The Nikkei 225 fell from nearly 39,000 in 1989 to about 15,000 by 1992 after Japan’s asset-price bubble burst.
The index reached an all-time intraday high of 38,957.44 on December 29, 1989. Japanese share and land prices had surged during the 1980s, supported by easy credit, optimistic expectations, and intense speculation. The Bank of Japan then tightened monetary policy, helping bring the boom to an end.
The Nikkei declined sharply in the early 1990s as stock and property prices fell. Japan’s banking system carried large volumes of impaired loans, and weak demand and financial restructuring contributed to a prolonged period of slow growth often called the Lost Decades.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange’s Prime Market. It is often called the Nikkei, but it is distinct from the broader TOPIX index.