I've been using my brother's Scangauge2 on my D16Y7-equipped 98 Civic and yesterday I noticed it showed that my car never goes into closed loop operation. I wonder if this is related to my P0135 code? The car still gets pretty good fuel mileage although I think it could be a little bit better. Also, I don't know if it's related to being stuck in open loop, I notice the car seems to be lacking in low end power.

 

Closed loop operation means that the ECU takes readings from the primary oxygen sensor and uses them to tune the mixture. So with a problem with the sensor, closed loop operation is impossible.

All Civics lack low-end power. Don't expect proper operation with the CEL on and a code set though. After clearing that up, you should also check the spark timing.