10 Things You Didn’t Know About the Yen

The Japanese Yen is considered a safe-haven currency and is often bought during times of uncertainty and volatility. With the Brexit in the UK, terror events in Europe, upcoming US elections, decrease in the Chinese economy and a crash in oil prices, the Yen is looking more and more appealing to investors.

However, as a heavily-export dependent economy, Japanese manufacturing is not happy with a high Yen and the Bank of Japan (BOJ) has cut rates in the past. The Bank under Chairman Kuroda was also one of the first introduce asset-purchasing programme along with negative interest rates to assist economic recovery after the global crises on 2008 and the devastating tsunami of 2011.

Quantitative Easing (QE) – easing of monetary policy has been the backbone of Kuroda’s strategy to bolster the economy but the most recent BOJ meeting in August shows a split amongst board members in continuing this approach. The Bank will assess how negative interest rates have affected bank deposits and if the asset-buying project has delivered the desired effects. It’s possible that at the next BOJ meeting in September we might see some changes to their stimulus programme and that may result in a lot of action for the yen.

For now, here are some fast facts about the yen.

1. Since 1971 the Yen has grown in value against the US Dollar 400%.
2. The 0.1 Yen note was created in 1947 and displays an image of a pigeon.
3. The 500 Yen coin is the largest denomination coin in the world, and is currently valued at approximately 6 US Dollars.
4. The Japanese economy grew during the 1980’s to such an extent that it was almost as large as the United States.
5. The 1 Yen coin is made from pure aluminium and can actually float on water.
6. The word “Yen” itself actually means “round object” in Japanese, and the Japanese pronounce it as “En.”
7. Counterfeiting the 5 Yen and 50 Yen coins is particularly difficult because they have holes in the middle.
8. The shine of the 5 Yen coin is due to its zinc and copper content, leading it to be considered a good luck charm in Japan.
9. Japanese coins do not display the year they were minted. Instead the show the current year of the existing Emperor’s reign.
10. In 1945 the United States government dropped propaganda leaflets over Japan that were designed to look like 10 Yen notes in order to create public fear over inflation.

Sources:

http://www.reuters.com/article/us-japan-economy-boj-idUSKCN10J00N?il=0

http://www.globalexchange.es/en/currencies-of-the-world/yen

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