Asia close: Stocks slip again, Chinese equities outperform

Stocks across the Pacific region were broadly lower on Thursday as investors continued to digest the possible implications of rating agency Fitch's decision, the day before, to downgrade America's sovereign debt.

In the background yields on longer-term U.S. government debt were still seeing upside pressure, not least amid the Treasury's heavy third quarter issuance schedule.

Indeed, Tokyo was said to be intervening to slow the rise on similarly-dated Japanese government bonds.

Japan's Nikkei-225 fell 1.68% to 32,159.28 and Hong Kong's Hang Seng dipped 0.49% to 19,420.87.

The Shanghai Stock Exchange's Composite Index on the other hand added 0.58% to 3,280.46, helped by a stronger-than-expected reading on Caixin's service sector Purchasing Managers' Index for July.

As of 1145 BST, the yield on 10-year JGBs was up by three basis points at 0.654% and those on 10-year U.S. Treasuries by six basis points to 4.147%.

Foreign exchange markets were still seeing some volatility as well with the U.S. dollar last trading down by 0.29% to 142.9 yen, having earlier risen to 143.87.

The move came amid 'market chatter' regarding the risk of intervention by authorities in Tokyo in foreign exchange markets.

Against China's yuan, the Greenback was dipping 0.24% to 7.1743.