Japanese yen

The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar and the euro. It is also widely used as a third reserve currency after the US dollar and the euro.

The New Currency Act of 1871 introduced Japan's modern currency system, with the yen defined as of gold, or of silver, and divided decimally into 100 ''sen'' or 1,000 ''rin''. The yen replaced the previous Tokugawa coinage as well as the various ''hansatsu'' paper currencies issued by feudal ''han'' (fiefs). The Bank of Japan was founded in 1882 and given a monopoly on controlling the money supply.

Following World War II, the yen lost much of its pre-war value as Japan faced a debt crisis and hyperinflation. Under the Bretton Woods system, the yen was pegged to the US dollar alongside other major currencies. After this system was abandoned in 1971 with the Nixon Shock, the short-lived Smithsonian Agreement temporarily reinstated a fixed exchange rate. However, since the end of that system in February 1973, the yen has been a floating currency.

Currency intervention by the Ministry of Finance and the Bank of Japan has occurred on limited occasions in recent years, with the intention of moderating the speed of exchange rate movements. Interventions took place intermittently from 1998 to 2003 and from 2010 to 2011 to curb excessive and speculative appreciation of the yen, and again in 2022 and 2024 to slow down speculative selling of the currency. The first two instances included coordinated interventions with respective countries, and the IMF has repeatedly stated that Japan is 'committed to a flexible exchange rate'. Provided by Wikipedia