The Nikkei 225 reached its 1989 peak before Japan's asset-price bubble burst and the country's long market decline began.
The index closed at 38,915.87 on December 29, 1989, its record closing level for decades. Japan's property and equity prices had risen rapidly during the 1980s, supported by easy credit, financial optimism, and speculative buying. When monetary policy tightened and the bubble deflated, Japanese shares fell sharply.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange's Prime Market. Its constituents are reviewed by Nikkei Inc., and the index is widely used as a headline measure of Japanese equities. Because it is price-weighted, a company's share price affects the index more directly than its total market capitalization.
The index's 1989 peak is often paired with the TOPIX, another major Japanese benchmark. TOPIX is broader and capitalization-weighted, so it is not the same index even though both tracked the collapse of Japan's bubble economy.