By Shinichi Saoshiro
TOKYO (Reuters) - 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.
That drove both the Dow <.DJI> and the S&P 500 <.SPX> to record closing highs overnight.
Tokyo's Nikkei <.N225> followed suit, rising 1 percent and South Korea's Kospi <.KS200> was up 0.2 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was steady.
The strong U.S. GDP prompted markets to bring forward the timing of a likely hike in interest rates by the Federal Reserve, pushing Treasury yields up and giving an already strong dollar fresh momentum.
The two-year U.S. Treasury yield
The greenback fetched 120.650 yen
"Risk appetite is returning at a faster pace than expected, thanks to the temporary pull back in Russia risk and a well balanced statement from the Fed last week," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.
However, given holiday-thin trading conditions and continued instability in crude oil prices, equities and currencies could experience volatility, he said.
The Russian rouble plunged to an all-time low in mid-December on the back of lower oil prices and Western sanctions, which make it almost impossible for Russian firms to borrow from the West.
The rouble 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 38 cents to $56.74 a barrel
Gold moved sideways as the improved sentiment dampened investor appetite for the safe-haven metal. Spot gold
(Editing by Shri Navaratnam)
