Japan’s stock exchange crashed in 1990 after the country’s asset-price bubble burst.
During the late 1980s, Japanese land and share prices rose to extraordinary levels, supported by easy credit, speculation, and strong economic confidence. The Nikkei 225 reached its historic closing peak of 38,915.87 on December 29, 1989. It then entered a prolonged decline as monetary policy tightened and confidence weakened.
The resulting period is often called Japan’s “Lost Decades.” Falling property and equity values damaged banks, companies, and household balance sheets. Japan experienced slow growth, financial-sector problems, and persistent deflationary pressure for many years.
The crash is sometimes dated simply to 1990, although the bubble’s market peak came in late 1989 and the consequences continued long afterward. Japan’s episode also differed from a one-day panic: it was a long unwinding of inflated asset prices rather than one isolated session.