Last month, the Nikkei Stock Average rose as much as 1% after breaking its 1989 record.
Japan's benchmark stock index has surpassed the 40,000 mark for the first time, continuing its recovery after decades of stagnation.
The Nikkei Stock Average rose 1% to 40,308.85 yen in morning trading on Monday as investors took a positive view of Japanese companies following gains on Wall Street.
Tech stocks such as Tokyo Electron and Advantest rose the most.
Japanese stocks have been the most popular stocks over the past year as foreign investors take advantage of a weaker yen and corporate governance reforms that have boosted shareholder returns.
The Nikkei Stock Average rose more than 28% in 2023, outperforming the S&P 500 in a bumper year for U.S. stock markets.
Last month, the benchmark index surpassed the 1989 record of 38,915.8, set as Japan's economy was on the brink of an asset crash that began the “lost decades” of economic stagnation.
The resurgence in Japan's stock market fortunes comes amid a sustained rally in U.S. stocks, fueled by excitement over advances in artificial intelligence.
The value of U.S. tech companies has soared in recent months, with chipmaker Nvidia's market capitalization surpassing $2 trillion on Friday.
Japan's overall economy is not in line with the stock market's fortunes, and structural issues such as a declining population and a rigid workforce are weighing on growth.
Japan's economy officially entered recession last month, losing its position as the world's third-largest economy to Germany.
