Press Release

FOR IMMEDIATE RELEASE

JT to Dissolve Consolidated Subsidiary

Tokyo, December 15, 2006 --- Japan Tobacco Inc. (JT) (TSE:2914) announced today that the company would dissolve its consolidated subsidiary Japan Metallizing Co., Ltd. (JM).

JM has been involved in the production and distribution of aluminum evaporated products, including aluminum evaporated paper which is used in tobacco packaging. However, under the current challenging operating environment, JT did not foresee opportunities for further growth in JM's future business, and therefore in an effort to enhance cost competitiveness for the entire JT group, has chosen to dissolve the company.

Following approval at JM's general shareholders meeting, scheduled to be held in June 2007, the liquidation of the company would be complete by the end of 2007.

The financial impact of this decision upon JT's consolidated accounts is expected to be minimal.

About Japan Metallizing Co., Ltd. (As of March 31, 2006)

Company:	Japan Metallizing Co., Ltd.
Location:	1111-2 Yahata, Chigasaki-shi, Kanagawa, Japan
Name of representative:	Yoshihei Higashigaito
Established:	July 1, 1982
Capital:	400 million yen
Number of issued shares:	8000
Net assets:	1,143 million yen
Total amount of assets:	1,421 million yen
End of fiscal year:	March 31
Type of business:	Manufacturing and sale of aluminum evaporated products used in cigarette packaging and other products
Number of employees:	29
Major shareholders:	Japan Tobacco Inc.:	(50.8%)
	Dai Nippon Printing Co., Ltd.:	(33.8%)

Japan Metallizing Co., Ltd.: Business Results 2004~2006

(Units: Millions of Yen)

	Fiscal year ended March 31, 2004	Fiscal year ended March 31, 2005	Fiscal year ended March 31, 2006
Net Sales	1,241	1,211	1,084
Operating Income	36	28	-6
Recurring Profit	44	31	-6
Net Income	33	8	-6

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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.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This document contains forward-looking statements about our industry, business, plans and objectives, financial condition and results of operations that are based on our current expectations, assumptions, estimates and projections. These statements discuss future expectations, identify strategies, discuss market trends, contain projections of results of operations or of our financial condition or state other forward-looking information. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those suggested by any forward-looking statement. We assume no duty or obligation to update any forward-looking statement or to advise of any change in the assumptions and factors on which they are based.
Risks, uncertainties or other factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, without limitation:

1.		health concerns relating to the use of tobacco products;
2.		legal or regulatory developments and changes, including, without limitation, tax increases and restrictions on the sale, marketing and usage of tobacco products, and governmental investigations and privately imposed smoking restrictions;
3.		litigation in Japan and elsewhere;
4.		our ability to further diversify our business beyond the tobacco industry;
5.		our ability to successfully expand internationally and make investments outside of Japan;
6.		competition and changing consumer preferences;
7.		the impact of any acquisitions or similar transactions;
8.		local and global economic conditions; and
9.		fluctuations in foreign exchange rates and the costs of raw materials.