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Japenese Yen: History

Known as the currency of Japan, the Yen, literally meaning “circle” or “round object” has been mirrored towards the silver Mexican Peso with the round shape of its coins. During earlier times, one Yen used to correspond to 100 sen, but according to researchers the sen is no longer an accepted currency used in Japan.

Introduced by the Meiji government, the Yen was used to replace the unstable Edo Period system of the mon currency wherein no standard of exchange was outlined. The New Currency Act of 1871 officiated Yen as the Japanese currency in a hope to bring stability to Japan’s rocky currency situation. Japan’s objective was to enter the Gold Standard of currency and with the signing of the New Currency Act that is exactly where they ended up.

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.

In 1949 the Yen was equivalent to 1 US Dollar and this exchange stayed in effect until 1971 according to researchers. Japanese coins come in 1, 5, 10, 50,100 and 500 Yen. Japanese bills come in 1, 2, 5 and 10,000 Yen. The 2,000 Yen option isn’t used quite as often as the other bill options.

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Modified:01/24/2011
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