Nikkei 225 · April 7, 1992

The spring the scale of the bad loans showed

-3.50%

single-day change vs previous close

Part of a longer stretch

When the bad loans surfaced

near the end of it · 1991-03-18 → 1992-08-18, -47.29% over the whole period

What happened that day?

The Nikkei 225 fell 3.5% on the day, in a week of heavy falls throughout
Land prices had been falling since 1990, and the value of what banks held as collateral was collapsing with them
The problem was that nobody knew the size of it, because the banks would not admit the losses and kept rolling the loans over
If you cannot price the loans, you cannot price the bank's shares either. That is why financial shares fell hardest
The Nikkei reached about a third of its 1989 peak in this period
18 August was the bottom of this phase, and a government package started the rebound from there

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.