Global markets showed modest gains on Tuesday, with investors cautious after a slump in cryptocurrencies and a sharp selloff in government bonds driven by expectations of an imminent interest rate hike in Japan.

S&P 500 futures were largely flat following declines on Wall Street overnight, while Japanese government bonds stabilised slightly after a strong auction, reversing some of the recent pressure on the country’s debt amid concerns over its fiscal outlook.

Ten-year Japanese government bond (JGB) yields touched a 17-year high of 1.88%, with 30-year yields reaching an all-time peak. Following the auction, the 10-year yield eased slightly to 1.865%.

Cryptocurrencies, often viewed as a barometer of market sentiment, recovered somewhat after Monday’s sharp losses. Bitcoin climbed 0.6% to $86,965.30, bouncing back from a 5.2% drop, though it remains roughly 30% below its October peak. Ether also rose 0.3% to $2,800.42.

In equities, MSCI’s broadest Asia-Pacific index outside Japan advanced 0.3%, while Tokyo’s Nikkei edged up 0.1% after a steep decline on Monday.

READ ALSO: Explainer: How New Tax Law Affects Nigerians Abroad, Stocks, Real Estate

South Korea’s Kospi led regional gains with a 1.6% increase, whereas China’s blue-chip CSI300 slipped 0.8%.

Read Also

Reuters reported that expectations for a Japanese rate hike surged Monday after Bank of Japan Governor Kazuo Ueda indicated that tightening monetary policy was possible.

In response, ten-year JGB yields rose six basis points, prompting a selloff in global bonds and pushing U.S. ten-year Treasury yields higher to 4.096%, though they later eased to 4.087% during Asian trading.

The yen strengthened, standing out among currencies over the past 24 hours at 155.64 per dollar, boosting the euro above $1.165 briefly and pressuring the dollar to $1.161 against the common currency.

Investors are awaiting eurozone inflation data later in the session, while some anticipate a prolonged decline in the dollar as the U.S. Federal Reserve prepares for potential faster and deeper rate cuts.

Data released Monday suggested manufacturing activity contracted for a ninth consecutive month in November, supporting expectations of a December rate reduction.

However, consumer spending showed resilience, with Americans spending $23.6 billion online at the start of the holiday season.

Commodities also saw movement, with gold holding above $4,200 an ounce and oil prices steady after recent drone attacks on Russian supply, with Brent crude futures at $63.17 per barrel.