The Nikkei 225 fell by more than 80 percent after Japan’s asset-price bubble burst in the early 1990s.
The index reached an all-time intraday high of 38,957.44 on December 29, 1989. It then entered a prolonged decline as inflated land and share prices collapsed, banks faced bad loans, and the Japanese economy moved into a long period of weak growth and financial stress.
The Nikkei’s closing low during the major post-bubble decline was 7,054.98 on March 10, 2009. Measured from its 1989 peak, that represented a fall of more than 80 percent. The decline was therefore much longer than a single-day crash and became associated with Japan’s “Lost Decades.”
The Nikkei 225 is a price-weighted index of 225 major companies listed on the Tokyo Stock Exchange. It is not identical to Japan’s broader TOPIX index. The bubble’s aftermath also affected property markets, employment patterns, monetary policy, and bank balance sheets.