(Updates at 0645 GMT)

By Ankur Banerjee

SINGAPORE, March 19 (Reuters) - Japanese shares ended

higher on Tuesday, while the yen slid to 150 per dollar after

the Bank of Japan as widely expected ended eight years of

negative interest rates and ushered in the nation's first policy

tightening since 2007.

In a week filled with central bank meetings across the

globe, the BOJ heralded a new era as it shifted away from years

of ultra-easy monetary policy. It also abandoned yield curve

control and dropped purchases of riskier assets, including

exchange-traded funds.

"The BOJ took its first, tentative step towards policy

normalization. The big question is what happens next," Frederic

Neumann, chief Asia economist at HSBC.

"Likely, the BOJ will find that it is getting 'stuck at

zero', being unable to lift short-term interest rates

meaningfully further in the coming quarters."

Japan's Nikkei was choppy initially after the

decision but closed 0.66% higher, while Japanese government bond

yields fell. 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 0.78% to 150.29 per dollar,

indicating the landmark pivot had already been priced into

markets after weeks of policy clues and media reports that a

shift was imminent.

Analysts expect the yen, which is extremely sensitive to

U.S. rates, to be more influenced by the Federal Reserve's

policy decisions as well as projections of the number of rate

cuts this year by the U.S. central bank.

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 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.

"The sell-off in the yen highlights how the funding

properties of the yen persists," said Aninda Mitra, head of Asia

macro and investment strategy at BNY Mellon investment

management. "But we would be more cautious about greater two-way

risk and higher volume going forward."

MSCI's broadest index of Asia-Pacific shares outside Japan

fell 0.84%. China stocks fell, with Hong Kong's

Hang Seng index down over 1%, while the blue-chip shares

fell 0.59%.

European bourses were looking at a lower open, with

Eurostoxx 50 futures down 0.30%, German DAX futures

down 0.29% and FTSE futures 0.32% lower.

CENTRAL BANK BONANZA

Australia's central bank held interest rates steady on

Tuesday 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 Fed is widely expected to hold rates steady on

Wednesday, with the market's attention 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 basis points (bps) of easing this

year. 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."

The yield on benchmark 10-year Treasury notes

eased to 4.324% in Asian hours, having risen to a three-week

high of 4.348% on Monday. The elevated yields boosted the

dollar, with its index touching a two week high of

103.82.

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)