The 225-issue Nikkei Stock Average finished 606.6 points, or 2.13 percent, higher from Wednesday at 29,066.32, its highest close since Nov. 25.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 28.98 points, or 1.46 percent, higher at 2,013.08.
Trading volume on the main section increased to 1,053.52 million shares from Wednesday's 990.23 million shares.
Tracking overnight gains in the U.S. market, Tokyo stocks opened high from the outset and extended gains in the afternoon, as investors who had taken a wait-and-see stance ahead of the two-day meeting of the U.S. central bank moved to buy a wide range of stocks.
During the policy meeting through Wednesday, the Fed decided to scale back its support for the pandemic-hit economy faster than previously scheduled due to concerns over rising inflation and hinted at three interest rate hikes next year, which might bring negative impact on the market.
However, the market showed a limited reaction to the interest rate hikes, with dealers saying that the move was also anticipated by market participants.
Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., said, "Fed Chairman (Jerome) Powell expressed confidence that the economy of the United States will grow even though it is still necessary to be cautious of the risks of the Omicron COVID-19 variant."
He added that the Tokyo stocks will continue tracking any gains in the U.S. market.
He also said that the outcome of the Bank of Japan's two-day policy meeting that began on Thursday would have a "very limited impact" on the stock market since no major policy changes are expected during the meeting.
By the close of play, except for pulp and paper firms, all sectors advanced in general with marine transportation, precision instruments, and mining issues heading the surge. Gaining issues outnumbered losing ones 1,676 to 421 on the First Section, while 87 finished unchanged.
Technology companies tracked overnight gains in their U.S. counterparts, with Tokyo Electron climbing 3.1 percent, Advantest jumping 5.4 percent, and Lasertec surging 5.6 percent.
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