Japan’s stock-market crash in 1989 marked the beginning of a prolonged collapse in asset prices.
Japan’s Nikkei 225 reached an all-time closing high of 38,915.87 on December 29, 1989. The market had risen dramatically during an asset-price bubble fueled by abundant credit, rising land values, and strong investor optimism. After monetary policy tightened and confidence changed, Japanese equities began a long decline.
The crash was followed by a collapse in commercial and residential property prices, creating severe problems for banks and borrowers. Japan’s economy then experienced years of weak growth, deflationary pressure, and financial restructuring. The term “Lost Decades” is often used for the broader period, although the exact dates vary and the economic experience was not uniformly stagnant every year.