*  *  *  Introduction The Bank of Japan submitted its Semiannual Report on Currency and Monetary Control for the first half of fiscal 2005 to the Diet in December 2005. 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 The growth of Japan's economy slowed temporarily from the second half of 2004 to the summer of 2005. Thereafter, it emerged from this pause and has continued to recover steadily. Exports and industrial production have continued to increase. Business fixed investment has continued to increase against the background of high corporate profits.