(Updates at 0925 GMT)

By Ankur Banerjee and Alun John

SINGAPORE/LONDON, March 19 (Reuters) -

Global shares dipped on Tuesday while the yen slid after the

Bank of Japan

met market expectations and ended eight years of negative

interest rates, likely the highlight of a busy week for central

banks.

MSCI's world share index dropped 0.16%,

though was still around all-time highs, and the U.S benchmark 10

year Treasury yield was around 2 basis points (bps)

lower at 4.324%.

But the day's big news was in Japan, where the BOJ heralded

a new era as it shifted away from years of ultra-easy monetary

policy. It also abandoned bond yield curve control and dropped

purchases of riskier assets, including exchange-traded funds.

Japan's Nikkei was choppy initially after the

decision but closed 0.66% higher, buoyed by the weaker yen,

while Japanese government bond yields fell.

Though the move was Japan's first interest rate hike in

17 years, it still keeps its rates stuck around zero as a

fragile economic recovery forces the central bank to go slow on

further rises in borrowing costs, analysts say, giving the yen

little traction.

In a statement announcing its decision, the BOJ said it

will keep buying "broadly the same amount" of government bonds

as before and ramp up purchases in case yields rise rapidly.

The yen weakened, with the dollar up 1% to 150.64,

indicating the landmark pivot had already been priced into

markets after weeks of policy clues and media reports that a

shift was imminent.

"What would have been quite seismic announcements

historically were in the end quite muted, given what had already

been leaked to the markets over the last few days. Bond moves

were broadly positive as were stock market moves -- the real

action was focussed on the currency," said Charles Hepworth,

investment director at GAM Investments

Investor focus is now on whether Tuesday's BOJ hike is a

one-and-done move or if there is more tightening to come as it

may influence the yen's role as a cheap funding currency for

carry trades.

BOJ Governor Kazuo Ueda

said

in his press conference that accommodative financial

conditions will be maintained for the time being and the pace of

further hikes will depend on the economic and inflation

outlooks.

European shares were fairly muted, with the STOXX 600

down a touch and euro zone bond yields edged up.

CENTRAL BANK BONANZA

In the day's other central bank news, the Reserve Bank of

Austrlia held interest rates steady as expected, while watering

down a tightening bias to just say that it was not ruling

anything in or out on policy.

The Australian dollar slipped 0.63% to $0.6519

following the decision. The Aussie is down over 4% against the

U.S. dollar this year.

The Federal Reserve's two-day meeting wraps up on

Wednesday, and central banks in Britain, Norway, and

Switzerland meet Thursday. All are expected to keep rates

steady, though markets are not ruling out a move in the Alps.

When it comes to the Fed, the market's attention is on

policymakers' updated economic and interest rate projections and

comments from Chair Jerome Powell.

Last week's stronger than expected inflation reports led

traders to reduce their bets on rate cuts this year, with

markets now pricing in 71 bps of easing in 2024. At the start of

the year, traders were pricing in 150 bps of cuts.

Traders are pricing in a 54.7% chance of the Fed starting

its easing cycle in June, the CME FedWatch tool showed, sharply

lower than earlier expectations.

Erik Weisman, chief economist and portfolio manager at MFS

Investment Management, said a lot will be riding on the next

inflation report due next month, where "another strong print

would likely call into question Fed cuts this year, while a

lower figure will probably put a June cut firmly back on the

table."

In commodities, spot gold eased to $2,155.60 an

ounce. U.S. crude fell 0.18% to $82.57 per barrel and

Brent was at $86.74, down 0.17% on the day.

(Editing by Shri Navaratnam and Kim Coghill)