(Updates yields, adds comments)

TOKYO, March 19 (Reuters) - Japan's government bond

(JGB) yields fell on Tuesday after the Bank of Japan ended eight

years of negative interest rates and other remnants of its

unorthodox stimulus, ushering in a new era of monetary policy

for markets.

The 10-year JGB yield reversed its rise

earlier in the session, dropping 3 basis points (bps) to 0.725%,

its lowest since March 7.

The two-year JGB yield slipped 1 bp to a

two-week low of 0.170%.

"Investors were relieved and they bought JGBs because the

outcome of the BOJ's policy meeting was within their

expectations," said Takeshi Ishida, strategist at Resona

Holdings.

In a widely expected decision, the BOJ ditched a policy that

applied a 0.1% charge on some excess reserves financial

institutions parked with the central bank.

The BOJ set the overnight call rate as its new policy rate

and decided to guide it in a range of 0-0.1% partly by paying

0.1% interest to deposits at the central bank.

The one-month treasury bill yield rose to 0.01%

from negative 0.012%. The yield turned positive for the first

time since April 2016 in the previous session, rising to as high

as 0.05%.

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.

But it will scale back the maximum limit of its purchases of

JGBs at its regular bond buying operation, a move that allows

the market to control yield movements.