Tokyo stocks closed higher Tuesday, with the benchmark Nikkei stock index finishing at its highest level in more than 26 years as the yen's softer tone against the U.S. dollar lifted exporters issues and raised hopes for earnings results at the end of the month.

The 225-issue Nikkei Stock Average added 236.93 points, or 1.00 percent, from Monday to close the day at 23,951.81, marking its highest closing level since Nov. 15, 1991.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 10.35 points, or 0.55 percent, to finish at 1,894.25.

Technical analysts here said that as the yen continued to ease against the U.S. dollar during trading hours investors' risk appetite returned.

As a result, export issues, which are widely exposed to currency fluctuations, advanced as a weaker yen boosts export-oriented firms' profit outlooks when the yen is weak in comparison to other major currencies.

Exporters, including automobile and tech-related issues, also see yields boosted when repatriated on favorable exchange rates, all underpinned by increased competitiveness in overseas markets.

A rise in U.S. stock futures during trading hours here also helped buoy the market, investment analysts said, with the market's upside supported by overseas investors speculating that Japanese firms will produce solid earnings results at the end of this month.

By the close of play, electric appliance, information and communication, and transportation equipment-linked issues led gainers, and falling issues outpaced rising ones by 980 to 972 on the First Section, with 111 ending the day unchanged.

On the main section on Tuesday, 1,318.17 million shares changed hands, dropping from Monday's volume of 1,421.70 million shares.

Market capitalization on the First Section totaled a record 701.72 trillion yen (6.33 trillion U.S. dollars) and the turnover on the second trading day of the week came to 2,430.7 billion yen (21.94 billion U.S. dollars).