Asian markets slipped on Thursday as traders questioned whether a European Central Bank move to pump cheap cash into banks would be enough to unclog credit markets and ease the region's debt crisis.

Following its announcement that it would provide three-year loans at rates as low as one percent, a total of 523 banks snapped up a record 489.2 billion euros ($641 billion).

However, some market-watchers said the fact that so many institutions jumped in so quickly highlighted the precarious state that they were in.

Tokyo was 0.62 lower by the break, Hong Kong fell 0.60 percent, Sydney shed 0.99 percent, Seoul was 0.27 percent off and Shanghai dropped 1.08 percent.

The ECB move -- along with strong US data, a successful Spanish bond auction and an upbeat German confidence indicator -- helped boost Asian markets and the euro on Wednesday but doubts soon returned Thursday.

Until now, the ECB has lent for a maximum of one year and the new arrangement is part of a series of unprecedented measures to keep credit flowing in Europe at a time when banks are increasingly wary of lending to each other due to the debt crisis.

With pressure, mainly from Germany on the bank not to become lender of last resort for indebted economies, the latest plan was for banks to use the cheap money to ease their own cash flows and also buy up government debt.

"The market appreciates the introduction of the ECB loan facility and recognises this is a positive step," said Angus Gluskie, managing director at White Funds Management in Sydney.

"Nevertheless, there was disappointment that the euro banks haven't immediately pumped the money into sovereign bond purchases."

And Eric Viloria, senior currency Strategist at FOREX.com, said that despite the ECB's lending dealers remained nervous "as it is uncertain how the banks will use the funds".

"Moreover, the operation does not address the underlying structural issues of excessive budget deficits and deteriorating growth in European sovereigns," he told Dow Jones Newswires.

The euro, which jumped as high as $1.3188 in New York on Wednesday, eased in Asia Thursday to $1.3041, while it also fell to 101.74 yen from 101.88 yen.

The dollar was at 78.07 yen, compared with 78.05.

New York's main contract, light sweet crude for delivery in February, added 40 cents to $99.07 a barrel and Brent North Sea crude for February gained 13 cents to $107.84.

Gold was trading at $1,611.55 an ounce at 0200 GMT, against $1,637.97 an ounce late Wednesday.