Japanese yen

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Japanese yen
日本円 (Japanese)
JPY coins 2.png
Coins of the Japanese yen.
ISO 4217
CodeJPY
Number392
Exponent0
Denominations
Subunit
1100sen (錢)
11000rin (厘)
Plural The language(s) of this currency does not have a morphological plural distinction.
Symbol ¥ (international)
(Japan—present day)
(Japan—traditional)
Banknotes
Freq. used ¥1000, ¥5000, ¥10,000
Rarely used ¥2000
Coins ¥1, ¥5, ¥10, ¥50, ¥100, ¥500
Demographics
User(s)Flag of Japan.svg  Japan
Issuance
Central bank Bank of Japan
Website www.boj.or.jp
Printer National Printing Bureau
Website www.npb.go.jp
Mint Japan Mint
Website www.mint.go.jp
Valuation
Inflation 0.3% at January 2017
SourceStatistics Japan, [1] March 2016

The yen(Japanese: , Hepburn:en, symbol: ¥ ; code: JPY; also abbreviated as JP¥) is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. [2] It is also widely used as a reserve currency after the U.S. dollar, the euro, and the pound sterling.

Japanese is an East Asian language spoken by about 128 million people, primarily in Japan, where it is the national language. It is a member of the Japonic language family, and its relation to other languages, such as Korean, is debated. Japanese has been grouped with language families such as Ainu, Austroasiatic, and the now-discredited Altaic, but none of these proposals has gained widespread acceptance.

Hepburn romanization is a system for the romanization of Japanese that uses the Latin alphabet to write the Japanese language. It is used by most foreigners learning to spell Japanese in the Latin alphabet and by the Japanese for romanizing personal names, geographical locations, and other information such as train tables, road signs, and official communications with foreign countries. Largely based on English writing conventions, consonants closely correspond to the English pronunciation and vowels approximate the Italian pronunciation.

A currency symbol is a graphic symbol used as a shorthand for a currency's name, especially in reference to amounts of money.

Contents

The concept of the yen was a component of the Meiji government's modernization program of Japan's economy; which postulated the pursuit of a uniform currency throughout the country modeled after the European decimal currency system. Before the Meiji Restoration, Japan's feudal fiefs all issued their own money, hansatsu , in an array of incompatible denominations. The New Currency Act of 1871 did away with these and established the yen, which was defined as 1.5 g (0.048 troy ounces) of gold, or 24.26 g (0.780 troy ounces) of silver, as the new decimal currency. The former han (fiefs) became prefectures and their mints private chartered banks, which initially retained the right to print money. To bring an end to this situation the Bank of Japan was founded in 1882 and given a monopoly on controlling the money supply. [3]

Meiji period Japanese era 1868–1912

The Meiji period, or Meiji era, is an era of Japanese history which extended from October 23, 1868 to July 30, 1912. This era represents the first half of the Empire of Japan, during which period the Japanese people moved from being an isolated feudal society at risk of colonisation by European powers to the new paradigm of a modern, industrialised nationstate and emergent great power influenced by Western scientific, technological, philosophical, political, legal, and aesthetic ideas. As a result of such wholesale adoption of radically-different ideas the changes to Japan were profound, and affected its social structure, internal politics, economy, military, and foreign relations. The period corresponded to the reign of Emperor Meiji and was succeeded upon the accession of Emperor Taishō by the Taishō period.

Europe Continent in the Northern Hemisphere and mostly in the Eastern Hemisphere

Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west and the Mediterranean Sea to the south. It comprises the westernmost part of Eurasia.

Meiji Restoration restoration of imperial rule in Japan

The Meiji Restoration, also known as the Meiji Renovation, Revolution, Reform, or Renewal, was an event that restored practical imperial rule to the Empire of Japan in 1868 under Emperor Meiji. Although there were ruling Emperors before the Meiji Restoration, the events restored practical abilities and consolidated the political system under the Emperor of Japan.

Following World War II the yen lost much of its prewar value. To stabilize the Japanese economy the exchange rate of the yen was fixed at ¥360 per $1 as part of the Bretton Woods system. When that system was abandoned in 1971, the yen became undervalued and was allowed to float. The yen had appreciated to a peak of ¥271 per $1 in 1973, then underwent periods of depreciation and appreciation due to the 1973 oil crisis, arriving at a value of ¥227 per $1 by 1980.

World War II 1939–1945 global war

World War II, also known as the Second World War, was a global war that lasted from 1939 to 1945. The vast majority of the world's countries—including all the great powers—eventually formed two opposing military alliances: the Allies and the Axis. A state of total war emerged, directly involving more than 100 million people from over 30 countries. The major participants threw their entire economic, industrial, and scientific capabilities behind the war effort, blurring the distinction between civilian and military resources. World War II was the deadliest conflict in human history, marked by 50 to 85 million fatalities, most of whom were civilians in the Soviet Union and China. It included massacres, the genocide of the Holocaust, strategic bombing, premeditated death from starvation and disease, and the only use of nuclear weapons in war.

Exchange rate rate at which one currency will be exchanged for another

In finance, an exchange rate is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in relation to another currency. For example, an interbank exchange rate of 114 Japanese yen to the United States dollar means that ¥114 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥114. In this case it is said that the price of a dollar in relation to yen is ¥114, or equivalently that the price of a yen in relation to dollars is $1/114.

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained its external exchange rates within 1 percent by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments. Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well.

Since 1973, the Japanese government has maintained a policy of currency intervention, and the yen is therefore under a "dirty float" regime. This intervention continues to this day. The Japanese government focuses on a competitive export market, and tries to ensure a low yen value through a trade surplus. The Plaza Accord of 1985 temporarily changed this situation from its average of ¥239 per US$1 in 1985 to ¥128 in 1988 and led to a peak value of ¥80 against the U.S. dollar in 1995, effectively increasing the value of Japan’s GDP to almost that of the United States. Since that time, however, the yen has greatly decreased in value. The Bank of Japan maintains a policy of zero to near-zero interest rates and the Japanese government has previously had a strict anti-inflation policy. [4]

Managed float regime is the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries' exchange rates by buying and selling currencies to maintain a certain range. The peg used is known as a crawling peg.

Plaza Accord 1985 international agreement

Announcement of the Ministers of Finance and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States, commonly known as The Plaza Accord or Plaza Agreement, was an agreement joint by 5 major industry countries of France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. The five governments signed the accord on September 22, 1985 at the Plaza Hotel in New York City. The U.S. dollar depreciated significantly since the agreement until it is replaced by Louvre Accord in 1987.

United States dollar Currency of the United States of America

The United States dollar is the official currency of the United States and its territories per the United States Constitution since 1792. In practice, the dollar is divided into 100 smaller cent (¢) units, but is occasionally divided into 1000 mills (₥) for accounting. The circulating paper money consists of Federal Reserve Notes that are denominated in United States dollars.

Pronunciation and etymology

Yen derives from the Japanese word (えん, en,  [eɴ] ; lit. "round"), which is cognate with the Chinese yuan, North Korean won and South Korean won. Originally, the Chinese had traded silver in mass called sycees and when Spanish and Mexican silver coins arrived, the Chinese called them "silver rounds" (Chinese : 銀圓 ) for their circular shapes. [5] The coins and the name also appeared in Japan. While the Chinese eventually replaced with , [lower-alpha 1] the Japanese continued to use the same word, which was given the shinjitai form in reforms at the end of World War II.

The won or Korean People's won is the official currency of North Korea. It is subdivided into 100 chon. The won is issued by the Central Bank of the Democratic People's Republic of Korea, based in the capital city, Pyongyang.

South Korean won Official currency of the Republic of Korea

The won or the Korean Won is the currency of South Korea. A single won is divided into 100 jeon, the monetary subunit. The jeon is no longer used for everyday transactions, and appears only in foreign exchange rates. The won is issued by the Bank of Korea, based in the capital city of Seoul.

Sycee

A sycee or yuanbao(Chinese: t 元寶,s 元宝,pyuánbǎo, lit. "coin pouch") was a type of silver or gold ingot currency used in imperial China from its founding under the Qin dynasty until the fall of the Qing in the 20th century. Sycee were not made by a central bank or mint but by individual silversmiths for local exchange; consequently, the shape and amount of extra detail on each ingot were highly variable. Square and oval shapes were common, but boat, flower, tortoise and others are known. Their value—like the value of the various silver coins and little pieces of silver in circulation at the end of the Qing dynasty—was determined by experienced moneyhandlers (shroffs), who estimated the appropriate discount based on the purity of the silver and evaluated the weight in taels and the progressive decimal subdivisions of the tael.

The spelling and pronunciation "yen" is standard in English. This is because when Japan was first encountered by Europeans around the 16th century, Japanese /e/ () and /we/ () both had been pronounced [je] and Portuguese missionaries had spelled them "ye". [lower-alpha 2] Some time thereafter, by the middle of the 18th century, /e/ and /we/ came to be pronounced [e] as in modern Japanese, although some regions retain the [je] pronunciation. Walter Henry Medhurst, who had neither been to Japan nor met any Japanese, having consulted mainly a Japanese-Dutch dictionary, spelled some "e"s as "ye" in his An English and Japanese, and Japanese and English Vocabulary (1830). [7] In the early Meiji era, James Curtis Hepburn, following Medhurst, spelled all "e"s as "ye" in his A Japanese and English dictionary (1867); in Japanese, e and i are slightly palatalized, somewhat as in Russian. [8] That was the first full-scale Japanese-English/English-Japanese dictionary, which had a strong influence on Westerners in Japan and probably prompted the spelling "yen". Hepburn revised most of "ye"s to "e" in the 3rd edition (1886) [9] in order to mirror the contemporary pronunciation, except "yen". [10] This was probably already fixed and has remained so ever since.

English language West Germanic language

English is a West Germanic language that was first spoken in early medieval England and eventually became a global lingua franca. Named after the Angles, one of the Germanic tribes that migrated to the area of Great Britain that would later take their name, England, both names ultimately deriving from the Anglia peninsula in the Baltic Sea. It is closely related to Frisian and Low Saxon, and its vocabulary has been significantly influenced by other Germanic languages, particularly Norse, and to a greater extent Latin and French.

Walter Henry Medhurst Missionary in China

Walter Henry Medhurst, was an English Congregationalist missionary to China, born in London and educated at St Paul's School. He was one of the early translators of the Bible into Chinese language editions.

James Curtis Hepburn American Christian missionary to Japan known for the Hepburn writing system

James Curtis Hepburn was an American physician, translator, educator, and lay Christian missionary. He is known for the Hepburn romanization system for transliteration of the Japanese language into the Latin alphabet, which he popularized in his Japanese–English dictionary.

History

Introduction

Early 1-yen banknote (1873), engraved and printed by the Continental Bank Note Company of New York JAPAN-10-Constitutional Monarchy-One Yen (1873).jpg
Early 1-yen banknote (1873), engraved and printed by the Continental Bank Note Company of New York

In the 19th century, silver Spanish dollar coins were common throughout Southeast Asia, the China coast, and Japan. These coins had been introduced through Manila over a period of two hundred and fifty years, arriving on ships from Acapulco in Mexico. These ships were known as the Manila galleons. Until the 19th century, these silver dollar coins were actual Spanish dollars minted in the new world, mostly at Mexico City. But from the 1840s, they were increasingly replaced by silver dollars of the new Latin American republics. In the later half of the 19th century, some local coins in the region were made in the resemblance of the Mexican peso. The first of these local silver coins was the Hong Kong silver dollar coin that was minted in Hong Kong between the years 1866 and 1869. The Chinese were slow to accept unfamiliar coinage and preferred the familiar Mexican dollars, and so the Hong Kong government ceased minting these coins and sold the mint machinery to Japan.

Early one yen coin (1.5 g of pure gold), obverse and reverse Early one yen coin front and reverse.jpg
Early one yen coin (1.5 g of pure gold), obverse and reverse

The Japanese then decided to adopt a silver dollar coinage under the name of 'yen', meaning 'a round object'. The yen was officially adopted by the Meiji government in an Act signed on June 27, 1871. [11] The new currency was gradually introduced beginning from July of that year. The yen was therefore basically a dollar unit, like all dollars, descended from the Spanish Pieces of eight, and up until the year 1873, all the dollars in the world had more or less the same value. The yen replaced Tokugawa coinage, a complex monetary system of the Edo period based on the mon. The New Currency Act of 1871, stipulated the adoption of the decimal accounting system of yen (1, ), sen (1100, ), and rin (11000, ), with the coins being round and manufactured using Western machinery. The yen was legally defined as 0.78 troy ounces (24.26 g) of pure silver, or 1.5 grams of pure gold (as recommended by the European Congress of Economists in Paris in 1867; the 5-yen coin was equivalent to the Argentine 5 peso fuerte coin [12] ), hence putting it on a bimetallic standard. (The same amount of silver is worth about 1300 modern yen, [13] while the same amount of gold is worth about 6500 yen. [14] )[ when? ]

Early silver one yen coin, 24.26 grams of pure silver, Japan, minted in 1870 (Meiji year 3) Early silver one yen coin Japan.jpg
Early silver one yen coin, 24.26 grams of pure silver, Japan, minted in 1870 (Meiji year 3)

Following the silver devaluation of 1873, the yen devalued against the U.S. dollar and the Canadian dollar (since those two countries adhered to a gold standard), and by the year 1897, the yen was worth only about US$0.50. In that year, Japan adopted a gold exchange standard and hence froze the value of the yen at $0.50. [15] This exchange rate remained in place until Japan left the gold standard in December 1931, after which the yen fell to $0.30 by July 1932 and to $0.20 by 1933. [16] It remained steady at around $0.30 until the start of the Second World War on December 7, 1941, at which time it fell to $0.23. [17]

The sen and the rin were eventually taken out of circulation at the end of 1953. [18]

Fixed value of the yen to the U.S. dollar

No true exchange rate existed for the yen between December 7, 1941, and April 25, 1949; wartime inflation reduced the yen to a fraction of its pre-war value. After a period of instability, on April 25, 1949, the U.S. occupation government fixed the value of the yen at ¥360 per US$1 through a United States plan, which was part of the Bretton Woods System, to stabilize prices in the Japanese economy. [19] That exchange rate was maintained until 1971, when the United States abandoned the gold standard, which had been a key element of the Bretton Woods System, and imposed a 10 percent surcharge on imports, setting in motion changes that eventually led to floating exchange rates in 1973.

Undervalued yen

By 1971, the yen had become undervalued. Japanese exports were costing too little in international markets, and imports from abroad were costing the Japanese too much. This undervaluation was reflected in the current account balance, which had risen from the deficits of the early 1960s, to a then-large surplus of US$5.8 billion in 1971. The belief that the yen, and several other major currencies, were undervalued motivated the United States' actions in 1971.

Yen and major currencies float

Following the United States' measures to devalue the dollar in the summer of 1971, the Japanese government agreed to a new, fixed exchange rate as part of the Smithsonian Agreement, signed at the end of the year. This agreement set the exchange rate at ¥308 per US$1. However, the new fixed rates of the Smithsonian Agreement were difficult to maintain in the face of supply and demand pressures in the foreign-exchange market. In early 1973, the rates were abandoned, and the major nations of the world allowed their currencies to float.

Japanese government intervention in the currency market

In the 1970s, Japanese government and business people were very concerned that a rise in the value of the yen would hurt export growth by making Japanese products less competitive and would damage the industrial base. The government therefore continued to intervene heavily in foreign-exchange marketing (buying or selling dollars), even after the 1973 decision to allow the yen to float.

Despite intervention, market pressures caused the yen to continue climbing in value, peaking temporarily at an average of ¥271 per US$1 in 1973, before the impact of the 1973 oil crisis was felt. The increased costs of imported oil caused the yen to depreciate to a range of ¥290 to ¥300 between 1974 and 1976. The re-emergence of trade surpluses drove the yen back up to ¥211 in 1978. This currency strengthening was again reversed by the second oil shock in 1979, with the yen dropping to ¥227 by 1980.

Yen in the early 1980s

During the first half of the 1980s, the yen failed to rise in value even though current account surpluses returned and grew quickly. From ¥221 in 1981, the average value of the yen actually dropped to ¥239 in 1985. The rise in the current account surplus generated stronger demand for yen in foreign-exchange markets, but this trade-related demand for yen was offset by other factors. A wide differential in interest rates, with United States interest rates much higher than those in Japan, and the continuing moves to deregulate the international flow of capital, led to a large net outflow of capital from Japan. This capital flow increased the supply of yen in foreign-exchange markets, as Japanese investors changed their yen for other currencies (mainly dollars) to invest overseas. This kept the yen weak relative to the dollar and fostered the rapid rise in the Japanese trade surplus that took place in the 1980s.

Effect of the Plaza Accord

JPY Nominal Effective Exchange Rates (1970-).svg
JPY Real Effective Exchange Rates (1970-).svg
JPY nominal and real effective exchange rates (2005 = 100)

In 1985, a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$1 in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar. After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$1 in December 1992. In April 1995, the yen hit a peak of under 80 yen per dollar, temporarily making Japan's economy nearly the size of the US. [20]

Post-bubble years

The yen declined during the Japanese asset price bubble and continued to do so afterwards, reaching a low of ¥134 to US$1 in February 2002. The Bank of Japan's policy of zero interest rates has discouraged yen investments, with the carry trade of investors borrowing yen and investing in better-paying currencies (thus further pushing down the yen) estimated to be as large as $1 trillion. [21] In February 2007, The Economist estimated that the yen was 15% undervalued against the dollar, and as much as 40% undervalued against the euro. [22]

After the global economic crisis of 2008

Comparison of the GNP-weighted nominal exchange rates: CHF and JPY versus CNY, EUR, USD, and GBP Currency gnp weighted comparison 1999 2011.svg
Comparison of the GNP-weighted nominal exchange rates: CHF and JPY versus CNY, EUR, USD, and GBP

However, this trend of depreciation reversed after the global economic crisis of 2008. Other major currencies, except the Swiss franc, have been declining relative to the yen.

On April 4, 2013, the Bank of Japan announced that they would expand their Asset Purchase Program by $1.4 trillion in two years. The Bank of Japan hopes to bring Japan from deflation to inflation, aiming for 2% inflation. The amount of purchases is so large that it is expected to double the money supply. But this move has sparked concerns that the authorities in Japan are deliberately devaluing the yen in order to boost exports. [23] However, the commercial sector in Japan worried that the devaluation would trigger an increase in import prices, especially for energy and raw materials.

On May 9, 2013, the currency weakened to 100 yen = 1 US$ for the first time since April 2009. [24]

Coins

The Japanese 1870 20 gold yen (on average) contains 33.33 grams of gold (0.9000 fine) and weighs 0.9645 ounces Japan 1870 20 Yen (alt).jpg
The Japanese 1870 20 gold yen (on average) contains 33.33 grams of gold (0.9000 fine) and weighs 0.9645 ounces

Coins were introduced in 1870. There were silver 5-, 10-, 20- and 50-sen and 1-yen, and gold 2-, 5-, 10- and 20-yen. Gold 1-yen were introduced in 1871, followed by copper 1-rin, 12-, 1- and 2-sen in 1873.

Early 1-yen silver coin, 26.96 grams of .900 pure silver, Japan, minted in 1901 (Meiji year 34) 1yen-M34.jpg
Early 1-yen silver coin, 26.96 grams of .900 pure silver, Japan, minted in 1901 (Meiji year 34)
10 Japanese yen
10 Yen (Japan).jpg
Obverse: Lettering: 日 本 国 & 十 円. Phoenix Hall of Byōdō-in displayed.Reverse: Face value. Lettering: Lettering: 10 昭和五十六年 (Showa 56 or 1981).
1,773,000,000 coins minted (1951 to 1958)

Cupronickel 5-sen coins were introduced in 1889. In 1897, the silver 1-yen coin was demonetized and the sizes of the gold coins were reduced by 50%, with 5-, 10- and 20-yen coins issued. In 1920, cupro-nickel 10-sen coins were introduced.

Production of silver coins ceased in 1938, after which a variety of base metals were used to produce 1-, 5- and 10-sen coins during the Second World War. Clay 5- and 10-sen coins were produced in 1945, but not issued for circulation.

After the war, brass 50-sen, 1- and 5-yen were introduced between 1946 and 1948. In 1949, the current type of holed 5-yen was introduced, followed by bronze 10-yen (of the type still in circulation) in 1951.

Coins in denominations of less than 1-yen became invalid on December 31, 1953, following enforcement of the Small Currency Disposition and Fractional Rounding in Payments Act(小額通貨の整理及び支払金の端数計算に関する法律,Shōgaku tsūka no seiri oyobi shiharaikin no hasūkeisan ni kan suru hōritsu).

In 1955, the current type of aluminium 1-yen was introduced, along with unholed, nickel 50-yen. In 1957, silver 100-yen pieces were introduced, followed by the holed 50-yen coin in 1959. These were replaced in 1967 by the current cupro-nickel type, along with a smaller 50-yen coin. In 1982, the first 500-yen coins were introduced. [26]

The date (expressed as the year in the reign of the emperor at the time the coin was stamped) is on the reverse of all coins, and, in most cases, country name (through 1945, Dai Nippon(大日本, "Great Japan"); after 1945, Nippon-koku(日本国, "State of Japan") and the value in kanji is on the obverse, except for the present 5-yen coin where the country name is on the reverse.

Alongside with the 5-Swiss franc coin and the rarely used 5-Cuban convertible peso coin, the 500-yen coin is one of the highest-valued coin to be used regularly in the world, with value of US$4.5 as of October 2017. Because of this high face value, the 500-yen coin has been a favorite target for counterfeiters; it was counterfeited to such an extent, that in 2000, a new series of coins was issued with various security features, but counterfeiting continued.[ citation needed ]

The 1-yen coin is made out of 100% aluminum and can float on water if placed correctly.

On various occasions, commemorative coins are minted, often in gold and silver with face values up to 100,000 yen. [27] The first of these were silver ¥100 and ¥1000 Summer Olympic coins issued on the occasion of the 1964 games. Recently this practice is undertaken with the 500-yen coin, the first two types were issued in 1985, in commemoration of the science and technology exposition in Tsukuba and the 100th anniversary of the Governmental Cabinet system. The current commemorative 500- and 1000-yen coin series honouring the 47 prefectures of Japan commenced in 2008, with 47 unique designs planned for each denomination. Only one coin per customer is available from banks in each prefecture. 100,000 of each 1000-yen silver coin have been minted. Even though all commemorative coins can be spent like ordinary (non-commemorative) coins, they are not seen often in typical daily use and normally do not circulate.

Instead of displaying the Gregorian calendar year of mintage like most nations' coins, yen coins instead display the year of the current emperor's reign. For example, a coin minted in 2009, would bear the date Heisei 21 (the 21st year of Emperor Akihito's reign). [28]

New circulating coins [29]
ImageValueTechnical parametersDescriptionDate of first minting
DiameterThicknessMassCompositionEdgeObverseReverse
¥1 22 mm1.5 mm1 g100% aluminium Plain Itō Hirobumi Map of Hokkaidō TBA
¥5 23 mm1.5 mm3.75 g60–70% copper
30–40% zinc
Reeded Natsume Sōseki Map of Tōhoku & Kantō TBA
¥10 24 mm1.5 mm4.5 g95% copper
3–4% zinc
1–2% tin
Plain Nitobe Inazō Map of Chūbu & Kansai TBA
¥50 25 mm1.7 mm4 g Cupronickel
75% copper
25% nickel
Segmented (Plain and Reeded edges) Fukuzawa Yukichi Map of Chūgoku & Shikoku TBA
¥100 26 mm1.7 mm4.8 g Cupronickel
75% copper
25% nickel
Plain Noguchi Hideyo Map of Kyūshū TBA
¥500 27 mm2 mm7 g(Nickel-brass) 72% copper
20% zinc
8% nickel
Reeded with edge inscription of "NIPPON GINKŌ" in italics, twelve sided Higuchi Ichiyō Map of Tokyo TBA
These images are to scale at 2.5 pixels per millimeter. For table standards, see the coin specification table.

Due to the great differences in style, size, weight and the pattern present on the edge of the coin they are very easy for people with visual impairments to tell apart from one another.

EdgesUnholed
Plain edge¥1 (light)
¥10 (medium)
¥100 (medium)
Reeded edge¥5 (medium)
¥500 (heavy)
Segmented (Plain and Reeded edges)¥50 (medium)

Banknotes

A Series D 2000-yen note, featuring Shureimon (obverse side) and The Tale of Genji (reverse side) 2000yen.jpg
A Series D 2000-yen note, featuring Shureimon (obverse side) and The Tale of Genji (reverse side)

The issuance of the yen banknotes began in 1872, two years after the currency was introduced. Throughout its history, the denominations have ranged from 10 yen to 10,000 yen.

Before and during World War II, various bodies issued banknotes in yen, such as the Ministry of Finance and the Imperial Japanese National Bank. The Allied forces also issued some notes shortly after the war. Since then, the Bank of Japan has been the exclusive note issuing authority. The bank has issued five series after World War II. Series F, the new series introduced in 2020, consists of ¥1000, ¥2000, ¥5000, and ¥10,000 notes. The EURion constellation pattern is present in the designs.

Series F (2020)
ImageValueDimensionsMain ColorDescriptionDate of issue
ObverseReverseObverseReverse
¥1000 150 × 76 mmBlue Okada Nana from AKB48 & STU48 Mt. Fuji, Lake Motosu and cherry blossoms TBA
¥2000 156 × 76 mmGreen Yokoyama Yui from AKB48 Tokyo Tower and Tokyo Skytree
¥5000 156 × 76 mmPurple Mutō Tomu from AKB48The Diet building
¥10,000 160 × 76 mmBrown Kashiwagi Yūki from AKB48 & NGT48 The headquarters of the Bank of Japan
For table standards, see the banknote specification table.

Japan is generally considered a cash-based society, with 38% of payments in Japan made by cash in 2014. [30] Possible explanations are that cash payments protect one's privacy, merchants do not have to wait for payment, and it does not carry any negative connotation like credit.

Determinants of value

Most traded currencies by value
Currency distribution of global foreign exchange market turnover [31]
RankCurrency ISO 4217 code
(symbol)
% of daily trades
(bought or sold)
(April 2016)
1
Flag of the United States.svgUnited States dollar
USD (US$)
87.6%
2
Flag of Europe.svgEuro
EUR (€)
31.4%
3
Flag of Japan.svgJapanese yen
JPY (¥)
21.6%
4
Flag of the United Kingdom.svgPound sterling
GBP (£)
12.8%
5
Flag of Australia (converted).svgAustralian dollar
AUD (A$)
6.9%
6
Flag of Canada (Pantone).svgCanadian dollar
CAD (C$)
5.1%
7
Flag of Switzerland.svgSwiss franc
CHF (Fr)
4.8%
8
Flag of the People's Republic of China.svgRenminbi
CNY (元)
4.0%
9
Flag of Sweden.svgSwedish krona
SEK (kr)
2.2%
10
Flag of New Zealand.svgNew Zealand dollar
NZD (NZ$)
2.1%
11
Flag of Mexico.svgMexican peso
MXN ($)
1.9%
12
Flag of Singapore.svgSingapore dollar
SGD (S$)
1.8%
13
Flag of Hong Kong.svgHong Kong dollar
HKD (HK$)
1.7%
14
Flag of Norway.svg Norwegian krone
NOK (kr)
1.7%
15
Flag of South Korea.svg South Korean won
KRW (₩)
1.7%
16
Flag of Turkey.svgTurkish lira
TRY (₺)
1.4%
17
Flag of Russia.svgRussian ruble
RUB (₽)
1.1%
18
Flag of India.svg Indian rupee
INR (₹)
1.1%
19
Flag of Brazil.svg Brazilian real
BRL (R$)
1.0%
20
Flag of South Africa.svg South African rand
ZAR (R)
1.0%
Other7.1%
Total [32] 200.0%

Beginning in December 1931, Japan gradually shifted from the gold standard system to the managed currency system. [33]

The relative value of the yen is determined in foreign exchange markets by the economic forces of supply and demand. The supply of the yen in the market is governed by the desire of yen holders to exchange their yen for other currencies to purchase goods, services, or assets. The demand for the yen is governed by the desire of foreigners to buy goods and services in Japan and by their interest in investing in Japan (buying yen-denominated real and financial assets).

Since the 1990s, the Bank of Japan, the country's central bank, has kept interest rates low in order to spur economic growth. Short-term lending rates have responded to this monetary relaxation and fell from 3.7% to 1.3% between 1993 and 2008. [34] Low interest rates combined with a ready liquidity for the yen prompted investors to borrow money in Japan and invest it in other countries (a practice known as carry trade). This has helped to keep the value of the yen low compared to other currencies.[ citation needed ]

International reserve currency

The percental composition of currencies of official foreign exchange reserves from 1995 to 2017. [35] [36] [37]

Japanese yen
   US dollar
   Euro
   Other

SDR basket

The special drawing rights (SDR) valuation is an IMF basket of currencies, including the Japanese yen. The SDR is linked to a basket of currencies with 41.9% for the U.S. dollar, 37.4% for the euro, 11.3% for the pound sterling, and 9.4% for the yen (as of 2011). [38] The percentage for the yen has, however, declined from 18% in 2000. The exchange rate for the Japanese yen is expressed in terms of currency units per U.S. dollar; other rates are expressed as U.S. dollars per currency unit. The SDR currency value is calculated daily and the valuation basket is reviewed and adjusted every five years. The SDR was created in 1969, to support the fixed exchange system.

Historical exchange rate

The table below shows the monthly average of the U.S. dollar–yen spot rate (JPY per USD) at 17:00 JST: [39] [40]

YearMonth
JanFebMarAprMayJunJulAugSepOctNovDec
1949–1971360
1972308
1973301.15270.00265.83265.50264.95265.30263.45265.30265.70266.68279.00280.00
1974299.00287.60276.00279.75281.90284.10297.80302.70298.50299.85300.10300.95
1975297.85286.60293.80293.30291.35296.35297.35297.90302.70301.80303.00305.15
1976303.70302.25299.70299.40299.95297.40293.40288.76287.30293.70296.45293.00
1977288.25283.25277.30277.50277.30266.50266.30267.43264.50250.65244.20240.00
1978241.74238.83223.40223.90223.15204.50190.80190.00189.15176.05197.80195.10
1979201.40202.35209.30219.15219.70217.00216.90220.05223.45237.80249.50239.90
1980237.73244.07248.61251.45228.06218.11220.91224.34214.95209.21212.99209.79
1981202.19205.76208.84215.07220.78224.21232.11233.62229.83231.40223.76219.02
1982224.55235.25240.64244.90236.97251.11255.10258.67262.74271.33265.02242.49
1983232.90236.27237.92237.70234.78240.06240.49244.36242.71233.00235.25234.34
1984233.95233.67225.52224.95230.67233.29242.72242.24245.19246.89243.29247.96
1985254.11260.34258.43251.67251.57248.95241.70237.20236.91214.84203.85202.75
1986200.05184.62178.83175.56166.89167.82158.65154.11154.78156.04162.72162.13
1987154.48153.49151.56142.96140.47144.52150.20147.57143.03143.48135.25128.25
1988127.44129.26127.23124.88124.74127.20133.10133.63134.45128.85123.16123.63
1989127.24127.77130.35132.01138.40143.92140.63141.20145.06141.99143.55143.62
1990145.09145.54153.19158.50153.52153.78149.23147.46138.96129.73129.01133.72
1991133.65130.44137.09137.15138.02139.83137.98136.85134.59130.81129.64128.07
1992125.05127.53132.75133.59130.55126.90125.66126.34122.72121.14123.84123.98
1993125.02120.97117.02112.37110.23107.29107.77103.72105.27106.94107.81109.72
1994111.49106.14105.12103.48104.00102.6998.5499.8698.7998.4098.00100.17
199599.7998.2390.7783.5385.2184.5487.2494.56100.31100.68101.89101.86
1996105.81105.70105.85107.40106.49108.82109.25107.84109.76112.30112.27113.74
1997118.18123.01122.66125.47118.91114.31115.10117.89120.74121.13125.35129.52
1998129.45125.85128.83131.81135.08140.35140.66144.76134.50121.33120.61117.40
1999113.14116.73119.71119.66122.14120.81119.76113.30107.45106.00104.83102.61
2000105.21109.34106.62105.35108.13106.13107.90108.02106.75108.34108.87112.21
2001117.10116.10121.21123.77121.83122.19124.63121.53118.91121.32122.33127.32
2002132.66133.53131.15131.01126.39123.44118.08119.03120.49123.88121.54122.17
2003118.67119.29118.49119.82117.26118.27118.65118.81115.09109.58109.18107.87
2004106.39106.54108.57107.31112.27109.45109.34110.41110.05108.90104.86103.82
2005103.27104.84105.30107.35106.94108.62111.94110.65111.03114.84118.45118.60
2006115.33117.81117.31117.13111.53114.57115.59115.86117.02118.59117.33117.26
2007120.59120.49117.29118.81120.77122.64121.56116.74115.01115.77111.24112.28
2008107.60107.18100.83102.41104.11106.86106.76109.24106.71100.2096.8991.21
200990.3592.5397.8398.9296.4396.5894.4994.9091.4090.2889.1189.52
201091.2690.2890.5693.4391.7990.8987.6785.4484.3181.8082.4383.38
201182.6382.5281.8283.3481.2380.4979.4477.0976.7876.7277.5077.81
201276.9478.4782.3781.4279.7079.2778.9678.6878.1778.9780.9283.60
201389.1593.0794.7397.74101.0197.5299.6697.8399.3097.73100.04103.42
2014103.94102.02102.30102.54101.78102.05101.73102.95107.16108.03116.24119.29
2015118.25118.59120.37119.57120.82123.7123.31123.17120.13119.99122.58121.78
2016118.18115.01113.05109.72109.24105.44103.97101.28101.99103.81
2017
YearJanFebMarAprMayJunJulAugSepOctNovDec
Month
JPY-USD 1950-.svg
JPY/USD exchange rate since 1950
JPY-USD v2.svg
JPY/USD exchange rate since the Heisei era
JPY-CAD v2.svg
JPY/CAD exchange rate
JPY-EUR v2.svg
JPY/EUR exchange rate
JPY-GBP v2.svg
JPY/GBP exchange rate
JPY-CHF v2.svg
JPY/CHF exchange rate
JPY-AUD v2.svg
JPY/AUD exchange rate
JPY-NZD v2.svg
JPY/NZD exchange rate
JPY-ZAR v2.svg
JPY/ZAR exchange rate
JPY-CNY v2.svg
JPY/CNY exchange rate
KRW-JPY v2.svg
KRW/JPY exchange rate
JPY-INR v2.svg
JPY/INR exchange rate
Current JPY exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD USD INR CNY KRW
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD USD INR CNY KRW
From XE: AUD CAD CHF EUR GBP HKD USD INR CNY KRW
From OANDA: AUD CAD CHF EUR GBP HKD USD INR CNY KRW
From fxtop.com: AUD CAD CHF EUR GBP HKD USD INR CNY KRW

See also

Older currency

Footnotes

  1. ; yuán is not a simplified form of ; yuán, but a completely different character. One of the reasons for replacements is said to be that the previous character had too many strokes. [5] Both characters have the same pronunciation in Mandarin, but not in Japanese. In 1695, certain Japanese coins were issued whose surface has the character gen(), but this is an abbreviation of the era name Genroku (元禄).
  2. It is known that in ancient Japanese there were distinct syllables /e/ /we/ /je/. From middle of 10th century, /e/ () had merged with /je/, and both were pronounced [je], while a kana for /je/ had disappeared. Around the 13th century, /we/ () and /e/ ceased to be distinguished (in pronunciation, but not in writing system) and both came to be pronounced [je]. [6]

Notes

  1. "Statistics Bureau Home Page/Consumer Price Index". Stat.go.jp. Retrieved 2016-06-12.
  2. "Foreign exchange turnover in April 2013: preliminary global results" (PDF). Bank for International Settlements. Retrieved February 7, 2015.
  3. Mitsura Misawa (2007). Cases on International Business and Finance in Japanese Corporations. Hong Kong University Press. p. 152.
  4. "History of Japanese Yen". Currency History.
  5. 1 2 Ryuzo Mikami  [ ja ], an article about the yen in Heibonsha World Encyclopedia , Kato Shuichi(ed.), Vol. 3, Tokyo: Heibonsha, 2007.
  6. S. Hashimoto (1950). 国語音韻の変遷 [The History of Japanese Phonology] (in Japanese). Tokyo: Iwanami Shoten.
  7. Medhurst (1830), p. 296.
  8. Hepburn (1867).
  9. "明治学院大学図書館 - 和英語林集成デジタルアーカイブス". www.meijigakuin.ac.jp.
  10. 明治学院大学図書館 - 和英語林集成デジタルアーカイブス (in Japanese). Meijigakuin.ac.jp. Retrieved 2016-06-12.
  11. A. Piatt Andrew, Quarterly Journal of Economics, "The End of the Mexican Dollar", 18:3:321–356, 1904, p. 345
  12. (in Spanish) Historia de la moneda
  13. xe.com (September 7, 2006). "Equivalent of 0.78 troy ounce of silver in yen" . Retrieved September 7, 2006.
  14. xe.com (September 7, 2006). "Equivalent of 0.04822612 troy ounce of gold in yen" . Retrieved September 7, 2006.
  15. "Archived copy". Archived from the original on November 24, 2005. Retrieved July 9, 2012.CS1 maint: Archived copy as title (link)
  16. pp. 347–348, "Average Exchange Rate: Banking and the Money Market", Japan Year Book 1933, Kenkyusha Press, Foreign Association of Japan, Tokyo
  17. pp. 332–333, "Exchange and Interest Rates", Japan Year Book 1938–1939, Kenkyusha Press, Foreign Association of Japan, Tokyo
  18. A law of the abolition of currencies in a small denomination and rounding off a fraction, July 15, 1953 Law No.60( 小額通貨の整理及び支払金の端数計算に関する法律 Shōgakutsūka no seiri oyobi shiharaikin no hasūkeisan ni kansuru hōritsu))
  19. p. 1179, "Japan – Money, Weights and Measures", The Statesman's Year-Book 1950, Steinberg, S. H., Macmillan, New York
  20. Hongo, Jun, "Despite mounting debt, yen still a safe haven", Japan Times , September 13, 2011, p. 3.
  21. "What Keeps Bankers Awake at Night?" The Economist (London). February 1, 2007.
  22. "The Cheap Yen is Dangerous", The Economist (London). February 8, 2007.
  23. "Japan aims to jump-start economy with $1.4tn of quantitative easing". The Guardian . April 4, 2013. Retrieved May 23, 2013.
  24. "Yen breaches 100 threshold mark against US dollar". BBC. May 10, 2013. Retrieved January 26, 2014.
  25. Cuhaj, George S., ed. (2009). Standard Catalog of World Coins 1801–1900 (6 ed.). Krause. p. 862. ISBN   978-0-89689-940-7.
  26. Japan Mint. "Number of Coin Production (calendar year)". Archived from the original on November 10, 2006. Retrieved September 7, 2006.
  27. Japan Mint. "Commemorative Coins issued up to now". Archived from the original on November 9, 2006. Retrieved September 7, 2006.
  28. Japan Mint. "Designs of circulating coins". Archived from the original on September 18, 2009. Retrieved December 26, 2007.
  29. "Archived copy". Archived from the original on October 18, 2009. Retrieved July 20, 2010.CS1 maint: Archived copy as title (link)
  30. Soble, Jonathan. "Cash remains king in Japan". Financial Times.
  31. "Triennial Central Bank Survey Foreign exchange turnover in April 2016" (PDF). Triennial Central Bank Survey. Basel, Switzerland: Bank for International Settlements. 11 December 2016. p. 7. Retrieved 22 March 2017.
  32. The total sum is 200% because each currency trade always involves a currency pair; one currency is sold (e.g. US$) and another bought (€). Therefore each trade is counted twice, once under the sold currency ($) and once under the bought currency (€). The percentages above are the percent of trades involving that currency regardless of whether it is bought or sold, e.g. the U.S. Dollar is bought or sold in 87% of all trades, whereas the Euro is bought or sold 31% of the time.
  33. Japan Mint. "75th anniversary of Japan's shift from gold standard to managed currency system". Archived from the original on November 7, 2007. Retrieved December 26, 2007.
  34. Bank of Japan: "Statistics" Archived October 14, 2008, at the Wayback Machine . 2008.
  35. For 1995–99, 2006–17: "Currency Composition of Official Foreign Exchange Reserves (COFER)". Washington, DC: International Monetary Fund. August 14, 2018.
  36. For 1999–2005: International Relations Committee Task Force on Accumulation of Foreign Reserves (February 2006), The Accumulation of Foreign Reserves (PDF), Occasional Paper Series, Nr. 43, Frankfurt am Main: European Central Bank, ISSN   1607-1484 ISSN   1725-6534 (online).
  37. Review of the International Role of the Euro (PDF), Frankfurt am Main: European Central Bank, December 2005, ISSN   1725-2210 ISSN   1725-6593 (online).
  38. IMF Currency Amounts in New Special Drawing Rights (SDR) Basket
  39. Bank of Japan: "Foreign Exchange Rates". 2006. Archived June 17, 2008, at the Wayback Machine
  40. Bank of Japan: US.Dollar/Yen Spot Rate at 17:00 in JST, Average in the Month, Tokyo Market Archived June 3, 2013, at the Wayback Machine for duration January 1980 ~ September 2010. Retrieved February 10, 2016

Further reading

Preceded by:
Japanese mon
Currency of Japan
1870
Succeeded by:
Current

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