Japan’s stock exchange suffered the 1989 collapse known as the bursting of the Japanese asset-price bubble.
Japan’s equity and property prices rose dramatically during the second half of the 1980s. The Nikkei 225 reached its record near the end of 1989, but tighter monetary conditions and changing expectations caused prices to reverse. The decline became a defining financial event in Japan.
Japanese land values also fell for years, damaging banks and companies that had relied on inflated collateral. Weak demand, financial-sector problems, and repeated attempts at economic support contributed to a long period of slow growth commonly called the Lost Decades.
This episode is distinct from the 1987 global Black Monday crash. Japan participated in the 1987 turmoil, but the country-specific asset bubble peaked in late 1989 and then unwound over the following years.