Japan saw its Nikkei 225 benchmark fall from a 1989 peak during its asset-price bubble crash.
The Nikkei 225 reached an all-time closing high of 38,915.87 on December 29, 1989. The Japanese asset-price bubble then burst as land and share prices declined, banks accumulated bad loans, and economic growth weakened. The index fell for years rather than recovering quickly after a single session.
Japan’s subsequent period of weak growth and deflation is often called the Lost Decades. The market’s long decline became one of the clearest examples of how a financial bubble can damage banks, businesses, households, and public finances.
The Nikkei’s 1989 high is distinct from the 1987 Black Monday crash, which affected markets worldwide. Black Monday was a rapid global one-day shock; Japan’s bubble collapse was a prolonged domestic and regional adjustment.