What 1990s bubble collapse caused Japan's prolonged stock-market downturn?

The 1990s bubble collapse that caused Japan's prolonged stock-market downturn was the Japanese asset price bubble.

Japan experienced exceptionally rapid rises in land and share prices during the late 1980s. Easy credit, optimistic expectations, and financial deregulation helped push valuations far above levels supported by underlying economic conditions. The Nikkei 225 reached an intraday peak of 38,957.44 on 29 December 1989.

The Bank of Japan raised interest rates, and asset prices then fell. The Nikkei lost much of its value during the early 1990s, while falling property prices weakened banks and borrowers. The resulting period is commonly called Japan's Lost Decade, although economic stagnation and financial problems extended beyond the 1990s.

The crash was not a single one-day event like Black Monday. It was a prolonged unwinding of both stock and real-estate bubbles. It is also distinct from Japan's later 2008 decline, which was tied to the global financial crisis.