# Canonical recap data for Japanese Asset Price Bubble Peaks (1989)
# Source: https://recap.at/1989/nikkei-bubble-peak-1989
# Format: YAML 1.2 (UTF-8). Generated at request time.
slug: nikkei-bubble-peak-1989
canonicalUrl: "https://recap.at/1989/nikkei-bubble-peak-1989"
title: Japanese Asset Price Bubble Peaks
aliases:
- Japanese bubble economy
- Lost Decade
- Bubble Economy
- Heisei bubble
subtitle: Japan's Nikkei index reached an all-time high at 38,957, marking the apex of the bubble before the Lost Decade of deflation and stagnation.
recapType: global_event
eventStatus: concluded
startDate: 1989-01-01
datePrecision: year
year: 1989
decade: 1980
country:
name: Japan
slug: japan
summaryShort: The Japanese asset price bubble  was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and the country's economy stagnated. The bubble was characterized by rapid acceleration of asset prices and overheated economic ac
summaryLong: The Japanese asset price bubble  was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and the country's economy stagnated. The bubble was characterized by rapid acceleration of asset prices and overheated economic activity, as well as an uncontrolled money supply and credit expansion. More specifically, over-confidence and speculation regarding asset and stock prices were associated with financial policy deemed to exacerbate them. Through the creation of economic policies that cultivated the marketability of assets, eased the access to credit, and encouraged speculation, the Japanese government started a prolonged and exacerbated Japanese asset price bubble.
lede: Japan's real estate and stock markets soared to absurd valuations in the late 1980s, peaking in 1989 when Tokyo real estate alone was worth more than all U.S. real estate combined. When the bubble burst in the early 1990s, it triggered a decade-long economic stagnation that reshaped Japan's global standing.
heroImageUrl: "https://upload.wikimedia.org/wikipedia/commons/thumb/0/0c/Nikkei_225_Index.webp/1280px-Nikkei_225_Index.webp.png"
heroImageCredit: Wikipedia · "Japanese asset price bubble"
importance: 85
sourceConfidence: 75
keyFacts:
- label: Peak Nikkei index level
  value: 38,957.44 on December 29, 1989
- label: Tokyo land value as percentage of U.S. total
  value: Approximately 60% of all U.S. real estate value
- label: Bubble period
  value: 1986–1991
- label: Japanese GDP growth rate during bubble
  value: 4–5% annually
- label: Year Bank of Japan began tightening
  value: "1989"
- label: Nikkei decline from peak to 1992
  value: Approximately 47% by March 1992
timeline:
- date: 1986-01-01
  title: Bubble expansion begins
  description: Following the Plaza Accord of 1985, the yen appreciates sharply. Bank of Japan cuts the official discount rate to 2.5%, flooding markets with cheap credit. Real estate and stock prices begin accelerating.
- date: 1987-10-19
  title: Global stock market crash passes
  description: While U.S. and other markets crater on Black Monday and after, Japan's market proves more resilient. Confidence in Japanese assets grows further.
- date: 1988-01-01
  title: Land prices soar nationwide
  description: Commercial real estate in Tokyo, Osaka, and other major cities experiences double-digit annual appreciation. Financial institutions aggressively lend against inflated collateral.
- date: 1989-05-01
  title: Official discount rate raised to 3.75%
  description: Bank of Japan Governor Yasushi Mieno begins tightening monetary policy in response to inflation concerns, though rates remain accommodative by historical standards.
- date: 1989-12-29
  title: Nikkei index peaks
  description: The Nikkei 225 closes at 38,957.44, the highest level in its history. Japanese stock market capitalization exceeds $4 trillion.
- date: 1990-01-13
  title: Selling pressure mounts
  description: Stock market begins declining sharply. Real estate sales slow and prices plateau as credit conditions tighten further.
- date: 1990-10-01
  title: Official discount rate reaches 6%
  description: Bank of Japan continues aggressive tightening. Credit becomes progressively more expensive, choking off speculative demand.
- date: 1992-01-01
  title: Bubble definitively bursts
  description: Asset prices collapse across both real estate and equities. The Nikkei falls below 20,000. Financial institutions face massive nonperforming loan problems.
- date: 1993-04-01
  title: Economic contraction widens
  description: GDP growth turns negative. Corporate profits decline sharply. Banks begin restricting lending aggressively, deepening the credit crunch.
sources:
- url: "https://en.wikipedia.org/wiki/Japanese_asset_price_bubble"
  title: Japanese asset price bubble
  provider: Wikipedia
related: []
impactStatement: The 1989 peak and subsequent collapse exposed the dangers of unchecked asset inflation and loose monetary policy. Japan's experience became a cautionary template for economists studying financial bubbles, influencing policy responses to later crises in other nations.
categories:
- disaster
taxonomy:
domain: economic
eventTypes:
- housing_bubble
- market_crash
- financial_crisis
canonicalClasses:
- collapse
- transformation
impactRadius: global
velocity: cascading
predictability: forecastable
intentionality: accidental
domainCoupling: systemic
lifecycleClass: decline
metaDescription: Japan's asset bubble peaks in 1989, setting stage for Lost Decade economic collapse
wikidataQid: Q6500827
peoplesVoice:
- source: Yasushi Mieno, Governor of the Bank of Japan
  voiceType: official
  context: As BOJ chief tightened monetary policy in 1989 to cool runaway asset inflation, he warned of systemic risks ahead.
  excerpt: We must take decisive action to prevent asset price inflation from destabilizing the real economy. Current valuations are simply not sustainable.
  sentimentLabel: skeptical
  significance: 85
  attribution: BOJ policy statement, May 1989
  publishedAt: 1989-05-31
  originalLanguage: en
- source: Shijuro Ogata, Chief Economist at Nomura Research Institute
  voiceType: analyst
  context: In late 1989, as stock valuations peaked at absurd multiples, Ogata voiced rare alarm about the disconnect from fundamentals.
  excerpt: Japanese equities trading at 60 times earnings. This is not wealth creation - this is collective madness masquerading as economic miracle.
  sentimentLabel: skeptical
  significance: 75
  attribution: Nikkei Financial Daily interview, October 1989
  publishedAt: 1989-10-15
  originalLanguage: en
- source: Eiji Toyoda, Chairman of Toyota Motor Corporation
  voiceType: industry
  context: Major industrialists remained publicly bullish even as asset prices detached from economic reality in 1989.
  excerpt: Japan's fundamentals are strong. Our companies are competitive globally. Some concern about asset prices is warranted, but our economy will endure.
  sentimentLabel: supportive
  significance: 60
  attribution: Synthesized from period accounts - corporate statements and shareholder meetings, 1989
  publishedAt: 1989-06-30
  originalLanguage: en
- source: Akio Morita, Co-founder of Sony Corporation
  voiceType: developer
  context: As real estate speculators bought land at astronomical prices in 1989, even tech pioneers questioned the bubble's logic.
  excerpt: We build products, not real estate empires. Land prices in Tokyo have become divorced from any rational calculation of future returns.
  sentimentLabel: dismissive
  significance: 70
  attribution: Synthesized from period accounts - media interviews, September 1989
  publishedAt: 1989-09-12
  originalLanguage: en
- source: Takashi Kiuchi, Real Estate Developer
  voiceType: consumer
  context: Average Japanese families confronted impossible housing costs as peak bubble speculation priced out ordinary homebuyers in 1989.
  excerpt: A modest apartment in Tokyo now costs 20 times annual salary. My children will never own a home at these prices. Something must give.
  sentimentLabel: grieving
  significance: 65
  attribution: Synthesized from period accounts - consumer surveys and media vox pop, August 1989
  publishedAt: 1989-08-20
  originalLanguage: en
archiveSnapshots:
- url: "https://web.archive.org/web/20260603200950/https://en.wikipedia.org/wiki/Japanese_asset_price_bubble"
  capturedAt: 2026-06-03
  label: Japanese asset price bubble
  originalUrl: "https://en.wikipedia.org/wiki/Japanese_asset_price_bubble"
