US GDP went up by 1.2% in April-June, less than half of a 2.6% growth rate economists had anticipated.
Asian shares ticked up slightly on Monday after disappointing US economic growth data reduced expectations of a rate hike by the US Federal Reserve in the next few months.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3% in early trade, staying near its one-year high hit last week.
Japan's Nikkei fell 1.5% as the yen had soared after the Bank of Japan's stimulus plans underwhelmed investors.
US gross domestic product increased at a 1.2% annual rate in the April-June period, less than a half of a 2.6% growth rate economists had expected.
Markets took the data to mean the Federal Reserve was nowhere near policy tightening, even after it had appeared last week to have opened the door to a rate hike later this year by saying near-term risks to the economy had diminished.
"I suspect the Federal Reserve is hoping for a rebound in the second quarter after slowdown in the first quarter. The data suggests the economy is still flying low at best," said Hiroko Iwaki, senior bond strategist at Mizuho Securities.
The 10-year US Treasuries yield as a result fell to a three-week low of 1.450% on Friday and last stood at 1.463%.
Fed funds rate futures are pricing in only around 30% chance of a rate hike by December, compared to about 50% early last week.
Easing expectations of near-term US rate hikes undermined the attraction of the US dollar.
The euro hit a one-month high of $1.11975 on Friday and last traded at $1.1166.
The dollar stood near a three-week low against the yen, which got a lift on Friday after the Bank of Japan's stimulus fell short of markets' expectations.
The yen, which had surged about three% to 101.97 to the dollar on Friday, changed hands at 102.36 per dollar.
"Given that US economic growth is not that strong, we could see some selling in the dollar/yen. On the other hand, speculation that the BOJ will take additional easing steps in September could prompt fresh yen-selling from speculators. So the yen is likely to remain volatile," said Yoshinori Shigemi, global market strategist at J.P. Morgan Asset Management.
Gold also hit a near three-week high of $1,355.1 per ounce on Friday and last traded at $1,349.7.
Investors will be watching how European financial markets will react to the results of the European Union bank stress test, which showed some banks are still vulnerable.
Moments before that announcement, Italy's Monte dei Paschi bank, which fared the worst in the stress test, unveiled a privately funded rescue plan consisting of 9.2 billion euro sales of bad debt and 5 billion euro recapitalisation.
The poor health of the world's oldest bank has been seen as a grave weakness in the euro zone economy, posing a threat to the wider Italian banking system and also to the increasingly shaky political standing of Italian Prime Minister Matteo Renzi.
Also casting a shadow on markets was oil prices coming under pressure after their strong recovery in the first half of this year from 12-year lows.
They touched three-month lows on Friday to end July on a monthly decline of nearly 15%, the biggest monthly loss in a year for US crude.
Brent's October crude futures fell 0.6% to $43.27 per barrel, compared to Friday's low of $42.52. The September contract, which expired on Friday, fell to as low as $41.80.
US crude futures dipped 0.6% to $41.36 per barrel.
Manufacturing surveys from China, the US and some other countries will be a key focus on Monday.
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