The Nikkei 225 reached its pre-crash peak on December 29, 1989, during Japan's asset-price bubble.
The index closed at 38,915.87 on that date. Japanese share and land prices had risen dramatically during the 1980s, supported by credit expansion, speculation, and confidence in the economy. When monetary conditions tightened and the bubble burst, both equity and property prices entered a prolonged decline.
The Nikkei's fall became a central symbol of Japan's “Lost Decades.” It did not simply drop for a few weeks; the market remained far below its 1989 level for many years. The index eventually surpassed its 1989 closing high in 2024.
The Nikkei 225 tracks 225 prominent companies listed on the Tokyo Stock Exchange's Prime Market. It is price-weighted, so companies with higher share prices have greater influence than they would in a market-capitalization-weighted index.