The broader Topix climbed 0.65 per cent to 1,981.50, its highest close since May 14, 1991. SoftBank Group was the biggest boost to the index, followed by Sony, which rose 1.62 per cent.
The Nikkei share average gained 0.52 per cent to 29,921.09.
“The market sentiment is very strong. It’s lifted by the optimism that most of Japanese companies would benefit from the recovery of the U.S. economy,” said Hideyuki Ishiguro, senior strategist at Daiwa Securities.
“Investor confidence was boosted also because the U.S. bond yields retreated. Cash payments to American individuals, followed by the passage of the U.S. economic relief package, is another reason to support the market.”
The S&P 500 and Dow Jones Industrial Average closed at record highs on Monday, while the tech-heavy Nasdaq climbed over 1 per cent.
Japan’s technology shares advanced too, with SoftBank Group jumping 2.41 per cent, Tokyo Electron rising 1.54 per cent and Advantest jumping 3.37 per cent.
In the airline sector, ANA Holdings and Japan Airlines rose 2.35 per cent and 3.85 per cent, respectively, tracking U.S. peers Delta Air Lines and Southwest Airlines , which said leisure bookings were rising.
Travel agency H.I.S. gained 1.42 per cent despite the COVID-19 crisis leading it to a 7.9 billion yen ($72.34 million) quarterly net loss.
E-commerce firm Rakuten Inc fell 1.44 per cent after surging up to 24 per cent on Monday on news about a capital tie-up with Japan Post Holdings.
Ebara Corp was the biggest gainer in the Nikkei index, rising 6.25 per cent, followed by CyberAgent, which rose 4.46 per cent. Kawasaki Kisen followed with a 4.38 per cent rise.
