The sharemarket has outperformed other markets in the Asian region as strength in the banking sector pushed it higher.
At the close, the benchmark S&P/ASX 200 Index was up 4.3 points at 5046.3, while the All Ordinaries edged 4.1 points higher to 5027.9.
Commonwealth Bank shares closed at a record high, and its big bank rivals also posted strong gains. That helped offset falls by energy stocks and metals companies.
Activity on the market was low, as investors waited for this week's central bank meeting in the US.
"Asia is not looking too flash at present," IG chief market strategist Chris Weston said. "The fact the ASX 200 has held up so well is positive, with financials and materials providing support."
Japan's market fell 3.32 per cent as investors worried about talk of a delay to an anticipated increase in the country's consumption tax. A debt review in China had hurt sentiment on its market.
Commonwealth Bank added 21¢ to $73.86, above its previous best closing price of $73.49 in May. Westpac gained 30¢ to $30.82, National Australia Bank gained 16¢ to $31.16 and ANZ was 23¢ higher at $29.64.
In the resource sector, BHP Billiton dropped 5¢ to $34.55, Rio Tinto shed 13¢ to $57.11 and Fortescue Metals added 4¢ to $3.65.
But goldminer Newcrest lost 26¢ to $12.15, while OZ Minerals shed 8¢ to $4.05 after warning it would take a hit of up to $240 million in its first-half results, largely due to lower copper and gold prices.
Energy companies also fell, with Woodside down 28¢ to $37.50, Santos down 17¢ to $13.64 and Oil Search 5¢ lower at $7.99.
The Australian dollar dipped as the slide on the Japanese market dented the popularity of higher-yielding currencies.
Late on Monday, the dollar was at US92.45¢, down from US92.54¢ on Friday.
This strengthened the yen against the greenback and the Australian dollar as the weak share prices of car exporters Toyota and Honda dented risk sentiment.
The dollar is expected to trade above US92¢ until Thursday morning, when the US Federal Reserve finishes its two-day policy meeting.
"It's unlikely to go above 93 and likewise it's going to find support in the lower 92 area," Easy Forex currency dealer Tony Darvall said.
Traders also continue to expect an August interest rate cut in Australia.