The Nikkei 225 lost more than 50% during the 1990–1992 collapse of Japan’s asset bubble.
Japan’s asset-price bubble had driven extraordinary increases in both share and land prices during the second half of the 1980s. The Nikkei 225 reached its famous peak at the end of 1989, then fell sharply as monetary policy tightened and confidence in inflated asset values weakened.
By August 1992, the index had lost more than half its value from its peak. The decline was followed by a prolonged period of weak growth, falling prices, corporate debt problems, and banking stress often called Japan’s “lost decade,” although economic weakness extended beyond a single decade.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange. TOPIX, another important Japanese benchmark, uses a different methodology and should not be substituted for it.