Asian stocks fell on Thursday after lacklustre Chinese and Japanese economic data added to heightened worries about slackening global growth, sapping investors' appetite for riskier assets.

The latest policy response to rising global risks came from the Reserve Bank of New Zealand (RBNZ), which cut its benchmark rate by 25 basis points to 2.75 per cent and signalled more easing if China's economy slows down further.

Those risks were highlighted in data showing China's consumer inflation in August edging up, but producer prices falling for the 42nd straight month in the latest sign that deflation remains a significant risk for the world's second-largest economy.

Furthermore, Japan's key gauge of capital spending unexpectedly fell for a second straight month in July, signalling that the economy is struggling to get back on track after contracting in the second quarter.

With many economies facing headwinds, ANZ bank economists revised down their global growth forecasts for 2016 and 2017, expecting growth to remain more or less unchanged around 3.5 per cent "over the next couple of years."

"Previously we had growth edging up to 4 per cent by 2017. In the near term the risks are skewed to further downward revision," the economists at ANZ wrote.

Amid the sombre mood, the previous day's policy-hopes driven surge in the Shanghai Composite Index flagged and the shares fell 1.6 per cent. The losses were limited for now, however, as soft indicators fanned expectations for extra government stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan was 1.8 per cent lower after rallying 3.2 per cent on Wednesday. Australian shares fell 2.2 per cent and South Korea's Kospi shed 0.1 per cent.

Tokyo's Nikkei fell 2.9 per cent in the wake of the downbeat Japanese machinery orders numbers, after jumping 7.7 per cent the day before amid hopes for fresh government stimulus.

"The BOJ may ease policy further in October, but additional easing would not be enough to achieve its inflation target," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

The S&P 500 ended Wednesday down 1.5 per cent and futures slipped another down 0.2 per cent in the Asian day.

Elsewhere, Standard & Poor's stripped Brazil of its investment-grade credit rating on Wednesday, further hampering President Dilma Rousseff's efforts to regain market trust and pull Latin America's largest economy from recession.

In New Zealand, while the rate cut was widely anticipated, the RBNZ also said a further fall by the New Zealand dollar was "appropriate", sending the kiwi buckling.

The New Zealand dollar dived about 2 per cent and last fetched $0.6278, moving back towards a 6-year low of $0.6200 struck late in August.

The Australian dollar suffered collateral damage and retreated 0.2 per cent to $0.6999.

The US dollar slipped in line with receding investor risk appetite and was down 0.1 per cent at 120.38 against the safe-haven yen.

The euro was steady at $1.1210.

Commodities highlighted lingering concerns about global growth, with US crude oil sliding nearly 4 per cent overnight.

US crude stood little changed at $44.14 a barrel.

Oil prices are off more than 50 per cent since June 2014 with a global supply glut also weighing heavily on the commodity

In recent weeks, oil rallied in volatile trading after falling to 6-1/2-year lows when a stock market slide in China sent global equities and commodities prices tumbling. – Reuters