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Strong demand for Japanese government bonds helped to steady Asian markets on Tuesday, a day after hawkish comments from the central bank governor sparked a global sell-off.
The yen steadied and equity markets were flat, with investors reassured by demand at an auction of Japanese government bonds. The benchmark Nikkei 225 and the broader Topix both closed up 0.1 per cent, while the yen weakened 0.1 per cent against the dollar.
The auction of 10-year Japanese bonds came a day after comments from Bank of Japan governor Kazuo Ueda suggested to investors that the central bank was ready to raise interest rates this month for the first time in almost a year.
Ueda’s comments on Monday pushed yields on Japanese government debt to 17-year highs — yields move inversely to prices — and triggered declines in other bond markets around the world. Higher yields on safer assets contributed to a fall of more than 5 per cent in the price of bitcoin.
Elsewhere in Asia the Hang Seng was flat while China’s CSI 300 index rose 0.5 per cent. Korea’s Kospi index rose 1.7 per cent.