In the 1980s, Japan’s economy seemingly knew no bounds. Growth was strong, reaching a peak of 6.7 per cent in 1988 off the back of robust expansion in the 1960s and 1970s. On some measures, land in Tokyo cost four times more than the equivalent space in Manhattan.
Rules governing the banking system were liberalised in the 1980s, resulting in a sharp rise in credit flows around the economy. Much of this lending centred on the property market which, combined with relaxed monetary policy, drove land prices to exuberant highs.
Confidence in the Japanese economy continuing to grow at a rapid pace lifted investor sentiment, driving the Nikkei index of Japan’s top companies to a peak of 38,915 in the final month of the decade.
