US companies added 263,000 workers in March, suggesting further tightening of the labor market, payrolls processor ADP said. The figure was the most since December 2014 and far exceeded expectations of economists polled by Reuters for a gain of just 187,000.

The data came ahead of the US Labor Department's monthly non-farm payrolls report Friday, which includes both public and private-sector employment. Economists polled by Reuters expect the report to show US employers added 180,000 jobs in March.

Analysts said traders probably viewed the ADP data as a sign of a strong US jobs report.

That would "make an even better case for the Fed to continue its tightening and maybe increase the probability that they could move three more times this year," said David Coard, head of fixed income sales and trading at Williams Capital Group in New York.

The minutes of the central bank's March meeting are due at 2:00 p.m. EDT (1800 GMT).

Benchmark 10-year Treasury yields hit a session high of 2.382 percent in the wake of the ADP data from 2.350 percent late on Tuesday and a more than five-week low of 2.314 percent touched earlier that day.

Yields stabilized to trade only slightly higher on the day, however, after the Institute for Supply Management said its index of non-manufacturing activity fell to 55.2 in March from 57.6 in February. The latest reading was below expectations of 57.0 from a Reuters poll of 64 economists.

US 10-year Treasury notes were last down 3/32 in price to yield 2.362 percent. The two-year was roughly flat in price to yield 1.254 percent, while 30-year yields were last at about 3 percent from 2.992 percent late on Tuesday.