Japan's Topix index climbed above the key psychological mark of 3,000 points for the first time on Friday, underpinned by clarity over U.S. tariffs and a run of strong earnings reports.
Automakers rallied, with Toyota (7203.T) jumping 3.5%.
SoftBank Group (9984.T) surged more than 10% after the artificial-intelligence-focused technology investor swung back to profit in the first quarter.
"There has been a string of positive news at an unexpected time," said Mutsumi Kagawa, an analyst at Marine Strategies.
"With stock prices soaring, there's the fear of missing out, and there are likely to be a lot of investors newly buying shares. This is starting to look like a short squeeze."
The U.S. government on Thursday promised to amend a presidential executive order to remove overlapping tariffs on Japanese goods, Tokyo's trade negotiator Ryosei Akazawa said.
U.S. officials will lower auto tariffs to 15% from 27.5%, in line with the agreement on trade reached by the two countries last month.
The broad Topix (.TOPX) rose as much as 1.7% to a record peak of 3,038.84, although momentum waned in the afternoon session and the index ended the day up 1.2%.
The more tech-focused Nikkei share average (.N225) rallied as much as 2.4% to 42,033.92, its highest point since July 24, before closing the day with a 1.9% advance.
SoftBank led the gains on the Nikkei, contributing about 259 points to the index's 761-point rally.
The startup investor's "multi-decade campaign to pioneer transformative platforms is achieving fruition in AI now, and is being understood by the market," said Richard Kaye, a portfolio manager at Comgest.
Shares of Sony Group (6758.T) gained 3.5%, adding to its earnings-fuelled 4.1% advance from Thursday.
Among automakers, those most reliant on the U.S. market led the gains, with Mazda (7261.T) climbing 4.9% and Subaru (7270.T) leaping 5.4%.
The standout loser was Chugai Pharmaceutical (4519.T), which plummeted nearly 18% after trials showed Eli Lilly's (LLY.N) experimental weight-loss drug, licensed from Chugai, was less effective than Novo Nordisk's (NOVOb.CO) Wegovy.
