Title: Japan's Lost Decade: Brief History and Lessons
Headings: What You Can Learn From Japan's Lost Decade
Portfolio Management International Investing
What You Can Learn From Japan's Lost Decade
What This Period of Japanese History Teaches Us About Financial Crises
What Caused Japan's Lost Decade?
Japan's Lost Decade in Detail
Japan's Lost Decade vs. the 2008 U.S. Crisis
Lessons Learned From Japan's Lost Decade
Article Sources

Content: What Caused Japan's Lost Decade? Most economic crises immediately follow an economic boom where valuations disconnect from reality. For example, the dot-com bust and the Great Recession in the United States immediately followed several record U.S. stock market valuations. 1 ﻿
Similarly, Japan's lost decade was largely caused by speculation during a boom cycle. Record-low interest rates fueled stock market and real estate speculation that sent valuations soaring throughout the 1980s. Property and public company valuations more than tripled to the point where a three square meter area near the Imperial Palace was sold for $600,000. 2 ﻿
Upon realizing that the bubble was unsustainable, the Bank of Japan raised interest rates to try and stem the speculation. The move quickly led to a stock market crash and debt crisis, as borrowers failed to make payments on many debts that were backed by speculative assets. 3 ﻿ Finally, the issues manifested themselves in a banking crisis that led to consolidation and several government bailouts. 4 ﻿
Japan's Lost Decade in Detail
After the initial economic shock, Japan's economy was sent into its now-infamous lost decade, where economic expansion halted for more than ten years.