Chinese and Hong Kong shares hit month lows and the yuan fell to its lowest in six months as Shanghai authorities said tough COVID-19 restrictions would remain in place.

Chinese blue chips shed 1.8 percent while Hong Kong stocks fell 2 percent, both falling to their lowest level since mid March. The spot yuan touched 6.4478 per dollar, its softest level since October.

The declines pulled MSCI's broadest index of Asia-Pacific shares outside Japan 0.66 percent lower, despite gains in Korea and Australia, where the local benchmark rose 0.4 percent to not far off a record peak.

Japan's Nikkei rose 1.22 percent.

Analysts at Nomura said they were cutting their second quarter China gross domestic product (GDP) growth forecast to 1.8 percent year-on-year from 3.4 percent, "owing to rapidly worsening high-frequency activity data in April, the rising number of cities under full and partial lockdowns, severe logistics disruptions, and signs that Beijing is unlikely to end its zero-COVID strategy soon."

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A prolonged slowdown in China would have substantial global spillovers, IMF Managing Director Kristalina Georgieva said on Thursday, but added that Beijing has room to adjust policy to provide support.

However, US and European stock futures pointed to higher opens elsewhere. EUROSTOXX 50 futures gained 0.4 percent and FTSE futures rose 0.3 percent, while Nasdaq futures jumped 0.8 percent and S&P500 futures advanced 0.5 percent.

Part of the reason for the share market gains, said analysts, was the overnight decline in the US benchmark 10-year yield, even if though this might prove short lived.

It was last at 2.8766 percent, a little higher in Asia trade, but still bruised after falling from as high as 2.981 percent early on Wednesday.

"I think we're still heading towards 3 percent for 10 year treasuries, I think it was a little bit of profit taking," said Rob Carnell, head of research for Asia Pacific at ING.

Lower yields sent the dollar lower overnight, particularly against the beaten down euro and sterling, which managed to recover a little ground.

Moves were more muted in Asia hours. The dollar index was little changed at 100.36, down from a near two-year peak the previous day of 101.03.

The dollar gained 0.22 percent on the yen to 128.16, however, as the yen's recovery on Wednesday - its first session of gains against the dollar in nearly two weeks - proved short-lived.

The yen has quickly slid to 20-year lows, hurt by the Bank of Japan keeping yields pinned down low while rates rise in the United States. Investors believe it has even further to fall, with most betting that even a government intervention wouldn't be enough to turn around the momentum.

Oil prices firmed in choppy trade as concerns about supply due to a potential European Union ban on Russian oil came to the fore. Russian forces stepped up their attacks in eastern Ukraine on Thursday.

Brent crude futures rose 1.54 percent to $108.44 a barrel, and US crude futures rose 1.44 percent to $103.7.

Spot gold fell 0.25 percent to $1,954.7 an ounce.

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