The Nikkei 225 was the benchmark index that reached Japan's famous stock-market peak in 1989 before the asset-price crash.
The index reached an all-time closing high of 38,915.87 on December 29, 1989. That peak came after a huge rise in Japanese share and land prices during the late 1980s. Easy credit, financial liberalization, and speculative expectations helped drive the boom.
After Japan's central bank tightened policy, asset prices began falling. The Nikkei declined sharply during the early 1990s, while banks and companies faced losses tied to property and equity holdings. The prolonged economic stagnation that followed became associated with Japan's “Lost Decades.”
The Nikkei 225 is distinct from TOPIX, another important Japanese market index. The Nikkei is price-weighted and tracks 225 leading companies listed on the Tokyo Stock Exchange's Prime Market.