Chinese stocks surged higher in the first quarter, extending last year’s world-beating rally, as investors look past the country’s sluggish economy and bet Beijing will take further stimulus measures.

Shanghai has gained 15.9% already in 2015 and the country’s second-biggest market, the Shenzhen Stock Exchange—full of lesser-known but fast-growing technology and pharmaceutical companies—has surged 38.6% to rank as the world’s top-performing major index this year.

The stock rally in China and Japan—Asia’s second-biggest winner—show investors are flocking to markets where governments are taking steps to fire up economies. Meanwhile, most Asian currencies suffered losses as they succumbed to a rallying U.S. dollar and investors’ concerns over the region’s debt.

China though was the undisputed winner amid growing expectations that the government will add to two interest-rate cuts since November, a potential boost for stocks as borrowed cash is pumped into the market. Evidence that Chinese leaders are worried about the economy growing at its slowest rate in over two decades was seen on Monday when the central bank eased measures on buying property, a sector that had been a drag on growth.

Aside from gains, China’s stock market scored the most heavily traded month ever while combined trading volume between the Shanghai and Shenzhen exchanges reached a record 19.47 trillion yuan for this month so far, nearly five fold its value a year ago, when it hit 4.20 trillion yuan.

Chinese investors have also borrowed an unprecedented amount of money to pile into the market. The value of margin lending reached a record 1.48 trillion yuan as of Monday, up from 1.16 trillion at the end of February.

Hong Kong’s markets meanwhile, where many Chinese stocks are traded, haven’t emulated the success of their mainland counterparts. The Hang Seng Index was up 5.5% in the first quarter and the Hang Seng China Enterprises Index, a gauge of Hong Kong listings of mainland companies, underperformed with gains of 3%.

Elsewhere, the benchmark Nikkei Stock Average in Japan rallied 10% over the first three months of the year, its best quarterly performance since last three months of 2013. The rally means Japan is on pace for a fourth years of gains as the government introduces measures to stoke the economy while the central bank pushes down the yen which benefits many of Japan’s exporters.

Buying of stocks by Japan’s central bank and more recently by government and quasi-government pension funds, has also kept the Nikkei’s rally going.

In foreign-exchange markets in Asia, however, many currencies recorded heavy losses. Malaysia’s ringgit was Asia’s biggest loser and is on track to post its worst six-month loss since the Asian financial crisis, hit by falling global commodity prices, a surging U.S. dollar and foreign-currency debt. The ringgit is down 11.76% over the last two quarters, and has declined to its weakest level in over six years.

Malaysia’s central bank has tried to prop up its currency, with foreign-exchange reserves dropping 16% in the six months to January this year, according to the latest data available. Almost half of Malaysia’s government debt is held by foreign investors and in recent months investors have shed their holdings of shorter term Malaysian bonds.

Still, analysts from Goldman Sachs say the U.S. dollar had appreciated less against Asian currencies compared with global currencies, with most countries in the region benefiting from their position as large oil importers.

“Exceptions do prove the rule, however,” analysts from Goldman Sachs wrote in a note to clients last week, “Indonesia and Malaysia are large commodity exporters and have not enjoyed the same benefits as the rest of the region.” The bank expects the Malaysian ringgit to touch 3.85 against the U.S. dollar and the rupiah 14,000 in the next 12 months.

The analysts note that on average, the U.S. dollar has appreciated by 7.3% against Asian currencies and 17%, 18% and 20% against the rest of the G-10, Latin America and CEEMA currencies, respectively, since the U.S. dollar started rallying in July 2014.

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