Japan’s stock-market bubble burst in 1990, beginning a prolonged decline in the Nikkei 225.
The Japanese asset-price bubble had driven extraordinary increases in land and share prices during the late 1980s. The Nikkei 225 reached an intraday peak of 38,957.44 on 29 December 1989, but prices fell as monetary policy tightened and confidence in highly valued assets weakened.
The decline became part of a wider economic stagnation often called the Lost Decades. Banks carried large volumes of nonperforming loans, companies reduced investment, and falling land prices damaged balance sheets. The stock-market collapse was therefore closely tied to a broader property and banking crisis.
Japan’s episode is not the same as the 1997 Asian financial crisis, which began in Thailand. The Nikkei eventually fell below 8,000 in 2003, showing how long the consequences of the bubble’s collapse persisted.