In the April 2006 Outlook Report, we presented our view that, through fiscal 2007, the Japanese economy is likely to experience a sustained period of expansion under price stability. Economic developments since then seem to indicate that the economy is moving broadly in line with this projection. The expansion of overseas economies is broadening in extent.
In the United States, the pace of economic expansion has moderated somewhat, reflecting recent decreases in housing investment and slowing growth in household expenditure and employment. These developments, however, can be seen as part of the process of adjustment toward stable growth.