Tokyo stocks have closed 0.29 per cent higher on bargain hunting while a weaker yen boosted exporters, despite jitters over the unrest in Iraq.
The benchmark Nikkei 225 index on Tuesday added 42.68 points to finish at 14,975.97, while the Topix index of all first-section shares was also up 0.29 per cent, or 3.52 points, at 1,238.20.
Investors took advantage of cheaper valuations after the Nikkei tumbled more than one per cent on Monday in reaction to the fighting in Iraq, where militants are sweeping towards Baghdad after taking over several towns.
On Wednesday, the Fed wraps up a two-day policy meeting and while it is expected to further reduce its stimulus and keep interest rates at record lows, comments by bank chief Janet Yellen will be dissected for clues about future policy.
Kenichi Hirano, market analyst at Tachibana Securities, said: "The likelihood of a prolonged US rate scenario will weigh on the dollar's rise, normally an important ingredient to Japan stock market buying.
"But investors have been dip-buying for the last month, defying sometimes weaker-dollar days," he told Dow Jones Newswires.
In forex trade, the US dollar rose to Y101.94 from Y101.84.
Canon rose 0.14 per cent to Y3,391 while Uniqlo clothing chain operator Fast Retailing added 0.30 per cent to end at Y33,250.
Mitsubishi Heavy Industries fell 1.42 per cent to Y621. The Japanese giant and Germany's Siemens on Monday unveiled the terms of their joint bid for the energy assets of French industrial jewel Alstom, also coveted by US industry giant General Electric.
On Wall Street, the Dow edged up 0.03 per cent, while the broad-based S&P 500 advanced 0.08 per cent and the Nasdaq Composite Index rose 0.24 per cent.
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