The Bank of Japan's potential exit from its negative interest rate policy is likely to have a limited impact on companies, the head of the country's banking lobby said on Thursday.

"An interest rate rise as a result of the policy exit would be small compared to the United States, so the impact of higher bank lending rates would be limited," Masahiko Kato, chairman of the Japanese Bankers Association, told reporters.

Kato, also the chief executive of Mizuho Bank, added that a narrower interest rate gap between Japan and United States could help ease the yen's excessive weakness, push down materials costs and support corporate earnings.

Kato said he believed that Japan at is the stage of gauging whether a virtuous cycle of higher wages and prices will take place to stably achieve the BOJ's inflation target. (Reporting by Ritsuko Shimizu; Writing by Makiko Yamazaki; Editing by Kim Coghill)