At 0830 AEDT on the ASX 24, the March three-year bond futures contract was trading at 95.080 (implying a yield of 4.120 per cent), up from Monday's close of 95.045 (4.955 per cent.
The March 10-year bond futures contract price was 94.580 (5.420 per cent), up from Monday's close of 94.560 (5.440 per cent).
UBS interest rate strategist Matthew Johnson said markets were driven by fears over the meltdown status of Japanese nuclear power plants in the wake of Friday's earthquake and tsunami that left at least 10,000 dead.
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"It was a bit squeezy overnight," Mr Johnson said.
"Equity markets have been spooked by the concerns over whether there's a nuclear problem in Japan.
"That's lead to a move to safety."
A new explosion at a stricken nuclear power plant hit Japan overnight, as it worked to avert a reactor meltdown following the disaster.
Panic selling saw stocks close more than six per cent lower on the Tokyo bourse. Power shortages prompted rolling blackouts and factory shutdowns in quake-hit areas.
During the domestic session on Tuesday, the Reserve Bank of Australia (RBA) is to release the minutes of its March 1 board meeting, at which it left the cash rate unchanged at 4.75 per cent.
Mr Johnson said he expected the minutes to be supportive of bonds in the current environment.
