Which Japanese asset-price bubble burst in the early 1990s, beginning decades of market weakness?

The Japanese asset price bubble burst in the early 1990s, beginning decades of market weakness.

During the late 1980s, Japanese stock and land prices rose dramatically amid easy credit, strong economic confidence, and speculative buying. The Nikkei 225 reached its record closing level of 38,915.87 on December 29, 1989.

The Bank of Japan tightened policy, and asset prices began falling. The Nikkei’s decline damaged banks, businesses, and household balance sheets because land and equities had often been used as collateral. Japan then experienced a prolonged period of weak growth and financial restructuring.

This episode is sometimes called Japan’s “lost decades,” although the phrase covers more than the initial stock-market crash. It also differs from the 1997 Asian financial crisis, which began later and spread across several economies.