Japan’s recent generation might not remember, or even know, how close their country was to ruin. The economy almost collapsed, including the other silver trading nations, with the implementation of the gold standard. Unexpectedly, the country rose from the fall and made its currency a major foreign exchange favorite.
The symbol for the Japanese yen (¥) is similar to the Chinese Yuan and Korean won. Literally meaning “round object”, yen (pronounced as en) originated from the Spanish silver coins widely traded around Asia.
In the 16th century, the Japanese pronunciation of /e/ is the same as /we/. But Portuguese missionaries interpreted this as /ye/, thus pronounced in Western world as yen instead of en. This widely influenced the Japanese words translations in other languages. Finally in 1886, James Curtis Hepburn, a Christian missionary, launched the 3rd revision of his Japanese and English dictionary, with /e/ used officially except in the yen.
The Japanese yen can be divided into 100 sen. The circulating coin denominations are 1, 5, 10, 50, 100, and 500 yen. The banknotes are in 1000, 2000, 5000, and 10000 yen. Before the gold standard, the yen is on fixed exchanged rate with the US dollar at 360 JPY per 1 USD. But in 1985, major countries declared the dollar as overvalued putting the yen as undervalued. After negotiations, a new fixed rate was implemented in 1971 which makes 308 JPY per 1 USD.
Fully shifting to the managed currency system, the supply and demand supported the growth of the yen in the foreign exchange market. Later on, the yen became in demand in major reserves and landed as the third most exchanged currency in the world.
Locally, even the 10000 yen bill is widely accepted by merchants in the country. There was no problem regarding lower denominations. This might be due to Japan operating mostly on cash basis. People still carry large amounts of cash with them. Cards are also accepted but mostly for the benefit of the business and tourism. As a leading technological nation, cellular phones are also used for payments when out of cash.