(MENAFN) Tokyo's financial markets finished Tuesday's session virtually unchanged as investors grappling with potential monetary policy shifts found themselves caught between opportunistic buying and mounting anxiety over borrowing cost increases following hints that the Bank of Japan (BOJ) could raise interest rates within weeks.

The benchmark Nikkei Stock Average inched up a marginal 0.17 points to settle at 49,303.45, while the broader Topix gauge climbed 2.73 points—a 0.08 percent gain—to close at 3,341.06.

Banking and nonferrous metal stocks led advances on the Prime Market's top tier, though mining and utility sector shares dragged on performance.

A critical development emerged when yields on Japan's 10-year government bonds surged momentarily to 1.88 percent—marking the highest point since June 2008—after BOJ Governor Kazuo Ueda indicated Monday that policymakers might implement a rate increase at their forthcoming meeting.

Currency markets saw the U.S. dollar hovering predominantly in the upper 155 yen zone throughout Tokyo trading hours, with market participants offloading yen positions to rebalance portfolios following Monday's currency strength, according to dealers.

Equities maintained positive momentum after Monday's dramatic session that saw the Nikkei plummet nearly 1,000 points, pressured by yen appreciation and climbing long-term yields.

Financial sector stocks attracted buyers on expectations that elevated long-term rates would boost profitability, though sustained yield increases dampened broader market enthusiasm, brokerage sources noted.

Upside potential remained constrained by Wall Street's overnight declines, where disappointing U.S. manufacturing figures for November soured investor appetite.

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