Japan’s Nikkei 225 stock index peaked in 1989 before the prolonged collapse of Japan’s asset-price bubble.
The Nikkei reached an intraday high of 38,957.44 on December 29, 1989. The boom had affected both equities and real estate, with rising land prices, easy credit, and optimistic expectations pushing asset values to extreme levels.
After the Bank of Japan tightened monetary policy and credit conditions changed, share and property prices began to fall. The decline helped produce a long period of weak growth and financial stress often called Japan’s “Lost Decades.” Banks carried large amounts of bad debt, while deflation and cautious spending complicated recovery.
The crash is sometimes described as one single event, but it was a multi-year unwinding of an asset bubble. Japan’s Nikkei later recovered, but it did not surpass its 1989 peak until 2024, an unusually long interval for a major stock index.