The greenback rose as high as 115.815 yen for the first time since Jan. 11, 2017, as long-term Treasury yields leapt 12.5 basis points overnight to touch 1.6420% for the first time since Nov. 24.
Money markets have fully priced in a first U.S. rate increase by May, and two more by the end of 2022.
The dollar index, which measures the currency against the yen and five other major peers, held close to the one-week high of 96.328 reached on Monday.
"The market is pricing in a more aggressive U.S. rate hike scenario - or at least the risk thereof - in 2022, and that definitely remains the key support for the dollar," said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.
"The key question for this year is where does inflation go, where does it peak?"
The euro traded at $1.1302, lifting off the one-week low of $1.12795 from overnight.
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