* Yen weak after BOJ's Kuroda reiterates policy stance
* Dollar steady after Friday's strong U.S. jobs report
* Bank of Canada interest rate decision due Wednesday (Updates prices, market activity and comments to U.S. afternoon trading)
By Saqib Iqbal Ahmed
NEW YORK, July 10 (Reuters) - The dollar rose against the yen on Monday as the Bank of Japan's offer last week to buy an unlimited amount of bonds drew investors' focus to the divergent monetary policy outlook between the U.S. Federal Reserve and the Bank of Japan.
BOJ Governor Haruhiko Kuroda on Monday reiterated the central bank's pledge to keep Japanese government bond yields anchored near zero. the global backdrop of rising bond yields, 10-year Treasuries most importantly," said Mazen Issa, senior FX strategist, at TD Securities in New York.
The spread between 10-year U.S. Treasury yields US10YT=RR and their Japanese counterpart JP10YT=RR is close to the widest in nearly two months, drawing bets that play on the divergence between rising Western government bond yields and low Japanese equivalents.
"The BOJ has provided a reminder that while everybody else has put in a bit of a hawkish pivot, if you will, the BOJ is very much not in that camp yet," Issa said.
The greenback was up 0.15 percent to 114.05 yen, after hitting a two-month high of 114.29 yen, earlier in the session.
"At the current level we would not be chasing the move higher here, especially not before earnings," said Alvise Marino, FX strategist at Credit Suisse (SIX:CSGN) in New York.
"Dollar-yen, of course, remains very sensitive on the risk front."
The dollar index .DXY , which tracks the greenback against six major rivals, was up 0.04 percent to 96.049.
Traders were wary of adding big positions ahead of Fed Chair Janet Yellen's semi-annual monetary policy testimony before Congress on Wednesday and U.S. consumer inflation data on Friday.
"It's been pretty quiet. There's a lot more event risk later in the week," Issa said.
Meanwhile, the Canadian dollar CAD= was down slightly against its U.S. counterpart while investors awaited a Bank of Canada interest rate decision on Wednesday. are divided on whether the central bank will hike rates but data from the overnight index swaps market show that money markets are almost fully priced for an increase.
"The Canadian dollar was the first currency to reprice in a hawkish direction, and this will also be the first one now to have a bit of a test, so that's the one we will be looking at the most closely," Marino said.
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