Tokyo was 1.25 percent, or 113.50 points, down at 8,943.76, its lowest close since March 15, when the Tokyo bourse plunged in the wake of the March 11 earthquake and tsunami and a subsequent nuclear emergency.

Sydney shed 1.22 percent, or 52.7 points, to 4,251.2 on profit taking and Seoul dropped 1.70 percent, or 32.09 points, to 1,860.58.

Hong Kong lost 1.34 percent, or 262.76, to 20,016.27 and Shanghai dropped 1.61 percent, or 41.79 points, to 2,559.47.

Shortly before Tokyo's opening bell, official data showed Japan's exports fell for a fifth straight month in July, but the nation still managed to record a trade surplus as the economy gradually recovers from the triple disaster.

Exports were down 3.3 percent from a year ago to 5.78 trillion yen ($75.4 billion), better than market expectation of a 4.4-percent fall, the Finance Ministry said.

"We're trying to confirm whether the recovery trend in exports will continue," Kazuhiro Takahashi, general manager at Daiwa Securities, told Dow Jones Newswires.

Takahashi said there was still a trend for buying shares of companies dependent on domestic demand and for avoiding exporters due to the strong yen.

The yen's strength hurts Japanese exporters by making their products more expensive abroad and reducing their repatriated overseas earnings.

"Selling, particularly of auto shares, is accelerating on the back of concerns about a slowdown in the global economy and the firmer yen," Monex market analyst Toshiyuki Kanayama told Dow Jones Newswires.

The Japanese unit remained high in Thursday trade at 76.65 yen to the dollar, slightly down from 76.54 yen in New York.

Forex investors were wary of a possible Japanese intervention after Finance Minister Yoshihiko Noda said he was watching the market "carefully".

The euro came under pressure from profit taking following gains made the previous day.

The single currency stood at $1.4386 and 110.26 yen, slipping from $1.4428 and 110.45 yen in New York Wednesday.

"The euro rose well on Wednesday, so investors are taking this chance to take profits," said Tokyo Forex and Ueda Harlow senior dealer Yuzo Sakai.

Moves by the Swiss National Bank to stem the rise of the safe-haven franc were met with a shrug, as players felt the bank had not done enough to make a significant difference.

The franc "shot up after the Swiss National Bank didn't announce a peg to the euro to weaken it, despite speculation of such a step", noted John Kyriakopoulos of National Australia Bank.

However, he added: "In our view this is a slow burner."

The Swiss franc saw volatile trade, falling sharply to below 1.1500 to the euro at around 0530 GMT before rebounding to 1.1464, compared with 1.1365 earlier in the day.

The dollar stood at 0.7976 francs from 0.7897.

Europe's main stock markets followed Asia's lead at the start of trading on Thursday, with London's FTSE 100 index of leading shares down 1.20 percent to 5,267.73 points.

Frankfurt's DAX 30 index slumped 1.59 percent to 5,854.36 points and in Paris the CAC 40 shed 1.15 percent to 3,216.77.

Overnight on Wall Street, the Dow Jones Industrial Average closed flat, up just 4.28 points, or 0.04 percent, at 11,410.21.

Gold closed in Asia at $1,794.00-$1,795.00 an ounce, up on its Wednesday close of $1,791.00-$1,792.00. It had opened at $1,787.00-$1,788.00.

Oil was lower as investors looked to more data indicating the health of the US economy, the world's biggest oil consuming nation.

The US government is expected to release figures on jobless claims and inflation in the world's biggest economy, which is struggling to avoid dipping back into recession.

New York's main contract, West Texas Intermediate light sweet crude for September delivery, was down 36 cents to $87.22 a barrel in Asian afternoon trade.

Brent North Sea crude for October eased nine cents to $110.51.

In other markets:

-- Manila closed 1.46 percent, or 63.27 points, higher at 4,403.54.

Top-traded Lepanto Consolidated Mining Co. "A" shares climbed 6.94 percent to 1.54 pesos while SM Investments Corp. rose 2.83 percent to 545 pesos.

San Miguel Corp. added 2.40 percent to 128 pesos.

-- Taipei fell 1.64 percent, or 126.79 points, to 7,614.97.

HTC shed 3.5 percent at Tw$773.0 while TSMC was 2.13 percent lower to Tw$64.4.

-- Wellington closed down 0.12 percent, or 3.88 points, at 3,286.22 in subdued trade.

Fletcher Building rose 1.2 percent to NZ$7.95, Telecom Corp. fell 1.7 percent to NZ$2.605 and Air New Zealand dipped 0.9 percent to NZ$1.10.

Copyright AFP (Agence France-Presse), 2011