The Nikkei 225 index at the Tokyo Stock Exchange climbed 121.81 points to 9,048.35 by the lunch break, rising above the 9,000 level for the first time since September 2.
The Topix index of all first-section issues gained 11.41 points, or 1.50 percent, to 774.20.
The advance came after the Dow Jones Industrial Average jumped 2.86 percent in New York Thursday on news of the eurozone crisis deal while US growth data eased worries of a new recession, dealers said.
The US economy grew 2.5 percent in the third quarter, a quick enough pace to blunt fears that the world's biggest economy was about to plunge into a recession again.
But it was not fast enough to signal that the current recovery is gathering momentum.
The news on the European deal also sent the euro higher against the yen, buoying sentiment towards Japanese companies with Europe exposure.
Hideyuki Ishiguro, supervisor of investment strategy at Okasan Securities, said "worries about the effects of a strong yen on Japanese exporters may have eased as well."
The euro was at 107.53 yen in Tokyo midday trade, down from 107.73 in New York but sharply up from rates in the 106-yen range a day earlier.
The dollar was at 75.86 yen, close to a new postwar low of 75.66 yen hit overnight.
Tokyo stocks rose despite government data Friday that showed industrial production fell by 4.0 percent in September from the previous month, marking the first drop in six months.
Olympus lost 6.78 percent to 1,263 yen after rocketing 23 percent on Thursday on buybacks from short-sellers, after its under-pressure chairman and president resigned earlier in the week over a fee payments scandal.
Nintendo jumped 5.31 percent to 11,700 yen on the Osaka exchange although the company announced late Thursday a deep net loss for the half year to September and forecast its first annual loss in at least three decades.
Shares were higher as "negative factors are now fully priced in," a strategist at a Japanese brokerage said. Nintendo shares are still down by nearly 60 percent from levels hit in February.