The Nikkei 225 lost about 78% during the collapse of Japan’s asset-price bubble.
Japan’s bubble peaked around the end of 1989, when extraordinary rises in share and land prices gave way to a long decline. The Nikkei 225 reached its then-record closing high on December 29, 1989, before falling dramatically during the 1990s and early 2000s.
Easy credit, rising property values, speculation, and financial liberalization had helped inflate asset prices. The Bank of Japan later tightened monetary policy, and the resulting adjustment exposed banks to large volumes of bad loans. The prolonged aftermath became known as the Lost Decades.
The Nikkei 225 is Japan’s best-known stock index, but TOPIX is another major Japanese benchmark and is sometimes confused with it. The bubble also involved land prices, so the event was broader than a stock-market collapse alone.