The Nikkei 225 fell almost 80% from its 1989 peak during Japan's asset-price bubble collapse.
The index reached an all-time closing high of 38,915.87 on December 29, 1989. Japan's property and stock bubbles then burst, and the Nikkei entered a prolonged decline that shaped the country's so-called Lost Decades.
The collapse followed years of rapid credit growth, rising land prices, and heavy speculation. Japanese banks and companies were left with damaged balance sheets, while falling property values weakened collateral and investment.
The Nikkei did not bottom immediately. It reached a major low in October 2008 during the global financial crisis, and it took decades to return to its 1989 peak. The index is price-weighted, meaning companies with higher share prices have greater influence on its movement.