JAKARTA- Indonesia raised 24.23 trillion rupiah ($1.66 billion) at a bi-weekly bonds auction on Tuesday which was below target, but demand for the notes have improved, the Finance Ministry said in a statement.

The weighted average yields of the bonds sold were below comparable bonds in the previous auction, with total incoming bids also rising, marking the first increase since early February.

Total bids amounted to 42.97 trillion rupiah.

The government of Southeast Asia's largest economy has been struggling to sell bonds in recent weeks amid investor risk-off sentiment due to rising U.S. Treasury yields. 

"Financial market conditions have begun to improve, marked by the stability of the 10-year U.S. Treasury (yield) at below 1.7%," the finance ministry.

Foreign participation in the auction also increased compared with the March 30 sale, representing 11.1% of total bids, the ministry said, without providing a comparison.

The ministry will hold a greenshoe option auction on Wednesday, aiming to raise 5.77 trillion rupiah.

($1 = 14,600.0000 rupiah)

(Reporting by Tabita Diela and Fransiska Nangoy; Editing by Ed Davies and Mike Harrison) ((tabita.diela@thomsonreuters.com; +628111135032;))