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UNCLAS SECTION 01 OF 15 TOKYO 000868 
 
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 03/31/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's weekend schedule (Nikkei) 
 
Defense and security affairs: 
4) U.S. Navy deserter to be questioned by police in connection with 
slain cab driver; Sailor told friend by phone: "I stabbed him" 
(Yomiuri) 
5) First time ever for a vacuum in Japan's host-nation support for 
U.S. forces stationed in Japan; U.S. postponing training moves 
(Yomiuri) 
6) Japan to foot the bill for off-base facilities in relocation of 
Okinawa Marines to Guam  (Mainichi) 
 
Foreign affairs: 
7) Israel's premier told Prime Minister Fukuda last month that North 
Korea was aiding Syria with its nuclear program  (Yomiuri) 
8) U.S. Senate and both chambers of the Diet to engage in 
parliamentary exchange in June  (Nikkei) 
9) Kickbacks went to employee of Indonesian embassy in Japan for 
help in visa applications  (Yomiuri) 
10) Fukuda in press remarks cautious about criticizing China for its 
actions against Tibetan rioters  (Tokyo Shimbun) 
 
Political affairs: 
11) Text of Prime Minister Fukuda's press interview  (Yomiuri) 
12) A bridging bill to cover tax-related bills other than gasoline 
tax to be enacted today to avoid vacuum  (Nikkei) 
13) New Komeito comes out with its own proposal to put road-related 
taxes into general coffers in return to Lower House override of 
defeated gas-tax bill  (Tokyo Shimbun) 
14) As provisional tax rate runs out, government to assist strapped 
oil suppliers with subsidies  (Nikkei) 
15) Government is taking pains selecting third candidate for Bank of 
Japan governor to prevent another veto by the opposition-controlled 
Upper House  (Nikkei) 
16) Fukuda says his administration will ready an economic stimulus 
package in April  (Yomiuri) 
17) Fukuda not traveling during Golden Week holidays due to turmoil 
in the Diet  (Sankei) 
18) Relic from the Abe administration, the "Second Chance Office" in 
the Prime Minister's Office, quietly closed  (Asahi) 
 
Polls: 
19) Asahi poll: 58 PERCENT  of public approve prime minister's 
proposed integration of road-relaved taxes into general coffers 
(Asahi) 
20) Yomiuri poll: 70 PERCENT  of public feel fearful about the 
worsening crime environment around them  (Yomiuri) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Poll: 58 PERCENT  of respondents favor Prime Minister Fukuda's 
proposal to move road-specific revenues into general account, 55 
PERCENT  opposed to keeping the status quo on using revenue for road 
construction 
 
 
TOKYO 00000868  002 OF 015 
 
 
Mainichi: 
Survey: Cost of producing refuse-derived fuel at 52 facilities 
across the country twice the cost of incineration, increasing 
taxpayers' burden by 20 billion yen 
 
Yomiuri: 
Police to question U.S. Navy deserter about murder of taxi driver 
 
Nikkei: 
Dai Nippon Printing and other materials production companies to 
invest a total of 300 billion yen in production increase in liquid 
crystal for filters and glass substrate 
 
Sankei: 
Excellent Japan: Japan's shot-put manufacturer boycotts Beijing 
Olympics by rejecting order for production of shot put 
 
Tokyo Shimbun: 
MHLW to launch survey of welfare institutions across the country to 
examine situation of abused children 
 
Akahata: 
It is possible to incorporate road-specific revenue into general 
revenues immediately, JCP Diet policy chief Kokuta and policy chief 
Koike assert on TV programs 
 
2) EDITORIALS 
 
Asahi: 
(1) Proposals for society of hope: Create vigorous community 
everybody can take part in 
 
Mainichi: 
(1) Decrease in money lending firms means consumer banking is 
recovering health 
(2) Rules on police questioning: Review of criminal justice system 
essential 
 
Yomiuri: 
(1) Kyoto Protocol: Simply making both ends meet meaningless 
(2) We hope the post of information analyst will be the first step 
toward breaking the vertically-segmented administrative system 
 
Nikkei: 
(1) Falling share prices a challenge for Japanese firms 
(2) Pay attention to reform in Bhutan 
 
Sankei: 
(1) Riots in Tibet: Japan needs to pressure Beijing to have 
dialogue 
(2) Japan should lead the way in medical checks for metabolic 
syndrome 
 
Tokyo Shimbun: 
(1) Beijing needs to meet with Dalai Lama so as to celebrate Beijing 
Olympics 
(2) Regional system council needs to have in-depth discussion on 
decentralization 
 
Akahata: 
(1) Turning point in hiring temporary workers has come 
 
 
TOKYO 00000868  003 OF 015 
 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, March 28 
 
NIKKEI (Page 2) (Full) 
March 29, 2008 
 
08:25 
Attended an anti-global warming promotion taskforce meeting at the 
Kantei, followed by a cabinet meeting. Health, Labor and Welfare 
Minister Masuzoe stayed on. 
 
09:30 
Met Deputy Chief Cabinet Secretary Iwaki at the Kantei. 
 
10:22 
Met Finance Ministry Budget Bureau Director-General Sugimoto. 
 
13:00 
Attended an Upper House Budget Committee session. 
 
16:06 
Attended an Upper House plenary session. 
 
17:01 
Met former LDP Secretary General Nakagawa at the Kantei, followed by 
Deputy Chief Cabinet Secretary Futahashi, joined in by Chief Cabinet 
Secretary Machimura and Assistant Deputy Chief Cabinet Secretary 
 
SIPDIS 
Saka. 
 
18:09 
Met Machimura. 
 
18:32 
Attended a Lower House plenary session. 
 
18:37 
Met LDP Secretary General Ibuki, Finance Minister Nukaga, and 
Machimura in the LDP presidential office. Ibuki stayed on. 
 
19:01 
Arrived at his official residence. 
 
20:57 
Attended the Lower House plenary session. 
 
21:03 
Paid courtesy visits to Lower House Speaker Kono, Upper House 
President Eda and ruling party leaders in the wake of Diet approval 
of the fiscal 2008 state budget. 
 
21:53 
Returned to his official residence 
 
Prime Minister's schedule, March 29 
 
NIKKEI (Page 2) (Full) 
March 30, 2008 
 
Morning 
Spent time at his official residence. 
 
 
TOKYO 00000868  004 OF 015 
 
 
16:03 
Gave an interview to Nikkei and other news organizations at the 
Kantei. 
 
16:38 
Returned to his official residence. 
 
17:43 
Dined at a Grand Prince Hotel Chinese restaurant with his wife, 
Kiyoko, and secretaries. 
 
19:57 
Returned to his official residence. 
 
Prime Minister's schedule, March 30 
 
NIKKEI (Page 2) (Full) 
March 31, 2008 
 
Morning 
Spent time at his official residence. 
 
17:00 
Appeared on the NHK program "An interview with the prime minister" 
 
4) U.S. Navy deserter to be questioned by police in connection with 
laying of cab driver; Sailor told friend, "I stabbed him" 
 
YOMIURI (Top play) (Excerpts) 
March 31, 2008 
 
In connection with the murder in Yokosuka City in Kanagawa 
Prefecture of Masaaki Takahashi (61), a taxi driver from Shinagawa 
Ward in Tokyo, it was learned on March 30 from the investigation of 
the special investigation unit of the Yokosuka Police Department 
that after the incident, the seaman (22) stationed at Yokosuka Naval 
Base whose name was on a credit card left in the taxi, called a 
friend who lived close to the crime scene and said, "I did it." The 
call indicates that he was involved in the incident. The sailor is 
now in custody of the U.S. Navy for the crime of desertion. The 
police investigative unit will soon formally ask the U.S. forces in 
Japan for investigative cooperation under the Japan-U.S. Status of 
Forces Agreement (SOFA) and question the sailor as in important 
witness in this murder case. 
 
According to a source in the investigative unit, the sailor is a 
U.S. citizen of Nigerian origin. The unit discovered from telephone 
records and other information that on March 19, immediately after 
the incident, the seaman called by cell phone a Nigerian friend. The 
sailor told him in the conversation such words as, "I did it," and, 
"I stabbed him." 
 
5) Sympathy budget to expire, experiencing vacuum period for 1st 
time; U.S. military training relocation put on hold 
 
YOMIURI (Page 2) (Full) 
March 29, 2008 
 
The House of Representatives Foreign Affairs Committee held a 
meeting of its directors yesterday, during which they agreed to take 
a vote on a new special agreement for the Japanese government to 
continue its sharing of costs for the stationing of U.S. forces in 
 
TOKYO 00000868  005 OF 015 
 
 
Japan (omoiyari yosan or literally "sympathy budget"). The current 
special agreement is to expire at the end of this month, so there 
will be a blank period during which the budget cannot be executed 
until the new agreement comes into effect. The sympathy budget will 
experience a vacuum period for the first time since it was started 
in 1978. 
 
The Democratic Party of Japan (Minshuto) and other opposition 
parties have been raising questions about waste in the budget and 
have called for full-scale deliberations on the sympathy budget. At 
the same time, the ruling and opposition parties have been clashing 
over tax-related bills which led to a delay in committee 
deliberations on the sympathy budget. 
 
The government-proposed special measures agreement is a kind of 
treaty. In this case, the House of Representatives' decision takes 
precedence over the House of Councillors' decision as provided by 
the Constitution. The agreement will therefore automatically receive 
Diet approval 30 days after its passage through the House of 
Representatives. Accordingly, it is expected to come into effect in 
early May even if the House of Councillors' deliberations are 
protracted. 
 
During the blank period, however, the United States will have to 
shoulder wages for base workers, as well as charges for utilities. 
In addition, the U.S. military will also have to pay for relocating 
its fighter jet training. The Japanese and U.S. governments are now 
coordinating to postpone U.S. military training from Okinawa to 
other prefectures in Japan until May or later. 
 
The Japanese government, after the special agreement is approved, 
will reimburse the U.S. for wages and utilities paid. The Japanese 
government thinks the sympathy budget will not be substantially 
affected, according to a Foreign Ministry official. Meanwhile, the 
Japanese government has asked the U.S. government to pay temporarily 
for the costs during the blank period. However, the U.S. government 
has been withholding its answer. 
 
"There's no doubt that America's confidence (in Japan) will 
decline," Foreign Minister Koumura told reporters yesterday. "The 
Japan-U.S. alliance's deterrence (in the security area) may weaken," 
he added, "and I'm worried about that." 
 
6) Japan to bear burden of off-base facilities as well as part of 
expense to relocate U.S. Marines to Guam 
 
MAINICHI (Page 1) (Excerpts) 
Eve., March 29, 2008 
 
In connection with the relocation expenses of U.S. Marines on 
Okinawa to Guam under the realignment of U.S. forces in Japan, it 
was learned today that Japan and the United States are coordinating 
a plan for Japan to cover the construction of off-base 
infrastructure, such as a power generator to be used by local 
population in Guam as well. This would amount to one-tenth of the 
total infrastructure expenses at Guam of 740 million dollars 
(approximately 74 billion yen) that Japan will bear. At the time of 
the Japan-U.S. (force-realignment) agreement in May 2006, the 
Japanese government explained that infrastructure subject to the 
agreement would be facilities only within the base. It was 
anticipated that if it expanded any more, there would be criticism 
from the opposition parties and others. 
 
TOKYO 00000868  006 OF 015 
 
 
 
With the total expense of 10.27 billion dollars for relocating the 
Marines from Okinawa to Guam, Japan's share was 59 PERCENT , 
amounting to 6.09 billion dollars (approximately 609 billion yen) 
This included the facilities related to the headquarters and living 
quarters, involving financing of 2.8 billion dollars (approximately 
280 billion yen) and 740 million dollars in infrastructure. 
According to source in the Japanese government, coordination is 
continuing on Japan financing such infrastructure outside the Marine 
base as the power generator, water pipes and sewerage, and a 
garbage-disposal facility. 
 
In addition, regarding facilities within the base, it has been 
firmed up anew that such would include recreation facilities, 
including a golf course, as well as a hospital and fire station. 
These facilities, too, will most likely be discussed now as part of 
Japan's burden. 
 
7) Israeli prime minister told Fukuda in February that Israel bombed 
nuclear facility in Syria that used DPRK help 
 
YOMIURI (Page 2) (Full) 
March 31, 2008 
 
It became clear yesterday that during his visit to Japan in 
February, Israeli Prime Minister Ehud Olmert told Prime Minister 
Yasuo Fukuda that the military installation in Syria Israel bombed 
last September was a nuclear facility that received technological 
assistance from North Korea. According to a Japanese government 
source, Fukuda and Olmert discussed the issue between the two of 
them only via interpreters. Prime Minister Olmert called for close 
cooperation between the two countries in dealing with North Korea's 
nuclear proliferation, explaining that the "facility was under 
construction with assistance in information on design and engineers 
from North Korea," according to the source. 
 
8) Japanese Diet to launch exchange program with U.S. Senate in 
June 
 
NIKKEI (Page 2) (Full) 
March 31, 2008 
 
The two Diet houses will launch a parliamentary exchange program 
with the U.S. Senate as early as June. Upper and Lower House members 
plan to hold annual meetings with U.S. senators to exchange views on 
security and economic issues. According to the Secretariat of the 
House of Representatives, the Japanese Diet has this kind of annual 
meeting with the European Parliament and China's National People's 
Congress. 
 
Kenji Kosaka, vice chairman of the Liberal Democratic Party (LDP) 
Diet Affairs Committee, Jun Azumi, deputy chair of the Democratic 
Party of Japan (DPJ or Minshuto) Diet Affairs Committee, and others 
visited Washington on March 21 and discussed the matter with Senator 
Daniel Inouye and senators. They have reached a basic agreement to 
formally launch the program after the current Diet session ends. 
 
Japanese and U.S. legislators will boil down items on the agenda. 
Japanese lawmakers have discussed with European Parliament members 
cooperation between Japan and the European Union, as well as 
economic and trade issues. 
 
 
TOKYO 00000868  007 OF 015 
 
 
9) Two firms paid 20 million yen in visa rebates to employee at 
Indonesian Embassy in Japan 
 
YOMIURI (Page 1) (Excerpts) 
March 31, 2008 
 
The Yomiuri Shimbun has learned through its investigations that two 
Japanese companies handling commercial and other types of visas 
required in entering Indonesia had transferred large sums of money 
into a bank account of a 50-year-old Japanese employee of the 
Indonesian Embassy in Japan in Shinagawa Ward, Tokyo. The amount 
totaled approximately 20 million yen in five years through 2006. One 
of the two firms has admitted that the funds were rebates on issuing 
visas. The act might be a violation of the Law against Unfair 
Competition (bribery to a foreign civil servant). Investigative 
authorities are collecting information. 
 
The companies in question are National Business Support (NBS), a 
travel agency in Chuo Ward, and Far East Development Corp., a 
company in Minato Ward affiliated with a major Indonesian oil firm. 
 
According to the Yomiuri Shimbun's investigation, the Japanese 
worker has been responsible for issuing visas for over 10 years at 
the Indonesian Embassy, and 100,000 to 300,000 yen had been 
transferred from the two firms a month to his major bank account. It 
has been confirmed that in the five-year period through 2006, the 
NBS had remitted approximately 14 million yen and Far East about 6 
million yen to his bank account. 
 
The embassy's official visa application fees range from 2,500 to 
11,500 yen. According to Far East, the company transferred the money 
to the Japanese worker's bank account in compliance with his request 
to pay 4,000 yen per person apart from the application fees. 
 
10) Fukuda cautious about criticizing China over Tibet situation 
 
TOKYO SHIMBUN (Page 1) (Full) 
March 30, 2008 
 
Some European leaders have announced they will not attend the 
opening ceremony of the Beijing Olympics in August in reaction to 
China's continued crackdown in Tibet. In an interview to reporters 
assigned to the cabinet at his official residence yesterday, Prime 
Minister Yasuo Fukuda commented on this issue: "We must fully 
consider whether it would be proper at the present stage to voice 
criticism or to link the current tense situation over Tibet to the 
Olympics." 
 
Fukuda emphasized: "I expect a dialogue to be held between the 
parties concerned in a way acceptable to both sides." Citing the 
planned visit to Japan by Chinese President Hu Jintao in May, Fukuda 
said: "This year is important for Japan-China relations. It will be 
a good opportunity for both countries to develop bilateral 
relations." 
 
11) Interview with Prime Minister Fukuda 
 
YOMIURI (Page 4) (Full) 
March 30, 2008 
 
The following are main points of an interview with Prime Minister 
Fukuda: 
 
TOKYO 00000868  008 OF 015 
 
 
 
Provisional tax rate for gasoline 
 
In order to avoid any confusion from arising with the end of this 
fiscal year just around the corner, I am making efforts in the hope 
of resolving the issue. If the provisional tax rate is scrapped as 
of April 1, as called for by the major opposition Democratic Party 
of Japan (DPJ), we will suffer a revenue shortage. We will need to 
get revenues from somewhere. A revenue shortfall in local 
governments would only interrupt business operations by such 
industries as road construction. I don't think the current level of 
the provision tax rate is higher than those of other industrialized 
countries. I wonder whether it is a good thing for our country to 
move in the direction of encouraging more carbon dioxide to be 
emitted by lowering the price of gasoline. I think it is imperative 
to keep at least the current level of the provisional gasoline tax 
rate. 
 
Selection of new Bank of Japan (BOJ) governor 
 
Given the unstable international monetary market, it is never 
desirable to leave the top BOJ post vacant. I hope (the DPJ) will 
pay as much respect as possible to the government's way of 
thinking. 
 
Possibility of a grand coalition 
 
As long as the current state of the divided Diet continues, some 
ideas are necessary. One idea would be for the ruling and opposition 
parties to hold policy talks. Forming a partial coalition aimed at 
dealing with a limited number of policy issues or other forms of a 
coalition is conceivable. Looking back on the past half year (since 
taking office), I've really thought things would not move forward. 
Making tenacious efforts to move politics forward is the only way 
for me to continue. 
 
Cabinet reshuffle 
 
I am not thinking at all about shuffling the cabinet at present, 
when the Diet is in session and tax system-related bills are yet to 
be approved. 
 
Possible dissolution of the Lower House 
 
Now that the economy is leveling off and monetary and economic 
situations are disturbing us, a judgment as to whether it is 
appropriate to (dissolve the Lower House) should take precedence 
over other matters. 
 
Tibet issue 
 
Speaking for Japan. we are worried about the current situation in 
Tibet. We hope the riots will be calmed down swiftly in a peaceful 
manner. We've already urged (Beijing) to secure transparency and 
also conveyed our position of welcoming a dialogue among relevant 
parties. We need to think whether now is appropriate to loudly 
criticize (Beijing) or link (Beijing's way of suppressing the riots) 
to the Beijing Olympics. 
 
Joint gas field development in East China Sea 
 
I want to make my utmost efforts to realize (joint development) 
 
TOKYO 00000868  009 OF 015 
 
 
while protecting Japan's sovereignty. I'd like to resolve this 
matter as quickly as possible. 
 
Permanent legislation for overseas deployment of SDF 
 
I think it is essential to have a general law (or permanent law) on 
the overseas dispatch of Self-Defense Forces (SDF) in order for 
Japan to take part in international peacekeeping operations swiftly 
and effectively. If such legislation is enacted, Japan will be able 
to demonstrate its fundamental policy at home and abroad. This kind 
of law needs to be prepared as quickly as possible. But given the 
current situation in the Diet, doing so at present is quite 
difficult. 
 
12) Stopgap bill on special tax measures except for those tied to 
roads to clear Diet today 
 
NIKKEI (Page 1) (Full) 
March 31, 2008 
 
Of the government-presented bills amending the Special Taxation 
Measures Law, a stopgap bill extending the expiration of the 
provisional tax rates other than the road-related rates until the 
end of May is expected to clear the Diet today with approval by the 
ruling and opposition blocs. Besides the seven items on which the 
Democratic Party of Japan has been calling for extensions, such as 
the provisionally lowered registration license tax rates for the 
transfer of land ownership and an offshore market tax exemption for 
financial institutions, the stopgap legislation includes 
preferential tax treatment for acquisition of automobiles. 
 
Asked about the expiration of the provisional tax rates on gasoline 
and other items in an NHK program evening, Prime Minister Yasuo 
Fukuda said: "We still have one more day left. I want (the ruling 
and opposition parties) to discuss the matter so that (the bill can 
be passed) in time." At the same time, the prime minister underlined 
the need to reinstate the provisional tax rates quickly in order to 
minimize revenue shortfalls, indicating that the abolition of the 
provisional rates would throw the nation's finances into the red. 
 
The government-presented bill amending the Special Taxation Measures 
Law won the approval of the House of Representatives in late 
February. Under the Constitution, the Lower House can readopt the 
legislation by a two-thirds majority on April 29, 60 days after the 
bill was sent to the House of Councillors. The government and ruling 
bloc intend to aim for an early enactment of the legislation with 
the aim of reinstating the provisional tax rates. 
 
13) New Komeito to ask LDP for party decision on putting highway tax 
revenues into general account starting in FY2009 as condition for 
Lower House revote 
 
TOKYO SHIMBUN (Top Play) (Excerpts) 
March 30, 2008 
 
It is now highly likely that the ruling coalition will fail to put 
to a vote a bill amending the Special Taxation Measures Law to 
maintain the current provisional gasoline and other tax rates by the 
end of this fiscal year. The New Komeito decided yesterday that in 
such a case, it would call on the Liberal Democratic Party to set 
the shift of the tax revenues to the general account starting in 
FY2009 as a condition for using the ruling coalition's two-thirds 
 
TOKYO 00000868  010 OF 015 
 
 
majority in the lower chamber for an override. Prime Minister Yasuo 
Fukuda announced in a news conference on March 27 that the 
government would open the tax revenues for general use in an effort 
to bring the Democratic Party of Japan to the negotiating table. 
 
If the gasoline prices are lowered on April 1 and prices raised 
again by a revote, the public will inevitably react strongly. 
 
In a bid to obtain public understanding, the New Komeito wants to 
show its determination to reduce wasteful spending as much as 
possible by shifting tax revenues into the general account. 
Specifically, the party will call on the LDP to adopt the prime 
minister's proposal as the party's decision. 
 
Within the LDP, though, many are still opposed to the plan. Given 
this, it seems difficult to unify views in the party by the time the 
bill is brought back into the Lower House for a revote on April 29 
or after. Meanwhile, if the New Komeito refuses to offer 
cooperation, the LDP will be unable to secure the two-thirds needed 
for an override. In such a case, the prime minister and the LDP will 
be driven into a more difficult situation. 
 
LDP Policy Research Council Chairman Sadakazu Tanigaki and his New 
Komeito counterpart Tetsuo Saito met at a Tokyo hotel to discuss 
this matter yesterday. Both agreed (1) to call on the opposition 
bloc to hold talks on revising the bill amending the Special 
Taxation Measures Law, based on the prime minister's proposal, by 
both camps' policy affairs chiefs and to reach an agreement by the 
31st; and (2) to continue to ask the opposition side to agree to 
hold talks if the bill is not passed within this fiscal year. The 
ruling coalition also hopes to discuss measures to avoid confusion 
after gasoline prices are reduced. 
 
14) Provisional gas tax rate expires today: Government to provide 
interest subsidy to gas stations, following reduction in gasoline 
prices 
 
NIKKEI (Page 1) (Excerpts) 
March 31, 2008 
 
Following an expiration of the provisional rate on the gasoline tax 
today, the tax portion of the gasoline price will drop by about 25 
yen per liter for portions to be shipped from April 1. The 
government yesterday started coordination with the possibility of 
assisting gas stations suffering a loss of profits due to 
price-reduction competition. It plans to prevent an escalation of a 
confused situation stemming from a drop in gasoline prices by such 
means as providing an interest subsidy to gas stations when they 
borrow money from a bank and expanding their debt guarantee 
frameworks. 
 
The government intends to finance those measures from the special 
energy measures account, whose funds are drawn from revenues from 
the Oil and Coal Tax imposed on crude oil, natural gas and others. 
 
Coordination is now under way with the possibility of offering a 
subsidy worth several billion yen to the National Petroleum Dealers 
Association (NPA) as fiscal resources for the envisaged measures. 
 
An interest subsidy will most likely be provided through the NPA. 
Under the existing system, subsidies are provided to gas stations in 
order for them to cover part of their interest payment when they 
 
TOKYO 00000868  011 OF 015 
 
 
borrow funds to diversify their business or they change or close 
down their business. Under the new system, gas stations suffering a 
deteriorated profit as a result of a decline in gasoline prices 
would also be eligible for subsidies. Gas stations would be able to 
borrow operating funds needed for the immediate future almost 
interest-free. 
 
15) Who is appropriate for BOJ governor in terms of notion of 
separation of fiscal and monetary administration?: Government having 
difficulty choosing third candidate 
 
NIKKEI (Page 2) (Excerpts) 
March 31, 2008 
 
The government is trying to choose a third candidate for Bank of 
Japan (BOJ) governorship, which has been left vacant. Its option is 
narrowing with Democratic Party of Japan (DPJ) Secretary General 
Yukio Hatoyama expressing his party's stance that the appointment of 
a person hailing from the Finance Ministry would be unacceptable. 
The government has yet to determine the aftereffect of the 
confrontation between the ruling and opposition camps over the 
special-purpose road construction funds issue. It is poised to 
cautiously reach a decision, including a decision on when to present 
a third nominee for a new BOJ governor. 
 
Prime Minister Yasuo Fukuda on an NHK television program yesterday 
rebutted the DPJ's assertion that fiscal administration must be 
separated from monetary administration: "I do not understand the 
meaning of separating fiscal administration from monetary 
administration. I rather believe that it is not until fiscal 
administration goes hand in hand with monetary administration that 
the Japanese economy can be managed properly." Asked about his image 
of a candidate, he simply replied, "It should be a person who meets 
the condition of placing the right person in the right job. The 
character of a candidate is also important, because a BOJ governor 
is responsible for managing a huge organization." 
 
Hatoyama during talks with his Liberal Democratic Party (LDP) 
counterpart Bunmei Ibuki on the selection of a BOJ governor on the 
28th categorically said, "There is an atmosphere in the party that 
the fact that former Finance-Ministry-official candidates have been 
rejected twice must be taken seriously." 
 
Hatoyama once indicated his view that Hiroshi Watanabe, an advisor 
to the Japan Center for International Finance, or Haruhiko Kuroda, 
governor of the Asian Development Bank, would be acceptable, though 
QQui*/Lthey are former Finance Ministry officials. However, with the 
government presenting Toshiro Muto and then Koji Tanami -- both are 
former Finance Ministry officials -- in succession, opposition to 
the idea of picking a former Finance Ministry official is mounting 
in the DPJ with one saying, "BOJ governorship is not a post for a 
retired Finance Ministry official." 
 
The dominant view among government officials is that since there are 
almost no personnel who meet the condition that a BOJ governor must 
be versed in international financing, an eligible candidate would be 
limited to those who hail from the Finance Ministry or the BOJ." 
 
However, if it nominates a former Finance Ministry official for the 
third time and the DPJ rejects it, the administration would 
unavoidably lose its power base. 
 
 
TOKYO 00000868  012 OF 015 
 
 
16) Fukuda reveals on TV program a plan to present economic stimulus 
measures in early April 
 
YOMIURI (Page 2) (Full) 
March 31, 2008 
 
Appearing on an NHK TV program yesterday evening, Prime Minister 
Fukuda commented on the Japanese economy, over which uncertainty is 
looming due to such factors as the slowdown of the U.S. economy, the 
strong yen, and rising oil prices. He said: 
 
"It is impossible to resort to increasing government spending in the 
conventional way. There is also a limit to lowering interest rates. 
. . . We must work out policy measures to strengthen the nation's 
economic growth potential. I would like to buoy up the somewhat 
slowing economy by presenting a growth strategy in early April, 
moving up the initial schedule." 
 
He thus indicated his determination to energize the economy by 
setting forth measures to strengthen the nation's economic growth 
potential, focusing on improving small businesses' strengths and 
resuscitating local economies. 
 
Asked about last autumn's negotiations over an aborted grand 
coalition between the Liberal Democratic Party and the Democratic 
Party of Japan (DPJ), Fukuda said that thu negotiations were 
initiated by DPJ leader Ichiro Ozawa. In reference to the 
difficulties his administration has faced in implementing key 
policies given the opposition camp's control of the Upper House, 
Fukuda said: 
 
"I think that since Mr. Ozawa was fully aware that such a situation 
could arise sooner or later, he proposed considering a coalition. I 
felt the same way." 
 
17) Prime Minister Fukuda unable to arrange tour of Europe during 
Golden Week, as Diet to reach crucial stage 
 
SANKEI (Page 5) (Slightly abridged) 
March 29, 2008 
 
In the wake of the standstill in the divided Diet, Prime Minister 
Yasuo Fukuda is now unable to arrange a tour of Europe originally 
slated for the Golden Week holiday period in early May. The reason 
is that depending on how deliberations on a bill to maintain the 
provisional gasoline tax rate and other road-related taxes will turn 
out, a fierce battle may take place in the Diet during that period. 
 
It has been the practice for Diet business to go into recess during 
the holiday period recess. Taking advantage of the holidays, former 
prime ministers have traveled overseas. In 2000 when Japan hosted 
the Kyushu-Okinawa Group of Eight (G8), then Prime Minister Yoshiro 
Mori visited seven European countries in nine days. 
 
As the G8 host nation, Fukuda was eager to play up his political 
acumen by visiting European countries prior to the opening of the 
July G8 summit in Hokkaido. In order to get high marks in diplomacy, 
it is indispensable for the prime minister to visit other countries 
ahead of the international conference. 
 
Fukuda has visited only one G-8 member country -- the United States 
-- since he assumed office. He initially planed to visit Russia, 
 
TOKYO 00000868  013 OF 015 
 
 
whose President Putin will step down on May 7, as well as major G8 
members in Europe to exchange views on global warming and other main 
topics of discussion in the G8 summit. 
 
However, deliberations on the revenue-connected bill have not moved 
ahead smoothly in the House of Councillors. In the case the bill is 
delayed as long as possible under Article 59 of the Constitution, 
passage of the bill will be April 29 or later, when the Upper House 
ends its deliberation. Although the government and ruling parties 
intend to readopt the legislation in the House of Representatives, 
the main opposition Democratic Party of Japan (DPJ or Minshuto) and 
other opposition parties appear likely to submit to the Upper House 
a censure motion against the prime minister. 
 
If that occurs, the ongoing Diet session may reach a climax from 
April 30 through and May 2 -- weekdays during the Golden Week 
holiday period from late April to early May. In addition, Chinese 
President Hu Jintao is expected to visit Japan after the Golden Week 
holiday period. 
 
18) Second Chance Office to be dissolved 
 
ASAHI (Page 4) (Full) 
March 31 2008 
 
The office in charges of measures to support a second chance, which 
was a feature policy of former Prime Minister Shinzo Abe, will today 
be dissolved. The Abe administration suffered a crushing defeat in 
the House of Councillors election last summer, in part because it 
failed to assuage public dissatisfaction with the social disparities 
that were seen as widening under the government of Prime Minister 
Junichiro Koizumi. The incumbent administration of Prime Minister 
Yasuo Fukuda has been trying to narrow the gap by placing priority 
on policies that deal with the daily lives of the people, while 
removing the policy imprint from the Abe government, 
 
According to the Cabinet Secretariat, all fulltime office staff will 
be transferred to other offices as of April 1 and the office itself 
will be dissolved. The office chief and a planning officer will 
remain for the time being in their present posts to confirm the 
state of achievements of support measures, but they will 
concurrently have other duties. Award ceremonies by the prime 
minister for persons of merit will be discontinued. 
 
In 2006 a total of 94 Diet members attended in the inaugural meeting 
of the Parliamentary League to Support a Second Chance. The 
parliamentary group set the trend for the Abe government. However, a 
government source said: "Since the current prime minister has been 
having difficulty showing his own political identity, he probably 
wants to distance himself from his predecessor's policies." 
 
19) Poll: 58 PERCENT  favor Fukuda's general-purpose initiative over 
road tax revenues 
 
ASAHI (Top play) (Abridged) 
March 31, 2008 
 
A total of 58 PERCENT  favor Prime Minister Fukuda's overtures of 
incorporating gasoline and other road-related tax revenues into the 
state's general account budget from fiscal 2009, the Asahi Shimbun 
found from its telephone-based nationwide spot public opinion survey 
conducted Mar. 29-30. Those opposed to that idea accounted for 24 
 
TOKYO 00000868  014 OF 015 
 
 
PERCENT . Meanwhile, Fukuda has also proposed maintaining the rate 
of provisional taxation on gasoline in fiscal 2008 for road and 
other road-related infrastructure projects. Asked about this idea, 
"yes" accounted for only 31 PERCENT , with "no" totaling 55 PERCENT 
. 
 
Asked whether to support the leading opposition Democratic Party of 
Japan's (Minshuto) rejection of Fukuda's overtures, public opinion 
was split, with 40 PERCENT  saying "yes" and 44 PERCENT  saying 
"no." 
 
The Diet has been in turmoil over the gasoline tax. Asked about 
responsibility for that, 22 PERCENT  answered the government and the 
ruling parties are more to blame, with 13 PERCENT  saying the 
opposition parties are more to blame and 59 PERCENT  saying both are 
equally to blame. As seen from these figures, many of the 
respondents regard both the governing parties and the opposition 
parties as responsible. The proportion of those who think "both are 
responsible" was 59 PERCENT  among those who support the ruling 
Liberal Democratic Party, 50 PERCENT  among DPJ supporters, and 64 
PERCENT  among those with no particular party affiliation. 
 
The approval rating for the Fukuda cabinet was 31 PERCENT  (32 
PERCENT  in the last survey taken Mar. 1-2). The disapproval rating 
was 53 PERCENT  (50 PERCENT  in the last survey). In the breakdown 
of public support for political parties, the LDP stood at 31 PERCENT 
 (29 PERCENT  in the last survey), with the DPJ at 20 PERCENT  (21 
PERCENT  in the last survey). 
 
20) Poll: 70 PERCENT  concerned about crime 
 
YOMIURI (Page 2) (Abridged) 
March 31, 2008 
 
A total of 70 PERCENT  are "very much" or "somewhat" concerned that 
they or their families may be involved in a crime and may become a 
victim, the Yomiuri Shimbun found from its yearly survey of the 
public. The figure rose 13 percentage points from the last survey 
taken in December 1998. Reflecting a growing sense of anxiety, a 
total of 79 PERCENT  think they need to do something for security 
even if they have to pay for it to some extent. People once thought 
security was free, but that attitude now seems to be a thing of the 
past. 
 
The survey was conducted Mar. 15-16 on a face-to-face interview 
basis. 
 
In the survey, those who answered "yes" to a question asking if they 
fear that they or their families may become a crime victim were 
asked to pick one or more specific crimes that concern them. In 
response to this question, "fraud and scams" accounted for 58 
PERCENT , followed by "home burglary" at 57 PERCENT , and "purse 
snatching and pick pocketing" at 45 PERCENT . 
 
The survey also asked people if they thought public security in 
Japan has improved or worsened over the past several years. To this 
question, those who think it has "improved" and those who think it 
has "improved to a certain degree" totaled only 12 PERCENT , and 
those who think it has "worsened" totaled 86 PERCENT . "Worsened" 
topped 80 PERCENT  in all seven surveys taken in May 1995 and 
afterward. 
 
 
TOKYO 00000868  015 OF 015 
 
 
Among those who gave negative answers, "weakening morals" accounted 
for 67 PERCENT , followed by "school or home education" at 47 
PERCENT  and "weakening community ties." 
 
SCHIEFFER