Japan’s stock-market bubble burst when the Nikkei 225 began its historic decline in 1990.
The Japanese asset-price bubble had pushed shares and property values to extraordinary levels during the second half of the 1980s. Easy credit, rising land prices, and optimistic expectations helped drive speculation. The Nikkei 225 reached an intraday record of 38,957.44 on December 29, 1989, then began a severe decline as financial conditions tightened and confidence weakened.
The market collapse was followed by falling property prices, bank problems, and a long period of weak economic growth often called Japan’s Lost Decades. The Nikkei’s decline was not a single-day crash like Black Monday; it was a prolonged unwinding of an enormous asset bubble. The episode is also distinct from the 1997 Asian financial crisis, which began years later and affected several other economies.