Bank of Japan Gov. Haruhiko Kuroda said Friday the central bank is not considering cutting rates again. It introduced a negative rate in February.
"At this point, I am not considering further lowering the negative interest rate," the BOJ chief told the Budget Committee of the House of Councilors.
"The policy effects are already being seen in interest rates," Kuroda said. "It is expected to spread to the real economy and prices in the future. I would like to monitor the situation."
Kuroda said the negative rates are likely to help the BOJ achieve its goal of 2 percent inflation around the first half of fiscal 2017, which begins in April next year.
The central bank's new policy, introduced as part of monetary easing, charges 0.1 percent on capital above a threshold that financial institutions lodge with the BOJ.
Since the BOJ's announcement in late January, some banks have cut mortgage rates while also slashing deposit rates as interest rates have moved lower, with the yield on the key 10-year government bond entering negative territory.
The shares of banks also suffered sell-offs amid fears that profits could be hurt by the negative interest policy.
