Knowra Japanese yen Japanese yen The official currency of Japan, issued as coins and banknotes and traded internationally under the code JPY. It is divided into 100 sen for accounting purposes, though sen are no longer used in everyday transactions.
Bank of Japan : Japan’s central bank, responsible for issuing banknotes and conducting monetary policy. It issues yen banknotes and steers the monetary conditions that affect their value.
Meiji Restoration : The political transformation beginning in 1868 that restored imperial rule and launched rapid modernization in Japan. The new government created the yen during its modernization program.
Yen carry trade : A strategy of borrowing in yen, often at low interest rates, to invest in higher-yielding assets elsewhere. Low yen funding costs have made the currency central to this trading strategy.
United States dollar : The official currency of the United States and the world’s leading reserve currency. The dollar is the yen’s most consequential counterpart in exchange-rate markets.
Japanese yen banknotes : Paper currency issued by the Bank of Japan in denominations of 1,000, 5,000, and 10,000 yen. These notes are the principal form of high-value physical yen.
New Currency Act of 1871 : The Japanese law of 1871 that established the yen as the country’s unit of currency. This law legally introduced the yen and its decimal subdivisions.
Japanese government bond : A debt security issued by Japan’s government to finance public spending. These bonds are denominated in yen and shape demand for yen assets.
Euro : The common currency used by member states of the European Union’s euro area. The euro offers a contrasting currency shared across multiple sovereign states.
Japanese yen coins : Coins denominated in 1, 5, 10, 50, 100, and 500 yen. Coins provide the everyday fractional denominations of the currency.
Japanese monetary reform of 1871 : The reform that replaced Japan’s varied feudal-era monetary units with a national decimal currency. It made the yen a standardized currency across the newly centralized state.
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