The Nikkei 225 fell sharply during the bursting of Japan’s asset-price bubble in 1990.
The Nikkei 225, Japan’s best-known share index, reached an all-time closing high of 38,915.87 on December 29, 1989. It then entered a prolonged decline as Japan’s property and equity bubble burst. The fall marked the beginning of a long period of economic stagnation often called the Lost Decade, although weak growth continued beyond the 1990s.
The bubble had been supported by rapid credit expansion and exceptionally high land and share prices. When monetary policy tightened and asset values turned downward, banks and companies faced heavy losses.
The Nikkei 225 is not the same as TOPIX, another major Japanese index. The Nikkei is price-weighted and tracks 225 prominent companies listed on the Tokyo Stock Exchange’s Prime Market.