Asian shares fell in thin holiday trade on Monday, with mainland China, Taiwan and South Korean markets closed for holidays.
Japanese markets bucked the weak trend, long-term bonds tumbled, and the yen touched a fresh low since early August against the U.S. dollar as pro-business leader Sanae Takaichi's victory in the ruling Liberal Democratic Party leadership race stoked bets on a revival in big spending and loose monetary policy.
The Nikkei average jumped 4.75 percent to a record high of 47,944.76 while the broader Topix index settled 3.10 higher at 3,226.06.
Defense-related shares topped the gainers list, with Kawasaki Heavy Industries climbing 9.4 percent and Mitsubishi Heavy Industries rallying 11.2 percent.
Automakers Nissan Motor, Honda and Toyota surged 4-5 percent after reports emerged that U.S. President Donald Trump is considering significant tariff relief for U.S. auto production.