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TOKYO — Japan’s central bank voted Friday to cut its key interest rate for the first time in seven years, finally joining central banks around the world in lowering borrowing costs to mitigate the impact of the global financial crisis.

The Bank of Japan policy board voted in a rare 4-4 split decision to lower the uncollateralized overnight call rate to 0.3 percent, the lowest among major economies. Gov. Masaaki Shirakawa, who has the final say in the event of a tie, voted in favor of a rate cut.

The central bank’s last loosened monetary policy in March 2001.

“Adjustments in the world economy stemming from financial crises in the United States and Europe have further increased in severity,” the Bank of Japan said in its statement. “Under these circumstances, increased sluggishness in Japan’s economic activity will likely remain over the next several quarters with exports leveling off and the effects of earlier increases in energy and materials prices persisting.”

Despite the global financial crisis, a faltering domestic economy and extreme market volatility, the Bank of Japan had until now left monetary policy untouched, reiterating its long-held stance that the world’s second-largest economy faced both upside and downside risks.

The Bank of Japan “judged that a reduction in policy interest rates and a further increase in the flexibility of money market operations were necessary to maintain accommodative financial conditions,” it said.

The central bank’s move follows a series of weak economic data recently, as well as evidence earlier Friday that inflation was slowing.

Core inflation, which excludes fresh food prices, jumped 2.3 percent during the month from a year earlier on still-high fuel and food costs, according to the Ministry of Internal Affairs and Communications. Although the result marks the 12th consecutive month of increase for the core consumer price index, it is slower than August’s 2.4 percent rise.

Fuel costs in particular are cooling, with gasoline prices rising 20.7 percent in September, down from 26.4 percent in August.

“As for prices, consumer price inflation is likely to decline gradually reflecting the recent fall in commodity prices, although it remains relatively high to date,” the central bank said.

Investor hopes for a rate cut intensified this week after The Nikkei financial daily reported Wednesday that the central bank was mulling a policy shift. The speculation reigned in a recently surging yen and helped fuel a rally in Japanese equity markets. The benchmark Nikkei 225 stock average jumped nearly 10 percent Thursday, though it was down 1 percent in late afternoon trading Friday.

Economists and market observers now await the central bank’s Semiannual Economic Outlook to be released in the afternoon, as well as comments by Shirakawa. (AP)

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