Tokyo stocks closed up 2.82 percent on Friday, the first day of 2013 trading, as the yen tumbled on relief over a US deal to avert the "fiscal cliff" of tax hikes and huge spending cuts.
The Nikkei 225 index on the Tokyo Stock Exchange, which ended 2012 at the highest level since the March 2011 quake and tsunami disaster, added 292.93 points to 10,688.11.
The Topix index of all first-section issues gained 3.34 percent or 28.71 points to 888.51.
"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.
Global markets rallied after 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.
The deal lifted the clouds of immediate crisis, sending the yen to its lowest level since July 2010 against the dollar.
The dollar rose to 87.73 yen in Tokyo afternoon trade, up from 87.19 yen in New York Thursday afternoon. The euro was at 114.35 yen and $1.3034 from 113.80 yen and $1.3052.