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The U.S. dollar was almost flat against the yen in Asia on Thursday, giving a relatively muted reaction to Japan’s upbeat economic growth data amid continued low volatility. As of 0450 GMT, the greenback was at Y101.83 from Y101.89 in late Wednesday trading in New York.

During the session, the dollar weakened to as low as Y101.67, its lowest since May 9, as the stock market kicked off trading with a sharp decline. The greenback later recouped some of its earlier loss and stayed flat in a subdued trading later in the session.

Japan’s gross domestic product grew at a seasonally adjusted annual rate of 5.9% in the January to March quarter, the Cabinet Office said Thursday.

While a strong GDP reading had already been factored into the GDP data, the result was even better than a 4.4% gain predicted by economists consensus surveyed by The Wall Street Journal.

“I think investors are now cautious about a fallback” in the current April-June quarter, said Kengo Suzuki chief Forex strategist at Mizuho Securities, adding that market participants will likely monitor economic indicators in Japan more carefully to confirm if the economy is performing within the scope of the government’s scenario.

With continued low volatility as seen in the dollar trading in an extremely tight range between Y101 and Y104 since late January, the number of market participants trading the greenback for the yen is falling. But “this means we need to be careful about the potential for a dramatic move once a big incentive comes out,” as historical patterns have shown in the past 20 years, said Mr. Suzuki.

Around 0450 GMT, the benchmark Nikkei Stock Average fell 1.0% after the weakness on the Wall Street.

The euro was at $1.3718 from $1.3715 and at Y139.69 from Y139.74.

By Hiroyuki Kachi