Japanese stocks are treading water, following worse-than-expected GDP data showing Asia’s second biggest economy is still on the brink between growth and recession.

The Nikkei is flat, having fallen as much as 0.5 per cent earlier in the session. The broader Topix is down 0.1 per cent, having fallen as much as 0.4 per cent. Healthcare stocks are having the worst morning, with the sector as a whole down 1.6 per cent, and the utilities sector is down 1.1 per cent.

Data showed the economy was flat in the three months to June 30 on a quarter-on-quarter basis, and 0.2 per cent on an annualised basis – both below expectations.

The yen strengthened by as much as 0.1 per cent following the announcement to ¥101.26 against the dollar, before pulling back again. The Japanese currency had ended Friday 0.7 per cent stronger.

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