The Nikkei average closed up 2.17 percent at 51,307.65, surging past the key 51,000 level for the first time. The broader Topix index slipped 0.23 percent, to 3,278.24 as exporters fell amid a rebound in the yen ahead of the Bank of Japan's policy decision this week.

U.S. Treasury Secretary Scott Bessent urged Japan's government to give the Bank of Japan (BOJ) room to raise interest rates in order to anchor inflation expectations and avoid excess exchange rate volatility.

Tech stocks topped the gainers list after Nvidia said it would build seven new AI supercomputers for the U.S. Department of Energy.

Advantest soared 22.1 percent, Tokyo Electron gained 3.3 percent and SoftBank Group added 3.9 percent.

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