Japan experienced the Nikkei’s famous 1989 stock-market bubble burst.
Japan’s asset-price bubble reached its stock-market peak on December 29, 1989, when the Nikkei 225 closed at 38,915.87. It then entered a prolonged decline, while Japanese land and property prices also fell sharply.
The boom had been supported by rapid credit growth, optimistic expectations, and high asset valuations. When monetary conditions tightened and confidence weakened, the inflated prices became difficult to sustain. The resulting period is often called Japan’s Lost Decades because economic stagnation and financial problems persisted for many years.
The Nikkei’s 1989 peak was not immediately recovered. The index eventually exceeded that closing level in 2024, more than three decades later. The episode is sometimes described simply as a stock crash, but it was also a broader asset bubble involving commercial land, residential property, banks, and corporate balance sheets.