(Updates with more details, comment)

By Brigid Riley

TOKYO, March 11 (Reuters) - Japanese government bond

yields rose on Monday, as traders maintained a cautious stance

following reports that the Bank of Japan is leaning toward

exiting negative interest rates next week.

The benchmark 10-year JGB yield was 3 basis

points (bps) higher at a one-month high of 0.760% in early

trade, while 10-year JGB futures fell 0.14 yen to

146.11 yen.

Although it looks to be a close call, BOJ policymakers are

warming up to the idea of ending negative interest rates this

month, according to four sources familiar with its thinking

said.

Upon ending negative rates, the central bank is also likely

to overhaul its massive stimulus programme that consists of a

bond yield control (YCC) and purchases of riskier assets, the

sources said.

Japan's Jiji news agency reported on Friday that the

central bank is considering replacing YCC with a new

quantitative framework.

Under its stimulus programme, the BOJ guides short-term

interest rates at -0.1% and the 10-year government bond yield

around 0%.

The reports have given investors "additional evidence that

supports an earlier hike rather than later in April", said

Shinichiro Kadota, chief currency strategist at Barclays.

The five-year yield edged up to its highest

level in four months at 0.40% before slipping to 0.385%.

The news comes as big Japanese companies appear set to offer

hefty pay hikes at annual wage talks with unions, which Japan's

central bank has marked as a key factor in determining the

timing of its exit.

Negotiations will wrap up on March 13, ahead of the BOJ's

meeting on March 18-19.

Japan's economy avoided a technical recession, revised

government GDP data showed on Monday, a "positive sign" that

further supports an earlier exit, added Kadota.

Market expectations for an end to negative rates as soon as

March grew after BOJ chief Kazuo Ueda and one of its board

members said on Thursday the economy was moving towards its 2%

inflation target.

The two-year JGB yield was flat at 0.195%.

The 20-year JGB yield was last 1.530% after

climbing to around a one-month high of 1.535%.

The 30-year JGB yield rose to 1.825%, its

highest since Feb. 1, before easing to 1.815%.