The Tokyo Stock Exchange’s benchmark Nikkei index rallied to near 39,000 at the end of 1989, the first year of the Heisei era that will end with Akihito’s abdication on April 30.

Three decades ago, soaring land prices sparked wild cost comparisons: the Imperial Palace grounds were worth more than all of Canada, and Tokyo and its three surrounding prefectures worth more than the entire United States of America.

“It was an enormous asset bubble. It was a surreal world,” said former banker Tag Murphy. “It felt as if money was dripping off trees.”

But as Naruhito prepares to ascend the Chrysanthemum Throne on May 1, the Nikkei has lost nearly half its peak value to hover around 21,000 and the central bank is waging a years-long losing battle against deflation.

In the boom days, landowners made a fortune and bankers like Murphy had more business than they could handle.

Bottles of Dom Perignon and Romanee-Conti were popped open one after another at bars in the swanky Ginza district, and it was often impossible to find an empty taxi at night.

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Atsushi Saito, a former executive at top brokerage Nomura Securities, remembers Wall Street giants like Merrill Lynch and Morgan Stanley expressing alarm as the Japanese advanced.

“They asked me, ‘What’s the end goal? Conquering the world?’ They were very afraid of Japanese financial firms,” he told reporters last year.

Japanese corporate management was considered “something like magic,” said Koichi Haji, executive research fellow at NLI Research Institute.

“People were even talking about Japan’s economy overtaking America’s,” he said, describing the situation as “abnormal”.

But it all came crashing down when inflated property prices collapsed and the bubble burst in the early 1990s.

Nomura employees were told to take off corporate lapel pins to ward off attacks by furious investors who had lost money, said one former senior manager at the company.

A truck filled with human excrement was rammed into a Nomura office. Executives wore bulletproof vests for months, according to the former employee, who said he kept the blinds in his office closed during the day.

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Japan Inc. has never regained its glory, and the country is now struggling with a string of challenges ranging from a rapidly ageing population to innovation woes.

“Ideas that would cause pain but bring about reforms for the future are deeply unpopular,” said Saito, who believes Japan needs global mergers and acquisitions, and stronger measures to attract foreign talent.

The country is also struggling to boost domestic demand and reform an entrenched system of lifetime employment that Murphy describes as a “labour aristocracy”.

Experts also point to a relatively slow uptake on digitalisation in manufacturing, and a preference for goods over services.

There have been small signs of inflation, with delivery company Yamato announcing in 2017 its first price increase for retail customers in 27 years.

“It was wrong to believe that loose monetary policy would rehabilitate the economy,” said Haji at NLI, referring to a years-long programme by the central bank that has barely moved the needle on inflation.

“We must admit that we don’t really know that the cause of this sickness is,” he adding, saying that a widening gap between the rich and poor, and worries over the future, could be factors.