Japan’s Nikkei 225 began a historic long decline after the country’s asset-price bubble burst in 1990.
Japan’s bubble had driven stock and land prices to extraordinary levels during the late 1980s. The Nikkei 225 reached an intraday peak of 38,957.44 on 29 December 1989. After the bubble burst, Japanese shares fell sharply, and the index entered a long period of weakness commonly associated with the country’s “Lost Decades.”
The boom was supported by loose credit, optimistic expectations, and rapidly rising real-estate values. Japanese banks had expanded lending against land and other assets. When monetary policy tightened and prices reversed, borrowers and banks were left with damaged balance sheets, creating persistent financial and economic problems.
Japan’s experience is often discussed alongside stock-market crashes, although the decline was not a single one-day event like Black Monday. The Nikkei later fell below 8,000 in 2003. Its 1989 peak remained far above subsequent levels for decades, illustrating how a bubble’s aftermath can last much longer than the initial collapse.