The dollar on Friday stood near a 14-year peak, bond yields were highly elevated and Asian stocks struggled for traction as global markets continued adjusting to the idea of higher US interest rates.

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In a move that reverberated across the financial markets, the US Fed on Wednesday raised rates for the first time in a year and hinted at three hikes to follow in 2017, up from the two projected in September.

The dollar index topped the 103.00 threshold for the first time since December 2002 overnight and last stood at 103.11.

The euro was steady at $1.0410 after hitting $1.0366 overnight, its lowest since January 2003. The dollar was little changed at 118.065 yen after surging to a 10-month high of 118.660 the previous day.

The greenback was lifted as the notion of the Fed tightening monetary policy next year more quickly than first thought took the benchmark US Treasury 10-year yield to highs not seen in two years.

"World markets continue to adjust to an outlook for higher US interest rates and increased inflation risk boosted by major US tax cuts," wrote Ric Spooner, chief market analyst at CMC Markets.

Tracking the rise in the US 10-year note`s yield, Japan`s 10-year government bond yield rose to an 11-month peak of 0.10% . That gain is expected to test the Bank of Japan`s (BOJ) resolve to keep the yield around zero percent. 

ALSO READ: US Federal Reserve raises key interest rate, sees three hikes in 2017

Asian stocks were mixed, reflecting the differing fortunes for developed and emerging market economies faced with higher US interest rates.

"Emerging market countries have been hit the hardest by capital leaving in search of higher yields and return along with the growing cost of paying back dollar denominated debt," wrote Kathy Lien, managing director of FX strategy at BK Asset Management.

Japan`s Nikkei climbed to a one-year high on a weaker yen and gains on Wall Street overnight. US shares rose on Thursday, brushing off the initial shock of a more hawkish Fed, led by shares of banks seen as the benefactors of higher rates.

European stocks also rose, gaining 1% on Thursday as bank stocks increased.

MSCI`s broadest index of Asia-Pacific shares outside Japan dipped a fraction after falling 1.8% on Thursday. The broader emerging market stock index was down 1.6%. 

Australian stocks shed 0.1%, while South Korea`s Kospi also lost 0.1%.

In commodities, crude oil prices nudged higher. Negative pressures from a bullish dollar were offset after OPEC members told customers they would cut crude supplies. 

US crude was up 0.4% at $51.11 a barrel .