Borrowing costs for the Eurozone countries hit by the crisis fell on Tuesday, January 7 after high investors' demand of Irish government bonds enabled Dublin to increase its funding target to nearly half of 2014. Government debt yields suffered a sharp decline in Spain, Portugal, Greece and Ireland after investors ordered €14 billion of 10-year Irish bonds. Financial Times report said Ireland's bond issue was the country's first since it emerged from its international bailout program in December. Ireland was able to raise €3.75 billion from the bond offer.

FT also reported that the robust demand for Eurozone "periphery" debt was a reflection of rising investors' appetite for government bonds with higher yields and increasing confidence that the economies in the Eurozone have become creditworthy. It also substantially improved the chances of Portugal following the lead of Ireland and getting out of its bailout later this year. The same can be said of Greece's ability to tap the global debt markets.

Although the borrowing costs in the US have gone up in the past few weeks after the US Federal Reserve unveiled its plans to reduce its bond buying program, Eurozone "periphery" bond yields have gone down.

Charlie Berman, the Chairman of Barclays Debt Capital Markets Operations, told FT, "The 'rising angels' of the eurozone periphery are attracting lots of demand." Citigroup Head of Sovereign Capital Philip Brown also said the order book of Ireland was comprised by well-known real money investors in northern Europe.

The decline in yields came as speculations rose of further action to be taken to head off deflation risk by the European Central Bank. The report said the inflation rate in the Eurozone dropped to 0.8% last month which is way under the annual rate set by the ECB of below but close to 2%.