A Brief History of the Japanese Yen
The country of Japan has seen many different kinds of currency over its long and rich history. From the earliest Wu Zhu coin brought over from China during the Han Dynasty (around 221 BC) to the privately minted Toraisen and Shichusen coins of the 14th-16th centuries, to the first introduction of paper currency (around 1600), Japan has continuously borrowed both its currency and its ideas of what money should be from other countries. The foreign influence continued with the introduction of the Yen in 1871, which remains the current official currency of Japan.
Yen in Japanese is translated to “a round object.” In 1871 the silver Spanish dollar was commonly found throughout Japan, China, and Southeast Asia. Their prominence led several of these countries to adapt coinage that looked like the familiar silver coins. The first to do so was Hong Kong, which introduced its own silver dollar in 1866. However, the Chinese government was skeptical of the new coin, which led to its discontinuation in 1869. With the end of the Hong Kong silver dollar, the government also decided to sell the mint machinery to Japan.
At this time, Japan was suffering from a system of currency that was extremely unstable due to a lack of an outlined standard of exchange. In an effort to fix this difficult problem, the Japanese government decided that the Japanese currency would enter into the popular Gold Standard of currency. They adopted The New Currency act of 1871, which officially introduced the Yen as the new standard currency.
When the Yen was adopted, it included the yen, the sen, and the rin. One yen was worth one hundred sen or 1000 rin. The coins minted included silver 5, 10, 20, and 50 sen as well as 1 yen. They also included gold 2, 5, 10, and 20 yen. Currently the coins in circulation are the 1, 5, 10, 50, 100, and 500 Yen. Bank notes have varied widely throughout Yen’s history, though current denominations include 1000, 5000, and 10,000 Yen. There are still technically 2000 yen bills in circulation but they are extremely rare and are often not accepted as valid forms of payment.
For many years, particularly during the World War II era and afterwards, the yen was continuously devalued on the world market. Then, in 1985, major nations signed the Plaza Accord, which recognized the overvaluing of the dollar. This agreement caused the yen to quickly rise in value. While its value against the US dollar continues to fluctuate, its relative strength has caused it to be the third most traded currency in the foreign exchange market today.
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