The Nikkei share average rose 0.65% to close at 26,405.87, while the broader Topix edged up 0.24% at 1,902.52.
"Japanese shares rose because U.S. equities gained at the end of last week, but the trading is very quiet with most participants in the U.S. and Europe away for holidays,"
said Shuji Hosoi, senior strategist at Daiwa Securities. Fast Retailing, the owner of the Uniqlo brand, rose 2.0%, while chip-making equipment maker Tokyo Electron gained 2.22%. Air-conditioning maker Daikin Industries climbed 1.39%.
Oil Prices Boost Japanese Oil Explorer Index
The rise in oil prices pushed the oil explorers index up 2.5%, making it the top gainer among the 33 industry sub-indexes on the Tokyo Stock Exchange. Inpex jumped 2.53%. The crude refiners' index also gained 1.33%, with Idemitsu Kosan rising 2.81%.
Japanese Banking and Insurance Sectors Weigh on Market
The banking sector lost 1.35% after surging more than 10% so far this month on expectations for better profits after the central bank last week allowed the 10-year government bond yield to rise up to 0.5% last week, from 0.25%. The 10-year JGB yield was last at 0.445%.
Sumitomo Mitsui Financial Group lost 2.21%, while Resona Holdings fell 2.75%. The insurance sector also fell 1.37%.
"The 10-year government bond yield hovers below the top end of the Bank of Japan's (BOJ) policy band, which prompted a sell-off of banking shares"