The Nikkei 225 reached a closing peak of 38,915.87, or nearly 39,000, on December 29, 1989, before Japan's long asset-price decline.
During the late 1980s, land and share prices surged in Japan amid easy credit, strong growth expectations, and speculative buying. The Nikkei's peak came near the end of the decade, while property prices continued to weaken afterward. When the bubble burst, banks were left with bad loans and companies faced falling collateral values.
Japan's resulting stagnation is often called the Lost Decades. The Nikkei did not quickly return to its 1989 level; it fell below 8,000 in 2003. This episode is distinct from the 1997 Asian financial crisis, which began with pressure on Thailand's baht. Japan's crash developed from a domestic asset bubble and became a prolonged banking and economic problem.