Toujin No Negoto　★　唐人の寝言

Currency seems to be a natural development across all countries ever. While I'm not going to go into the finer details of the history of money, I thought it might be fun to take a breif look into currency in the context of historical and modern Japan.

Before about 1600 AD, a lot of currency came from China. The Chinese traders would buy stuff using their own coins, and those coins would be traded among Japanese for other bartering.

In addition to this, coins started to be made by Daimyo. They came in different shapes and sizes, but the important thing was the weight. The weights went (from smallest unit), koitome, itome, shu, bu, ryo, with higher value being worth 4x the one before it (i.e. four bu in one ryo, etc.).

This was standardized by the Edo period from 1600, where the system now used gold, silver and copper coins, which could be interchanged at (constantly fluctuating) market rates. The denominations were as follows:

Gold Coins
1 Ooban = 7.5 Ryo*
1 Ryo (or Koban) = 4 Bu = 4 Kan = 70 Momme*
1 Bu = 4 Shu
1 Shu

Silver
1 Kamme = 10,000 Momme
1 Momme (3.75g) = 10 Fun
1 Fun = 10 Rin
1 Rin

Copper
1 Kan (3.75g) = 10 Mon
1 Mon

Everyday joes got paid in silver and copper. The samurai were paid in rice, which they usually recieved from the government depending on their worth and the size of their territory (or fief). Gold was for big money transactions.


The problem with having a weight-based money system was that the money kept being traded overseas. Because of this, there was a move toward diluting the quality of the gold (from 80% down to around 60%), and then to reducing the size of the coin.

The same thing happened for silver coins, being diluted down to only 20% silver. Special silver coins at around 80% quality were still minted for overseas traders who rejected the poor quality coins.

The overall lowering of quality was fine for an isolated economy, but for international trading, the number of minted coins needed rose sharply to around 160%. Even the high quality 80% silver coins didn't fix the problem. Japan had created a problem. So they decided to try an old trick again. They raised the quality of the gold coins back to their original values. This squashed the high prices, but also it had adverse effects on the economy, leaving everyone poor.

Again they tried to increase the quality of the coins, and this time they found the right formula, releasing just enough currency into circulation. The system remained stable for some 80 years. The trade problems only helped to push Japan in the direction of national seclusion 鎖国 sakoku

For a more detailed look at the economy and money system in this period, check out this site.

In 1872 a new system was introduced. It introduced the yen (円 actually the en) the sen (錢, 1/100th of a yen) and the rin (厘 1/1000th of a yen). Japan at this time used the gold standard which basically means the money was technically exchangable for a fixed gold. The sen and rin were abandoned in 1953.

Coins were minted from 1870. The coins minted after this include:

Silver coins

1 Yen (until 1955), 100 Yen (1957-1967)
5 Sen, 10 Sen, 20 Sen, 50 Sen (Until 1953)

Gold coins

2 Yen, 5 Yen, 10 Yen, 20 Yen (until 1953)
1 Yen (in 1871)

Copper coins

100 Yen (new design in 2000)
1 Sen, 2 Sen (in 1873)
1 Rin (in 1873)

Brass coins (from 1946)

1 Yen, 5 Yen (the current holed type from 1949)
50 Sen

Bronze coins
10 Yen (the current type, in 1949)

Aluminum coins

1 Yen (from 1955)

Nickel coins

50 Yen (unholed, 1957-1967)

Cupronickel coins (from 1967)

100 Yen, 50 Yen (hold type), 500 Yen (old type)

Before the war, in 1938, the old style silver coins stopped being produced. At the end of 1953, coins of less than 1 yen were taken out of use. Every now and again special commemorative coins are made, that are actually legal tender. These coins can have a face value of up to 100,000 Yen(!).

For a better analysis, and pictures of the coins, check out the Wikipedia page.

Notes have gone through a lot of changes since their inception in 1873. For a look at all the different types and their dates of inception, check out this PDF file (1.6MB).

It's interesting to note that the 2,000 Yen note is not always accepted everywhere, and is relatively rare. Some say it was introduced to boost the economy, leading to new vending machines programmed to accept them, to new cash registers able to fit them. For some interesting facts about the anti-forgery measures they have taken on the notes, check out the Bank of Japan website.

Japan also issued special notes in wartime to countries that they took over. The most notable case is that of Hong Kong, where all HK dollars were forcably changed to Japanese military yen. When Hong Kong's ownership was again relinquished, the money became mere paper, leaving Hong Kong in a desperate situation.

Another strange/fun fact: if you add up the value of the coins in circulation: 1,5,10,50,100,500, you get 666.