The risks to this outlook are tilted to the downside, reflecting in particular the increased uncertainties related to the external environment. Notably, current developments in emerging market economies have the potential to further affect global growth adversely via trade and confidence effects. Before addressing the second part of my remarks, let me revert to the evolution of the output gap, i.e.
*  *  *  Introduction The Bank of Japan submitted its Semiannual Report on Currency and Monetary Control for the first half of fiscal 2006 to the Diet on December 12, 2006. I am pleased to have this opportunity to present an overall review of the Bank's conduct of monetary policy. I. Developments in Japan's economy  Japan's economy is expanding moderately.