The Nikkei 225 reached its all-time closing high on December 29, 1989, before Japan’s asset bubble burst.
The index closed at 38,915.87, near the end of a decade of rapidly rising Japanese stock and land prices. Loose credit, speculative investment, and expectations of continuing growth helped push asset valuations to extraordinary levels.
After the peak, Japanese stocks fell for years as the bubble deflated. The Nikkei’s decline contributed to a prolonged period of weak growth, falling prices, banking problems, and corporate deleveraging often called Japan’s “Lost Decades.”
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange’s Prime Market. Its 1989 record stood for decades, so it is important to distinguish the record closing level from intraday highs and from the broader TOPIX index.