NEW YORK (CNN/Money) - Treasury prices tumbled and the dollar soared Friday as an unexpectedly stronger payroll report raised the possibility that the Federal Reserve would lift interest rates by June.

Yields for the benchmark 10-year notes soared above 4.77 percent for the first time since July 2002, smashing a long-standing chart barrier in the process.

At around 3:55 p.m. ET, the 10-year note dropped 1-7/32 points to 94-2/32, raising yields to 4.77 percent from 4.60 percent late Thursday. The 30-year bond dived 1-10/32 points to 98-23/32 to yield 5.47 percent, up from 5.37 late Thursday.

The two-year note fell 14/32 of a point to 99-10/32 to yield 2.61 percent, and the five-year note lost 1 point to 96-25/32 to yield 3.94 percent. Prices and yields move in opposite directions.

Payrolls grew by 288,000 jobs in April, the Labor Department reported, well above the 173,000 economists had forecast, according to a survey by Reuters. The number even topped the highest forecast of about 250,000.

March's payroll gain was revised up to 337,000 from an initial 308,000, giving the economy an average monthly gain of 217,000 a month so far this year, even with weaker-than-expected growth in January and February. Analysts had looked for an increase of about 173,000 jobs for March.

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"We now expect the first hike to come in June," Jim O'Sullivan, senior economist at UBS, told Reuters. "And rates could well be up at 2.00 percent by the end of the year."

In the currency market, the dollar gained against the euro and the yen, with the euro buying $1.1893, down from about $1.2075 late Thursday, and the dollar surged to ¥112.23, from ¥109.78 late in the previous session.

Analysts see the payroll figures as an important component to the timing and pace of an interest rate hike, which would support the dollar by pushing up yields of U.S. assets and burnishing their allure to foreign investors.

Higher interest rates often attract investors with the lure of higher returns on some fixed-income securities, such as certificates of deposit.