Japan’s Nikkei 225 reached a pre-collapse record closing value of 38,915.87 on December 29, 1989.
The record came near the end of Japan’s asset-price bubble, a period when land and stock prices rose dramatically. Easy credit, optimistic expectations, and financial liberalization helped fuel speculation. The Nikkei had risen from roughly 10,000 in the early 1980s to nearly 39,000 by the end of 1989.
After Japan’s central bank tightened monetary policy, asset prices began to fall. The Nikkei suffered a prolonged decline, and the economy entered a period often called the “Lost Decades.” Banks were left with impaired loans, while companies and households reduced spending and borrowing.
The 38,915.87 figure is a closing value, not the index’s highest intraday level. The distinction matters because financial indexes can reach a high during trading and finish the day lower.