This was a rally time today for Japanese and Chinese stocks. Whereas Japan’s Nikkei 225 (NKY) Stock Average closed above 16,000 for the first time in six years, China’s stocks climbed the most in three weeks. The major reason behind the upward movement in Japanese stocks is that the yen has dropped to near a five-year low which boosted earnings prospects for the nation’s exporters.

On one hand, China’s benchmark money-market rates slid after the government decided to inject fifty billion dollars in market, on the other, its growth was spurred by a second-day drop in benchmark money-market rates due to the same reason. The injected cash into the financial system also led to yuan reaching to a 20-year high.

On the brighter trading day the Shanghai Composite Index (SHCOMP) was on upward movement as it went up by 0.6 percent to 2,106.35 at the close. Whereas oil company PetroChina Co. and technology companies advanced, Taiwan’s benchmark index climbed 0.2 percent too on better prospects.

Major Indexes on Bright Side

A similar pattern was seen in Thailand’s SET Index (SET) which also gained 0.4 percent; however, the national currency of the country, baht slid for a seventh day and lost 0.1 percent to 32.725 per dollar. In fact, the Baht has been facing huge trouble this year all along and fell yesterday to the lowest level since June 2010.

On yesterday’s trading, the S&P 500 Index (SPX) extended record highs and closed up 0.3 percent. Before the Christmas holiday about 2.6 billion shares changed hands in the U.S. So far, S&P 500 has rallied almost 29 percent this year which is unprecedented growth only seen in 1997.

Major indexes have been on the growth path so far this year; for instance, like S&P500, the Nikkei 225 climbed 0.8 percent and added to a 54 percent rally this year. In fact, the Nikkei 225 has been the index that has gained the most among major developed markets. Overall, the US and Japanese economies have been on the right track towards the end of the year.

Among other global indexes the Shanghai Composite Index too advanced the most in three weeks; the growth is attributed to the fact that China’s seven-day repurchase rate declined to great extent when the government decided to inject additional cash in financial system for greater liquidity. Similar pattern was seen in Russia’s Micex Index which rose before the Christmas holidays.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com