Japanese shares rose 0.60 percent on Tuesday morning after gains in Europe and on Wall Street on hopes that the European Central Bank may soon take action to ease the continent's debt crisis.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange added 52.44 points to 8,778.73, while the broader Topix index of all first-section shares added 0.63 percent, or 4.62 points, to 740.35.
"Overall risk aversion has lessened, as illustrated by appetite for stocks globally, which should offset the yen's gains somewhat," Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires.
The Tokyo market opened flat, but steadily gained toward the end of the morning session in thin trade ahead of a traditional Obon summer holiday.
"The market is...seeing a participation slowdown, as trading cues are largely absent," said Hideyuki Ishiguro, Okasan Securities equity strategist.
"This is in part seasonal, with the traditional Obon holiday travel season peak coming next week."
Markets will remain open during the holiday.
On Tuesday, Tokyo's exchange temporarily suspended derivatives trading due to a technical glitch, but resumed all operations before the morning session ended with little impact on share prices.
A weaker yen helped exporters with Toyota Motor adding 0.63 percent to 3,160 yen, Canon rising 1.83 percent to 2,839 yen, while banking giant Mitsubishi UFJ Financial Group gained 0.53 percent to 377 yen.
Sony lost 0.33 percent to 894 yen, while Panasonic fell 1.93 percent to 560 yen.
Sharp Corp rose 2.2 percent to 185 yen, after investors pounded the stock in recent sessions, driving it down to four-decade lows amid huge losses at the struggling consumer electronics maker.
On currency markets, the dollar strengthened to 78.26 yen, from 78.20 yen in New York late Monday.
The euro traded at $1.2399 and 97.04 yen, nearly flat with US trade.