of global standards. i therefore wholeheartedly support regional outreach initiatives of international standard setting bodies such as the aci. asia, of course, is region of rising importance in the global context, particularly in terms of finance. whether it is the volume of foreign exchange reserves or the growth of foreign exchange turnover or the amount of savings that needs to be mobilised for promoting economic growth and development, asia is likely to occupy top position in the world, if it is not already there. the prospects of a strong relative shift of financial market liquidity into asia are clear, so is the need for upgrading professionalism in finance, hopefully at a pace that is commensurate with its increasing importance in global finance. it is therefore absolutely right for the first regional office of aci to be established in asia and, if i may add, for it to be established in hong kong, as the truly international financial centre in the region. on the choice of hong kong, we are of course grateful and feel honoured, and i as chief executive of the hong kong monetary authority and as honorary president of the treasury markets association offer the full support of the two organisations to the activities of aci and aci asia. thank you.

toshihiko fukui : semiannual report on currency and monetary control ( bank of japana€™s overall review ) statement of a speech by mr toshihiko fukui, governor of the bank of japan, concerning the bank's semiannual report on currency and monetary control before the committee on financial affairs, house of councillors, 10 may 2007. * * * 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. as firms have been increasingly feeling a shortage of labor, the number of employees has continued to increase steadily and household income has continued to rise moderately. in this situation, private consumption has been firm. with the rise in demand both at home and abroad, production has been on an increasing trend and inventories as a whole have been more or less in balance with shipments. looking forward, japan's economy is likely to experience a sustained period of expansion with a virtuous circle of production, income, and spending in operation. the bank will, however, continue to pay close attention to developments in overseas economies, including the united states, as well as crude oil prices. on the price front, domestic corporate goods prices have recently been more or less at three - monthearlier levels. they are expected to increase in the immediate future mainly due to the rebound in international commodity prices. the year - on - year rate of change in the consumer price index ( cpi ; excluding fresh food ) has been around zero percent due to the drop in crude oil prices, but from a longer - term perspective it is projected to continue to follow a positive trend as the output gap continues to be positive. as for financial conditions, the environment for corporate finance has been accommodative. in the corporate bond and cp markets, the issuing environment has been favorable. the lending attitudes of private banks have continued to be accommodative. credit demand in the private sector has been rising. under these