Description

Introduced in 1871, the Japanese yen (Japanese: 円), or JPY, is the official currency of Japan. The symbol of the yen is ¥, along with JP¥, which is sometimes used to separate the Japanese yen from the Chinese yuan renminbi, which shares the same symbol.

The Japanese currency is the third most traded currency in the world after the United States dollar, (USD), and euro (EUR). JPY also ranks as the fourth reserve currency after the United States dollar, euro and British pound (GBP) globally.

Japanese yen banknotes are issued by Japan’s central bank, the Bank of Japan, in four denominations: ¥1,000, ¥2,000, ¥5,000 and ¥10,000. Yen coins are issued in six denominations: ¥1, ¥5, ¥10, ¥50, ¥100 and ¥500.

Economy

• Japan is a free-market economy, with the service industry accounting for almost 69 percent of the total gross domestic product (GDP).
• In 2020, Japan was the world’s third largest national economy by nominal GDP, with the country’s GDP being estimated at a little over US$5 trillion.
• Japan ranks as the second country in the world in terms of possessing the most foreign exchange reserves, which are worth US$1.3 trillion.
• In 2018, the country was the world's fourth largest importer and the fourth largest exporter.
• Japan has a strong industrial base and is home to some of the biggest and most technologically advanced producers of motor vehicles, electronics, machinery, steel and nonferrous metals, ships, chemicals, textiles, and processed foods.
• Agricultural enterprises use 13 percent of the land and Japan accounts for nearly 15 percent of the global fish catch, ranking second after China.
• Japan Exchange Group is the third largest stock exchange by market capitalisation globally.
• The Japanese currency often appreciates during times of uncertainty. Therefore the yen is viewed as a safe haven by investors.
• One of the major challenges the Japanese economy faces nowadays is an ageing and declining population, which peaked at 128 million in 2010 and fell to 125.9 million in 2020.

History

• During the 19th century, Spanish dollars were used in Japan, along with local currencies.
• With the New Currency Act taking place in 1871, the Japanese yen was officially introduced by the Meiji government to fix the monetary situation, replacing the mon currency system of the Tokugawa era.
• In 1882, the Bank of Japan was founded to control the money supply.
• In 1897, Japan adopted the gold standard.
• After World War II, the fixed exchange rate of the yen was established to improve the Japanese economy, as a result of the yen losing much of its value, which was set up at 360 JPY per 1 USD.
• In 1973, the yen became a floating currency.

Trivia

• The meaning of the word ‘yen’ is ‘round’.
• The weight of the 1-yen coin is 1 gram (0.035 oz).
• In 2019, it was reported that a few Japanese yen banknotes were getting a new design, expecting to begin circulation around 2024.
• It is estimated that the lifespan of the 10,000-yen banknote is 4 to 5 years. However, the lifespan of the 5,000-yen and 1,000-yen banknotes is only 1 to 2 years, because of being used more often.
• To celebrate the Okinawa Summit, which took place in 2000, a new banknote with the denomination of ¥2,000 was issued. Interestingly, hardly any banknotes exist in circulation today, primarily because they cannot be used in most vending machines in Japan.