JAPANESE MORNING PRESS HIGHLIGHTS 03/11/08

UNCLAS SECTION 01 OF 11 TOKYO 000628 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 03/11/08 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) 4) Japanese police identify North Korean organization, directly under Kim Il Sung, responsible for two of the abductions (Asahi) China connection: 5) Chinese government accuses Japanese diplomats of being spies (Yomiuri) 6) Tokyo's improving relations with Beijing could be shaken by China's charges of spying by Japanese diplomats (Yomiuri) 7) New Komeito head Ota meets South Korean President Lee (Yomiuri) Defense affairs: 8) Japanese government tells U.S. that Futenma relocation project faces eight-month delay due to environmental impact assessment (Yomiuri) 9) Defense Ministry's project team readies report on strengthening procurement system to prevent further corrupt practices (Asahi) Diet agenda: 10) After week at a standstill, the Diet is expected to normalize tomorrow and return to deliberations on legislation (Nikkei) 11) Very difficult to pass tax-related bills this fiscal year (by end of March) with opposition parties adamantly opposed and ready to boycott deliberation (Mainichi) 12) Upper House is now deliberating the national budget bill but ruling and opposition camps not talking the same language (Tokyo Shimbun) 13) Democratic Party of Japan (DPJ) not budging an inch in opposing appointment of Muto as Bank of Japan governor, with Muto testifying in Diet today (Sankei) 14) While most of DPJ hard-lined toward Muto as BOJ governor, some members willing to compromise (Nikkei) 15) In meeting of four opposition parties, Japanese Communist Party blasts DPJ for boycotting strategy instead of deliberating bills in the Diet (Tokyo Shimbun) 16) Watered down version of plan for cabinet personal agency creating internal tensions in Fukuda cabinet (Mainichi) 17) Japan woefully behind other advanced countries in inward foreign direct investment, revealing need to further ease restrictions on foreign capital (Tokyo Shimbun) Articles: 1) TOP HEADLINES Asahi: Names of two senior officials of North Korean intelligence agency floated as allegedly involved in abductions of Chimura, Hasuike floated, according to investigation by police: Under direct control of general secretary Mainichi: Internal investigation of ShinGinko Tokyo avoids question of responsibility of Tokyo governor: Seeking compensation from former TOKYO 00000628 002 OF 011 management personnel under consideration Yomiuri: Chinese court closed to public rules that "Japanese diplomats are spies" Nikkei: Nikkei Stock Average closes at lowest level in two and half years at 12,532 yen: View that U.S. economy has entered recession phase gains ground Sankei: Report on investigation into ShinGinko Tokyo blames former president as responsible for sloppy lending practices; Likely to be charged with criminal and civil liability Tokyo Shimbun: Report on investigation into ShinGinko Tokyo: 35 borrowers suspected of having window-dressed their accounts statements, revealing sloppy screening Akahata: Japanese Communist Party's Agricultural Revitalization Plan hailed 2) EDITORIALS Asahi: (1) We want to see dialogue on whaling issue deepen (2) Amendment to Anti-monopoly Law: Focus should be placed on boosting Fair Trade Commission's capability to crack down on illegal trading practices Mainichi: (1) Reallocation of road funds: It is absolutely necessary to reexamine special account system (2) Marathon runners chosen for Olympics Yomiuri: (1) Foreign currency reserves top 1 trillion yen: Huge amount poses risk (2) Order to pay administrative surcharges given to three NHK reporters who engaged in insider stock trading: NHK needs outside investigation Nikkei: (1) Stock market alert to slowdown of U.S. economy (2) Revival of Imperial-style press conferences, in which only convenient information is presented, by Defense Ministry unacceptable Sankei: (1) Marathon runners chosen for Olympics: Preparation for Beijing needed (2) Scandal involving Ministry of Land, Infrastructure and Transport Tokyo Shimbun: (1) Age of majority: Flexible discussion needed (2) Shooting at divinity school in Israel: Break cycle of violence Akahata: (1) Agricultural revitalization plan: Policy proposal to address TOKYO 00000628 003 OF 011 crisis 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, March 10 NIKKEI (Page 2) (Full) March 11, 2008 10:00 Met at the Kantei with Chief Cabinet Secretary Machimura, Deputy Chief Cabinet Secretary Futahashi, Assistant Deputy Chief Cabinet secretaries Saka and Ando. Machimura stayed behind. SIPDIS 11:00 Met Vice Defense Minister Masuda. Followed by Economic and Fiscal Policy Minister Ota. 12:17 Met Machimura. 14:25 Met Environment Research Committee Chairman Kawaguchi. 15:00 Met Vice Health, Labor and Welfare Minister Edogawa. Followed by Consumer Administration Promotion Minister Kishida. 16:55 Handed official nomination certificate to potential candidate for the by-election in Yamaguchi 2nd District for a Lower House seat, with Secretary General Ibuki and others present. Attended an executive meeting. 17:20 Arrived at the Kantei. 18:39 Returned to his official residence. 4) Two senior North Korean agents under Kim Jong Il's direct control surface in connection with abductions of Chimura, Hasuike, police reveal ASAHI (Top play) (Excerpts) Police authorities identified yesterday two senior North Korean agents suspected of having had a hand in the abductions of Yasushi Chimura (52) and his wife and Kaoru Hasuike (50) and his wife, and that the two agents had belonged to the North Korean Research Department for External Intelligence (currently called No. 35 Office). Police authorities believe that those two senior agents were aides to North Korean leader Kim Jong Il. This is the first time that senior agents who were directly under Kim have been linked to the series of abductions of Japanese nationals by North Korean agents. The police are carrying on their investigation in order to build a case. This discovery is likely to have a significant impact on diplomatic normalization talks between Japan and North Korea, in which Japan has called for progress on the abduction issue. According to informed sources, the two senior agents are Li Wan Gi, former director of the Research Department for External TOKYO 00000628 004 OF 011 Intelligence, and Kang Hae Ryong, former deputy director of that department. The allegations are that when the two served as director and deputy director respectively around 1978, they schemed to abduct Japanese nationals and instructed their staff to do so. The two senior officials are suspected of instructing suspect Sin Gwang Su (78) and suspect commonly called Che Sunchol to abduct couples. Sin Gwang Su is suspected of having abducted Yasushi Chimura and his wife and also Tadaaki Hara, and another suspect commonly called Che Sunchol, who is placed on the international wanted list, is suspected of having abducted Kaoru Hasuike and his wife. 5) Japanese diplomats were spies: China YOMIURI (Top play) (Lead paragraph) March 11, 2008 The Higher People's Court of Beijing Municipality of China, in a final ruling handed down in September 2006, concluded that two Japanese diplomats were spies for the Intelligence and Analysis Service of Japan's Foreign Ministry, which the court ruled was an espionage organization, informed sources in Tokyo revealed yesterday. According to the sources, the ruling said a senior Foreign Ministry official, who had worked at the Intelligence and Analysis Service, and a secretary of the Japanese Embassy in Beijing were spies. China's court trial is under a two-instance system. The ruling was part of the Beijing higher court's decision to uphold a first-instance sentence of life imprisonment imposed on a Chinese man, 48, who had met with the two Japanese diplomats. It is extremely unusual for a Chinese court ruling to describe an organization of Japan's Foreign Ministry as an espionage organization and Japanese diplomats as spies to be made public. The ruling reflects China's deep-seated wariness of Japan during the then administration of Prime Minister Junichiro Koizumi, when bilateral relations had reached a nadir. 6) Commentary: China's judiciary affected by politics YOMIURI (Page 2) (Full) March 11, 2008 The Higher People's Court of Beijing Municipality of China (corresponding to a high court) concluded in its final ruling handed down in September 2006 that two Japanese diplomats were spies, and the court also imposed a sentence of life imprisonment on a Beijing man. The ruling reflects the facts about China's judiciary that is placed under the guidance of its communist party and is inevitably subject to political influence. In addition, the ruling might have strongly mirrored bilateral relations that wavered in recent years. The ruling described the two Japanese diplomats, including a high-ranking official of the Foreign Ministry, as spies. This was a decisive factor to affect charges for the Chinese man, who was sentenced to life imprisonment. According to informed sources, however, the ruling did not specify the two Japanese diplomats' espionage. According to the informed sources, the ruling did not prove that the Chinese man had known that the two Japanese diplomats were spies, nor did it specify when, where, and how often the two Japanese diplomats met with the Chinese man and what they ordered the man to do. These are critical points that affect a court in its judgment of criminal facts and in its determination of appropriate punishment. TOKYO 00000628 005 OF 011 However, the ruling left these points ambiguous and imposed a sentence of life imprisonment on the Chinese man. In China, whose judiciary is under the guidance of its communist party, investigations and court trials are easily affected by the political situation. The Chinese man was detained in the spring of 2005, when Japan-China relations had fallen into their worst-ever state since the two countries normalized ties. Then Prime Minister Koizumi paid homage at Yasukuni Shrine, and bilateral relations went from bad to worse thereafter with no prospects for repair. There were large-scale anti-Japan demonstrations in China. China's public security authorities could likely arrest a "dangerous figure" who has contact with Japan, without fearing any negative impact of the man's arrest on bilateral relations. 7) New Komeito leader meets with ROK president YOMIURI (Page 4) (Full) March 11, 2008 Masakazu Hamasuna, Seoul New Komeito Representative Ota yesterday afternoon met with South Korean President Lee Myung Bak at the Blue House. On the question of whether to grant permanent foreign residents local election voting rights, Lee told Ota, "South Korean residents in Japan have strongly desired such rights over the years. I ask for your cooperation to move the matter forward." In response, Ota said, "I will strive to move the issue forward." In the dialogue, Lee mentioned North Korean issues and indicated his intent to proactively address the abduction issue by noting: "The previous administration paid little attention to the human rights issues, but our understanding is that they need to be resolved. In fact, not only Japanese nationals but also more than 400 South Koreans have been abducted." 8) EIA for relocation of Futenma airfield expected to be delayed by up to eight months YOMIURI (Page 4) (Full) March 11, 2008 The Japanese government conveyed to the United States government that an environmental impact assessment (EIA) of a coastal area on Camp Schwab, a location planned for an alternate facility of the U.S. Marine Corps Air Station Futenma in Okinawa Prefecture, will be delayed by up to eight months from the initial schedule. According to the initial schedule, the EIA was supposed to be completed at the end of July 2009. In Japan-U.S. working-level talks held in the prefecture on March 6, the Japanese side briefed the U.S. side on this delay. 9) Defense Ministry to continue procurement via trading houses ASAHI (Page 4) (Full) March 11, 2008 A Defense Ministry project team has studied how to improve the TOKYO 00000628 006 OF 011 Defense Ministry's procurement of defense equipment for the Self-Defense Forces in the wake of a bribery case involving its former administrative vice minister, and the project team yesterday finalized a report featuring a plan to check procurement in order to prevent trading companies' bill-padding practices. Defense Minister Ishiba had initially implied his intent to abolish the Defense Ministry's current procurement system of importing defense equipment through trading companies, noting that there are problems with such a procurement system. However, the Defense Ministry will maintain the system. The project team will work out and release a report late this month. The draft report suggests the need for the Defense Ministry to establish an import control division under the Equipment Procurement and Construction Office (EPCO) in fiscal 2009. The Defense Ministry will employ certified public accountants, trading company retirees, and others with expertise for that division to heighten its function of overseeing trading companies. The Defense Ministry will also inquire of foreign manufacturers about all estimates submitted by trading companies, beginning in the new fiscal year. In this connection, the Defense Ministry will post seven more officials in the United States for a total of 10 import procurement officials to enhance its overseas fact-finding surveys. Furthermore, the Defense Ministry will add up to a penalty for overbilling. The draft report also says the Defense Ministry will enter into more direct contracts with overseas manufacturers by providing information in English about its procurement plans. 10) Stalled Diet session expected to return to normal tomorrow or later NIKKEI (Page 2) (Full) March 11, 2008 The House of Councillors Budget Committee discussed in its executive meeting yesterday the issue of starting deliberations on the budget bill for FY2008, but the ruling and opposition parties failed to find common ground. As a result, the Diet session is expected to return to normal tomorrow or later. In the meeting, the ruling camp proposed starting deliberations today, but the Democratic Party of Japan (DPJ) refused to set any specific date for starting deliberations, saying that the ruling side has presented a proposal that cannot be accepted over the nomination for the post of Bank of Japan (BOJ) governor. In their Diet Affairs Committee chairmen's meeting on March 7, the LDP and the DPJ agreed on normalizing the Diet session, starting with the executive meeting on March 10. However, the DPJ demanded in the meeting yesterday apologies by Chairman Yoshitada Konoike for holding the meeting by exercising his authority and (his) severe criticism of the DPJ. Konoike said in a press conference yesterday: "It is outrageous to discuss the selection of a new BOJ governor and Japan's budget at the same level as a political issue." In the House of Representatives, the secretaries general of the DPJ, the Japanese Communist Party, the Social Democratic Party, and the People's New Party met yesterday afternoon. They confirmed that they TOKYO 00000628 007 OF 011 would (1) urge the ruling camp to deeply reflect on its way of having passed the budget bill through the Lower House; (2) make utmost efforts to set conditions for thorough deliberations in the Upper House; and (3) continue to pursue Defense Minister Ishiba's responsibility. 11) Bill amending Special Taxation Measures Law unlikely to clear Diet within current fiscal year; Opposition camp refuses to begin deliberations at Upper House Budget Committee MAINICHI (Page 5) (Excerpts) March 11, 2008 The directors of the ruling and opposition parties of the House of Councillors Budget Committee met for the first time in a week to discuss deliberations on the fiscal 2008 budget bill. The session broke off with the opposition camp refusing to respond to the ruling bloc's call for swift deliberations, citing the ongoing process to determine a new Bank of Japan governor, which requires confirmation by both chambers of the Diet. The committee is also still unable to begin deliberations on a bill amending the Special Taxation Measures Law, including the provisional gasoline tax rate. The government and ruling bloc are increasingly finding it difficult to realize their plan to enact those bills within the current fiscal year. Upper House Budget Committee Chairman Yoshitada Konoike of the Liberal Democratic Party in a press conference yesterday said: "It's like wiping a fogged glass with your hand. You cannot see tomorrow." At the directors meeting, the Democratic Party of Japan remained determined to continue to protract the confusion, with one member saying, "Because the government has presented at this particular time a BOJ personnel plan that is hardly acceptable, we cannot discuss a timetable." Even if the Upper House does not put the budget bill to a vote, it is certain to be enacted within the current fiscal year under the Constitution. Given the situation, the DPJ is set to apply pressure on the government and ruling coalition by blocking the Special Taxation Measures Law revision bill from clearing the Diet within the current fiscal year. Appearing on an NHK program on March 9, DPJ Deputy President Naoto Kan said: "(The prime minister) should dissolve the Lower House for a snap general election over the road-related tax revenues. At this point, a decision must be made by the public instead of by party interests." Even if the Diet returns to normal within this week, a rocky path lies ahead of the enactment of the Special Taxation Measures Law revision bill by March 31. Customarily, discussions on a budget-related bill begin when deliberations on a budget bill reach a certain stage. The outlook is that the Upper House Financial Affairs Committee will not discuss the special taxation law revision bill until next week or later. In view of the committee's timetable to meet on Tuesdays and Thursdays, it can discuss the bill two or three times before the current fiscal year ends. 12) Ruling, opposition camps fail to reach agreement on convocation of deliberations on FY2008 budget bill TOKYO SHIMBUN (Page 2) (Full) March 11, 2008 TOKYO 00000628 008 OF 011 The ruling and opposition parties discussed in a directors meeting yesterday afternoon of the House of Councillors Budget Committee the question of when to launch deliberations on the fiscal 2008 state budget and budget-related bills. However, the discussion ended with the gulf remaining wide because the opposition camp insisted that they could not decide on a timetable for deliberations as the direction of appointments of governor and deputy governors of the Bank of Japan have yet to be decided, although the ruling coalition sought to start them on March ¶11. In a meeting on March 7 of their Upper House Diet affairs committee chiefs, the ruling Liberal Democratic Party (LDP) and largest opposition Democratic Party of Japan (DPJ or Minshuto) reached a basic agreement to normalize Diet business on March 10, taking the day's consultation as the opportunity. But chances are that deliberations on the state budget and budget-related bills will be delayed to the latter half of this week or later. The opposition bloc has demanded that Upper House Budget Committee Chairman Yoshitada Konoike make clear responsibility for repeatedly exercising his authority in setting timetables for committee sessions. The opposition also has demanded that Konoike take responsibility for criticizing its strategy as a defeatist spirit in their idea. The opposition parties agreed in a meeting yesterday of their Diet affairs committee chairmen to set an apology by Konoike as a condition for normalizing the Diet. 13) DPJ remains opposed to government's plan to nominate Muto as BOJ governor SANKEI (Page 3) (Full) March 11, 2008 The Diet is scheduled to hold hearings with the candidates the government has nominated for the posts of Bank of Japan (BOJ) governor and deputy governor and then hold question-and-answer sessions in both chambers at their steering committees today. The Democratic Party of Japan (DPJ) will formally determine today its opposition to the government's proposal for promoting former Administrative Vice Finance Minister Toshiro Muto to the governorship. Meanwhile, Prime Minister Yasuo Fukuda yesterday emphasized that he would not change the government plan and indicated a willingness to hold talks with DPJ President Ichiro Ozawa. The ruling camp has insisted on holding plenary session votes in both chambers of the Diet on March 14, but the DPJ, the Japanese Communist Party and other two opposition parties plan to hold tomorrow a plenary session in the House of Councillors, which the opposition bloc now controls, to take a vote with the aim of blocking the nominations. Asked who will be held responsible if a vacancy in the post of BOJ governor is created, Ozawa said yesterday in a press conference in Iwakuni City, Yamaguchi Prefecture: "The responsibility will naturally rest with the government." He added that whether to hold a meeting with Fukuda will hinges on a judgment by the party's secretary general, Diet Affairs Committee chairman, and executive SIPDIS members. Prime Minister Fukuda told reporters at his official residence TOKYO 00000628 009 OF 011 yesterday: "We have submitted the plan, believing that it is the best choice, looking at the current economic and financial situations." Asked about the possibility of party head talks, he replied: "We will hold talks if necessary." The prime minister also said the same day: "There is no need to think about a resubmission (of the government's plan for the nomination of Muto)." But Upper House Steering Committee Chairman Takeo Nishioka (DPJ) indicated in a press conference that if the government resubmits its plan, he would not approve holding a plenary session in the Upper House. 14) Tug-of-war continuing between ruling and opposition camps over dates of vote on nominations of BOJ governor, deputies NIKKEI (Page 2) (Excerpts) March 11, 2008 A tug-of-war is continuing between the ruling and opposition parties over the date of votes in both Diet chambers on the government's nominations for the Bank of Japan (BOJ) posts of governor and deputies to the new governor. The opposition bloc has proposed holding a plenary session vote tomorrow, following hearings with the candidates on their policy stances and a question-and-answer session to be held today. In an effort to seek the understanding of the opposition side toward the Muto plan, the ruling camp unprecedentedly has been calling on the opposition side to conduct a careful discussion, sensing the opposition camp's maneuvers to quickly reject the government's nominations and propose alternatives. Liberal Democratic Party Diet Affairs Committee Chairman Tadamori Oshima reportedly grumbled to his counterpart of the Democratic Party of Japan, Kenji Yamaoka on the phone yesterday morning: "I will contact you if views in the party are coordinated. Prospects are quite gloomy." Later, Oshima called on Yamaoka with New Komeito Diet Affairs Committee Chairman Yoshio Urushibara and said: "It is not proper to take a vote the day after the hearings. It is desirable to reach a conclusion by taking votes in both Diet chambers on the same day." He stressed that it would be desirable to take plenary session votes in both chambers in the Diet on March 14, the day of a regular plenary session. 15) JCP in four-party meeting criticizes DPJ TOKYO SHIMBUN (Page 2) (Full) March 11, 2008 In a meeting yesterday of the secretaries general of four opposition parties from the two Diet chambers, the Japanese Communist Party criticized the Democratic Party of Japan's (DPJ or Minshuto) strategy of boycotting deliberations in the Upper House Budget Committee, saying: "The DPJ also has responsibility for taking a stance of skipping deliberations for a week. The method of delaying deliberations on the state budget bill will not be supported by the public." TOKYO 00000628 010 OF 011 Although DPJ Secretary General Hatoyama called out to other opposition parties for unity in managing Diet affairs, DPJ Chief of the Secretariat Tadayoshi Ichida turned the guns not only on the ruling Liberal Democratic Party but also on the DPJ over the stalemate in the Diet. In the recent extraordinary Diet session, the opposition parties failed to unit in a crucial stage, for example, the decision to summon witnesses before the Diet, which was made under the initiative by the DPJ, was returned to square one due to objections from other opposition parties. Yesterday's meeting was held to make up for that, but the uneasiness has remained instead. 16) Government to submit bill specifying establishment of cabinet personnel affairs agency, which could become toothless MAINICHI (Page 2) (Abridged slightly) March 11, 2008 The government decided yesterday to submit to the current Diet session a national civil service system reform bill clearly specifying the establishment of the cabinet personnel affairs agency. Prime Minister Yasuo Fukuda has accepted Administrative Reform Minister Yoshimi Watanabe's view. But the system is still designed to allow each cabinet minister to draft personnel plans on senior posts. The plan to establish the personnel affairs agency solely responsible for personnel affairs might become toothless at the stage of working out specifics. Chief Cabinet Secretary Nobutaka Machimura revealed in a press conference yesterday that the decision has been made by the prime minister. In a meeting on March 7, the prime minister reportedly presented Watanabe with a memo listing three points: (1) the chief cabinet secretary is to be responsible for the personnel affairs agency, (2) each cabinet minister is to draft personnel affairs plans, and (3) the option of expanding the basic labor rights to cover civil servants is to be studied, as before. The Watanabe plan was designed to allow the personnel affairs agency to directly control appoints of senior officers with the aim of eliminating harmful effects resulting from bureaucratic interests. Keeping effectively each minister's power of personnel affairs intact is equivalent to allowing the personnel affairs agency to strengthen only the current personnel affairs council composed of the chief and deputy chief cabinet secretaries and the Cabinet Affairs Office. The prime minister gave consideration to strong criticism in the government of the Watanabe plan, while endorsing his plan to establish the personnel affairs agency. Watanabe indicated to the press yesterday that he would follow the prime minister's instruction, saying: "There might be cases in which cabinet ministers select senior officials based on plans worked out by the personnel affairs agency." The system of the personnel affairs agency must be specified in separate legislation. Watanabe also indicated that he would keep a close watch on the process so that the plan will not be watered down. 17) Stagnant investment in Japan: Easing foreign capital restrictions urgently needed TOKYO 00000628 011 OF 011 TOKYO SHIMBUN (Page 10) (Full) March 11, 2008 Amid economic globalization creating a borderless capital market, Japan remains unable to lure inward foreign direct investment. The government aims at doubling the ratio of inward foreign direct investment to GDP to 5 PERCENT . Removing the closed nature of the domestic market and various barriers, such as strict foreign investment restrictions, will likely become conditions for realizing its goal. The outstanding balance of inward foreign direct investment in Japan stood at 12.8 trillion yen as of the end of 2006. Its ratio to GDP is 2.5 PERCENT , which is one-eighteenth of the level of Britain and one-third of that of South Korea. The driving force of the Japanese economy is mainly exports. Its exports to the U.S., and Asia, including China, have increased. However, growth dependent on foreign demand tends to become unstable. Other leading industrialized countries have also seen increased exports, but they have also accepted inward foreign direct investment to shore up domestic demand. In order for Japan with a dwindling population to continue stable growth, it needs to introduce foreign capital more than other industrialized countries. In reality, however, Japan is keeping foreign investment away from it. U.S. hedge fund Steel Partners last year tried to buy out Bull-Dog Sauce. However, the Bull-Dog Sauce side won a court battle, taking countermeasures against the takeover bid. The government policy has also become inward-looking, following the ruling parties' crushing defeat in the Upper House election last year. It is taking an incongruous response, as can be seen in the fact that it decided to dissolve the Experts Council on Inward Foreign Direct Investment under the Prime Minister's Office (Kantei) last December. SCHIEFFER