Tokyo's Nikkei index closed up 2.50% on Tuesday after US President Donald Trump dropped opposition to government aid for Joe Biden's transition team, with markets also buoyed by new vaccine news.

The Nikkei 225 index rose 638.22 points to close at 26 165.59, playing catch-up after a long weekend with surges in other markets.

The broader Topix index added 2.03%, or 35.01 points, to 1 762.40.

Shortly before the opening bell in Tokyo, Trump tweeted that the General Services Administration should start releasing federal funds and resources to start a transition, ending major uncertainty, although the president has yet to concede defeat in the election.

"The market took the news positively," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

Investors also welcomed news reports that Biden has tipped former Federal Reserve boss Janet Yellen for Treasury Secretary, Horiuchi told AFP.

Buying sentiment appeared already strong following a three-day weekend, during which global markets surged on positive news about vaccines.

International investors have cheered news that British drugs group AstraZeneca and the University of Oxford will seek regulatory approval for their coronavirus vaccine, following similar announcements by Pfizer/BioNTech and Moderna.

"From now on, we will see a tug-of-war between profit-taking and bargain-hunting. The market is heating up but sentiment remains strong," Horiuchi added.

The dollar stood at 104.40 yen in Asian afternoon trade against 104.54 yen in New York on Monday.

Japan Airlines soared 4.90% to 2 010 yen but rival ANA slumped 1.93% to 2 483 yen after an advisor to Prime Minister Yoshihide Suga reportedly called for the struggling companies to merge to weather the pandemic.

Sony surged 2.76% to 9 490 yen and Toyota gained 1.07% to 7 431 yen.

Source: News24