The Nikkei 225 reached its peak just before Japan’s early-1990s asset-price crash.
The index closed at 38,915.87 on December 29, 1989. That record marked the culmination of Japan’s late-1980s asset bubble, when stock and land prices rose dramatically amid easy credit, financial optimism, and speculative investment.
The bubble burst around the start of the 1990s. The Nikkei then entered a prolonged decline, while falling property values weakened banks, companies, and household balance sheets. Japan’s resulting period of slow growth is often called the Lost Decade, although economic stagnation and deflation extended beyond the 1990s.
The Nikkei 225 is not identical to the broader TOPIX index. The Nikkei is a price-weighted index of 225 companies listed on the Tokyo Stock Exchange’s leading market, whereas TOPIX uses a different construction.