The first Japanese coins were issued by the imperial court of Nara in AD 708, adopting the idea of coinage from China. The silver coins were not successful, but copper coins were issued until 958. Coins came back into fashion in Japan in the thirteenth century, in part because Japan imported the coins that China now replaced with paper currency. From then until 1600 Japan imported almost all its coins from China.
The Tokugawa Shoguns rose to power in 1603 and in 1606 Japan began issuing its own coins imitating Chinese coins. Japan also issued silver ingots and flat, rectangular gold coins. Silver dollars didn’t enter Japan until Commodore Perry opened Japan to foreign trade in 1853.
Before the Meiji Restoration in 1868, Japan had no fixed monetary system, though the system was based upon the gold Oban (JPO). The value of gold, silver and copper coins fluctuated against one another, and in 1600 over 60 different coins circulated. Governments would periodically try to fix the rates of exchange between different specie monies, but these edicts had little long-term impact. Japan began minting elliptical gold plates (called Oban and Coban) and rectangular plates (called Ichi Bu ban) in 1589 after the Portuguese arrived. The monetary system was reformed in May 1601 with the introduction of gold Keicho coin, equal to 20.1284 Yen, the Genroku coin in 1695 equal to 13.7314 Yen and the Hoe coin in 1706 equal to 10.313 Yen. Paper Hansatsu were first issued in 1617.
In general 1 Gold Oban was equal to 10 Gold Coban/Ryo, 40 Bu/Ichibukin or 160 Shu Kin. Officially, 1 gold Ryo was equal to 60 silver momme or 240 base metal kammon. One silver kamme was equal to 1000 momme = 10,000 fun, and 1 silver momme was equal to 3.75 grams of silver. One base metal kammon was equal to 1000 mon. As in Europe, market rates usually differed from these official conversion rates. The Chinese Tael was also used as a unit of account (JPT) in the 1700s. The value of the Ryo varied dramatically over time. Since Japan was essentially closed to the rest of the world, the gold/silver ratio varied dramatically from the rest of the world.
In 1858, Japan concluded a treaty of commerce and navigation with the United States, setting the exchange rate at 1 US Dollar = 0.75 Ryo. Since the gold-silver ration was much lower in Japan (1-5 or 1-10) than in the rest of the world (1-15), gold was drained from Japan, and foreign silver coins imported into Japan, which then allowed counterstamped coins to circulate. After the Meiji Restoration in 1867, the Yen (JPY) was introduced as the national currency with the Yen divisible into 100 Sen or 1000 Ren. The Yen was initially set at par with the US Dollar.
The Japanese government issued small denomination notes. Japan set up a system of National Banks to issue currency between 1872 and 1882, following the model of the United States. In 1882, Japan set up the Nippon Ginko (Bank of Japan), which is the sole note-issuing authority for Japan. In part, the indemnity from the Russo-Japanese War enabled Japan to go on the Gold Standard on October 1, 1897. Japan left the Gold Standard on December 17, 1931.
Both Korea and Taiwan issued currencies set at par to the Japanese Yen while they were occupied by Japan, and during World War II, Japan established currencies for each of the territories it occupied. Japan created the Military Yen, or Gumpyo (XJPM), set at par to the Japanese Yen. Japan occupied the territories of Brunei, Burma, Hong Kong, Malaya, Netherlands Indies, North Borneo, Philippines and Sarawak.
During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia.
The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese).
The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.
The Japanese government issued banknotes in each of the countries it occupied during World War II. The notes were issued at par with the local currency, but due to the excessive issue of these banknotes, they quickly depreciated in value. Local currencies included the Philippines Gumpyo Peso (PHJ), Netherlands Indies Gumpyo Gulden (IDDJ), Netherlands Indies Gumpyo Roepiah (IDDR), Malaya Gumpyo Dollar (MYAG), Burma Gumpyo Rupee (BUG), Hong Kong Military Yen (HKG), Oceania Gumpyo Pound (XOGP), and the French Indochina Military Yen (ICFG). See each of these countries for information on the occupation currencies issued by the Japanese.
The Japanese also issued several currencies during their occupation of China, mostly tied to the Japanese Yen in the beginning. The Central Bank of Manchukuo under the Japanese puppet government issued Yuan banknotes (CNMY) tied at par to the Japanese Yen. The Central Bank of Inner Mongolia (Meng Cheng Bank) issued a separate currency for Mongolia (CNJM) that was set at par to both the Manchukuo Yuan and Japanese Yen.
When the Japanese invaded the rest of China, they issued separate currencies for northern China and for southern China, as well as a Military Yen. The Federal Reserve Bank of China issued the Northern Chinese Dollar (also known as the Peking Dollar, Tientsin Dollar) (CNJP). Northern China had refused to send its silver reserves to the Nationalist government under the 1935 monetary reform, and autonomous coins and banknotes were issued in 1936 prior to the Japanese invasion. The Northern Chinese Dollar was set at par to the Japanese Yen, and later set at 1 Northern Chinese Dollars equal to 3.8 Nanking Dollars.
The Japanese set up the Central Bank of China was set up in Nanking after they invaded southern China. The Nanking Yuan were equal to one-fourth Military Yen and were exchanged at the rate of 1 Nanking Yuan equal to 2 Chinese Dollars after occupation.
All the Japanese currencies issued in occupied territories became worthless after the Japanese lost the war, though citizens were usually allowed to redeem some of them into the local currency, though usually at a discount to their face value.
After the war, the United States issued the Allied Yen (JPA) for use in Japan between September 1945 and July 1948. After July 1948, the Allied Yen was only used in Okinawa and other territories administered by the United States. The Japanese carried out a currency reform on March 2, 1946 to reduce the amount of outstanding currency, but inflation followed nonetheless. |
