Nikkei bottoms at 7,055
Almost twenty years later, the Nikkei reached its post-bubble low of 7,055 — down 82% from 1989. The Bank of Japan had been at zero interest rates since 1999, and had pioneered quantitative easing in 2001. Every tool the Fed would use in 2008 and 2020, Japan had tried first — and first run out of.
Every major central bank now studies Japan the way medicine studies an index patient. The Nikkei did not regain its 1989 peak until February 2024 — thirty-four years underwater. Abenomics (2012-present) was in part a final attempt to escape the pattern. The jury is still out.
06 · Japan's Lost Decade
On the last trading day of 1989, the Nikkei 225 closed at 38,957. Japanese corporate real estate was valued so highly that the grounds of the Imperial Palace were said to be worth more than all the real estate in California. Over the following twenty years, the index lost 82% of its value. Recovery to the 1989 peak did not happen until 2024 — thirty-four years later.
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