Japan’s Nikkei 225 peaked in December 1989 before the country entered a prolonged stock-market collapse.
The index reached an intraday record of 38,957.44 on December 29, 1989. It then fell sharply during the early 1990s as Japan’s asset-price bubble burst. The decline was accompanied by falling land prices, banking stress, and a long period of weak economic growth.
The bubble had driven extraordinary valuations in both equities and real estate. Easy credit, strong optimism, and expectations that asset prices would continue rising encouraged increasingly speculative behavior. When monetary conditions tightened and confidence changed, those prices became unsustainable.
Japan’s later economic period is sometimes called the “Lost Decades,” although the phrase covers more than the stock-market decline alone. The Nikkei eventually recovered its 1989 closing high only decades later, making the episode one of the clearest examples of a prolonged equity-market aftermath.