The Nikkei 225 closed on 6 November at ¥57,434.77, down 6.0% from the previous day and 20.6% from its most recent high of ¥72,366.34. It has entered a bear market nine times over the past 27 years, against a backdrop of shocks including the collapse of the US IT bubble, the Lehman shock, the European debt crisis and the COVID-19 shock. The speed of recovery is considered dependent on the macroeconomic environment.
The Nikkei 225 ended trading on 6 November at ¥57,434.77, down ¥3,643.13, or 6.0%, from the previous day and 20.6% below the record high of ¥72,366.34 reached on 25 June. A decline of more than 20% from the high over the most recent year is considered entry into a bear market, and the article reviews past cases to examine what they suggest. The period covered runs from 4 January 2000 to 6 November 2026, during which the market entered a bear market nine times, including the current instance. The background included the collapse of the IT bubble, the Lehman shock, the European debt crisis, the China shock and the COVID-19 shock.
The extent of the stock market recovery after entering a bear market is heavily influenced by the macroeconomic environment and whether additional shocks occur. In case 1, it took approximately 6 years and 3 months to recover from the low to the most recent high because of the impact of the Lehman shock and the European crisis. By contrast, case 7 recovered in approximately 7.5 months and case 8 in approximately 4 months, with policy responses and expectations of an earnings recovery potentially cited as factors behind the rapid recoveries. Recovery tends to take several years when deterioration in corporate earnings and credit conditions persists, whereas a decline caused only by an event-related factor tends to be followed by a faster recovery.