The Nikkei 225 fell from its 1989 peak during Japan’s asset-price crash.
The index reached an all-time intraday high of 38,957.44 on December 29, 1989. During the preceding bubble, Japanese shares and land prices had risen dramatically, supported by easy credit, optimistic expectations, and financial speculation. The Bank of Japan later tightened monetary policy, and asset prices began to reverse.
The Nikkei then suffered a prolonged decline as banks confronted bad loans, companies reduced investment, and the economy entered a period often called the Lost Decades. The market’s fall was not a single-day event comparable to Black Monday; it was a drawn-out collapse followed by years of weak performance.
The Nikkei 225 and TOPIX are different indexes. The Nikkei is price-weighted and contains 225 major companies, while TOPIX is broader and capitalization-weighted. Both reflected the damage from Japan’s burst bubble.