The Nikkei 225 was the market index most associated with the 1989 bursting of Japan’s asset-price bubble.
The Nikkei 225, Japan’s best-known stock index, reached an intraday peak of 38,957.44 on December 29, 1989. The peak came after years of rapidly rising Japanese share and land prices, supported by easy credit, speculation, and strong optimism about Japan’s economy.
After the bubble burst, Japanese equities fell for many years. The Nikkei eventually reached a low of 7,054.98 in March 2009 during the global financial crisis. Japan also experienced prolonged economic stagnation and deflation, contributing to the phrase “lost decades.”
The Nikkei 225 is not identical to TOPIX, another important Japanese index. The Nikkei is price-weighted and contains 225 companies, while TOPIX is broader and weighted by market capitalization. Both reflected the bubble’s collapse, but the Nikkei became its most recognizable measure.