FOR IMMEDIATE RELEASE

Tokyo, May 11, 2006 --- Japan Tobacco Inc. (JT) (TSE: 2914) announced today that it has applied to the Minister of Finance for approval(*1) to amend the list prices of all 116 domestic tobacco brands, including 115 cigarette brands and 1 cut tobacco brand, due to the scheduled tobacco excise tax hike in Japan that will take effect on July 1, 2006.

The company decided to reflect the increased tax charge into the product prices to deal with demographic changes of the Japanese population and repeated excise tax hikes that have had a negative impact on domestic cigarette consumption.

At the same time, JT is committed to taking various measures to improve customer satisfaction, including the establishing of designated smoking spaces. The company is also committed to preventing youths from smoking with an industry-wide initiative to introduce cigarette vending machines equipped with an adult identification function, which will begin in 2008 nationwide. This will naturally lead to more costs for the company, but JT believes the youth smoking prevention is an important cause and thus is supporting the investment.

A total of 13 brands, including 11 brands in the Mild Seven Family(*2), will receive additional increases in price, to maintain and enhance the quality of this top Japanese brand, which has long satisfied Japanese consumers.

The new list prices will take effect on July 1, 2006, following approval by the Minister of Finance.

Summary of the cigarette price amendments

1.	A total of 96 brands will receive a price increase of JPY 1 per cigarette.
2.	Others: 19 brands
	-	The following 13 brands will receive a price increase of JPY 1.5 per cigarette:
		From JPY 270 to JPY 300 (12 Brands)
			Mild Seven
			Mild Seven Lights
			Mild Seven Super Lights
			Mild Seven Extra Lights
			Mild Seven FK
			Mild Seven One
			Mild Seven One Box
			Mild Seven One 100's Box
			Mild Seven One Menthol Box
			Mild Seven One Menthol 100's Box
			Mild Seven Super Lights Eco Style
			Cherry
		From JPY 320 to JPY 350 (1 Brand)
			Cabin Prestige
	-	The following 6 brands will receive a price increase of JPY 0.5 per cigarette:
			Wakaba
			Echo
			Shinsei
			Golden Bat
			Uruma
			Violet

Appendix:
Comparison of Current and New Retail Prices

*1. In Japan, under the Tobacco Business Law, list prices for JT's and imported tobacco products must be approved by the Minister of Finance. Tobacco retailers are only permitted to sell tobacco products at list prices that have been approved by the Minister of Finance.
*2. Mild Seven Family has launched in 1977. It is the world second best-selling brand and the best-selling brand in the Japan market.

***

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 4.637 trillion in the fiscal year ended March 31, 2006.