Japanese currency has a history covering the period from the 8th century CE to the present. After the traditional usage ofrice as acurrency medium, Japan adoptedcurrency systems and designs from China before developing a separate system of its own.
Before the 7th-8th centuries CE, Japan usedcommodity money for trading. This generally consisted of material that was compact and easily transportable and had a widely recognized value. Commodity money was a great improvement over simplebarter, in which commodities were simply exchanged against others. Ideally, commodity money had to be widely accepted, easily portable and storable, and easily combined and divided in order to correspond to different values. The main items of commodity money in Japan werearrowheads,rice grains andgold powder.
This contrasted somewhat with countries likeChina, where one of the most important items of commodity money came from the southern seas:shells.[1] Since then however, the shell has become a symbol for money in many Chinese and Japaneseideograms.[1]
The earliest coins to reach Japan were ChineseBan Liang and Wu Zhu coins, as well asthe coins produced by Wang Mang during the first centuries of the first millennium CE; these coins have been excavated all over Japan, but as Japan's economy was not sufficiently developed at the time, these coins were more likely to be used as precious objects rather than a means of exchange; rice and cloth served as the main currencies of Japan at the time.[2]
The first coins produced in Japan are called theMumonginsen (無文銀銭, or 'silver coins without inscription') and the copper alloyFuhonsen (富本銭, coins made from an alloy of copper, lead and tin) which were all introduced in the late seventh century. These currencies (alongside other reforms) were based on the Chinese system and were therefore based on theChinese units of measurement. In modern times the usage ofFuhonsen has often been interpreted as charms rather than currency, but it has recently been discovered that these copper coins were in fact the first government-made coinage of Japan.[2]
Japan's first formal currency system was theKōchōsen (Japanese: 皇朝銭, "Imperial currency"). It was exemplified by the adoption of Japan's first official coin type, theWadōkaichin.[3] It was first minted in 708 CE on the orders ofEmpress Genmei, Japan's 43rd Imperial ruler.[3]"Wadō Kaichin" is the reading of the four characters printed on the coin, and is thought to be composed of the era nameWadō (和銅, "Japanese copper"), which could alternatively mean "happiness", and "Kaichin", thought to be related to "currency".[1]
This coinage was inspired by the Tang coinage (唐銭) namedKaigen Tsūhō (Chinese: 開元通宝,Kai Yuan Tong Bao), first minted inChang'an in 621 CE.[1] The Wadokaichin had the same specifications as the Chinese coin, with a diameter of 2.4 cm and a weight of 3.75g.[1]
Japan's contacts with the Chinese mainland became intense during theTang period, with many exchanges and cultural imports occurring.[3] The first Japanese embassy to China is recorded to have been sent in 630.[1] The importance of metallic currency appeared to Japanese nobles, probably leading to some coin minting at the end of the 7th century,[3] such as theFuhonsen coinage (富本銭), discovered in 1998 through archaeological research inNara Prefecture.[1] An entry of theNihon Shoki dated April 15, 683 mentions: "From now on, copper coins should be used, but silver coins should not be used", which is thought to order the adoption of theFuhonsen copper coins.[1] The first official coinage was struck in 708.
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TheWadōkaichin soon became debased, as the government rapidly issued coins with progressively lesser metallic content, and local imitations thrived.[1] In 760, a reform was put in place, in which a new copper coin calledMan'nen Tsūhō [ja] (萬年通寳) was worth 10 times the value of the formerWadōkaichin, with also a new silver coin namedTaihei Genpō (大平元寶) with a value of 10 copper coins, as well as a new gold coin namedKaiki Shoho (開基勝寶) with a value of 10 silver coins.[1]
Silver minting was soon abandoned however, but copper minting took place throughout theNara period.[3] Twelve coin types are known, including one coin in gold.[1]
TheKōchōsen Japanese system of coinage became strongly debased, with its metallic content and value decreasing. By the middle of the 9th century, the value of a coin in rice had fallen to 1/150th of its value of the early 8th century.
By the end of the 10th century, compounded with weaknesses in the political system, this led to the abandonment of the national currency, with the return torice as a currency medium.[1] The last official Japanese coin issue was in 958, with very low quality coins calledKengen Taihō [ja] (乹元大寶), which soon fell into disuse.[1]
The lastKōchōsen coins produced after the Wadōkaichin include:[2]
| Inscription | Kyūjitai | Shinjitai | Year of introduction (Julian calendar) | Image |
|---|---|---|---|---|
| Wadō Kaichin | 和同開珎 | 和同開珎 | 708 |  |
| Man'nen Tsūhō [ja] | 萬年通寳 | 万年通宝 | 760 |  |
| Jingū Kaihō [ja] | 神功開寳 | 神功開宝 | 765 |  |
| Ryūhei Eihō [ja] | 隆平永寳 | 隆平永宝 | 796 |  |
| Fuju Shinpō [ja] | 富壽神寳 | 富寿神宝 | 818 |  |
| Jōwa Shōhō [ja] | 承和昌寳 | 承和昌宝 | 835 |  |
| Chōnen Taihō [ja] | 長年大寳 | 長年大宝 | 848 |  |
| Jōeki Shinpō [ja] | 饒益神寳 | 饒益神宝 | 859 |  |
| Jōgan Eihō [ja] | 貞觀永寳 | 貞観永宝 | 870 |  |
| Kanpyō Taihō [ja] | 寛平大寳 | 寛平大宝 | 890 |  |
| Engi Tsūhō [ja] | 延喜通寳 | 延喜通宝 | 907 |  |
| Kengen Taihō [ja] | 乹元大寳 | 乾元大宝 | 958 |  |
From the 12th century, the expansion of trade and barter again highlighted the need for a currency. Chinese coinage came to be used as the standard currency of Japan, for a period lasting from the 12th to the 17th century.[1] Coins were obtained from China through trade or through"Wakō" piracy.[1] Coins were also imported fromAnnam (modernVietnam) andKorea.[1]
There is evidence to suggest that theYuan dynasty used to extensively exportChinese cash coins to Japan for local circulation. TheSinan shipwreck, which was a ship from Ningbo to Hakata that sank off the Korean coast in the year 1323,[4] carried some 8,000strings of cash coins,[5] which weighed about 26,775 kg.[6]
As the Chinese coins were not in sufficient number as trade and economy expanded, local Japanese imitations of Chinese coins were made from the 14th century, especially imitations ofMing coins, with inscribed names identical to those of contemporary Chinese coins.[1] These coins had a very low value compared to Chinese coins, and several of them had to be exchanged for just one Chinese coin. This situation continued until the beginning of theEdo period, when a new system was put in place.
The growth of the economy and trade meant that small copper currency became insufficient to cover the amounts that were being exchanged. During theSengoku period, the characteristics of the future Edo period system began to emerge. Local Lords developed trade, abolishing monopolistic guilds, which led to the need for large-denomination currencies. From the 16th century, local experiments started to be made, with the minting of local coins, sometimes in gold. Especially theTakeda clan ofKōshū minted gold coins which were later adopted by theTokugawa shogunate.[1]
Hideyoshi unified Japan, and thus centralized most of the minting of large denomination silver and gold coins, effectively putting in place the basis of a unified currency system. Hideyoshi developed the largeŌban plate, also called theTenshō Ōban (天正大判), in 1588, a predecessor to Tokugawa gold coinage.[7]
A common practice in that period was to melt gold into copper molds for convenience, derived from thesycee manufacturing method. These were called Bundōkin (分銅金), of which there were two types, the small Kobundō (小分銅), and the large Ōbundō (大分銅). A Kobundō would represent about 373 g in gold.[1]
Tokugawa coinage was a unitary and independent metallic monetary system established byshōgunTokugawa Ieyasu in 1601 inJapan, and which lasted throughout theTokugawa period until its end in 1867.[8]
From 1601, Tokugawa coinage consisted of gold, silver, and bronze denominations.[8] The denominations were fixed, but the rates actually fluctuated on the exchange market.[8] Tokugawa started by minting Keicho gold and silver coins, and Chinese copper coins were later replaced by Kan'ei Tsuho coins in 1670.
The material for the coinage came from gold and silver mines across Japan. For this purpose, new gold mines were opened, such as theSado andToi gold mines in theIzu Peninsula. Regarding diamond[clarification needed] coins, theKan'ei Tsūhō coin (寛永通宝) came to replace the Chinese coins that had been in circulation in Japan, as well as those that were privately minted, and became the legal tender for small denominations.[1]
Yamada Hagaki, Japan's first notes, were issued around 1600 byShinto priests also working as merchants in theIse-Yamada (modernMie Prefecture), in exchange for silver.[1] This was earlier than the firstgoldsmith notes issued inEngland around 1640.[1] The first known feudal note was issued by the Fukui clan in 1661. During the 17th century, the feudal domains developed a system offeudal notes, giving currency to pledged notes issued by the lord of the domain, in exchange for convertibility to gold, silver or copper.[1] Japan thus combined gold, silver, and copper standards with the circulation ofpaper money.[1]
Tokugawa coinage remained in use during theSakoku period of seclusion, although it was progressively debased to try to manage government deficits. The first debasement, in 1695, was called the Genroku Recoinage.[1]
The Tokugawa coinage collapsed following the reopening of Japan to the West in 1854, as the silver-gold exchange rates gave foreigners huge opportunities forarbitrage, leading to the export of large quantities of gold. Gold traded for silver in Japan at a 1:5 ratio, while that ratio was 1:15 abroad. During theBakumatsu period in 1859Mexican dollars were even given official currency in Japan, by coining them with marks in Japanese and officializing their exchange rate of three"Bu"[clarification needed]. They were calledAratame Sanbu Sadame (改三分定, "Fixed to the value of threebu").[1]
Meanwhile, local governments issued their own currency chaotically, so that the nation's money supply expanded by 2.5 times between 1859 and 1869, leading to crumbling money values and soaring prices. The system was replaced by a new one after the conclusion of theBoshin War, and with the onset of theMeiji government in 1868.[1]
Following 1868, a new currency system based on theJapanese yen was progressively established along Western lines, which has remained Japan's currency system to this day.
Immediately after theMeiji Restoration in 1868, previous gold, silver and copper coins, as well as feudal notes, continued to circulate, leading to great confusion. In 1868, the government also issued coins and gold-convertible paper money, calledDaijōkansatsu (太政官札), denominated inRyō, an old unit from the Edo period, and private banks calledKawase Kaisha were allowed to issue their own currency as well. Complexity, widespread counterfeiting of gold coins and feudal notes led to widespread confusion.[1]
Through the New Currency Act of 1871, Japan adopted thegold standard along international lines, with 1yen corresponding to 1.5g of pure gold. The Meiji government issued new notes, calledMeiji Tsūhōsatsu (明治通宝札), in 1872, which were printed inGermany.[1]
Silver coins were also issued for trade with Asian countries who favoured silver as a currency, thus establishing ade facto gold-silver standard.[1]
The National Bank Act of 1872 led to the establishment of four banks between 1873 and 1874, and there were more than 153national banks by the end of 1879. The national banks issued identically designed convertible notes, which were effective in funding industry and progressively replaced government notes. In 1876, an amendment allowed the banks to make the banknotes virtually non-convertible. These national banknotes imitated the design of American banknotes, although the name of the issuer was different for each.[1]
Severe inflation broke out with theSeinan Civil War in 1877. This was controlled by the reduction of government spending and the removal of paper currency from circulation. During the Seinan Civil War, an original type of paper money was issued by the rebel leaderSaigō Takamori in order to finance his war effort.[1]
In 1881, the first Japanese note to feature a portrait, theEmpress Jingū note (神功皇后札), was issued.[1]
In order to regularize the issuance of convertible banknotes, acentral bank, theBank of Japan, was established in 1882. The bank would stabilize the currency by centralizing the issuance of convertible banknotes. The first central banknotes were issued by the Bank of Japan in 1885. They were called Daikokusatsu (大黒札), and were convertible in silver.[1]
Following the devaluation of silver, and the abandonment of silver as a currency standard by Western powers, Japan adopted thegold standard through the Coinage Law of 1897. The yen was fixed at 0.75g of pure gold, and banknotes were issued which were convertible into gold.[1] In 1899, the National Banks banknotes were declared invalid, leaving the Bank of Japan as the only supplier of currency.[1]
During World War I, Japan prohibited the export of gold in 1917, as did many countries such as theUnited States. Gold convertibility was again shortly established in January 1930, only to be abandoned in 1931 when Great Britain abandoned the gold standard. Conversion of banknotes into gold was suspended.[1]
From 1941, Japan formally adopted a managed currency system, and in 1942 the Bank of Japan Law officially suppressed the obligation of conversion.[1]
In 1946, following theSecond World War, Japan removed the old currency (旧円券) and introduced the "New Yen" (新円券).[1] Meanwhile, American occupation forces used a parallel system, calledB yen, from 1945 to 1958.
Since then, together with the economic expansion of Japan, the yen has become one of the major currencies of the world.[9]
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The Sinan shipwreck found off the western coast of South Korea in 1976 contained 26,775 kg (58,905 lb) of Chinese coins, mostly dating from the Song dynasty.
Early Japanese Coins. David Hartill.ISBN 978-0-7552-1365-8
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