The Nikkei 225 peaked at the end of Japan’s 1980s asset-price bubble.
The index reached an intraday record of 38,957.44 on December 29, 1989. Japanese stock and land prices had risen dramatically during the decade, supported by easy credit, optimistic expectations, and aggressive lending. Tokyo land values became especially famous for their extraordinary valuations.
The Bank of Japan tightened monetary policy beginning in 1989. As borrowing conditions changed and confidence weakened, both equity and property prices fell. The Nikkei’s decline continued for years, and Japan entered a prolonged period of slow growth, banking problems, deflationary pressure, and corporate restructuring 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 not the same as TOPIX, which uses a different methodology and covers a broader group of companies. The 1989 peak was not finally exceeded until 2024.