The country of Japan has seen many different kinds of currency over its long and rich history. The yen is the legal tender in Japan, and after the euro and the US dollar it is the most valued currency in the market.
Origins and history
The word “yen” means “circle” or “round object”. This currency was officially adopted by the Meiji government with the “New Currency Act” of 1871 in the hope of stabilising the monetary situation of the country at the time. By 1897, Japan adopted the gold exchange standard (they would remove from it in 1931) and the yen was gradually becoming more valuable. They now had coins and paper money for the first time.
The stable monetary exchange became a floating exchange which caused the Yen to become a floating currency. The floating nature of the Yen caused its overall value to drop. Many researchers state that the Yen ultimately lost its full value during World War II. Japan’s currency once found itself within the Gold Standard, but once the United States dropped their Gold Standard status, surcharges began to be placed on exchange rates and imports from Japan. The Japanese later signed the Smithsonian Agreement to enter into a fixed exchange in relationship to the US Dollar. However, with damaging fluctuations in the supply and demand aspects of market, the agreement was dropped.
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.
Distinctions of the Japanese Yen
There are several things Japanese yen has that make it different from other currencies apart from the circles in the centeron the 5 and 50 yen coins. The faces on the banknotes are famous historical figures. These are people who have made a huge impact on Japanese society. On the 10,000 JPY bill is the author, teacher, and founder of Keio University, Yukichi Fukuzawa. On the 5000 yen bill is the writer, Ichiyo Higuchi. Finally, on the 1000 yen bill is the bacteriologist Hideyo Noguchi.
The yen’s security features
Japan’s currency is one of the most difficult currencies to counterfeit. The bills feature many anti-counterfeit measures including watermarks, holograms, and intaglio ink, which raises the print of the bills to the touch. It would be hard to print or scan a similar one.
The bills even use luminescent ink, which makes the banknotes glow under ultraviolet light!