The Bank of Japan on Tuesday decided to further ease credit to help quell fears of a global recession in the wake of last week's terrorist attacks in the United States.

The central bank said it is cutting its official discount rate -- the rate at which the central bank loans money to banks -- by 0.15 percentage point from the current 0.25 percent to a historic low of 0.10 percent effective today.

The official discount rate serves as the ceiling rate on loans under a standby "Lombard type" lending facility, which was introduced in March, even if money market rates climb.