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Tokyo's benchmark Nikkei index advanced more than 1.3 percent on Tuesday after US and European markets bounced back on optimism over post-lockdown economic activity.
The Nikkei 225 index rose 1.33 percent, or 293.10 points, to close at 22,288.14 while the broader Topix index was up 0.62 percent, or 9.55 points, at 1,558.77.
"Investors bought on dips following sizable declines the previous day," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.
Sentiment was also supported by gains in US and European stocks on Monday as optimism over easing lockdowns outweighed fears of surging coronavirus infections.
"We expected that virus infection cases would rise again after lockdowns are lifted," said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.
"The view that the (global) economy will stay on a gradual recovery path still holds -- unless we see drastic spikes in deaths or critically ill patients," he told AFP, adding markets had fallen too much recently on excessive pessimism.
But it was unknown whether stocks would keep up their run with key economic indicators coming up later this week such as the June US payrolls report on Thursday.
"Since expectations are high, markets are prone to disappointment," Sengoku said.
Investors shrugged off weak economic data released from Japan early Tuesday, including rising unemployment and poor factory production for May.
"The negative figures were all factored in," Horiuchi said.
In individual stocks trade, telecoms and investment giant SoftBank Group rallied 1.30 percent to 5,450 yen while Uniqlo casual wear operator Fast Retailing gained 1.74 percent to 61,700 yen.
NTT rose 0.47 percent to 2,515.5 yen after the Nikkei business daily reported the telecom group would enter the renewable energy market.
The group will invest more than 1 trillion yen ($9.3 billion) by 2030 to boost capacity and establish its own transmission network, the daily said.
Nissan gained 1.14 percent to 399.2 yen and Toyota edged up 0.04 percent to 6,762 yen.
The dollar was trading at 107.76 yen in Asian afternoon trade compared with 107.56 yen in New York Monday afternoon.
The Nikkei 225 lost 0.56 percent, or 126.45 points, to end at 22,455.76, while the broader Topix index fell 0.40 percent, or 6.36 points, to 1,587.09.
The Nikkei 225 fell 1.22 percent, or 274.53 points, to close at 22,259.79 while the broader Topix index was down 1.18 percent, or 18.65 points, at 1,561.85.
The benchmark Nikkei 225 index rose 0.72 percent, or 160.52 points, to 22,306.48. It lost 0.91 percent over the week.
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Following a Monday slide, the greenback was steady on most majors and clung on near a two-week low against a basket of currencies , tracking the mood in equity markets.
By category, production of machine tools were up 27.6 per cent on the month, intermediate goods stagnated at 0.1 per cent and consumer goods were up slightly at 1.4 per cent, the Destatis official statistics agency said.