The Nikkei 225 fell from nearly 39,000 in 1989 to about 7,600 by 2003.
The index tracks 225 major companies listed on the Tokyo Stock Exchange and is Japan’s best-known share-market benchmark. It reached an intraday record of 38,957.44 on December 29, 1989, near the end of Japan’s asset-price bubble.
During the following years, Japanese share and property prices collapsed. Banks were left with large portfolios of bad loans, companies reduced investment, and economic growth weakened. The prolonged aftermath is often called Japan’s Lost Decades. The Nikkei’s fall was therefore not a single-day crash but a long decline following the bursting of an exceptionally large financial bubble.
The index’s price-weighted structure is a common source of confusion. Unlike a market-capitalization-weighted index, companies with higher share prices have greater influence regardless of their total market value. TOPIX is another major Japanese index, but it is not the answer to this question.