Press Release

FOR IMMEDIATE RELEASE

JT to Expand its Innovative D-spec Category in Japan
In response to increased demand

Tokyo, December 11, 2006 --- Japan Tobacco Inc. (JT) (TSE: 2914) announced today that it would launch three new cigarette products in January 2007 - "D-spec H Side Slide Box," "D-spec R Side Slide Box" and "D-spec C Side Slide Box" - in Tokyo, Chiba, Saitama, Kanagawa and Fukuoka prefectures, in response to stronger demand for its innovative "D-spec" reduced odor products.

JT's "Alphabet H Side Slide Box," "Alphabet R Side Slide Box" and "Alphabet C Side Slide Box" brands have received high praise for their simple and stylish package designs since their introduction in July 2004. Each brand's design is based on a single color scheme and letter, which represents their respective flavors. The boxes are red, gray and green, and bear the letter "H," "R" or "C," which represent "Hard," "Regular" and "Coolmint" respectively. In response to increased demand for "D-spec" products, which JT has been committed to expanding, the company has decided to transform these three existing products into new D-spec brands and discontinue the "Alphabet" line.

"D-spec," reduced odor segment products (known as Less Smoke Smell products abroad), incorporate the company's odor-reducing technology in response to consumer demands for the reduction in the unpleasant smell of smoke. After six years of research and development efforts, JT introduced this new and innovative technology to mask the unpleasant odors. The company has received a large amount of positive feedback from consumers regarding the benefits of D-spec products such as reduced smoke smell in clothes and hair.

In Russia, JT launched two D-spec products for the first time on a nationwide scale in the second half of 2006 - "Lucia Citrus Fresh Menthol" and "Lucia Light." Prior to the launch, "Lucia Citrus Fresh Menthol" had been sold exclusively in Moscow to evaluate the brand's potential in the Russian market. The study showed a sustained demand for the brand attributed to the benefits of the D-spec offering.

This illustrates that D-spec products have made solid in-roads into the markets, and with the introduction of "D-spec H Side Slide Box," "D-spec R Side Slide Box" and "D-spec C Side Slide Box" in Japan, 22 D-spec products will be available in the Japan market.

Profile of New Products

[D-spec H Side Slide Box]

Price: 320 yen/ 20 Cigarettes

Tar / Nicotine: 12mg / 0.9mg

Sales Areas: From January 15, 2007: Tokyo, Chiba, Saitama, Kanagawa, Fukuoka Prefectures (launch)

[D-spec R Side Slide Box]

Price: 320 yen/ 20 Cigarettes

Tar / Nicotine: 5mg / 0.5mg

Sales Areas: From January 15, 2007: Tokyo, Chiba, Saitama, Kanagawa, Fukuoka Prefectures (launch)

[D-spec C Side Slide Box]

Price: 320 yen/ 20 Cigarettes

Tar / Nicotine: 7mg / 0.6mg

Sales Areas: From January 15, 2007: Tokyo, Chiba, Saitama, Kanagawa, Fukuoka Prefectures (launch)

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