The Japanese benchmark Nikkei 225 slipped 224 points or 0.56 percent to close at 39,587.00. The day's trading range was between 39,830.50 and 39,524.00.
Nippon Express Holdings topped gains with a gain of 2.8 percent. Recruit Holdings, NEC Corp, Toho Co, all added more than 2 percent in the day's trading. Yaskawa Electric Corp plunged 10.3 percent. SMC Corp followed with losses of 7 percent.
Japan's leading index increased more than expected in May after falling in the previous three months, preliminary data from the Cabinet Office showed on Monday.
The leading index, which measures future economic activity, rose to 105.3 in May from 104.2 in April. The coincident index that measures the current economic situation came in at 115.9, down slightly from 116.0 in the previous month. Meanwhile, the lagging index rose to 112.7 in May from 112.5 a month ago.