The yen is a Japanese currency with a rich history

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Few people know the name of the Japanese currency, because in the foreign market the yen is the third most popular, second only to the US dollar and the euro. It was introduced in 1872 by the Meiji-led government with the aim of creating a system similar to the European one. The emperor signed the corresponding decree a year earlier. The new Japanese currency implied the use of a decimal accounting system. At that time, the cost of one yen was 0.78 troy ounces, which was equivalent to the price of one and a half grams of gold. As of today, the same amount can be purchased for more than 3.5 thousand yen.

Japanese coins and banknotes

The first coins in Japan were introduced in 1870. They were made from gold and silver. In the first case, the denomination was 5, 10, 20, 50 sen and one yen, and in the second - 2, 5, 10, 20 yen.

Almost twenty years later, a 5 sen coin appeared in circulation, for the manufacture of which was usedan alloy of copper and nickel. In 1897, the country's government withdrew silver yen from circulation and halved the size of gold coins. Beginning in 1954, Japan lost its power and stopped accepting absolutely all coins, the denomination of which was less than one yen. Now the largest denomination of coins in Japan is 500 yen. It should be noted that they are among the most expensive on the planet, so they very often become objects of fakes.

Throughout its history, Japanese currency has been issued in banknotes ranging from ten sen to ten thousand yen. The only body en titled to issue them is the National Bank. It should be noted that five series of Japanese banknotes have been issued so far.

Fixed yen exchange rate and appreciation

As during the Second World War, and after it, Japanese money has lost its value significantly. In this regard, in order to ensure economic stability in the country, in 1970 its fixed exchange rate was established, amounting to 360 yen for one US dollar. A year later, due to some depreciation of the dollar, its value was already 308 yen. At that time, the government understood that if the Japanese currency continued to rise in price, the country's products would become less competitive, and this, in turn, would greatly harm exports and the development of local industry. As a result, Japan in 1973 began to take an active part in the purchase and sale of foreign currency in international markets. Despite such measures, asthe official exchange rate, the Japanese yen continued to rise in price. If at the end of the year one American dollar was worth 271 yen, then in 1980 it was 227.

Plaza Agreement and its impact on the yen

In 1985, the world's leading financiers and analysts came to the conclusion that the US dollar is a highly overvalued currency. As a result, the so-called "Plaza" agreement was signed, which confirmed this fact. As a result, in 1988 the value of one dollar was 128 yen. In other words, the Japanese currency, in relation to the American one, has almost doubled its value. It reached its peak in early 1995, when the exchange rate was 80 yen to the dollar.