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UNCLAS SECTION 01 OF 11 TOKYO 000823 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
INDEX: 
 
(1) Poll on Fukuda cabinet, political parties (Yomiuri) 
 
(2) Fukuda government to mark six months tomorrow since coming into 
office; Prone to making mistakes and lacking cohesiveness, but ready 
to take the offensive (Mainichi) 
 
(3) Prime Minister Fukuda finds himself in fix over six months, with 
DPJ refusing "grand coalition" proposal, nominations for BOJ top 
posts (Asahi) 
 
(4) Poll: 50 PERCENT  want Ishiba to prevent recurrence of Aegis 
accident instead of resigning (Nikkei) 
 
(5) Government to discuss operation of SOFA to share information on 
deserters (Asahi) 
 
(6) Large blue coral colony found in planned relocation site for 
U.S. Futenma base (Tokyo Shimbun) 
 
(7) Concern about weakening capital investment: Leading companies' 
business sentiment worsening; Some companies expect economy to pick 
up in summer or later (Yomiuri) 
 
ARTICLES: 
 
(1) Poll on Fukuda cabinet, political parties 
 
YOMIURI (Page 13) (Full) 
March 24, 2008 
 
Questions & Answers 
(Some portions already reported) 
 
Q: Do you support the Fukuda cabinet? 
 
Yes 33.9 
No 54.0 
Other answers (O/A) 2.6 
No answer (N/A) 9.5 
 
Q: (Only for those who answered "yes" to the foregoing question) 
Give up to two reasons for your approval of the Fukuda cabinet. 
 
I can appreciate its political stance 25.6 
It's stable 28.4 
The prime minister is trustworthy 27.9 
Something can be expected of its economic policy 4.8 
Something can be expected of its foreign policy 5.8 
Because it's a coalition of the Liberal Democratic Party and New 
Komeito 12.4 
Because the prime minister is from the LDP 30.5 
It's better than its predecessors 12.2 
O/A+N/A 5.9 
 
Q: (Only for those who answered "no" to the foregoing question) Give 
up to two reasons for your disapproval of the Fukuda cabinet. 
 
I can't appreciate its political stance 47.8 
It's unstable 26.8 
The prime minister is untrustworthy 23.4 
 
TOKYO 00000823  002 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
Nothing can be expected of its economic policy 37.9 
Nothing can be expected of its foreign policy 8.6 
Because it's a coalition of the Liberal Democratic Party and New 
Komeito 8.8 
Because the prime minister is from the LDP 4.9 
It's worse than its predecessors 8.1 
O/A+N/A 3.0 
 
Q: What issues do you want the Fukuda cabinet to pursue on a 
priority basis? Pick as many as you like from among those listed 
below, if any. 
 
Economic, employment measures 53.9 
Fiscal reconstruction 24.5 
Tax reform, consumption tax 32.1 
Social security reform, including pension and healthcare systems 
58.1 
Low birthrate countermeasures, including childcare support 27.4 
Education reform 18.6 
Social divide, including income gaps 22.1 
Administrative reform, including public service personnel cuts 19.7 
Politics and money issues 30.2 
Asia diplomacy, including China and South Korea 12.5 
North Korea 17.9 
Defense, security 11.6 
Constitutional revision 4.8 
Crisis management, including disaster prevention 8.4 
Public security, crime prevention 16.9 
Environmental protection 22.7 
Food safety 37.1 
O/A + nothing in particular + N/A 3.7 
 
Q: Which political party do you support now? Pick only one. 
 
Liberal Democratic Party (LDP) 33.1 
Democratic Party of Japan (DPJ or Minshuto) 17.6 
New Komeito (NK) 2.7 
Japanese Communist Party (JCP) 2.5 
Social Democratic Party (SDP or Shaminto) 1.1 
People's New Party (PNP or Kokumin Shinto) 0.3 
New Party Nippon (NPN or Shinto Nippon) 0.1 
Other political parties --- 
None 41.9 
N/A 0.7 
 
Q: When would you like the House of Representatives to be dissolved 
for a general election? Pick only one from among those listed 
below. 
 
As early as possible 22.2 
After this July's G-8 summit 22.5 
Within this year 22.0 
Sometime during the current term up until September 2009 24.7 
N/A 8.6 
 
Q: What kind of government would you like to see now? Pick only 
one. 
 
The current LDP-Komeito coalition government 22.1 
A DPJ-led coalition government of opposition parties 16.1 
The LDP's single-party government 7.2 
The DPJ's single-party government 4.9 
 
TOKYO 00000823  003 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
A coalition government centering on the LDP and the DPJ 20.7 
A government under a new framework of political parties after 
realigning the ruling and opposition parties 15.3 
O/A 0.4 
N/A 13.2 
 
Q: Prime Minister Fukuda has now been in office for nearly a half 
year. What do you think about Prime Minister Fukuda's own and his 
cabinet's performance? 
 
Appreciate very much 4.9 
Appreciate somewhat 28.6 
Don't appreciate very much 41.7 
Don't appreciate at all 21.8 
N/A 3.0 
 
 
Q: Is there anything you can appreciate about Prime Minister Fukuda 
or his cabinet? If any, pick as many as you like from among those 
listed below. 
 
Resumption of the Maritime Self-Defense Force's refueling mission in 
the Indian Ocean 11.8 
Blanket relief for all hepatitis C virus victims 49.9 
Setting up of social security panel 3.5 
Response to pension record-keeping flaws 17.5 
Appointment of state minister for consumer affairs and setting up of 
consumer administration panel 3.3 
Response to Chinese-made frozen gyoza dumpling incidents 8.6 
Response to stock market, other economic conditions 1.6 
Response to Aegis accident 5.3 
Diplomacy toward U.S. 3.9 
Diplomacy toward China, South Korea 10.4 
Global warming 11.5 
O/A 0.2 
Nothing 27.1 
N/A 4.5 
 
Q: Do you know well about Prime Minister Fukuda's political 
approach? 
 
Yes 8.8 
No 88.7 
N/A 2.5 
 
Q: Do you think Prime Minister Fukuda is steady in his job 
performance? 
 
Yes 43.2 
No 47.8 
N/A 9.0 
 
 
Q: If there is anyone you appreciate in the Fukuda cabinet for that 
person's job performance? If any, pick as many as you like from 
among those listed below. 
 
Internal Affairs & Communications Minister Masuda 3.6 
Justice Minister Hatoyama 4.3 
Foreign Minister Koumura 6.0 
Finance Minister Nukaga 1.6 
Education, Culture, Sports, Science & Technology Minister Tokai 1.2 
 
TOKYO 00000823  004 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
Health, Labor & Welfare Minister Masuzoe 51.4 
Agriculture, Forestry & Fisheries Minister Wakabayashi 0.7 
Economy, Trade & Industry Minister Amari 1.2 
Land, Infrastructure & Transport Minister Fuyushiba 4.1 
Environment Minister Kamoshita 2.1 
Defense Minister Ishiba 13.5 
Chief Cabinet Secretary Machimura 8.6 
National Public Safety Commission Chairman Izumi 0.4 
Okinawa Affairs Minister Kishida 0.8 
Financial Services Minister Watanabe 11.5 
Economic & Fiscal Policy Minister Ota 3.6 
Declining Birthrate Minister Kamikawa 1.6 
None + N/A 35.8 
 
Q: How long would you like the Fukuda cabinet to continue? Pick only 
one from among those listed. 
 
As long as possible 12.8 
2 or 3 years 14.4 
1 year or so 22.7 
About a half year 18.6 
Quit as early as possible 25.3 
O/A 0.3 
N/A 5.9 
 
Q: What do you think about DPJ President Ozawa's job performance as 
his party's representative? 
 
Appreciate very much 4.3 
Appreciate somewhat 25.1 
Don't appreciate very much 42.0 
Don't appreciate at all 23.0 
N/A 5.7 
 
Q: Who do you think is most appropriate in the Diet for prime 
minister? Pick only one from among those listed below. 
 
Taro Aso 21.2 
Shinzo Abe 1.2 
Nobuteru Ishihara 1.8 
Akihiro Ota 0.5 
Katsuya Okada 2.1 
Ichiro Ozawa 5.3 
Naoto Kan 3.4 
Yuriko Koike 1.3 
Junichiro Koizumi 16.1 
Sadakazu Tanigaki 1.7 
Shoichi Nakagawa 0.3 
Fukushiro Nukaga 0.2 
Yukio Hatoyama 0.9 
Yasuo Fukuda 4.0 
Seiji Maehara 0.8 
Yoichi Masuzoe 3.2 
Nobutaka Machimura 0.9 
Kaoru Yosano 0.3 
Others 0.5 
None 24.9 
N/A 9.5 
 
Polling methodology 
Date of survey: Mar. 15-16. 
Subjects of survey: 3,000 persons chosen from among all eligible 
 
TOKYO 00000823  005 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
voters throughout the country (at 250 locations on a stratified 
two-stage random-sampling basis). 
Method of implementation: Door-to-door visits for face-to-face 
interviews. 
Number of valid respondents: 1,786 persons (59.5 PERCENT ) 
Breakdown of respondents: Male-46 PERCENT , female-54 PERCENT ; 
persons in their 20s-9 PERCENT , 30s-14 PERCENT , 40s-15 PERCENT , 
50s-21 PERCENT , 60s-23 PERCENT , 70 and over-18 PERCENT ; big 
cities (Tokyo's 23 wards and government-designated cities)-22 
PERCENT , major cities (with a population of more than 300,000)-19 
PERCENT , medium-size cities (with a population of more than 
100,000)-24 PERCENT , small cities (with a population of less than 
100,000)-24 PERCENT , towns and villages-11 PERCENT . 
 
(2) Fukuda government to mark six months tomorrow since coming into 
office; Prone to making mistakes and lacking cohesiveness, but ready 
to take the offensive 
 
MAINICHI (Page 5) (Full) 
March 25, 2008 
 
The government of Prime Minister Yasuo Fukuda will mark six months 
tomorrow since it came into office. It has found managing the 
divided Diet fraught with many difficulties, and it has been forced 
to waver back and forth in selecting its nominee for a new governor 
of the Bank of Japan. Meanwhile, the cabinet support rate has 
continued to slide. Legislation amending the Special Taxation 
Measures Law, aimed at retaining the current provisional tax for 
gasoline and road-related taxes, has been left pending in the Diet. 
 
Failure in formation of grand alliance 
 
Fukuda assumed the prime minister's post on Sept. 26 last year 
following the sudden resignation of then Prime Minister Shinzo Abe. 
The Fukuda government was launched, facing a House of Councillors 
that was controlled by the opposition camp. This was the reason why 
Fukuda named his government the "back to the wall" cabinet. At that 
time, Fukuda showed determination by saying: "If the cabinet makes 
even a small mistake (in its judgment), the Liberal Democratic Party 
will lose the reins of government." Even before assuming the prime 
minister's post, Fukuda looked into the possibility of forming a 
grand alliance between the LDP and the Democratic Party of Japan, 
the largest opposition force. After taking office, through two 
face-to-face meetings, Fukuda built a relationship of trust with DPJ 
President Ichiro Ozawa, who was then positive about such discussion 
with the government and ruling coalition. However, meeting with 
strong opposition from many DPJ lawmakers, Ozawa had to give up on 
the grand alliance idea. 
 
Criticizes DPJ's response 
 
Using the Constitution's provision that states if the Upper House 
rejects a bill, it still can be passed by a two-thirds Lower House 
overriding vote, Fukuda enacted the new anti-terrorism measures law 
to continue the Maritime Self-Defense Force's refueling operation in 
the Indian Ocean. However, the DPJ was able to threaten to undermine 
the Fukuda government by using such issues as missing pension 
payment records and the collision between an MSDF Aegis destroyer 
and a fishing boat. 
 
When his nominee for Bank of Japan governor, then Deputy Gov. 
Toshiro Muto, was rejected by the DPJ, Fukuda picked as a next 
 
TOKYO 00000823  006 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
choice Koji Tanami, a former vice finance minister. But his 
nomination, too, was rejected by the opposition camp. As it stands, 
the top post at the central bank has been left vacant for the first 
time in the postwar period. As a result, Fukuda's hold over the 
party is beginning to unravel. 
 
Despite this, the Prime Minister's Official Residence (Kantei) has 
taken the offensive. A source in the government asserted: "The prime 
minister has not made any significant mistakes." Fukuda indeed 
believes that he did not err in his choice of candidates for the new 
BOJ governor. His stubborn disposition has reappeared, and he told 
aides: "The DPJ's rejection of the government's plan has damaged 
Japan's interests." A senior Machimura faction member spoke for 
Fukuda: "I have lost my trust in Mr. Ozawa." 
 
(3) Prime Minister Fukuda finds himself in fix over six months, with 
DPJ refusing "grand coalition" proposal, nominations for BOJ top 
posts 
 
ASAHI (Page 4) (Full) 
March 25, 2008 
 
During the past six months since Yasuo Fukuda assumed office, the 
prime minister has devoted himself to trying to build a relationship 
with the Democratic Party of Japan (DPJ) led by President Ozawa 
under conditions in which the opposition bloc has control over the 
House of Councillors. For Fukuda, it was a continuing trial and 
error process. He even kept alive a kind of "hotline" to Ozawa even 
after a "grand alliance" scheme between the two misfired. But the 
hotline did not work when Fukuda nominated a candidate to head the 
Bank of Japan (BOJ). And on the issue of the legislation to continue 
the provisional gasoline tax rate, as well, the prime minister has 
yet to find a way to start talks with the DPJ in order to maintain 
the rate the end of March, when current legislation ends. With 
public support for the cabinet plummeting, the Fukuda government now 
finds it difficult to take a hard-line stance or to be ready to 
dissolve the House of Representatives if need be. The government 
remains unable to move effectively. 
 
"Hotline with Ozawa" cut off 
 
Speaking before reporters at his official residence yesterday, 
Fukuda complained of the DPJ's stance, saying "Honestly speaking, I 
cannot see why it has taken such a stance. It rejected our 
nominations for the BOJ governor post. The party has also refused 
talks on budget-related bills. It is difficult to even get to talk 
with it." 
 
The prime minister has long stressed a willingness to pursue a 
dialogue with the DPJ and had refrained from openly criticizing it. 
But recently he has not been able to hide his irritation at the 
DPJ. 
 
Fukuda also lashed out at the DPJ's response to the issue of the 
provisional highway-related tax rates. National Governors' 
Association Chairman Wataru Aso and other representatives from local 
groups called on the prime minister at his official residence 
yesterday to ask the government to do its best to maintain the 
current tax rates. Fukuda told them: "Time is running out. With only 
this week to go, the other side has still refused talks. It is quite 
deplorable." 
 
 
TOKYO 00000823  007 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
According to his close aide, the prime minister intentionally 
refrained from criticizing the DPJ, based on the judgment that 
matters would not move forward smoothly without the understanding of 
the DPJ, as long as it controls the Upper House. 
 
With this situation in mind, the prime minister has continued 
efforts since coming into office to grope for ways to join hands 
with DPJ President Ozawa, with an eye on a "grand alliance." Fukuda 
held three rounds of meetings with Ozawa late last October and in 
November, using former Prime Minister Mori and Yomiuri Shimbun Group 
President Tsuneo Watanabe as intermediary, but the grand coalition 
initiative fell through as a result of Ozawa encountering opposition 
from the DPJ executive. 
 
Afterward, Ozawa disclosed the process that led to the realization 
of the party head talks, but the prime minister remained silent, 
just saying: "There is the need to keep faith with President Ozawa. 
It is impermissible for me to talk everything." 
 
A senior government official explained how the prime minister was 
feeling at that time: "Mr. Ozawa lost his grip on the party and was 
unable to unify views in the party. But the prime minister, instead 
of resorting to a tough stance, patiently tried to maintain the 
relationship with Mr. Ozawa." 
 
Difficult to dissolve Lower House, given low public support 
 
The hotline with Ozawa seemed to work effectively to push ahead with 
the government's nomination for the BOJ governorship. 
 
According to several ruling party members, Fukuda and Ozawa began to 
secretly meet last December. There was even a scene in which when 
 
SIPDIS 
Fukuda unofficially proposed nominating Deputy BOJ Governor Toshiro 
Muto for the governorship, he got a positive impression that Ozawa 
would accept. 
 
But DPJ members were beset with doubts and fears about 
behind-the-scenes negotiations between Ozawa and Fukuda in the 
aftermath of the row in the party over Fukuda's grand coalition 
proposal. In late February, the ruling camp forcibly passed the 
budget bill through the House of Representatives. Set off by this 
event, the hotline between Fukuda and Ozawa was cut off. 
 
When he dined with LDP Research Council Chairman Sadakazu Tanigaki 
and others on the night of March 19, Prime Minister Fukuda quoted a 
leading figure in the DPJ as saying: "The nomination of Mr. Muto is 
acceptable. I will take responsibility and persuade the four party 
executives to accept the plan." Although Fukuda did not mention who 
the leading figure was, he disclosed what was going on in backstage 
negotiations with the DPJ." 
 
Following his grand coalition proposal having been rejected and the 
hotline with Ozawa having been cut off, the DPJ formally refused 
talks on revising the government's bill on the highway-related tax 
rates yesterday. The prime minister's relations with the DPJ are now 
in the worst state since he assumed office. Under the prime 
minister's envisioned strategy, he would manage to survive until the 
July Lake Toya Summit in Hokkaido while keeping a low profile by 
enacting the budget-related bills by the end of the fiscal year and 
putting forth the policy of protecting the environment and 
consumers, as well as foreign policy. But the DPJ's clarification of 
its intention to press the government to dissolve the Lower House 
 
TOKYO 00000823  008 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
prior to the end of the fiscal year has begun to upset that 
strategy. 
 
The prime minister has "put the seal" on the possibility of 
dissolving the Lower House until after the G-8 Summit, but he does 
not have enough power to turn around the political situation on his 
own. Particularly, public support for his cabinet remains too low 
for him to do so. In addition, since the nation's economy is 
sluggish, the Fukuda administration cannot choose an option that 
might lead to depriving the ruling coalition of its two-thirds lower 
chamber overriding vote. 
 
In a press conference yesterday, Chief Cabinet Secretary Machimura 
replied in a strong tone to a question about what measures he has in 
mind to break an impasse: "Besides talks, what measures are there? 
Is there some meaning in creating a political vacuum as a result of 
the Lower House being dissolved?" 
 
(4) Poll: 50 PERCENT  want Ishiba to prevent recurrence of Aegis 
accident instead of resigning 
 
NIKKEI (Page 2) (Full) 
March 25, 2008 
 
The Nihon Keizai Shimbun conducted a public opinion survey on Mar. 
21-23, in which respondents were asked about Defense Minister 
Shigeru Ishiba's responsibility over the recent fatal collision of a 
Maritime Self-Defense Force Aegis destroyer with a fishing boat. To 
this question, 50 PERCENT  answered that Ishiba should hurry to work 
out recurrence prevention measures without resigning as defense 
minister, with 39 PERCENT  saying he should resign after clearing up 
the cause of the accident, and 5 PERCENT  saying he should resign at 
once. 
 
Among those who support the ruling Liberal Democratic Party, 61 
PERCENT  urged Ishiba to work out recurrence prevention measures 
without resigning, with 31 PERCENT  saying he should resign after 
clearing up the cause of the accident, and 3 PERCENT  calling for 
his immediate resignation. Among those who support the leading 
opposition Democratic Party of Japan (Minshuto), 46 PERCENT 
answered that Ishiba should resign after clearing up the cause of 
the accident, with 8 PERCENT  insisting on his immediate 
resignation, and 44 PERCENT  saying he should work out recurrence 
prevention measures without resigning. 
 
(5) Government to discuss operation of SOFA to share information on 
deserters 
 
ASAHI (Page 4) (Full) 
March 25, 2008 
 
The government decided yesterday to hold talks with Washington to 
improve the operation of the Japan-U.S. Status of Forces Agreement 
(SOFA) in a way allowing the two countries to share information on 
missing U.S. service members in Japan, including deserters. The 
decision follows the discovery of a credit card belonging to a U.S. 
sailor who went missing (in early March) in the taxi of a driver who 
was slain in Yokosuka, Kanagawa Prefecture. 
 
Foreign Minister Masahiko Koumura said before the House of 
Councillors Budget Committee yesterday: "We would like to discuss 
with the U.S. side and relevant government agencies how information 
 
TOKYO 00000823  009 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
on missing U.S. service members should be shared." 
 
Koumura was responding to a question from Keiichiro Asao of the 
Democratic Party of Japan. 
 
According to the Foreign Ministry, the United States under the SOFA 
is not required to inform Japan of missing U.S. service members. The 
sailor, now in the custody of the U.S. Navy, went missing on March 
¶8. The U.S. side declared him a deserter on March 10. The United 
States has not requested an investigation by Japan. 
 
Under the SOFA, U.S. service members are exempt from 
passport-checks, visas, and alien registration requirements when 
entering Japan. The government has no information on U.S. service 
members who are missing from their bases in Japan. Given the 
situation, there has been an argument in the government that 
information on missing U.S. service members must be shared between 
Japan and the United States. 
 
(6) Large blue coral colony found in planned relocation site for 
U.S. Futenma base 
 
TOKYO SHIMBUN (Page 1) (Full) 
Eve., March 24, 2008 
 
A joint survey by the World Wide Fund for Nature Japan (WWF Japan) 
and the Nature Conservation Society of Japan (NACS-J) confirmed that 
one of the largest blue coral colonies in the world exists in waters 
off Okinawa's Nago City, where an alternative facility for the U.S. 
military's Futenma Air Station is planned to be relocated. 
 
EIA on the way 
 
The two organizations assert that an urgent need at present is to 
preserve the waters that have some of the world's richest 
biodiversity, including dugongs, as the Ministry of Defense's (MOD) 
Defense Policy Bureau has now launched an environmental impact 
assessment (EIA) in the area. 
 
The blue coral colony in the area was discovered some 400 meters off 
Teima Fishing Port in Oura Bay, Nago City, in last September. The 
colony lies on a slope extending from a depth of one meter to 20 
meters. 
 
Valuable assets should be conserved by political decision 
 
Commentary by Toshiya Ura 
 
The blue coral colony discovered off Nago City, Okinawa Prefecture, 
is one of the largest in the world. Nanzan University Prof. 
Shigekazu Mezaki, a councilor of the WWF Japan, notes: "I have never 
heard of this size colony on a seabed slope. The maximum height of 
the colony is 15 meters, five times as high as the colony found in 
the Shiraho waters around Ishigaki Island, previously said to be the 
world's largest. This colony is a valuable asset for the entire 
world and can help foster understanding of the progress of coral, 
which changes its form to adapt itself to the environment." 
 
The discovered blue coral colony sits about 3 km northeast of the 
planned relocation site. The MOD's Okinawa Policy Bureau began an 
EIA on March 18 in preparation for the construction of an alternate 
facility. Reportedly, the U.S. military also has sought to construct 
 
TOKYO 00000823  010 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
a gun-loading ground and a 214-meter quay in addition to the 
previous plan. 
 
Because the area is a major feeding ground for dugongs, there is 
concern that the dugongs may be driven to extinction with a change 
in the sea current stemming from the possible contamination of 
seawater because of a series of surveys and construction work. 
 
Wilderness found on the east coast on the northern part of the main 
Okinawa island has remained the same as it was before the war. This 
area is indispensable for the future of Okinawa, a prefecture that 
relies on tourism. That wilderness is a valuable natural asset. 
 
Permits and license rights regarding reclamation under the Law for 
Reclamation of Public Land lie with the governor. The ongoing EIA 
has not offered any opportunity for the environment minister to say 
anything about the EIA. But it is politicians who can take action to 
preserve some of the world's richest biodiversity before all is 
lost. 
 
(7) Concern about weakening capital investment: Leading companies' 
business sentiment worsening; Some companies expect economy to pick 
up in summer or later 
 
YOMIURI (Page 11) (Full) 
March 25, 2008 
 
It has become clear through the results of an economic forecast 
survey conducted on companies, released yesterday by the Cabinet 
Office and the Finance Ministry, that the business sentiment of 
leading companies, which have led the economic recovery up until 
now, has significantly deteriorated. This is because the sharp rise 
in the prices of raw materials, such as crude oil and grain, and the 
slowdown of the U.S. economy, are having an adverse effect on their 
business confidence. There is concern that while the Japanese 
economy is in a temporary slump, the deteriorated business 
confidence will negatively affect the economy, such as by 
constraining capital investment. 
 
Business confidence index marks record low of minus 9.3: Eight 
industries record positive figures 
 
The business confidence index of leading companies (those 
capitalized at over 1 billion yen) is determined by subtracting the 
percentage of companies that say the economy is deteriorating from 
the percentage that say the economy is improving. This figure was 
minus 9.3 in a survey carried out in the January-March quarter, the 
lowest level since the surveys were started in the April-June 
quarter in 2004. 
 
Among industries that showed a marked drop in business confidence 
were food manufacturers, which are suffering from high grain prices 
and a rise in transportation cost, down 29.2 percentage points, 
followed by the financial and insurance sectors, which are being 
buffeted by the U.S. subprime mortgage crisis, down 25.9 points, and 
information and communications equipment manufactures, which are 
suffering sluggish sales of cell-phone handsets, down 22.2 points. 
 
Only 8 of 34 sectors, including the automobile, precision machinery, 
and advertising industries, were in positive territory. 
 
Moves to cut back on capital investment 
 
TOKYO 00000823  011 OF 011 
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 03//08 
 
 
In connection with the worsening business sentiment, companies have 
begun showing signs of cutting back on capital investment intended 
to increase production capacity. 
 
Capital investment in fiscal 2007 is expected to show a slight 
increase of 0.6 PERCENT  from fiscal 2006. However, plans for 
capital investment in fiscal 2008 are down 9.4 PERCENT  from the 
previous year. 
 
Many companies expect a significant decrease in capital investment, 
as can be seen in that food manufacturers expect a 30.9 PERCENT 
drop, the wholesale industry, which is expected to suffer a drop in 
U.S.-bound exports, projects a 38.9 PERCENT  fall, and the 
restaurant and hotel industry, which is prone to being directly 
affected by sluggish consumption, expects a 50.8 PERCENT  drop. 
 
Further deterioration? 
 
In the meantime, leading companies project that business sentiment 
will improve to negative 2.3 in the April-July quarter and positive 
6.6 in the July-September quarter. Japan Business Federation (Nippon 
Keidanren) Chairman Fujio Mitarai told a news conference yesterday, 
"Major economic stimulus measures to be taken by the U.S. in May 
will produce results around early summer." He thus stressed his 
perception that if the U.S. economy takes an upward turn due to 
support from stimulus measures, the Japanese economy will return to 
a healthy speed. 
 
However, the commotion in global financial markets stemming from the 
subprime mortgage crisis is still continuing. There are no 
indications of the situation improving. The survey this time was 
carried out on Feb. 25 and therefore does not include the impact of 
the strengthening yen and weakening dollar, two trends that have 
only progressed since then. Chances are that companies' business 
confidence regarding the domestic economy has further deteriorated. 
 
SCHIEFFER