Japan yen to us dollar exchange rate
I first arrived in Japan on July 15, , as an American college student beginning a year abroad. Though I already knew a certain amount about the country and its people, life in Tokyo, my new home, was full of surprises. One that I will never forget was the profusion of zeroes on the paper currency that I got in exchange for my US dollars. The price tags in stores were similarly startling. Well before I came to Japan, I had learned that the country had made a remarkable recovery from the devastation of World War II and achieved great economic growth and technological advances. In some ways it had even surpassed the United States, as with its high-speed Shinkansen rail link between Tokyo and Osaka.
Dollar Yen Exchange Rate (USD JPY) - Historical Chart
I first arrived in Japan on July 15, , as an American college student beginning a year abroad. Though I already knew a certain amount about the country and its people, life in Tokyo, my new home, was full of surprises. One that I will never forget was the profusion of zeroes on the paper currency that I got in exchange for my US dollars. The price tags in stores were similarly startling. Well before I came to Japan, I had learned that the country had made a remarkable recovery from the devastation of World War II and achieved great economic growth and technological advances.
In some ways it had even surpassed the United States, as with its high-speed Shinkansen rail link between Tokyo and Osaka. This positive image did not fit well with the multizero bills, which seemed like the currency of a country whose economy was on the rocks.
And in March the post—World War II system of fixed exchange rates was scrapped and major currencies were allowed to float against each other. Over the four and a half decades since then, the exchange rate has fluctuated, but overall the yen has risen substantially. This makes it worth over three times more in dollar terms than as of mid Despite this rise, the exchange rate of the yen to the dollar still runs to three digits, which is highly unusual for a currency of a major country.
From time to time there has been talk of redenominating the yen by a factor of , which would mean two fewer zeros at the end of each of the current denominations—10, becoming , 5, becoming 50, and so forth. But this idea has not been implemented. So many Westerners visiting Japan probably feel the same sense of strangeness as I did 47 years ago at seeing the implausibly high numbers on Japanese currency.
Japan adopted the yen as its currency unit in This was early in the Meiji era — , when Japan was scrambling to turn itself into a modern nation-state that could deal with the Western powers on an equal footing. The new currency was set at a value of 1. As shown in the attached chart, the yen lost about half of its value against the greenback in the s and s, and it took another fall in the s, declining to around a quarter of its original value in dollar terms.
Tokyo and other major cities lay in ruins, the economy was in tatters, and inflation raged unchecked, robbing the currency of its worth. The yen may appreciate against the dollar in the future, reducing the number of digits in the exchange rate from three to two again. But no amount of ordinary currency appreciation can wipe out the drastic devaluation of the early postwar period and restore the yen to a value in the range of the dollar, thereby bringing the exchange rate down to a single digit.
My perspective is different. Shortly after graduating from college in , I got a job in Tokyo and have lived here ever since. But even after long exposure to three-digit yen-dollar rates and currency notes loaded with zeroes, they still feel strange to me.
It seems peculiar for a country of such high international stature to have such a puny currency, worth less than an American penny. The number of foreign tourists visiting Japan has grown dramatically in recent years, and as I noted above, those coming from the United States or other Western countries are liable to have the same sort of reaction. Subjective impressions aside, Japan is exceptional among the major advanced nations in having such a low-valued currency unit.
Consider the attached table presenting the exchange rates of the currencies used by the 36 economically advanced democracies belonging to the Organization for Economic Cooperation and Development. The table lists these 20 currencies in the order of their value expressed in US dollars. Note: Blue highlighting marks the currencies used by members of the Group of Seven other than Japan.
G7 members France, Germany, and Italy use the euro. Japan may have the second-biggest economy in the OECD, but its currency unit is near the bottom of the list, at number 17 out of Within the Group of Seven, meanwhile, Japan places last in terms of currency unit value. The other six members of this select group all use units with values among the top five in the OECD listing: the British pound, the euro—used by G7 members France, Germany, and Italy—the US dollar, and the Canadian dollar.
In other words, it has a value in the same league as the three Scandinavian countries. And one US dollar fetches about seven yuan—a single-digit exchange rate. I realize, of course, that these currency unit values, high or low, have no inherent connection with the economic scale or soundness of the countries that use them. The yen, I noted is also an outlier by comparison with the currency units of other major economic powers.
In view of this disparity, I think Japan should seriously consider redenominating its currency by a factor of The rin places fifth among the OECD currencies, just after the Swiss franc, and its value is in the same dollar-centered range as the other G7 units. Let us also take a look at a revised version of the historical yen-dollar exchange rate chart presented in the previous half of this article. I expect that tourists from abroad, particularly those from the West, would quickly familiarize themselves with the rin; they would be able to grasp prices in shops and restaurants without referring to electronic or paper conversion tools.
By the same token, Japanese visiting the United States or other Western countries would know that currencies like the dollar and the euro were in the same general range as their own rin. So Chinese tourists shopping in Japan need to divide prices by 16 to get the equivalent amount in their own currency. Dividing by 16 is not something many people can do in their heads! Were Japan to adopt the rin, multiplication by 8 would give the approximate value in yuan.
This, I daresay, would be considerably easier. And at first glance before conversion into yuan , Japanese prices would look invitingly low rather than absurdly high. The yen coins and bills now in circulation will keep their value, and all contracts, securities, and other legal documents with amounts in yen will remain valid; there will be no need to rewrite them.
The new currency will doubtless seem strange at first to its Japanese users. But most international visitors will surely find it more comfortable to deal with than the yen. And for the first time since the nineteenth century, Japan will have a currency unit close in value to the US dollar, the de facto global standard around which other major currencies are clustered.
So by all means let us keep the yen for everyday use.
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