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%, 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% 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% to 2,267 yen after its subsidiary Yahoo Japan was slapped with an additional tax payment order.

In Shanghai, Chinese shares were flat as recent sessions' sharp losses appeared to have priced in the negative impact of weak June manufacturing data, dealers said.

The Shanghai Composite Index, which covers both A and B shares, was down 0.05%, or 1.22 points, at 2,397.15 in afternoon trade.

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% 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% and BHP Billiton shedding 1.43%.

Singapore was also lower, easing 0.48% to 2,822.00. Hong Kong was closed for a public holiday.

Regional markets were also affected by losses on US stocks caused primarily by poor employment data and jitters about Europe that capped Wall Street's worst quarterly performance in more than a year.

The blue-chip Dow Jones Industrial Average tumbled 96.28 points (0.98%) to end Wednesday at 9,774.02, a day after Wall Street shares slipped more than two percent and below the psychologically sensitive 10,000 level.

The Dow has fallen 3.5% in June and for the quarter it fared even worse -- losing 10% -- the worst quarterly loss since its 13% drop in the first quarter of 2009.

It came after US payrolls firm ADP said US non-farm private employment had increased by a much-less-than-expected 13,000 in June, an ominous prelude to Friday's employment data.

Oil fell further in Asian trade as concerns lingered over rising US gasoline stockpiles and weaker than expected US jobs data.

New York's main contract, light sweet crude for August delivery, dropped 78 cents to $74.85 a barrel.

Gold opened at $1,241.00-$1,242.00 an ounce in Hong Kong, down from Wednesday's close of $1,243.00-$1,244.00.