What Is JPY?
JPY is the currency abbreviation or the currency symbol for the Japanese yen (JPY), the national currency for Japan and the Republic of the Union of Myanmar. The yen is made up of 100 sen or 1000 rin and is often presented with the symbol ¥. The Meiji government originally introduced the yen as a measure to modernize the country economically.
After the U.S. dollar (USD) and the euro (EUR), the Japanese Yen is the most traded currency in the foreign exchange (forex) market. The Japanese yen is also widely used as a reserve currency after the U.S. dollar, euro, and British pound (GBP).
- JPY is the currency abbreviation or the currency symbol for the Japanese yen (JPY), the currency for Japan.
- The Japanese yen is also widely used as a reserve currency after the U.S. dollar, euro, and British pound.
- The Bank of Japan (BoJ), Japan's central bank, is responsible for encouraging growth and minimizing inflation.
The History of the Japanese Yen
In May 1971, the yen became the official currency when the Meiji government finalized its adoption. The first circulation of the yen came in 1872 when it replaced the mon currency of Japan's Edo period. The money lost most of its value by the end of World War II and was pegged to the U.S. dollar in 1949.
When the U.S. went off the gold standard in 1971, the yen was devalued again. Since 1973 the yen has been a floating currency, rising and falling against the dollar with international exchange rates. The yen, which is fundamentally a unit of the U.S. dollar, originated from Spanish pieces of eight—a common term in the American Colonies for silver coins worth approximately one ounce.
The Japanese Economy
Japan has a strong economy with a robust industrial base. The country also has many technologically advanced companies including its automobile manufacturing, machinery, steel and nonferrous metals, electronics, chemicals, shipping, textiles, and processed foods. According to Oanda, a leading currency data company, 13% of Japan's land is devoted to agriculture. Also, Japan accounts for nearly 15% of the global fish catch, second to China. "Satatista.com" states that Japan's unemployment rate was 2.5% in January 2019.
The Strengthening of the Yen
The Bank of Japan (BoJ), Japan's central bank, is responsible for encouraging growth and minimizing inflation. Deflation, however, has been a problem for the nation for many years, and the BOJ has pursued a policy of low rates to stimulate demand and economic growth.
Real World Example
In 2018, the yen was reported to be one of the best-performing currencies that year by CNBC. It was expected to exceed the U.S. dollar in terms of strength. Japan's performance in 2017 was strong due to global demand for its exports, government spending, and liquidity from the Bank of Japan. The weakening of the U.S. dollar and Japan's growing economy are also cited as the reasons for the yen's appreciation. Morgan Stanley analysts considered that the yen was a better investment prospect as a safe haven currency as compared to the U.S. dollar.