The Japanese yen: The third most traded currency

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

The Japanese yen has a long history, and has succeeded in becoming a powerful currency around the world.

The Japanese yen (JPY, ¥) is the official currency of Japan, and is the third most commonly traded currency in the world, after the US dollar and the euro. It’s also Asia’s most heavily traded currency. When it comes to reserve currency, it’s right behind the US dollar, euro and British pound. Japanese yen carries trade with the US and Australian dollar, mainly because of the yen’s relatively low cash rate.

TransferWise International Money Transfers Business

Why we like: TransferWise

When you need to send money, benefit from competitive mid-market exchange rates and straightforward fees with TransferWise.

  • Transparent fees and very low exchange rates.
  • Next-day delivery to your loved ones or businesses.
  • Trusted the world over, with five-star ratings on Trustpilot.

    Compare money transfer services to send money to Japan

    Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Amount Received Description CTA Details
    USD 0 1 - 2 days USD 0.00 107.932 JPY 539,658 Offering no maximum and no minimum limit transfers with $0 fees. Go to site Show details
    USD 1 1 - 2 days USD 55.00 108.365 JPY
    Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks. Go to site Show details
    GBP 1,000 1 - 2 days USD 0.00 107.281 JPY 536,407 Exclusive: Minimum transfer of $1,000 for Finder readers (normally $5,000).
    For larger transfers, get no transaction fees and no maximum send limits.
    Go to site Show details
    USD 1,000 1 day USD 0.00 107.281 JPY 536,407 No-maximum limit transfers with competitive exchange rates for 100+ currencies. Go to site Show details
    USD 5,000 1 day USD 0.00 107.281 JPY 536,407 Venstar will support you through the entire process of your international transactions, from start to finish. Go to site Show details

    Compare up to 4 providers

    Currency in Japan dates back to the 8th century when coins made of copper and sliver, called the “Wadōkaichin”. These coins were similar to the Chinese coins, and were even used by the Japanese when Japan couldn’t produce enough coins. Once the economy grew in Japan, and trade was more prevalent, there was a need for large-denomination currencies.

    The daimyo warrior, Hideyoshi unified Japan in the 1500s, and put in place a unified currency system, centralized most of the minting of large denomination silver and gold coins.

    The modern day yen came into effect in May 1871, and by December 1931 it shifted from the gold standard to the current managed currency system.

    Back to top

    Value and exchange rates of the Japanese yen

    After the devaluation of silver in 1873 the yen devalued against the US and Canadian dollars because they followed the gold standard. By 1897 the Japanese yen valued at around USD0.50, and because it adopted the gold standard in the same year, the value of the yen froze at USD0.50. The exchange rate remained the same until Japan withdrew from the gold standard in 1931. By 1932 the value of the yen fell to USD0.30, and by 1933 it dropped to USD0.20. Its value remained steady until World War II began, and by December 1941 it traded at USD0.23.

    World War II damaged the yen, causing inflation and the drop of value to a fraction of its prewar value. There was no true exchange rate for the yen from December 1941 to April 1949. In 1949 the Bretton Woods System fixed the value to one US dollar per 360 yen, helping to stabilize prices in Japan.

    Once the US stopped using the gold standard in 1971, the yen had become largely undervalued. Imports cost the Japanese too much, while exports sold for too little. The Japanese government agreed to a new fixed exchange rate to one US dollar per 308 yen.

    Supply and demand pressures in the forex markets meant that the new rates were hard to maintain and by 1973, most countries adopted the floating currency system.

    During the 1970s business people in Japan as well as the country’s government were worried about competition in the import and export markets and the rise of the yen’s value. They were concerned that this would make Japanese products less competitive, so the Japanese government continued intervening in forex markets even after the yen adopted the floating system in 1973.

    The yen did climb in value until the beginning of the oil crises in 1973. From an average of around 271 yen per US dollar in 1973, its value dropped between 290 yen and 300 yen from 1974 to 1976. A trade surplus re-emergence got it to trade at 211 yen per US dollar in 1978. Another oil shock in 1979 dropped the value again, and in 1980 saw the US dollar trade at 227 yen.

    The yen did not rise in value in the early part of the 1980s, and its average value against the US dollar dropped from 221 yen in 1981 to 239 yen in 1985.

    However, the 1985 Plaza Accord led to a change in fortunes for the yen. By 1988, it peaked to ¥128 against the US dollar. It dropped in value slightly in 1989 and 1990, but got to a new high of ¥123 against the US dollar in December 1992. By April 1995, it hit a new peak of less than ¥80 per US dollar, at which point Japan’s economy was almost the size as the US economy.

    But the Japanese asset price bubble caused the yen to decline in value, and continued in a downward trend even after. In February 2002, it traded at ¥134 to the US dollar. A 2007 estimate by The Economist said the yen was 40% undervalued against the euro, and 15% undervalued against the US dollar.

    The global economic crisis that began in 2008 actually caused the yen to gain ground against most other major currencies. From November 2008 to April 2013, the US dollar valued at less than 100 yen, and one US dollar traded at over 100 yen again only in May 2013. By September 2015, the US dollar traded at 120.13 yen.

    The table below gives you an indication of how the yen has fluctuated in value against some major currencies.

    1990 2000 2005 2010 2015
    US dollar 0.0069 0.0092 0.0091 0.0114 0.0082
    Euro 0.0100 0.0073 0.0086 0.0074
    Pound sterling 0.0038 0.0061 0.0050 0.0073 0.0054
    Canadian dollar 0.0080 0.0137 0.0110 0.0117 0.0105
    Chinese renminbi yuan 0.0332 0.0768 0.0746 0.0772 0.0519

    All values are yearly averages.

    Back to top

    History of the Japanese yen

    In the 19th century Spanish silver dollars were used throughout South East Asia, Japan and the cost of China. These coins arrived on ships from Mexico to Manila, for over two and a half centuries. By the second half of the 19th century local coins the production of coins that resembled Mexican pesos began, beginning with the silver Hong Kong dollars. However, these Hong Kong dollars were not used very long.

    In 1871 Japan decided to officially adopt a silver coin named ‘yen’, which literally translates to ‘a round object’. The yen was basically a dollar unit, and until 1873 all dollars the world over valued pretty much the same. The use of a decimal system came into effect as per the New Currency Act of 1871, which the country did away with in 1953.

    Back to top

    Coins and banknotes of the Japanese yen

    Circulation of coins began in 1870, at which point there were 5, 10, 20 and 50 silver sen coins, and 2, 5, 10 and 20 gold yen coins. The use of 1 yen gold coins began in 1871. Currently circulating coins include ¥1, ¥5, ¥10, ¥50, ¥100 and ¥500. Occasionally, Japan mints commemorative coins in silver and gold with face values of up to 100,000 yen.

    The Japanese Yen-003

    The Japanese Yen-004

    The Japanese Yen-005

    Japan started issuing banknotes in 1872, and the denominations of these notes have always varied in between 10 and 10,000 yen. Different bodies in the country issued banknotes before and during WWII which included the Imperial Japanese National Bank and the Ministry of Finance. Post war, only the Bank of Japan had the authority to issue bank notes. There have been five series since World War II, and the fifth series, or series E, consists of 1,000 yen, 2,000 yen, 5,000 yen, and 10,000 yen notes.

    The Japanese Yen-001

    The Japanese Yen-002

    Was this content helpful to you? No  Yes

    Ask an Expert

    You are about to post a question on

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

    By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

    Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
    Go to site