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. 

MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS gained 0.3 percent.

South Korea's Kospi .KS200 was up 0.4 percent and Tokyo'sNikkei .N225 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 bullish outlook pushed Treasury yields up and gave an already strong dollar fresh momentum. The two-year U.S. Treasury yield US2YT=RR rose to a high not seen in almost four years in light of the Fed expectations.

The greenback fetched 120.650 yen JPY=, 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 EUR=.

"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 31 cents to $56.81 a barrel CLc1 after gaining $1.86 overnight on the U.S. growth figures. The GDP data bolstered demand expectations for the commodity that had sunk to a 5-1/2-year low last week and spooked global financial markets. [O/R]

Gold traded close to a three-week low as the improved sentiment dampened investor appetite for the safe-haven metal. [GOL/]

Spot gold XAU= stood little changed at $1,176.61 an ounce, within distance of the three-week trough of $1,170.17 hit on Monday.