* Nonfarm payrolls report shows bigger-than-expected job increase

* BOJ's special JGB purchase operations pressure yen

* Dollar-long positions pared ahead of jobs data-IMM

TOKYO, July 10 (Reuters) - The dollar was on solid footing in early Asian trading on Monday, after a bigger-than-expected increase in U.S. jobs suggested the Federal Reserve would stick with its tightening plans for the rest of this year.

U.S. job growth surged more than expected in June and employers increased hours for workers, suggesting the Fed could stick to its plan for its third interest rate hike this year and begin to reduce its balance sheet despite sluggish wage gains and tepid inflation.

Against the yen, the dollar was 0.1 percent higher at 113.98 , after notching a high of 114.18 in the wake of the jobs report, its loftiest level since May 11.

The dollar index, which gauges the greenback against a currency basket, was steady at 96.018.

"The solid jobs report gives us more reason to expect the Fed to announce that it's prepared to start trimming its balance sheet," said Mitsuo Imaizumi, Tokyo-based chief foreign exchange strategist for Daiwa Securities.

"By contrast, the Bank of Japan is nowhere near a policy exit, and it's taking steps that weaken the yen," he said.

On Friday, the BOJ sought to keep Japanese government bond yields near its policy target, embarking on a special market operation as well as increasing the size of its regular JGB purchase operations.

Recent positioning data showed that some investors pared their long dollar positions ahead of the jobs report, amid concerns that a spate of lacklustre data would prompt the Fed to alter its hawkish plans.

Speculators this week slashed net long bets on the U.S. dollar to their lowest since mid-May 2016 in the week ended July 4, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The value of the dollar's net long position dropped to $135 million, from net longs of $4.5 billion the previous week. The latest week marked the first time since mid-April 2016 that net long dollar positioning fell to under $1 billion.

Higher U.S. Treasury yields underpinned the dollar. The benchmark 10-year U.S. yield stood at 2.389 percent in Asian trading, not far from its U.S. close of 2.393 percent on Friday, when it touched a more than eight-week high of 2.398 percent after the jobs report.

The euro edged down 0.1 percent to $1.1400 but gained against its Japanese counterpart. The euro was 0.1 percent higher at 129.99 yen, after rising as high as 130.125 yen on Friday, its highest since February 2016. (Editing by Shri Navaratnam)