Japan's Nikkei gave up most of its early gains to close little changed on Monday after the central bank's Tankan survey boosted bets on an interest rate hike.
The Nikkei rose 0.12 percent to close at 39,631.06 points, after rising as much as 0.9 percent early in the session, tracking futures.
Shotaro Yasuda, market analyst at Tokai Tokyo Research Institute, said the Bank of Japan's Tankan survey results indicate that Japanese companies will continue to raise prices and this will be followed by continued inflation.
He added that this has reinforced expectations that the Bank of Japan will raise interest rates again soon, and encouraged investors to sell stocks to make profits.
The closely watched Tankan survey showed a headline sentiment index for major manufacturers came in at +13 in June, up from +11 in March and slightly above the median market forecast for a reading of +12.
The reading, the highest since March 2022, reflects a recovery in auto sector production and manufacturers' success in passing on higher raw material costs through higher prices.
The broader Topix index closed 0.52 percent higher at 2,824.28, after hitting 2,838.67, its highest level since January 1990.
The Topix index of value shares jumped 0.96 percent and the Topix index of fast-growing companies rose 0.05 percent.
Department store operators rose, with J.Front Retailing jumping 14.72 percent to become the top percentage gainer on the Nikkei and Takashimaya up 11.09 percent after they raised their annual profit forecasts.
