South Korea's central bank chief said Japan’s export restrictions partially factored in to the decision to cut the key rate on Thursday.

Bank of Korea(BOK) Governor Lee Ju-yeol made the remark when speaking to reporters shortly after the unexpected decision was made at a monetary policy board meeting in Seoul.

The central bank slashed its policy rate by a quarter percentage point to one-point-50 percent, the first cut since June 2016.

The BOK also lowered its growth outlook for the year to two-point-two percent from the two-point-five percent projected three months earlier.

The decision is seen as an apparent attempt to spur growth amid the trade feud with Japan and a continued decline in exports and facility investment.

Earlier this month, Japan placed curbs on three key materials used by South Korea’s tech industry to make semiconductors and flat screens. There are concerns that Japan may enhance the scope of its controls as the row continues.