Tokyo's benchmark Nikkei index surged more than three percent on the first trading day of 2018 as investors caught up with recent rallies on Wall Street, fuelled by optimism over the US economy.

The bellwether index rose 3.26 percent, or 741.39 points, to close at 23,506.33, while the broader Topix index was up 2.55 percent, or 46.26 points, at 1,863.82.