The Nikkei 225 in Tokyo has retreated as Japanese government bonds soar, sending ten-year yields to a nine-year nadir.
This is amid mounting speculation the Bank of Japan will increase its debt purchases to support the ailing economy.
Shinzo Abe – the current leader of the opposition who is tipped to come out on top in the general election next month – and incumbent prime minister Yoshihiko Noda are set to debate policies tomorrow.
Japan's gross domestic product is likely to shrink by 0.4 per cent in the three months ending December 31st, after the nation posted a 3.5 per cent decline in the third quarter, an estimate from economists polled by Bloomberg revealed.
Mr Abe is in favour of unlimited easing, setting an inflation target of two per cent and adopting negative interest rates.
At 10:40 GMT, the Nikkei 225 in Tokyo retreated by 1.2 per cent to an index value of 9308.3.
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