Japan's 1990 stock-market collapse followed the bursting of its late-1980s asset-price bubble.
Japanese shares and property prices rose dramatically during the second half of the 1980s. The Nikkei 225 reached an intraday record of 38,957.44 on December 29, 1989. The Bank of Japan then tightened monetary policy, and confidence in highly valued assets weakened. The Nikkei fell sharply in 1990 and continued to struggle for years.
The bubble had been fueled by abundant credit, optimistic expectations, and strong speculation in both equities and land. Japanese banks were deeply connected to the property and corporate sectors, so falling asset prices damaged balance sheets and reduced lending. The prolonged aftermath became known as Japan's Lost Decades.
The crash is not simply a synonym for Japan's entire later economic stagnation. The market collapse was an early and highly visible part of a wider process involving banking problems, deflation, weak demand, and slow restructuring. The Nikkei did not regain its 1989 peak for decades.