Which event caused the 1989 crash of Japanese stocks after the Nikkei's late-1989 peak?

The Japanese asset price bubble burst caused the crash that followed the Nikkei’s late-1989 peak.

During the second half of the 1980s, Japanese stocks and land prices rose dramatically. Easy credit, optimistic expectations, financial deregulation, and speculative buying helped push asset values far above levels supported by ordinary earnings and rents. The Nikkei 225 reached its record closing level of 38,915.87 on December 29, 1989.

The Bank of Japan then tightened monetary policy, and the speculative boom began to unwind. Stock and land prices fell, leaving banks with weakened balance sheets and borrowers with heavy debts. The resulting economic stagnation became associated with Japan’s “lost decades,” although the phrase covers a long and complex period rather than one single crash.

The event is sometimes called the bursting of Japan’s bubble economy. It is different from the 1997 Asian financial crisis, which began with Thailand’s currency problems. Japan’s market decline also developed over years, rather than ending in one dramatic trading session.