Industrial output data, which showed a rise for the fifth straight month, suggested that the economy is on the recovery track, even though the number fell short of the market consensus.

It seems that foreign selling, partly spurred by relatively expensive Japanese shares, has peaked out.

Share prices were weaker as many investors are keenly awaiting the machinery orders (figures).

Because of the uncertainties over exchange rates, investors were hesitant to chase export-oriented shares, and instead, went for domestic-demand-oriented shares.

Basically, investors can't really take aggressive positions this week, as they are waiting for the Bank of Japan's meeting, even if they expect the end to the ultra-loose policy to come on Thursday.

Market participants are relieved as they now see the trend of foreigners exiting the Japanese market is over.