yen

The yen, symbolized by ¥ and with the ISO code JPY, is the official currency of Japan. It is issued by the Bank of Japan and used throughout Japan and its overseas territories. The yen is one of the world’s most traded currencies and is a significant component of international foreign exchange reserves.

Etymology and symbol: The term yen derives from the Japanese word en, written as 円, meaning circle or round. The currency symbol ¥ is used internationally to represent the yen.

History and structure: The yen was introduced in 1871 during the Meiji Restoration to modernize and standardize Japan’s monetary system, replacing a mix of feudal coinages. It was decimalized so 1 yen = 100 sen, and 1 sen = 10 rin; the sen and rin were phased out in circulation in the mid-20th century. Today’s currency consists of coins in denominations of 1, 5, 10, 50, 100, and 500 yen, and banknotes in denominations of 1,000; 2,000; 5,000; and 10,000 yen. The 2,000 yen note, while less common, remains in circulation.

Issuance and policy: The Bank of Japan is responsible for issuing banknotes and coins and for conducting monetary policy. The BoJ aims to ensure price stability and financial system stability, using tools such as interest rates and asset purchases. The yen is generally treated as a freely floating currency in foreign exchange markets and serves as a major reserve currency for many central banks around the world.

Usage: In practice, the yen is the standard unit of account in Japan for everyday transactions, pricing, and savings, and it plays a central role in Japan’s economy and in global finance.