The Nikkei index extended its winning streak to three trading days, closing at a fresh record high Thursday boosted by optimism about the U.S. economy after the Federal Reserve signaled three interest rate cuts for the year.
The 225-issue Nikkei Stock Average ended up 812.06 points, or 2.03 percent, from Tuesday at 40,815.66. It briefly hit a record intraday high of 40,823.32.
The broader Topix index finished 45.24 points, or 1.64 percent, higher at 2,796.21, its highest level since January 1990.
Japanese financial markets were closed Wednesday for a national holiday.
On the top-tier Prime Market, gainers were led by pulp and paper, wholesale trade and bank issues.
The U.S. dollar, which hit a four-month high of 151.82 yen overnight, briefly retreated to the lower 150 yen range in Tokyo on wariness over a yen-buying market intervention by Japanese authorities to stem a further slide in the currency, dealers said.
But the U.S. currency rose to the upper 150 yen level in the afternoon, as investors sold the yen, perceived as a safe-haven asset, in tandem with a rise in Japanese stocks, they said.
At 5 p.m., the dollar fetched 151.22-24 yen compared with 151.19-29 yen in New York at 5 p.m. Wednesday.
The euro was quoted at $1.0928-0929 and 165.26-30 yen against $1.0917-0927 and 165.16-26 yen in New York on Wednesday.
The yield on the benchmark 10-year Japanese government bond rose 0.015 percentage point from Tuesday's close to 0.740 percent. The yield fell 0.030 point Tuesday after the Bank of Japan expressed the view that financial conditions are expected to remain accommodative.
A wide range of issues were sought throughout the day, supported by record-high closes on the three key U.S. stock indexes overnight, which sent the Nikkei index past the previous record close logged on March 4.
The Fed on Wednesday maintained its forecast of three interest rate cuts this year despite recent signs of resilient growth in the world's largest economy.
"Market participants felt a clear sense of security that the Fed was leaning toward slight monetary easing, as there had been some concerns that (the bank) would reduce its rate cuts from three to two times," said Shingo Ide, chief equity strategist at the NLI Research Institute.
The benchmark extended gains in the afternoon as the yen depreciated against the dollar, helping to lift export-oriented firms, analysts said, as a weak yen increases their overseas profits when they are repatriated.
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