Japanese stocks, dollar up on robust US GDP data

Data shows US economy grew at 5% in Q3, its quickest pace in 11 years

Japanese stocks rallied and the dollar stood tall on Wednesday thanks to surprisingly robust US 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 US economy grew at a 5.0% 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 and the S&P 500 to record closing highs overnight.

Tokyo's Nikkei followed suit, rising 1% and South Korea's Kospi was up 0.2%.

MSCI's broadest index of Asia-Pacific shares outside Japan was steady.

The strong US 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 US Treasury yield rose to a high not seen in almost four years in light of the Fed expectations.

The greenback fetched 120.650 yen, approaching a 7-1/2 year peak of 121.86 yen touched earlier this month. The euro sank to a fresh 28-month low of $1.2165.

"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.

US crude oil dipped 38 cents to $56.74 a barrel after gaining $1.86 overnight after the US growth figures. The GDP data bolstered demand expectations for the commodity that sank to a 5-1/2-year low last week and spooked global financial markets.

Gold moved sideways as the improved sentiment dampened investor appetite for the safe-haven metal. Spot gold stood little changed at $1.177.00 an ounce.