Japan’s Nikkei 225 reached its record high before the country’s early-1990s asset-price crash.
The index closed at 38,915.87 on December 29, 1989, near the end of Japan’s asset-price bubble. During the late 1980s, land and share prices rose rapidly, supported by credit growth, optimistic expectations, and financial speculation. The Bank of Japan then tightened monetary policy, and the boom reversed.
The Nikkei fell sharply during the early 1990s, while land prices also declined. Japan’s subsequent period of weak growth, banking distress, deflationary pressure, and repeated policy responses became known as the Lost Decades. The 1989 peak is often confused with the 1987 Black Monday record or with later recoveries in other Asian markets. The Nikkei did not quickly return to its 1989 level; it remained below that record for decades. The question concerns the country represented by the index, not the exchange’s city: the Nikkei 225 is a Japanese stock-market index associated with the Tokyo Stock Exchange.