Which asset bubble burst in Japan around 1990, helping trigger a prolonged stock-market decline?

The asset bubble that burst in Japan around 1990 was the Japanese asset price bubble.

During the second half of the 1980s, Japanese share and land prices rose dramatically amid abundant credit, financial optimism, and speculation. The Nikkei 225 reached its record closing level of 38,915.87 on December 29, 1989. Japanese authorities then tightened monetary policy, and asset prices began to fall.

The collapse damaged banks and companies because many loans had been secured against land and other assets whose values were declining. Japan entered a prolonged period of weak growth, banking problems, falling prices, and stock-market underperformance. The 1990s are therefore often associated with Japan’s “lost decade,” although economic stagnation and financial repair extended beyond that decade.

The event is sometimes described as a stock-market crash alone, but the defining feature was the simultaneous collapse of both equities and real estate. That broader combination is why the historical name includes “asset price.”