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* U.S. nonfarm payrolls rose by 192,000 in March
* U.S. unemployment rate unchanged at 6.7 pct
* Medium-term Treasuries yields see biggest dip
By Sam Forgione
NEW YORK, April 4 (Reuters) - U.S. Treasuries yields dipped Friday after an employment report for March came in slightly lower than economists expected, leading medium-term yields to fall the most as fears eased of an early hike in interest rates by the Federal Reserve.
Nonfarm payrolls increased by 192,000 new jobs last month after rising 197,000 in February, the Labor Department said. The unemployment rate was unchanged at 6.7 percent. Economists had expected employment to increase 200,000 last month and the unemployment rate to fall one-tenth of a percentage point.
"It's a solid, on-trend number that was perhaps a little less on the headline than traders' expectations, so we're seeing a little bit of a bond market rally," said John Briggs, U.S. rates strategist at RBS in Stamford, Connecticut.
Short- and medium-term Treasuries yields had surged after Fed Chair Janet Yellen suggested on March 19 that the central bank could raise interest rates earlier than expected. Yellen's remarks turned more dovish in a speech on March 31, when she defended the Fed's supportive measures.
"This number doesn't give any reason to move up the Fed timing of rate hikes, which is what was feared most," said Briggs of RBS.
Short- and medium-dated Treasuries notes are viewed as most vulnerable to a hike in overnight interest rates, which are currently near zero.
While the data eased fears of an imminent Fed rate hike, it should allow the central bank to continue scaling back its monthly bond-buying stimulus, traders said. Yellen has argued that the Fed needs to maintain a highly accommodative monetary policy for some time to eliminate slack in the labor market.
The employment report offered further evidence of resilience in the U.S. economy after a brutally cold winter hurt economic data at the start of the year.
"The economy was performing about as well as it could have given those adverse effects," said Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management in Kansas City, Missouri.
The 7-year U.S. Treasury note rose 10/32 in price to yield 2.33 percent, compared to a yield of 2.38 percent late Thursday. The 5-year Treasury note rose 8/32 in price to yield 1.73 percent, compared to a yield of 1.79 percent late Thursday.
The benchmark 10-year U.S. Treasury note rose 9/32 in price to yield 2.76 percent, compared to a yield of 2.79 percent late Thursday. The 30-year Treasury bond rose 9/32 in price to yield 3.61 percent, compared to a yield of 3.63 percent late Thursday.
On Wall Street, U.S. stocks opened higher, putting both the Dow Jones industrial average and the Standard & Poor's 500 at record levels.
Editing by Bernadette Baum