Bond yields and dollar rise on strong job data

U.S. Treasury bond yields shot up in holiday-shortened trading Friday after the unemployment rate fell to a five-month low, signaling that the economy could be stronger than expected.

The yield on the benchmark 10-year Treasury note surged to 4.75% -- its highest level since mid-February -- from 4.68% on Thursday. The bond market closed at 11 a.m. Eastern time for Good Friday; the stock market and many other U.S. financial markets were closed all day.

Around the world, most stock markets also were closed for Good Friday or local holidays. Exceptions included Tokyo, where stocks edged lower, and the sometimes volatile Shanghai market, which rose 0.1% to its fifth-straight record close.

It was a nearly 9% drop in Shanghai on Feb. 27 that helped touch off a global sell-off. Major U.S. stock indexes lost more than 3% that day, though they have recently rebounded.

The Labor Department’s report showing the unemployment rate falling to 4.4% in March, instead of rising to 4.6% as expected, sent the dollar higher on the perception that the U.S. economy was perhaps more robust than investors had thought for much of this year.

The greenback rose to 119.31 yen from 118.68 yen Thursday while the euro slipped to $1.3372 from $1.3427.

“Clearly versus the consensus number this was a surprise, particularly for those in the camp that the economy is falling off the face of the earth,” said Robert F. Auwaerter, head of fixed-income portfolio management at Vanguard Group.