Last year Germany's highest court for civil disputes ruled Volkswagen had to pay compensation to owners of vehicles with rigged diesel engines in Germany.
Other European government bond yields were also lower, but the drop was more moderate, with peripheral countries roughly in line with the core, tracking U.S. Treasuries.
The pan-European STOXX 600 index advanced 0.5pc to near February 2020 highs, while London's blue-chip FTSE 100 gained 0.2pc and Germany's DAX index was up 0.6pc.
The National Bank of Hungary (NBH) has said it would hold foreign currency swap tenders at the end of each quarter if needed to reduce market volatility.
By providing euros via fx swaps, the NBH can ease selling pressure on the forint on the spot market.
Brussels says "security cooperation can be suspended in case of violations by the UK of its commitment for continued adherence to the European Convention of Human Rights".