Potential problems in the economic performance in 2006 include the following: 1. There is still potential for investment to rebound. The real growth of total fixed asset investment in 2005 was 23.7 percent, 3.8 percentage points higher than the previous year. The aggregate scales of projects being constructed, newly launched and being planned are still fairly large.
*  *  *  Today I will explain the Bank of Japan's view regarding recent developments in economic activity and prices and the basic thinking behind its conduct of monetary policy. In addition, I will touch upon the issues facing Japan's financial system.