Tokyo - Bank of Japan (BOJ) on Friday decided to cut its key short-term interest rate to 0.3 per cent from the current 0.5 per cent.

The bank's policy board members voted 5-4 to lower the interest rate at the end of a one-day meeting.

BOJ Governor Masaaki Shirakawa cast a vote to support the rate cut as the nation's economy would need more time to recover amid weak exports and high material prices, according to media reports.

The decision marked the first rate cut by the central bank in seven and half years. (dpa)