The Nikkei 225 reached its historic peak on December 29, 1989, before Japan’s asset-price crash.
It closed that day at 38,915.87, after a long period of rapidly rising share and land prices. Easy credit, optimistic expectations, and financial deregulation helped fuel the bubble during the 1980s. Japanese land values and equities became extraordinarily expensive relative to underlying earnings and rents.
The bubble began to deflate in 1990 as the Bank of Japan raised interest rates and financial conditions tightened. The Nikkei fell heavily, while property prices continued declining for years. The prolonged aftermath became associated with Japan’s “lost decades” of weak growth and financial repair.
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange’s Prime Market. It is often confused with TOPIX, a broader capitalization-weighted index. The 1989 peak is a key reference point in histories of stock-market bubbles and crashes.