The Nikkei 225 was the Japanese stock index whose peak preceded the country’s asset-price crash and prolonged economic stagnation.
The index reached an intraday high of 38,957.44 on December 29, 1989. During the late 1980s, Japanese share and land prices rose dramatically, supported by easy credit, speculation, and strong economic confidence. After the bubble burst, stock and property values fell for years. Japanese banks carried bad loans, businesses reduced investment, and economic growth weakened.
The term “Lost Decades” usually refers to the prolonged period of economic difficulty after the bubble, although scholars debate its exact boundaries and causes. The Nikkei’s 1989 peak is different from the date of its eventual low: the index fell to a low in 2009 during the global financial crisis. TOPIX is another important Japanese benchmark, but the famous bubble-era record specifically belongs to the Nikkei 225.