Tokyo stocks closed 1.10 percent higher Thursday as the Bank of Japan stuck to its view that the economy was picking up moderately and held off fresh easing measures.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 97.44 points to 8,978.60, while the broader Topix index of all first-section shares gained 0.83 percent, or 6.20 points, to 751.84.
The BoJ kept interest rates unchanged at zero to 0.1 percent, while keeping unchanged the size of its main policy tool, a 70 trillion yen ($891 billion) asset-purchase programme.
"It's difficult to attribute the market's reaction to the central bank as anything more than a 'relief rally'," said Naomi Fink, head of Japan strategy at Jefferies Japan.
"China's slowing CPI (consumer price index) opens the door for more possible easing from its monetary authorities, which could be a plus for Japan shares, especially those with strong ties there," she added.
China's inflation rate hit a two-and-a-half-year low of 1.8 percent in July, giving the government further policy leeway to boost slowing growth.
In Tokyo trade, Sony rose 1.09 percent to 922 yen and Toyota was up 1.42 percent at 3,205 yen.
Japan Tobacco rose 2.05 percent to 2,528 yen after saying Wednesday it would re-brand its popular Mild Seven cigarettes as it pushes further into overseas markets.
Nikon shares tumbled 8.10 percent to 2,086 yen after the camera maker cut its operating profit forecast for the fiscal year through March 2013.
On currency markets, the euro bought $1.2366 and 97.05 yen, compared with $1.2363 and 96.99 yen in New York late Wednesday.
The dollar was quoted at 78.50 yen against against 78.45 yen.
On Wall Street the blue-chip Dow Jones Industrial Average closed at 13,175.64 on Wednesday, a gain of 7.04 points, or 0.05 percent.