TOKYO, March 11 Reuters The yen firmed against the dollar on Monday as signs the Bank of Japan will exit negative interest rates at its policy meeting next week contrasted with expectations that the Federal Reserve will cut rates in June.

The dollar index, which measures the currency against the yen and five other major rivals, stuck close to a nearly twomonth low reached on Friday, when monthly payrolls figures signalled a cooling U.S. labour market, keeping the Fed on track to ease policy.

The greenback eased 0.06 to 146.995 yen , and earlier dipped as low as 146.54, bringing it to the cusp of Friday39;s fiveweek low of 146.48.

The dollar index was 0.06 higher at 102.74, hovering not far from Friday39;s low of 102.33, a level not seen since Jan. 15.

Dollaryen should remain heavy this week, with bounces into 148 likely to attract sales as expectations continue building that the BOJ might tweak policy on 19th March, Westpac strategists wrote in a note to clients.

Meanwhile, the dollar index looks vulnerable to a deeper setback, and could test support at 101 this week, the note said.

A growing number of BOJ policymakers are warming to the idea of ending negative rates at their March 1819 meeting, sources told Reuters, amid expectations for hefty pay rises from Japan39;s biggest firms that could boost soft consumer spending. Results of this year39;s annual shunto wage negotiations are due on Wednesday.

Elsewhere, Jiji news agency reported the BOJ is considering a new…