Japan Bubble Burst

Dated events

1. Dec. 29, 1989 · Nikkei 225 closes at a record 38,915.87 on the last trading day of 1989
   The Japanese stock market reached its highest point ever, capping a decade of soaring prices in stocks and real estate fueled by cheap borrowing and speculation. This was the peak of the bubble, after this day, prices began a long slide because the Bank of Japan had already started raising interest rates to cool things down, making borrowing more expensive and shaking confidence. Japanese stocks would not return to this level for over three decades.
2. Jan. 4, 1990 · Nikkei falls 0.5% on the first trading day of 1990 as its long slide begins
   When the Tokyo stock market opened for the new year, prices immediately started falling and kept dropping through the first weeks of January. Investors were suddenly worried that the Bank of Japan's recent interest rate increases would make it harder for companies and speculators to keep borrowing the money that had been pushing prices up. This was the beginning of a crash that would see Japanese stocks lose almost 40 percent of their value by the end of the year.
3. Aug. 30, 1990 · Bank of Japan raises its discount rate to 6%, its fifth hike since May 1989
   Japan's central bank raised its key lending rate to 6%, its highest level since 1981, trying to pop the bubble in land and stock prices on purpose. This made borrowing much more expensive, which hurt companies and property speculators who depended on cheap loans to keep buying. The rate hikes removed the fuel that had driven the boom, and stock and land prices continued to fall for years afterward.
4. Aug. 18, 1992 · Nikkei hits a six-year low near 14,309, down over 60% from its 1989 peak
   The Japanese stock market broke below a level it hadn't seen in six years, showing that the decline was not a temporary dip but a deep, ongoing collapse. People and banks who owned stocks and real estate were now sitting on huge losses, and banks were stuck with loans that borrowers couldn't repay because the property backing those loans had lost so much value. It became one of the low points of what was later called Japan's "Lost Decade" of economic stagnation.
5. Nov. 24, 1997 · Yamaichi Securities, one of Japan's big four brokers, announces it will close
   Yamaichi Securities, one of Japan's oldest and largest brokerage firms, announced it was shutting down after hiding billions in losses from the bubble era. This terrified people because it showed that major financial institutions had been covering up how badly they were hurt, raising fears that other banks and firms might also be hiding huge problems. The collapse came a week after the failure of Hokkaido Takushoku Bank, deepened Japan's banking crisis, and led the government to eventually step in with massive rescue plans for the financial system.

Assets named in this scenario · 10

iShares 20+ Year Treasury Bond ETFiShares MSCI Emerging Markets ETFiShares MSCI Japan ETFJapanese Yen (JPY)Mitsubishi EstateMitsubishi UFJ FinancialMizuho FinancialSPDR S&P 500 ETF TrustSumitomo Mitsui FinancialToyota Motor