MBA Japan

Japan Currency


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The Japanese currency unit is the Yen (), and is denoted by JPY. Usually, this Japanese currency is fabricated to people with sight impairments. However, it is extensively used as a reserve currency after the United States dollar, the euro and the pound sterling. In standard Japanese, the yen is pronounced "en" but the spelling and pronunciation of "yen" is standard in English, because of a historical Portuguese transliteration. The name "en" was used because it means "round", as opposed to the oblong shape of preceding coinage. One hundredth of a yen is called a sen, although this unit is so small that it is only mentioned today in the financial markets.

The Yen is divided in coins and bills. The coins are listed as 1 Yen, 5 Yen, 10 Yen, 50 Yen, 100 Yen, and 500 Yen. The coins of 500, 100 and 50 Yen are made of nickel, the 10 yen of bronze, and the 5 yen of copper and the 1 yen of aluminium. With holes through the middle, the 50 yen and more often the 5 yen coin are considered lucky and often used in jewellery. The bills are listed as 10,000 Yen, 5,000 Yen, 2,000 Yen and 1,000 Yen. New 1,000 Yen, 5,000 Yen and 10,000 Yen bills were issued in November, 2004. All of the bills and coins come in diverse sizes. For example, the bills descend in size from 10,000 Yen to 1,000 Yen.

The comparative value of the yen is established in foreign exchange markets by the economic forces of supply and demand. The supply of the yen in the market is managed by the desire of yen holders to exchange their yen for other currencies to buy goods, services, or assets. On the other hand, the demand for the yen is managed 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).


The yen was introduced by the Meiji government in 1870 to replace the preceding complex system of the Edo Period, where there was no fixed exchange rate between the several coins used. The New Currency Act of 1871 recognized the yen as the official unit of currency and moved Japan onto the Gold Standard. It was named the "yen" because of the direct translation to "round object." In April of 1949, the yen was pegged at 1 USD = 360, where it stayed until 1971. At this time, however, the Bretton Woods system collapsed. This international monetary system, based on stable and adaptable exchange rates, was reluctantly switched to a regime of floating exchange rates and the value of the yen started to float as it still does today.

What does it look like?

The coins have pictures of plants or places in Japan on them. However, the bills often have pictures of places in Japan on them or sometimes images of famous Japanese people. Example: The 1,000 Yen bill features world-renowned bacteriologist Noguchi Hideyo; the 5,000 Yen bill has Higuchi Ichiyo, one of Japan's earliest feminist novelists; and the 10,000 Yen bill keeps Fukuzawa Yukichi.

100 Yen
Japanese 100 yen coin shows Cherry Blossom (cherry tree).

10 Yen
Japanese 10 yen coin shows Phoenix Hall of Byodo-in.

1000 Yen
A 1000 yen bill shows the bacteriologist Hideyo Noguchi.

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