Japan’s stock-market crash in 1990 began the collapse of its asset-price bubble.
Japanese share and land prices had risen dramatically during the second half of the 1980s. The Nikkei 225 reached an all-time closing high of 38,915.87 on 29 December 1989. It then fell sharply in 1990 as monetary tightening, credit restrictions and doubts about extreme valuations weakened the boom.
The market decline became part of a broader collapse in Japanese asset prices. Banks were left with large volumes of troubled loans, and the economy entered a prolonged period of stagnation commonly associated with Japan’s “Lost Decades.”
The crash is sometimes dated only to 1990, but the bubble’s peak occurred at the end of 1989 and the consequences continued for years. Japan’s experience also became a frequently cited warning about property bubbles linked to excessive credit.