In the week to Friday, the Nikkei-225 gained 183.78 points, or 1.70 percent, to 10,982.10, the best finish since early October 2008. The broader Topix index of all first-section shares added 25.11 points, or 2.67 percent, to 966.40.
Cheerful earnings news from US firms brightened investor sentiment and boosted shares on Wall Street and in Tokyo in recent days.
The Tokyo also remained upbeat despite gloomy news about flagship carrier Japan Airlines, which is expected to file for bankruptcy on Tuesday.
The Nikkei, however, could face resistance as it draws near the 11,000 level, Daiwa Securities said in a note to clients.
The less-than-expected improvement of the US employment for December was weighing on the dollar against the yen, posing a short-term risk for Japanese shares going forward, Daiwa added.
In the coming week, investors will keep their eyes on earnings reports from US high-tech giants such as IBM and Google as well as major financial institutions, including Bank of America, Citigroup, and Morgan Stanley. Fresh US housing starts and other key data in the coming week will also provide clues, Daiwa said.
China's October-December gross domestic product data next week will also influence the market, Nomura Securities said, expecting the Nikkei to move between 10,500-11,300.