The dollar rose against a swath of currencies on Friday, rocketing to 4 1/2-year high against Japan's yen as data showing a robust rebound in U.S. consumer sentiment prompted investors to pile on bullish bets.
Debate over whether the Federal Reserve would wind down its asset-buying program later this year gathered pace, helping push the dollar upward against a basket of currencies to a near three-year peak.
(Read More: Fed 'Tapering' Talk Getting Louder)
The greenback broke through the 103-yen mark after a report showed U.S. consumer sentiment in early May rose to the highest in nearly six years as Americans felt more confident about their financial and economic prospects.
(Read More: US Consumer Sentiment Surges; Leading Indicators Rise)
The dollar was also buoyed by a rise in U.S. Treasury yields, which move inversely to price, although yields were range-bound.
"The consumer sentiment report fed into the story of the U.S. (economy) outperforming other countries," said Sebastien Galy, FX strategist at Société Générale in New York.