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Speaker 1: This Day in History Class is production of iHeartRadio. Hello

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Speaker 1: and welcome to This Day in History Class, a show

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Speaker 1: that discovers something new about history every day of the week.

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Speaker 1: I'm Gabe Lucier and in this episode, we're looking at

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Speaker 1: Japan's adoption of the yen, including the role the currency

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Speaker 1: played in opening the traditionally closed off nation to the

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Speaker 1: rest of the world. The day was June twenty seventh,

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Speaker 1: eighteen seventy one. The yen became the national currency of Japan.

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Speaker 1: The new silver coinage and banknotes were introduced by the

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Speaker 1: Meiji government in an effort to help modernize the Japanese economy.

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Speaker 1: Three years earlier, a political revolution had ended the reign

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Speaker 1: of the Tokugawa shoguns and returned the Japanese emperor to

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Speaker 1: power for the first time in more than five hundred years.

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Speaker 1: With the Meiji Emperor back in control, the island nation

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Speaker 1: began to transition from a feudal system to a fully

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Speaker 1: industrialized country, one that was willing to engage with foreign

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Speaker 1: trading partners. However, in order to do that, Japan would

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Speaker 1: first have to simplify and centralize its currency system, a

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Speaker 1: task that was easier said than done. By the time

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Speaker 1: of the Meiji Restoration in eighteen sixty eight, Spanish and

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Speaker 1: Mexican dollars had become a common currency of trade in

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Speaker 1: East Asian countries, especially China. The Chinese called the silver

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Speaker 1: coins yuen, meaning round or circular, and Japan later upheld

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Speaker 1: that naming convention, calling the imported coins yen the Japanese

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Speaker 1: termed for circle. But Spanish silver dollars were just one

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Speaker 1: of many forms of currency circulated in Japan prior to

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Speaker 1: the restoration. In fact, when the Tokugawa were running things,

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Speaker 1: every feudal lord in the country issued their own unique currency.

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Speaker 1: The various feudal notes or script were largely incompatible, as

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Speaker 1: they were produced in wildly inconsistent denominations. In fact, in

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Speaker 1: eighteen sixty eight, survey by the Ministry of Finance found

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Speaker 1: that a total of one thousand, six hundred and ninety

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Speaker 1: four different denominations had been issued by nearly two hundred

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Speaker 1: and fifty clans during the Tokugawa period. It's hard to

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Speaker 1: overstate the confusion and inconvenience caused by such a patchwork system,

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Speaker 1: which is exactly why the Meiji government fast tracked the

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Speaker 1: adoption of a common currency shortly after its return to power.

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Speaker 1: When designing this new currency, the government decided to stick

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Speaker 1: with the name yen, even for rectangular banknotes, as the

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Speaker 1: term had already become synonymous with money in many parts

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Speaker 1: of the country. Although first minted in eighteen sixty nine,

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Speaker 1: the yen wasn't formally adopted until the signing of the

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Speaker 1: New Currency Act on June twenty seventh, eighteen seventy one.

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Speaker 1: Later that year, the government finally suspended the exchange of

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Speaker 1: clan notes, and all the existing mints were converted into

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Speaker 1: private chartered banks. At first, the banks were allowed to

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Speaker 1: continue printing new yen on their own, but that right

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Speaker 1: was revoked in eighteen eighty four when the newly created

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Speaker 1: Bank of Japan was granted exclusive control of the nation's

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Speaker 1: money supply. The decimal based yen added some much needed

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Speaker 1: uniformity to Japan's economy, but it didn't have much value

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Speaker 1: in international markets until eighteen ninety seven. That's when the

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Speaker 1: nation decided to follow the lead of the US and

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Speaker 1: Canada by ditching silver and adopting the gold standard instead.

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Speaker 1: The switch provided a significant boost to Japan's exports and trade,

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Speaker 1: but those gains were largely undone by gold embargoes during

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Speaker 1: the First World War and by political instability in the

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Speaker 1: years following it. Of course, all those setbacks to Japan's

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Speaker 1: efforts to strengthen the yen were nothing compared to the

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Speaker 1: damage inflicted by World War II. The currency's value plummeted

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Speaker 1: during the war and in the years of US occupation. Afterward,

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Speaker 1: Inflation rose rapidly, and the yen continued to depreciate against

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Speaker 1: the dollar. However, against the odds, Japan's economy made a

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Speaker 1: remarkable comeback in the second half of the twentieth century.

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Speaker 1: The yen became one of the world's leading currencies, rivaling

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Speaker 1: the British pound and the U. S Dollar on international markets.

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Speaker 1: Ever since that epic rebound, the yen has been considered

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Speaker 1: a safe bet for investors, as it often appreciates in

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Speaker 1: value even during downturns and financial markets. However, in twenty

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Speaker 1: twenty two, the Japanese yen declined to a twenty four

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Speaker 1: year low against the US dollar, leading some to question

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Speaker 1: if its strength is still the sure thing and used

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Speaker 1: to be. On the other hand, as of mid twenty

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Speaker 1: twenty three, the Japanese yen is still the most traded

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Speaker 1: by far of all Asian currencies, and the third most

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Speaker 1: traded currency in the world after the US dollar and

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Speaker 1: the Euro, so I wouldn't count it out just yet.

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Speaker 1: Oh and by the way, if you ever find yourself

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Speaker 1: in Japan and you're interested in the history of the

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Speaker 1: nation's money, you might want to stop by the Bank

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Speaker 1: of Japan Currency Museum in Tokyo. It has a massive

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Speaker 1: collection of antiquated money, including ancient coins, feudal script and yen,

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Speaker 1: both old and new. And the best part is admission

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Speaker 1: is completely free, so you don't even have to spend

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Speaker 1: any of your own yen to see it. And hopefully

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Speaker 1: you now know a little more about history today than

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Speaker 1: you did yesterday. If you want to keep up with

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Speaker 1: the show, you can follow us on Twitter, Facebook, and

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Speaker 1: Instagram at TDI HC Show, and if you have any

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Speaker 1: comments or suggestions, you can always send them along by

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Speaker 1: writing to This Day at iHeartMedia dot com. Thanks to

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Speaker 1: Chandler Mays and Ben Hackett for producing the show, and

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Speaker 1: thank you for listening. I'll see you back here again

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Speaker 1: tomorrow for another day in History Class