The Nikkei 225 reached its all-time peak on December 29, 1989, just before Japan's asset-price bubble burst.
The index closed at 38,957.44 on that date. The peak followed years of rapidly rising Japanese share and property prices, supported by easy credit and strong optimism about Japan's economy. After the bubble began to deflate, Japanese equities entered a prolonged decline that became associated with the Lost Decades.
The Nikkei 225 is a price-weighted index of 225 leading companies listed on the Tokyo Stock Exchange's Prime Market. Because it is price-weighted, companies with higher share prices have more influence on its movements than companies with lower share prices, regardless of market capitalization.
The index's 1989 peak is often discussed alongside Japan's broader asset-price bubble. It should not be confused with TOPIX, another major Japanese index that uses a different construction method and measures a broader group of companies.