The benchmark Nikkei stock index extended its winning streak to a 13th straight day on Thursday, it's longest since 1988, as investors took a positive cue from record advances on Wall Street overnight and the yen retreating against the U.S. dollar.

The 225-issue Nikkei Stock Average added 85.47 points, or 0.40 percent, from Wednesday to close the day at 21,448.52, marking its highest close since Oct. 1996.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 5.40 points, or 0.31 percent, to finish at 1,730.04.

Market strategists here said that investors were in a buoyant mood from the get-go following U.S. shares advancing overnight, which saw the Dow Jones Industrial Average closing at a record high, breaching the 23,000 line for the first time.

They added that a comparatively weak yen against the U.S. dollar also underpinned the market and saw foreign investors snap up blue chip issues, as expectations for solid earnings are high.

Japanese firms with an exposure to overseas markets have been gaining traction with investors as their profitability and competitiveness improves when the yen is weak and the yields are repatriated, market players noted.

"Robust U.S. shares boosted the market, which was also underpinned by the weak yen," Yutaka Miura, a senior technical analyst at Mizuho Securities Co., was quoted as saying.

While political issues can spook the market here, Hiroaki Kiwata from Toyo Securities said that despite the upcoming lower house election, investors were firmly focused on corporate profits, as earnings season starts to swing into full gear.

While iron and steel, metal product and nonferrous metal-linked issues comprised the day's notable advancers, export-related issues also found favor on the yen's slide against the U.S. dollar.

As such, Nintendo added 1.4 percent to 43,530 yen and Nissan gained 0.82 percent to 1,096 yen.

Following reports of cost-cutting measures related to its LCD TV division, Panasonic rose 1.7 percent to close at 1,645 yen.

Shares of embattled manufacturer Kobe Steel jumped 6.7 percent, after three Japanese automakers verified the safety of aluminum parts made by the firm, which has been under the spotlight recently for falsifying quality data.

Financial and insurance-oriented issues found favor, with Mitsubishi UFJ Financial Group rising 1.1 percent and Nomura Holdings gaining 0.5 percent to 660 yen.

Dai-ichi Life Holdings, meanwhile, rose 1.4 percent and T&D Holdings gained 1.6 percent.

Real estate issues also advanced on the penultimate trading day of the week, with Tokyu Fudosan Holdings gaining 0.7 percent to 709 yen, while Mitsubishi Estate edged up 0.4 percent, to close the day at 2,038.00 yen.

On the main section on Thursday, 1,520.38 million shares changed hands, rising from Wednesday's volume of 1,357.76 million shares and falling issues beat rising ones by 1,096 to 813 on the First Section, with 122 ending the day unchanged.

The turnover on Thursday came to 2,410.6 billion yen (21.33 billion U.S. dollars).