NEW YORK (CNNMoney.com) - Bond prices fell Thursday, lifting corresponding yields, after a report underscoring a healthy labor market sparked inflation fears.

The dollar weakened versus the euro and lost nearly one percent against the yen on fresh hints from Japan's central bank that it will eventually shift away from its ultra-easy monetary policy and raise its key short-term interest rate.

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The benchmark 10-year note lost 8/32 to 99-17/32, yielding 4.55 percent, up from 4.52 percent late Wednesday. The 30-year bond fell 13/32 to 99-29/32, yielding 4.50 percent, up from 4.48 percent in the previous session. Bond prices and yields move in opposite directions.

The five-year note declined 7/32 to 4.61 percent after an auction of five-year notes garnered surprisingly weak demand.

The two-year note edged down two ticks to yield 4.71 percent.

The government said the number of Americans filing for jobless claims in the latest week fell unexpectedly to 278,000. (Full story.)

The number of new claims remained under 300,000 for the sixth straight week, the longest stretch in more than five years.

The weekly report is the latest sign of a robust labor market, which some economists fear could put upward pressure on wages and prices.

In currency trading, the dollar fell versus the yen after Bank of Japan Governor Toshihiko Fukui suggested the central bank's five-year-old policy of flooding the financial system with money would end soon.

The dollar bought ¥117.12, down from ¥118.44 in the previous session. The euro gained against the dollar, buying $1.1919, up slightly from $1.1911 late Wednesday.

-- from staff and wire reports

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