Japan’s asset-price collapse began after its stock market peaked on December 29, 1989.
The Nikkei 225 reached an intraday high of 38,957.44 on that date, after years of rapidly rising Japanese share and land prices. The bubble had been fueled by abundant credit, optimistic expectations, and high asset valuations. When monetary policy tightened and confidence weakened, stock prices began a prolonged decline, followed by a collapse in property values and serious stress in the banking sector.
The episode is often called Japan’s asset price bubble or the burst of Japan’s economic bubble. It was not a single-day crash in the same sense as Black Monday in 1987. Instead, it developed into a long period of stagnation and financial weakness known as the Lost Decades. The Nikkei’s 1989 peak was not surpassed until 2024, a striking illustration of how long the consequences lasted.