The country that experienced the 1989 collapse known as the bursting of its asset-price bubble was Japan.
Japan’s asset-price bubble developed during the late 1980s, when land and stock prices rose dramatically amid easy credit, optimistic expectations, and strong economic confidence. The Nikkei 225 reached its all-time closing high of 38,915.87 on December 29, 1989.
Stock prices then declined, followed by a major fall in land values. Banks were left with large portfolios of bad loans, and companies and households reduced borrowing and spending. The resulting period of weak growth and deflation became associated with Japan’s “Lost Decades.”
This event differs from a single-day crash: the Japanese collapse unfolded over years and involved both equities and real estate. The Nikkei’s 1989 peak was not surpassed until 2024, illustrating how long the recovery took in headline stock-market terms.