Tokyo stocks jumped more than three percent on Friday, the first day of 2013 trading, following global rallies on a US deal to avert a "fiscal cliff" of tax hikes and huge spending cuts.
The Nikkei 225 index at the Tokyo Stock Exchange, which ended 2012 at the highest level since the March 2011 quake and tsunami disaster, added 3.26 percent to 10,734.23 a few minutes after the opening.
Later in the morning the benchmark index was up 2.52 percent.
"Japan's markets are opening relatively late after the US government acted, and thus they stand to benefit from the news as well as the enthusiastic response from other bourses," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Nishi also noted the yen's drop against the dollar and euro, which is positive for Japanese exporters.
The dollar rose to 87.63 yen in early Asian trade from 87.19 yen in New York Thursday afternoon. The euro was at 114.26 yen and $1.3034 from 113.80 yen and $1.3052.
But Nishi told Dow Jones Newswires that profit-taking was likely to temper share prices.
Tokyo markets had been closed from the end of 2012 until Thursday for holidays.
The US House of Representatives late Tuesday passed a deal between the White House and Republicans to raise taxes on the rich and put off automatic $109 billion budget cuts for two months, lifting the clouds of immediate crisis.
The market is watching the next moves by Congress and US President Barack Obama.
CLSA equity strategist Nicholas Smith said: "Thereafter (the) focus will be on who Prime Minister (Shinzo) Abe wants to recommend as the new Bank of Japan governor."
Abe, who took office in December, has pressured the central bank to take aggressive easing steps to help drag Japan out of years of deflation.
It has spawned speculation that he will want someone willing to agree to his inflation target to replace current governor Masaaki Shirakawa, whose five-year tenure ends on April 8.