Japanese markets ended sharply higher after the Japan Innovation Party emerged as a possible coalition partner for the LDP ahead of a parliamentary vote to decide the prime minister expected next week.

Investors shrugged off data that showed Japan's core machinery orders unexpectedly declined month-over-month in August.

The Nikkei average rose 1.27 percent to 48,277. 74 while the broader Topix index closed up 0.62 percent at 3,203.42. Tech stocks surged, with SoftBank Group climbing 8.6 percent and Tokyo Electron adding 4.1 percent.

Renesas Electronics jumped 8.2 percent after reports suggested that the chip maker is working with bankers to explore a sale of its timing division.

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