(Updates at 1230 GMT)

By Ankur Banerjee and Alun John

SINGAPORE/LONDON, March 19 (Reuters) - Global shares

dipped and the yen slid on Tuesday after the Bank of Japan met

market expectations by ending 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 near all-time highs, and U.S. Nasdaq futures

were down 0.7%, with chip stocks having a rare bad day

in premarket trading. The U.S benchmark 10-year Treasury yield

was around 1 basis point (bp) lower at 4.33%.

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 after the decision but

closed 0.66% higher, buoyed by the weaker yen, while Japanese

government bond yields fell. The dollar rose as much as 1% to

150.7 yen.

"The BOJ clearly has been very, very keen to manage this

process so that it is not disruptive," said David Mitchinson,

fund manager at Japan focused Zennor Asset Management. "The

markets have front-run them and anticipated their move."

Though the shift 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

rate-sensitive yen little traction.

In a statement announcing its decision, the BOJ said it

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

as before.

"So some of that spread closure between Japan and the U.S.

isn't quite really happening at the moment because although

Japan has hiked a little, the U.S. hasn't cut," said

Mitchinson, pointing to the fact that U.S. inflation pressures

have been stronger than expected

BOJ Governor Kazuo Ueda said in his press conference that

accommodative financial conditions would be maintained for the

time being and the pace of further hikes would depend on the

economic and inflation outlooks.

European shares were fairly muted, with the STOXX 600 down a

touch and euro zone bond yields little changed.

CENTRAL BANK BONANZA

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

Australia held interest rates steady as expected, while watering

down a tightening bias to say it was not ruling anything in or

out on policy.

The Australian dollar slipped 0.7% to $0.6514

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

on 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 U.S. rate cuts this year, with

markets now pricing in 71 bps of easing in 2024, roughly in line

with expectations the Fed published in December, the latest

iteration of which are due at this meeting.

At the start of the year, traders were pricing in 150 bps of

cuts.

In commodities, spot gold eased 0.35% to $2,152.70 an

ounce, after hitting all time highs earlier this month. U.S.

crude edged up 0.13% to $82.82 per barrel and Brent

was at $87.01, up 0.1% on the day.

(Additional Reporting by Naomi Rovnick in London, Editing by

Kim Coghill and Mark Potter)