The Nikkei gained 0.92% to end at 29,123.18, after rising as high as 29,145.89 earlier, a level last seen on Aug. 19.
The broader Topix added 1% to 2,078.06, ending near the day's peak of 2,078.37, its highest since September 2021. The yen weakened to the cusp of 137 per dollar in Tokyo, extending its decline from Friday, when the BOJ kept stimulus settings unchanged and signaled it was in no hurry to normalize policy. Japan has a shortened trading week, marking the 'Golden Week' holiday from Wednesday, when the U.S. Federal Reserve sets policy, followed by the European Central Bank on Thursday. "I'm a bit surprised" that Japanese stocks would rise so much ahead of those risk events, said Kenji Abe, a strategist at Daiwa Securities. "The strong performance is partly because of yen weakness due to the BOJ's dovish stance, but also Japanese investors have some expectations that investors in the U.S. are becoming less risk averse, and there might be some foreign inflows into Japanese stocks." All three of the main U.S. bourses made strong gains, and the VIX volatility gauge dropped to its lowest since November 2021. (Reporting by Kevin Buckland; Editing by Rashmi Aich)
