* Dollar index crawls away from nearly 2-week low hit on Friday
* Yen's gains tempered by expectations that BOJ could ease further
* Dollar long bets had increased ahead of jobs report-IMM data
By Lisa Twaronite
TOKYO, Oct 5 (Reuters) - The dollar nursed losses on Monday, edging away from a nearly two-week low against a basket of currencies marked in the previous session after weak U.S. jobs data led traders to pare bets that the Federal Reserve was poised to hike interest rates as early as this month.
The key nonfarm payrolls report showed that employers added only 142,000 jobs last month, falling far short of economists' consensus expectation for a rise of 203,000 jobs, according to a Reuters poll. Moreover, the August figures were revised sharply lower. ID:nLNN2LEBGC
That raised doubts that the U.S. economy was strong enough to justify the Fed's long-awaited interest rate increase, which would be the first since 2006.
The dollar index .DXY , which tracks the greenback against a basket of six major currencies, slid to 95.218, its lowest level since Sept. 21. It last stood at 95.887, up about 0.1 percent.
While the Fed is still expected to be the first major central bank to raise interest rates in the near future, uncertainty about the timing of this hike has kept the dollar locked in ranges.
By contrast, some investors believe the Bank of Japan could unveil further easing steps as early as the conclusion of its next policy meeting on Wednesday, which has curbed the yen's upside.
"Although in the U.S. the FOMC is expected to delay its first rate hike until the first quarter next year, after last week's NFP report, we continue to believe that the U.S. economy is one of the few capable of generating inflation due to a relative tight labour market," strategists at Barclays (LONDON:BARC) said in a note to clients.
"Deteriorating growth and weakening inflation outlook in Japan increased the pressure for the BOJ to act early," they said, adding that they now expect Japan's central bank to take additional stimulus steps at its October 30 meeting rather than its meeting in April 2016.
The dollar was buying 120.06 yen JPY= , up about 0.1 percent and moving away from Friday's low of 118.68 yen, its lowest since Sept. 7. The euro was trading at 134.68 yen EURJPY= , up about 0.2 percent.
The euro also bought $1.1216 EUR= , up 0.1 percent, after it popped to a nearly two-week high of $1.1319 on Friday.
Investors had increasingly been betting the Fed would hike rates. After bullish bets on the dollar fell to their lowest level in more than a year, they rose in the week ended Sept. 29, the first increase in dollar-long positions in three weeks, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. IMM/FX