Japan’s Nikkei 225 began a historic crash after peaking at the end of 1989.
The Nikkei 225 reached its famous record closing level of 38,915.87 on December 29, 1989. That peak followed years of soaring Japanese share and land prices, fueled by easy credit, rapid bank lending, and strong optimism about Japan’s economic power.
The bubble burst as monetary policy tightened and asset prices became unsustainable. The Nikkei fell sharply during 1990 and continued to weaken over subsequent years. Japan then entered a prolonged period of slow growth, falling prices, banking stress, and balance-sheet repair often called the “Lost Decades.”
The crash was not simply a stock-market event. Commercial land prices, corporate borrowing, and banks’ collateral values were all connected to the bubble. A common mistake is to identify 1989 as the low; it was the peak, while the market’s long decline continued well afterward.