The dollar rally and bond market selloff since the Nov. 8 U.S. election have also been stoked by bets that U.S. President-elect Donald Trump's administration would cut taxes and increase fiscal spending, which would result in higher U.S. growth and inflation.
"The dollar and bonds have been trading in lockstep," said
Ellis Phifer, senior market strategist at Raymond James in Memphis, Tennessee. "There are still concerns spending will increase and more debt supply will be on its way."
The dollar index, a gauge of the greenback's value against a basket of currencies, was up 0.15 percent at 103.29 after hitting 103.65, its highest since December 2002.
The benchmark 10-year Treasury yield was up more than 4 basis points at 2.583 percent.
The dollar rebounded against the yen after the Bank of Japan left monetary policy unchanged as expected, supporting the view that it is the major central bank furthest away from normalizing its monetary policy.