Japan experienced the Nikkei 225’s 1990 crash after its late-1980s asset-price bubble.
Japanese land and share prices rose rapidly during the second half of the 1980s. The Nikkei 225 reached an intraday peak of 38,957.44 on December 29, 1989, before falling sharply during the following years. The collapse helped begin Japan’s prolonged period of weak growth and financial stress, often called the Lost Decades.
The bubble was supported by easy credit, high asset valuations, and optimistic expectations. Japanese banks had substantial exposure to property and corporate borrowers, so falling collateral values weakened the financial system as well as the stock market.
The 1990 crash is sometimes dated from the market’s decline rather than one universally defined crash day. It is also distinct from the 1997 Asian financial crisis, which began with pressure on Thailand’s baht and spread across several economies.