Japan's Nikkei 225 fell for years after the bursting of the country's late-1980s asset-price bubble.
Japanese stocks and land prices surged during the 1980s amid abundant credit, speculation, and confidence in continued economic growth. The Nikkei 225 reached an intraday peak of 38,957.44 on December 29, 1989. After the bubble burst, equities and property prices declined sharply.
The resulting period is often called Japan's Lost Decades. Banks carried large volumes of nonperforming loans, while weak demand, deflation, and slow restructuring prolonged the economic consequences. The Nikkei fell below 8,000 in 2003, although it later recovered.
The bubble was not simply a stock-market event: commercial land prices were also extraordinarily inflated. Japan's experience is frequently cited as a warning that asset-price booms can damage banks and the wider economy when lending expands too quickly. The Nikkei eventually exceeded its 1989 record only in 2024.