NEW YORK (CNNMoney.com) - Bond prices fell for the third straight session Friday, lifting the yield on the benchmark 10-year note to its highest level in a year as traders faced the prospect of higher global interest rates.

The dollar rose against the yen.

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The benchmark 10-year Treasury note fell 13/32 to 98-16/32, pushing its yield to 4.69 percent -- its highest level since March 23 last year -- and up from 4.63 percent late Thursday.

The 30-year bond tumbled 25/32 to 97-12/32, yielding 4.66 percent, up from 4.61 the previous session. Bond prices and yields move in opposite directions.

The five-year note declined 6/32 to yield 4.72 percent, and the two-year note edged lower two ticks, yielding 4.75 percent.

Concerns that economic strength abroad could spill over and spur inflation in the U.S. pressured Treasuries. The prospect of rising rates in Europe and Japan also triggered concerns that foreign investors will diversify from U.S. Treasuries and start investing elsewhere.

The European Central Bank raised its short-term interest rate Thursday to 2.5 percent, the highest level in three years, sinking Treasuries.

Meanwhile in Japan, a robust price report led many to believe the Bank of Japan would end its ultra-easy monetary policy and raise rates from near zero as early as next week.

An upbeat reading on the services sector, which accounts for about 80 percent of U.S. economic activity, also supported the decline in bonds.

The Institute for Supply Management said the pace of growth in the services sector rose in February, bringing the ISM services index to 60.1. That topped estimates for a rise to 58.

In other economic news, the University of Michigan said its reading on consumer sentiment fell to its lowest level in three months in February, revised down to 86.7 from the 87.4 it previously reported. (Full story)

In currency trading, the euro bought $1.2039, relatively unchanged from late Thursday, while the dollar bought ¥116.39, up from ¥115.88 the previous session.

-- from staff and wire reports

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