What is Japan Money Called
Japanese currency is called Yen (円).
Whether you're planning a trip to Japan or simply curious about the country's monetary system, this article is here to unravel the mysteries of the yen (円) and provide you with all the essential information you need. As the official currency of Japan, the yen has a fascinating history and holds significant importance in the global economy. From its origins dating back to the 19th century to its modern-day role as one of the world's most traded currencies, the yen has a story worth knowing.
In this article, we'll explore the unique features of the yen, including its currency code (JPY), denominations, and the symbols used to represent it. We'll also delve into topics such as exchange rates, currency conversion, and tips for handling yen during your stay in Japan. Whether you're a currency enthusiast or a curious traveler, 'Yen 101' is your gateway to understanding all things yen. So, fasten your seatbelts and get ready to embark on this informative journey into the world of Japan's currency. Let's dive into 'Yen 101' and unlock the secrets of the yen together.
History of the Japanese yen
The history of the Japanese yen dates back to the Meiji (明治) period in the late 19th century. During this time, Japan underwent a rapid modernization process, including the establishment of a modern currency system. The yen was introduced as a replacement for the previous currency, the Tokugawa-era (徳川) mon (文).
The word "yen" (円) itself translates to "round object" or "circle" in Japanese, which is reflected in the shape of the coins. The first yen coins were minted in 1871, and they featured a dragon on one side and the denomination on the other. These early coins were made of silver and had a high silver content, making them valuable in international trade.
Over the years, the yen has undergone several changes, both in terms of its design and its value. In the early 20th century, Japan adopted the gold standard, which pegged the value of the yen to gold. However, the gold standard was abandoned during World War II, and the yen experienced significant inflation and devaluation.
After the war, Japan underwent a period of economic growth and stability, which led to the yen becoming one of the world's major currencies. Today, the yen is known for its stability and is widely traded in the global foreign exchange market.
Significance of the yen in the global economy
The yen plays a crucial role in the global economy, particularly in the field of international trade and finance. Japan is one of the world's largest economies, and the yen is one of the most widely used currencies for cross-border transactions.
One of the reasons for the yen's significance is Japan's position as a major exporter of goods and services. Many countries, especially those in Asia, rely on Japanese imports, and therefore, the yen is in high demand for the element of these trade transactions. Additionally, Japan is home to numerous multinational corporations, which further drives the need for the yen in global financial markets.
Another factor that contributes to the yen's importance is Japan's role as a major creditor nation. Japanese investors hold substantial amounts of foreign assets, and the yen is used for financing these investments. This makes the yen a key currency in the international capital markets.
Furthermore, the yen is considered a safe-haven currency, meaning that investors often flock to it during times of economic uncertainty or market volatility. The stability of the yen, combined with Japan's low-interest-rate policy, makes it an attractive option for investors seeking refuge from turbulent markets.
In summary, the yen's significance in the global economy stems from Japan's economic strength, its role as a major exporter and creditor nation, and the currency's stability and safe-haven status.
Banknotes and coins of the yen
The yen is issued in the form of banknotes and coins, each with its unique design and denomination. Let's take a closer look at the different banknotes and coins that make up Japan's currency.
Banknotes:
The yen banknotes are available in denominations of 1,000 yen, 2,000 yen, 5,000 yen, and 10,000 yen. Each banknote features prominent figures from Japanese history and culture.
The 1,000 yen (五千円) banknote, for example, showcases a portrait of Noguchi Hideo (野口英雄), a prominent bacteriologist and medical researcher. The reverse side of the note features Mount Fuji, Japan's iconic volcanic mountain.
The 2,000 yen (二千円) banknote is a relatively rare denomination and features a portrait of Shureimon (守礼門), a famous gate located in Okinawa. This banknote was introduced in 2000 to commemorate the G8 Summit held in Okinawa that year.
The 5,000 yen (五千円) banknote depicts a portrait of Higuchi Ichiyo (樋口一葉), a renowned Japanese writer from the Meiji era. The reverse side of the note showcases a scene from her most famous work, "Takekurabe."
Lastly, the 10,000 yen (一万円) banknote features a portrait of Yukichi Fukuzawa (福沢諭吉), an influential figure in the Meiji era who played a significant role in Japan's modernization. The reverse side of this note showcases the Chinese phoenix (鳳凰) from e Byōdō-in Temple (平等院), a notable example of Buddhist Pure Land architecture
Coins:
In addition to banknotes, the yen is also available in the form of coins. There are six different denominations of yen coins: 1 yen, 5 yen, 10 yen, 50 yen, 100 yen, and 500 yen.
The 1 yen coin is made of aluminum, features a young tree design on its obverse, symbolizing the healthy growth of Japan. This design has been in use since its introduction in 1955.
The 5 yen coin made of brass, features an obverse design that includes a rice plant growing out of water, symbolizing agriculture and fisheries, which are key components of Japan's economy. This design was first minted in 1959 and has remained unchanged since then.
The 10 yen coin made of a bronze alloy, features the Phoenix Hall of the Byōdō-in, a Buddhist temple in Uji, Kyoto Prefecture.
50 yen coin is made of a cupronickel (combination of copper and nickel), features a chrysanthemum design on its obverse. This design was first minted in 1967 and represents one of Japan's most significant national symbols.The coin is notable for having a center hole, a feature introduced in 1959 as part of a design change. This design distinguishes it from other coins and symbolizes openness and transparency.
The 100 yen coin is the most commonly used coin in Japan and is made of a combination of copper and nickel. It features an image of a cherry blossom (sakura 桜) on one side and the value of the coin on the other side.
Lastly, the 500 yen coin is made of a combination of copper, zinc, and nickel. It features an image of Paulownia flowers on one side and the value of the coin on the other side.
These banknotes and coins are widely accepted throughout Japan, and it's essential to familiarize yourself with their features and values before your visit.
NEW banknotes of the yen
In 2024, Japan will introduce new banknotes for 1,000, 5,000, and 10,000 yen denominations, each featuring notable Japanese historical figures and cultural symbols.
New Banknotes:
The new 1,000 yen banknote will feature Kitasato Shibasaburo (北里柴三郎), a pioneering Japanese microbiologist known for his work in serum therapy and the discovery of the bacillus of bubonic plague. The reverse side of this banknote will showcase an iconic artwork, "The Great Wave off Kanagawa,"(神奈川沖浪裏) from Katsushika Hokusai's (葛飾北斎) famous series "Thirty-six Views of Mount Fuji." (富嶽三十六景)
The new 5,000 yen banknote will feature Tsuda Umeko,(津田梅子) a pioneering educator in women's higher education in Japan. On the reverse side, it will display a design of Wisteria (Fuji 藤) flowers, which are deeply embedded in Japanese culture and have ancient significance.
The new 10,000 yen banknote will feature Shibasawa Eiichi (渋沢栄一), an influential figure in Japan's economic development during the Meiji era. On the reverse side, it will showcase the Tokyo train station, symbolizing Japan's modernization and economic growth.
Exchange rates and currency conversion
Understanding exchange rates and currency conversion is crucial when dealing with foreign currencies like the yen. Exchange rates determine the value of one currency in terms of another and fluctuate constantly due to various factors such as economic conditions, interest rates, and geopolitical events.
When converting your home currency to yen, the exchange rate will determine how many yen you'll receive for each unit of your currency. Similarly, when converting yen back to your home currency, the exchange rate will determine how much you'll receive.
Exchange rates can be obtained from banks, currency exchange services, or online platforms. Keep in mind that these rates may vary slightly depending on where you obtain them. It's a good idea to compare rates and fees to ensure you're getting the best deal.
Currency conversion can be done in various ways, depending on your needs and preferences. Here are a few common methods:
1. Cash exchange: This involves exchanging your home currency for yen at a bank or currency exchange service. You'll receive physical yen notes and coins, which you can use for your expenses during your stay in Japan.
2. ATM withdrawals: If you prefer to use your debit or credit card, you can withdraw yen directly from ATMs in Japan. Make sure to check with your bank or card issuer regarding international withdrawal fees and daily withdrawal limits.
3. Prepaid travel cards: These cards allow you to load a specific amount of yen onto the card, which you can then use for purchases and withdrawals in Japan. Prepaid travel cards often offer competitive exchange rates and can be a convenient option.
Regardless of the method you choose, keeping track of exchange rates and fees is essential to ensure you're getting the most value for your money.
Factors that affect the value of the yen
The value of the yen is influenced by various factors, both domestic and international. Understanding these factors can provide insights into the movements of the yen and help you make informed decisions when dealing with the currency.
One of the primary drivers of the yen's value is Japan's economic performance. Positive economic indicators, such as strong GDP growth, low unemployment rates, and increasing exports, tend to strengthen the yen. Conversely, negative economic indicators can lead to a weakening of the yen.
Another factor that affects the yen is the interest rate differential between Japan and other countries. Higher interest rates in Japan relative to other countries can attract foreign investors seeking better returns, leading to an increase in the demand for yen and, consequently, an appreciation in its value.
Furthermore, geopolitical events and market sentiment can impact the value of the yen. Uncertainty and instability in global financial markets often drive investors towards safe-haven currencies like the yen, causing it to appreciate. On the other hand, positive market sentiment and risk appetite can lead to a weakening of the yen as investors seek higher-yielding assets.
Central bank policies and interventions also play a role in influencing the yen's value. The Bank of Japan, Japan's central bank, can employ monetary policy measures such as interest rate adjustments and quantitative easing to manage the value of the yen. Intervention in the foreign exchange market is another tool that the central bank may utilize to stabilize the currency.
It's important to note that predicting currency movements is challenging, and the value of the yen can be subject to sudden changes based on various factors. Keeping abreast of economic news, monitoring market trends, and seeking expert advice can help you navigate the dynamic nature of the yen.
Using yen for travel and shopping in Japan
When traveling to Japan, it's essential to familiarize yourself with the practical aspects of using yen for your expenses. Here are some tips to make your yen transactions smooth and hassle-free:
1. Cash is king: While credit cards are widely accepted in major cities and tourist areas, it's a good idea to carry some cash with you, especially when venturing into smaller shops, local markets, or rural areas. Some small establishments may not accept cards, so having yen on hand will ensure you can make purchases conveniently.
2. ATMs and cash withdrawals: ATMs are readily available throughout Japan, and most accept international cards. However, not all ATMs are accessible 24/7, so plan your cash withdrawals accordingly. Additionally, be mindful of any withdrawal fees and daily limits imposed by your bank or card issuer.
3. Currency denominations: Familiarize yourself with the different yen banknotes and coins to avoid confusion during transactions. Keep smaller denominations for smaller purchases and larger bills for larger expenses.
4. Shopping tips: When shopping in Japan, be aware that the listed prices usually include consumption tax, which is currently set at 10%. However, some duty-free shops offer tax-free shopping for tourists, so look out for those to save on your purchases.
5. Tipping culture: Unlike in some countries, tipping is not customary in Japan. In fact, attempting to tip someone may be seen as rude. Service charges are usually included in the bill at restaurants, and exceptional service is expected as part of the overall experience.
By keeping these tips in mind, you'll be well-prepared to handle yen transactions during your stay in Japan and make the most of your travel experience.