Japan experienced the Nikkei 225’s historic peak of 38,915.87 on December 29, 1989, before its asset-price crash.
During Japan’s late-1980s asset-price bubble, land and share prices rose dramatically. Easy credit, optimistic expectations, and strong economic performance encouraged speculation. The Nikkei reached its record closing level on the final trading day of 1989.
The bubble burst soon afterward. Japanese stock prices fell heavily, while commercial and residential land values also declined. Banks were left with large portfolios of nonperforming loans, which weakened lending and slowed investment. The resulting stagnation became associated with Japan’s “Lost Decades.”
The Nikkei’s 1989 high is often described as a stock-market crash itself, but the wider event was an asset-price collapse affecting both equities and real estate. The index did not return to that level for more than three decades; it finally exceeded the 1989 record in February 2024. Japan’s experience is also distinct from the 1997 Asian financial crisis, which began with Thailand’s currency devaluation.