The benchmark Nikkei average <.N225> advanced 0.6% to 21,885.24, while the broader Topix climbed 1.0% to 1,603.00, with all but two of its 33 subindexes finishing higher.
Japanese big manufacturers' business confidence worsened to a six-year low in the July-September quarter, a central bank survey showed, a sign the bitter U.S.-China trade war is taking a heavier toll on the export-reliant economy. [nL3N26L0UG]
"The tankan survey was positive, with the headline manufacturing reading well above consensus and only slightly down from three months ago," said John Vail, chief global strategist at Nikko Asset Management.
"Overall, it is good news for risk markets that Japanese companies are not pessimistic given all the external concerns," Vail said by adding that the outlook for both manufacturing and non-manufacturing was also in positive territory.
Blue-chip exporters were high, with Honda Motor, Panasonic and Bridgestone Corp advancing 2.5%, 2.9% and 2.2%, respectively.
On Monday, Wall Street stocks rallied, with all three major indexes rising, helped by gains in Apple Inc .[.N/C]Apple rose 2.4% after chief executive Tim Cook told a German daily that sales of its newest iPhones were off to a strong start, while JPMorgan raised its forecast for shipment volumes.[nL3N26L3PA]
Tokyo-listed Apple-related shares were in demand on Tuesday. Murata Manufacturing Co, TDK Corp and Minebea Mitsumi jumped 2.8%, 2.7% and 4.7%, in that order.
On Monday, White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as "fake news", also giving investors an excuse to buy back risk assets. [nL2N26L0C8]
By sector, paper and pulp <.IPAPR.T>, rubber products <.IRUBR.T> and sea transport <.ISHIP.T> were among the top performing subsector indexes on the Topix, up 2.8%, 2.3% and 2.1%, respectively.
(Edited by Richard Borsuk)
By Tomo Uetake