"Once oil prices stop rising, the uncertainty on global economic conditions and corporate earnings will subside," Hiroichi Nishi, general manager at Nikko Cordial Securities, told Dow Jones Newswires. Takashi Ushio, general manager at Marusan Securities, said: "As enthusiasm grows for corporate restructuring at home, factors are in place for the market to go upward once near-term uncertainties can be removed."

Dealers said the market's focus was on whether protests planned for later this week in Saudi Arabia would materialise. The Dow Jones Industrial Average dropped 0.66 percent on Monday. The euro firmed to $1.3979 in Asian trade from 1.3971 in New York late Monday, while it rose to 115.11 yen from 114.90 yen. The dollar stood at 82.37 yen, up from 82.25 yen. Kyocera was up 1.19 percent at 8,480 yen on a Barclays Capital upgrade. Merger and restructuring activities involving Japanese firms gave the Nikkei index a lift, dealers said. Medical equipment maker Terumo rose 3.22 percent to 4,640 on its $2.63 billion acquisition of major US blood transfusion technology firm CaridianBCT. Hitachi rose 1.78 percent to 514 after Western Digital agreed to acquire its hard disk drive business for about $4.3 billion in cash and stock. However Sony was off 0.61 percent at 2,908 yen and Sharp fell 1.32 percent to 821.