Lost Decade was the nickname for Japan's 1990s asset-price collapse and its prolonged economic aftermath.
Japan experienced an extraordinary rise in land and stock prices during the late 1980s. The Nikkei 225 reached its record closing level of 38,915.87 on 29 December 1989. After the bubble burst, equity and property values fell sharply, leaving banks with bad loans and companies with excessive debt.
Economic growth weakened through much of the 1990s, and deflationary pressure made recovery more difficult. The term originally referred to the 1990s, but some writers use “Lost Decades” for the longer period that extended into the 2000s.
The Japanese case is not simply a stock-market crash: the collapse involved both equities and real estate, followed by banking and corporate problems. The Nikkei did not return to its 1989 closing high for decades, which helped make the episode a standard example of a long balance-sheet recession.