Nikkei 225 · July 1, 1991
The day the squeeze stopped
+3.51%
single-day change vs previous close
Part of a longer stretch
When the bad loans surfaced
early in it · 1991-03-18 → 1992-08-18, -47.29% over the whole period
What happened that day?
- On 1 July 1991 the Nikkei 225 rose 3.51%
- The Bank of Japan cut its discount rate that day — the first cut since May 1989, after six increases in two years
- It was the moment the hand that had been squeezing the bubble finally let go
- The market read it as the turn. It was not
- Rates kept falling for years afterwards, eventually to zero, and the index still did not recover
- Loosening money was not enough, because the real problem was the bad loans sitting on bank books
- In this stretch the index was 20.96% below its peak
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.