Gaijinbiker at Riding Sun has a pretty good post on this kerfuffle. (Use title link.)
From Japan Media Review:
...The Kyodo report even surprised the bureaucrats who wrote it, according to IT Media News. Shigeo Naito, deputy section chief of the Ministry's Information and Communications Policy Division, claimed that every member of the panel believes that anonymity is actually indispensable to the Web, since it enables people to speak freely without being constrained, say, by who they work for. "We were proud that [the panel's report] was pretty liberal, coming as it did from a government agency. But the way it was interepreted, made it seem as if we were calling for people to use their real names," said Naito.
Though the Kyodo report may have mischaracterized what the Ministry intended to say in its panel report, bloggers and journalists are still not convinced that the Ministry doesn't have its eye on regulating the Internet. With neighboring China stepping up its crackdown on subversive Internet content, and even Japanese politicians calling for regulation in the wake of some widely publicized crimes and suicides that appear to have a link to the Internet, many expect greater government intervention ahead...