The Bank of Japan cut its benchmark interest rate Friday to 0.3 percent from 0.5 percent, joining other central banks in moving to limit further damage from the global financial crisis.

The BOJ will also start paying interest on excess reserve balances lenders deposit at the central bank.

In addition, the BOJ lowered its economic growth forecast to 0.1 percent for this fiscal year from an earlier projection in April of 1.5 percent.