The benchmark Nikkei 225 index was up 0.90 percent, or 182.81 points, at 20,601.62 in early trade, while the broader Topix index climbed 0.68 percent, or 10.17 points, to 1,495.46.

Investors are closely watching US Federal Reserve Chairman Jerome Powell's speech when he opens the central bank's annual Jackson Hole symposium later this week, said Shuji Hosoi, senior strategist at Daiwa Securities.

"The focus is on whether any sense of the Fed's policy direction, such as prospects of rate hikes, will be provided to address uncertainties over the global economy," Hosoi said.

Other key events this week include US corporate earnings reports, mooted Japan-US ministerial trade talks in Washington, and US housing sales data, he noted.

Analysts also pointed to news that Washington and Beijing are working to revive trade talks as a positive factor for the Japanese market.

The dollar fetched 106.39 yen in early Asian trade, against 106.36 yen in New York on Friday.

In Tokyo, banks were among the winners, with Mitsubishi UFJ Financial trading up 1.02 percent at 503.9 yen and Mizuho Financial up 0.65 percent to 154.8 yen.

Carmakers also gained, with Nissan edging up 0.32 percent to 660.9 yen and Toyota trading up 0.82 percent at 6,846 yen.

On Wall Street, the Dow ended up 1.2 percent to 25,886.01.