JAPANESE MORNING PRESS HIGHLIGHTS 02/22/08

UNCLAS SECTION 01 OF 12 TOKYO 000469

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 02/22/08


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Defense and security affairs:
4) MSDF restarts refueling mission in the Indian Ocean after
four-month absence (Asahi)
5) USFJ to issue today report on off-base housing as part of efforts
to counter criminal incidents (Asahi)
6) Government to consult with U.S. on improving operation of the
SOFA, focusing on military personnel living off base (Mainichi)
7) Uncertainty looming over permanent legislation for MSDF refueling
mission, affected by Aegis collision with fishing boat (Yomiuri)
8) Defense Ministry technician arrested in Hokkaido for bribery
(Asahi)

Aegis collision:
9) Defense Minister Ishiba apologizes to family of fishermen lost at
sea when Aegis ship collided with their boat (Mainichi)
10) Prime Minister Fukuda rejects notion of Ishiba resigning his
post (Yomiuri)
11) Pressure on Defense Minister Ishiba to resign is rising in
opposition parties and parts of ruling camp (Asahi)
12) Ishiba rejects taking responsibility for Aegis accident; ruling
camp fears opposition will tie up the Diet over the issue (Yomiuri)


China connection:
13) Prime Minister Fukuda, visiting Chinese State Councilor Tang
confirm close cooperation in resolving food-safety issue (Tokyo
Shimbun)
14) Preparations underway full-scale for the April visit of China's
President Hu to Japan (Tokyo Shimbun)

Korean Peninsula affairs:
15) Assistant Secretary Hill expects North Korea will issue full
report of nuclear programs next month (Tokyo Shimbun)
16) DPJ President Ozawa in meeting with ROK President-elect Lee
promises efforts to enfranchise foreigners so they can vote in local
elections (Mainichi)
17) Ozawa drumming up public relations for the DPJ during his Seoul
visit (Mainichi)

18) In concentrated deliberations in the Lower House Budget
Committee, ruling and opposition camps unable to find common
agreement on funding highway building (Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
JCG likely to conclude Aegis destroyer was obligated to avoid
colliding with a fishing boat

Mainichi:
Microsoft to disclose information about Windows

Yomiuri:
Aegis destroyer might have lost sight of a fishing boat and collided

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with it

Nikkei:
NTT Communications, KDDI planning to launch corporate
telecommunications business in Russia

Sankei:
SESC to advise FSA next week to give orders for three NHK employees
to pay surcharge on insider stock trading

Tokyo Shimbun:
Did Aegis destroyer crew's failed to convey correctly information
about a fishing boat?

Akahata:
JCP House of Representatives member Kasai grills government over
unreasonable plan for construction of huge crossing; Land minister
expresses intention to reconsider the plan

2) EDITORIALS

Asahi:
(1) Aegis collision: SDF must not evade responsibility
(2) President Roh with his commoner touch will leave the political
stage forlornly

Mainichi:
(1) Revenue for road construction is not the Land Ministry's purse
(2) Resumed refueling mission: Japan needs to discuss carefully how
long the mission should be continued with an eye on the expiration
date for the mission

Yomiuri:
(1) Boost Japan's Afghan aid
(2) Pakistan needs to swiftly pave the way to stability

Nikkei:
(1) Japan, China should work together to shed light to poisonous
dumplings problem
(2) Time for "Ishihara bank" to end its business

Sankei:
(1) Investigation of poisonous dumplings: Japanese and Chinese
investigators need to fully exchange information
(2) Need to prepare for earthquake in Kyoto in order to prevent
cultural assets from being destroyed by fire

Tokyo Shimbun:
(1) Aegis collision: SDF's giving out information bit by bit
outrageous
(2) Ban on surrogate birth: Tasks still remain to be discussed

Akahata:
(1) "Ishihara bank": Will taxpayers' money again be wasted?

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, February 21

NIKKEI (Page 2) (Full)
February 22, 2008


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07:55
Met Deputy Chief Cabinet Secretary Ono at the Kantei.

08:31
Met Deputy Chief Cabinet Secretary Futahashi, joined by Assistant
Deputy Chief Cabinet Secretaries Saka and Ando.

09:00
Attended a Lower House Budget Committee session.

12:32
Attended a Lower House plenary session.

14:00
Attended the Lower House Budget Committee session.

18:23
Met Chinese State Councilor Tang Jiaxuan at the Kantei.

19:44
Returned to his official residence.

4) MSDF resumes refueling mission in Indian Ocean

ASAHI (Page 1) (Abridged)
February 22, 2008

Keiichi Kaneko, Northern Arabian Sea, Indian Ocean

The Maritime Self-Defense Force resumed its refueling support for
naval vessels from multinational forces in the Indian Ocean
yesterday afternoon (yesterday evening, Japan time) after a hiatus
of about four months. Resuming the MSDF's refueling mission topped
the agenda of Prime Minister Fukuda, who came into office in
September last year. The ruling coalition of the Liberal Democratic
Party and New Komeito enacted a special measures law for refueling
support in a second vote of the House of Representatives with a
majority of two-thirds. Under the new special measures law, the
government has managed to resume the MSDF's refueling activities in
the Indian Ocean. However, the law is valid for one year only. In
the protracted war on terror, the Diet is to focus its debate on
whether to create a permanent law allowing Japan to send the
Self-Defense Forces overseas whenever necessary.

At around twelve noon, Feb. 21, the MSDF supply ship Oumi, escorted
by the MSDF destroyer Murasame, provided a total of 160 kiloliters
to a Pakistani frigate.

Chief Cabinet Secretary Machimura, meeting the press yesterday,
underscored the importance of ensuring sealane security, given the
recent high price of crude oil. "The Indian Ocean is a peaceful
sea," Machimura said. "That is important," he added, "and I feel
that Japan has now resumed the operation in its national
interests."

However, the MSDF resumed its refueling mission shortly after the
collision of an MSDF Aegis destroyer with a fishing boat and amid
growing criticism and distrust of the SDF and the Defense Ministry.

5) USFJ to report off-base military population

ASAHI (Page 38) (Abridged)

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February 22, 2008

In the wake of an Okinawa-based U.S. Marine's rape of a junior high
school girl, the Japanese government and U.S. Forces Japan are
studying measures to prevent similar incidents. According to an
outline of these preventive measures, USFJ will inform the Japanese
government about its standards to be cleared for allowing U.S.
servicemen to live outside their bases. USFJ will also report the
number of U.S. military personnel living outside their bases. In
addition, USFJ will review its educational programs for U.S.
military personnel, including steps to prevent sex crimes. An
interim report is expected to be out today. Based on Okinawa's
request, the government and USFJ will finalize their action plan
that factors in effectiveness and other perspectives.

The Japanese government wants local police and U.S. military
authorities to carry out joint patrol in off-base areas. However,
Okinawa prefectural police have raised a question. "We wonder if we
can hold suspects," a local police official says. USFJ is therefore
considering joint patrol without its military police (MP)
authorities who are empowered to detain suspects. Japan and the
United States will continue their coordination. Security cameras
will also be installed in downtown and other areas with local
consent.

The Japan-U.S. Status of Forces Agreement (SOFA),which stipulates
legal status for USFJ personnel, exempts U.S. military personnel,
civilian employees, and families from foreign registration, unlike
the case of foreign nationals residing in Japan. This SOFA provision
has prevented local governments to grasp the accurate number of U.S.
military personnel living outside their bases.

Defense Minister Ishiba met with USFJ Commander Wright yesterday and
called for USFJ to clarify its off-base living standards, such as
age and rank factors. Wright explained that USFJ has closely
examined young servicemen in particular when allowing their off-base
living. He vowed to review that procedure.

USFJ will also review and verify its existing sexual assault
prevention and other educational programs in order to protect
Japanese minors from U.S. military personnel's sexual violence.

6) Government plans to discuss improved operation of SOFA with U.S.
to grasp situation of U.S. service members living off base

MAINICHI (Page 3) (Abridged slightly)
February 22, 2008

The government decided yesterday to hold talks with the United
States to improve the operation of the Japan-U.S. Status of Forces
Agreement so that it can grasp the situation of U.S. service members
living off base as part of comprehensive measures to prevent a
recurrence of the alleged rape of a junior high school girl in
Okinawa (on February 10). The government plans to have the
Japan-U.S. Joint Committee and other venues discuss the number of
U.S. service members living off base and the reporting systems in
the areas where they live.

U.S. Forces Japan has imposed a "lockdown" to completely prohibit
U.S. service members from leaving the base, starting on February 20.
A senior Foreign Ministry official said: "It will not last forever.
It is not a permanent preventive measure." Given the fact that the

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U.S. serviceman who allegedly sexually assaulted the girl on Feb. 10
lives off base, the government has recognized the need to take
fundamental measures regarding U.S. service members living off
base.

Democratic Party of Japan Secretary General Yukio Hatoyama and
others asked Foreign Minister Masahiko Koumura yesterday to revise
the SOFA. In response, Koumura underlined the government's positive
stance toward improving the operation of the SOFA. In Diet replies
in the past, the foreign minister has said regarding grasping the
situation of off-base U.S. service members: "We will fully discuss
the matter at Japan-U.S. Joint Committee meetings."

Under SOFA Article 9-2, U.S. service members and civilian employees
are not subject to immigration control and the alien registration
system. For this reason, U.S. military personnel are not required to
register their residency.

7) Uncertainty looming over permanent legislation for MSDF refueling
mission, affected by Aegis collision with fishing boat

YOMIURI (Page 2) (Full)
February 22, 2008

The Maritime Self-Defense Force (MSDF) resumed its refueling mission
in the Indian Ocean on Feb. 21. This means that Japan has rejoined
the international community's war against terrorism, but the
resumption of the mission came just after the collision between an
MSDF Aegis-equipped destroyer and fishing boat. Members of the
government and the ruling parties are having a headache, with one
saying: "It is bad timing."

The government and the ruling camp are worried about the impact of
the collision on prospects for continuing the MSDF mission beyond
next January, when the new antiterrorism law, which is the basis of
the mission, is to expire.

To have the MSDF continue its mission beyond next January, the
Liberal Democratic Party has already studied conditions for
dispatching Self-Defense Force (SDF) troops overseas to be set in a
permanent bill. A project team of the ruling camp will also be
launched shortly. Even so, views are split in the camp over what to
do about easing weapons-use standards and the need for a resolution
of the United Nations Security Council. A senior Foreign Ministry
official said: "Since permanent legislation involves the
interpretation of the Constitution, it will take time. It may be
difficult to enact the bill in the current Diet session."

At such a time, the collision occurred. In a meeting of the LDP
National Defense Department yesterday, one participant said:
"Restoring public confident (in the Defense Ministry) is necessary
for discussion on a permanent bill. We cannot conduct discussions
under the current situation." The government is in a great quandary.


8) Defense Ministry official arrested over bribery

ASAHI (Page 38) (Full)
February 22, 2008

Hokkaido police yesterday arrested a Defense Ministry official and a
construction contractor on bribery charges over a facility

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construction project for the Ground Self-Defense Force. The arrested
official is Makoto Sogabe, 55, currently a technician serving in the
Defense Ministry's Okinawa Defense Bureau, and the other arrested
person is Yasuo Yamanaka, 43, who runs a construction company in the
Hokkaido town of Bihoro. Yamanaka once headed a local junior
chamber. The two are suspected of having given and taken money in
cash without using a bank account so as not to leave any evidence,
the police said.

According to investigations, Sogabe accepted the bribe from Yamanaka
in selective bidding in March 2006 for the construction of a storage
facility at the GSDF's Engaru garrison in the Hokkaido town of
Engaru. At that time, Sogabe was an assistant director of the civil
engineering division of the now-defunct Defense Facilities
Administration Agency's Obihiro branch office, which is currently
the Defense Ministry's Obihiro branch office, and he was responsible
for placing work orders and estimating construction costs. Sogabe is
alleged to have leaked the estimate price and accepted about 2
million yen in exchange for that information.

9) Defense Minister Ishiba apologizes to family members of missing
fishermen in Katsuura

MAINICHI (Page 1) (Full)
February 22, 2008

Defense Minister Shigeru Ishiba yesterday visited Katsuura City,
Chiba Prefecture, for the first time since the collision occurred
(between the Self-Defense Force Aegis-equipped destroyer Atago and a
small fishing boat). Ishiba offered his apologies to the family
members of Haruo Kichisei and his son, Tetsuhiro, who are still
missing. He told them: "I truly apologize for the collision that
should not have occurred."

Asked by reporters about the opposition camp's demand for his
resignation as defense minister, Ishiba expressed his intention not
to accept the demand, saying:

"I take seriously the feelings of the family members that they want
me to thoroughly investigate the cause of the accident and come up
with measures to prevent a recurrence, and that they don't want to
see the accident be used as a tool for a political fight."

Asked about criticism of his ministry's announcement, Ishiba
responded:

"We received information that included different times when the MSDF
first spotted the fishing boat. We are trying to disclose
information immediate after we receive it. It is not appropriate to
release information that is taken as wrong. So, we will be careful
about dispatching information."

10) Fukuda expresses intention to reject call for defense minister's
resignation

YOMIURI (Page 2) (Full)
February 22, 2008

Prime Minister Fukuda emphasized last night that he would not make
Defense Minister Ishiba resign for the time being in response to the
opposition camp's demand for his resignation over the collision
between an Aegis-equipped destroyer and a fishing vessel. Fukuda

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said:

"We should not think about such a thing right now. It is not proper
to refer to it when the investigation is underway. It is necessary
that the defense minister properly handles the issue."

11) Calls for defense minister's resignation growing; Severe views
in ruling parties as well

ASAHI (Page 2) (Excerpts)
February 22, 2008

"I want all persons in responsible positions to take responsibility.
The prime minister said, 'Politics needs to turn its eyes toward the
people.' Where were you looking in carrying out politics?"

With these words, Mayor Teruo Fujihira of Katsuura, Chiba
Prefecture, expressed his frustration with the government in a
meeting with Democratic Party of Japan (DPJ) shadow cabinet defense
minister Keiichiro Asao and others, who were visiting the city
yesterday afternoon.

The DPJ has raised questions about the change in the Defense
Ministry's initial claim that (the Aegis destroyer Atago) spotted a
light two minutes before the collision to a new statement that it
was 12 minutes before the collision. Secretary General Yukio
Hatoyama yesterday demanded Defense Minister Ishiba's resignation,
telling the press, "The ministry's nature of covering up matters has
not changed at all." Hatoyama also indicated that in the event
Ishiba does not respond to the call, the party would consider
submitting a censure motion against him to the House of Councillors.
All opposition parties, including the Japanese Communist Party and
the Social Democratic Party, are lined with each other in demanding
Ishiba's dismissal or resignation.

The government is utterly on the defensive against the opposition
camp's strong offensive. Aware of growing calls for Ishiba's
resignation, Prime Minister Fukuda last night defended the defense
chief by telling the press: "The situation does not allow us to
think about such a matter. Investigations of the cause and rescue
operations are underway. It is necessary for Defense Minister Ishiba
to take firm control of them."

Ishiba visited Katsuura yesterday to offer apologies to the family
of the missing fishing boat captain and others. He also held a press
conference in the city in which he stressed that he has no intention
of resigning, saying: "Family members told me to find out the cause
and take thorough preventive measures. They also indicated that they
do not want to see the matter politicized. As a politician, I want
to fulfill my responsibility and respond to their requests."

The government defends Ishiba partly because MOD reform that started
following a series of scandals is still only halfway through. The
government also holds high regards for Ishiba, who tactfully fended
off the opposition camp in Diet deliberations on refueling support
legislation to resume the refueling operation in the Indian Ocean.
In addition, there seems to be no one other than Ishiba who can
handle Diet deliberations that are likely to be difficult.

Further, there is the traumatic experience of the previous
administration, which was forced into its own resignation as a
result of loss of impetus following a string of resignations of

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individual cabinet ministers.

Even though the prime minister keeps defending Ishiba, if a censure
motion is submitted to the opposition-controlled Upper House, it is
certain to be adopted. If the question of his resignation drags on,
it might seriously affect the battle between the ruling and
opposition camps in late March over such issues as the road-related
provisional tax rates and the pension name-identification work.

12) Defense minister rejects idea of taking responsibility for Aegis
collision; Ruling camp concerned about effect on Diet deliberations

YOMIURI (Page 2) (Full)
February 22, 2008

A tug of war is continuing between the ruling and opposition camps
over the issue of whether Defense Minister Ishiba should resign to
take responsibility for the collision of an Aegis destroyer with a
fishing boat. The opposition bloc has indicated it will submit a
censure motion calling for his resignation in the House of
Councillors, while the government and the ruling camp have
emphasized the need to give priority to searching for the two
missing fishermen and shedding light on the cause of the accident in
an attempt to hold in check the opposition bloc's demand for
Ishiba's resignation.

The defense minister offered an apology yesterday to family members
of the two missing fishermen and fishery workers in Katsuura City,
Chiba Prefecture. Ishiba then expressed his determination to
continue to fulfill his duties as defense minister.

Speaking before reporters in Katsuura, Ishiba indicated that he
would not resign from his post, remarking: "I was told to do my best
to find out the cause of the accident and to take preventive
measures. One family member said that the accident should not be
made a political issue. I have seriously responded to the feelings
of the family." But Katsuura Mayor Teruo Fujihira yesterday said to
visiting Keiichiro Asao, the defense minister in the Democratic
Party of Japan's (DPJ) shadow cabinet: "I want all officials in a
responsible position to resign to take responsibility when the cause
of the accident is clarified."

DPJ Secretary General Hatoyama and People's New Party Secretary
General Hisaoki Kamei met Chief Cabinet Secretary Machimura at the
Prime Minister's Office yesterday and insisted that the defense
minister should resign, saying: "The defense minister bears grave
responsibility." Later, Hatoyama announced that the party would
study the possibility of submitting a censure motion in the Upper
House. The Japanese Communist Party and the Social Democratic Party
have also decided to take a joint step with the DPJ in calling on
the defense minister to be dismissed or resign.

In response, the government and the ruling parties are ready to
reject the opposition's demand for Ishiba's resignation.

The government is concerned that the issue of Ishiba's resignation
may affect Diet deliberations on the FY2008 budget bill. It also
fears that the issue might develop into an issue of the prime
minister's responsibility for appointing Ishiba as defense minister.
But one Liberal Democratic Party member, focusing on the fact that
the Defense Ministry has repeatedly changed its explanation of the
accident, said: "We may never know what will happen if the ministry

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changes its explanation again and if public criticism mounts."

13) Prime minister meets Chinese State Councilor Tang; Both confirm
cooperation for resolving tainted dumpling issue

TOKYO SHIMBUN (Page 2) (Full)
February 22, 2008

Prime Minister Yasuo Fukuda yesterday met with visiting State
Councilor Tang Jiaxuan (former foreign minister) at the Prime
Minister's residence (Kantei). They confirmed that Japan and China
would cooperate to find out the truth about the poisoning of
Chinese-made gyoza dumplings. Tang proposed, "I would like to set up
a mid-to long-term cooperative mechanism responsible for supervising
food safety."

Fukuda stated, "Food safety is a matter of grave concern for both
countries." Tang expressed his sympathy for the poisoning victims.
Concerning the poisoning problem, he underscored, "We must not let
this incident affect Japan-China relations as a whole. The Chinese
government will tackle the food safety issue in a responsible
manner."

Referring to President Hu Jintao's visit to Japan slated for April,
Tang noted, "It is important for both countries to proactively
cooperate in preparing for his visit to Japan." Fukuda replied, "I
would like to cooperate in broad areas." They also confirmed that
the two countries would cooperate for an early settlement of the
issue of the development of gas fields in the East China Sea.

Following the meeting with Fukuda, Tang met with Foreign Minister
Masahiko Koumura at the Foreign Ministry's Iikura Guest House. He
during the meeting expressed concern about Taiwan carrying out in
March a referendum on the propriety of its returning to the UN.
Koumura responded, "I cannot support an attempt to unilaterally
change the present situation."

14) Preparations for President Hu's visit to Japan get under way:
Settling food safety issue of urgent concern

TOKYO SHIMBUN (Page 2) (Full)
February 22, 2008

Visiting Chinese State Councilor Tang Jiaxuan has begun to prepare
the way for President Hu's visit to Japan in April by successively
meeting with Prime Minister Fukuda and Foreign Minister Masahiko
Koumura yesterday. What concerns the two countries is the food
safety issue, including the recent case of tainted gyoza dumplings
from China. Reflecting the fact that the public is highly sensitive
to this issue, both officials underscored their determination to
shed light on the matter.

During the talks with Fukuda and Koumura, Tang stressed his resolve
to work out the dumpling problem, noting, "China attaches high
importance to this incident. I would like to explain what happened
to the peoples of both countries." Koumura responded, "I would like
to step up cooperation and assistance for an early and thorough
explanation of the facts about the incident."

Japan and China are aiming at building a mutual-beneficial strategic
relationship. Preparations for President Hu's visit to Japan will
move into full swing with Foreign Minister Yang Jiechi's visit to

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Japan slated for late March. However, the gyoza dumpling poisoning
incident could cast a pall over both countries' drive to establish
such ties if it is left unattended. For this reason, Japan wants to
settle the issue before the summit, by brining up the issue at a
bilateral strategic dialogue between Foreign Minister Mitoji
Yabunaka and his Chinese counterpart Wang Yi to be held in Beijing
on the 22nd-23rd.

Japan is concerned that mounting popular distrust about foods
imported from China could mar the plan to improve bilateral
relations. A senior Foreign Ministry official noted that China, too,
does not want to see this problem drag on.

During the meetings yesterday, both countries confirmed their
intention to cooperate in finding out the truth about the
poisonings. Tang proposed setting up a mid-to long-term framework
for securing food safety. The Japanese side will hear the specifics
of the proposed framework from China and consider how best it can
offer cooperation.

The police authorities of both countries yesterday held a meeting to
exchange information. However, how pesticides have gotten mixed in
gyoza packages still remains unclear. Pesticides were also found in
packages of frozen food manufactured by another company. There are
many difficult issues to clear before the distrust of Chinese food
imports in Japan can be wiped away

15) North Korea's nuclear report to be completed next month,
Assistant Secretary Hill predicts in Tokyo

TOKYO SHIMBUN (Page 2) (Full)
February 22, 2008

Visiting Assistant Secretary of State Hill yesterday met with a
nonpartisan group of lawmakers in Tokyo for an exchange of views on
North Korea's nuclear problem and other issues. According to former
Liberal Democratic Party (LDP) Vice President Taku Yamasaki, Hill
indicated prospects that North Korea before the end of March will
finish giving a complete and accurate report of all nuclear
activities, something it had agreed to do at the Six-Party Talks
last year.

Hill also reportedly indicated that in order to bring about progress
on the issue of the abduction of Japanese nationals, (Japan) should
call on North Korea to reinvestigate the matter.

16) ROK President-elect Lee seeks to allow foreign residents in
Japan local election voting rights in meeting with DPJ President
Ozawa

MAINICHI (Page 5) (Excerpts)
February 22, 2008

So Watanabe, Seoul

Major opposition Democratic Party of Japan (DPJ) President Ichiro
Ozawa, now visiting South Korea, yesterday met with President-elect
Lee Myung Bak. In the session, Lee spoke of the issue of local
election voting rights, which have not yet been given to foreign
residents in Japan, and asked for Ozawa's cooperation to allow
foreign residents such rights, telling him, "I have been asked by
South Koreans residing in Japan (to work on Japan) to allow them

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local voting rights." Ozawa indicated he will work hard on the
issue, telling Lee: "It is regrettable that while South Korea has
already allowed such rights, Japan still remains slow to do so. I
will do all I can so that such rights will be given to (foreign
residents in Japan)."

The session took place at the president-elect's office in Seoul. It
lasted for 45 minutes. Ozawa was the first DPJ leader to meet in
South Korea with a top-level South Korean leader since Naoto Kan met
with Roh Moo Hyun in February 2003, just before Roh assumed the post
of president.

On the North Korean nuclear issue, Lee played up his position by
noting, "It may take time, but there is every hope that the issue
will be resolved by efforts of both Japan and South Korea." He
added, "In East Asia, South Korea-Japan relations are extremely
important. We must enhance cooperation." In response, Ozawa noted:
"In order not to throw the world into confusion, we must work on
China to democratize."

17) Ozawa plays up "summit" diplomacy by visiting ROK

MAINICHI (Page 5) (Excerpts)
February 22, 2008

So Watanabe, Seoul

Ichiro Ozawa, president of the major opposition Democratic Party of
Japan (DPJ),yesterday met with president-elect Lee Myung Bak of
South Korea ahead of Prime Minister Yasuo Fukuda, following his
visit to China in last December. With a dissolution of the Lower
House for a snap election unlikely to occur so soon, Ozawa is now
desperate to play up through "summit" diplomacy his party's presence
as a party capable of taking the reins of government, as he is
losing ground in the party.

When it comes to visiting other countries, Ozawa has regarded the
prime minister as his rival since the Upper House election. In this
sense, his visit to South Korea this time was no exception. He
dwelled on the idea of visiting South Korea ahead of the prime
minister. When South Korea asked Ozawa to attend the president's
inauguration on Feb. 25, Ozawa preferred to visit South Korea
beforehand, considering that he would be overshadowed by Fukuda if
he did so, because Fukuda plans to have a summit with the president
on the sidelines of the inauguration. So, Ozawa decided to send
Deputy President Naoto Kan to the ceremony on his behalf in order to
get one step ahead of Fukuda in terms of meeting with Lee.

18) No headway in intensive deliberation on road-related tax bills
at Lower House Budget Committee

NIKKEI (Page 2) (Full)
February 22, 2008

The House of Representatives Budget Committee held yesterday an
intensive deliberation on whether the provisional tax for road
construction should be retained, with the presence of Prime Minister
Yasuo Fukuda and other cabinet ministers. The main opposition
Democratic Party of Japan (DPJ or Minshuto) demanded a one-year
freeze of the government's midterm plan to spend 59 trillion yen for
road construction and repair over next ten years since fiscal 2008.
Fukuda, however, rejected the demand. So the discussion did not go

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anywhere.

The Ministry of Land, Infrastructure, and Transport drafted last
November a midterm plan, which stipulated that 65 trillion yen would
be needed for road construction and repair, but the government and
ruling parties slashed it to 59 trillion yen in their discussion at
the end of last year. The DPJ has pursued the 59-trillion midterm
plan, citing that a traffic demand estimate used for drafting the
midterm plan is out of date. The reason for the DPJ's demand for
one-year freeze is that new data will come out as early as this
fall. Sumio Mabuchi of the DPJ asserted: "A new plan should be drawn
up." Fukuda, however, responded: "I would like to make efforts to
draw up a better plan."

Land, Infrastructure, and Transport Minister Tetsuzo Fuyushiba
explained the breakdown of project expenditures to be reduced: 1) 3
trillion yen by cutting costs; 2) 2 trillion yen by a collaboration
of road construction and other projects such as road repair projects
and town development; and 3) 1 trillion yen by using existing
expressways by lowering toll charges. DPJ Vice President Katsuya
Okada continued a question: "Was it easy to reduce the costs by 3
trillion yen? It's a sloppy plan."

Fukuda was desperate to build a defense arm, replying: "We will come
up with a better plan through debate on the compilation of a state
budget." DPJ Deputy President Naoto Kan urged Fukuda to integrate
the special account of road-related taxes into the general account
and to abolish the provisional tax rates. Fukuda, however, urged the
DPJ to present its own counterproposals toward the government's
bills.

SCHIEFFER