Exporters such as Toyota Motor Corp, Honda Motor Co and Canon Inc are among five most traded stocks by turnover on the board, rising between 2.0 percent and 2.5 percent.
The dollar rose as high as 82.55 yen, its strongest level since early April, on a pledge by the main opposition Liberal Democratic Party, tipped to take power in an election next month, to push for further central bank easing.
A softer yen allows exporters to earn more when they repatriate overseas earnings, and boosts their competitiveness.
"Investors are increasingly relieved that exporters' earnings will be better than expected if the yen's weakness continues," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
Traders said that an increasing number of foreign investors are returning to the Japanese market due to expectations that an LDP-led government would push the Bank of Japan to take aggressive monetary stimulus.
"Foreigners have just started to pour in new, long money. Many of them are still underweight on Japanese stocks, but they fear that if they remain underweight, there is a risk of losing because they believe that Japanese stocks will outperform their
global peers," said Tetsuro Ii, the chief executive officer of Commons Asset Management.
"We've been getting questions from foreign investors asking how far the Bank of Japan will likely give in to Abe's demands."
The demands of Japan's opposition leader and probable next prime minister Shinzo Abe include "unlimited" easing until 2 or 3 percent inflation is achieved, pushing short-term interest rates below zero and having the BOJ buy bonds issued specifically to fund public works projects.
Anticipating resistance from central bankers, Abe has spoken of possibly rewriting a law guaranteeing the BOJ's independence, so that the government can force its agenda.
"Investors think that the bank may not achieve everything, but some of the demands are possible," Ii said.
By the midday break, the Nikkei climbed 1.1 percent at 9,319.36, trading above the 9,300-line for the first time since May 2. The broader Topix advanced 0.9 percent to 773.88, the highest level since July 6.
But with U.S. markets closed for the Thanksgiving holiday on Thursday and the Japanese market closed on Friday for Labor Day, volumes may stay low and gains could be trimmed in late trade, market analysts said.
They noted that investor sentiment remains upbeat, but markets are closely watching talks among U.S policymakers on how to avoid the U.S. "fiscal cliff," which has raised fears about the direction of the world's largest economy.
"A lot of investors have positions to unwind when the Nikkei reaches 9,400," said Yutaka Miura, senior technical analyst at Mizuho Securities. "Until there is a clear sign that the U.S. fiscal cliff is resolved, the Nikkei's upside will likely be capped around this level as major Japanese stocks are highly sensitive to the health of the U.S. economy."
Among other exporters, Advantest Corp surged 2.8 percent to 1,069 yen, Nikon Corp added 3.8 percent to 2,176 yen and Tokyo Electron Ltd gained 1.8 percent to 3,595 yen.