The Nikkei 225 lost more than 60% during Japan’s 1990s asset-price collapse.
Japan’s asset-price bubble expanded during the second half of the 1980s, with rapidly rising stock and land prices. The Nikkei 225 reached an all-time closing high of 38,915.87 on December 29, 1989. It then fell sharply as monetary policy tightened and confidence in exaggerated asset valuations weakened.
By the early 1990s, the collapse had damaged banks, companies, and households. Falling collateral values left financial institutions with bad loans, while weak demand and financial repair contributed to a prolonged period of slow growth often called Japan’s Lost Decade.
The Nikkei 225 is Japan’s best-known stock index, but it is not the same as TOPIX, which covers a broader section of the Tokyo Stock Exchange’s prime market. The crash is therefore best identified by the Nikkei’s name and by the wider phrase Japanese asset-price bubble.