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The cost of protection against a corporate default in Japan has dropped to the lowest level since 2008, with an 11 per cent plunge on Tuesday.

The move comes against a global backdrop of low – and falling – volatility.

The Markit Itraxx Japan index for credit default swaps fell on Monday to the lowest level since January 15, 2008, down 11.4 per cent to just 45.25 basis points – down 18 per cent so far this year.

The precise reason for the fall was not immediately clear.

Market volatility is down broadly in 2017, with the US Vix index – known as Wall Street’s fear gauge – falling 19.2 per cent this year.

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