The US dollar fell as investors feared the Fed would raise interest rates on Friday to keep inflation on track and push up house prices.
The dollar index was down 0.3 per cent at 93.60 yen, its lowest since March 1.
US Treasury yields rose to 1.89 per cent and the 10-year Treasury note was unchanged at 1.8 per cent.
US bond yields rose by more than 2 per cent to 2.07 per cent, with yields on 10- and 30-year bonds rising by more on both sides.
US stocks were among the best performers on Wall Street.
The Dow Jones Industrial Average was up 22.69 points, or 0.5 per cent for the day, to 21,933.04.
The Nasdaq Composite gained 18.53 points, to 7,566.03.
The S&P 500 gained 2.51 points, 0.7 per cent; the Nasdaq composite gained 3.51, 0