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UNCLAS SECTION 01 OF 12 TOKYO 000837 
 
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//08 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Defense and security affairs: 
4) Yokosuka seaman in custody says he never rode in the cab of the 
slain driver  (Yomiuri) 
5) Lower House Foreign Affairs Committee starts deliberations on the 
special measures bill providing host-nation support to U.S. forces 
in Japan  (Tokyo Shimbun) 
6) DPJ opposition to host-nation support budget will result in a gap 
until the bill can be overridden a month after the current budget 
expires  (Mainichi) 
7) LDP lawmaker and defense policy specialist Gen Nakatani comes out 
against Defense Minister Ishiba's plan for reforming the Defense 
Ministry  (Mainichi) 
8) Defense Ministry's think-tank sees China acquiring an aircraft 
carrier within two years  (Sankei) 
9) MOD think-tank in report warns against China using defense 
exchanges with Japan for own purposes  (Yomiuri) 
10) Prime Minister Fukuda's remark "retracted" about early enactment 
of a permanent SDF dispatch law  (Sankei) 
11) Papers sent to the prosecutors on ASDF officer who leaked 
defense secrets  (Mainichi) 
 
Diet in turmoil: 
12) Ruling and opposition camps trading charges as Diet remains 
stalled over key legislation  (Tokyo Shimbun) 
13) One month blank can be expected before provision tax laws that 
expire at the end of March, can be enacted by a Lower House revote 
(Mainichi) 
14) Fukuda is filled with alarm about the impossible situation bills 
are facing in the Diet where the Upper House is controlled by the 
opposition camp  (Mainichi) 
15) Fukuda seeks to assure the public, particularly local areas 
likely to be hit hard by the expiration of the provision taxes 
(Yomiuri) 
16) Even gasoline stations that will lower pump prices in April 
likely to feel the pain of the expiration of provision tax rates 
(Mainichi) 
17) Some members of the DPJ are uncomfortable with the party's 
opposition to the appointment of the LDP-backed head of the National 
Personnel Authority  (Yomiuri) 
18) Infrastructure Development Institute to close doors due to 
expiring tax-related law (Mainichi) 
 
19) Justice Ministry panel proposes drastic review of foreign 
residency registration procedures  (Tokyo Shimbun) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Sankei & Tokyo Shimbun: 
Tokyo Metropolitan Assembly's committee approves 40 billion-yen 
bailout for ShinGinko Tokyo 
 
Mainichi: 
MLIT found to have used 2.3 trillion yen from special account budget 
for road projects to cover personnel expenses since its foundation 
 
TOKYO 00000837  002 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
 
Yomiuri: 
Government, ruling bloc intend to put the gasoline tax bill to a 
revote if the bill fails to be adopted by the end of the fiscal year 
(3/31) 
 
Nikkei: 
Nichirei, Ajinomoto, and other major food companies begin reducing 
their production of frozen foods 30 PERCENT  due to consumers' 
hesitant buying in wake of poisonous frozen dumplings 
 
Akahata: 
Four opposition parties jointly hold a rally aimed at scrapping a 
new medical system for the elderly, which is to be introduced in 
April 
 
2) EDITORIALS 
 
Asahi: 
(1) Heavy responsibility of Tokyo metropolitan government and 
metropolitan assembly for their decision to bailout ShinGinko Tokyo 
bank 
(2) Mayor should be tough against gangs 
 
Mainichi: 
(1) Gasoline tax dispute has yet to be settled 
(2) Hakamada murder case: Supreme Court's decision gives us an 
opportunity to reconsider death punishment 
 
Yomiuri: 
(1) Recording of questioning needs to be tried and tested for 
practical use 
(2) Bailout for ShinGinko Tokyo questionable 
 
Nikkei: 
(1) Tokyoites will eventually pay the price for the bailout of 
ShinGinko Tokyo 
(2) Political situation in Pakistan still remains murky 
 
Sankei: 
(1) Do not create public confusion by allowing expiration of the 
provisional tax rates 
(2) Land prices: Attention needs to be paid to what impact there 
will be on business conditions 
 
Tokyo Shimbun: 
(1) Plan to injection additional funds into ShinGinko Tokyo is a 
self-righteous act by Gov. Ishihara: 
(2) What makes youths kill indiscriminately? 
 
Akahata: 
(1) Bailout for ShinGinko Tokyo is an act that goes against public 
opinion 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 26 
 
NIKKEI (Page 2) (Full) 
March 27, 2008 
 
10:01 
 
TOKYO 00000837  003 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
Met Chief Cabinet Secretary Machimura and Deputy Chief Cabinet 
Secretary Futahashi at the Kantei. 
 
SIPDIS 
 
10:55 
Met LDP Secretary General Ibuki. 
 
12:04 
Met Futahashi. 
 
13:01 
Met Machimura. 
 
16:10 
Met LDP Reform Headquarters chief Takebe. 
 
17:50 
Met alpinist Ken Noguchi, Environment Minister Kamoshita and Vice 
Environment Minister Tamura. Kamoshita and Tamura stayed on. 
 
19:17 
Returned to his official residence. 
 
4) U.S. sailor denies riding in taxi of slain cabbie 
 
YOMIURI (Page 38) (Full) 
March 27, 2008 
 
A 22-year-old U.S. Navy seaman apprentice, who is stationed at the 
U.S. Navy's Yokosuka base and whose credit card was found inside the 
taxicab of a driver found slain in the city of Yokosuka, Kanagawa 
Prefecture, has denied his alleged involvement in the murder case by 
telling the U.S. Naval Criminal Investigative Service (NCIS) that he 
never rode in that taxicab, sources revealed. 
 
An investigative task force set up at the Yokosuka Police Station 
has received the U.S. sailor's fingerprints from U.S. Naval Forces 
Japan. The police will check the provided fingerprints with those 
left on the kitchen knife used for the killing and those left inside 
the taxi. In addition, the police are also analyzing images recorded 
by security cameras installed near the place where the taxi driver 
was slain, and they are now looking into the authenticity of the 
sailor's account. 
 
The U.S. sailor, who deserted from the Yokosuka base on March 8, was 
detained on March 22. He has since been in custody as a deserter at 
the base undergoing NCIS investigation. The Yokosuka police task 
force has been exchanging information with the NCIS and will shortly 
question the sailor. 
 
According to findings from the police investigation so far, the 
61-year-old slain driver, Masaaki Takahashi, picked up a passenger 
near JR Shinagawa Station in Tokyo's Minato-ku at around 7:30 p.m. 
Mar. 19, and his taxi exited the Yokosuka interchange of the 
Yokohama-Yokosuka Highway via the Metropolitan Expressway Yokohane 
(Yokohama-Haneda) route and arrived at the place where he was 
killed. He was stabbed to death at around 9:15, according to the 
police. 
 
5) Lower House Foreign Affairs Committee to initiate deliberations 
on sympathy budget 
 
TOKYO SHIMBUN (Page 2) (Full) 
 
TOKYO 00000837  004 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
March 27, 2008 
 
The House of Representatives Committee on Foreign Affairs yesterday 
launched deliberations on a new accord replacing the special 
measures agreement on Japan's host-nation support (or the so-called 
sympathy budget) for the U.S. forces stationed in Japan. The current 
agreement will expire at the end of this month. The government was 
forced to make difficult replies since they were severely pursued 
yesterday by both the ruling and opposition parties. 
 
Jiro Ono of the ruling Liberal Democratic Party (LDP) raised a 
question about the fact that workers whose salaries are paid by 
Japan include employees of such entertainment facilities as bowling 
alleys and golf courses in U.S. bases. "The Self-Defense Forces do 
not have such people working for them," he said. Foreign Ministry 
North American Affairs Bureau Director General Shinichi Nishimiya 
responded: "(Those entertainment facilities) will bolster the morale 
of U.S. military personnel and maintain their social wellbeing." 
 
Referring to the point that the percentage of Japan's sympathy 
budget is higher then other countries that host U.S. forces, Shoichi 
Kondo of the main opposition Democratic Party of Japan (DPJ or 
Minshuto) asserted: "South Korea does not pay utilities and water 
charges. Japan should cut its burden further." Senior Vice Defense 
Minister Akinori Eto responded: "When considering Japan's economic 
situation, your view should be fully taken into account. We can 
discuss such issues as saving costs in negotiating the new 
agreement." 
 
6) Blank period in sympathy budget inevitable 
 
MAINICHI (Page 2) (Full) 
March 27, 2008 
 
The House of Representatives Foreign Affairs Committee began 
yesterday discussing approval for an extension of the special 
agreement on Japan's host-nation support (HNS) for stationing U.S. 
forces in Japan ("sympathy budget") that expires on March 31. The 
major opposition Democratic Party of Japan grilled the government, 
asking if it has urged the U.S. side to make efforts to reduce 
utility expenses at U.S. military housing. With the ruling and 
opposition blocs failing to reach an agreement on a plan for 
deliberation, it now seems inevitable that a blank period will be 
created in Japan's HNS starting in April. 
 
Foreign Minister Masahiko Koumura commented on the impact of a 
possible blank period, "I hear that the U.S. military has postponed 
part of its training relocation plan." 
 
A provision specifying the Lower House's superiority applies to the 
special measures agreement, which is a kind of treaty. For this 
reason, even if the matter is voted down in the Upper House, it will 
be automatically enacted 30 days after the Lower House's 
endorsement. 
 
7) Former Defense chief Nakatani criticizes Ishiba's defense 
ministry reform proposal, arguing, "A clear distinction is essential 
between civilian and uniformed officials" 
 
MAINICHI (Page 5) (Full) 
March 27, 2008 
 
 
TOKYO 00000837  005 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
Ryuko Tadokoro 
 
Former Defense Agency Director-General Gen Nakatani of the ruling 
Liberal Democratic Party (LDP) in a book Daremo Kakenakatta 
Bouei-sho no Shinjitsu (The truth about the Ministry of Defense that 
no one has ever written) (published by Gentosha) criticized Defense 
Minister Shigeru Ishiba's proposal to unify and realign civilian 
officials (working in internal bureaus) and uniformed officers 
(serving in the Self-Defense Forces (SDF) and the three staff 
offices). Nakatani pointed out in the book: "It is wishful thinking 
to assume that if (uniformed officers and civilian officials) are 
simply mixed together, splendid results would be produced." 
 
Nakatani hails from the Ground Self-Defense Force. He agrees to the 
plan to review the entire organization, but he noted: "It is 
necessary to make a sharp distinction between civilian and uniformed 
officers. Military personnel and the military forces have their 
specialized area." Last month Ishiba suggested completely 
integrating both civilian bureaus and the three staff offices, but 
his proposal has come under criticism inside and outside MOD. 
 
8) China likely to launch flattop in 2 years 
 
SANKEI (Page 5) (Abridged) 
March 27, 2008 
 
The National Institute for Defense Studies (NIDS), a think tank of 
the Defense Ministry, released yesterday its annual report, East 
Asian Strategic Review 2008. Referring to China's ongoing naval 
modernization, the NIDS report notes that the Chinese navy is 
undoubtedly making a feasibility study to build an aircraft carrier. 
"There is no doubt that the Chinese navy will operate outside 
Chinese waters," the report says. In August last year, Chinese 
Defense Minister Cao Guangchuan visited as a part of defense 
exchanges between Japan and China. The report, however, warns: "The 
slogan of defense exchanges alone is now a fait accompli with no 
confidence building, and China may use this to advertise a 
peace-like image of itself." 
 
Last year, Japan and China held intergovernmental talks over gas 
field development in the East China Sea, during which Japan hinted 
at a prospecting plan. On that occasion, a Chinese official said 
China would then send warships. The NIDS report analyzes: "China is 
making naval visits for friendship while using its military 
deterrent. This is intended to establish China's de facto hegemony 
in the East China Sea by promoting a peace and friendship mood so 
that Japan will hesitate to reach for the East China Sea." 
 
Meanwhile, the NIDS report also explains that Chinese President Hu 
Jintao has consistently prioritized spending on China's naval 
buildup. The report indicates that China will complete an aircraft 
carrier by 2010 at the earliest. In addition, the report anticipates 
that China will switch its naval strategy from coastal defense in 
the seas near the Japanese archipelago, Taiwan, and the Philippines 
to ocean defense in the seas, including the Indian Ocean. The report 
also notes the Chinese navy's training that was conducted in August 
last year for underway replenishment. "China is already making 
inroads into the oceans," the report concludes. 
 
9) Japan's defense institute says "China may utilize" defense 
exchange to "showcase its image as a pacifist state" 
 
 
TOKYO 00000837  006 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
YOMIURI (Page 2) (Full) 
March 27, 2008 
 
The National Institute for Defense Studies (NIDS) under the Ministry 
of Defense (MOD) yesterday released its annual report "East Asian 
Strategic Review 2008," an analysis of the security and military 
situation in East Asia. The report expressed alarm at Japan-China 
defense exchanges, including port calls by both countries' vessels, 
by noting: "With the tacit emergence of Japan-China defense 
exchanges as a fait accompli, such exchanges are expected to be 
utilized by China to advertise its image as a peaceful state." NIDS 
unusually expressed concern about Japan-China defense exchanges, 
despite the fact that MOD has attached importance to them. 
 
The report touched on Chinese National Defense Minister Cao 
Gangchuan's visit to Japan last August as part of a defense exchange 
by pointing out: "(Then) Defense Minister Koumura expressed concern 
about China's increased defense spending, but no satisfactory answer 
came from the Chinese side. The Chinese defense minister's tour of 
Japan can be described as a trip to assuage the argument of China 
being a threat that is being voiced in Japan." 
 
Regarding the issue of joint development of gas fields in the East 
China Sea, a pending issue between the two countries, the report 
said: "The Chinese Navy's friendly visits to Japan are intended to 
promote a peaceful and friendly mood between Japan and China so as 
to make Japan hesitant to engage in gas exploration in the East 
China Sea. By so doing, the Chinese side intends to establish in 
effect hegemony in the East China Sea." The report concluded: "China 
is trying to secure an advantage over Japan by using both hard and 
soft power." Full-scale defense exchanges between the two countries 
started in the 1990s. Last November, a Chinese Navy vessel made a 
first call at a Japanese port. 
 
10) Fukuda backpedals on permanent law 
 
SANKEI (Page 5) (Abridged) 
March 27, 2008 
 
Prime Minister Yasuo Fukuda has now indicated that the government 
would submit a bill to the Diet at its current session for permanent 
legislation allowing Japan to send the Self-Defense Forces for 
overseas missions as needed. "I said it would be better to present 
the bill early because the Democratic Party of Japan (Minshuto) 
supports this legislation," Fukuda told reporters at his office 
yesterday evening. On Mar. 25, Fukuda showed his willingness to 
present the bill to the Diet. Fukuda explained that he had met that 
day with former Liberal Democratic Party Vice President Taku 
Yamasaki and he was only introducing Yamasaki's remarks. 
 
Chief Cabinet Secretary Nobutaka Machimura, meeting the press 
yesterday, also said: "We've not made such a judgment. We'd like to 
make a comprehensive judgment while seeing developments in the 
Diet." 
 
Meanwhile, DPJ President Ichiro Ozawa has been insisting on creating 
a permanent law. Fukuda showed his willingness on Mar. 25 to present 
a bill at the current Diet session. This also can be taken as a 
tactic to shake up the DPJ, which has been toughening its stance 
against the ruling coalition in the Diet. 
 
11) GSDF Criminal Investigation Command sends papers on ASDF colonel 
 
TOKYO 00000837  007 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
to prosecutors for leaking secrets to Yomiuri reporter 
 
MAINICHI (Page 1) (Full) 
March 27, 2008 
 
By Ken Honda 
 
The Defense Ministry announced yesterday that the Ground 
Self-Defense Force Criminal Investigation Command has sent to 
prosecutors indictment papers on a 50-year-old Air Self-Defense 
Force colonel based at the Defense Intelligence Headquarters -- 
currently attached to the DIH general affairs department -- on 
suspicion of leaking defense secrets regarding trends of Chinese 
Navy submarines to a Yomiuri Shimbun reporter in violation of the 
Self-Defense Forces Law. This is the first case that papers on an 
SDF officer have been sent to prosecutors for leaking defense 
secrets to the news media. The case is likely to stir up a 
 
SIPDIS 
controversy from the viewpoint of the freedom of the press and the 
people's right to know. 
 
According to investigations, the colonel is suspected to have leaked 
defense secrets regarding submarine movements provided by the U.S. 
military. The colonel has reportedly admitted to the charges in 
general. The possibility is strong that prosecutors will drop 
charges because revealing the highly confidential information in a 
public trial would be difficult. Although the SDF Law has a 
provision punishing the act of soliciting a person to leak 
information, the SDF has apparently not pressed charges against the 
reporter, concluding that his act was part of news-gathering 
activities. 
 
The problem resulted from the Yomiuri's May 31, 2005, morning 
edition that reported that a Chinese Navy submarine had stalled 
after causing a fire in the South China Sea. The vessel that caught 
on the fire was a Ming-class attack submarine. The submarine's 
position was also mentioned in the article. The Criminal 
Investigation Command is believed to have concluded that what is 
mentioned in the article fall under defense secrets. Although asked 
about the charges and reporter's news gathering, a spokesman said, 
"I cannot answer." 
 
12) Gasoline: Strategic move to avoid responsibility in event of 
confusion; Ruling parties criticizing DPJ as exercising tyranny of 
numbers; DPJ stressing stance of responding to talks 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 27, 2008 
 
With the possibility of a bill amending the Special Tax Measures Law 
failing to secure Diet approval within the current fiscal year, both 
the ruling and opposition parties have each begun making strategic 
moves in an effort to avoid a situation in which they are called on 
to take the blame in the event of confusion reigning. There are 
acrimonious exchanges, with the ruling parties criticizing the 
opposition of doing nothing that the Democratic Party of Japan (DPJ 
or Minshuto) is buying time, by rejecting Diet deliberations, while 
the DPJ is rebutting them, saying that it is ready to respond to a 
dialogue at any time. 
 
New Komeito Diet Affairs Committee Chairman Yoshio Urushibara after 
talks between the Diet affairs chiefs of both the ruling and 
opposition camps expressed discontent with the DPJ, "Their approach 
 
TOKYO 00000837  008 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
of making an accusation even before starting Diet deliberations and 
doing nothing will never be able to gain the public's 
understanding." 
 
Since the bill amending the Special Tax Measures Law cleared the 
Lower House on February 29, the ruling parties had been calling on 
the DPJ to agree to start Diet deliberations by promptly holding a 
session to explain the bill and a question-and-answer session. 
 
However, the DPJ has indicated no signs of responding to the LDP's 
call, citing the party's circumstance as the reason. The prevailing 
view in the ruling parties is that the DPJ would not agree to take a 
vote within the current fiscal year, as one senior Upper House 
member of the LDP predicted. 
 
For this reason, the ruling camp is now focusing on an approach of 
appealing the "tyranny of numbers" by the DPJ, the top party in the 
Upper House, to the public, instead of finding a breakthrough 
through talks. It is also criticizing the DPJ for its stance of not 
responding to its all for talks to revise the bill amending the 
Special Tax Measures Law. 
 
The DPJ is also making a frantic effort to get the pubic on its side 
as part of a propaganda battle intended to realize cheaper gasoline. 
Regarding the LDP-proposed revision talks, DPJ President Ozawa said, 
"I would like to hold talks at every opportunity." He appears to be 
determined to show a stance of responding to a call for dialogue in 
order not to provoke criticism of the public. Though the DPJ has not 
respond to a proposal for a meeting of secretaries general made by 
the ruling camp, it has offered a counterproposal for talks between 
Diet affairs chiefs and officials responsible for policy-making of 
the ruling and opposition parties. 
 
The DPJ yesterday compiled its own report on an impact of an 
expiration of special measures other than the gasoline tax. Its 
strategy is to appeal the seriousness of the situation to the public 
with one senior member noting, "It makes no sense that the ruling 
parties do not agree on the DPJ's proposal, which exclude taxes 
other than the gas tax." 
 
13) One-month blank in provisional tax rates coming; Government, 
ruling parties coordinating plan to take second vote on tax-related 
bill in late April 
 
MAINICHI (Page 1) (Excerpts) 
March 27, 2008 
 
With the prospect that a bill amending the Special Taxation Measures 
Law will not be passed by March 31 and that the expiration of the 
provisional gasoline tax will be unavoidable, the government and 
ruling parties have begun coordinating to put the bill to a second 
vote before the end of April in the House of Representatives. The 
government and ruling coalition aim to minimize the social impact by 
allowing the provisional rates to lapse for just about one month. 
They also launched a study of measures to support gasoline stations 
and local governments with the expiration of provisional gas tax in 
mind. Once the reduced gasoline prices rise to the original prices, 
the public may react sharply. Prime Minister Yasuo Fukuda as a 
result will explain the situation to the public in late March after 
the fiscal 2008 budget and budget-related bills clear the Diet. 
 
The special tax revision bill was passed on Feb. 29 by the Lower 
 
TOKYO 00000837  009 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
House and sent to the House of Councillors. But the Upper House has 
yet to start deliberations on the legislation. Under the 
Constitution, if a bill has not been voted within 60 days after 
being sent to the Upper House, the bill is considered as being 
rejected and it will be sent back to the Lower House. Therefore, the 
lower chamber will be able to readopt it by a two-thirds majority 
vote on April 29 or after. Asked by the press that whether a second 
vote was one of his options, Fukuda said last evening: "In order to 
prevent confusion from occurring on April 1 or later, the issue must 
be resolved as early as possible." So, he did not reject that 
option. 
 
14) Fukuda, fearing public confusion, to give explanation on tactic 
of using revote in lower chamber to reinstate gas tax 
 
MAINICHI (Page 2) (Full) 
March 27, 2008 
 
Prime Minister Yasuo Fukuda is considering giving an explanation to 
the public on the government's plan to bringing the bill amending 
the Special Tax Measures Law back into the House of Representatives 
for a revote. He is strongly concerned that a reduction (and then a 
rise) in the gasoline price may create confusion in the society. 
Even so, the public may react sharply if the price once lowered is 
soon raised. An opposition member said: "If the prime minister 
announces the policy of using the ruling coalition's two-thirds 
lower chamber overriding vote, it will become difficult to hold 
talks on revising the bill." The prime minister will make a bitter 
decision under difficult conditions. 
 
Speaking before reporters yesterday, Fukuda said: "Since the Diet is 
in such a state, the people feel anxious. The issue should be 
settled as soon as possible. That is the best way." 
 
15) Government may seek 2nd lower chamber vote on bill for 
maintaining provisional gasoline tax rate to avoid effect on local 
government finances 
 
YOMIURI (Page 4) (Excerpts) 
March 27, 2008 
 
The government and the ruling coalition have decided to pass 
tax-related bills, including a bill amending the Special Tax 
Measures Law to maintain the current provisional gasoline tax rate, 
at the House of Representatives again in late April if the bills are 
not made into law by the end of this fiscal year. They will give 
priority to minimizing the impact of the expiration of the 
provisional tax rates on local government finances and the people's 
lives. In such a case, gasoline prices are expected to go up and 
rise. To avoid any confusion among the people, Prime Minister 
Fukuda's persuasive explanation to the people will play a key role. 
 
The tax-related bills passed the Lower House on Feb. 29, but the 
bills have not been debated after they were sent to the House of 
Councillors, in which the Democratic Party of Japan (DPJ) has 
control. 
 
In a meeting of the ruling and opposition Diet affairs chiefs 
yesterday, the ruling side sought that deliberations on the bills be 
started an early date, but Kenji Yamaoka of the DPJ did not respond 
to the call, insisting: "The budget bill for FY2008 should be 
discussed first in accordance with the conventional Diet 
 
TOKYO 00000837  010 OF 012 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 
 
procedures." No prospects are in sight for the start of talks on 
revising the bills. The DPJ has proposed establishing a consultative 
body composed of each party's policy chief and Diet affairs chief. 
But the ruling camp has seen the DPJ's proposal as intended to delay 
deliberations. 
 
The bills are unlikely to be put to a vote in the Upper House before 
the provisional tax rates expire March 31. Given this, the view that 
the bills be brought back into the Lower House for a revote is 
gaining dominance in the ruling coalition. In this case, the vote 
will be taken in late April under the provision in the Constitution 
that if a bill is not put to vote within 60 days after it is sent to 
the Upper House, the bill will be regarded as voted down. 
 
In preparations for the expiration of the provisional tax rates, 
some local governments have already started putting on hold tenders 
for their highway construction projects. Such measures as reducing 
the real estate registration license tax will also lose effect if 
the bills are not enacted. The government and the ruling parties 
have judged it necessary to quickly unsnarl any confusion expected 
to arise following the end of these measures. 
 
A senior Liberal Democratic Party member said: "It will serve to 
minimize the effect on economic activities if Prime Minister Fukuda 
gives a press conference at the end of the fiscal year and reveals 
the government plan to use Lower House revote to force through the 
bills." 
 
16) Some gas stations to lower prices on April 1 if provisional rate 
expires, reflecting fierce competition 
 
MAINICHI (Page 2) (Excerpts) 
March 27, 2008 
 
In anticipation that the provisional gasoline tax rate will expire 
at the end of March, some gasoline stations have decided to lower 
the gasoline price by 25 yen per liter starting on April 1. The 
gasoline tax is imposed at the stage of shipment from oil 
refineries. So the current higher tax rate is applied to those 
purchased or to be purchased by the end of March. If such products 
are sold at a lower price on and after April 1, those businesses 
will inevitably suffer losses. Major oil companies have called on 
gas stations to sell oil at the proper price, but retailers are 
under pressure to make a difficult decision amid intensifying 
competition. 
 
K.K. Aizu General in Aizu-wakamatsu, Fukushima Prefecture, which 
operates 21 shops in Fukushima and Niigata prefectures, has decided 
to sell regular gasoline at 120-124 yen per liter, 25 yen lower than 
the current level, if the provisional tax rate expires on April 1. 
The company intends to minimize the loss by reducing the usual 
inventory for seven to 10 days at the end of the month to that for 
two to three days. 
 
Sales manager Kazuo Yanaginuma said: "Most customers believe that 
the price will come down on April 1. It will be undesirable if we 
maintain the current higher price and if customers harbor a sense of 
distrust. ... Given the current fierce sales competition, I think 
that some other shops will also lower the price starting on the 
1st." 
 
The manager of a gasoline station in Saitama Prefecture has decided 
 
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to reduce the price if its rivals start selling at a lower price. 
The store manager wants to avoid suffering a deficit, but he is 
worried that if his shop offers a higher price than other shops, the 
disposal of stored goods will be delayed." After checking the prices 
offered by its nearby rival shops in the early morning on April 1, 
the manager will make a final decision. 
 
A number of gasoline stations are likely to be pressed to move 
forward the lowering of the price, fearing that keeping the current 
price would lead to reducing customers or overstocking. 
 
17) DPJ may agree to government's reappointment of NPA President 
Tani 
 
YOMIURI (Page 4) (Excerpts) 
March 27, 2008 
 
The steering committees of the two Diet houses yesterday held 
hearings on the reappointment of National Personnel Authority 
President Masahito Tani. His reappointment will be decided on the 
28th in the plenary sessions of the two chambers of the Diet. The 
focus is on whether the main opposition Democratic Party of Japan 
(DPJ or Minshuto), which had opposed the appointment of Tani in 
2004, will reject or accept the reappointment now. There are 
increasing calls in the DPJ for going along with Tani's 
reappointment, citing that he made positive remarks in the hearings 
about restricting the practice of amakudari or placing retired 
senior bureaucrats at high-paying posts at private firms. 
 
In the hearings, Tani said this about the amakudari practice: "The 
system that was created at the convenience of ministries should not 
exist." Asked about the series of misconducts by public servants, 
Tani stressed: "I will do my best to implement the necessary 
reform." 
 
A senior DPJ member highly valued Tani's remark yesterday, saying: 
"He responded to questions in a polite way. He has changed his 
remarks from those he had previously made " The senior DPJ member 
also said: "I am concerned that the DPJ would come under criticism 
if we disapprove it just as we had rejected the government 
nomination for the new governor of Bank of Japan." The largest 
opposition party will decide its response today in meetings of the 
subcommittee on NPA president appointment and Diet executive 
members. 
 
18) IDI to close key overseas offices 
 
MAINICHI (Page 2) (Excerpts) 
March 27, 2008 
 
The Infrastructure Development Institute (IDI) announced yesterday 
that it would close its offices in Paris and Beijing as a result of 
reviewing public-interest corporations by the Ministry of Land, 
Infrastructure and Transport. The step seems to reflect the MLIT's 
decision not to fund the IDI from the road-related tax revenues 
beyond fiscal 2007. The IDI's decision to close its overseas key 
research offices is likely to raise questions about the significance 
of its own existence. 
 
The IDI announced its decision at yesterday's meeting of the Liberal 
Democratic Party Administrative Reform Headquarters committee on 
public-interest corporations. The Paris office opened in 1995 and 
 
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the Beijing office in 2003. Staffed with about three personnel, both 
offices have been engaged in research on public works projects and 
international exchanges. They are expected to be closed down before 
the end of fiscal 2008. 
 
19) Proposal for reviewing alien registration system: Panel 
reporting to justice minister presents final report, calling for 
integration of foreign residents control 
 
TOKYO SHIMBUN (Page 2) (Full) 
March 27, 2008 
 
The Study Group on Immigration Control Policy (chaired by Takeshi 
Kimura, head of the National Institution for Academic Degrees and 
University Evaluation) has looked into reform of the foreign 
residents control system. The panel yesterday submitted to Justice 
Minister Kunio Hatoyama a final report seeking the introduction of a 
new foreign residents control system similar to the Basic Resident 
Register system applied to Japanese nationals, by revising the 
present aliens' registration system. Based on the proposals, the 
justice minister will present a set of related bills, including a 
bill amending the Immigrant Control and Refugee Recognition Law, to 
the regular Diet session next year. 
 
Under the current system, the central government is responsible for 
issuing resident permits, while the local governments are in charge 
of aliens' registration procedures. The final report calls for 
unifying the current dual system so that the central government 
controls foreign residents in an integrated way. 
 
The final report includes such proposals as: (1) immigration bureaus 
issuing resident cards, an identification card carrying the holder's 
name, photograph, nationality and period of stay; (2) mandating 
foreign residents to report changes in their place of employment; 
and (3) establishing a system allowing the government to ask schools 
and companies that accept foreigners to provide information on 
them. 
 
While calling for stricter control of foreign residents, the report 
also proposes improving the convenience for foreigners who are 
legally staying in Japan. 
 
It calls for deregulation, including an extension of the maximum 
period of stay from the current three years to five years and a 
revision to the reentry system, which requires a prior filing of an 
application for permission. 
 
SCHIEFFER