The Nikkei 225 stock average climbed 0.8%, adding to a 54% rally this year, the most among major developed markets. Japan's currency fell 0.1%, weakening for a third day.
The Turkish lira slid 0.6% against the dollar, reversing earlier gains. China's seven-day repurchase rate fell for a second day after the central bank injected funds into the financial system. Most global markets were closed for the holidays.
Bank of Japan Gov. Haruhiko Kuroda told a business lobby group Wednesday that the nation's economy is on a smooth recovery path this year. U.S. reports showed orders for durable goods and new-home sales rose more than forecast in November, underscoring economic confidence expressed by the Federal Reserve this month when it said it would begin reducing its stimulus program.
"The yen's depreciation is due to a stronger U.S. economy and the logic of buying into Japanese stocks is clear — a weaker yen is good for Japan's export-oriented economy," said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. "The funds injection by China's central bank is pretty symbolic."
The Nikkei 225 rose to 16,009.99, the highest close since Dec. 11, 2007. Fast Retailing Co., Asia's biggest apparel chain, jumped 4.7%.
The yen, which has tumbled 17% this year, the most among 10 developed-market currencies tracked by Bloomberg, declined to 104.41 against the greenback. It slid to 104.64 per dollar Dec. 20, the weakest since October 2008, and Wednesday fell 0.1% to 142.77 per euro, near the five-year low of 142.90 reached last week.
The Shanghai composite index gained 0.6% to 2,106.35, led by oil companies. PetroChina Co., the biggest energy producer, rose 0.7%.
Turkey's lira depreciated to 2.0902 per dollar and the benchmark equities index slid 2.2%. Environment and Urban Works Minister Erdogan Bayraktar resigned as a minister and lawmaker after saying he was under pressure and Erdogan should step down if necessary, NTV television reported.
Economy Minister Zafer Caglayan quit earlier Wednesday after police detained his son Dec. 17 in probes into bribery, money laundering and gold smuggling, his office said in a statement. Interior Minister Muammer Guler also resigned, according to NTV. A raid on Guler's son's home found several safes and stacks of cash.
Egypt's EGX 30 index gained 1.4% and the ADX general index rose 0.6% in Abu Dhabi.
Russia's Micex index was little changed and the ruble weakened almost 0.2% to 32.6834 per dollar.
Thailand's SET index gained 0.4%. The baht slid for a seventh day after reaching the lowest level since June 2010 amid political unrest.