The Nikkei index extended its winning streak to four days on Friday to end at a record high for the second day in a row, boosted by buying of exporters on the yen's weakness against the U.S. dollar.
The 225-issue Nikkei Stock Average ended up 72.77 points, or 0.18 percent, from Thursday at 40,888.43. The broader Topix index finished 17.01 points, or 0.61 percent, higher at 2,813.22, its highest level since January 1990.
On the top-tier Prime Market, gainers were led by rubber product, transportation equipment and bank issues.
The dollar briefly climbed to a four-month high in the upper 151 yen range in Tokyo, following better-than-expected U.S. manufacturing-related data that spurred expectations of a wider interest rate differential between the United States and Japan, dealers said.
On the stock market, the Nikkei benchmark briefly climbed to a record intraday level above the 41,000 mark, also lifted by advances on Wall Street overnight.
"Automakers were especially strong due to the yen weakening, while some chip-related issues also drew buying" after a U.S. key semiconductor index soared overnight, said Koichi Fujishiro, senior economist at Dai-ichi Life Research Institute.
But the benchmark briefly fell into negative territory in the afternoon, as investors locked in gains following its surge by over 2,100 points over the past three trading days, analysts said.
Market sentiment has been supported by a sense of relief after the outcome of central bank policy meetings in Japan and the United States, analysts said.
The Bank of Japan said that financial conditions will remain "accommodative" despite ending its negative interest rate policy, while the Federal Reserve signaled three interest rate cuts for the year.
