JAPANESE MORNING PRESS HIGHLIGHTS 03//08

UNCLAS SECTION 01 OF 12 TOKYO 000837 SIPDIS SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) Defense and security affairs: 4) Yokosuka seaman in custody says he never rode in the cab of the slain driver (Yomiuri) 5) Lower House Foreign Affairs Committee starts deliberations on the special measures bill providing host-nation support to U.S. forces in Japan (Tokyo Shimbun) 6) DPJ opposition to host-nation support budget will result in a gap until the bill can be overridden a month after the current budget expires (Mainichi) 7) LDP lawmaker and defense policy specialist Gen Nakatani comes out against Defense Minister Ishiba's plan for reforming the Defense Ministry (Mainichi) 8) Defense Ministry's think-tank sees China acquiring an aircraft carrier within two years (Sankei) 9) MOD think-tank in report warns against China using defense exchanges with Japan for own purposes (Yomiuri) 10) Prime Minister Fukuda's remark "retracted" about early enactment of a permanent SDF dispatch law (Sankei) 11) Papers sent to the prosecutors on ASDF officer who leaked defense secrets (Mainichi) Diet in turmoil: 12) Ruling and opposition camps trading charges as Diet remains stalled over key legislation (Tokyo Shimbun) 13) One month blank can be expected before provision tax laws that expire at the end of March, can be enacted by a Lower House revote (Mainichi) 14) Fukuda is filled with alarm about the impossible situation bills are facing in the Diet where the Upper House is controlled by the opposition camp (Mainichi) 15) Fukuda seeks to assure the public, particularly local areas likely to be hit hard by the expiration of the provision taxes (Yomiuri) 16) Even gasoline stations that will lower pump prices in April likely to feel the pain of the expiration of provision tax rates (Mainichi) 17) Some members of the DPJ are uncomfortable with the party's opposition to the appointment of the LDP-backed head of the National Personnel Authority (Yomiuri) 18) Infrastructure Development Institute to close doors due to expiring tax-related law (Mainichi) 19) Justice Ministry panel proposes drastic review of foreign residency registration procedures (Tokyo Shimbun) Articles: 1) TOP HEADLINES Asahi, Sankei & Tokyo Shimbun: Tokyo Metropolitan Assembly's committee approves 40 billion-yen bailout for ShinGinko Tokyo Mainichi: MLIT found to have used 2.3 trillion yen from special account budget for road projects to cover personnel expenses since its foundation TOKYO 00000837 002 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 Yomiuri: Government, ruling bloc intend to put the gasoline tax bill to a revote if the bill fails to be adopted by the end of the fiscal year (3/31) Nikkei: Nichirei, Ajinomoto, and other major food companies begin reducing their production of frozen foods 30 PERCENT due to consumers' hesitant buying in wake of poisonous frozen dumplings Akahata: Four opposition parties jointly hold a rally aimed at scrapping a new medical system for the elderly, which is to be introduced in April 2) EDITORIALS Asahi: (1) Heavy responsibility of Tokyo metropolitan government and metropolitan assembly for their decision to bailout ShinGinko Tokyo bank (2) Mayor should be tough against gangs Mainichi: (1) Gasoline tax dispute has yet to be settled (2) Hakamada murder case: Supreme Court's decision gives us an opportunity to reconsider death punishment Yomiuri: (1) Recording of questioning needs to be tried and tested for practical use (2) Bailout for ShinGinko Tokyo questionable Nikkei: (1) Tokyoites will eventually pay the price for the bailout of ShinGinko Tokyo (2) Political situation in Pakistan still remains murky Sankei: (1) Do not create public confusion by allowing expiration of the provisional tax rates (2) Land prices: Attention needs to be paid to what impact there will be on business conditions Tokyo Shimbun: (1) Plan to injection additional funds into ShinGinko Tokyo is a self-righteous act by Gov. Ishihara: (2) What makes youths kill indiscriminately? Akahata: (1) Bailout for ShinGinko Tokyo is an act that goes against public opinion 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, March 26 NIKKEI (Page 2) (Full) March 27, 2008 10:01 TOKYO 00000837 003 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 Met Chief Cabinet Secretary Machimura and Deputy Chief Cabinet Secretary Futahashi at the Kantei. SIPDIS 10:55 Met LDP Secretary General Ibuki. 12:04 Met Futahashi. 13:01 Met Machimura. 16:10 Met LDP Reform Headquarters chief Takebe. 17:50 Met alpinist Ken Noguchi, Environment Minister Kamoshita and Vice Environment Minister Tamura. Kamoshita and Tamura stayed on. 19:17 Returned to his official residence. 4) U.S. sailor denies riding in taxi of slain cabbie YOMIURI (Page 38) (Full) March 27, 2008 A 22-year-old U.S. Navy seaman apprentice, who is stationed at the U.S. Navy's Yokosuka base and whose credit card was found inside the taxicab of a driver found slain in the city of Yokosuka, Kanagawa Prefecture, has denied his alleged involvement in the murder case by telling the U.S. Naval Criminal Investigative Service (NCIS) that he never rode in that taxicab, sources revealed. An investigative task force set up at the Yokosuka Police Station has received the U.S. sailor's fingerprints from U.S. Naval Forces Japan. The police will check the provided fingerprints with those left on the kitchen knife used for the killing and those left inside the taxi. In addition, the police are also analyzing images recorded by security cameras installed near the place where the taxi driver was slain, and they are now looking into the authenticity of the sailor's account. The U.S. sailor, who deserted from the Yokosuka base on March 8, was detained on March 22. He has since been in custody as a deserter at the base undergoing NCIS investigation. The Yokosuka police task force has been exchanging information with the NCIS and will shortly question the sailor. According to findings from the police investigation so far, the 61-year-old slain driver, Masaaki Takahashi, picked up a passenger near JR Shinagawa Station in Tokyo's Minato-ku at around 7:30 p.m. Mar. 19, and his taxi exited the Yokosuka interchange of the Yokohama-Yokosuka Highway via the Metropolitan Expressway Yokohane (Yokohama-Haneda) route and arrived at the place where he was killed. He was stabbed to death at around 9:15, according to the police. 5) Lower House Foreign Affairs Committee to initiate deliberations on sympathy budget TOKYO SHIMBUN (Page 2) (Full) TOKYO 00000837 004 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 March 27, 2008 The House of Representatives Committee on Foreign Affairs yesterday launched deliberations on a new accord replacing the special measures agreement on Japan's host-nation support (or the so-called sympathy budget) for the U.S. forces stationed in Japan. The current agreement will expire at the end of this month. The government was forced to make difficult replies since they were severely pursued yesterday by both the ruling and opposition parties. Jiro Ono of the ruling Liberal Democratic Party (LDP) raised a question about the fact that workers whose salaries are paid by Japan include employees of such entertainment facilities as bowling alleys and golf courses in U.S. bases. "The Self-Defense Forces do not have such people working for them," he said. Foreign Ministry North American Affairs Bureau Director General Shinichi Nishimiya responded: "(Those entertainment facilities) will bolster the morale of U.S. military personnel and maintain their social wellbeing." Referring to the point that the percentage of Japan's sympathy budget is higher then other countries that host U.S. forces, Shoichi Kondo of the main opposition Democratic Party of Japan (DPJ or Minshuto) asserted: "South Korea does not pay utilities and water charges. Japan should cut its burden further." Senior Vice Defense Minister Akinori Eto responded: "When considering Japan's economic situation, your view should be fully taken into account. We can discuss such issues as saving costs in negotiating the new agreement." 6) Blank period in sympathy budget inevitable MAINICHI (Page 2) (Full) March 27, 2008 The House of Representatives Foreign Affairs Committee began yesterday discussing approval for an extension of the special agreement on Japan's host-nation support (HNS) for stationing U.S. forces in Japan ("sympathy budget") that expires on March 31. The major opposition Democratic Party of Japan grilled the government, asking if it has urged the U.S. side to make efforts to reduce utility expenses at U.S. military housing. With the ruling and opposition blocs failing to reach an agreement on a plan for deliberation, it now seems inevitable that a blank period will be created in Japan's HNS starting in April. Foreign Minister Masahiko Koumura commented on the impact of a possible blank period, "I hear that the U.S. military has postponed part of its training relocation plan." A provision specifying the Lower House's superiority applies to the special measures agreement, which is a kind of treaty. For this reason, even if the matter is voted down in the Upper House, it will be automatically enacted 30 days after the Lower House's endorsement. 7) Former Defense chief Nakatani criticizes Ishiba's defense ministry reform proposal, arguing, "A clear distinction is essential between civilian and uniformed officials" MAINICHI (Page 5) (Full) March 27, 2008 TOKYO 00000837 005 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 Ryuko Tadokoro Former Defense Agency Director-General Gen Nakatani of the ruling Liberal Democratic Party (LDP) in a book Daremo Kakenakatta Bouei-sho no Shinjitsu (The truth about the Ministry of Defense that no one has ever written) (published by Gentosha) criticized Defense Minister Shigeru Ishiba's proposal to unify and realign civilian officials (working in internal bureaus) and uniformed officers (serving in the Self-Defense Forces (SDF) and the three staff offices). Nakatani pointed out in the book: "It is wishful thinking to assume that if (uniformed officers and civilian officials) are simply mixed together, splendid results would be produced." Nakatani hails from the Ground Self-Defense Force. He agrees to the plan to review the entire organization, but he noted: "It is necessary to make a sharp distinction between civilian and uniformed officers. Military personnel and the military forces have their specialized area." Last month Ishiba suggested completely integrating both civilian bureaus and the three staff offices, but his proposal has come under criticism inside and outside MOD. 8) China likely to launch flattop in 2 years SANKEI (Page 5) (Abridged) March 27, 2008 The National Institute for Defense Studies (NIDS),a think tank of the Defense Ministry, released yesterday its annual report, East Asian Strategic Review 2008. Referring to China's ongoing naval modernization, the NIDS report notes that the Chinese navy is undoubtedly making a feasibility study to build an aircraft carrier. "There is no doubt that the Chinese navy will operate outside Chinese waters," the report says. In August last year, Chinese Defense Minister Cao Guangchuan visited as a part of defense exchanges between Japan and China. The report, however, warns: "The slogan of defense exchanges alone is now a fait accompli with no confidence building, and China may use this to advertise a peace-like image of itself." Last year, Japan and China held intergovernmental talks over gas field development in the East China Sea, during which Japan hinted at a prospecting plan. On that occasion, a Chinese official said China would then send warships. The NIDS report analyzes: "China is making naval visits for friendship while using its military deterrent. This is intended to establish China's de facto hegemony in the East China Sea by promoting a peace and friendship mood so that Japan will hesitate to reach for the East China Sea." Meanwhile, the NIDS report also explains that Chinese President Hu Jintao has consistently prioritized spending on China's naval buildup. The report indicates that China will complete an aircraft carrier by 2010 at the earliest. In addition, the report anticipates that China will switch its naval strategy from coastal defense in the seas near the Japanese archipelago, Taiwan, and the Philippines to ocean defense in the seas, including the Indian Ocean. The report also notes the Chinese navy's training that was conducted in August last year for underway replenishment. "China is already making inroads into the oceans," the report concludes. 9) Japan's defense institute says "China may utilize" defense exchange to "showcase its image as a pacifist state" TOKYO 00000837 006 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 YOMIURI (Page 2) (Full) March 27, 2008 The National Institute for Defense Studies (NIDS) under the Ministry of Defense (MOD) yesterday released its annual report "East Asian Strategic Review 2008," an analysis of the security and military situation in East Asia. The report expressed alarm at Japan-China defense exchanges, including port calls by both countries' vessels, by noting: "With the tacit emergence of Japan-China defense exchanges as a fait accompli, such exchanges are expected to be utilized by China to advertise its image as a peaceful state." NIDS unusually expressed concern about Japan-China defense exchanges, despite the fact that MOD has attached importance to them. The report touched on Chinese National Defense Minister Cao Gangchuan's visit to Japan last August as part of a defense exchange by pointing out: "(Then) Defense Minister Koumura expressed concern about China's increased defense spending, but no satisfactory answer came from the Chinese side. The Chinese defense minister's tour of Japan can be described as a trip to assuage the argument of China being a threat that is being voiced in Japan." Regarding the issue of joint development of gas fields in the East China Sea, a pending issue between the two countries, the report said: "The Chinese Navy's friendly visits to Japan are intended to promote a peaceful and friendly mood between Japan and China so as to make Japan hesitant to engage in gas exploration in the East China Sea. By so doing, the Chinese side intends to establish in effect hegemony in the East China Sea." The report concluded: "China is trying to secure an advantage over Japan by using both hard and soft power." Full-scale defense exchanges between the two countries started in the 1990s. Last November, a Chinese Navy vessel made a first call at a Japanese port. 10) Fukuda backpedals on permanent law SANKEI (Page 5) (Abridged) March 27, 2008 Prime Minister Yasuo Fukuda has now indicated that the government would submit a bill to the Diet at its current session for permanent legislation allowing Japan to send the Self-Defense Forces for overseas missions as needed. "I said it would be better to present the bill early because the Democratic Party of Japan (Minshuto) supports this legislation," Fukuda told reporters at his office yesterday evening. On Mar. 25, Fukuda showed his willingness to present the bill to the Diet. Fukuda explained that he had met that day with former Liberal Democratic Party Vice President Taku Yamasaki and he was only introducing Yamasaki's remarks. Chief Cabinet Secretary Nobutaka Machimura, meeting the press yesterday, also said: "We've not made such a judgment. We'd like to make a comprehensive judgment while seeing developments in the Diet." Meanwhile, DPJ President Ichiro Ozawa has been insisting on creating a permanent law. Fukuda showed his willingness on Mar. 25 to present a bill at the current Diet session. This also can be taken as a tactic to shake up the DPJ, which has been toughening its stance against the ruling coalition in the Diet. 11) GSDF Criminal Investigation Command sends papers on ASDF colonel TOKYO 00000837 007 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 to prosecutors for leaking secrets to Yomiuri reporter MAINICHI (Page 1) (Full) March 27, 2008 By Ken Honda The Defense Ministry announced yesterday that the Ground Self-Defense Force Criminal Investigation Command has sent to prosecutors indictment papers on a 50-year-old Air Self-Defense Force colonel based at the Defense Intelligence Headquarters -- currently attached to the DIH general affairs department -- on suspicion of leaking defense secrets regarding trends of Chinese Navy submarines to a Yomiuri Shimbun reporter in violation of the Self-Defense Forces Law. This is the first case that papers on an SDF officer have been sent to prosecutors for leaking defense secrets to the news media. The case is likely to stir up a SIPDIS controversy from the viewpoint of the freedom of the press and the people's right to know. According to investigations, the colonel is suspected to have leaked defense secrets regarding submarine movements provided by the U.S. military. The colonel has reportedly admitted to the charges in general. The possibility is strong that prosecutors will drop charges because revealing the highly confidential information in a public trial would be difficult. Although the SDF Law has a provision punishing the act of soliciting a person to leak information, the SDF has apparently not pressed charges against the reporter, concluding that his act was part of news-gathering activities. The problem resulted from the Yomiuri's May 31, 2005, morning edition that reported that a Chinese Navy submarine had stalled after causing a fire in the South China Sea. The vessel that caught on the fire was a Ming-class attack submarine. The submarine's position was also mentioned in the article. The Criminal Investigation Command is believed to have concluded that what is mentioned in the article fall under defense secrets. Although asked about the charges and reporter's news gathering, a spokesman said, "I cannot answer." 12) Gasoline: Strategic move to avoid responsibility in event of confusion; Ruling parties criticizing DPJ as exercising tyranny of numbers; DPJ stressing stance of responding to talks TOKYO SHIMBUN (Page 2) (Full) March 27, 2008 With the possibility of a bill amending the Special Tax Measures Law failing to secure Diet approval within the current fiscal year, both the ruling and opposition parties have each begun making strategic moves in an effort to avoid a situation in which they are called on to take the blame in the event of confusion reigning. There are acrimonious exchanges, with the ruling parties criticizing the opposition of doing nothing that the Democratic Party of Japan (DPJ or Minshuto) is buying time, by rejecting Diet deliberations, while the DPJ is rebutting them, saying that it is ready to respond to a dialogue at any time. New Komeito Diet Affairs Committee Chairman Yoshio Urushibara after talks between the Diet affairs chiefs of both the ruling and opposition camps expressed discontent with the DPJ, "Their approach TOKYO 00000837 008 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 of making an accusation even before starting Diet deliberations and doing nothing will never be able to gain the public's understanding." Since the bill amending the Special Tax Measures Law cleared the Lower House on February 29, the ruling parties had been calling on the DPJ to agree to start Diet deliberations by promptly holding a session to explain the bill and a question-and-answer session. However, the DPJ has indicated no signs of responding to the LDP's call, citing the party's circumstance as the reason. The prevailing view in the ruling parties is that the DPJ would not agree to take a vote within the current fiscal year, as one senior Upper House member of the LDP predicted. For this reason, the ruling camp is now focusing on an approach of appealing the "tyranny of numbers" by the DPJ, the top party in the Upper House, to the public, instead of finding a breakthrough through talks. It is also criticizing the DPJ for its stance of not responding to its all for talks to revise the bill amending the Special Tax Measures Law. The DPJ is also making a frantic effort to get the pubic on its side as part of a propaganda battle intended to realize cheaper gasoline. Regarding the LDP-proposed revision talks, DPJ President Ozawa said, "I would like to hold talks at every opportunity." He appears to be determined to show a stance of responding to a call for dialogue in order not to provoke criticism of the public. Though the DPJ has not respond to a proposal for a meeting of secretaries general made by the ruling camp, it has offered a counterproposal for talks between Diet affairs chiefs and officials responsible for policy-making of the ruling and opposition parties. The DPJ yesterday compiled its own report on an impact of an expiration of special measures other than the gasoline tax. Its strategy is to appeal the seriousness of the situation to the public with one senior member noting, "It makes no sense that the ruling parties do not agree on the DPJ's proposal, which exclude taxes other than the gas tax." 13) One-month blank in provisional tax rates coming; Government, ruling parties coordinating plan to take second vote on tax-related bill in late April MAINICHI (Page 1) (Excerpts) March 27, 2008 With the prospect that a bill amending the Special Taxation Measures Law will not be passed by March 31 and that the expiration of the provisional gasoline tax will be unavoidable, the government and ruling parties have begun coordinating to put the bill to a second vote before the end of April in the House of Representatives. The government and ruling coalition aim to minimize the social impact by allowing the provisional rates to lapse for just about one month. They also launched a study of measures to support gasoline stations and local governments with the expiration of provisional gas tax in mind. Once the reduced gasoline prices rise to the original prices, the public may react sharply. Prime Minister Yasuo Fukuda as a result will explain the situation to the public in late March after the fiscal 2008 budget and budget-related bills clear the Diet. The special tax revision bill was passed on Feb. 29 by the Lower TOKYO 00000837 009 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 House and sent to the House of Councillors. But the Upper House has yet to start deliberations on the legislation. Under the Constitution, if a bill has not been voted within 60 days after being sent to the Upper House, the bill is considered as being rejected and it will be sent back to the Lower House. Therefore, the lower chamber will be able to readopt it by a two-thirds majority vote on April 29 or after. Asked by the press that whether a second vote was one of his options, Fukuda said last evening: "In order to prevent confusion from occurring on April 1 or later, the issue must be resolved as early as possible." So, he did not reject that option. 14) Fukuda, fearing public confusion, to give explanation on tactic of using revote in lower chamber to reinstate gas tax MAINICHI (Page 2) (Full) March 27, 2008 Prime Minister Yasuo Fukuda is considering giving an explanation to the public on the government's plan to bringing the bill amending the Special Tax Measures Law back into the House of Representatives for a revote. He is strongly concerned that a reduction (and then a rise) in the gasoline price may create confusion in the society. Even so, the public may react sharply if the price once lowered is soon raised. An opposition member said: "If the prime minister announces the policy of using the ruling coalition's two-thirds lower chamber overriding vote, it will become difficult to hold talks on revising the bill." The prime minister will make a bitter decision under difficult conditions. Speaking before reporters yesterday, Fukuda said: "Since the Diet is in such a state, the people feel anxious. The issue should be settled as soon as possible. That is the best way." 15) Government may seek 2nd lower chamber vote on bill for maintaining provisional gasoline tax rate to avoid effect on local government finances YOMIURI (Page 4) (Excerpts) March 27, 2008 The government and the ruling coalition have decided to pass tax-related bills, including a bill amending the Special Tax Measures Law to maintain the current provisional gasoline tax rate, at the House of Representatives again in late April if the bills are not made into law by the end of this fiscal year. They will give priority to minimizing the impact of the expiration of the provisional tax rates on local government finances and the people's lives. In such a case, gasoline prices are expected to go up and rise. To avoid any confusion among the people, Prime Minister Fukuda's persuasive explanation to the people will play a key role. The tax-related bills passed the Lower House on Feb. 29, but the bills have not been debated after they were sent to the House of Councillors, in which the Democratic Party of Japan (DPJ) has control. In a meeting of the ruling and opposition Diet affairs chiefs yesterday, the ruling side sought that deliberations on the bills be started an early date, but Kenji Yamaoka of the DPJ did not respond to the call, insisting: "The budget bill for FY2008 should be discussed first in accordance with the conventional Diet TOKYO 00000837 010 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 procedures." No prospects are in sight for the start of talks on revising the bills. The DPJ has proposed establishing a consultative body composed of each party's policy chief and Diet affairs chief. But the ruling camp has seen the DPJ's proposal as intended to delay deliberations. The bills are unlikely to be put to a vote in the Upper House before the provisional tax rates expire March 31. Given this, the view that the bills be brought back into the Lower House for a revote is gaining dominance in the ruling coalition. In this case, the vote will be taken in late April under the provision in the Constitution that if a bill is not put to vote within 60 days after it is sent to the Upper House, the bill will be regarded as voted down. In preparations for the expiration of the provisional tax rates, some local governments have already started putting on hold tenders for their highway construction projects. Such measures as reducing the real estate registration license tax will also lose effect if the bills are not enacted. The government and the ruling parties have judged it necessary to quickly unsnarl any confusion expected to arise following the end of these measures. A senior Liberal Democratic Party member said: "It will serve to minimize the effect on economic activities if Prime Minister Fukuda gives a press conference at the end of the fiscal year and reveals the government plan to use Lower House revote to force through the bills." 16) Some gas stations to lower prices on April 1 if provisional rate expires, reflecting fierce competition MAINICHI (Page 2) (Excerpts) March 27, 2008 In anticipation that the provisional gasoline tax rate will expire at the end of March, some gasoline stations have decided to lower the gasoline price by 25 yen per liter starting on April 1. The gasoline tax is imposed at the stage of shipment from oil refineries. So the current higher tax rate is applied to those purchased or to be purchased by the end of March. If such products are sold at a lower price on and after April 1, those businesses will inevitably suffer losses. Major oil companies have called on gas stations to sell oil at the proper price, but retailers are under pressure to make a difficult decision amid intensifying competition. K.K. Aizu General in Aizu-wakamatsu, Fukushima Prefecture, which operates 21 shops in Fukushima and Niigata prefectures, has decided to sell regular gasoline at 120-124 yen per liter, 25 yen lower than the current level, if the provisional tax rate expires on April 1. The company intends to minimize the loss by reducing the usual inventory for seven to 10 days at the end of the month to that for two to three days. Sales manager Kazuo Yanaginuma said: "Most customers believe that the price will come down on April 1. It will be undesirable if we maintain the current higher price and if customers harbor a sense of distrust. ... Given the current fierce sales competition, I think that some other shops will also lower the price starting on the 1st." The manager of a gasoline station in Saitama Prefecture has decided TOKYO 00000837 011 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 to reduce the price if its rivals start selling at a lower price. The store manager wants to avoid suffering a deficit, but he is worried that if his shop offers a higher price than other shops, the disposal of stored goods will be delayed." After checking the prices offered by its nearby rival shops in the early morning on April 1, the manager will make a final decision. A number of gasoline stations are likely to be pressed to move forward the lowering of the price, fearing that keeping the current price would lead to reducing customers or overstocking. 17) DPJ may agree to government's reappointment of NPA President Tani YOMIURI (Page 4) (Excerpts) March 27, 2008 The steering committees of the two Diet houses yesterday held hearings on the reappointment of National Personnel Authority President Masahito Tani. His reappointment will be decided on the 28th in the plenary sessions of the two chambers of the Diet. The focus is on whether the main opposition Democratic Party of Japan (DPJ or Minshuto),which had opposed the appointment of Tani in 2004, will reject or accept the reappointment now. There are increasing calls in the DPJ for going along with Tani's reappointment, citing that he made positive remarks in the hearings about restricting the practice of amakudari or placing retired senior bureaucrats at high-paying posts at private firms. In the hearings, Tani said this about the amakudari practice: "The system that was created at the convenience of ministries should not exist." Asked about the series of misconducts by public servants, Tani stressed: "I will do my best to implement the necessary reform." A senior DPJ member highly valued Tani's remark yesterday, saying: "He responded to questions in a polite way. He has changed his remarks from those he had previously made " The senior DPJ member also said: "I am concerned that the DPJ would come under criticism if we disapprove it just as we had rejected the government nomination for the new governor of Bank of Japan." The largest opposition party will decide its response today in meetings of the subcommittee on NPA president appointment and Diet executive members. 18) IDI to close key overseas offices MAINICHI (Page 2) (Excerpts) March 27, 2008 The Infrastructure Development Institute (IDI) announced yesterday that it would close its offices in Paris and Beijing as a result of reviewing public-interest corporations by the Ministry of Land, Infrastructure and Transport. The step seems to reflect the MLIT's decision not to fund the IDI from the road-related tax revenues beyond fiscal 2007. The IDI's decision to close its overseas key research offices is likely to raise questions about the significance of its own existence. The IDI announced its decision at yesterday's meeting of the Liberal Democratic Party Administrative Reform Headquarters committee on public-interest corporations. The Paris office opened in 1995 and TOKYO 00000837 012 OF 012 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 03//08 the Beijing office in 2003. Staffed with about three personnel, both offices have been engaged in research on public works projects and international exchanges. They are expected to be closed down before the end of fiscal 2008. 19) Proposal for reviewing alien registration system: Panel reporting to justice minister presents final report, calling for integration of foreign residents control TOKYO SHIMBUN (Page 2) (Full) March 27, 2008 The Study Group on Immigration Control Policy (chaired by Takeshi Kimura, head of the National Institution for Academic Degrees and University Evaluation) has looked into reform of the foreign residents control system. The panel yesterday submitted to Justice Minister Kunio Hatoyama a final report seeking the introduction of a new foreign residents control system similar to the Basic Resident Register system applied to Japanese nationals, by revising the present aliens' registration system. Based on the proposals, the justice minister will present a set of related bills, including a bill amending the Immigrant Control and Refugee Recognition Law, to the regular Diet session next year. Under the current system, the central government is responsible for issuing resident permits, while the local governments are in charge of aliens' registration procedures. The final report calls for unifying the current dual system so that the central government controls foreign residents in an integrated way. The final report includes such proposals as: (1) immigration bureaus issuing resident cards, an identification card carrying the holder's name, photograph, nationality and period of stay; (2) mandating foreign residents to report changes in their place of employment; and (3) establishing a system allowing the government to ask schools and companies that accept foreigners to provide information on them. While calling for stricter control of foreign residents, the report also proposes improving the convenience for foreigners who are legally staying in Japan. It calls for deregulation, including an extension of the maximum period of stay from the current three years to five years and a revision to the reentry system, which requires a prior filing of an application for permission. SCHIEFFER