Japanese shares opened higher Monday, tracking gains on Wall Street last week after the US Congress resolved a fresh political deadlock and voted to extend a payroll tax holiday.
The Nikkei index at the Tokyo Stock Exchange rose 1.37 percent or 114.96 points to 8,510.12 in early trade. The Topix index of all first section shares gained 0.78 percent or 5.62 points to 728.74.
The gains came after US markets cheered a decision by US lawmakers to extend temporary tax breaks and unemployment benefits, despite earlier Republican threats to block the move.
The Dow Jones Industrial Average on Friday closed up 124.35 points (1.02 percent) at 12,294.00.
The broader S&P 500 gained 11.33 (0.90 percent) to 1,265.33, while the Nasdaq Composite rose 19.19 (0.74 percent) to 2,618.64.
Still, the Nikkei faced risks of slowing momentum as participants were expected to take a wait-and see approach until fund mangers return from the holiday in the US market, said Kenichi Hirano, operating officer at Tachibana Securities.
The New York market is closed Monday for the Christmas holiday.
"They must have trimmed long positions before the break," he told Dow Jones Newswires
"Given firm US economic indicators, they may start buying back once they return," he said.
The forex market was quiet with the dollar standing at 78.07 yen, basically unchanged from 78.06 yen in New York Friday.
The euro was also flat at $1.3039 and 101.79 yen, compared with $1.3040 and 101.86 yen in New York Friday.