The benchmark Nikkei stock index of the Tokyo Stock Exchange rose 129.94 points to 10,754.03. The Topix index of all first section shares advanced 1.31 percent, or 12.43 points, to 963.70.

Expectations are growing in the market for solid US manufacturing data due later Tuesday, brokers said.

"It will be easier to shift from pessimistic to optimistic sentiment this week on the back of a recovery in the US economy," Masayoshi Yano, senior market analyst at Meiwa Securities, told Dow Jones Newswires.

Analysts also said the Nikkei's gain was due to a weaker yen and Monday's increase on Wall Street following a dip in crude futures.

"The market is closely watching oil prices due to their possible impact on corporate earnings," said Kenichi Hirano, equity general manager at Tachibana Securities.

The dollar advanced to 82.14 yen in Tokyo afternoon trading from 81.79 yen in New York late Monday. The euro was also firmer at 113.40 yen compared to 112.85 yen.

But Hiroichi Nishi, general manager at Nikko Cordial Securities, also said the gains were likely to be limited amid lingering concerns about unrest in the Middle East and North Africa.

US stock markets rose strongly overnight, as mergers and acquisitions action lifted sentiment.

In Tokyo shares of advertising agency Dentsu rose on a tie-up with social networking site Facebook.

Dentsu rose 4.89 percent to 2,723 yen after saying it will become the official representative of Facebook in providing sales and marketing support to companies in Japan.

Toyota advanced 0.91 percent to 3,855 yen and Honda rose 1.83 percent to 3,610 yen, partly on upbeat expectations for the US economy.

Mitsubishi UFJ Financial Group climbed 3.31 percent to 468 yen, and Sumitomo Mitsui Financial Group was up 3.24 percent at 3,185 yen.

Consumer lender Shinsei soared 7.69 percent to 112 yen after it said it would issue more shares, which analysts said reduced risks related to capital adequacy.