Asian shares came under pressure on Thursday as a disappointing survey on Chinese manufacturing stoked concerns about the regional giant and overshadowed better news from Japan.
The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 in August from July's 18-month high of 51.7. Investors reacted by selling the Australian dollar AUD, often used as a liquid proxy for bets on China, while shares in Shanghai dropped 0.5 percent.
The MSCI Asia Pacific excluding Japan Index slid 0.7 percent to 509.25 as of 11:08 a.m. in Hong Kong, with five shares falling for each two that rose. The measure closed yesterday at a more than six-year high. Indices in South Korea and Taiwan remained in the red.
Japanese shares managed to buck the trend, aided by a survey showing manufacturing activity accelerated in August as export and domestic demand increased.
The Markit flash Japan PMI jumped to a seasonally adjusted 52.4, up from 50.5 in July and the highest reading since March just before a hike in taxes sent demand cratering. Tokyo's Topix was still up 0.8 percent with the Nikkei gaining 0.9 percent after the yen took a spill against the U.S. dollar in a positive sign for Japanese exports and corporate earnings.