The Nikkei 225 lost more than half its value during Japan’s 1990s asset-price crash.
Japan’s speculative bubble in stocks and real estate peaked around 1989. The Nikkei 225 reached an all-time intraday high of 38,957.44 on December 29, 1989. After the Bank of Japan tightened monetary policy and credit conditions changed, asset prices began to fall.
The index declined for years, reaching a major low in 2003 below 8,000 points. From its 1989 peak to that low, the Nikkei lost roughly four-fifths of its value, not merely half. The property collapse damaged banks because land and real-estate collateral had been heavily overvalued.
The long aftermath is often called Japan’s “Lost Decades.” The country experienced weak growth, deflationary pressure, banking problems, and repeated policy efforts to support recovery. The Nikkei and TOPIX are different indexes: the Nikkei is price-weighted, while TOPIX tracks a broader group of Tokyo-listed companies by market capitalization.