Japanese Stock Market

Japanese Stock Market Bubble

Counted among the top stock markets of the world, the Japanese stock market is one of the strongest and biggest stock markets. Japanese stock market includes five stock exchanges. But this market has not been always stable. In the year 1991, there was a big crash known as Japanese stock market bubble. . This was a major setback for the progressing economy of Japan. Let us take a brief look at this bubble, and analyze the various reasons behind it.

This bubble was started in 1991. But the main story behind this bubble starts right after the end of Second World War. Japan was virtually devastated in Second World War. The economy of Japan was affected very badly, and was on the verge of a total collapse. But, largely because of the hard work of the people of Japan, the economy gradually started to stabilize.

At that point of time, the United States of America was also helping Japan to rebuild its economy. US was also giving Japan a lot of military protection, which was also very important, as defense requirements demand a very expenditure from any government. These factors helped Japan rebuild its economy. They also allowed the government to work and act freely for the development of the country.

All through the decade of 1980, Japan was considered a heaven because of its booming economy. The standard of living of the people of Japan was very high. In fact, the quality of living of a common man in Japan was the best among all the countries of the world. Japan also became the largest creditor in the world. It also had the highest GDP per capita during the period.

But this could not last for long. The economy of Japan received a setback of sorts when the government raised the rates. . The Japanese stock market crashed by almost 30,000 points. This proved to a major setback as at that time the Japanese Stock Market was standing at 40,000.

The main reason for this crash was that the value of stock market was just hyped. It was standing on false promises, and was greatly lacking on solid financial backup. This was the most prominent reason for this crash which is considered the biggest ever stock market crash in the history of Asia.

Later, many scams happened hitting the economy of the country even more. Japan is still reeling because of the Japanese Stock Market Bubble. The market had sank to as low as 8000 in as recently as 2003.