Japan’s stock-market bubble burst in 1990 after the Nikkei 225 had peaked in 1989.
The Nikkei 225 reached an intraday high of 38,957.44 on December 29, 1989. Japanese land and equity prices had risen dramatically during the 1980s, supported by easy credit, optimism, and speculation. When monetary policy tightened and asset prices turned downward, the boom unraveled.
The resulting period is associated with Japan’s “Lost Decades.” Banks carried large volumes of bad loans, companies reduced investment, and weak demand persisted. The Nikkei fell for years and did not regain its 1989 peak for decades.
The bubble is often summarized as a simple stock-market crash, but property prices and the banking system were equally important. Japan’s experience also differs from the 1987 global crash: the central problem was a prolonged deflationary aftermath rather than a brief worldwide one-day plunge.