NEW YORK (CNN/Money) - Bond prices rebounded late Friday after a volatile trading day driven by a batch of surprising economic reports.

The dollar rallied against the euro and yen.

The benchmark 10-year note rose 8/32 of a point to 96-13/32, yielding 4.45 percent, down from 4.48 late Thursday. Prices had rallied even further, with yields dipping briefly below 4.40, after a surprisingly weak March job report.

The 30-year bond gained 17/32 of a point to 109-22/32, to yield 4.72 percent, down from 4.76 late Thursday. Bond prices and yields move in opposite directions.

In shorter-dated debt, the five-year note rose 5/32 of a point to yield 4.13 percent, while the two-year edged up two ticks, yielding 3.74 percent.

In another key economic report, the Institute of Supply Management's survey of purchasing managers dipped to 55.2 in March from 55.3 in February. But prices paid climbed to 73.0 from 65.5, upsetting bondholders who have become increasingly sensitive to any hint that inflation might be building.

Traders noted the ISM released its non-manufacturing report by mistake and the headline figure of 63.1 was initially taken by the market to be the manufacturing report, triggering a wave of selling.

That wiped out an earlier rally after the small rise in U.S. payrolls in March temporarily eased fears the Federal Reserve might have to hike interest rates faster and farther than many had thought.

The Labor Department reported a net gain of 110,000 jobs in March, after a revised 243,000 gain in February. That was only half of the hiring forecast by economists surveyed by Briefing.com, who had predicted a 220,000 job gain.

The unemployment rate fell to 5.2 percent compared with 5.4 in February.

The report gave the market reason to believe there is less risk that the Federal Reserve will hike interest rates more aggressively to combat inflation.

The market has already priced in a quarter point interest rate rise at the central bank's next policy meeting, and had feared a half point rate hike if inflation was seen increasing at a rapid clip.

The disappointing March payroll report was reinforced by Thursday's higher-than-expected first-time jobless claims, which rose to 350,000 in the week ended March 26. That was up from a revised 330,000 in the previous week, the Labor Department said. Wall Street economists had forecast a drop to 320,000.

The dollar strengthened after business surveys reflecting steady growth outweighed the surprisingly weak employment report and signaled continued interest rate hikes by the Federal Reserve.

The dollar bought ¥107.61, up from ¥107.11 late Thursday, while the euro bought $1.2905, down from $1.2967.

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