The Nikkei 225 reached 38,957.44 on December 29, 1989, at the height of Japan’s late-1980s asset-price bubble.
The index tracked 225 leading companies listed on the Tokyo Stock Exchange. During the bubble, rapidly rising share and land prices encouraged speculation and created expectations of further gains. After the peak, Japanese equities entered a prolonged decline as the bubble deflated and financial institutions faced mounting bad loans.
The 1989 peak is often discussed as the beginning of Japan’s “lost decades,” although the economic stagnation and financial problems developed over many years. The Nikkei’s fall is sometimes confused with a single one-day crash; in reality, it was a long market downturn. TOPIX is another important Japanese index, but the quoted 38,957.44 record belongs specifically to the Nikkei 225.