Japan’s prolonged market and economic collapse after its late-1980s asset bubble burst became known as the Lost Decade.
Japanese land and share prices had risen dramatically during the 1980s. The Bank of Japan tightened monetary policy, and the bubble began to deflate around 1990. The Nikkei 225 fell from its 29 December 1989 peak of 38,957.44, while banks accumulated bad loans tied to falling property values.
Economic stagnation persisted through much of the 1990s, with weak growth, falling prices, financial failures, and repeated policy responses. Because the weakness continued beyond ten years, economists sometimes use “Lost Decades” in the plural.
The term does not mean that every Japanese industry stopped advancing. It refers mainly to prolonged macroeconomic stagnation and the collapse of inflated asset prices after the bubble.