Money in Japan

Japanese money is called yen, "en" in japanese. The kanji for it means "round". When the yen was created in 1871, this name was chosen because the previous money had been oblong.

Coins "tama"

1 yen "ichi en" aluminum
5 yen "go en" copper, with a hole
10 yen "juu en" bronze
50 yen "go juu en" nickel, with a hole
100 yen "hyaku en" nickel
500 yen (old) "ko go hyaku en" nickel
500 yen (new) "shin go hyaku en" 500 yen coin

Bills "satsu"

1,000 yen "sen en" features Natsume Soseki, a famous writer
2,000 yen "ni sen en" is new in 2000. It features Shiremon, the gate of Shuri Castle in Okinawa. The back is a picture taken from the scrolls of The Tale of Genji by Murasaki Shikibu.
5,000 yen "go sen en" features Nitobe Inazo, a Meiji period educator
10,000 yen "ichi man" features Fukuzawa Yukichi, a Meiji period educator

A Short History of Exchange Rates to the US Dollar

1913 1$ = .02 yen (according to webster1913)
1949-1971 1$ = 360 yen
1971-1973 1$ = 308 yen (after this it went to a floating value)
1994 1$ = 80 yen (peak of the bubble economy
2000 1$ = 105 yen
2001 1$ = 125 yen
2002 1$ = 133 yen
So for now, 100 yen = .75 US$

Things about money I have heard in 1.5 years living in Japan:

Lots of money in the wallet!

Surveys report that on average Japanese carry 20,000 - 30,000 yen in their wallet. That's over 200$ US. That's because most places don't take credit cards, debit cards, or checks. Shockingly, ATMs have opening and closing times, usually 10 am to 7 pm, and less on weekends. Getting mugged illegally is rare, but paying insane prices isn't - 600 for a beer is normal, 1800 for a movie, 20,000/hour for the company of a beautiful woman in a snakku. So, you might as well walk around with tons of money in your pocket.

Buying Small Things With Big Bills

If you go into a convenience store and get a pack of gum for 100 yen (1$ US), and try to pay with a 10,000 yen note (100$ US), the cashier won't bat an eye. I often buy extremely small things with huge bills and have never noticed any different reaction from the cashier.

Carrying Even More Cash!

There was a story in Tokyo about a group of foreign bandits. This was their method: They'd see a salaryman going into an ATM in the middle of the day, obviously on business. Getting behind him, they'd throw a 10,000 yen note on the floor. After his money popped out of the machine, they'd tap him on the shoulder and say "you dropped that". When he bent down to get it, they'd grab his money. Some thieves got away with over 5,000,000 (~50,000$ US) this way. The amazing thing about this is that it's common for people to walk around with that much cash. There are other stories of old people being robbed while they are carrying their entire life savings in cash. There's no limit to the amount of cash an ATM will give out at one time.

Money for the taking

Another story I heard was about an office that stored lots of cash for a company. It was located on the 2nd floor of a building, but without much security. Apparently, some junior high school kids opened one of the windows at night and climbed out with piles of 10,000 yen notes. The only way they were found out is because the teachers noticed them walking around school, giving out money. They spent what they could on arcades, playstations, etc. I saw this on NHK news sometime in 2001.

Sensible/Crazy Banks

The Japanese system does have some advantages - there is a system of postal savings which lets you use any post office as a bank. Also, it is easy to transfer money from one account to the account of someone else, in another bank. You can also set up automatic withdrawal for almost any recurring payment.

However, there are crazy things about the banks as well - there are no national banks. So here in Kochi, we have Kochi Bank and Shikoku Bank, and maybe a branch of a bank in a nearby city, or a Tokyo Bank. If I go to another prefecture, they will have all different local banks, and maybe a bank from Tokyo. It's crazy, because you can walk around for quite a long time looking for an outlet of your bank, and never find one. If your bank is local, and you leave the area, you will never be able to get any money.

http://www.japan-zone.com/new/money.shtml

As explained by pi, there are 6 denominations of Japanese coins

1

5

10

50

100

500

add up the pretty little numbers and what do you get?

1 + 5 + 10 + 50 + 100 + 500 = 666

...makes you wonder does it not?

The yen as we know it is a modern creation. Before then, Japan had a series of currency systems that would make even Victorian Britons scratch their heads.

The ancient system

Before about 1600, Japan used a variety of coins. Much of the coinage in Japan during this era came from China: Chinese merchants would buy Japanese stuff in coin, and Japanese people would use the same coins to trade among themselves.

Besides Chinese coins, there were also coins minted by feudal lords (daimyo). In those bad old days, the only way to value these coins was by weighing them. The basic unit was the ryo, about 15 grams, which was subdivided into smaller units of weight: four bu to a ryo, four shu to a bu, four itome to a shu, and four koitome to an itome.

As in China, Japanese coins often had holes in the center so they could be carried on a string. This practice continues today in the 5-yen and 50-yen coins (although people usually carry them in their wallets nowadays).

The Edo-era system

Under the Tokugawa bakufu the coin system was standardized on a regional basis.

Around present-day Tokyo, trade was in gold coins, the largest of which was the one-ryo gold koban. Each koban was divided into four bu, and each bu was further divided into four shu. The value of a koban was roughly the same as the value of a koku of rice, the koku being the standard economic measure of pre-modern Japan. Occasionally, gold would be minted into huge coins called oban, which might be worth 10 koban (i.e. 150 g of gold), the kind of money you would only give someone for, say, conquering a province.

If you went farther west, around Osaka, trade was in silver coins measured by their weight in momme (1 momme = 3.75g). A koban's equivalent in silver was 50 to 60 momme, and a coin of that value was known as a cho. There were also bu and shu coins minted in the silver equivalent to their Tokyo values.

In addition to the gold and silver standards, small-scale trading was done in copper coins called mon. The exchange rate for copper varied between 4,000 and 10,000 mon to the koban. Daily wages, as well as prices for most everyday goods and services, would be in mon.

The old yen system

In the 1870s, Japan shifted from feudal government to parliamentary government, and adopted bimetallism as part of the modernization process. The yen became the official currency in 1871, having a value equivalent to the old koban. Each yen was divided into 100 sen, and each sen was divided into 100 rin. Yen coins for domestic trade were minted in gold, while yen coins for foreign trade were minted in silver.

During this decade, Japan created a number of national banks, each of which printed their own banknotes. In 1882, the national banks were replaced by a single Bank of Japan, which took over all currency printing and put the country on a silver standard.

In 1897, Japan switched to the gold standard. Japanese banknotes were convertible to gold until 1942, when Japan began printing money rather willy-nilly. During the war, Japanese coins appeared in aluminum and tin, and inflation got so bad that the sen and rin eventually became practically useless. Which is why, today, everything is denominated in yen, and a one-yen coin is light enough to float on top of a glass of water.

Sources

• Bank of Japan Currency Museum, http://www.imes.boj.or.jp/cm/english_htmls/history.htm