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South Korea's currency slipped in value after the country's central bank unexpectedly cut its benchmark interest rate to a new record low.

The won fell 0.3% against the US dollar after the Bank of Korea cut the seven-day repurchase rate by 25 basis points to 1.25%.

The Kospi stock index fell 0.14% to close at 2,024.17 points.

Analysts say that there could be further rate cuts in the coming months as the economy is in a weak state.

"As things stand, the economy is already in a fragile state and could certainly use more support," said Krystal Tan from Capital Economics.

China inflation

Other Asian stock markets are erasing earlier gains and falling following subdued Chinese inflation data.

Consumer prices on the mainland rose 2% in May from a year earlier, compared to estimates of a 2.2% increase.

Producer prices fell by 2.8% which was below estimates for a fall of 3.2%.

Japan's Nikkei 225 ended 1% lower at 16,668.41 while the broader Topix also lost 1% to shut at 1,337.41.

Over in Australia, the ASX 200 index slipped 0.15% to 5,361.

New Zealand's main index fell 0.3% to close at 6,970.55 after its central bank kept interest rates on hold due to concerns about rising home prices.

Markets in China, Hong Kong and Taiwan are closed for a public holiday.