TOKYO—Tokyo stocks closed higher on Monday, fueled by significant gains in financial and exporter shares. The 225-issue Nikkei Stock Average saw an increase of 697.12 points, or 1.80 percent, ending the day at 39,332.74, while the broader Topix index rose 45.32 points, or 1.68 percent, to finish at 2,739.39.

According to Namibia Press Agency, the stock market's upturn was driven by robust buying in the financial sector, including banks, insurance firms, and securities houses, spurred by expectations of higher interest rates. Additionally, a weaker yen contributed to the rise in shares of automobile and electronics companies, enhancing their competitive edge in foreign markets.

Analysts observed that the Nikkei's approach to the 40,000 point threshold, a level not seen since July, has been marked by volatility since late September. Market watchers are now focusing on upcoming earnings reports from Japanese and U.S. companies this week, which are expected to be a significant determinant in whether the Nikkei can sustain its momentum and breach this crucial level.