Japan’s 1989 stock-market peak preceded the collapse of its asset-price bubble in the early 1990s. The Nikkei 225 reached an all-time closing high of 38,915.87 on 29 December 1989.
During the late 1980s, Japanese land and share prices rose dramatically amid easy credit, optimistic expectations, and rapid financial expansion. After monetary policy tightened and asset prices turned downward, banks were left with impaired loans secured by falling collateral. The resulting balance-sheet problems contributed to a long period of weak growth and deflation.
The phrase “Lost Decades” generally describes Japan’s prolonged economic stagnation after the bubble, although scholars debate its exact boundaries and whether the period should be treated as one or two decades. The stock-market crash was part of a broader asset collapse that also included commercial and residential land.