Japan's long market decline after its 1989 asset-price bubble burst became known as the Lost Decade.
Japan's stock and property prices had surged during the 1980s. The Nikkei 225 reached its record closing level of 38,915.87 on December 29, 1989. After the bubble burst, share and land prices fell, banks accumulated bad loans, and economic growth weakened.
The term originally described the 1990s, but economists often use “Lost Decades” for the prolonged period of sluggish growth that extended into the 2000s and beyond. The label refers to economic performance, not simply the stock market's decline.
A common mistake is to identify the crash as one single day. Japan's collapse unfolded over years, with the Nikkei losing most of its value from the 1989 peak to its 2008 financial-crisis low. Demographic change, deflation, banking problems, and policy responses all shaped the aftermath.