Japan experienced the 1989 crash after the bursting of its real-estate and stock-market bubble.
Japan’s Nikkei 225 reached an intraday high of 38,957.44 on December 29, 1989. Excessive lending, rising land prices, optimistic expectations, and financial deregulation had helped drive asset valuations to extraordinary levels during the late 1980s.
After the bubble burst, stock and land prices fell for years. Banks were left with large non-performing loans, businesses reduced investment, and the economy entered a prolonged period of weak growth and deflation. The Nikkei’s later losses became a central symbol of the country’s “Lost Decades.”
The crash was not simply a one-day stock-market event. It was the beginning of a long balance-sheet adjustment involving banks, corporations, households, and government policy. Japan’s experience later became a major comparison point in discussions of asset bubbles.