Japan experienced the 1990 collapse of the asset-price bubble that preceded its Lost Decades.
During the second half of the 1980s, Japanese land and stock prices rose to exceptionally high levels. Easy credit, financial deregulation, and optimistic expectations helped fuel speculation. The Nikkei 225 reached its historical closing high of 38,915.87 on 29 December 1989.
The Bank of Japan tightened monetary policy, and the bubble began to deflate. Equity and property prices then fell for years. Banks were left with large portfolios of bad loans, while households and companies reduced borrowing and spending. These conditions contributed to prolonged weak growth and deflation.
The phrase “Lost Decades” commonly describes Japan's long period of economic stagnation after the bubble burst. The stock-market collapse did not happen on one single day, and the later economic experience had several causes beyond the initial fall in share prices.