The islands, which are also claimed by China, are surrounded by rich fishing zones and located near important shipping routes.
Japan coast guard sources said although some of the Chinese vessels moved out of the territorial waters after the former sent warnings, but the others continued to stay within 12 nautical miles from the islands. One of the Chinese vessels even responded to the coast guard saying Japan should remove its ships out of the water. China refers to the islands as Diaoyu while Japan calls them Senkaku.
Describing the territorial violation by the Chinese as 'unprecedented', Japanese Chief Cabinet Secretary Osamu Fujimura said Japan was on the alert over the incident and strongly condemned the Chinese intrusion. Tokyo also called the Chinese Ambassador to Japan and protested over the incident.
The Chinese, on the other hand, said the surveillance ships entered the waters which were also claimed by Taiwan and for patrolling and law enforcement activities.
Tensions started between the two countries after Tokyo governor Shintaro Ishihara proposed to buy and develop the islands so that the Chinese could not assert their control on them. Both sides stepped up their stands on the islands in August.
The Japanese government said it was not eyeing to develop the islands but still Tokyo's move to buy the islands annoyed Beijing. Anti-Japanese protests were held in various Chinese cities and there were even calls to boycott Japanese goods.
On Thursday, two Taiwanese coast guard ships sailed near the disputed islands and coast guard sources said it was demonstrating its capacity to protect local fishermen.
(With agency inputs)