Maritime surveillance vessels were spotted yesterday in the 12-nautical-mile zone off the Senkaku islands, which China calls the Diaoyus, in the East China Sea shortly after 9:00 am (0000 GMT/0530 IST), the coastguard said.
They left the zone shortly before 9:00 pm.
It is the latest episode in a fraught few months which have seen repeated stand-offs between official ships from both sides as they jostle over ownership of the strategically-important and resource-rich islands.
The submarine was thought to be Chinese, Japanese media said.
It sailed close to 12-nautical-mile territorial waters off Kume, alarming Japanese officials, although it did not violate international law.
"The situation is worth attention," Chief Cabinet Secretary Yoshihide Suga told a regular press briefing, noting that a foreign submarine was also spotted on May 2 near the Japanese island of Amami on the fringe of the East China Sea.
Asked about the three Chinese ships, US State Department spokeswoman Jen Psaki said Washington did not take a position on "the question of ultimate sovereignty over the islands".
"We do urge all parties to avoid actions that could raise tensions or result in miscalculations that would undermine peace, security and economic growth in this vital part of the world," she said.
The territorial row ramped up in September when Tokyo nationalised three islands in the chain, in what it said was a mere administrative change of ownership.
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