Investors have also remained anxious ahead of Trump`s inauguration on Friday, with many using it as an excuse to take some money off the table.
Yellen said in a speech to the Commonwealth Club of California in San Francisco on Wednesday that holding off too long to begin raising rates could "risk a nasty surprise down the road," and that it "makes sense" for the Fed to gradually lift rates.
MSCI`s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched 0.1 percent lower in early trade.
On Wall Street, stronger financial shares helped push up the S&P 500 .SPX, though the Dow Jones Industrial Average .DJI edged down.
Japan`s Nikkei stock index .N225 was up 1 percent, lifted by the weaker yen`s tailwind.
"The dollar clearly rose on Yellen`s remarks," said Mitsuo Imaizumi, chief currency strategist at Daiwa Securities in Tokyo. "But with tomorrow`s inauguration of Trump ahead, Japanese investors still might take a cautious stance today."
While market participants expect the incoming U.S. administration to embark on stimulus policies that would lift growth and inflation and keep the Fed on course for rate hikes, many investors are also concerned about the potential fallout of Trump`s protectionist stance.
The dollar index .DXY, which tracks the greenback against a basket of six major counterparts, rose 0.4 percent to 101.31.
The dollar was firm against the yen at 114.66 JPY=, moving well above from the previous session`s low of 112.57 yen.
The euro was also steady on the day at $1.0632 EUR= ahead of the European Central Bank`s regular policy meeting later in the session, after the ECB surprised markets last month by saying it would trim its monthly bond purchases in April.
None of the economists polled by Reuters last week expected any change at Thursday`s meeting. They were unanimous in saying that the ECB`s next move, after April`s planned cut, would be to further taper its quantitative easing.
Crude oil prices took back ground lost in the previous session when the dollar strengthened. A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies.
U.S. crude CLc1 added 0.7 percent to $51.46 per barrel, after shedding 2.67 percent on Wednesday.
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