FOR IMMEDIATE RELEASE

Tokyo, March 7, 2005 --- Japan Tobacco Inc. (JT) (TSE:2914) and its subsidiary, Japan Filter Technology, Ltd. (JFT), announced today that both companies have completed an agreement for the transfer of shares in Nitto Kogyo Co., Ltd., JT's office automation equipment parts manufacturing subsidiary, to NOK Corporation (NOK), a leading car rubber parts and electronic device circuit board manufacturing company.

Nitto, established in 1921, manufactures and sells cigarette manufacturing machinery parts, such as rollers and belts for cigarette-making machines, and has since shifted its business to focus on the manufacturing of parts for office automation equipment, including photocopying components. With this in mind, and with the mid-term management plan, "JT PLAN-V," coming to fruition, the company began examining Nitto's position within JT's business portfolio as it no longer saw a fit with its three core businesses - tobacco, pharmaceuticals and foods. Thus, JT and JFT, as a JT group, have decided today to transfer all shares of Nitto to NOK, because JT has judged that Nitto can have greater growth potential through NOK which is aggressively operating in the office automation equipment parts business.

JT and JFT will transfer 35,858 shares and 77,068 shares respectively, at JPY 45,000 per share, to NOK. It is scheduled to take place on March 29, 2005, once at least two-thirds of Nitto shareholders, including JT and JFT, have agreed to transfer their shares to NOK.

JT estimates that the financial impact to its business from this transfer will be very limited.

In "JT PLAN-V," JT announced that it would continue to optimize the operations of the entire JT group and maintain only those functions which are essential to the group's profitability and smooth operations. This is just one example of how JT is implementing "JT PLAN-V."

Appendix: Summary of Nitto Kogyo Co., Ltd.
Appendix: Summary of NOK Corporation
Appendix: Summary of Japan Filter Technology, Ltd.

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Japan Tobacco Inc. is the world's third largest international manufacturer of tobacco products. The company manufactures internationally recognized cigarette brands including Camel, Winston, Mild Seven and Salem. Since its privatization in 1985, JT has actively diversified its operations into pharmaceuticals and foods. The company's net sales were JPY 4.625 trillion in the fiscal year ended March 31, 2004.