The Nikkei 225 marked the peak before Japan’s stock-market crash and its long stagnation.
Japan’s benchmark Nikkei 225 reached an all-time intraday high of 38,957.44 on December 29, 1989. The peak came after a powerful asset-price boom in Japanese shares and real estate. Easy credit, optimistic expectations, and rising land and equity prices had created a speculative environment.
After the peak, Japanese stocks entered a prolonged decline. The Nikkei fell dramatically during the early 1990s, while banks and companies struggled with bad loans and the collapse of inflated asset values. The resulting period is often called Japan’s Lost Decade, although economic weakness and deflation continued beyond the 1990s.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange. It is not identical to TOPIX, a broader capitalization-weighted Japanese index, so the two names should not be treated as interchangeable.