NEW YORK (CNN/Money) - U.S. Treasurys were firmer Monday, reversing some of last week's steep losses, as stock market declines, weak economic data and fears of new terrorism threats kept interest for safe-haven government securities solid.

The dollar slid to a new low for the year against the yen as worries persisted over the pace of the U.S. economic recovery.

"There are still concerns over the longer-term investment picture in the United States," said Shahab Jalinoos, currency strategist at UBS Warburg. "Markets are downgrading their view on how much the U.S. economy is likely to outperform its peers and this makes other asset blocks look more attractive."

Around 3:40 p.m. ET, two-year bills rose 5/32 of a point at 100-4/32, yielding 3.29 percent. Five-year notes were 10/32 of a point higher at 99-10/32, yielding 4.52 percent.

The benchmark 10-year notes rose 16/32 of a point at 97-19/32, yielding 5.19 percent, while 30-year bonds rose 24/32 of a point to 95-14/32 to yield 5.69 percent.

Traders said a warning from Vice President Dick Cheney that new attacks on the United States were "almost certain" sent a flight-to-quality bid to Treasurys. Suicide bombings in Israel also renewed worries about heightened turmoil in the Middle East, helping to support Treasury prices.

Stocks retreated Monday after the Nasdaq Composite index rose every day last week and the Standard & Poor's 500 index and the Dow Jones industrial average climbed four out of five sessions last week.

"Stocks got a little frothy last week, and they're giving back a little bit. (Treasurys) got a little short-term oversold, and then with Cheney's comments over the weekend and another warning that there could be a (terrorist) threat, we've got a little bounce here," said John Kadich, market analyst at Gelber Group.

Short-term Treasurys also gained after the Conference Board said its index of leading indicators posted its first decline since last September, falling 0.4 percent to 111.7, more than economists' forecasts of a 0.2 percent decline.

Conference Board economist Ken Goldstein said the drop in the leading indicators suggested that "the recovery is developing quite slowly."

Last week, twin reports showing a larger-than-expected surge in retail sales and a pop in consumer sentiment to a 1-1/2 year high brought the Treasury market to its knees, and sent shorter-dated yields to one month-highs.

"If we see stocks weak or if there's more news about terrorists, we could see Treasurys right back on their highs," Kadich said. "There's potential to catch a lot of (shorts) off guard if we get through 101-3/32 to 101-4/32 in June bonds."

Kadich said chart patterns for the June 10-year note would remain positive until the contract breached support at 104-12/32 and 104-7/32.

In the currency market, renewed weakness in the dollar worked against Treasury prices.

The U.S. currency slid to new lows for the year against the euro, Swiss franc and yen on Monday as worries persisted over the outlook for the U.S. economy and asset prices. But the dollar later clawed back some lost ground.

The dollar touched a five-month low against the yen despite a top Japanese finance official's warning against excessive yen strength. Tokyo stocks edged higher.

Haruhiko Kuroda, Japan's vice minister of finance for international affairs, warned steps might be taken to combat excessive strength of the yen.

"We are ready to take the proper measures, if necessary," Kuroda said. Kuroda also said the recent yen surge does not reflect Japan's economic fundamentals.

Japan, fighting an economic slump, prefers a weaker yen as it makes the country's products cheaper and thus more competitive in overseas markets.

Also, dealers said the dollar's inability to draw any advantage from Friday's upbeat U.S. economic data had only added to its bearish tone, with thin trading conditions making for choppy moves.

"The market is still anti-dollar at the moment, carrying over Friday's sentiment," said Lee Ferridge, head of global currency strategy at Rabobank.

Around 3:40 p.m. ET, the dollar bought ¥125.39, down from ¥126.03 last week.

The euro was quoted at 92.22 U.S. cents, up from 92.04 cents last week.  

-- from staff and wire reports