The benchmark 225-issue Nikkei average hit a fresh three-month high in Tokyo trading Wednesday as stocks continued to rise thanks to an overnight rise in U.S. equities and a weaker yen.
The Nikkei, made up of issues listed on the first section of the Tokyo Stock Exchange, rose 288.15 points, or 1.29 percent, to 22,613.76, its best finish since Feb. 21. On Tuesday, the index gained 263.22 points.
The Topix index of all TSE first-section issues closed up 11.40 points, or 0.72 percent, at 1,599.08, after rising 18.93 points the previous day.
The Nikkei gained nearly 500 points at one point soon after the opening, supported by growing expectations for an economic recovery in and outside Japan, brokers said.
But the Nikkei turned top-heavy after the initial buying ran its course, due to selling on rallies, they said.
"A wave of short covering pushed up the market, but selling to lock in profits gained strength after the Nikkei approached 23,000 following its recent sharp rises," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
"With a lot of short positions built up, short covering is likely to continue supporting the market" until next week's special quotation fixing to settle June index futures and option contracts, he said.
Rising issues outnumbered falling ones 1,177 to 896 in the TSE's first section, while 96 issues were unchanged.
Volume increased to 1.552 billion shares from Tuesday's 1.335 billion shares.
Toyota, Sony and other export-oriented issues attracted purchases thanks to the weaker yen.
Semiconductor-related stocks such as Tokyo Electron and Advantest rose after their U.S. peers fared well Tuesday.
Oil names such as JXTG and Idemitsu advanced on a rise in crude oil prices.
Among other winners were clothing store chain Fast Retailing and industrial robot producer Fanuc.
Power suppliers, including Tokyo Electric Power Company Holdings Inc., fell amid a growing risk-on mood.
Also on the negative side were SoftBank Group and Takeda Pharmaceutical.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average rose 360 points to end at 22,730.