Japanese shares opened higher Wednesday following solid gains on Wall Street, boosted by a surge in German investor sentiment and a successful Spanish debt auction.
The Nikkei index at the Tokyo Stock Exchange added 0.75 percent or 71.30 points to 9,596.62 shortly after the opening bell.
Spirits brightened as German investor sentiment hit a seven-month high on hopes Europe's top economy will dodge recession.
The widely watched investor confidence index calculated by the ZEW economic institute soared to 6.9 points in December from minus 15.7 points in November.
It was the highest reading since May and also the first time since then the index has been in positive territory, the institute said.
"Effects are likely to push Japanese stocks higher gradually," Kenichi Hirano, market analyst at Tachibana Securities, told Dow Jones Newswires.
Spain's borrowing costs fell sharply Tuesday in a sale of short-term treasury bills. The Treasury raised 3.89 billion euros ($5.0 billion) in an auction of 12 and 18-month bills.
The Japanese headline index may test 9,650 on expectations for an improvement in the eurozone economy, Hirano said.
In the United States, the Federal Reserve's Federal Open Market Committee, which finishes a two-day meeting on Wednesday, is expected to decide to expand bond purchase operations to replace the expiring "Operation Twist" bond swap programme.
Hirano said markets had already factored in the likely move, adding: "There are few major selling catalysts".
The Dow Jones Industrial Average rose 78.56 points (0.60 percent) to 13,248.44, scoring a fifth straight day of gains.
The euro bought $1.3001 and 107.29 yen, compared with $1.3003 and 107.28 yen in New York Tuesday.
The dollar stood at 82.51 yen, flat from New York.
-- Dow Jones Newswires contributed to this report --