Tokyo stocks closed 0.96 percent higher Tuesday, boosted by a weaker yen and extending a post-election rally after Japan's conservative opposition swept to victory in weekend polls.
The benchmark Nikkei 225 index added 94.13 points to 9,923.01, while the broader Topix index of all first-section shares rose 1.12 percent, or 9.01 points, to 816.85.
The Tokyo market won support after the yen dived to multi-month lows against the dollar and euro Monday following the win by the Liberal Democratic Party, headed by hawkish Shinzo Abe who is now set to become premier.
Abe campaigned on a promise to pressure the Bank of Japan (BoJ) into more aggressive easing measures to boost the faltering economy.
The premier-in-waiting met with the central bank chief on Tuesday ahead of the BoJ's two-day policy meeting, which starts Wednesday.
Also on the meeting's agenda will be the possibility of setting an inflation target, with Abe pushing for a two percent goal, Kyodo news agency reported.
Foreign investors are hopeful that "the incoming ruling coalition will compel the BoJ to act in favour of more policy easing," an equity trading director at a foreign brokerage told Dow Jones Newswires.
US stocks rose overnight on Wall Street's hopes for a compromise among divided US lawmakers to avert the fiscal cliff of tax hikes and spending cuts that would likely tip the US economy into recession.
In Tokyo, Toyota shares jumped to their highest level this year, boosted by the weaker yen and after a report said the firm was on track to be world's biggest automaker in 2012, overtaking General Motors and Volkswagen.
Its shares were up 2.76 percent at 3,720 yen.
Fukushima operator TEPCO soared 17.32 percent to 237 yen, its second huge jump in as many days after Abe's election triumph cast doubt on plans to ditch atomic power following last year's nuclear disaster.
Sharp spiked 8.63 percent to 327 yen. There was no specific news to affect the volatile stock which has been climbing in recent weeks as investors bet the struggling electronics giant would solve a severe cash-flow crisis.
On currency markets, the dollar was stronger at 84.01 yen from 83.87 yen in New York on Monday, while the euro gained to $1.3170 and 110.63 yen, from $1.3161 and 110.40 yen.