The Nikkei index on Monday ended at a fresh 34-year high above the 36,000-point threshold, as investors sought tech shares amid expectations that the Bank of Japan will likely maintain its ultraloose monetary policy.
The 225-issue Nikkei Stock Average rose 583.68 points, or 1.62 percent, from Friday to 36,546.95, its highest close since February 1990 when Japan was experiencing an asset price bubble. The broader Topix index was up 34.89 points, or 1.39 percent, at 2,544.92, also its highest finish since February 1990.
On the top-tier Prime Market, gainers were led by real estate, insurance and electric appliance issues.
The U.S. dollar briefly weakened to the upper 147 yen range in Tokyo amid wariness among some that the Japanese currency's recent weakening would prompt authorities to conduct a yen-buying intervention.
Stocks were in positive territory throughout the day, with chip-related issues such as Tokyo Electron and Advantest briefly pushing the Nikkei index up over 600 points following sharp gains on a U.S. semiconductor index late last week.
Investors now await the outcome of the two-day BOJ policy meeting ending Tuesday, as it is widely expected the central bank will keep the current policy settings intact while gauging the strength of wage growth and examining the impact of a deadly earthquake that struck central Japan three weeks ago.
"Stocks were bought due to renewed confidence that the bank will not surprise nor signal any changes," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
Market participants are focused on the central bank's economic and price outlook report on Tuesday and press conference by BOJ Gov. Kazuo Ueda, analysts said.
