The disappointing figures and a negative lead from Wall Street offset a survey showing business confidence in Japan at its highest level for more than two years.

Tokyo slipped 0.10 percent as profit-takers moved in following a healthy rally on Friday and despite the yen falling against the dollar.

Shanghai was 0.67 percent lower owing to the weak manufacturing numbers, while Sydney's index, which includes several firms that rely on Chinese business, lost 1.34 percent. Seoul fell 0.34 percent.

Hong Kong and Bangkok were closed for public holidays.

Beijing's official purchasing managers index (PMI), a closely watched gauge of manufacturing activity, came in at 50.1 in June, in line with expectations but down from 50.8 in May. Anything above 50 points to growth and anything below indicates contraction.

HSBC also said its own PMI came in at 48.2, down from May's final reading of 49.2 and its lowest since September.

The figures are the latest sign that the Asian powerhouse is losing strength, which could have implications for other economies that rely it if for their own growth.

They also come after fears of a cash crunch in China's financial system sent global markets into a tailspin, before the country's central bank said it would provide any necessary support.