Portuguese government bond yields dropped the most in eight weeks as the securities climbed with those across the euro area after Mario Draghi said the European Central Bank raised the cap on the proportion of bonds it’s able to purchase under its stimulus program.

German 10-year bunds, Europe’s benchmark sovereign securities, climbed for a third day. Italian bonds advanced the most since July as ECB President Draghi said the central bank set a purchase limit of 33 percent of a country’s debt stock, up from 25 percent previously. He spoke in Frankfurt after officials kept interest rates at record lows Thursday.

“The increase in the 25 percent ceiling to 33 percent should be taken very positively for bunds,” said Richard McGuire, head of European rates strategy at Rabobank International in London. “With most commentators expecting Mr Draghi to simply jawbone today, this adjustment to the mechanics of QE should also bolster sentiment more broadly with peripherals likely to also be supported as a result.”

Germany’s 10-year bund yield dropped five basis points, or 0.05 percentage point, to 0.73 percent as of 4:19 p.m. London time, having declined two basis points over the previous two days. The 1 percent security due in August 2025 rose 0.47, or 4.70 euros per 1,000-euro ($1,110) face amount, to 102.55.

Portugal’s 10-year yields tumbled 11 basis points to 2.57 percent, the steepest decline since July 8. Those on similar-maturity Italian debt fell six basis points to 1.92 percent, the biggest drop since July 30. Spain’s slid three basis points to 2.10 percent.

ECB Stimulus

The ECB began a program of asset purchases in March that initially sent euro-region bond yields to record lows. Policy makers have pledged to buy 60 billion euros of securities a month until at least September 2016 to boost the economy. The central bank bought 61.3 billion euros of public and private debt in July. Purchases have exceeded the ECB’s monthly goal since May.

Lower bond yields are a boon for the ECB because its objective of stronger inflation and growth requires lower borrowing costs to encourage consumers and companies to spend.

The stimulus measures are aimed at helping push up the inflation rate, which was at an annualized 0.2 percent in August, to the its goal of just below 2 percent. ECB Vice President Vitor Constancio said last weekend that lower oil prices are “complicating the task” of getting inflation near to that level.

Inflation Forecasts

The ECB cut its outlook for inflation and growth through 2017 on Thursday. Officials see consumer prices barely growing this year with an increase averaging 0.1 percent. Inflation will then accelerate to 1.1 percent in 2016 and 1.7 percent the next year, Draghi said.

The five-year, five-year forward inflation swap rate, a gauge of price-growth expectations in the five years starting 2020, fell three basis points to 1.70 percent. It touched a 2015 high of 1.86 percent just two months ago, based on closing levels. Inflation erodes the fixed-income payments on bonds.

“Draghi’s comment is dovish, making more room for a potentially longer program,” said Vincent Chaigneau, head of rates and foreign exchange strategy at Societe Generale SA in London. “He did stress it is premature to say whether recent events will have lasting effects though. He is making room but not expanding QE just yet.”

— With assistance by Anchalee Worrachate