Japan’s Nikkei 225 fell after the country’s asset-price bubble burst around 1990.
During the late 1980s, Japanese shares and property prices rose to extraordinary levels. Easy credit, strong optimism, and rapid bank lending helped drive the boom. The Nikkei 225 reached an all-time intraday high of 38,957.44 on December 29, 1989.
The Bank of Japan tightened monetary policy, and asset prices then began to collapse. The Nikkei fell sharply in 1990 and continued weakening over subsequent years. Property values also declined, leaving banks with bad loans and contributing to a prolonged period of slow growth often called Japan’s Lost Decades.
The episode is distinct from the 1997 Asian financial crisis, which began with pressure on Thailand’s currency and spread across several Asian economies. Japan was affected by that later crisis too, but the Nikkei’s famous bubble collapse began earlier and was rooted in Japan’s own late-1980s asset boom.