The Bank of Japan does have the scope to lower rates further, Governor Haruhiko Kuroda said Wednesday.
Speaking to lawmakers, the central bank chief said there was room to lower interest rates further.
In reply to a question from a lawmaker, Kuroda said it was theoretically possible to cut the benchmark rate to as low as minus 0.5 percent.
The Bank of Japan left its stimulus measures and negative interest rates unchanged after its policy session on Tuesday.
The bank had introduced negative interest rates in January in order to achieve its 2 percent inflation at the earliest possible time.
At a press conference on Tuesday, Kuroda said there was no need for the central bank to confirm the full impact of negative interest rate, if action was necessary.
Further, he said the effects of the negative interest rate were feeding into the economy and prices.
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