Japan experienced the 1989 crash after its Nikkei 225 index reached a record high.
The Nikkei 225 closed at 38,915.87 on December 29, 1989, its all-time closing high at that point. The peak came after years of rapid increases in Japanese property and share prices, supported by abundant credit and optimistic expectations. The Bank of Japan then tightened monetary policy, and the bubble began to deflate.
Japanese equities fell sharply in 1990, while land prices and economic growth also weakened. The prolonged aftermath became known as Japan’s Lost Decades, although the timing and meaning of that label are debated. The Nikkei did not regain its 1989 closing high until 2024.
The crash was not simply a one-day event. It was the beginning of a long asset-price collapse involving stocks, commercial land, and residential property. Japan’s experience is often cited as an example of how a credit-fueled asset bubble can leave lasting effects after prices turn downward.