US tech rallies also lifted the index, analysts said, following days of highs unseen since Japan’s asset price bubble burst over three decades ago.
The benchmark Nikkei 225 index rose 1.77 percent, or 608.14 points, to 35,049.86 — the first time the index has closed above the 35,000 mark since February 1990.
The broader Topix index added 1.57 percent, or 38.39 points, to 2,482.87.
“The biggest factor behind the rally is most likely hopes that the Japanese economy will finally get back to normal after years of deflation,” senior strategist Ryuta Otsuka of Toyo Securities told AFP.
Speculation is rife that the Bank of Japan could tighten its longstanding monetary easing policies as soon as April, he added.
Rallies in US tech shares, led by chip giant Nvidia, are also supporting the Japanese market, Otsuka said.The dollar stood firm at 145.40 yen in Tokyo, against 145.77 yen in New York.
Among major shares, Sony Group jumped 3.54 percent to 14,340 yen, Toyota climbed 3.61 percent to 2,844 yen, and SoftBank Group rose 1.92 percent to 6,431 yen.
