(Aug 30): The Nikkei 225 Stock Average is set to record its widest monthly trading range in 34 years after the Bank of Japan’s (BOJ) rate hike and signs of a US slowdown triggered wild price swings earlier this month.

The gap between the Nikkei’s intraday high and low during this month increased to ¥7,625 (RM227.11) after the gauge tumbled as much as 13% on Aug 5 in a broad selloff. That’s the biggest difference since August 1990, when the stock market was in the midst of a sharp downturn after the bubble economy burst.

While the magnitude of the gap for the two periods may look similar, volatility quickly subsided this time around, suggesting the outlook may be different.

“The economic situation is different from when the bubble burst,” said Koichi Kurose, the chief strategist of Resona Asset Management Co. Concerns over a US slowdown and the market’s loss of confidence in the BOJ’s policies have largely corrected, while Japan’s economy is recovering, he said. “The wide trading range will probably settle from September, and the market will likely return to near record levels towards year end.”

Uploaded by Isabelle Francis