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Japanese currency has a history covering the period from the 8th century CE to the present. After the traditional usage of
rice Rice is a cereal grain and in its Domestication, domesticated form is the staple food of over half of the world's population, particularly in Asia and Africa. Rice is the seed of the grass species ''Oryza sativa'' (Asian rice)—or, much l ...
as a currency medium, Japan adopted currency systems and designs from China before developing a separate system of its own.


History


Commodity money

Before the 7th-8th centuries CE, Japan used
commodity money Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves ( intrinsic value) as well as their value in buying goods. This is in contrast to representa ...
for trading. This generally consisted of material that was compact and easily transportable and had a widely recognized value. Commodity money was a great improvement over simple
barter In trade, barter (derived from ''bareter'') is a system of exchange (economics), exchange in which participants in a financial transaction, transaction directly exchange good (economics), goods or service (economics), services for other goods ...
, in which commodities were simply exchanged against others. Ideally, commodity money had to be widely accepted, easily portable and storable, and easily combined and divided in order to correspond to different values. The main items of commodity money in Japan were
arrowheads An arrowhead or point is the usually sharpened and hardened tip of an arrow, which contributes a majority of the projectile mass and is responsible for impacting and penetrating a target, or sometimes for special purposes such as signaling. ...
,
rice Rice is a cereal grain and in its Domestication, domesticated form is the staple food of over half of the world's population, particularly in Asia and Africa. Rice is the seed of the grass species ''Oryza sativa'' (Asian rice)—or, much l ...
grains and
gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...
powder. This contrasted somewhat with countries like
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
, where one of the most important items of commodity money came from the southern seas: shells. Since then however, the shell has become a symbol for money in many Chinese and Japanese
ideograms An ideogram or ideograph (from Greek 'idea' + 'to write') is a symbol that is used within a given writing system to represent an idea or concept in a given language. (Ideograms are contrasted with phonograms, which indicate sounds of speech ...
.


Early coinage

The earliest coins to reach Japan were Chinese
Ban Liang The banliang () was the first unified currency in imperial Chinese history, first minted as early as 378 BC and introduced by the first emperor Qin Shi Huang around 210 BC (although coins with this inscription already circulated in the ...
and Wu Zhu coins, as well as the coins produced by Wang Mang during the first centuries of the first millennium CE; these coins have been excavated all over Japan, but as Japan's economy was not sufficiently developed at the time, these coins were more likely to be used as precious objects rather than a means of exchange; rice and cloth served as the main currencies of Japan at the time. The first coins produced in Japan are called the ''
Mumonginsen (aka "Plain silver coin") is believed to be the earliest form of Japanese currency. Issued between 667 and 672 AD during the Tenji period, there are theories that mainly lean towards these coins being privately minted. Overview Throughout their ...
'' (無文銀銭, or 'silver coins without inscription') and the copper alloy ''
Fuhonsen aka is an early form of Japanese currency that was created around 683 ( Tenmu 12) during the Asuka period. Its suggested that these coins were minted before the creation of the Wadōkaichin in 708 based on an entry in the Nihon Shoki. Theories dif ...
'' (富本銭, coins made from an alloy of copper, lead and tin) which were all introduced in the late seventh century. These currencies (alongside other reforms) were based on the Chinese system and were therefore based on the
Chinese units of measurement Chinese units of measurement, known in Chinese as the ''shìzhì'' ("market system"), are the traditional units of measurement of the Han Chinese. Although Chinese numerals have been decimal (base-10) since the Shang dynasty, Shang, several Chine ...
. In modern times the usage of ''Fuhonsen'' has often been interpreted as charms rather than currency, but it has recently been discovered that these copper coins were in fact the first government-made coinage of Japan.


Kōchōsen currency system (8th–10th centuries)


Embassy to the Tang court (630 CE)

Japan's first formal currency system was the ''Kōchōsen'' (Japanese: 皇朝銭, "Imperial currency"). It was exemplified by the adoption of Japan's first official coin type, the ''
Wadōkaichin , also romanized as ''Wadō-kaichin'' or called ''Wadō-kaihō'', is the oldest official Japanese currency, Japanese coinage, first mentioned for 29 August 708 on order of Empress Genmei. It was long considered to be the first type of coin prod ...
''.''The Cambridge history of Japan: Heian Japan'' John Whitney Hall, Donald H. (Donald Howard) Shively, William H. McCullough p.434
/ref> It was first minted in 708 CE on the orders of
Empress Genmei , also known as Empress Genmyō, was the 43rd monarch of Japan,Imperial Household Agency (''Kunaichō'') 元明天皇 (43) retrieved August 22, 2013. according to the traditional order of succession. Genmei's reign spanned the years 707 through ...
, Japan's 43rd Imperial ruler. ''" Wadō Kaichin"'' is the reading of the four characters printed on the coin, and is thought to be composed of the era name Wadō (和銅, "Japanese copper"), which could alternatively mean "happiness", and "Kaichin", thought to be related to "currency". This coinage was inspired by the Tang coinage (唐銭) named '' Kaigen Tsūhō'' (Chinese: 開元通宝, ''Kai Yuan Tong Bao''), first minted in
Chang'an Chang'an (; zh, t=長安, s=长安, p=Cháng'ān, first=t) is the traditional name of the city now named Xi'an and was the capital of several Chinese dynasties, ranging from 202 BCE to 907 CE. The site has been inhabited since Neolithic time ...
in 621 CE.
Japan Currency Museum The , formally known as the , is a museum about Japanese currency located in front of the Bank of Japan building in Chūō, Tokyo. The museum opened in November 1985.Edan CorkillBank of Japan Currency Museum invests in exhibition on wallets '' ...
(日本貨幣博物館) permanent exhibit, articles
The History of Japanese Currency
The Wadokaichin had the same specifications as the Chinese coin, with a diameter of 2.4 cm and a weight of 3.75g. File:Chinese shell money 16th 8th century BCE.jpg, Chinese shell money was widely accepted, easy to carry, and easy to count. File:Japan commodity money before the 8th century.jpg, Japanese commodity money before the 8th century, including arrowheads, rice grains, and gold powder. Now in the Japanese Currency Museum. File:Japanese embassy to the Tang court.jpg, The Japanese embassy to the Tang court. File:Nihon Shoki 15 April 683.jpg, The Nihon Shoki entry of 15 April 683 (Tenmu 12th year) mandates the use of copper coins. File:Japan known coin types from 708 to 958.jpg, Known coin types of Japan from 708 to 958, chronologically arranged. Japan's contacts with the Chinese mainland became intense during the
Tang period The Tang dynasty (, ; zh, c=唐朝), or the Tang Empire, was an imperial dynasty of China that ruled from 618 to 907, with an interregnum between 690 and 705. It was preceded by the Sui dynasty and followed by the Five Dynasties and T ...
, with many exchanges and cultural imports occurring. The first Japanese embassy to China is recorded to have been sent in 630. The importance of metallic currency appeared to Japanese nobles, probably leading to some coin minting at the end of the 7th century, such as the ''
Fuhonsen aka is an early form of Japanese currency that was created around 683 ( Tenmu 12) during the Asuka period. Its suggested that these coins were minted before the creation of the Wadōkaichin in 708 based on an entry in the Nihon Shoki. Theories dif ...
'' coinage (富本銭), discovered in 1998 through archaeological research in
Nara Prefecture is a Prefectures of Japan, prefecture of Japan located in the Kansai region of Honshu. Nara Prefecture has a population of 1,321,805 and has a geographic area of . Nara Prefecture borders Kyoto Prefecture to the north, Osaka Prefecture to the ...
. An entry of the
Nihon Shoki The or , sometimes translated as ''The Chronicles of Japan'', is the second-oldest book of classical Japanese history. It is more elaborate and detailed than the , the oldest, and has proven to be an important tool for historians and archaeol ...
dated April 15, 683 mentions: "From now on, copper coins should be used, but silver coins should not be used", which is thought to order the adoption of the ''Fuhonsen'' copper coins. The first official coinage was struck in 708.


Currency reform (760)

The ''Wadōkaichin'' soon became debased, as the government rapidly issued coins with progressively lesser metallic content, and local imitations thrived. In 760, a reform was put in place, in which a new copper coin called ' (萬年通寳) was worth 10 times the value of the former ''Wadōkaichin'', with also a new silver coin named ''
Taihei Genpō (aka: 大平󠄁元寶) is an early form of Japanese silver currency which is recorded in the Shoku Nihongi of the Nara period. Historical documents confirm that this coinage was established in the 4th year of Tenpyō-hōji, along with copper Ma ...
'' (大平元寶) with a value of 10 copper coins, as well as a new gold coin named ''
Kaiki Shoho is an early form of Japanese currency that was issued in 760 (Tenpyō-hōji 4) during the Nara period. These coins were struck in a gold alloy, and have a circular square hole in the middle. Very few "Kaiki Shoho" coins were minted as they were ...
'' (開基勝寶) with a value of 10 silver coins. Silver minting was soon abandoned however, but copper minting took place throughout the
Nara period The of the history of Japan covers the years from 710 to 794. Empress Genmei established the capital of Heijō-kyō (present-day Nara). Except for a five-year period (740–745), when the capital was briefly moved again, it remained the capita ...
. A variety of coin types are known, altogether 12 types, including one coin type in gold. File:Kaikishōhō TNM front.jpg, Japanese gold coin Kaiki Shōhō (開基勝寶) from 760. File:Wadokaichin coin 8th century Japan.jpg, A Silver Wadō Kaichin (和同開珎) coin from 8th-century Japan.


Last issues (958)

The ''Kōchōsen'' Japanese system of coinage became strongly debased, with its metallic content and value decreasing. By the middle of the 9th century, the value of a coin in rice had fallen to 1/150th of its value of the early 8th century. By the end of the 10th century, compounded with weaknesses in the political system, this led to the abandonment of the national currency, with the return to
rice Rice is a cereal grain and in its Domestication, domesticated form is the staple food of over half of the world's population, particularly in Asia and Africa. Rice is the seed of the grass species ''Oryza sativa'' (Asian rice)—or, much l ...
as a currency medium. The last official Japanese coin issue was in 958, with very low quality coins called ' (乹元大寶), which soon fell into disuse. The last ''Kōchōsen'' coins produced after the Wadōkaichin include:


Chinese coinage (12th–17th centuries)


Importation of Chinese coinage

From the 12th century, the expansion of trade and barter again highlighted the need for a currency. Chinese coinage came to be used as the standard currency of Japan, for a period lasting from the 12th to the 17th century. Coins were obtained from China through trade or through ''" Wakō"'' piracy. Coins were also imported from Annam (modern
Vietnam Vietnam, officially the Socialist Republic of Vietnam (SRV), is a country at the eastern edge of mainland Southeast Asia, with an area of about and a population of over 100 million, making it the world's List of countries and depende ...
) and
Korea Korea is a peninsular region in East Asia consisting of the Korean Peninsula, Jeju Island, and smaller islands. Since the end of World War II in 1945, it has been politically Division of Korea, divided at or near the 38th parallel north, 3 ...
. There is evidence to suggest that the
Yuan dynasty The Yuan dynasty ( ; zh, c=元朝, p=Yuáncháo), officially the Great Yuan (; Mongolian language, Mongolian: , , literally 'Great Yuan State'), was a Mongol-led imperial dynasty of China and a successor state to the Mongol Empire after Div ...
used to extensively export
Chinese cash coins The cash or ''qian'' was a type of coin of China and the East Asian cultural sphere, Sinosphere, used from the 4th century BCE until the 20th century, characterised by their round outer shape and a square center hole ( zh, c=方穿, poj=hong-chh ...
to Japan for local circulation. The
Sinan shipwreck Sinan (Arabic: سنان ''sinān'') is a name found in Arabic and Early Arabic, meaning ''spearhead''. The name may also be related to the Ancient Greek name Sinon. It was used as a male given name. Etymology The word is possibly stems from th ...
, which was a ship from Ningbo to Hakata that sank off the Korean coast in the year 1323, carried some 8,000 strings of cash coins, which weighed about 26,775 kg.


Imitations of Chinese coinage

As the Chinese coins were not in sufficient number as trade and economy expanded, local Japanese imitations of Chinese coins were made from the 14th century, especially imitations of
Ming The Ming dynasty, officially the Great Ming, was an imperial dynasty of China that ruled from 1368 to 1644, following the collapse of the Mongol-led Yuan dynasty. The Ming was the last imperial dynasty of China ruled by the Han people, t ...
coins, with inscribed names identical to those of contemporary Chinese coins. These coins had a very low value compared to Chinese coins, and several of them had to be exchanged for just one Chinese coin. This situation continued until the beginning of the
Edo period The , also known as the , is the period between 1600 or 1603 and 1868 in the history of Japan, when the country was under the rule of the Tokugawa shogunate and some 300 regional ''daimyo'', or feudal lords. Emerging from the chaos of the Sengok ...
, when a new system was put in place. File:Chinese Seisou Genbou coin.jpg,
Northern Song The Song dynasty ( ) was an imperial dynasty of China that ruled from 960 to 1279. The dynasty was founded by Emperor Taizu of Song, who usurped the throne of the Later Zhou dynasty and went on to conquer the rest of the Ten Kingdoms, endin ...
Chinese coin ''Shèngsòng Yuánbǎo'' (聖宋元寶). File:Seisou Genbou Japanese coin.jpg, ''Seisō Genbō'' (聖宋元宝) Japanese imitation of the Song type, 14th–17th centuries. File:Ming coin used as currency in Japan.jpg, Chinese
Ming The Ming dynasty, officially the Great Ming, was an imperial dynasty of China that ruled from 1368 to 1644, following the collapse of the Mongol-led Yuan dynasty. The Ming was the last imperial dynasty of China ruled by the Han people, t ...
coin ''Yǒnglè Tōngbǎo'' (永樂通寳) used as currency in Japan. File:Eiraku Tsuuhou Japanese coin.jpg, ''Eiraku Tsūhō'' (永楽通宝) Japanese imitation of the Ming type, 14th–17th centuries. File:Genpō Tsūhō Japanese coin.jpg, ''Genpō Tsūhō'' (元豊通宝) Japanese imitation, 14th–17th centuries.


Local experiments (16th century)

The growth of the economy and trade meant that small copper currency became insufficient to cover the amounts that were being exchanged. During the
Sengoku period The was the period in History of Japan, Japanese history in which civil wars and social upheavals took place almost continuously in the 15th and 16th centuries. The Kyōtoku incident (1454), Ōnin War (1467), or (1493) are generally chosen as th ...
, the characteristics of the future Edo Period system began to emerge. Local Lords developed trade, abolishing monopolistic guilds, which led to the need for large-denomination currencies. From the 16th century, local experiments started to be made, with the minting of local coins, sometimes in gold. Especially the
Takeda clan The was a Japanese samurai clan active from the late Heian period until the late 16th century. The clan was historically based in Kai Province in present-day Yamanashi Prefecture. The clan reached its greatest influence under the rule of Taked ...
of
Kōshū Kōshū or Koshu may refer to: * ** Kai Province, Kōshū, another name for Kai Province. ** Kōshū, Yamanashi, the present city in Yamanashi Prefecture. ** Koshu (grape), a variety of Grape. / :ja:甲州 (葡萄), 甲州 (葡萄) * ** Hyūga Prov ...
minted gold coins which were later adopted by the
Tokugawa shogunate The Tokugawa shogunate, also known as the was the military government of Japan during the Edo period from 1603 to 1868. The Tokugawa shogunate was established by Tokugawa Ieyasu after victory at the Battle of Sekigahara, ending the civil wars ...
.
Hideyoshi , otherwise known as and , was a Japanese samurai and ''daimyō'' (feudal lord) of the late Sengoku and Azuchi-Momoyama periods and regarded as the second "Great Unifier" of Japan.Richard Holmes, The World Atlas of Warfare: Military Innov ...
unified Japan, and thus centralized most of the minting of large denomination silver and gold coins, effectively putting in place the basis of a unified currency system. Hideyoshi developed the large
Ōban An Ōban (大判) was a monetary ovoid gold plate, and the largest denomination of Tokugawa coinage Tokugawa coinage was a unitary and independent metallic monetary system established by ''shōgun'' Tokugawa Ieyasu in 1601 in Japan, and whic ...
plate, also called the Tenshō Ōban (天正大判), in 1588, a predecessor to Tokugawa gold coinage. A common practice in that period was to melt gold into copper molds for convenience, derived from the
sycee A sycee (;.. from Cantonese , zh, j=Sai3 Si1, y=sai-sī, ). or yuanbao ( zh, t= 元寶, s= 元宝, poj=Goân-pó, j=jyun4 bou2, p=yuánbǎo, l=primary treasure, first=t) was a type of gold and silver ingot currency used in imperial China from ...
manufacturing method. These were called Bundōkin (分銅金), of which there were two types, the small Kobundō (小分銅), and the large Ōbundō (大分銅). A Kobundō would represent about 373 g in gold. File:Kiritomoeban.jpg, Kiritomoeban (桐巴判), 16th century. File:Kobundo 3.jpg, Kobundō, "Turtle scale
Paulownia ''Paulownia'' ( ) is a genus of seven to 17 species of hardwood trees (depending on taxonomic authority) in the family Paulowniaceae, the order Lamiales. The genus and family are native to east Asia and are widespread across China. The genus, o ...
" ''Kinkōkiri'' mark (亀甲桐), ''Nunome'' (布目) emblem. File:Kobundo 4.jpg, Kobundō, "Fixed" ''Tei'' mark (定), ''Ishime'' (石目) emblem. File:Kobundo 5.jpg, Kobundō, "
happiness Happiness is a complex and multifaceted emotion that encompasses a range of positive feelings, from contentment to intense joy. It is often associated with positive life experiences, such as achieving goals, spending time with loved ones, ...
" ''Kichi'' mark (吉) mark, ''Nunome'' (布目) emblem. File:Kobundo Japan.jpg, A Kobundō (小分銅), 95–97% gold, "
Paulownia ''Paulownia'' ( ) is a genus of seven to 17 species of hardwood trees (depending on taxonomic authority) in the family Paulowniaceae, the order Lamiales. The genus and family are native to east Asia and are widespread across China. The genus, o ...
" ''Kiri'' mark (桐), Kikubana (菊花) emblem, 373.11 grams, Japan. File:Koshukin.jpg, An early minting experiment by the Takeda clan of Kōshū (甲州金) in the 16th century.


Tokugawa currency (17th–19th centuries)

Tokugawa coinage Tokugawa coinage was a unitary and independent metallic monetary system established by ''shōgun'' Tokugawa Ieyasu in 1601 in Japan, and which lasted throughout the Tokugawa period until its end in 1867. History The establishment of Tokugawa co ...
was a unitary and independent metallic monetary system established by ''
shōgun , officially , was the title of the military rulers of Japan during most of the period spanning from 1185 to 1868. Nominally appointed by the Emperor, shoguns were usually the de facto rulers of the country, except during parts of the Kamak ...
''
Tokugawa Ieyasu Tokugawa Ieyasu (born Matsudaira Takechiyo; 31 January 1543 – 1 June 1616) was the founder and first ''shōgun'' of the Tokugawa shogunate of Japan, which ruled from 1603 until the Meiji Restoration in 1868. He was the third of the three "Gr ...
in 1601 in
Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
, and which lasted throughout the
Tokugawa period The , also known as the , is the period between 1600 or 1603 and 1868 in the history of Japan, when the country was under the rule of the Tokugawa shogunate and some 300 regional ''daimyo'', or feudal lords. Emerging from the chaos of the Sengok ...
until its end in 1867. From 1601, Tokugawa coinage consisted of gold, silver, and bronze denominations. The denominations were fixed, but the rates actually fluctuated on the exchange market.Metzler p.15 Tokugawa started by minting Keicho gold and silver coins, and Chinese copper coins were later replaced by Kan'ei Tsuho coins in 1670. The material for the coinage came from gold and silver mines across Japan. For this purpose, new gold mines were opened, such as the Sado and Toi gold mines in the
Izu Peninsula The is a mountainous peninsula with a deeply indented coastline to the west of Tokyo on the Pacific Ocean, Pacific coast of the island of Honshu, Japan, the largest of the four main islands of Japan. Formerly known as Izu Province, Izu peninsu ...
. Regarding diamond coins, the ''
Kan'ei Tsūhō The Kan'ei Tsūhō (Kyūjitai: 寛永通寳; Shinjitai: 寛永通宝) was a Japanese mon (currency), Japanese mon coin in use from 1626 until 1868 during the Edo period. In 1636, the ''Kan'ei Tsūhō'' coin was introduced by the Tokugawa shoguna ...
'' coin (寛永通宝) came to replace the Chinese coins that had been in circulation in Japan, as well as those that were privately minted, and became the legal tender for small denominations. '' Yamada Hagaki'', Japan's first notes, were issued around 1600 by
Shinto , also called Shintoism, is a religion originating in Japan. Classified as an East Asian religions, East Asian religion by Religious studies, scholars of religion, it is often regarded by its practitioners as Japan's indigenous religion and as ...
priests also working as merchants in the
Ise Ise may refer to: Places *Ise, Mie, a city in Japan **Ise Grand Shrine, a Shinto shrine located in Ise, Mie * Ise Ekiti, a city in Nigeria * Ise, Norway, a village in Norway *Ise Province, an ancient province of Japan *River Ise, a tributary of the ...
-Yamada (modern
Mie Prefecture is a Prefectures of Japan, prefecture of Japan located in the Kansai region of Honshu. Mie Prefecture has a population of 1,781,948 () and has a geographic area of . Mie Prefecture is bordered by Gifu Prefecture to the north, Shiga Prefecture an ...
), in exchange for silver. This was earlier than the first
goldsmith A goldsmith is a Metalworking, metalworker who specializes in working with gold and other precious metals. Modern goldsmiths mainly specialize in jewelry-making but historically, they have also made cutlery, silverware, platter (dishware), plat ...
notes issued in
England England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...
around 1640. The first known feudal note was issued by the Fukui clan in 1661. During the 17th century, the feudal domains developed a system of feudal notes, giving currency to pledged notes issued by the lord of the domain, in exchange for convertibility to gold, silver or copper. Japan thus combined gold, silver, and copper standards with the circulation of
paper money Paper money, often referred to as a note or a bill (North American English), is a type of negotiable promissory note that is payable to the bearer on demand, making it a form of currency. The main types of paper money are government notes, which ...
. Tokugawa coinage remained in use during the
Sakoku is the most common name for the isolationist foreign policy of the Japanese Tokugawa shogunate under which, during the Edo period (from 1603 to 1868), relations and trade between Japan and other countries were severely limited, and almost all ...
period of seclusion, although it was progressively debased to try to manage government deficits. The first debasement, in 1695, was called the Genroku Recoinage. File:Feudal notes of Japan Edo period.jpg, Feudal notes of Japan, Edo period.


Bakumatsu currency (1854–1868)

The Tokugawa coinage collapsed following the reopening of Japan to the West in 1854, as the silver-gold exchange rates gave foreigners huge opportunities for
arbitrage Arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more marketsstriking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which th ...
, leading to the export of large quantities of gold. Gold traded for silver in Japan at a 1:5 ratio, while that ratio was 1:15 abroad. During the
Bakumatsu were the final years of the Edo period when the Tokugawa shogunate Meiji Restoration, ended. Between 1853 and 1867, under foreign diplomatic and military pressure, Japan ended its isolationist foreign policy known as and changed from a Feudali ...
period in 1859 Mexican dollars were even given official currency in Japan, by coining them with marks in Japanese and officializing their exchange rate of three ''"Bu"''. They were called ''Aratame Sanbu Sadame'' (改三分定, "Fixed to the value of three ''bu''"). Meanwhile, local governments issued their own currency chaotically, so that the nation's money supply expanded by 2.5 times between 1859 and 1869, leading to crumbling money values and soaring prices. The system was replaced by a new one after the conclusion of the
Boshin War The , sometimes known as the Japanese Revolution or Japanese Civil War, was a civil war in Japan fought from 1868 to 1869 between forces of the ruling Tokugawa shogunate and a coalition seeking to seize political power in the name of the Impe ...
, and with the onset of the
Meiji government The was the government that was formed by politicians of the Satsuma Domain and Chōshū Domain in the 1860s. The Meiji government was the early government of the Empire of Japan. Politicians of the Meiji government were known as the Meiji ...
in 1868. File:Aratame sanbu sadame silver coin 1859 Japan.jpg, A Mexican dollar used as currency in Japan, marked with "Aratame sanbu sadame" (''Fixed to the value of three bu'') (改三分定) from 1859. File:Allegory of inflation during the Bakumatsu era.jpg, Allegory of inflation and soaring prices during the Bakumatsu era.


Imperial Japan (1871–present)

Following 1868, a new currency system based on the
Japanese yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar and the euro. It is also widely used as a third reserve currency after the US dollar and the euro. Th ...
was progressively established along Western lines, which has remained Japan's currency system to this day. Immediately after the
Meiji Restoration The , referred to at the time as the , and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored Imperial House of Japan, imperial rule to Japan in 1868 under Emperor Meiji. Althoug ...
in 1868, previous gold, silver and copper coins, as well as feudal notes, continued to circulate, leading to great confusion. In 1868, the government also issued coins and gold-convertible paper money, called '' Daijōkansatsu'' (太政官札), denominated in ''
Ryō The was a gold currency unit in the shakkanhō system in pre- Meiji Japan. It was eventually replaced with a system based on the '' yen''. Origins The ''ryō'' was originally a unit of weight from China, the ''tael.'' It came into use in Ja ...
'', an old unit from the Edo period, and private banks called ''Kawase Kaisha'' were allowed to issue their own currency as well. Complexity, widespread counterfeiting of gold coins and feudal notes led to widespread confusion.


Birth of the yen: New Currency Act (1871)

Through the New Currency Act of 1871, Japan adopted the
gold standard A gold standard is a backed currency, monetary system in which the standard economics, economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the ...
along international lines, with 1
yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar and the euro. It is also widely used as a third reserve currency after the US dollar and the euro. T ...
corresponding to 1.5g of pure gold. The Meiji government issued new notes, called ''Meiji Tsūhōsatsu'' (明治通宝札), in 1872, which were printed in
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
. Silver coins were also issued for trade with Asian countries who favoured silver as a currency, thus establishing a de facto gold-silver standard. File:First Meiji one yen banknote 1871.jpg, The First Meiji one yen banknote, Meiji Tsūhōsatsu (明治通宝札) from 1871. File:Early one yen banknote front and reverse.jpg, An early 1 yen banknote showing both the front and reverse. National Bank notes, 1873.


National Bank Act (1872)

The National Bank Act of 1872 led to the establishment of four banks between 1873 and 1874, and there were more than 153 national banks by the end of 1879. The national banks issued identically designed convertible notes, which were effective in funding industry and progressively replaced government notes. In 1876, an amendment allowed the banks to make the banknotes virtually non-convertible. These national banknotes imitated the design of American banknotes, although the name of the issuer was different for each. Severe inflation broke out with the Seinan Civil War in 1877. This was controlled by the reduction of government spending and the removal of paper currency from circulation. During the Seinan Civil War, an original type of paper money was issued by the rebel leader
Saigō Takamori Saigō Takamori (; 23 January 1828 – 24 September 1877) was a Japanese samurai and politician who was one of the most influential figures in Japanese history. He played a key role in the Meiji Restoration, which overthrew the Tokugawa shogunate ...
in order to finance his war effort. In 1881, the first Japanese note to feature a portrait, the
Empress Jingū was a Legend, legendary Japanese empress who ruled as a regent following her Emperor Chūai, husband's death in 200 AD. Both the and the (collectively known as the ''Kiki'') record events that took place during Jingū's alleged lifetime. Legen ...
note (神功皇后札), was issued.


Bank of Japan (1882)

In order to regularize the issuance of convertible banknotes, a
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
, the
Bank of Japan The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It is headquartered in Nihonbashi, Chūō, Tokyo, Chūō, Tokyo. The said bank is a corporate entity ...
, was established in 1882. The bank would stabilize the currency by centralizing the issuance of convertible banknotes. The first central banknotes were issued by the Bank of Japan in 1885. They were called Daikokusatsu (大黒札), and were convertible in silver. Following the devaluation of silver, and the abandonment of silver as a currency standard by Western powers, Japan adopted the
gold standard A gold standard is a backed currency, monetary system in which the standard economics, economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the ...
through the Coinage Law of 1897. The yen was fixed at 0.75g of pure gold, and banknotes were issued which were convertible into gold. In 1899, the National Banks banknotes were declared invalid, leaving the Bank of Japan as the only supplier of currency. File:Bank of Japan gold convertible yen banknote 1900.jpg, A Bank of Japan gold-convertible yen banknote from 1900.


World Wars

During World War I, Japan prohibited the export of gold in 1917, as did many countries such as the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. Gold convertibility was again shortly established in January 1930, only to be abandoned in 1931 when Great Britain abandoned the gold standard. Conversion of banknotes into gold was suspended. From 1941, Japan formally adopted a managed currency system, and in 1942 the Bank of Japan Law officially suppressed the obligation of conversion.


Modern yen

In 1946, following the
Second World War World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
, Japan removed the old currency (旧円券) and introduced the "New Yen" (新円券). Meanwhile, American occupation forces used a parallel system, called
B yen was a colloquial term used to refer to a form of military scrip used in post-war US-Occupied Okinawa from April 15, 1946, to September 1958."B yen." ''Okinawa konpakuto jiten'' (沖縄コンパクト事典, "Okinawa Compact Encyclopedia"). '' ...
, from 1945 to 1958. Since then, together with the economic expansion of Japan, the yen has become one of the major currencies of the world. File:WWII Japanese 1 yen bill, front.jpg, Front of the 1944 one-yen banknote File:WWII Japanese 1 yen bill, back.jpg, Reverse of the 1944 one-yen banknote File:WWII Japanese 50 sen bill, front.jpg, Front of the 1946 fifty-sen banknote File:WWII Japanese 50 sen bill, back.jpg, Reverse of the 1946 fifty-sen banknote File:Daijokansatsu notes 1868 Japan.jpg, Daijōkansatsu notes (太政官札) denominated in Ryō, 1868, Japan. File:US dollar note and Japanese National Bank note 1873.jpg, American banknote, and Japanese 1873 banknote closely following the U.S. design. File:Early one yen gold coin.jpg, An early one yen gold coin File:Gold standard one yen banknote 1916 Japan.jpg, A gold standard one yen banknote from 1916 File:Japanese Government Asian banknotes during the Second World War.jpg, Japanese Government Asian banknotes distributed during the World War II, specifically to the Philippines. File:Various types of B Notes 1945 1958.jpg, A complete set of "B Yen" notes used by American occupation forces in 1945–1958. File:P103-2000Yen-(2000) front.jpg, A Series D 2,000 yen note. File:10 Yen (Japan).jpg, 10
Japanese yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar and the euro. It is also widely used as a third reserve currency after the US dollar and the euro. Th ...
(1981).


See also

* Coinage of Asia *
History of Chinese currency The history of Chinese currency spans more than 3000 years from ancient China to imperial China and modern China. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ...


Citations


Further reading

* Early Japanese Coins. David Hartill.


External links


Timeline of Japanese coins
Japan Mint The is an Independent Administrative Institution of the Japanese government, responsible for producing and circulating the coins of Japan. The agency has its head office in Osaka with branches in Saitama and Hiroshima. The Japan Mint does not p ...
{{Japanese currency and coinage (pre-yen), state=collapsed Economic history of Japan Currencies of Asia Currencies of Japan