Japan's Nikkei 225 reached 38,957.44 at the end of trading on December 29, 1989, before the country's early-1990s market crash.
The record came during Japan's asset-price bubble, a period of rapidly rising stock and land prices supported by easy credit and strong optimism. The Bank of Japan raised interest rates beginning in 1989, and the speculative boom then reversed. The Nikkei fell steeply during 1990 and remained far below its 1989 peak for decades.
The market collapse was part of a broader economic stagnation often called Japan's Lost Decades. Falling property values weakened banks and companies, while bad loans constrained new lending. The Nikkei's 1989 peak is frequently confused with the index's intraday high; 38,957.44 is the closing value on December 29, while the intraday record was slightly higher.