The Japanese yen is currently considered one of the most quoted and stable currencies. In addition, it is the third of the world's reserve currencies after the US dollar and the euro. The ease with which this relatively young currency survived the tragedy that struck the Japanese nation in March of the last year after the explosion at Fukushima nuclear plant is surprising.
The strong earthquake triggered a tsunami; a ten-meter wave struck the east coast of Japan, destroying villages, taking into the ocean cars, homes and thousands of lives. The natural disaster caused an accident at the nuclear power plant "Fukushima-1", leading to irreversible consequences and becoming the second largest after the disaster at Chernobyl. Japan was plunged into mourning, but the yen began to grow. Sluggishly, slowly the rate of the Japanese currency crept up because the enterprising and intelligent citizens of this country keep their savings abroad, and insured their wealth and business just like people in Europe and the United States do. Thus, the income from abroad that rushed to the Land of the Rising Sun after the news of the accident helped the yen to stay afloat after the devastating tsunami waves.
Interestingly, the Japanese prefer to keep its currency low against the euro and the US dollar. The Japanese bank is trying by all means to prevent excessive volatility of the yen in the market and conducts powerful currency interventions that can lower the rate of the yen against the US dollar (that, incidentally, is not much older than the Japanese currency).
The yen emerged in Japan in 1870. The same year in England the first metal bicycle was sold, Belgian citizen Zinovy Theophile Gramm received a patent for the invention of electric generator, and Scotsman Alexander Graham Bell was only a few steps from creating a telephone. All of the abovementioned peers of the yen came into this world in order to make life easier. The same trait was an attribute of the Japanese currency whose name means "round" in Japanese.
Earlier, before the advent of the yen, the Japanese were living with the most complex monetary system of the Edo period, commonly using gold, silver, copper and paper money of the central government and individual princely possessions. The coins used by the Japanese were oval, rectangular, and at times of uncertain shape, resembling a gold or silver bullion. The yen has gained life immediately after the Meiji Revolution and was manufactured from gold. One coin was equal to 1.5 grams of precious metal and had a round shape, thus its name.
With the advent of the Japanese yen the monetary system became decimal, which was already far from being a novelty to other countries in the world. However, Japan has always been distinctive and chose its own path of development. Japan said goodbye to the complex monetary system much later than other civilized countries.
In the 20th century, the yen faced some serious obstacles. In 1910 the Japanese started to save their gold reserves, thus lowering the value of coins to 10 yen, and then 2 and 5 yen. After 1932, Japan plunged into the abyss of an economic crisis that swallowed the young Japanese currency, converting it from a round gold coin into cheap, mediocre bills. In 1933, Japan abandoned the gold standard. But it was only the beginning of the collapse. Six years later the national currency of Japan refocused completely to the US dollar. When it seemed that nothing worse could happen, the world war broke out.
In the period from 1940 to 1945 the yen was rapidly losing its value, and was literally on the verge of death. At the time, for one U.S. dollar one could easily pay from fifty to nine hundred yen, depending on a province. However, when the shots stopped, and the smell of gunpowder was no longer in the air, in the 1953 the Japanese national bank note was assigned the status of an international currency. The yen rejoiced and soared, which led to a sharp rise in price of goods in the local market. World market prices of trade goods from Japan became exorbitant. The devaluation played a cruel joke with the Japanese and their products were no longer affordable. Here, as usual, speculators got out from all the dark corners, leading to widespread bankruptcy and devastation of businesses.
The value of the yen began to rise at the very end of the century, in connection with a series of successive revaluation against the U.S. dollar and other major foreign currencies. The Japanese currency met the millennium under the banner of stability, and since 2002 the Japanese economy has been growing. The country's authorities took a clear course for export of goods, and in order not to destabilize the market it was decided to keep the national currency "in check". Here one can sense the Japanese character: the country that produced the culture of the samurai and geisha, anime cartoons, instant noodles, and various robots only superficially looks calm and stable, and probably this is the wisdom of it.
Maria Snytkova.