Japan’s Nikkei 225 peaked in 1989 before the country’s asset-price bubble burst.
The Nikkei 225 reached an intraday record of 38,957.44 on December 29, 1989. The peak came after years of soaring Japanese stock and land prices, abundant credit, and strong optimism about the economy. Prices then fell sharply as the bubble deflated.
Japan entered a prolonged period of weak growth, banking problems, falling asset values, and deflationary pressure. The 1990s are often called the “Lost Decade,” although economic stagnation and financial difficulties extended beyond that decade.
The episode is sometimes described only as a stock-market crash, but property prices were central to the bubble as well. Japanese banks had lent heavily against inflated land values, so falling real-estate prices damaged balance sheets and made the financial aftermath especially persistent.