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Tokyo - Tokyo's Nikkei 225 stock index climbed more than 7% in 2014, ending Tuesday near its highest levels since before the global financial crisis struck.
The advance adds to a 57% surge in 2013 - its best annual return in four decades - as the Bank of Japan's monetary easing blitz sharply weakened the yen, a plus for exporters such as Toyota and Sony.
On the year's last trading day Tuesday the index fell 1.57% on profit-taking, losing 279.07 points to end at 17 450.77.
The broader Topix index of all first-section shares gained 8.07% over the year to finish at 1 407.51.
Analysts were generally upbeat on the prospects for the Japanese market in 2015. But geopolitical issues - including political turmoil in Greece - and an uncertain outlook for the world's number three economy threaten to limit further gains.
The Nikkei struggled at the start of the year, but a fresh round of Bank of Japan monetary easing in late October pushed the yen even lower.
In addition, the national pension fund - the world's biggest - said it would shift more of its portfolio into stocks, giving the flagging market a boost.
Tokyo's plan to cut corporate tax rates, confirmed on Tuesday; a fresh $29bn fiscal stimulus plan; and speculation over even more BoJ easing could help lift the market further, analysts said.
The market also welcomed Prime Minister Shinzo Abe's move to delay a second sales tax rise scheduled for 2015, after a levy increase in April slammed the brakes on growth and pushed Japan into recession.
"Three tailwinds - a weaker yen, cheap crude oil prices and delaying the second sales tax hike - are blowing through Japan's stock market... and supporting share prices," SMBC Nikko Securities said.
Nomura Securities analyst Hisao Matsuura tipped the Nikkei to climb as high as 20 000 next year as Japan moves to strengthen its lagging corporate governance rules. The number of initial public offerings in Tokyo this year hit 77, returning to pre-financial crisis levels.
"Improving corporate governance is an encouraging factor - before, that was not the case, and investors grew frustrated," Matsuura said.
As the year draws to a close, the Nikkei's annual return was trailing that of the Dow Jones Industrial Average and S&P 500, but was ahead of major European markets including London's FTSE 100 and Germany's DAX index.
Still, the Nikkei remains a shadow of its former self.
This week, the index marked a quarter-century since it peaked at almost 39 000 in the last days of 1989. Japan's asset bubble then popped, dealing a huge blow to the economy and sending the Nikkei plunging over the next two decades.
And the prospect of foreign investors pouring money into Tokyo markets this year appeared uncertain after inflows dropped by more than 90% in 2014, according to Bloomberg News.
That may signal frustration with the pace of Abe's economic reforms, analysts said.
They want action to loosen a highly regulated labour market and free up the protected agricultural sector to more outside competition.
"The Japanese economy was not in good shape compared to the previous year, which is a prime reason for stagnant buying by foreign investors," said Yoshihiro Okumura, general manager at Chibagin Asset Management.
"Also, last year foreign investors bought Japanese shares on expectations. Now they want to see results."
The BoJ's expansion of its already vast asset-buying programme - a cornerstone of Abe's attempt to spur growth - sent the yen tumbling with the unit hitting a seven-year low against the dollar, boosting exporters' profitability.
On Tuesday the dollar bought ¥120.41, about 40% higher than the ¥86 level when Abe swept to power in late 2012 on a ticket to revive the once world-beating economy.
Among major Tokyo-listed shares, Sony jumped 35% in 2014 while rival Panasonic gained 17%, as the duo pressed on with major overhauls of their vast businesses.
Toyota rose 18%, Nissan jumped 20% and small car maker Suzuki gained 29%.
Honda, hit by an exploding air bag crisis, fell 18% with supplier Takata's shares plunging more than 50%.
