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Japanese yen

2007 Schools Wikipedia Selection. Related subjects: Currency

   CAPTION: Japanese yen
   日本円 (Japanese)


   ¥10000 engraved by Edoardo Chiossone Circulated coins in all 6
                                        denominations
   ¥10000 engraved by Edoardo Chiossone Circulated coins in all 6
                                        denominations
   ISO 4217 Code JPY
   User(s) Japan
   Inflation -0.2%
   Source The World Factbook, 2005 est.
   Subunit
   1/100 sen
   1/1000 rin
   Symbol ¥
   Plural The language(s) of this currency does not have a morphological
   plural distinction.
   Coins ¥1, ¥5, ¥10, ¥50, ¥100, ¥500
   Banknotes
   Freq. used ¥1000, ¥5000, ¥10000
   Rarely used ¥2000
   Central bank Bank of Japan
   Website www.boj.or.jp
   Printer National Printing Bureau
   Website www.npb.go.jp
   Mint Japan Mint
   Website www.mint.go.jp

   The yen or en ( Japanese: 円, en, in older Japanese 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 円.

Etymology

   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 (圓
   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 also uses the single-crossbar Y (Ұ). Consequently, the
   ISO abbreviations JPY for the yen and CNY for the yuan are used to
   avoid confusion of the two currencies.

   In standard Japanese, the yen is pronounced "en" but the spelling and
   pronunciation of "yen" is standard in English, due to a historical
   Portuguese transliteration. The inclusion of the letter y is based on
   romanization of an obsolete writing of the word, examples of which can
   also be found in such words as Yebisu, Iyeyasu, and Yedo. Like the
   spellings of names of people outside Japan, the romanization of yen has
   become a permanent feature.　En 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.

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, 圓), sen (^1⁄[100], 錢), and rin (^1⁄[1000], 厘), with the coins being
   round and cast as in the West. The yen was legally defined as 0.78 troy
   ounces (24.26 g) of pure silver, or 1.5 grams of pure gold. The same
   amount of silver is worth about 1181 today's yen, while the same amount
   of gold is worth about 3572 yen. The Act also moved Japan onto the gold
   standard. (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 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. After the Plaza Accord of
   1985, the yen appreciated against the dollar.

Coins

   Currently Circulating Coins
   Image Value Technical parameters Description Date of first minting
   Diameter Thickness Mass Composition Edge Obverse Reverse
   ¥1 20 mm 1.2 mm 1 g 100% aluminium Smooth Young tree, state title,
   value Value, year of minting 1955
   ¥5 22 mm 1.5 mm 3.75 g 60–70% copper
   30–40% zinc Smooth Ear of Rice, gear, water, value State title, year of
   minting 1949
   ¥10 23.5 mm 1.5 mm 4.5 g 95% copper
   3–4% zinc
   1–2% tin Smooth Hōōdō Temple, Byōdō-in, state title, value Evergreen
   tree, value, year of minting 1951
   ¥50 21 mm 1.7 mm 4 g Cupronickel
   75% copper
   25% nickel Milled Chrysanthemum, state title, value Value, year of
   minting 1967
   ¥100 22.6 mm 1.7 mm 4.8 g Cherry blossoms, state title, value 1967
   ¥500 26.5 mm 2 mm 7.2 g Cupronickel
   75% copper
   25% nickel Smooth with lettering ("NIPPON ◆ 500 ◆ NIPPON ◆ 500 ◆")
   Paulownia, state title, value Value, bamboo, Mandarin orange, year of
   minting 1982
   ¥500 7 g 72% copper
   20% zinc
   8% nickel Milled slantingly Value, bamboo, Mandarin orange, year of
   minting, latent image 2000
   These images are to scale at 2.5 pixels per millimeter, a standard for
   world coins. For table standards, see the coin specification table.
   Japanese 10 yen coin (obverse) showing Phoenix Hall of Byōdō-in
   Enlarge
   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.

   500 yen coins are probably the highest valued coins to be used
   regularly in the world (with rates in the neighbourhood 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.

   No doubt because of this high face value, the 500 yen has been a
   favorite target for counterfeiters. It was counterfeited to such an
   extent that in 2000, the existing 500 yen coins were withdrawn from
   circulation and a new series issued with various security features.
   Counterfeiting continues.

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

   Instead of displaying the A.D. year of mintage like most coins, yen
   coins instead display the year of the current emperor's reign. For
   example, a coin minted in 2006 would bear the date Heisei 18 (the 18th
   year of the Heisei Emperor's reign).

Determinants of value

Economic forces of supply and demand

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

Fixed value of the yen to the dollar

   In 1949 the value of the yen was fixed 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.

An undervalued yen

   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 U.S. $5.8 billion in 1971. The belief
   that the yen, and several other major currencies, were undervalued
   motivated the United States' actions in 1971.

The yen and major currencies float

   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.

Japanese government intervention in the currency market

   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 1973 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 re-emergence of trade
   surpluses drove the yen back up to ¥211 in 1978. This currency
   strengthening was again reversed by the second oil shock in 1979, with
   the yen dropping to ¥227 by 1980.

The yen in the early 1980's

   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.

The effect of the Plaza Accord

   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. In April
   1995, the yen hit a peak of under 80 yen per dollar, temporarily making
   Japan's economy nearly the size of the US.

   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. (monthly
   average)
   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
   2006 117.18 116.35 117.47 114.32 111.85 114.66 114.47 117.23 117.91
   Source:
   Current JPY exchange rates
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   Retrieved from " http://en.wikipedia.org/wiki/Japanese_yen"
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   with only minor checks and changes (see www.wikipedia.org for details
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