Learn About the History of Japan’s Currency, the Yen, and the Types of Money in Use
Japanese banknotes are known around the world for being clean and difficult to counterfeit, and many first-time visitors from abroad are surprised when they see them.
The designs are varied, the quality is high, and they truly live up to the label “Made in Japan.”
However, Japan’s current system of currency management only began after World War II, following many changes over time.
This article introduces how Japanese money developed, the history of its currency up to the present day, and the different types of money in use.
It also takes a detailed look at the unique features of the yen, payment methods, and how it is issued and managed,
so be sure to read to the end and deepen your understanding of Japanese history and culture.
Types and Units of Japanese Yen
The unit of Japanese currency is the yen, and its international currency code is JPY.
It is widely used in international financial markets as one of the world’s major currencies.
Its origin is unclear, but it is often written as “yen” in the Roman alphabet, and the “\” symbol is also commonly used.
Japanese yen is divided into coins and banknotes, and currently a total of 10 types are issued, consisting of six coins and four banknotes.
As explained later, the 5-yen and 50-yen coins have holes in the center, which is rare even by global standards.
Another characteristic is that Japanese banknotes tend to have fewer stains and wrinkles than those in many other countries, so many visitors to Japan find them exceptionally clean.
- Coins
-
・1-yen coin
・5-yen coin
・10-yen coin
・50-yen coin
・100-yen coin
・500-yen coin - Banknotes
-
・1,000-yen note
・2,000-yen note
・5,000-yen note
・10,000-yen note
The 1-Yen Coin, Whose Design Was Chosen Through a Public Competition
Made of aluminum, the 1-yen coin is the lightest of all Japanese coins.
On the front, a young tree appears in the center, with “Japan” and “One Yen” above and below it, while the reverse shows the numeral “1” and the year of minting.
The “young tree” does not refer to any specific plant (there is no tree actually called wakagi), but was chosen as a symbol of a growing Japan.
Another notable feature is that it is the only coin whose design was selected through a public competition.
The “young tree” has eight leaves, so take a closer look if you get the chance.
The 5-Yen Coin, Known for Its Unique Features
The gold-colored 5-yen coin with a hole has several unique features among Japanese coins.
Its front shows rice ears, water, and a gear, symbols of Japan’s agriculture, fisheries, and industry, arranged from the center toward the top, with the characters for “five yen” at the bottom.
On the reverse, young sprouts symbolizing new growth and hope for democracy are shown on both sides of the hole, with “Japan” at the top and the year of minting at the bottom.
Because the coin is labeled only in kanji numerals and does not use Arabic numerals, visitors to Japan who cannot read kanji may not be able to tell its value.
The 10-Yen Coin, with an Intricate Design That Also Helps Prevent Counterfeiting
The brown-colored 10-yen coin is the lowest-denomination coin that can be used in vending machines.
Its front features the Phoenix Hall of Byodoin, a World Heritage Site, in the center, with “Japan” and “Ten Yen” above and below, surrounded by an arabesque pattern.
On the reverse are the number “10,” the year of minting, and evergreen trees wrapped in a ribbon, representing tokiwagi, such as pine and cedar.
Be sure to notice the intricate design of the Phoenix Hall of Byodoin, which was also adopted as an anti-counterfeiting measure.
Also, 10-yen coins minted mainly from 1951 to 1958 have grooves on the edge, giving them a jagged feel, and are called giza-ju.
They are not commonly seen in circulation today, but it is a fun bit of trivia to know.
The 50-Yen Coin, a Coin with a Hole in the Center
When the 50-yen coin was first issued, it did not have a hole.
Its design was changed to include a hole in 1959, and the 50-yen coin in circulation today has been in use since 1967.
On the front, three chrysanthemum flowers appear on the left and right sides of the hole, with “Japan” at the top and “Fifty Yen” at the bottom.
On the reverse, the Arabic numeral “50” appears above the hole and the year of minting below it, and the edge of the coin is also notable for its 120 ridges.
The 100-Yen Coin, Commonly Used in Everyday Life
The 100-yen coin is highly practical and is the coin Japanese people use most in everyday life.
Its front features three Japanese cherry blossoms, one of Japan’s national flowers, with “Japan” at the top and “One Hundred Yen” at the bottom.
The reverse has a large “100” in Arabic numerals, with the year of minting written below it.
It also has 103 ridges on the edge, so comparing it with a 50-yen coin can be interesting.
The 500-Yen Coin, Made with the Latest Technology
The 500-yen coin, the highest-value coin in Japan, currently exists in two designs in circulation: the old type and the new type.
The old type features paulownia on the front, along with “Japan” at the top and “Five Hundred Yen” at the bottom, while the reverse shows “500” and the year of minting in the center, with bamboo leaves, tachibana, and twigs around it.
The new type, issued from 2021, is mostly similar, but it is 0.1 grams heavier and includes some design changes.
Its biggest features are the use of three different materials and the world’s first irregular diagonal ridges on the edge of the coin, made possible by the latest technology.
Another highlight is the micro-lettering on the rim of the coin’s surface, where “JAPAN” and “500YEN” can be seen.
Also take a look at the advanced technology on the reverse: when viewed from above, “JAPAN” appears in the “0” of “500,” and when viewed from below, “500YEN” appears and disappears depending on the angle.
Since both types are in circulation, you should be able to clearly see the differences if you compare them side by side.
New Banknotes Were Issued on July 3, 2024
In Japan, new banknotes were issued on July 3, 2024 (excluding the 2,000-yen note).
Along with the introduction of the latest technology, changes to the designs and portraits had already been announced.
Depending on when you visit Japan, you may see banknotes of the same denomination with different designs.
Older banknotes can still be used after July 4, so there is no need to worry if you still have some.
For reference, the previous series featured bacteriologist Hideyo Noguchi, who contributed to overcoming infectious diseases, on the 1,000-yen note, novelist Ichiyo Higuchi of the Meiji era (1868–1912) on the 5,000-yen note, and Yukichi Fukuzawa, an Enlightenment thinker active in the same era, on the 10,000-yen note.
Below, we introduce the new designs and the achievements of the people now featured on the notes.
The 1,000-Yen Note Features the Father of Modern Japanese Medicine
The front of the blue-toned 1,000-yen note features a portrait of bacteriologist Shibasaburo Kitasato, known as the “father of modern Japanese medicine.”
The reverse depicts The Great Wave off Kanagawa from Thirty-Six Views of Mount Fuji by the world-famous ukiyo-e artist Katsushika Hokusai.
In 1889, Shibasaburo Kitasato became the first person in the world to succeed in pure culturing the tetanus bacillus, and he developed serum therapy for tetanus, which became the foundation of modern vaccination.
In addition to discovering the plague bacterium and researching various infectious diseases, he also devoted himself to training future generations through efforts such as founding the Japan Medical Association and establishing the Keio University School of Medicine.
He can be seen as a figure who had a major impact on the development of medical research, education, and administration, as well as the improvement of public health overall.
The 5,000-Yen Note Features a Woman Who Dedicated Her Life to Women’s Status and Education
The new 5,000-yen note, based on purple tones, features a portrait of educator Umeko Tsuda, who made a major contribution to the modernization of women’s education in Japan.
Another distinctive feature is its layout, with the watermark placed on the left side and a large “5000” in the center.
The reverse shows nodafuji, a traditional Japanese wisteria flower that has long been cherished and also appears in the Nihon Shoki and Kojiki, Japan’s oldest historical texts.
At the age of six, Umeko Tsuda accompanied the Iwakura Mission to the United States as one of Japan’s first overseas students and stayed there for Approx. 11 years.
After returning to Japan, she devoted her life to improving the status of women and advancing girls’ education, most notably by founding Joshi Eigaku Juku, now Tsuda University.
She is also said to have been the first Japanese woman to publish a paper in an academic journal in Europe or the United States, and her achievements are highly regarded both in Japan and abroad.
The 10,000-Yen Note Features a Business Leader Involved in Founding Approx. 500 Companies
The new 10,000-yen note, the highest-value banknote in Japan, features a portrait of businessman Eiichi Shibusawa, known as the “father of Japanese capitalism.”
Like the previous note, its main color is brown, but it also has a somewhat more colorful appearance.
Another point to notice is that the kanji numeral uses “壱” instead of “一,” and the style of the numeral “1” differs from that on the 1,000-yen note.
The reverse depicts the Marunouchi building of Tokyo Station, an Important Cultural Property long loved for its red-brick station building.
Eiichi Shibusawa was involved in founding Approx. 500 companies, including Dai-Ichi Kokuritsu Bank, Japan’s first joint-stock company and bank, now Mizuho Bank, as well as JR East and Kirin Brewery.
His contributions also include helping establish Japan’s financial system and playing a major role in building the foundations of the economy and industry through projects such as the Tomioka Silk Mill and the Imperial Hotel.
At the same time, his activities extended to many other areas, including establishing and supporting Approx. 600 public projects, and his abilities were even recognized by management scholar Peter Drucker.
The Rare 2,000-Yen Note, Seldom Seen in Daily Life
The 2,000-yen note was issued to commemorate the year 2000 millennium and the Okinawa Summit.
On the front, the characters for “Two Thousand Yen” appear on the left, while Shureimon Gate at Shuri Castle, along with background patterns of Japanese cherry blossoms and wild aster, decorates the upper right.
Shureimon Gate in Naha City, Okinawa Prefecture, is a designated tangible cultural property of the prefecture and an important structure that still conveys the history of the Ryukyu Kingdom today.
Meanwhile, the reverse uses designs taken from The Tale of Genji Emaki and the Murasaki Shikibu Diary Emaki.
The former is notable for its “Suzumushi” scene depicting Hikaru Genji and Reizei-in.
The latter shows Murasaki Shikibu lifting a shitomido shutter to protest Fujiwara no Saneshige and Fujiwara no Narifusa.
The 2,000-yen note has not been reprinted since 2003 and is not widely circulated today outside Okinawa, so you may be lucky if you come across one.
Japanese Coins and Banknotes Change Approx. Once Every 20 Years
In principle, Japan’s banknotes and coins are revised and redesigned on an Approx. 20-year cycle.
The main reasons are to prevent counterfeiting and improve ease of use in line with the times.
To ensure people can use money with confidence, it is important to prevent damage caused by counterfeit currency from spreading in advance.
The current banknotes were first issued in 2004, but printing technology has advanced greatly since then.
To further reduce the risk of counterfeiting, the latest redesign introduced high-definition watermarking with finely detailed line patterns and 3D holograms, in which the direction of the portrait changes depending on the viewing angle.
Design changes based on the concept of universal design were also made so that everyone, including visually impaired people and foreign visitors, can use the currency more easily.
Japanese Coins and Banknotes Feature Advanced Anti-Counterfeiting Technology and Durability
Even by global standards, Japanese banknotes and coins use highly advanced anti-counterfeiting technology.
The 3D hologram mentioned above was adopted on banknotes for the first time in the world.
In addition, various other technologies such as watermarks, special inks, and micro designs are used to make counterfeiting difficult.
Japanese banknotes are also known for their exceptional durability and ability to withstand long-term use.
They are made from materials such as mitsumata and abaca, which offer excellent water resistance and tear resistance, creating sturdy, special banknotes with a unique feel.
As a result, they are less likely to deteriorate even with frequent use and rough handling, and are highly regarded as currency that combines functionality with beauty.
Common Payment Methods in Japan
In Japan, cash is still the main payment method.
Although cashless payments are becoming more common, the cashless payment ratio in 2023 was 39.3%, which is still low compared with other developed countries. (South Korea: Approx. 95%, China: Approx. 77%)
As a result, there are still quite a few shops and facilities that accept cash only.
Many stores in central urban areas, department stores, and large shopping malls accept payment methods other than cash, but when traveling in Japan, it is recommended to carry some cash as well.
For example, some restaurants and shrines and temples (for offertory donations) do not accept cashless payments, so keep that in mind.
The following four are the main non-cash payment methods.
- Credit cards (Visa, Mastercard, etc.)
- E-money, transportation IC cards (Suica, PASMO, etc.)
- QR codes (PayPay, LINE Pay, etc.)
- Debit cards
Also, Japan basically does not have a tipping culture.
Restaurant meal charges and hotel accommodation fees already include service charges.
Most Japanese people do not expect tips, so feel free to relax and enjoy your trip.
The History and Changes of Japanese Currency
In ancient Japan, people lived by bartering goods they wanted with one another.
Gradually, items such as rice, salt, and cloth became commodity money and served the role of currency.
Later, currency appeared in Japan for the first time, leading eventually to the modern era.
Here, we will explain the history and changes of Japanese money in chronological order.
Fuhonsen, Japan’s First Currency
Japan’s first currency is said to be Fuhonsen, minted in the late 7th century.
Modeled after Chinese money with a round shape and square hole, it circulated as Japan’s own original currency.
In 708, Wadokaichin, known as Japan’s first official minted coin, was issued.
Although 12 kinds of copper coins, known as the Kōchō Jūnisen, were minted over Approx. 250 years, their quality gradually declined because of financial difficulties and shortages of raw materials, leading to a loss of public trust.
As a result, after the last issue in 958, official coin minting was halted, and Japan returned once again to an era of commodity money.
The Heian Period, When Chinese Money Was Used
After coin minting stopped in the Heian period (794–1185), no official Japanese currency was produced for Approx. 600 years.
What was used instead during this time was toraisen, coins imported from China.
After the founding of the Song dynasty in what is now China, trade between Japan and Song became active, and large amounts of Song coins flowed into Japan and became widely used.
However, in the 1400s, poor-quality coins such as shichusen, privately minted imitations of Song coins, began to circulate.
Their quality, type, and size varied widely, and even their value was unclear, so they seem to have been judged mainly by the quality of the metal.
The ظهور of Gold and Silver Coins
With advances in refining technology, the situation began to change in the Sengoku period (1467–1590), when gold and silver started to be used.
To secure military funds, Sengoku warlords developed gold and silver mines and worked on minting currency to strengthen their control.
In particular, Kōshūkin minted by Takeda Shingen is famous as Japan’s first gold coin.
Later, Toyotomi Hideyoshi, who came to hold real power, began minting gold and silver coins in 1587 and also aimed to unify the currency system.
Among them, the Tensho Nagao-ban, used as a reward, is especially well known.
Unification of Currency
After Tokugawa Ieyasu unified the country and the Edo period (1603–1868) began, five types of gold and silver coins were issued according to size and quality.
At this point, currency was finally unified.
Later, the third shogun, Tokugawa Iemitsu, had the copper coin Kanei Tsuho produced.
This established the tri-metal currency system of gold, silver, and copper, and units such as ryo, kan, and mon were also created, helping shape a culture unique to Japan.
Money changers, who exchanged these three types of currency, also developed and played a role similar to that of banks today.
Introduction of the Yen as Currency
Although the Edo shogunate collapsed and the Meiji period (1868–1912) began, the old currency system remained in place, causing economic confusion.
In 1871, the Meiji government promulgated the New Currency Act and introduced the new unit of yen (sen and rin) under the gold standard system, in which gold and paper money could be exchanged.
At the same time, the system was changed from the old base-4 system to the decimal system.
Government notes and national banknotes were issued, but they failed to take hold because counterfeit notes spread and defects were discovered.
Then, in 1877, the mass issuance of paper money caused inflation, creating an urgent need to stabilize currency value.
As a result, the Bank of Japan was established in 1882 as Japan’s central bank, and in 1885 it officially began issuing Bank of Japan notes.
The first banknote issued was the old 10-yen note, which featured Daikokuten in its design.
Postwar Currency Management
In 1942, the government and the Bank of Japan began managing and adjusting currency in much the same way as they do today.
After the end of the war, inflation occurred again, so a measure called the “new yen switch” was carried out to collect old money.
Later, the new 1,000-yen note was issued in 1950, and the unit of sen was abolished in 1953.
Modern Management of Banknote and Coin Issuance
Today, the management of banknote and coin issuance is strictly divided between the Bank of Japan and the government.
Banknotes are issued solely by the Bank of Japan, which oversees their production (National Printing Bureau, an Incorporated Administrative Agency), circulation (financial institutions), and management.
When banknotes return to the Bank of Japan, they are checked for authenticity, including the number of notes and whether there is any counterfeiting or alteration, and those unsuitable for circulation are discarded at the end of their role.
Coins, on the other hand, are issued by the government, manufactured by the Japan Mint (an Incorporated Administrative Agency), and then delivered to the Bank of Japan for circulation.
Like banknotes, coins enter circulation when financial institutions withdraw funds from their current account deposits held at the Bank of Japan.
Fun Facts About the Yen
Finally, here are four fun facts about Japan’s yen.
Knowing these facts may help you feel more familiar with Japanese currency and appreciate it even more.
They are well worth knowing, and make great topics to share with family or friends while traveling or during free time.
What Are the Criteria for Choosing the People on Banknotes?
The selection of people featured on banknotes is decided by the Minister of Finance after discussions among the Ministry of Finance, the Bank of Japan, and the National Printing Bureau.
The selection criteria are based on three main factors: anti-counterfeiting, dignity, and national recognition.
There is also the purpose of honoring historical contributors and cultural figures.
Specific conditions include the following.
- Cultural figures who were active from the Meiji period onward
- People widely known to the Japanese public whose achievements are recognized both in Japan and abroad
- People who are socially respected and possess the dignity suitable for appearing on banknotes
- People for whom an accurate portrait or photograph survives down to fine details *for anti-counterfeiting purposes
On the current 5,000-yen note, first used in 2004, novelist Ichiyo Higuchi became the first woman to be selected.
Umeko Tsuda is also featured on the new banknotes, reflecting the diversity of the times.
Why Do the 5-Yen and 50-Yen Coins Have Holes?
There are three main reasons why the 5-yen and 50-yen coins have holes.
The first is counterfeiting prevention.
As the number of coin types increases, it becomes necessary to issue coins of similar size and material, which also increases the risk of counterfeiting.
That is why holes were added to make them harder to process.
The second is easier identification.
The 5-yen and 10-yen coins, as well as the 50-yen and 100-yen coins, are similar in size and texture, so holes were added to make them easier to tell apart.
This also helps people with visual impairments identify them quickly by touch.
The third is cost reduction.
When the 5-yen coin was first issued in 1948, the 1-yen and 10-yen coins were also made of copper.
Considering the postwar shortage of resources, the 5-yen coin adopted a hole-in-the-center design.
As mentioned above, the 50-yen coin was changed to a holed design in 1959, partly because of its relative value compared with the 100-yen coin.
Is the 5-Yen Coin Considered Lucky?
In Japan, the 5-yen coin is widely regarded as a lucky coin.
In addition to its golden appearance, the hole in the center is associated with having a “clear outlook,” and the coin is said to bring good connections.
Also, go-en, meaning “five yen,” sounds the same as a word meaning “good fortune” or “good relationships,” so many Japanese people use it as an offering at shrines and temples.
Another feature is that the meaning is said to change depending on the number of coins.
For example, three coins (15 yen) can be read as “May I have sufficient good fortune,” and seven coins (35 yen) as “May good fortune come again and again.”
If you have the chance to visit a shrine or temple in Japan, why not try making a wish with one of these lucky coins?
Lucky to Find One? Commemorative Currency Issued in Limited Numbers
Currency issued to commemorate historical events or major milestones in Japan is called commemorative currency or commemorative coins.
Examples include a 1,000-yen silver coin issued to commemorate Expo 2025 Osaka, Kansai, Japan, and a 10,000-yen gold coin issued to commemorate an emperor’s enthronement.
There are many other types as well, including those issued for the World Cup, the Olympics, the 100th anniversary of the court system, and the 100th anniversary of the cabinet system. The size, design, denomination, and number issued vary depending on the commemorative currency, but like the banknotes and coins introduced above, they can also be used for shopping.
However, they may not be accepted in vending machines and similar machines.
Commemorative currency issued in small numbers is traded among collectors at prices higher than its face value.
If you happen to receive one while shopping during your trip, you might want to keep it in a safe place.
If there is a commemorative coin currently on sale that you would like, it may also be a nice idea to buy one at a financial institution or the Japan Mint as a souvenir of your trip to Japan.
FAQ about Japanese Yen
Q
What is the origin of the name “yen”?
A
The exact origin is unknown. Two leading theories are that it comes from unifying the shape of all money into a round form, and that it derives from “圓 (en),” a Chinese currency unit.
Q
Is the yen used anywhere outside Japan?
A
It is not used today, but from 2014 to 2019, the yen was legal tender in Zimbabwe in Africa.
Summary
This article has explained the history of Japan’s currency, the yen, along with fun facts, the types of money in use, and how it is managed.
From July 3, 2024, three new banknotes were issued, marking a new page in the history of Japanese currency.
Each of the 10 types of currency has its own distinctive features and detailed design ideas, so when you visit Japan, be sure to compare them and enjoy the differences.
The article below introduces the flow of Japanese history from prehistoric times to the present, along with the major events of each era. If you are interested, be sure to check it out as well.