The benchmark Nikkei-225 index gained 169.77 points to 9,629.43, the first close above 9,600 since June 1. The Topix index of all first-section issues rose 1.63 percent or 13.26 points to 828.99.
"Developments regarding the US economy and Europe determine the global risk appetite and the short-term concerns in Europe for now have subsided," said Hisatsune Kobayashi, general manager at SMBC Nikko Securities.
The Greek government won a critical vote of confidence in parliament on Tuesday as it struggles to gain support for extra austerity measures required before Athens is given the help it needs to avoid defaulting.
Greek Prime Minister George Papandreou must now persuade parliament to approve a five-year, 28 billion euro ($40 billion) package of tax increases and spending cuts to win a new bailout.
"Concerns about Greece and the US economy have not been completely eliminated, but we're seeing some of the recent pessimistic market sentiment recede," said Naoteru Teraoka, general manager at Chuo Mitsui Asset Management.
US stocks rallied on Tuesday on hopes that Greece's government would survive the confidence vote, with the Dow Jones Industrial Average gaining 0.91 percent.
The market is now awaiting the outcome of the US central bank's policy-making Federal Open Market Committee meeting, which is due to wind up later Wednesday, brokers said.
Cheered investors snapped up mainstay shares.
Sony climbed 3.71 percent to 2,012 yen following its recent falls on investor anxiety over hacker attacks that compromised millions of user accounts.
British police working with the FBI arrested a 19-year-old man over attacks by the Lulz Security hacking group on the websites of the CIA, US Senate, Sony and others, Scotland Yard said Tuesday.
Toshiba was up 2.82 percent at 400 yen.
Elpida Memory shot up 4.34 percent to 960 yen in the wake of a Nikkei daily report that it has developed the world's thinnest mobile DRAM chip package.
Shares in Tokyo Electric Power Co, the company at the centre of the world's worst nuclear crisis since Chernobyl 25 years ago, were up 0.32 percent at 306.
The Yomiuri Shimbun reported the company, facing massive costs in dealing with the crisis at its Fukushima Daiichi nuclear power plant, is preparing to ask more than 50 financial institutions for a set of relief measures, including around 2 trillion yen in debt refinancing.
Copyright APP (Associated Press of Pakistan), 2011
Copyright AFP (Agence France-Presse), 2011