Japan's stock exchange suffered a 1989 crash after the country's speculative asset bubble burst.
The Nikkei 225 reached its famous peak on December 29, 1989, and then entered a severe, prolonged decline. The bubble had lifted both Japanese share prices and land values to extraordinary levels, supported by abundant credit and widespread expectations that prices would continue rising.
When asset values turned downward, banks and companies were left with weakened balance sheets and large amounts of bad debt. Falling collateral values made it harder for borrowers to refinance, while declining demand and deflation put further pressure on the economy.
Japan's experience is often used as a warning about the consequences of asset bubbles and slow financial restructuring. The crash was not a single session comparable to Black Monday in 1987; it was the beginning of a long market and economic downturn. The country is Japan, while the benchmark most often discussed is the Nikkei 225.