Tokyo stocks jumped 1.63 percent Wednesday morning, following a rise on Wall Street largely driven by speculation of further stimulus from US and European central banks.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange gained 143.34 points to 8,946.65 by the break, while the broader Topix index of all first-section shares was up 1.25 percent, or 9.29 points, at 752.99.
The Nikkei's rise above 8,900 was its first above that level since July 10, tracking a broader rally on Asian markets.
"Hopes for more (European Central Bank) easing in particular are realistic; something clearly must be done to help strapped borrowers like Spain and Italy, even though Germany is resistant," said Tachibana Securities market analyst Kenichi Hirano.
"Japan shares should continue to benefit from the general risk-on enthusiasm," he told Dow Jones Newswires.
But Mattia Ciancaleoni, director of equity sales at Citigroup, said "there are still no strong fundamental drivers, either on the earnings front or otherwise... A lot of players remain on the sidelines".
Shares in Sharp, which has plumbed four-decade lows in recent days, rose 7.65 percent to 197 yen after the Nikkei business daily reported the struggling electronics giant and Taiwan's Hon Hai Precision would confirm an earlier plan by Hon Hai to invest in the Japanese firm.
Sharp had lost about 30 percent of its value since late last week after it announced gloomy business results, while comments from Hon Hai that it would renegotiate the investment threw the deal into doubt.
The top-selling Yomiuri Shimbun also said Wednesday that Sharp had entered into talks with its creditor banks over a previously disclosed plan to shore up its dented balance sheet.
In other trade, Panasonic rose 3.16 percent to 586 yen while Sony was up 4.75 percent at 947 yen.
The market largely discounted official data that showed Japan's current account surplus fell 45.0 percent in the first six months of the year from the same period in 2011, largely due to a spike in energy imports after Japan switched off its nuclear reactors in the wake of last year's atomic crisis.
On currency markets, the dollar was nearly flat at 78.52 yen in midday Tokyo trade against 78.59 yen in New York late Tuesday.
The euro bought $1.2397 and 97.34 yen, compared with $1.2401 and 97.37 yen.
The Dow Jones Industrial Average finished 0.39 percent higher at 13,168.60 on Tuesday.