Japanese yen facts for kids

Quick facts for kids Japanese yen
Bi-metallic ¥500 coin (obverse) Series F ¥10,000 banknote
ISO 4217 Code	JPY
User(s)	Japan
Inflation	2.8% (June 2024)
Source	Statistics Bureau of Japan
Subunit
1⁄100	sen (銭) theoretical since the 1950s
Symbol	¥
Plural	The language(s) of this currency does not have a morphological plural distinction.
Coins
Freq. used	¥1, ¥5, ¥10, ¥50, ¥100, ¥500
Banknotes
Freq. used	¥1,000, ¥5,000, ¥10,000
Rarely used	¥2,000
Printer	National Printing Bureau

USD/JPY exchange rate 1971–2023

The yen (symbol: ¥; code: JPY) is the official money of Japan. It is one of the most traded currencies in the world. People use it a lot for buying and selling things between countries. It's also kept by many countries as a backup currency, like a financial safety net.

Japan started its modern money system in 1871. The yen was set to a certain value of gold or silver. It replaced older types of Japanese money and paper notes. The Bank of Japan was created in 1882. It became the only place allowed to print yen banknotes.

After World War II, the yen lost a lot of its value. To help Japan's economy, the yen's value was fixed. It was set at ¥360 for every US dollar. This was part of a global money system called Bretton Woods. When this system ended in 1971, the yen's value was allowed to change freely. It became stronger, reaching ¥271 per US dollar by 1973. Its value changed a lot after that, due to things like the 1973 oil crisis.

Since 1973, the Japanese government has tried to keep the yen's value stable. They wanted to help Japanese companies sell more goods to other countries. In 1985, an agreement called the Plaza Accord made the yen much stronger. It went from ¥239 per dollar in 1985 to ¥80 in 1995. This made Japan's economy seem almost as big as the United States' when measured in dollars.

However, the yen's value has gone down a lot since then. By July 2024, it was around ¥158 per dollar. The Bank of Japan has kept interest rates very low. This has made some companies worried about the yen's future. But a weaker yen has also helped Japan's tourism. It makes travel to Japan more affordable for people from other countries.

What Does "Yen" Mean?

The word "Yen" comes from the Japanese word en, which means "round". This is because the first modern coins were round. The Chinese also had a similar word, yuan, for their round silver coins. When Europeans first came to Japan, they heard the Japanese "e" sound as "ye". This is why the spelling "yen" became common in English.

History of the Yen

How the Yen Began (1868–1876)

5 yen coin from 1870 (year 3)

50 sen coin from 1870 (year 3)

After the old Japanese government fell, the new government wanted to fix the money system. There was a lot of confusion because different parts of Japan used different types of money. Emperor Meiji put Ōkuma Shigenobu in charge of this big change.

Ōkuma suggested making coins round instead of square. He also proposed calling the new money "yen". This idea was accepted. The first yen coins were made of gold in 1870. Silver coins were also made. On June 27, 1871, the yen officially became Japan's modern money. It was divided into 100 sen and 1,000 rin.

Paper money, called Meiji Tsuho notes, also started in 1872. These were like IOUs from the government. Soon after, national banks were set up. They also printed their own banknotes.

Money Problems and the Bank of Japan (1877–1887)

A big rebellion in 1877 caused a lot of inflation. This meant money became worth less and less. The government stopped printing so much paper money in 1880. They decided to create a central bank to control the money.

The Bank of Japan opened on October 10, 1882. It was given the power to print all banknotes. These new banknotes could be exchanged for the older government notes. By 1899, all the old national bank notes were taken out of use. In that year, Japan officially linked the yen to gold. This meant the yen's value was set to a specific amount of gold. This link lasted until 1931. After that, the yen's value dropped a lot.

The smaller units, sen and rin, were removed from circulation at the end of 1953. This was because they had lost too much value due to inflation.

Yen's Fixed Value to the US Dollar

From 1941 to 1949, there was no clear value for the yen. World War II caused its value to drop greatly.

To help Japan's economy after the war, the US government set a fixed value for the yen. From April 25, 1949, ¥360 was equal to one US dollar. This fixed rate was part of the Bretton Woods system. It helped keep prices stable in Japan.

This exchange rate stayed the same until 1971. Then, the US stopped linking its dollar to gold. This led to big changes, and by 1973, currencies like the yen were allowed to change their value freely.

Yen's Value Changes Freely

By 1971, the yen was considered too cheap. Japanese goods were very inexpensive for other countries to buy. This meant Japan was selling a lot more than it was buying. The US wanted to change this.

After some agreements, the yen's value was set to ¥308 per US dollar. But this new fixed rate was hard to keep. In early 1973, countries decided to let their currencies "float." This means their value would change based on how much people wanted to buy or sell them.

Yen in Okinawa

After World War II, the US controlled Okinawa. They used a special currency there called the B yen. Later, the US dollar was used. When Okinawa returned to Japan in 1972, the Japanese yen replaced the dollar. People in Okinawa could exchange their dollars for yen at a special rate.

Government's Role in Yen's Value

In the 1970s, Japan's government worried that a stronger yen would hurt exports. So, they often bought or sold US dollars to keep the yen's value lower.

Even with this help, the yen's value went up. It reached ¥271 per US dollar in 1973. But then, the 1973 oil crisis made the yen weaker again. It dropped to ¥290-¥300 per US dollar. Later, as Japan's trade grew, the yen became stronger again, reaching ¥211 in 1978. Another oil crisis in 1979 made it weaker once more.

Yen in the Early 1980s

In the early 1980s, the yen didn't get stronger, even though Japan was selling a lot of goods. This was because interest rates in the US were much higher than in Japan. Japanese investors sent their money overseas to earn more. This meant they sold yen to buy other currencies, which kept the yen's value low. This helped Japan's trade surplus grow even more.

The Plaza Accord's Impact

JPY nominal and real effective exchange rates (2005 = 100)

In 1985, a big change happened. Major countries agreed that the US dollar was too strong and the yen was too weak. This agreement, called the Plaza Accord, caused the yen's value to rise quickly. It went from ¥239 per US dollar in 1985 to ¥128 in 1988. By April 1995, it reached a peak of under ¥80 per US dollar. This made Japan's economy seem almost as large as the US economy.

Yen After the Economic Bubble

After an economic "bubble" burst in Japan, the yen's value went down. It reached ¥134 per US dollar in 2002. The Bank of Japan kept interest rates very low. This made it less attractive to keep money in yen. Many investors borrowed yen cheaply and invested it in countries with higher interest rates. This practice, called "carry trade," also pushed the yen's value down. In 2007, some experts thought the yen was much cheaper than it should be.

Yen After the 2008 Global Crisis

Comparison of the GNP-weighted nominal exchange rates: CHF and JPY versus CNY, EUR, USD, and GBP

However, after the 2008 global economic crisis, the yen started to get stronger. Other major currencies became weaker compared to the yen.

In 2013, the Bank of Japan announced a huge plan to buy assets. They hoped to bring Japan out of deflation (when prices fall) and cause 2% inflation (when prices rise). This plan was so big it was expected to double the money supply. Some worried this was a way to make the yen weaker on purpose to help exports. But Japanese businesses worried it would make imports, like energy, more expensive.

Yen During Recent Global Inflation (2022 Onwards)

Since 2022, the yen has become much weaker compared to other currencies. One main reason is Japan's very low interest rates. Other countries, like the US, raised their interest rates to fight inflation. This difference made investors want to put their money in other currencies to earn more. This "yield differential" makes the yen less attractive.

The Bank of Japan has tried to help by buying yen and selling dollars. But the yen's value has continued to fall. By July 2024, it reached its lowest value against the dollar in over 37 years. This is a big concern in Japan. However, a weaker yen makes Japan a cheaper and more attractive place for tourists to visit.

Ideas to Redenominate the Yen

Some people have suggested changing the yen's value. They propose a "new yen" that would be worth 100 old yen. This would make the yen's value closer to one US dollar. But this hasn't happened. The yen is still trusted globally, and changing the currency would be very expensive. It would mean reissuing all new money and updating all machines that read currency.

Coins of Japan

The Japan Mint has been making legal coins since 1871.

Coins You Can Use Today

Coins presently minted
Value	Image	Technical parameters				Description			Date of first minting
		Diameter	Thickness	Mass	Composition	Edge	Obverse	Reverse
¥1		20 mm	1.5 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 (rarely)
									1959
¥10		23.5 mm	1.5 mm	4.5 g	95% copper 3–4% zinc 1–2% tin	Reeded	Phoenix Hall, Byōdō-in, state title, value	Evergreen tree, value, year of minting	1951 (rarely)
						Smooth			1959
¥50		21 mm	1.7 mm	4 g	Cupronickel 75% copper 25% nickel	Reeded	Chrysanthemum, state title, value	Value, year of minting	1967
¥100		22.6 mm	1.7 mm	4.8 g	Cupronickel 75% copper 25% nickel	Reeded	Cherry blossoms, state title, value	Value, year of minting	1967
¥500		26.5 mm	1.81 mm	7.1 g	Bi-metallic (75% copper 12.5% zinc 12.5% nickel)	Reeded helically	Paulownia, state title, value	Bamboo, Mandarin orange, Value, year of minting	2021
These images are to scale at 2.5 pixels per millimetre. For table standards, see the coin specification table.

The front of all coins shows the value in Japanese characters. It also shows the country name. Before 1945, it said "Great Japan." After 1945, it says "State of Japan." The only exception is the current 5-yen coin, which has the country name on the back. The back of all coins shows the year they were made. This year is based on the reign of the current emperor, not the regular calendar. For example, a coin from 1900 would say "Meiji 33," meaning the 33rd year of Emperor Meiji's rule. Japanese coins never show pictures of the emperor.

The 500 yen coin is one of the highest-value coins used regularly in the world. Because of its high value, it has been a target for fake coins. So, new versions with better security features were made in 2000 and 2021.

Japanese coins are easy to tell apart by touch. They have different sizes, weights, and patterns on their edges. For example, the 1 yen coin is made of 100% aluminum and can float on water if placed carefully!

Older Coins No Longer Used

Sen Coins

50 sen coin from 1870 (year 3 of Meiji)

The "sen" coins were worth one-hundredth of a yen. They were first made in 1870. These included 5, 10, 20, and 50 sen coins made of silver. Copper sen coins (half, 1, and 2 sen) came later. Over time, silver was removed from sen coins. During World War II, different metals were used. Some clay 5 and 10 sen coins were even made in 1945, but they were never used. Like the Rin, all sen coins became invalid at the end of 1953 because they were worth so little.

Rin Coins

One rin coin from 1873 (year 6 of Meiji)

"Rin" coins were worth one-thousandth of a yen. They were first made in 1873. These coins were very small. They were not popular and were stopped in 1884. Later, 5 rin coins were made during World War I because there was a shortage of small coins. But these were also stopped after only four years. All 1 and 5 rin coins were officially taken out of circulation at the end of 1953.

Banknotes of Japan

Value	Image		Dimensions	Main Color	Description		Date of issue	Issue suspended
	Obverse	Reverse			Obverse	Reverse
Series F
¥1000			150 × 76 mm	Blue	Kitasato Shibasaburō	The Great Wave off Kanagawa (from Thirty-six Views of Mount Fuji series by Hokusai)	3 July 2024
¥5000			156 × 76 mm	Purple	Umeko Tsuda	Wisteria flowers
¥10,000			160 × 76 mm	Brown	Shibusawa Eiichi	Tokyo Station (Marunouchi side)
Series E
¥1000			150 × 76 mm	Blue	Hideyo Noguchi	Mount Fuji, Lake Motosu and cherry blossoms	1 November 2004	2025 - 2027
¥5000			156 × 76 mm	Purple	Ichiyō Higuchi	Kakitsubata-zu (Painting of irises, a work by Ogata Kōrin)
¥10,000			160 × 76 mm	Brown	Fukuzawa Yukichi	Statue of hōō (phoenix) from Byōdō-in Temple
Series D
¥2000			154 × 76 mm	Green	Shureimon	The Tale of Genji and portrait of Murasaki Shikibu	19 July 2000

Yen banknotes started being printed in 1872. Over time, their values have ranged from 1 yen to 10,000 yen. Since 1984, the smallest banknote is the 1,000 yen note. Before and during World War II, different groups printed yen notes. But since the war, the Bank of Japan is the only one that prints them. They have released five new series of banknotes since World War II.

Japan is a country where people often use cash. About 38% of payments in Japan were made with cash in 2014. This might be because cash payments offer more privacy. Also, merchants get paid right away.

Today, Japanese banknotes feature portraits of people from the Meiji era (1868-1912) or later. This is because using clear photographs helps prevent people from making fake money.

New banknotes, called Series F, were introduced on July 3, 2024. The ¥1000 bill shows Kitasato Shibasaburō and a famous wave painting. The ¥5000 bill features Tsuda Umeko and wisteria flowers. The ¥10,000 bill shows Shibusawa Eiichi and Tokyo Station. The ¥2000 note was not redesigned because it is not used very often.

What Makes the Yen's Value Change?

The value of the yen changes in special markets where currencies are traded. This value is decided by how many people want to buy yen and how many want to sell it.

• When people want to sell yen to buy things or invest in other countries, the supply of yen goes up. This can make the yen weaker.
• When foreigners want to buy Japanese goods or invest in Japan, the demand for yen goes up. This can make the yen stronger.

Since the 1990s, the Bank of Japan has kept interest rates low. This was to help Japan's economy grow. Low interest rates mean it's cheap to borrow yen. So, some investors borrow yen and then invest it in countries with higher interest rates. This is called a "carry trade." This practice has helped keep the yen's value low compared to other currencies, especially the US dollar.

Yen as a World Reserve Currency

The yen is one of the major currencies that countries keep as a "reserve." This means it's part of a special basket of currencies used by the International Monetary Fund (IMF). Its share in this basket has gone down a bit over the years.

Yen's Value Over Time

Before World War II, the yen was worth about 3.6 yen per US dollar. After the war, its value dropped a lot, going as low as 600 yen per US dollar in 1947. This was because too much money was printed to pay for the war and rebuilding.

When US forces entered Japan in 1945, they set an official rate of 15 yen to the dollar. But because of inflation, the rate quickly dropped. By 1947, it was 600 yen to the dollar. In 1949, it was officially set at 360 yen to the dollar. This rate stayed until 1971.

Since 2022, the yen's value against the dollar has become weaker each month. By July 2024, it was around ¥161 per dollar. This is the lowest value for the yen in a long time. One main reason is that the US raised its interest rates, while Japan kept its rates very low. The strong US economy also played a role. Japan's trade balance (what it sells versus what it buys) has also been negative, which can weaken the yen. Some experts are worried about the yen's future value. Even natural disasters, like the Noto Peninsula earthquake in 2024, have seen the yen weaken, which is unusual.

Average Monthly Yen to US Dollar Rates

The table below shows the average value of the US dollar in yen each month:

Average Monthly Real Effective Exchange Rate

This table shows how strong or weak the yen was compared to other currencies, considering prices. A higher number means the yen was stronger.

Images for kids

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  JPY/USD exchange rate since 1950

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  JPY/USD exchange rate in the Heisei and Reiwa eras

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  JPY/CAD exchange rate

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  JPY/EUR exchange rate

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  JPY/GBP exchange rate

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  JPY/CHF exchange rate

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  JPY/AUD exchange rate

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  JPY/NZD exchange rate

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  JPY/ZAR exchange rate

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  JPY/CNY exchange rate

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  KRW/JPY exchange rate

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  JPY/INR exchange rate

See Also

• Japan Mint
• Economy of Japan
• List of countries by leading trade partners

Older Japanese Money

• Japanese mon (currency)
• Koban (coin)
• Ryō (Japanese coin)