Japan’s stock-market crash began in 1989 when the country’s asset-price bubble burst.
During the late 1980s, Japanese share and land prices rose to extraordinarily high levels. Easy credit, strong optimism, and speculation helped drive the boom. The Nikkei 225 reached its historical peak of 38,915.87 on December 29, 1989, before prices began a prolonged decline.
The collapse damaged banks, businesses, and households whose balance sheets depended on inflated asset values. Japan then experienced years of weak growth, falling prices, and unresolved banking problems. This period is widely known as the Lost Decades, although the timing and definition of the term can vary.
The event is often confused with Japan’s 1990 market crash because the peak occurred in late 1989 and the steep decline continued afterward. The defining country is Japan, and the bubble involved both equities and real estate rather than stocks alone.