The Nikkei 225 Index rallied 1.3% to around 37,900 while the broader Topix Index jumped 1.2% to 2,780 on Tuesday, extending recent gains and tracking Wall Street higher as US retail sales data eased recession concerns.

Japanese stocks also benefited from a weaker yen, which enhances the profit outlook for the country's export-driven industries and makes local assets more attractive to foreign investors.

Meanwhile, investors are focused on the upcoming Bank of Japan policy decision this week, with expectations that the central bank will hold interest rates steady at 0.5% when its meeting concludes on Wednesday.

Leading gainers included: Mitsubishi UFJ (+1.2%), Mitsubishi Corp (+4.4%), Fujikura (+2.2%), Advantest (+2.3%), and Toyota Motor (+3.2%).

Source: Trading Economics