*  *  *  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.
Exports have continued to increase due to the expansion of overseas economies. Business fixed investment has also continued to increase against the background of high corporate profits and generally favorable business sentiment. The positive influence of the strength in the corporate sector has been feeding through into the household sector.