Tokyo stocks up 1.46% by break

The Nikkei 225 index at the Tokyo Stock Exchange added 128.15 points to 8,935.53 by the break, while the broader Topix index of all first-section shares gained 1.10 percent, or 8.04 points, to 740.30.

The rise came on expectations the US Federal Reserve, which starts a two-day policy meeting Wednesday, will launch a third round of quantitative easing, or bond buying, to boost the world's biggest economy.

Also buoying Wall Street were fresh data showing that the US trade deficit was virtually unchanged in July from June, an unexpected reading although both imports and exports dropped amid a slowdown in the global economy.

The Dow Jones Industrial Average finished 0.52 percent higher at 13,323.36.

However, Moody's later Tuesday warned it could strip the United States of its triple-A rating if Congress failed to cut the federal debt burden, a year after Standard & Poor's took away the country's top-notch mark.

The Tokyo market got a boost from official data Wednesday that showed Japan's core machinery orders in July jumped 4.6 percent, beating the market forecast for a 1.4 percent increase.

The figures are seen as leading indicators of corporate capital spending and are watched for movements that may reflect the outlook for the broader economy.

"The better-than-expected machinery orders data supported the Tokyo market, but the upside would be heavy ahead of key events overseas," said Masahiro Yamaguchi, strategist at Mizuho Securities.

A German court ruling Wednesday on the constitutionality of the eurozone's rescue fund was expected to clear the way for the bailout mechanism, soothing fiscal turmoil in the 17-nation bloc.

On currency markets, the dollar bought 77.88 yen, against 77.73 yen in New York late Tuesday, while the euro traded at $1.2859 and 100.15 yen, from $1.2848 and 99.88 yen in US trade.