Japanese yen

Last updated

日本円 (Japanese)
P103-2000Yen-(2000) front.jpg JPY coins 2.png
2000 yen note printed ShureimonThe 6 types of coins of the Japanese yen
ISO 4217
Plural The language(s) of this currency do(es) not have a morphological plural distinction.
Symbol ¥
Freq. used ¥1,000, ¥5,000, ¥10,000
Rarely used ¥1, ¥2, ¥5, ¥10, ¥20, ¥50, ¥100, ¥500 (no longer in production), ¥2,000 (still printed)
Freq. used ¥5, ¥10, ¥50, ¥100, ¥500
Rarely used ¥1
User(s)Flag of Japan.svg  Japan
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
Inflation 2.6% (July 2022)
SourceStatistics Bureau of Japan [1]
USD/JPY exchange rate USD-JPY.webp
USD/JPY exchange rate

The yen (Japanese: , 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 (US$) and the euro. [2] It is also widely used as a third reserve currency after the US dollar and the euro.


The New Currency Act of 1871 introduced Japan's modern currency system, with the yen defined as 1.5 g (0.048 troy ounces) of gold, or 24.26 g (0.780 troy ounces) of silver, and divided decimally into 100 sen or 1,000 rin. The yen replaced the previous Tokugawa coinage as well as the various hansatsu paper currencies issued by feudal han (fiefs). The Bank of Japan was founded in 1882 and given a monopoly on controlling the money supply. [3]

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 US$ 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 US$ in 1973, then underwent periods of depreciation and appreciation due to the 1973 oil crisis, arriving at a value of ¥227 per US$ by 1980.

Since 1973, the Japanese government has maintained a policy of currency intervention, so the yen is under a "dirty float" regime. The Japanese government focused on a competitive export market, and tried to ensure a low exchange rate for the yen through a trade surplus. The Plaza Accord of 1985 temporarily changed this situation; the exchange rate fell from its average of ¥239 per dollar in 1985 to ¥128 in 1988 and led to a peak rate of ¥80 against the US$ in 1995, effectively increasing the value of Japan’s GDP in dollar terms to almost that of the United States. [4] Since that time, however, the world price of the yen has greatly decreased. 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. [5]

Pronunciation and etymology

Yen derives from the Japanese word (えん, en,  [eɴ] ; "round"), which borrows its phonetic reading from Chinese yuan, similar to 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 from the Philippines, the Chinese called them "silver rounds" (Chinese :銀圓; pinyin :yínyuán) for their circular shapes. [6] The coins and the name also appeared in Japan. While the Chinese eventually replaced ; with , [note 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 spelling and pronunciation "yen" is standard in English 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". [note 2] 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 people, 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). [8] 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. [9] 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 "ye"s to "e" in the 3rd edition (1886) [10] to mirror the contemporary pronunciation, except "yen". [11] This was probably already fixed and has remained so ever since.



Early silver 1-yen coin, 24.26 g fine silver, minted in 1870 (Meiji year 3) Early silver one yen coin Japan.jpg
Early silver 1-yen coin, 24.26 g fine silver, minted in 1870 (Meiji year 3)

The Spanish-American silver dollar was the predominant currency of international trade between Asia and Spanish America from the 16th to 19th centuries, produced by the Spanish colonial empire from the rich silver mine output of Mexico and Potosí in Bolivia and Peru, and then brought over by the Manila galleons to the Philippines and the rest of Asia. In the 19th century these dollars were supplanted by identically-minted pesos of the newly-independent Latin American countries, the Mexican peso being the most widely-used.

The British colony of Hong Kong first attempted to mint its own version of the silver dollar from 1866 to 1869, but the Chinese were slow to accept unfamiliar coinage and preferred the familiar Mexican dollars, so the Hong Kong government ceased minting these coins and sold the mint machinery to Japan.

Early one-yen coin, 1.5 g fine gold Early one yen coin front and reverse.jpg
Early one-yen coin, 1.5 g fine gold

On June 27, 1871 the Meiji government officially adopted the "yen" as Japan's modern unit of currency under the New Currency Act of 1871. [12] While initially defined at par with the Spanish and Mexican dollars then circulating in the 19th century at 0.78 troy ounce (24.26 g) of fine silver, the yen was also defined as 1.5 grams of fine gold, considering recommendations to put the currency on the bimetallic standard. The Act also 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 acquired from Hong Kong. The new currency was gradually introduced beginning from July of that year.

The yen replaced the complex monetary system of the Edo period in the form of Tokugawa coinage as well as the various hansatsu paper currencies issued by Japan's feudal fiefs in an array of incompatible denominations. 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]

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

Following the silver devaluation of 1873, the yen devalued against the US and Canadian dollars (since those two countries adhered to a gold standard), and by 1897, the yen was worth only about US$0.50. In that year, Japan adopted a gold exchange standard, defining the yen as 0.75 g fine gold or US$0.4985. [13] 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. [14] It remained steady at around $0.30 until the start of the Pacific War on December 7, 1941, at which time it fell to $0.23. [15] The sen and the rin were eventually taken out of circulation at the end of 1953. [16]

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 prewar 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$ through a United States plan, which was part of the Bretton Woods system, to stabilize prices in the Japanese economy. [17] That exchange rate was maintained until 1971, when the United States abandoned the gold standard, ending a key element of the Bretton Woods system, and setting in motion changes that eventually led to floating exchange rates in 1973.

Yen and major currencies float

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.

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$. 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.

Yen adoption in Okinawa

After World War II the United States-administered Okinawa issued a higher-valued currency called the B yen from 1946 to 1958, which was then replaced by the U.S. dollar at the rate of $1 = 120 B yen. Upon the reversion of Okinawa to Japan in 1972 the Japanese yen then replaced the dollar. In light of the dollar's reduction in value from ¥360 to ¥308 just before the reversion, an unannounced "currency confirmation" took place on Oct. 9, 1971 wherein residents disclosed their dollar holdings in cash and bank accounts; dollars held that day amounting to US$60 million were entitled for conversion in 1972 at a higher rate of ¥360. [18]

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. [19]

Despite intervention, market pressures caused the yen to continue climbing in value, peaking temporarily at an average of ¥271 per US$ 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 per US$ to ¥300 per US$ 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 per US$ by 1980. [19]

Yen in the early 1980s

During the first half of the 1980s, the yen failed to rise in value, though current account surpluses returned and grew quickly. From ¥221 per US$ in 1981, the average value of the yen actually dropped to ¥239 per US$ 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$ 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$ in December 1992. In April 1995, the yen hit a peak of under 80 yen/US$, temporarily making Japan's economy nearly the size of that 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$ 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 number 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 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.

Redenomination proposals

Numerous proposals have been made since the 1990s to redenominate the yen by introducing a new unit or new yen, equal to 100 yen, and nearly worth one U.S. dollar. This has not happened to date, since the yen remains trusted globally despite its low unit value, and due to the huge costs of reissuing new currency and updating currency-reading hardware. The negative impact of postponing upgrades to various computer software until redenomination occurs, in particular, was also cited. [24]


Gold 20-yen coin, 1870, 33.33 grams of 90% fine gold, fine gold content 0.9645 troy ounce. Japan 1870 20 Yen (alt).jpg
Gold 20-yen coin, 1870, 33.33 grams of 90% fine gold, fine gold content 0.9645 troy ounce.
Early 1-yen coin, 26.96 grams of 90% fine silver, Japan, Meiji year 34 (1901) 1yen-M34.jpg
Early 1-yen coin, 26.96 grams of 90% fine silver, Japan, Meiji year 34 (1901)

Coins were introduced in 1870, in 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.

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. After 1920, all previous series of silver coins were discontinued in favor of cupro-nickel 10-sen and reduced-size silver 50-sen coins.

Production of silver 50-sen 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. The current-type holed brass 5-yen was introduced in 1949, the bronze 10-yen in 1951, and the aluminum 1-yen in 1955.

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 first unholed, nickel 50-yen was introduced. 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 100-yen along with a smaller 50-yen. [26]

In 1982, the first cupronickel 500-yen coin was introduced. Alongside with the 5-Swiss franc 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 its high face value, the 500-yen coin has been a favorite target for counterfeiters, resulting in the issuance in 2000 of the second nickel-brass 500-yen coin with added security features. Continued counterfeiting of the latter resulted in the issuance in 2021 of the third bi-metallic 500-yen coin with more improvements in security features.

The observe side of all coins shows the coin's value in kanji as well as the country name (through 1945, Dai Nippon (大日本, "Great Japan"); after 1945, Nippon-koku (日本国, "State of Japan") (except for the current 5-yen coin with the country name on the reverse). The reverse side of all coins shows the year of mintage, which is not shown in Gregorian calendar years, but instead in the regnal year of the current emperor's reign. For reference:

Currently circulating coins [27]
ImageValueTechnical parametersDescriptionDate of first minting
1JPY.JPG ¥1 20 mm1.5 mm1 g100% aluminiumSmoothYoung tree, state title, valueValue, year of minting1955
5JPY.JPG ¥5 22 mm1.5 mm3.75 g60–70% copper
30–40% zinc
SmoothEar of Rice, gear, water, valueState title, year of minting1959
10JPY.JPG ¥10 23.5 mm1.5 mm4.5 g95% copper
3–4% zinc
1–2% tin
Reeded Phoenix Hall, Byōdō-in, state title, valueEvergreen tree, value, year of minting1951 (rarely)
50JPY.JPG ¥50 21 mm1.7 mm4 g Cupronickel
75% copper
25% nickel
Reeded Chrysanthemum, state title, valueValue, year of minting1967
100JPY.JPG ¥100 22.6 mm1.7 mm4.8 g Cupronickel
75% copper
25% nickel
Reeded Cherry blossoms, state title, valueValue, year of minting1967
500yen-S57.jpg ¥500 26.5 mm1.85 mm7.2 g Cupronickel
75% copper
25% nickel
Lettered Paulownia, state title, value Bamboo, Mandarin orange, Value, year of minting1982
500JPY.JPG ¥500 26.5 mm2 mm7 g(Nickel-brass) 72% copper
20% zinc
8% nickel
Reeded slantingly Paulownia, state title, value Bamboo, Mandarin orange, Value, year of minting2000
500yen-R3.jpg ¥500 26.5 mm1.81 mm7.1 g Bi-metallic (75% copper
12.5% zinc
12.5% nickel)
Reeded helically Paulownia, state title, value Bamboo, Mandarin orange, Value, year of minting2021
These images are to scale at 2.5 pixels per millimetre. 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 easy for people with visual impairments to tell apart from one another.

Smooth edge¥1 (light)
¥10 (medium)
Reeded edge¥100 (medium)
¥500 (heavy)

Commemorative coins have been minted on various occasions in base metal, silver and gold. [28] The first of these were silver ¥100 and ¥1,000 Summer Olympic coins issued for the 1964 games. The largest issuance by denomination and total face value were 10 million gold coins of ¥100,000 denomination for the 60th anniversary of reign of the Shōwa Emperor in 1986, totalling ¥1 trillion and utilizing 200,000 kg fine gold. ¥500 commemorative coins have been regularly issued since 1985. In 2008 commemorative ¥500 and ¥1,000 coins were issued featuring Japan's 47 prefectures. Even though all commemorative coins can be spent like ordinary (non-commemorative) coins, they do not normally circulate, and ¥100,000 coins are treated with caution due to the discovery of counterfeits. [29]

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


The issuance of yen banknotes began in 1872, two years after the currency was introduced. Denominations have ranged from 1 yen to 10,000 yen; since 1984, the lowest-valued banknote is the 1,000 yen note. 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.

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.

At present, portraits of people from the Meiji period and later are printed on Japanese bank notes. The reason for this is that from the viewpoint of preventing forgery, it is desirable to use a precise photograph as an original rather than a painting for a portrait. [31] [32]

Series E banknotes

Series E banknotes were introduced in 2004 in ¥1000, ¥5000, and ¥10,000 denominations. The EURion constellation pattern is present in the designs.

ImageValueDimensionsMain ColorDescriptionSeriesDate of issue
1000 yen banknote (Series E), obverse.png 1000 yen banknote (Series E), reverse.png ¥1000 150 × 76 mmBlue Hideyo Noguchi Mount Fuji, Lake Motosu and cherry blossoms Series ENovember 1, 2004
2000 yen banknote (Series D), obverse.png 2000 yen banknote (Series D), reverse.png ¥2000 154 × 76 mmGreen Shureimon The Tale of Genji and portrait of Murasaki Shikibu Series DJuly 19, 2000
5000 yen banknote (Series E), obverse.png 5000 yen banknote (Series E), reverse.png ¥5000 156 × 76 mmPurple Ichiyō Higuchi Kakitsubata-zu (Painting of irises, a work by Ogata Kōrin)Series ENovember 1, 2004
10000 yen banknote (Series E), obverse.png 10000 yen banknote (Series E), reverse.png ¥10,000 160 × 76 mmBrown Fukuzawa Yukichi Statue of hōō (phoenix) from Byōdō-in TempleSeries ENovember 1, 2004

Series F banknotes

On April 9, 2019, Finance Minister Tarō Asō announced new designs for Series F banknotes ¥1000, ¥5000, and ¥10,000 notes, for use beginning in 2024. [33] The ¥1000 bill will feature Kitasato Shibasaburō and The Great Wave off Kanagawa, the ¥5000 bill will feature Tsuda Umeko and Wisteria flowers, and the ¥10,000 bill will feature Shibusawa Eiichi and Tokyo Station. The Ministry decided to not redesign the ¥2000 note due to low circulation.

Series F (2024, scheduled)


DescriptionDate of issue
1000 yen obverse scheduled to be issued 2024 front.jpg 1000 yen obverse scheduled to be issued 2024 back.jpg ¥1000 150 × 76 mmBlue Kitasato Shibasaburō The Great Wave off Kanagawa (from Thirty-six Views of Mount Fuji series by Hokusai)2024, scheduled
5000 yen obverse scheduled to be issued 2024 front.jpg 5000 yen obverse scheduled to be issued 2024 back.jpg ¥5000 156 × 76 mmPurple Umeko Tsuda Wisteria flowers
10000 yen obverse scheduled to be issued 2024 front.jpg 10000 yen obverse scheduled to be issued 2024 back.jpg ¥10,000 160 × 76 mmBrown Shibusawa Eiichi Tokyo Station (Marunouchi side)

Determinants of value

Most traded currencies by value
Currency distribution of global foreign exchange market turnover [34]
RankCurrency ISO 4217
Symbol Proportion of
daily volume,
April 2019
Flag of the United States.svgUnited States dollar
Flag of Europe.svgEuro
Flag of Japan.svgJapanese yen
円 / ¥
Flag of the United Kingdom.svgSterling
Flag of Australia (converted).svgAustralian dollar
Flag of Canada (Pantone).svgCanadian dollar
Flag of Switzerland.svgSwiss franc
Flag of the People's Republic of China.svgRenminbi
元 / ¥
Flag of Hong Kong.svgHong Kong dollar
Flag of New Zealand.svgNew Zealand dollar
Flag of Sweden.svgSwedish krona
Flag of South Korea.svg South Korean won
원 / ₩
Flag of Singapore.svgSingapore dollar
Flag of Norway.svg Norwegian krone
Flag of Mexico.svgMexican peso
Flag of India.svg Indian rupee
Flag of Russia.svgRussian ruble
Flag of South Africa.svg South African rand
Flag of Turkey.svgTurkish lira
Flag of Brazil.svg Brazilian real
Flag of the Republic of China.svg New Taiwan dollar
Flag of Denmark.svg Danish krone
Flag of Poland.svg Polish złoty
Flag of Thailand.svg Thai baht
Flag of Indonesia.svg Indonesian rupiah
Flag of Hungary.svg Hungarian forint
Flag of the Czech Republic.svg Czech koruna
Flag of Israel.svg Israeli new shekel
Flag of Chile.svg Chilean peso
Flag of the Philippines.svg Philippine peso
Flag of the United Arab Emirates.svg UAE dirham
Flag of Colombia.svg Colombian peso
Flag of Saudi Arabia.svg Saudi riyal
Flag of Malaysia.svg Malaysian ringgit
Flag of Romania.svg Romanian leu
Flag placeholder.svg Other2.2%
Total [note 3] 200.0%

Beginning in December 1931, Japan gradually shifted from the gold standard system to the managed currency system. [35]

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 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. [36] 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 special drawing rights (SDR) valuation is an IMF basket of the world's major reserve currencies, including the Japanese yen. Its share of 8.33% as of 2016 has declined from 18% as of 2000. [37]

The percental composition of currencies of official foreign exchange reserves from 1995 to 2020. [38] [39] [40]

   US dollar

Historical exchange rate

Before the war commenced, the yen traded on an average of 3.6 yen to the dollar. After the war the yen went as low as 600 yen per USD in 1947, as a result of currency overprinting in order to fund the war, and afterwards to fund the reconstruction.

When McArthur and the US forces entered Japan in 1945, they decreed an official conversion rate of 15 yen to the USD. Within 1945–1946: the rate tanked to 50 yen to the USD because of the ongoing inflation. During the first half of 1946, the rate fluctuated to 66 yen to the USD and eventually plummeting to 600 yen to the dollar by 1947 because of the failure of the economic remedies. Eventually, the peg was officially moved to 270 yen to the dollar in 1948 before being adjusted again from 1949 to 1971 to 360 yen to the dollar.

Beginning in 2022 the Yen rate has become increasingly weaker with each passing month. The reasoning behind this is the US moving towards higher interest rates, while Japan remains "ultra-low". Other factors include the strength of the US economy and its labor market, while Japan continues to lag behind its peers to bring its economy back to its pre-pandemic size. Japan’s trade balance staying in the red is also likely feeding into the weaker yen. [41]

The table below shows the monthly average of the U.S. dollar–yen spot rate (JPY per USD) at 17:00 JST: [42] [43] [44]

JPY-USD 1950-.svg
JPY/USD exchange rate since 1950
JPY-USD v2.svg
JPY/USD exchange rate in the Heisei and Reiwa eras
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

See also

Older currency


  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. [6] 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 the 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]. [7]
  3. 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 US dollar is bought or sold in 88% of all trades, whereas the euro is bought or sold 32% of the time.

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<span class="mw-page-title-main">Currency</span> Generally accepted medium of exchange for goods or services

A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state. Under this definition, U.S. dollars (US$), euros (€), Japanese yen (¥), and pounds sterling (£) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance - i.e. legal tender laws may require a particular unit of account for payments to government agencies.

<span class="mw-page-title-main">Norwegian krone</span> National currency of Norway

The krone, plural kroner, is currency of the Kingdom of Norway. Traditionally known as the Norwegian crown in English. It is nominally subdivided into 100 øre, although the last coins denominated in øre were withdrawn in 2012.

<span class="mw-page-title-main">Renminbi</span> Official currency of the Peoples Republic of China

The renminbi is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the eighth most traded currency in the world as of April 2019.

The Australian dollar is the currency of Australia, including its external territories: Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. It is officially used as currency by three independent Pacific Island states: Kiribati, Nauru, and Tuvalu. It is legal tender in Australia. Within Australia, it is almost always abbreviated with the dollar sign ($), with A$ or AU$ sometimes used to distinguish it from other dollar-denominated currencies. The $ symbol precedes the amount. It is subdivided into 100 cents.

<span class="mw-page-title-main">Canadian dollar</span> Currency of Canada

The Canadian dollar is the currency of Canada. It is abbreviated with the dollar sign $, there is no standard disambiguating form, but the abbreviation Can$ is often suggested by notable style guides for distinction from other dollar-denominated currencies. It is divided into 100 cents (¢).

<span class="mw-page-title-main">Philippine peso</span> Currency of the Philippines

The Philippine peso, also referred to by its Filipino name piso, is the official currency of the Philippines. It is subdivided into 100 sentimo, also called centavos.

<span class="mw-page-title-main">Korean won</span> Official currency of the Korean Empire from 1902–1910

The Korean won or Korean Empire won, was the official currency of the Korean Empire between 1902 and 1910. It was subdivided into 100 jeon.

The Hong Kong dollar is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong and the Hong Kong dollar.

The New Taiwan dollar is the official currency of Taiwan, China. The New Taiwan dollar has been the currency of Taiwan, China since 1949, when it replaced the Old Taiwan dollar, at a rate of 40,000 old dollars per one new dollar. The basic unit of the New Taiwan dollar is called a yuan (圓) and is subdivided into ten jiao (角), and into 100 fen (分) or cents, although in practice both jiao and fen are never actually used.

<span class="mw-page-title-main">Malaysian ringgit</span> Official currency of Malaysia

The Malaysian ringgit is the currency of Malaysia. It is divided into 100 sen. The ringgit is issued by the Central Bank of Malaysia.

<span class="mw-page-title-main">Indian rupee</span> Official currency of India

The Indian rupee is the official currency of India. The rupee is subdivided into 100 paise, though as of 2019, coins of denomination of 1 rupee are the lowest value in use. The issuance of the currency is controlled by the Reserve Bank of India. The Reserve Bank manages currency in India and derives its role in currency management on the basis of the Reserve Bank of India Act, 1934.

<span class="mw-page-title-main">Silver standard</span> Monetary system

The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. Silver was far more widespread than gold as the monetary standard worldwide, from the Sumerians c. 3000 BCE until 1873. Following the discovery in the 16th century of large deposits of silver at the Cerro Rico in Potosí, Bolivia, an international silver standard came into existence in conjunction with the Spanish pieces of eight. These silver dollar coins played the role of an international trading currency for nearly four hundred years.

<span class="mw-page-title-main">History of Chinese currency</span> History of money in China

The history of Chinese currency spans more than 3000 years. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ago. Cowry shells are believed to have been the earliest form of currency used in Central China, and were used during the Neolithic period.

The yuan is the base unit of a number of former and present-day currencies in Chinese.

<span class="mw-page-title-main">History of the rupee</span> History of the many currencies named rupee

The history of the rupee traces back to ancient Indian subcontinent. The mention of rūpya by Pāṇini is seemingly the earliest reference in a text about coins. The term in Indian subcontinent was used for referring to a coin.

Japanese currency has a history covering the period from the 8th century AD to the present. After the traditional usage of rice as a currency medium, Japan adopted currency systems and designs from China before developing a separate system of its own.

<span class="mw-page-title-main">Korean currency</span>

Korean currency dates back as far as the Goryeo dynasty (918–1392) when the first coins were minted. The coins, cast in both bronze and iron, were called tongbo and jungbo. Additionally, silver vases called ŭnbyŏng were widely used and circulated as a currency among the aristocracy of Goryeo.

<span class="mw-page-title-main">United States dollar</span> Official currency of the United States

The United States dollar is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. U.S. banknotes are issued in the form of Federal Reserve Notes, popularly called greenbacks due to their predominantly green color.

The 1 yen note (1円券) was a denomination of Japanese yen in seven different series from 1872 to 1946 for use in commerce. These circulated with the 1 yen coin until 1914, and briefly again before the notes were suspended in 1958. Notes from the Japanese government, known as "government notes," were the first to be issued through a company in Germany. Because they were being counterfeited, they were replaced by a new series which included the first portrait on a Japanese banknote. Almost concurrently, the government established a series of national banks modeled after the system in the United States. These national banks were private entities that also released their own notes which were later convertible into gold and silver. All three of these series came to an end due to massive inflation from the Satsuma Rebellion in 1877. National bank notes were re-issued as fiat currency before the national banks themselves were abolished. Both national bank and government one yen notes were gradually redeemed for Bank of Japan note starting in 1885. This redemption process lasted until all three series were abolished in 1899.

<span class="mw-page-title-main">Qing dynasty coinage</span> Historical coinage of China

Qing dynasty coinage was based on a bimetallic standard of copper and silver coinage. The Manchu-led Qing dynasty was established in 1636 and ruled over China proper from 1644 until it was overthrown by the Xinhai Revolution in 1912. The Qing dynasty saw the transformation of a traditional cash coin based cast coinage monetary system into a modern currency system with machine-struck coins, while the old traditional silver ingots would slowly be replaced by silver coins based on those of the Mexican peso. After the Qing dynasty was abolished its currency was replaced by the Chinese yuan of the Republic of China.



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Further reading

Preceded by:
Japanese mon
Currency of Japan
Succeeded by: