A weaker yen underpinned gains as the currency traded at 104.24 per dollar, within reach of last week's five-year peak of 104.63. Blue-chip stocks rose with KDDI 3 percent higher while Fanuc and Fast Retailing added over 1 percent each.
Mitsubishi Motors jumped 4.3 percent after lifting its operating profit forecast by 20 percent for this financial year.
Meanwhile, the government released its monthly economic report, where the word "deflation" was not used for the first time in four years as the government acknowledged rising prices
(Read more: Japan government approves record budget spending)
Shanghai up 0.1%
China's benchmark Shanghai Composite closed at a one-week high, extending gains into a second session as fears of a repeat of June's credit crunch eased. Still, the benchmark index traded 2.7 percent below it's 200-day simple moving average of 2,149.
"I think for next year, if you look at the actual fundamental valuations, the China benchmark index is on a forward P/E of around 9.5x, but also showing some growth picking up. So for that, I think you've got a good backdrop for Chinese equities going forward," said Sam Le Cornu, senior portfolio manager, Asia listed equities at Macquarie.
Commodity-related stocks were the top performers, with Baoshan Steel and Zijin Mining both over 1 percent higher.
Sydney adds 0.7%
Australia's benchmark S&P ASX 200 rose to a new one-month closing high but trading volumes were light as the stock exchange observed a holiday-shortened session.