Japan's Nikkei share average rose above 15,400 for the first time in five years on Friday, gaining 1.92 percent, as the value of shares traded on the first section of the Tokyo Stock Exchange hit a record high.
Tokyo Electron Ltd and other technology firms followed their US counterparts higher, while Softbank Corp extended recent gains due to investor confidence in its earnings prospects.
Brokerages such as Nomura Holdings Inc and other companies likely to benefit from strong stocks surged, and clothing retailer Fast Retailing Co Ltd advanced on news it would acquire a French lingerie firm.
Investor confidence was boosted by a host of factors, both in Japan and abroad, said Kirby Dally, strategist at Society General Securities' Fimat division in Hong Kong.
In addition to Japan's economic recovery, investors have welcomed lower oil prices and increasing signs of strength in the US economy, he said.
"There was only so far that the Japanese market was going to go based on the domestic-economic recovery story because it has been played out it has been in the market for the past few months.
Without the bright outlook in the US we would not have the impetus to continue over 15,000 like this," he said. The Nikkei finished the day up 291.10 points at 15,421.60, its highest close since October 2000.
The broader TOPIX index finished up 1.53 percent or 23.91 points, at 1,583.72, its highest close since July 2000.
Tokyo saw its most valuable day of stock trading since the present exchange opened its doors in 1949, with 3.61 trillion yen ($29.96 billion) worth of shares changing hands on the Tokyo Stock Exchange's (TSE) first section.
The previous record of 3.54 trillion yen was set last month. A total of 3.32 billion shares were exchanged, the most since November 9. Advancers swept past decline are 1,086 to 479 yen.
Technology firms stormed ahead after Intel Corp, the world's biggest chip maker, hit a four-month high on expectations it will raise its forecasts for revenue and profit in a mid-quarter update next week.
Tokyo Electron, the world's second-biggest chip equipment maker, rose 3.4 percent to 7,550 yen.
Kyosera Corp, the world's top maker of ceramic casings for chips, added 2.4 percent to 8,500 yen. Fear of being left out of a Bull Run was also prompting investors to buy, said Tubas Ihara, manager of investment information at Retail Crew Securities.
"Investors want to buy on dips but the market isn't dipping," he said. Shares in Internet and communications conglomerate Softbank reached a five-year high, surging 4.4 percent to 10,690 yen.
The company, long a favourite of individual investors, has added 50 percent since November, due to optimism about its earnings and its new mobile phone service licence.
Nomura, Japan's top brokerage, gained 7.7 percent to 2,175 yen and No 3 Nikkei Cordial Corp surged 8.1 percent to 1,820 yen, on expectations they will benefit from heightened activity in the Japanese stock market.
Fast Retailing, Japan's biggest casual clothing chain, finished up 9 percent at 9,360 yen, after hitting it's highest since August 2001.
On Thursday, the operator of Unique shops said it would buy a 95 percent stake in France's second-biggest lingerie brand, Petit Vehicle S.A., for about 70 million euros ($82.15 million) to boost its global reach.