The Nikkei 225 was the major Japanese stock index whose peak preceded the country’s 1989–1990 market crash.
The index reached an intraday record of 38,957.44 on December 29, 1989, during the final phase of Japan’s asset-price bubble. At the time, Japan’s economy appeared exceptionally strong, while rising land and stock prices encouraged increasingly optimistic expectations.
The bubble burst as the Bank of Japan tightened monetary policy and interest rates rose. Japanese share prices fell steeply, and land values also declined. The Nikkei lost roughly half its value within about a year and continued falling for much longer, contributing to Japan’s prolonged economic stagnation often called the Lost Decades.
The Nikkei 225 is a price-weighted index of 225 leading companies listed on the Tokyo Stock Exchange’s Prime Market. It is not the same as TOPIX, which uses a broader, capitalization-weighted approach.