It took a long time, but we got there in the end. In August 2025, Japan’s Topix stock market index finally rose above its previous all-time high, last registered on the final trading day of 1989.

It was not just the scale of Japan’s collapse that stood out - though the decline in the Topix from peak to trough of 80% was astounding - nor the fact that land prices followed a similar trajectory thereby ensuring a severe banking crisis, as most loans were collateralized on real estate. No, the standout feature of the Great Japanese Bear Market was simply how long it dragged on.

Whereas the Wall Street Crash of 1929 bottomed out in 1932 and the Dow Jones ascended to a new high in 1954, Japan’s Topix Index was still making new lows in 2012, more than two decades after the slump had started. For the first time in the postwar world, mild but chronic deflation took hold, disincentivising risk-taking and encouraging the hoarding of cash by individuals and businesses. Prices and wages slowly eroded. Nothing seemed to change except everyone got older.

The contrast with China, which was consistently reporting double digit Gross Domestic Product........

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