The Japanese stock index that peaked at 38,957 points before the early-1990s crash was the Nikkei 225.
The Nikkei 225 reached an all-time intraday high of 38,957.44 on December 29, 1989. Its rise reflected Japan’s extraordinary late-1980s asset boom, when property and share prices surged amid easy credit and optimistic expectations.
The bubble burst after the Bank of Japan tightened monetary policy and interest rates rose. Falling property values weakened borrowers and financial institutions, while stock prices also plunged. Japan then entered a prolonged period of weak growth and deflation often called the Lost Decades.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange’s Prime Market. It is not the same as TOPIX, which is capitalization-weighted and covers a broader group of companies. The 1989 peak remained unbroken for decades, making it a classic example of how a stock-market boom can persist long after underlying risks have grown.