Which 1989 Japanese index crash followed the collapse of Japan’s late-1980s asset-price bubble?

The Nikkei 225 crash followed the collapse of Japan’s late-1980s asset-price bubble.

The Nikkei 225 reached its record closing level of 38,915.87 on December 29, 1989. Japanese share prices then fell sharply as the speculative bubble in stocks and real estate unwound. The index’s decline continued into the 1990s and became associated with Japan’s “lost decade,” although the country’s economic difficulties lasted longer.

The bubble had been supported by rapid credit growth, rising land prices, and optimistic expectations. Japanese banks and companies were deeply connected to property and equity markets, so falling asset values weakened balance sheets and reduced lending.

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 the broader TOPIX index. That distinction matters when comparing Japanese market records and historical crash statistics.