Japan's Topix index erased gains after the nation's central bank decided against adding to record monetary easing.

Mobile phone carriers and construction stocks were the heaviest drags.

Toshiba slid 1.8 per cent after posting a quarterly net loss and as the Tokyo bourse put the company on a monitoring list following an accounting scandal.

Nisshin Seifun Group rose the most on the Nikkei 225 Stock Average after SMBC Nikko Securities said the flour producer will beat its operating profit forecast.

The Topix was little changed at 1,462.24 at the close of trading in Tokyo, wiping out gains of as much 1.9 per cent.

Volume was 19 per cent below the 30-day average. The Nikkei 225 increased 0.3 per cent to 18,026.48, paring gains as the yen reversed losses and rose 0.4 per cent to 119.81 per dollar.

Inflation in July slowed to zero for the third time this year, increasing pressure on Governor Haruhiko Kuroda.

He said in August that the BOJ could meet its 2 per cent price target with the current level of stimulus.

Short-selling of shares on the Tokyo Stock Exchange surged to 42.4 per cent of total trading value on Monday, the highest since bourse data became available in 2008.

- Bloomberg