The Nikkei 225 Index advanced by 2.08% on Monday, closing at 6,970.22 points. The top-performing stocks included Recruit Holdings (up 22.79%), Sumitomo Metal Mining (rising 12.73%), and Olympus (gaining 9.63%).

The Bank of Japan's summary of opinions from its July policy meeting, released on Monday, indicated that the case for a September rate hike has strengthened. This is due to a growing number of policymakers calling for more aggressive measures to address escalating inflation risks.

The summary revealed that at least three of the nine board members suggested the Bank of Japan could increase interest rates at a faster pace than the current roughly two hikes per year. This highlights increasing concern among the central bank's policymakers that it may be falling behind in its efforts to contain inflation.

Analysts noted that the hawkish tone of the summary reinforced market expectations that the Bank of Japan could raise rates as early as September. This sentiment follows a push from U.S. Treasury Secretary Scott Bessent and a coordinated intervention by Tokyo and Washington to support the Japanese yen.