GLOBAL MARKETS-Japan stocks choppy, yen slides to 150 after BOJ makes landmark policy shift as expected

(Updates at 0352 GMT)

By Ankur Banerjee

SINGAPORE, March 19 (Reuters) - Japanese shares were volatile on Tuesday, while the yen fell to near 150 per dollar after the Bank of Japan in a widely expected move 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.

The BOJ set the overnight call rate its new target and said it would guide it in a range of 0-0.1% by paying 0.1% interest on excess reserves financial institutions park with the central bank.

BOJ Governor Kazuo Ueda is expected to hold a news conference at 3:30 p.m. (0630 GMT) to explain the decision.

Japan's Nikkei was choppy, moving between gains and losses, while the yen weakened 0.39% to 149.74 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.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.66%. China stocks fell, with Hong Kong's Hang Seng index down over 1%, while the blue-chip shares eased 0.3%.

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.

While financial markets have priced in rate cuts for most other major central banks starting around June, the RBA is a notable outlier with no such mid-year pricing.

The Australian dollar slipped 0.4% to $0.6534 following the decision. The Aussie is down 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, comments from Chair Jerome Powell and interest rate projections.

Last week's stronger than expected inflation reports led traders to reduce their bets of rate cuts this year, with markets pricing in 71 basis points 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 from earlier expectations.

"The Fed likely won't tell us if a June cut is the baseline, but rather will continue to express confidence that multiple cuts are still expected for this year," said Erik Weisman, chief economist and portfolio manager at MFS Investment Management.

Weisman 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 1.4 basis points to 4.326% 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 103.67.

In commodities, spot gold was last at $2,160.51 an ounce. U.S. crude fell 0.16% to $82.59 per barrel and Brent was at $86.74, down 0.17% on the day.

Cocoa futures in New York and London gained more than 4% on Monday to reach record highs, buoyed by a supply shortage after poor crops in West Africa.

(Editing by Shri Navaratnam and Kim Coghill)