Japanese yen

"Yen" redirects here. For other uses, see Yen (disambiguation).

Japanese yen
日本円 (Japanese)
Bi-metallic ¥500 coin (obverse)Series F ¥10,000 banknote
ISO 4217
CodeJPY (numeric: 392)
Unit
UnitYen
PluralThe language(s) of this currency do(es) not have a morphological plural distinction.
Symbol¥‎
Denominations
Subunit
 1None (since 1953)
 1⁄100Sen (銭) (before 1953)
Banknotes
 Freq. used¥1,000, ¥5,000, ¥10,000
 Rarely used¥2,000
Coins
 Freq. used¥1, ¥5, ¥10, ¥50, ¥100, ¥500
Demographics
User(s)Japan
Issuance
Central bankBank of Japan
 Websiteboj.or.jp
PrinterNational Printing Bureau
 Websitenpb.go.jp
MintJapan Mint
 Websitemint.go.jp
Valuation
Inflation2.5% (September 2024)
 SourceStatistics Bureau of Japan[1]
USD/JPY exchange rate 1971–2023

The yen (Japanese: 円, symbol: ¥; code: JPY) 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 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 pre-war 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 government of Japan has maintained a policy of currency intervention, so the yen is under a managed 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, falling to an average of almost ¥158 per dollar and ¥171 per euro in July 2024.[5] 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.[6] From late 2020 to first half 2024, the yen depreciated against the dollar by about 60%,[7][5] giving rise to serious concern in Japan about long-term prospects for the currency.[8][9][10] The sharp fall in the value of the currency has led some companies, including Modec, to stop presenting their financial statements in Japanese yen.[11] However, this weakness has had some benefits for Japan's tourism industry, as the low exchange rate makes its purchasing power attractive for travellers, particularly those from foreign nations.[12][13]

  1. ^ "Statistics Bureau Home Page/Consumer Price Index". Stat.go.jp. Archived from the original on August 15, 2022. Retrieved August 28, 2022.
  2. ^ "Foreign exchange turnover in April 2013: preliminary global results" (PDF). Bank for International Settlements. Archived (PDF) from the original on November 6, 2021. Retrieved February 7, 2015.
  3. ^ Mitsura Misawa (2007). Cases on International Business and Finance in Japanese Corporations. Hong Kong University Press. p. 152.
  4. ^ "ECONOMIC SUPERPOWERS AT ODDS: As Yen rises, Japanese and U.S. GDPs Go Head-to-Head, A forecast that Japan's economy will surpass America's by 2000 almost came true on April 19". Los Angeles Times. May 8, 1995. Archived from the original on December 20, 2021. Retrieved February 3, 2021.
  5. ^ a b "Japanese Yen per 1 US Dollar Monthly average (2024)". X-rates.com. Retrieved May 12, 2024.
  6. ^ "History of Japanese Yen". Currency History. August 24, 2014. Archived from the original on December 14, 2021. Retrieved July 12, 2016.
  7. ^ "US Dollar per 1 Japanese Yen Monthly average (2022)". X-rates.com. Retrieved January 31, 2024.
  8. ^ Cite error: The named reference Bloom 220610 was invoked but never defined (see the help page).
  9. ^ Cite error: The named reference Kato 220902 was invoked but never defined (see the help page).
  10. ^ Cite error: The named reference Economist 231102 was invoked but never defined (see the help page).
  11. ^ "三井海洋開発など、決算書の円表記やめます 拠点も資金も日本に戻らず 円の警告・国富を考える（3）" [Financial statements will no longer be in yen; bases and funds will not return to Japan The warning about the Japanese yen and national wealth (3)]. 日本経済新聞 (in Japanese). June 5, 2024. Retrieved July 5, 2024.
  12. ^ Jacob, Charmaine (October 13, 2022). "The yen may be weak, but Japan's tourism isn't expected to get a 'bona fide' rebound without Chinese visitors". CNBC. Retrieved January 25, 2024.
  13. ^ "Japan's weaker yen a blessing to some, burden for others". AP News. May 25, 2022. Retrieved January 25, 2024.