The unit of Japanese currency is yen (¥). Coins are available in denominations of 1, 5, 10, 50, 100 and 500 yen and bank notes in denominations of 1,000, 2,000, 5,000 and 10,000 yen.
Silver Wadōkaichin |
Tokugawa coinage |
Following 1868, a new currency system based on the Japanese yen was progressively established along Western lines, which has remained Japan's currency system to this day. The Yen had officially became the national currency of Japan. It is the third most traded currency in the foreign exchange market behind the United States dollar and the Euro. No true exchange rate existed for the yen; after a period of instability, on April 25, 1949 the U.S. occupation government fixed the value of the yen 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. When the United States abandoned the gold standard, 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 causing the exchange rate of yen to changed frequently through out the years ahead. On May 9, 2013, the currency weakened to 100 yen for every US dollar for the first time since April 2009.
Japan has a reputation of being a cash-based society, but trends have gradually been changing, and there has been a significant increase in the acceptance of other payment methods. Cash is still the preferred payment method, especially when it involves small amounts. Big bills are readily used and accepted in Japan; you are unlikely to be frowned upon for using a 10,000 yen bill to pay even for low-cost items, although smaller denominations are appreciated for payments made in taxis, smaller shops, temples and shrines. The likelihood that credit cards are accepted decreases in small cities and towns. There is an increased acceptance of credit and debit cards, especially in big cities. Most hotels accept payment by credit cards nowadays, as do most department stores, mid to high end restaurants, outlet malls and large retail shops. IC cards, such Suica and Icoca, are a stored value cards which can be recharged. Primarily a tool for convenient payment of train and bus fares, IC cards now double as a means of payment at an increasing number of shops and restaurants, especially in and around train stations.
Strength of Yen |
Recently, November 2014, Japan has slipped back into recession, with the economy shrinking 1.6 percent in the third quarter, surprising economists. The yen has already tumbled 14 percent in the past 12 months and 19 percent the previous year, making it the worst-performing major currency against the dollar both years. Economists and strategists predict the new recession will force politicians to postpone another planned increase in the country's consumption tax, along with an unscheduled election, and perhaps even ramp up quantitative easing (increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity) even further. Some are worried the trade is getting played out, with the yen already weakening 12 percent against the dollar in the last three months. But when it comes to the yen right now, it seems, no forecast is too bearish (rough, surly, or clumsy).
-The more you know~
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