Japan’s benchmark Nikkei 225 suffered a major crash after its 1989 peak.
The Nikkei 225 reached an intraday high of 38,957.44 on December 29, 1989. That peak marked the end of Japan’s asset-price bubble, during which land and equities had risen to extraordinary levels. The index then declined for years as the economy entered a prolonged period of weak growth and falling prices.
The bubble had been supported by abundant credit, strong optimism, and rapidly rising real-estate values. When monetary policy tightened and asset prices turned downward, banks were left with bad loans and businesses faced heavy debt burdens.
This episode is often called Japan’s “lost decades,” although the timing and definition of that phrase vary. The crash was not simply a stock-market event: the collapse of property prices and the banking system made its economic consequences particularly persistent.