Japan introduces new currency notes

The government will redesign the ¥10,000, ¥5,000 and ¥1,000 banknotes adding cutting-edge technology to prevent counterfeiting, Finance Minister Taro Aso announced.

Background

Following 1868, a new currency system based on the Japanese yen was progressively established along Western lines, which has remained Japan's currency system to this day.

In 1946, following the Second World War, Japan removed the old currency and introduced the "New Yen". Meanwhile, American occupation forces used a parallel system, called B yen, from 1945 to 1958. Since then, together with the economic expansion of Japan, the yen has become one of the major currencies of the world.

Analysis

The new designs will be introduced in the first half of fiscal 2024, he said. The new ¥10,000 bill will feature Eiichi Shibusawa (1840-1931), a banker and business leader dubbed “the father of Japanese capitalism” who played a key role in modernizing the Japanese economy, Aso said.

The portraits on the new bills will also be 3D holograms — the first in the world to be adopted on banknotes, according to the Finance Ministry. Meanwhile, the government will not redesign the ¥2,000 bill, because the number of bills in circulation “is extremely small” when compared with the other three banknotes, Aso said.

The announcement comes days after Chief Cabinet Secretary Yoshihide Suga’s on April 1 announcement of the name of the new Imperial era, Reiwa, which begins May 1 when Crown Prince Naruhito ascends to the Chrysanthemum Throne.

The government apparently chose the timing of the banknotes’ announcement to coincide with this, as Emperor Akihito is set to abdicate on April 30.

Japan changes the designs of the three bills to prevent counterfeiting about every 20 years, according to Aso. Last time Japan introduced new banknotes was in 2004. That plan was announced in August 2002.

Assessment

Our assessment is that the new security features in Japan’s latest series of currency notes will enable it to fight counterfeited notes and unaccounted wealth with a greater degree of efficiency. We believe that as Yen is one of the world’s most traded currencies, the integration of the latest security measures will safeguard against the influx of fake notes targeted at manipulating the value of Yen in the international currency markets.