
(1) 5th anniversary of start of Iraq war: How to overcome total 
failure 
 
Mainichi: 
(1) Prime minister, DPJ should be humble about nomination of BOJ 
governor 
(2) Low stock prices and declining dollar urging U.S. government's 
decision 
 
Yomiuri: 
(1) Vacancy in BOJ governor post unallowable 
(2) China's ethnic policies led to Tibet riots 
 
Nikkei: 
(1) Vacancy in BOJ governor post during financial emergency 
unforgivable 
 
Sankei: 
(1) Party heads must break stalemate in appointment of BOJ governor 
(2) Under international supervision, shed light on truth about Tibet 
riots 
 
Tokyo Shimbun: 
(1) New BOJ governor should be nominated as quickly as possible 
(2) Can feelings of the poor be felt by second-generation leaders in 
China? 
 
Akahata: 
(1) Shortage of manpower of welfare services: Improvement in labor 
conditions urgent 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 17 
 
NIKKEI (Page 2) (Full) 
March 18, 2008 
 
09:40 
Wrote his name in the visitors' book at the residence of Prince 
Tomohito, who is now in the hospital. 
 
10:01 
Met with Chief Cabinet Secretary Machimura, followed by Assistant 
Deputy Chief Cabinet Secretary Saka. 
 
11:00 
Met with Gunma Prefecture Governor Osawa, followed by Vice 
Environment Minister Tamura and Resources and Energy Agency Director 
General Mochizuki. 
 
12:30 
Government and ruling parties liaison council meeting. Then met with 
Finance Minister Nukaga. 
 
13:47 
Met with Special Advisor to the Cabinet Okuda. 
 
14:37 
Met with National Police Agency Director General Yoshimura. 
 
 
TOKYO 00000713  003 OF 011 
 
 
15:02 
Met with Saka and Comprehensive Maritime Policy Administrative 
Office chief Oba. Then met with Defense Ministry Defense Policy 
Bureau Director General Takamizawa and Defense Intelligence 
Headquarters chief Mukunoki and Cabinet Intelligence Director 
Mitani. 
 
16:02 
Met with Mitani, followed by State Minister for Economic and Fiscal 
Policy Ota, Cabinet Office Policy Officers Fujioka and Matsumoto. 
Ota remained. 
 
17:04 
LDP executive meeting in the Diet. 
 
18:04 
Met with Peruvian President Garcia. Then signed a joint statement 
and held press conference. 
 
19:17 
Banquet hosted by Prime Minister Fukuda. 
 
20:44 
Arrived at the official residence. 
 
4) Poll: Cabinet support down to 34 PERCENT 
 
YOMIURI (Page 1) (Abridged) 
March 18, 2008 
 
The approval rating for Prime Minister Fukuda and his cabinet fell 
4.8 percentage points from February to 33.9 PERCENT  in a 
face-to-face nationwide public opinion survey conducted by the 
Yomiuri Shimbun on Mar. 15-16. The disapproval rating for the Fukuda 
cabinet was 54.0 PERCENT , up 3.2 points. The Fukuda cabinet's 
nonsupport rate hit an all-time high since it came into office. 
 
Those who do not support the Fukuda cabinet were asked to pick up to 
two reasons. In response, 48 PERCENT  answered that they cannot 
appreciate its political stance, topping all other answers. Among 
other answers, "nothing can be expected of its economic policy" 
accounted for 38 PERCENT , followed by "'it's unstable" at 27 
PERCENT . 
 
Respondents were also asked if they thought the government dealt 
appropriately with the recent collision of a Maritime Self-Defense 
Force Aegis destroyer with a fishing boat that has left its two 
crewmen missing. To this question, 74 PERCENT  answered "no." 
 
The current additional rate of provisional taxation on gasoline is 
to expire at the end of March. In the survey, respondents were asked 
if they thought it would be better to continue this additional gas 
taxation after that. To this question, "yes" accounted for 27 
PERCENT , down 2 points from February, with "no" at 64 PERCENT , up 
2 points. 
 
Meanwhile, the government has asked the Diet to approve its proposal 
to promote Bank of Japan Vice Governor Toshiro Muto to the post of 
BOJ governor. However, the leading opposition Democratic Party of 
Japan (Minshuto) disagreed. In this regard, respondents were asked 
if they supported the DPJ's decision. To this question, "very much" 
and "somewhat" totaled no more than 25 PERCENT , with "not very 
 
TOKYO 00000713  004 OF 011 
 
 
much" and "not at all" adding up to 59 PERCENT . 
 
In the breakdown of public support for political parties, the ruling 
Liberal Democratic Party leveled off at 33.1 PERCENT , up 0.5 
points. However, the DPJ dropped 2.4 points to 17.6 PERCENT . 
 
5) LDP Secretary General Ibuki: "Plummeting support rates due to 
lack of leadership" 
 
TOKYO (Page 2) (Full) 
March 18, 2008 
 
Liberal Democratic Party (LDP) Secretary General Ibuki yesterday at 
a press conference made this comment about the trend of falling 
support rates for the Fukuda Cabinet in every opinion poll: "The 
major reason for the lack of support is probably because the 
perception of a lack of leadership." In his view, the public are 
harboring doubts about the Prime Minister's leadership. 
 
Ibuki, having in mind such factors as the lopsided Diet where the 
opposition camp controls the Upper House making it difficult to 
select the governor of the Bank of Japan, pointed out: "Since our 
camp does not have a majority in the Upper House, we cannot smoothly 
steer the government. Looking at it from the eyes of the public, the 
situation is a mess. Under the current situation in the Upper House, 
it would be the same no matter who was in charge." 
 
6) Sympathy budget to expire shortly 
 
YOMIURI (Page 4) (Abridged) 
March 18, 2008 
 
The standoff between the ruling and opposition parties in the 
divided Diet, where the ruling camp controls the lower chamber and 
the opposition camp dominates the upper chamber, is casting a shadow 
on Japan's foreign relations. 
 
On the morning of Mar. 13, the leading opposition Democratic Party 
of Japan (Minshuto) held a meeting of its foreign affairs and 
defense division. In the meeting, DPJ lawmakers focused their 
discussion on the propriety of a special agreement for a three-year 
extension of Japan's host nation support for the stationing of U.S. 
forces in Japan ("omoiyari yosan" or literally "sympathy budget"). 
 
"Why do we have to take care of such a thing," one DPJ member said. 
"This is even more terrible than the road-related tax revenues," 
another participant said. 
 
In the meeting, a senior official of the Defense Ministry explained 
the breakdown of personnel costs for Japanese employees who are 
working at U.S. military bases on the Japanese government's sympathy 
budget payroll. DPJ lawmakers voiced their criticism. 
 
The Defense Ministry revealed spending related to recreational 
facilities for the U.S. military, including 76 bartenders (annual 
average income at 4.31 million), 47 golf course maintenance workers 
(4.25 million yen), and 14 recreation specialists (4.51 million 
yen). 
 
In the sympathy budget's past two extensions, the DPJ called for 
eliminating wasteful spending. Even so, the DPJ agreed to extend it, 
taking the position that the Japan-U.S. relationship is the most 
 
TOKYO 00000713  005 OF 011 
 
 
important bilateral relationship. This time, however, Keiichiro 
Asao, the defense minister in the DPJ's shadow cabinet, implied the 
DPJ's intention to raise an objection. "I'm not saying Japan will do 
anything just because there is a request from the U.S.," Asao said. 
 
The special agreement is a kind of treaty, and the House of 
Representatives' decision comes before the House of Councillors' 
decision under the Constitution. It will come into effect within 30 
days after the House of Representatives' approval. However, the Diet 
has yet to enter into deliberations in the aftermath of 
confrontation between the ruling and opposition parties. 
 
The special agreement, as well as the current rate of provisional 
taxation on gasoline, is to expire at the end of the current fiscal 
year. After that, the Japanese government's spending, such as 
personnel costs and utilities charges, will lose its legal grounds. 
One senior Defense Ministry official said, "We would have to ask the 
United States to pay for the time being." 
 
7) Prime Minister Fukuda faces stalemate over appointment of new BOJ 
governor 
 
MAINICHI (Page 2) (Full) 
March 18, 2008 
 
Yoshiaki Nakagawa, Katsumi Kawakami 
 
With the incumbent Bank of Japan (BOJ) governor's term of office set 
to expire on March 19, Prime Minister Yasuo Fukuda yesterday sounded 
out the major opposition Democratic Party of Japan (DPJ) about the 
idea of keeping incumbent Governor Toshihiko Fukui and Deputy 
Governor Toshiro Muto in their posts instead of promoting Muto to 
the governor's post. But the DPJ refused to accept this proposal. 
Despite turmoil in the market over the yen appreciation and falling 
stock prices, Fukuda allowed one day to go to waste without being 
able to formally present any breakthrough measure. It is becoming 
more likely that the governor's post will be left vacant. 
 
 "It is not that I did so to create a vacuum." Making this comment 
to the press yesterday evening, Fukuda revealed his frustration as 
the term of the incumbent BOJ governor is to expire shortly. 
 
The idea Fukuda showed to the DPJ was to not appoint someone new to 
the BOJ's top position. According to an informed source, Fukuda's 
proposal to the DPJ was a two-step concept. Specifically, the 
government would (1) formally reappoint incumbent BOJ Governor Fukui 
as governor for another five years and (2) keeping Fukui in the post 
on a provisional basis by extending his term of office as BOJ 
governor by amending the BOJ Law. 
 
According to some in the government and the ruling parties, this 
proposal implied that Fukuda still dwelled on the idea of appointing 
Muto as BOJ governor, given that he had openly stated that the 
proposal would be "the best of all." The proposal would leave room 
to appoint Muto as BOJ chief in the future as long as he remains in 
the post of deputy governor, even if Fukui were to stay on as BOJ 
chief because his remaining in the post is seen as a provisional 
measure. 
 
Because of the DPJ's opposition to the proposal, the government and 
the ruling camp decided not to formally present it to the Diet 
yesterday. If the proposal to reappoint Fukui as BOJ governor is 
 
TOKYO 00000713  006 OF 011 
 
 
rejected in the Upper House, the post of BOJ governor will be left 
vacant on March 19. In the Upper House, the DPJ and other opposition 
parties are certain to oppose the idea of revising the BOJ Law so as 
to provisionally extend Fukui's term of office. In order to revise 
the BOJ Law, the ruling bloc needs to take a re-vote on the idea in 
the Lower House, but given that the deliberations on tax revenues 
for road projects are coming to a climax in the Diet, this situation 
will likely force Fukuda to have a full showdown with the opposition 
bloc with his course of action at stake. 
 
If the post of BOJ governor is left vacant, Masaaki Shirakawa, whose 
appointment as deputy BOJ governor has been confirmed, will act as 
governor, but if that happens, Fukuda will be certain to see his 
grip on power weaken. 
 
In the Prime Minister's Official Residence (Kantei), the staff is 
looking for a "third candidate," but this effort seems to have hit a 
snag. According to a senior ruling Liberal Democratic Party (LDP) 
member, the staff for Fukuda informally sounded out Masayuki Oku, 
president of Sumitomo Mitsui Banking Corporation and chairman of the 
Japanese Bankers Association, about the idea of assuming the post of 
BOJ governor, but Oku refused. 
 
8) Vacancy in BOJ governor post highly likely as government puts off 
presenting new candidate to Diet 
 
ASAHI (Page 1) (Excerpts) 
March 18, 2008 
 
The government yesterday postponed presenting to the Diet its new 
candidate to replace Bank of Japan Governor Toshihiko Fukui, whose 
term in office will expire tomorrow. The government yesterday 
sounded out the main opposition Democratic Party of Japan (DPJ or 
Minshuto) about altering its initial candidate, Deputy Governor 
Toshiro Muto, for the BOJ governor post, which had been rejected by 
the House of Councillors, while retaining Muto in his current post. 
However, the government failed to obtain consent on its proposal 
from the DPJ. The possibility has now become stronger that the top 
job at the central bank will be vacant. If that is the case, Masaaki 
Shirakawa, a professor at Kyoto University graduate school, the 
nomination of who was approved by the two Diet chambers as a new 
deputy governor, will serve as the BOJ governor (until the new 
governor is appointed). 
 
From Sunday night to Monday, on the behalf of Prime Minister Yasuo 
Fukuda, Liberal Democratic Party Secretary General Bunmei Ibuki and 
Diet Affairs Committee Chairman Tadamori Oshima telephoned DPJ 
Secretary General Yukio Hatoyama to sound out the opposition party 
 
SIPDIS 
about reappointing Fukui or Muto. Yesterday afternoon, Ibuki called 
Hatoyama and told him: "If Muto is retained in his present post, the 
new governor might be chosen from business leaders." However, the 
ruling camp never mentioned the name of a business leader. 
Therefore, this nomination idea came to nothing. 
 
The reason why the LDP proposed keeping Muto in his current post is 
that Fukuda has not changed his view that Muto is the best choice. 
 
Fukuda's pet opinion is that cooperation between fiscal and monetary 
sectors is indispensable for suitable economic management. He is 
concerned that whether the central bank can be managed well only by 
BOJ officials and academics, excluding Muto, a former administrative 
vice finance minister, who is well versed in financial affairs. 
 
TOKYO 00000713  007 OF 011 
 
 
 
If the government's nominations are again rejected, the political 
base of the Fukuda government will be greatly shaken. Fukuda wants 
the DPJ's guarantee if he completely excludes Muto from his 
nomination list of the BOJ governor and a deputy governor. However, 
since he cannot see thorough how the DPJ will act, he becomes 
increasingly doubtful and suspicious about the largest opposition 
party. 
 
9) Government unable to present new nomination for BOJ governor to 
Diet before March 17; BOJ governorship likely to be left unfilled 
 
MAINICHI (Top play) (Abridged slightly) 
March 18, 2008 
 
The government and ruling camp gave up yesterday on a plan to submit 
to the Diet that same day a nomination for the successor to Bank of 
Japan Governor Toshihiko Fukui, whose term expires on March 19. In 
the wake of the disapproval by the Upper House of a plan to promote 
Deputy BOJ Governor Toshiro Muto, a former vice-finance minister, to 
the top BOJ post, the government and ruling bloc began coordination 
with the Democratic Party of Japan before presenting another plan to 
the Diet.  But they eventually decided that obtaining the party's 
understanding that day was difficult. A senior official admitted 
last night that the government might not be able to present a 
nomination to the Diet before March 19. The view is gaining ground 
in the government and ruling bloc that creating a vacuum in the BOJ 
governorship will be inevitable. 
 
Following the DPJ's rejection of a plan to keep Fukui as BOJ 
governor and Muto as deputy governor, Lower House steering committee 
chairman Takashi Sasagawa and his Upper House counterpart Takeo 
Nishioka discussed yesterday a response to a possible presentation 
of a new list of nominees by the government. With the expiration of 
Fukui's tenure near at hand, they requested the government to make a 
final decision   by 6:00 p.m. In response, the government replied 
last evening that presenting a new plan within the day was 
difficult. 
 
Last-ditch negotiations are likely to continue today between the 
ruling and opposition camps. The focus is whether or not the 
government and ruling bloc can coordinate views with the DPJ before 
a start of formal procedures for Diet approval on the matter. The 
government seems to have difficulty finding Muto's replacement. 
 
If the presentation of a new plan slips to March 18 or later, a 
failure to obtain approval of the both houses of the Diet by March 
19 would end up creating a vacancy in the BOJ governorship. In such 
a case, Kyoto University Professor Masaaki Shirakawa, who has been 
endorsed by the two Diet chambers to become a new BOJ deputy 
governor, will serve as acting BOJ governor. 
 
DPJ Secretary General Yukio Hatoyama yesterday criticized the 
government's response, saying: "Determining the new BOJ governor by 
March 19 has now effectively become impossible. What is the 
government doing?" Meanwhile, Prime Minister Yasuo Fukuda commented 
to reporters at his office last night: "The matter cannot be decided 
by the ruling camp and the government alone. Any nomination could be 
voted down in the Diet. We have to handle the matter carefully." The 
prime minister admitted that the government is unable to read the 
DPJ's moves. 
 
 
TOKYO 00000713  008 OF 011 
 
 
10) Scenario of "Acting governor Shirakawa" taking on realistic 
touch ahead of expiration of incumbent's term tomorrow; Government 
to be pressed with tight schedule 
 
NIKKEI (Page 2) (Excerpts) 
March 18, 2008 
 
The government yesterday postponed presenting to the Diet a plan for 
nominating new candidates for the posts of governor and deputy 
governor at the Bank of Japan (BOJ). If it wants to appoint a new 
governor by March 19, when the term of office of incumbent governor 
and vice governor expires, the government will be pressed with an 
extremely tight schedule. 
 
In appointing a new governor and deputy governors, the following 
process is taken: The government first presents candidates' names to 
the ruling and opposition parties; the steering committees of the 
two houses of the Diet hold hearings with the candidates regarding 
their policy stances and then question-and-answer sessions; and then 
both Diet chambers take votes in their plenary sessions. If the 
government submits a new plan today, there will be these only two 
options, in order to obtain Diet approval before the incumbents' 
term of office runs out: (1) Holding hearings on the 18th and 
plenary sessions on the 19th; or (2) holding hearings and plenary 
sessions on the 19th. Either way, the government will be pressed 
with a tight schedule. 
 
11) Appointment of new BOJ governor: Concerns mounting about 
difficulty in managing administration and prime minister's declining 
grip on administration 
 
YOMIURI (Page 4) (Excerpts) 
March 18, 2008 
 
The government has decided to postpone the presentation of its 
nomination for the successor to Bank of Japan Governor Toshihiko 
Fukui until March 18 or later. Given the situation, a sense of alarm 
is growing in the government, with one person saying, "Prime 
Minister Fukuda will find it even more difficult to run his 
administration." Support rates for the Fukuda cabinet are tumbling 
due to the pension record mess and the recent collision of an Aegis 
destroyer. If the "control tower" of the nation's monetary policy 
remains vacant due to the government's failure to determine the new 
BOJ governor by March 19, the Fukuda administration will suffer a 
serious blow. 
 
In a recent Yomiuri Shimbun opinion poll, the rate of support for 
the Fukuda cabinet dropped below 35 PERCENT . 
 
Asked by reporters for any means to boost his support rate, Prime 
Minister Yasuo Fukuda said last night: "I am not aiming at such a 
thing. I will just do things steadily as necessary." 
 
LDP Secretary General Ibuki took the following view last evening on 
the plummeting support rate: "(The prime minister) has not been able 
to run the administration smoothly because the ruling coalition does 
not hold a majority in the Upper House. The public thinks that his 
administration is slow to take action and that (the prime minister) 
lacks leadership. The question of determining the new Bank of Japan 
governor must be settled early." 
 
In addition to the subject of the BOJ governorship, the provisional 
 
TOKYO 00000713  009 OF 011 
 
 
gasoline tax rate expires on March 31. Despite that, there is no 
prospect for talks between the ruling and opposition camps on 
revising tax-related bills. The provisionally high gasoline tax rate 
declining to a lower level on April 1 is now becoming a real 
possibility. 
 
A midlevel LDP lawmaker said: "I'm concerned that voters will regard 
the prime minister as a person who cannot decide on anything and he 
will lose his grip on the administration." Some in the government 
and ruling bloc have again begun speaking of a "March crisis" for 
the Fukuda administration. 
 
12) Provisional gas tax rate: LDP having difficulty drafting 
revision plan, unable to find common settlement line with DPJ 
 
MAINICHI (Page 5) (Full) 
March 13, 2008 
 
The Liberal Democratic Party (LDP) is having difficulty revising the 
bill amending the Special Tax Measures Law, which incorporates an 
extension of the provisional rate applied to the gasoline tax. 
Policy Research Council Chairman Sadakazu Taniguchi, who is acting 
as a point of contact with the Democratic Party of Japan (DPJ or 
Minshuto), yesterday met with Election Committee Chairman Makoto 
Koga, a key member of the road policy clique in the Diet, and 
General Council Chairman Toshihiro Nikai to vet the situation. They 
found that it would be extremely difficult to respond to the DPJ's 
call to abolish the provisional rate. While a cut in gasoline prices 
looking like it may become reality in April, the LDP leadership is 
forced to undergo cliff-hanger coordination. 
 
Emerging from the talks with Koga, Tanigaki indicated hopes to see 
this issue make a soft-landing, noting, "We shared the sense of 
crisis that we must survive March 31." Tanigaki also met with former 
Prime Minister Yoshiro Mori and former Chairman Mikio Aoki of the 
LDP Caucus in the Upper House Mikio Aoki. They agreed on the need to 
throw a pitch of some compromise to the DPJ, but failed to work out 
specifics. 
 
If the Upper House refuses to put the amendment bill to a vote, the 
Lower House cannot revote on it. Should that occur, the price of 
gasoline will be lowered by approximately 25 yen per liter - the 
portion of the provisional rate, starting on April 1. In the event 
of the Upper House refuses to take a roll call on the bill, the 
government and the ruling parties, out of the need to secure fiscal 
resources, plan to extend the provisional rate, by voting on the 
bill once again in late April, based on the article of the 
Constitution stipulating that if the Upper House makes a decision 
different from that of the Lower House, the bill becomes a law when 
passed a second time by the Lower House. However, railroading a bill 
that is directly related to the household budget would deal a major 
blow to the LDP in terms of public opinion, according to a person 
who served as cabinet minister. 
 
The LDP is discussing the possibility of shortening the scope of the 
extension of the provisional rate from 10 years to five years and 
reducing the amount of investment secured in the mid-term road 
consolidation plan from the currently proposed 59 trillion yen. No 
views supporting a cut in the provisional tax rate, which will lead 
to a change to the fiscal 2008 budget, have been floated. 
 
Tanigaki yesterday evening conferred on the revision issue with New 
 
TOKYO 00000713  010 OF 011 
 
 
Komeito Policy Research Council Chairman Tetsuo Saito. Saito told 
reporters, "The DPJ would not respond, unless we come up with a 
proposal drastic enough to win high scores from the public." He thus 
indicated his view that it would be absolutely necessary to make a 
drastic compromise in order to have the bill enacted before the end 
of the current fiscal year. Tanigaki and Saito agreed on the 
possibility of the ruling party drafting a revision plan and 
submitting it to the DPJ. However, no prospect for a revision plan 
has yet to come into view. 
 
13) DPJ refuses deliberations on highway-related bill, making it 
difficult to secure Diet approval within fiscal year 
 
NIKKEI (Page 2) (Excerpts) 
March 18, 2008 
 
It now seems difficult for the government and the ruling camp to 
enact a bill amending the Special Taxation Measures Law, which 
includes a measure to extend the current provisional 
highway-construction tax rates, by the end of this fiscal year as 
they had planned. The Democratic Party of Japan (DPJ) is apparently 
aiming to press the government to dissolve the House of 
Representatives for a snap election, taking advantage of the 
expiration of the provisional tax rates at the end of March. 
 
In a meeting of the House of Councillors Diet Affairs Committee 
chairmen of the Liberal Democratic Party and the DPJ held in the 
Diet Building yesterday, the LDP suggested holding hearings with the 
relevant cabinet ministers regarding their policy stances on the 
18th, a premise for starting deliberations on the tax legislation, 
but the DPJ turned it down. Deliberations were essentially postponed 
to next week or later. 
 
The DPJ yesterday distributed to all members copies of a written 
request, under the name of Diet Affairs Committee Chairman Kenji 
Yamaoka, urging them to make thoroughgoing preparations for a 
possible Lower House election. 
 
Meanwhile, LDP Policy Research Council Chairman Sadakazu Tanigaki 
yesterday started work to coordinate views in the party on a draft 
amendment that the ruling camp plans to complete within this week. 
As part of efforts to find common ground with the DPJ, Tanigaki held 
a meeting with senior members of the road-policy clique in the Diet, 
such as Election Committee Chairman Makoto Koga and Executive 
Council Chairman Toshihiro Nikai, as well as with the DPJ with 
former Prime Minister Yoshiro Mori and former Upper House Chairman 
Mikio Aoki. The meeting, however, ended up with the four just 
expressing cautious views about drastically amending the bill, with 
no substantive discussion conducted on specifics. 
 
14) Japan concerned about impact of riots on Chinese president's 
planned visit to Japan 
 
YOMIURI (Page 4) (Full) 
March 18, 2008 
 
Protests against China set off by riots in Lhasa of the Tibet 
Autonomous Region are spreading around the world. The Japanese 
government is concerned about the possible impact of the protests on 
the planned visit to Japan by Chinese President Hu Jintao. 
 
At a news conference yesterday, Vice Foreign Minister Mitoji 
 
TOKYO 00000713  011 OF 011 
 
 
Yabunaka, speaking of the possible impact of the riots on the 
planned visit to Japan by the Chinese president, emphasized: 
"Basically, the riots have nothing to do with the visit." The 
Japanese and Chinese governments plan to formally announce President 
Hu's visit to Japan possibly by the end of the week. The two 
governments are making arrangements to set the visit at May 6 or 7. 
An official familiar with Japan-China negotiations noted: "We don't 
want to make waves at this point in time in connection with 
relations with China." 
 
SCHIEFFER