Japan's Nikkei average rose 1.0 percent to an 18-month closing high on Tuesday, with commodity-linked shares such as Mitsubishi Corp climbing following a rise in commodity prices.
The Nikkei is on track to rise 5.2 percent this quarter, and is up nearly 37 percent in Japan's 2009/10 financial year that ends on Wednesday.
While there were some concerns that Tokyo shares may be overbought on a short-term basis, market players said the Nikkei was likely to head higher in the new financial year.
While some shares have likely factored in the possibility of a further improvement in corporate earnings in 2010/11, earnings forecasts due to be announced from late April could provide an upside surprise to a significant number, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
"I think for about half the shares we might see numbers that are stronger than analysts' estimates," Akino said, adding that the Nikkei could rise to as high as 12,000 in April-June.
"Until last year, the surrounding environment had been poor and companies' estimates had been cautious. But I think this year we could see some enthusiastic numbers," he said.
The benchmark Nikkei gained 110.67 points to 11,097.14, its highest close since October 2008. It also hit an 18-month intraday high of 11,108.82.
The Nikkei's next major upside target lies near 11,310. That would be roughly a 38.2 percent retracement of its drop from its peak in 2007 down to its trough hit in 2008.
The broader Topix gained 1.4 percent to 979.58.
Some 2.2 billion shares changed hands on the Tokyo exchange's first section, the highest in about three weeks.
Shares rallied broadly, with advancing shares outpacing declining ones by more than 6 to 1.
Kobe Steel climbed 2.6 percent to 201 yen after raising its forecast for the financial year ending this month to a recurring profit of 5 billion yen ($54.04 million) from its previous forecast for a loss of 5 billion yen, and other steelmakers also gained.
Nonferrous smelter Dowa Holdings climbed 3.1 percent to 569 yen after the Nikkei business daily said it was likely to post a pre-tax profit of roughly 13.5 billion yen for the financial year that ends this month, exceeding a previous forecast of 10 billion yen.
Kobe Steel and Dowa Holdings were among a number of shares that saw their trading volume rise to more than twice their 30-day moving average, as was trading house Mitsubishi Corp, which climbed 3.9 percent to 2,462 yen.
"The next quarter is likely to see the Nikkei boxed into a 10,000-11,500 range," said Yutaka Miura, chief technical analyst at Mizuho Securities.
"It's risen quite a lot recently on hopes for a global economic recovery and good Japanese results, but if these don't live up to expectations there could be some short-term profit-taking."
Industrial production figures that showed a 0.9 percent fall for February, the first slip in a year, had little immediate effect, with market players saying forecasts of a 1.4 percent rise in March offset any negative impact.
