Private surveys indicated that a decline in China's manufacturing sector contributed to a lackluster performance for factories across Asia in the previous month, as businesses struggled with low demand, increasing the potential for a weak economic recovery in the region.

Surveys also indicated that the manufacturing activity decreased in Japan and grew more slowly in South Korea, partially because of weak domestic demand and increased input costs, further contributing to the negative outlook from a decline in China's factory activity.

China's Caixin/S&P Global manufacturing PMI dropped to 49.8 in July, down from 51.8 in the previous month, marking the lowest figure since October of last year and falling short of analysts' expected 51.5.The reading, which focuses mainly on smaller companies that export, aligned with an official PMI survey released Wednesday that indicated a decrease in manufacturing activity to a five-month low.

"Looking ahead, we expect a period of below trend global growth to weigh on manufacturing activity across Asia for the rest of this year," said Shivaan Tandon, markets economist at Capital Economics.

In July, Japan's au Jibun Bank Japan manufacturing PMI dropped to 49.1 from 50.0 in June, falling under the 50.0 mark for the first time in three months, indicating a contraction.