Japanese yen

YEN redirects here. For the airport with the same IATA airport code, see Estevan Airport.

The yen is the currency of Japan. It is also widely used as a reserve currency after the United States dollar and euro. The ISO 4217 codes for the yen are JPY and 392. The Latinised symbol is ¥, while in Japanese it is written with the kanji .

Etymology

In standard Japanese, the yen is actually pronounced "en", but the spelling "yen" is standard in English. The yen is a cognate of the Chinese yuan and the Korean won, and was originally written in the same way in Kanji as the Chinese yuan (�" pinyin: yuán, Wade-Giles: yuen). Modern Japanese writings now use the simplified shinjitai character (円) which is different from the one commonly used (as shorthand) in Chinese (元). The Latinized symbol (¥) for the Yen however, is identical to the one for the Chinese yuan, although the PRC tends to use one crossbar (Ұ) instead of two. Consequently, the ISO abbreviations JPY for the yen and CNY for the yuan are used to avoid confusion of the two currencies.

Yen literally means "round object" in Japanese, as yuan does in Chinese, referring to the ancient Chinese coins that were circular in shape and widely used in Japan up to the Tokugawa Period. The spelling and pronunciation with the letter y are based on romanization of an obsolete writing of the word. The same combination occurs in words such as Uyeda, Yebisu, Iyeyasu, Inouye and . Like the spellings of names of people outside Japan, the romanization of yen has become a permanent feature.

History

The yen was introduced by the Meiji government in 1870 as a system resembling those in Europe. The yen replaced the 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 (, 錢), and rin (, 厘), with the coins being round and cast as in the West. (The sen and the rin were eventually taken out of circulation in 1954.) While not a usage specific to currency, large quantities of yen are often counted in multiples of 10,000 (man, 万) in the same way as values in the United States are often quoted or rounded off to hundreds or thousands. The yen was legally defined as 0.8667 troy ounces (26.956 g) of silver, which is about US$6.50 in today's money. The Act also moved Japan onto the gold standard.

The yen lost most of its value during and after World War II; after a period of instability, the yen was pegged at 1 US dollar = ¥360 from April 25, 1949, to until 1971 when the Bretton Woods system collapsed and the value of the Yen began to float. As of December 2005, there are about ¥115 to the US dollar, about ¥139 to the Euro, and about ¥205 to the pound sterling. After the Plaza Accord of 1985, the yen appreciated against the dollar.

Coins

Currently Circulating Coins [1]
Image	Value	Diameter	Thickness	Weight	Composition	Edge	Obverse	Reverse	First Minted Year
	¥1	20 mm	1.2 mm	1 g	100% aluminium	Smooth	Young tree	Hindu Arabic numeral 1	1955
	¥5	22 mm	1.5 mm	3.75 g	60�"70% copper 30�"40% zinc	Smooth	Ear of Rice, Gear, Water	日本国(Japan)	1949
	¥10	23.5 mm	1.5 mm	4.5 g	95% copper 3�"4% zinc 1�"2% tin	Smooth	Hōōdō Temple, Byōdō-in	Evergreen tree, Hindu Arabic numeral 10	1951
	¥50	21 mm	1.7 mm	4 g	Cupronickel 75% copper 25% nickel	Milled	Chrysanthemum	Hindu Arabic numeral 50	1967
	¥100	22.6 mm	1.7 mm	4.8 g			Cherry blossoms	Hindu Arabic numeral 100	1967
	¥500	26.5 mm	2 mm	7.2 g	Cupronickel 75% copper 25% nickel	Smooth with lettering	Paulownia, Bamboo, Mandarin Orange	Hindu Arabic numeral 500	1982
	¥500			7 g	72% copper 20% zinc 8% nickel	Milled slantingly		Hindu Arabic numeral 500 with latent image [2]	2000
These images are to scale at 2.5 pixels per millimeter, a standard for world coins.

Japanese 10 yen coin (obverse) showing Phoenix Hall of Byōdō-in

The 5-yen and 50-yen coins are holed. The date is on the reverse of all coins, and, in most cases, the name 日本国, Nihonkoku (Japan) and the value in kanji is on the obverse, except for the 5-yen where Nihonkoku is on the reverse.

The first 1-yen coin (excluding early silver coins) was a brass coin introduced in 1948, and discontinued in 1950, the first 5-yen coin (excluding early gold coins) in 1948, and originally had no hole. The first 10-yen was introduced in 1951, the first 50-yen in 1955 (with no hole), the first 100-yen in 1957 (originally made out of silver). The 500-yen coin was introduced in 1982 [3].

500 yen coins are probably the highest valued coins to be used regularly in the world (with rates in the neighborhood of US$4.77, €3.59, and £2.49). The United States' largest-valued commonly-used coin (25¢) is worth around 26 yen; the Eurozone's largest (€2) is worth ¥279, and the United Kingdom's largest (£2) is worth ¥402 (as of March 2005). The Swiss 5-franc coin is currently (as of May 2006) worth about ¥457. The highest valued bill, the 10,000 yen bill, is worth just a little bit less than the U.S. $100 bill, the highest denomination of currently circulating U.S. currency.

On various occasions, commemorative coins are minted using gold and silver with various face values, up to 100,000 yen [4]. Even though they can be used, they are treated as collectibles.

Banknotes

(Names are written in the order of family name - given name, as part of Wikipedia's convention)

Series A (1946-48)

Series A (1946-48)
Value	Dimensions	Obverse	Reverse	Issued Date	Suspended Date	Expired Date
¥0.05	94 x 48 mm	Ume blossoms	Geometric patterns	May 25, 1948	December 31, 1953	December 31, 1953
¥0.1	100 x 52 mm	A pigeon	The Diet building	September 5, 1947
¥1	124 x 68 mm	Ninomiya Sontoku	Geometric patterns	March 19, 1946	October 1, 1958	Valid
¥5	132 x 68 mm	Geometric patterns	Geometric patterns	March 5, 1946	April 1, 1955
¥10	140 x 76 mm	The Diet building	Geometric patterns	February 25, 1946	April 1, 1955
¥100	162 x 93 mm	Prince Shōtoku, "Yumedono" (A hall associated with Prince Shōtoku in Hōryū-ji Temple)	Hōryū-ji Temple	February 25, 1946	July 5, 1956

Because a law of the abolition of currencies in a small denomination is enforced in 1953, banknotes and coins whose denominations are less than ¥1 are expired on December 31, 1953.

Series B (1950-53)

Series B (1950-53) [5]
Value	Dimensions	Color	Obverse	Reverse	Issued Date	Suspended Date
¥50	144 x 68 mm	Orange	Takahashi Korekiyo	The old headquarters of Nippon Ginko	December 1, 1951	October 1, 1958
¥100	148 x 76 mm	Brown-orange	Itagaki Taisuke	The Diet building	December 1, 1953	August 1, 1974
¥500	156 x 76 mm	Dark blue	Iwakura Tomomi	Mt. Fuji	April 2, 1951	January 4, 1971
¥1000	164 x 76 mm	Grey	Prince Shōtoku	"Yumedono"	January 7, 1950	January 4, 1965

The series B introduced a new high value banknote ¥1000.

Series C (1957-69)

Series C (1957-69) [6]
Value	Dimensions	Color	Obverse	Reverse	Issued Date	Suspended Date
¥500	159 x 72 mm	Blue	Iwakura Tomomi	Mt. Fuji	November 1, 1969	April 1, 1994
¥1000	164 x 76 mm	Yellow-green	Itō Hirobumi	The old headquarters of Nippon Ginko	November 1, 1963	January 4, 1986
¥5000	169 x 80 mm	Brown	Prince Shōtoku	The old headquarters of Nippon Ginko	October 1, 1957	January 4, 1986
¥10000	174 x 84 mm	Brown-green	Prince Shōtoku	A pillar painting of Hōō in Byōdōin Temple	December 1, 1958	January 4, 1986

The series C introduced two new high value banknotes ¥5000 and ¥10000.

Series D (1984)

A 1,000 yen note, featuring the portrait of Natsume Soseki. New yen notes entered circulation, replacing these, on November 1, 2004.

Series D (1984) [7]
Image		Value	Dimensions	Color	Obverse	Reverse	Issued Date
[8]	[9]	¥1000	150 x 76 mm	Blue	Natsume Sōseki	Pair of Cranes	November 1, 1984
[10]	[11]	¥5000	155 x 76 mm	Orange	Nitobe Inazō	Mt. Fuji, Lake Motosuko and Cherry blossoms
[12]	[13]	¥10000	160 x 76 mm	Brown	Fukuzawa Yukichi	Pair of Pheasants

Due to the discovery of a large number of counterfeit Series D banknotes at the end of 2004, all Series D banknotes except ¥2000 were virtually suspended on January 17, 2005 [14]. However, a cabinet ordinance of this suspension has not yet been declared. According to a news release [15] from the National Police Agency, they seized 11,717 counterfeit Series D banknotes (excluding the ¥2000 denomination) in 2005. However, they seized only 486 counterfeit current issue banknotes, namely Series E ¥1000, ¥5000, ¥10000, and Series D ¥2000.

Commemorative series D (2000, the current issue)

Commemorative series D (2000) [16]
Image		Value	Dimensions	Color	Obverse	Reverse	Issued Date
[17]	[18]	¥2000	154 x 76 mm	Green	Shurei-mon	Scene from the Tale of Genji and portrait of Murasaki Shikibu	July 19, 2000

The 2,000 yen note was first issued on July 19, 2000 to commemorate the G8 Economic Summit in Okinawa and the millennium year as well. Shurei-mon�"pictured on the front of the note�"is a famous gate in Naha, Okinawa near the site of the summit. These notes are hard to find and many Japanese consider it a novelty as it is the only denomination in the factor of 2 (from 1 and 5). Some say it was a way to stimulate the economy from building new vending machines to be able to process the note, to creating wider cash registers to handle the bill. This hasn't really materialised. Some businesses will refuse this note. To increase the circulation of the notes, some companies started paying wages in these notes.

Series E (2004, the current issue)

Series E (2004) [19]
Image		Value	Dimensions	Color	Obverse	Reverse	Issued Date
[20]	[21]	¥1000	150 x 76 mm	Blue	Hideyo Noguchi	Mt. Fuji, Lake Motosuko and Cherry blossoms	November 1, 2004
[22]	[23]	¥5000	156 x 76 mm	Purple	Higuchi Ichiyō	"Kakitsubata-zu" (Painting of Irises, a work by Ogata Korin)
[24]	[25]	¥10000	160 x 76 mm	Brown	Fukuzawa Yukichi	Statue of hōō (phoenix) from Byōdō-in Temple

Value

The relative value of the yen is determined in foreign exchange markets by the 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).

In 1949 the value of the yen was set 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. That exchange rate was maintained until 1971, when the United States abandoned the convertibility of the dollar to gold, 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.

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$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.

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 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 reemergence of trade surpluses drove the yen back up to ¥211 in 1978. This currency strengthening was again reversed by the second oil shock, with the yen dropping to ¥227 by 1980.

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.

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.

The yen's increased value made Japanese exports less price competitive and imports more price competitive, which should have brought down the value of trade and current account surpluses. The current account figures discussed earlier, however, indicated that such a response was slow. The strong appreciation of the yen began in 1985, but the current account continued to rise until 1987. Its decline in 1988 was rather small, although it experienced a more substantial decline in 1989.

Historical exchange rate

The table below shows the number of yen per U.S. dollar.

Year	Month
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1949–71	360
1972	308
1973	301.15	270.00	265.83	265.50	264.95	265.30	263.45	265.30	265.70	266.68	279.00	280.00
1974	299.00	287.60	276.00	279.75	281.90	284.10	297.80	302.70	298.50	299.85	300.10	300.95
1975	297.85	286.60	293.80	293.30	291.35	296.35	297.35	297.90	302.70	301.80	303.00	305.15
1976	303.70	302.25	299.70	299.40	299.95	297.40	293.40	288.76	287.30	293.70	296.45	293.00
1977	288.25	283.25	277.30	277.50	277.30	266.50	266.30	267.43	264.50	250.65	244.20	240.00
1978	241.74	238.83	223.40	223.90	223.15	204.50	190.80	190.00	189.15	176.05	197.80	195.10
1979	201.40	202.35	209.30	219.15	219.70	217.00	216.90	220.05	223.45	237.80	249.50	239.90
1980	238.80	249.80	249.70	238.30	224.40	218.15	226.85	219.20	212.00	211.75	216.75	203.60
1981	205.20	208.85	211.40	215.00	223.50	225.75	239.75	228.75	231.55	233.35	214.15	220.25
1982	228.45	235.20	248.30	236.30	243.70	255.55	256.65	259.60	269.40	277.40	253.45	235.30
1983	238.40	235.55	239.30	237.70	238.60	239.80	241.50	246.75	236.10	233.65	234.20	232.00
1984	234.74	233.28	224.75	226.30	231.63	237.45	245.45	241.70	245.40	245.30	246.50	251.58
1985	254.78	259.00	250.70	251.40	251.78	248.95	236.65	237.10	216.00	211.80	202.05	200.60
1986	192.65	180.45	179.65	168.10	172.05	163.95	154.15	156.05	153.63	161.45	162.20	160.10
1987	152.30	153.15	145.65	139.65	144.15	146.75	149.25	142.35	146.35	138.55	132.45	122.00
1988	127.18	128.12	124.50	124.82	124.80	132.20	132.53	134.97	134.30	125.00	121.85	125.90
1989	129.13	127.15	132.55	132.49	142.70	143.95	138.40	144.28	139.35	142.15	142.90	143.40
1990	144.40	148.52	157.65	159.08	151.75	152.85	147.50	144.50	137.95	129.35	132.75	135.40
1991	131.40	131.95	140.55	137.42	137.97	138.15	137.83	136.88	132.95	131.00	130.07	125.25
1992	125.78	129.33	133.05	133.38	128.33	125.55	127.30	123.42	119.25	123.35	124.75	124.65
1993	124.30	117.85	115.35	111.10	107.45	106.51	105.60	104.18	105.10	108.23	108.82	111.89
1994	109.55	104.30	102.80	102.38	104.38	98.95	99.93	99.57	98.59	97.37	98.98	99.83
1995	98.58	96.93	88.38	83.77	83.19	84.77	88.17	97.46	98.18	101.90	101.66	102.91
1996	106.92	104.58	106.49	104.29	108.37	109.88	107.13	108.40	111.45	113.27	113.44	115.98
1997	122.13	120.88	123.97	126.92	116.43	114.30	117.74	119.39	121.44	120.29	127.66	129.92
1998	127.34	126.72	133.39	131.95	138.72	139.95	143.79	141.52	135.72	116.09	123.83	115.20
1999	115.98	120.32	119.99	119.59	121.37	120.87	115.27	110.19	105.66	104.89	102.42	102.08
2000	106.90	110.27	105.29	106.44	107.30	105.40	109.52	106.43	107.75	108.81	111.07	114.90
2001	116.38	116.44	125.27	124.06	119.06	124.27	124.79	118.92	119.29	121.84	123.98	131.47
2002	132.94	133.89	132.71	127.97	123.96	119.22	119.82	117.97	121.79	122.48	122.44	119.37
2003	119.21	117.75	119.02	119.46	118.63	119.82	120.11	117.13	110.48	108.99	109.34	106.97
2004	105.88	109.08	103.95	110.44	109.56	108.69	111.67	109.86	110.92	105.87	103.17	103.78
2005	103.58	104.58	106.97	105.87	108.17	110.37	112.18	111.42	113.28	115.67	119.46	117.48
Source: http://www2.boj.or.jp/dlong/stat/stat2.htm

The table below shows the number of yen per pound sterling (rounded to the nearest yen).

Year	Month
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2003							189	194	188	184	183	188

See also

* Japanese Military Yen
* Capital flows in Japan
* Monetary and fiscal policy of Japan
* Balance of payments accounts of Japan (1960-90)

External links

*Japanese currency FAQ in Currency Museum, Bank of Japan
*OSATSU.NET - Japanese yen banknote tracking site, which looks like Where's George?
* Chart: US-Dollar in Yen
* Chart: 100 Yen in Euro
*Banknotes of Japan

Reference