HONG KONG: Asian stocks slid on Thursday on weaker than expected economic data from China and global economic fears, despite growing business confidence in Japan.

Japan's Nikkei index closed down 191.04 points, or 2.04 percent, at 9,191.60, its lowest since November 2009.

The fall came despite a central bank announcement that Japanese business confidence had reached its highest level in two years, as the world's number two economy continues to pull out of its worst slump in decades.

"A global recession is unlikely, but it's obvious recovery momentum is slowing down," Norihiro Fujito, general manager at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones Newswires.

The index of sentiment among major manufacturers rose for a fifth straight quarter to one point in June from minus 14 in March, according to the closely watched Tankan survey.

Toyota fell 2.27 percent to 3,010 yen after it warned of a possible recall due to an engine fault in its top line Lexus and Crown sedans, adding to a litany of woes in the Japanese auto industry.

Mobile carrier Softbank tumbled 4.38 percent to 2,267 yen after its subsidiary Yahoo Japan was slapped with an additional tax payment order.

In Shanghai, Chinese shares closed down 1.02 percent as weak June manufacturing data weighed on sentiment, dealers said.

The Shanghai Composite Index, which covers both A and B shares, was down 24.58 points at 2,373.79 on turnover of 46.4 billion yuan (6.8 billion dollars).

China's Purchasing Managers Index fell to 52.1 in June from 53.9 in May, the National Bureau of Statistics said Thursday.

In Sydney, Australian stocks closed at their lowest in 11 months on the weaker than expected Chinese economic data and a soft lead from Wall Street, with the benchmark S&P/ASX200 index down 1.49 percent or 64 points at 4,237.5.

The broader All Ordinaries was down 62.1 points at 4,262.7.

"Unfortunately, the beginning of the new financial year was not enough to rid the market of the current bout of global uncertainty and risk aversion it is experiencing, with seemingly little in the immediate future to turn things around," said IG Markets analyst Ben Potter.

Resources stocks experienced a mid-afternoon bounce following reports that the government was nearing a tax compromise with major miners, but closed firmly lower, with Rio Tinto off 2.34 percent and BHP Billiton shedding 1.43 percent.

Singapore's Straits Times Index tumbled 0.53 percent to close at 2,820.35.

Casino operator Genting Singapore was up 0.86 percent at 1.18 dollars and Singapore Telecom was unchanged at 3.04 dollars.

Hong Kong was closed for a public holiday.