In the early 1990s, land prices plummeted in Japan, leading many bank borrowers to default on their loans. Stock prices also came down sharply, reducing the value of banks’ shareholdings. The net result was that most Japanese banks fell into severe financial trouble, with many large banks near bankruptcy. As a result of this crisis:

banks did not operate normally, thus borrowers found it unusually difficult to obtain credit—a situation known as a “credit crunch.”

the Japanese economy enjoyed many years of robust growth throughout the 1990s.

the virtual breakdown of the banking system created credit shortages that made it easier for smaller firms to make capital investments and, in some cases, to purchase raw materials and pay workers.

the yen gained in value and Japan's trade balance was in surplus as the country lost its importing power.