The Nikkei 225 was the Japanese stock index that peaked at the end of Japan's late-1980s asset bubble. It reached an all-time closing high of 38,915.87 on December 29, 1989.
Japan's bubble economy was fueled by easy credit, rising land prices, and strong optimism about corporate and financial assets. When the Bank of Japan tightened monetary policy and asset prices turned downward, the Nikkei began a prolonged decline. The stock-market collapse was accompanied by falling property values and severe problems in the banking sector.
The downturn became associated with Japan's “Lost Decades,” a period of weak growth, deflationary pressure, and financial restructuring. The Nikkei did not return to its 1989 closing high until 2024, illustrating how long the consequences of an asset-price bubble can persist.