Japan’s stock-market bubble burst in 1990 after the Nikkei reached its 1989 peak.
The Japanese asset price bubble developed during the second half of the 1980s, when easy credit and optimism drove up share and land prices. The Nikkei 225 reached an intraday high of 38,957.44 on December 29, 1989.
The Bank of Japan tightened monetary policy, and asset prices then fell sharply. The stock-market decline was followed by a prolonged period of weak growth, banking problems, falling prices, and corporate deleveraging. This era became known as Japan’s “Lost Decades.”
The crash is sometimes confused with the 1997 Asian financial crisis, but Japan’s bubble burst several years earlier and began primarily as a domestic asset-price collapse. The Nikkei remained far below its 1989 high for decades.