NEW YORK (CNN/Money) - Bonds posted solid gains Tuesday as traders bought into a market that some believed was oversold in the last couple of days and money fled from stocks.

The benchmark 10-year note rose 15/32 of a point to 98-09/32 to yield 4.21 percent, down from 4.28 late Monday, while the 30-year bond gained 24/32 of a point to 112-01/32 to yield 4.57 percent, down from 4.62 on the session. Bond prices and yields move in opposite directions.

The five-year note added 9/32 of a point to yield 3.90 percent, and the two-year edged higher 5/32 of a point to yield 3.67 percent.

The gains came in spite of a $22 billion, three-year note auction in the afternoon.

The selloff over the last couple of days was sparked by a much stronger-than expected job report Friday, which stoked fears of inflation.

Inflation hurts bonds as it erodes the value of the fixed interest-paying investment.

It continued Monday, as the market prepared to absorb $51 billion in new government notes over the course of the week, the first auction being Tuesday.

But with investors fleeing the stock market on fears of major hedge fund losses, traders took the opportunity to bid up bonds and largely downplayed the importance of Friday's job report.

"There's lots of talk the jobs data overstated the strength of the labor market," one trader told Reuters.

The Treasury auction continues Wednesday, with $15 billion of five-year notes hitting the market followed by $14 billion of 10-year notes Thursday.

Bond and currency markets are also anticipating Wednesday's trade balance report for March. The ballooning trade gap has been a major factor behind the dollar's decline during the past few years, and Wednesday's release could put the spotlight back on structural problems in the world's largest economy.

In currency trading, the dollar gained against the yen and hit a three-week high against the euro early Monday.

The euro bought $1.2871, up from $1.2843 late Monday, while the dollar bought ¥105.59, down from ¥105.63 in the previous session.

"There's always the risk that a worse-than-expected number would lead to a selloff in the dollar," Tom Vosa, head of market economics at National Australia Bank, told Reuters.

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