Tokyo stocks opened 0.99 percent higher on Wednesday after key indexes on Wall Street rose to their highest levels in more than five years.
The Nikkei 225 index at the Tokyo Stock Exchange opened up 112.36 points at 11,484.70.
Shortly before the market opened, the government released data showing Japan suffered its worst ever trade deficit for January of 1.63 trillion yen ($17.4 billion) due mainly to higher fuel import bills.
But the market largely discounted the trade data.
The dollar was at 93.70 yen in early Asian trade against 93.54 yen in New York Tuesday afternoon.
The euro was firm after a widely watched German investor confidence index jumped to 48.2 points in February from 31.5 points in January, reaching its highest level since April 2010.
The common European currency bought 125.50 yen and $1.3389 compared with 125.24 yen and $1.3390 in US trade.
Tokyo shares are likely to climb following the rise in US stocks and the upbeat German numbers, said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
The Dow finished up 0.39 percent at 14,035.67, its best level since October 12, 2007, while the broad-based S&P 500 rose 0.73 percent to 1,530.94 -- its highest level since October 31 of the same year.
-- Dow Jones Newswires contributed to this article --