Japan’s Nikkei 225 reached its record closing high before the country’s 1990s asset-price crash.
The index closed at 38,915.87 on December 29, 1989, near the end of Japan’s asset-price bubble. Japanese share and land prices had risen dramatically during the 1980s, supported by credit expansion, speculation, and confidence in continued economic growth. After monetary policy tightened, the bubble burst.
The Nikkei then entered a prolonged decline. Japan’s financial system accumulated bad loans, banks became more cautious, and weak demand contributed to years of slow growth. The market’s later recovery did not quickly restore the 1989 peak.
The crash is sometimes described only as a stock-market event, but it was part of a wider asset-price collapse. Japanese commercial land prices also fell heavily, and the banking problems made the economic consequences more persistent than a brief trading shock.