The yen is the official currency of Japan. It is the third most traded currency on the world’s foreign exchange markets. It is also widely used by governments across the world as a reserve currency, where it is fourth most popular, behind the US dollar, the euro and the British pound.
The new currency was finally introduced in 1871. Initially, its value was linked to the price of both gold and silver, but this unusual arrangement was not really practical. By 1897, the link to the value of silver was abandoned and, like most of the rest of the world, the Gold Standard was adopted.
The yen continued in much the same form until the end of the Second World War, when the complete collapse of the Japanese economy caused rampant inflation, and the yen became virtually worthless. In 1949, the occupying US administration then fixed the value of the yen to the US dollar and, through considerable economic support, managed to stabilise prices.
Succeeding years saw truly rapid economic expansion, with the Japanese economy going from strength to strength. By 1971, the Japanese economy was so successful that the yen had become undervalued, resulting in its exports being so cheap that its trading partners could not compete. This was the major reason behind the American decision to abandon the Gold Standard that year, effectively causing the value of the dollar to fall against the yen. The fall-out from this economic mayhem led eventually to the introduction of floating exchange rates in 1973. The economic uncertainty was made worse by the impending oil crisis.
The value of the yen continued to vary with the economic climate until the end of the 20th Century, when the Japanese asset price bubble burst in the early 1990s. The resulting economic decline continued for well over a decade, with virtually zero inflation and economic growth throughout the period. Much of the rest of the world’s economy was struck by its own banking crash in 2008, so Japanese economic growth is relatively weak even to this day. At the time of writing, the value of the yen is around $1 = 110 yen.
Being one of the most widely traded currencies in the world, a large amount of the currency is used in online transactions. However, the attractions of good old traditional British bingo have yet to take old in the Far East, so it remains relatively rare for the yen to be used as a currency of payment on UK registered bingo and casino sites.