"That is coupled with the a plunge in (Hungarian) interest rate swaps at the end of last year," one Budapest-based fixed income trader said.
"That has made asset swap packages, that is government bond buying hedged through interest rate swaps, very attractive," the trader added.
Demand soared for long-term bonds. Together with a top-up auction, the government sold 108.5 billion forints ($384.6 million) worth of 3-, 5-, and 10-year papers, above its 70 billion forint offer which was already high relative to the past months' auctions.
Bids for the 10-year bond totalled 127.7 billion forints, the highest since 2008.
The paper was sold at an average 2.76 percent, its lowest yield in eight months, down 10 basis points from Wednesday and by half a percentage point since the middle of December.
Long-term bond yields in the United States, Germany and the biggest Central European economy, Poland, have also declined in the past weeks.
That trend got support on Wednesday from weak manufacturing data released in the biggest emerging economy, China, and also in Poland and the Czech Republic.
Poland's 10-year bond yield, however, took a breather on Thursday after the past weeks' sharp decline, just like its German peer, and rose one basis point to 2.77 percent.
"The rise in (Polish bond) yields could have something to do with the rising oil prices in the past two days, which translates into moves on core markets and Polish bonds," said Rafal Benecki, chief economist of ING in Poland.
The corresponding Czech yield, meanwhile, continued to fall, and set a one-year low at 1.66 percent.
Global growth worries, also fuelled by a revenue warning from Apple have weighed on Central European currencies in the first days of the year and caused jitters in the region's stock markets as holidays kept turnover thin.
On Thursday, regional markets were mixed.
The zloty eased 0.1 percent versus the euro, but trading at 4.2979 at 1446 GMT it rebounded from early lows on the weaker side of the 4.3 line.
The Czech crown, meanwhile, firmed a quarter of a percent to 25.706.
Warsaw's bluechip equity index fell 2.1 percent, piercing its 90-day moving average.