Japanese stocks rallied and the dollar stood tall on Wednesday thanks to surprisingly robust U.S. economic growth, helping investors head into the Christmas holidays in a more relaxed mood after the global markets turbulence of the past two weeks.
Risk appetite got a helping hand from revised data showing the U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear.
The news drove both the Dow and the S&P 500 to record closing highs overnight while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3 percent and South Korea's Kospi was up 0.4 percent. Tokyo's Nikkei rallied 1.1 percent.
“America's strong economy is pushing the dollar up and the yen down, and that's a big plus for Japanese exporters related to the U.S.,” said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.
The strong U.S. GDP prompted markets to bring forward the timing of a likely hike in interest rates by the federal reserve, which last week gave an upbeat assessment of the world's biggest economy.
The Russian ruble, which had plunged to an all-time low in mid-December on the back of lower oil prices and Western sanctions, has since pulled back a little, shored up by informal capital control measures designed to head off a repeat of the inflation and protests that marked Russia's 1998 financial crisis.
U.S. crude oil dipped 31 cents to $56.81 a barrel after gaining $1.86 overnight on the U.S. growth figures and Gold traded close to a three-week low as the improved sentiment dampened investor appetite for the safe-haven metal.
