Why doesn't the Yen have cents? Is it devalued?

Have you ever noticed and wondered why there are no cents in Japanese currency? Is it because she devalued and reached this point? The Japanese don't get confused when buying? Has the yen always been like this, or has it already been fractional?

When we talk about the value of the yen to people, the first statement they make is that the currency is over-undervalued. There is always confusion when trying to explain that there is no fractioning or cents in the Japanese currency. 

In this article, we will cover the following topics:

Is the Japanese currency YEN devalued?

For a currency to be considered undervalued, it needs to raise the prices of things, discourage investment and end industrialization. Japan is the complete opposite of this with an inflation of 1%. Quite different from the cruzado and the cruzeiro where inflation reached 2000 and the coins were still fractioned (there were cents or decimals).

The Japanese yen yen (円 – en) is made up of 1, 5, 10, 50 and 100 yen coins, while its banknotes are 1,000, 2,000, 5,000 and 10,000 yen. About 100 yen is equivalent to 0.90 cents in US dollars (2018) making the currency cheaper than the dollar itself.

Goen - 5 yen coin
5 yen coins, equivalent to 0.5$

In Japan you earn more than 700 yen per hour of work, making a 100 yen coin as insignificant as 1 real. Fortunately, with 100 yen you can buy a drink, a chocolate or a snack. I think about the Japanese yen like I think about the dollar, just put an imaginary comma before the last 2 zeros.

Despite the fact that Japan's currency is currently as valuable as the dollar, the main reason the yen has not split was actually the devaluation of its currency in the past.

yen is not fractional? Japanese coin without cents?

Now that we know that the yen is not devalued, we should understand why the Japanese yen currency is not fractional, it does not have cents or decimal values. The answer is simple, the people preferred it that way!

In 1953, a law called the Shōgaku tsūka no seiri oyobi shiharaikin no hasūkeisan ni kan suru hōritsu [小額通貨の整理及び支払金の端数計算に関する法律] which literally means Small Currency Disposal Act and Fractional Rounding of Payments.

Some may find this decision strange, but it's been that way for many years and the Japanese don't think about changing just for the convenience of the rest of the world. There is no difficulty in denoting 50,000 instead of 500.00. Mainly for the Japanese where the counting numbers in language changes to 1万 [ichi man] when reaching 10,000.

The only valid reason currently for fixing zeros in the Japanese yen would be inflation. This is exactly what happened with the yen before 1953, when there were fractional measures before the yen. In other words! There used to be cents in Japan...

The yen has already been split, Know the sen!

The yen was introduced to Japan in the year 1871 and had not one, but two fractions called RIN [厘] and SEN [銭]. 10 RIN is equivalent to 1 SEN, while 100 SEN is equivalent to 1 YEN. That's how things worked in Japan until 1953.

There were coins of 1 and 5 RIN, followed by 1, 2, 5, 10, 20 and 50 SEN. At the time of fractionation, the yen was 1, 2, 5, 10, 20, 50, 100 and 500. In Japan there were even coins that were not completely round, as in the case of some versions of 1 SEN and 1 YEN.

This image has an empty alt attribute; its file name is old-yen-coins. jpg
Above the SEN coins being the one on the right 1 yen, below we have the RIN coins.

I question the need for RIN, but SEN was already the equivalent of our penny. The ideogram for sen [銭] can still be found in words like sat [銭湯] meaning public baths. Referring to the low price of bathrooms in the past.

Currently, the 1 RIN has become a relic, as its last mints were from before 1900. One of the first RINs was auctioned for over 60,000 dollars. We have already written a little about the Yen value through the ages, we recommend reading the article to understand about the history of the Japanese currency that we will highlight below.

The article is still halfway through, but we recommend also reading:

WHY IS THE YEN NO LONGER FRACTIONAL?

Prior to 1900 the yen used silver as the country's currency standard, but this silver standard devalued and lost to the gold standard. It was not until 1897 that Japan was able to switch to the gold standard by winning the Sino-Japanese War, but it was too late and the yen devalued to only half a US dollar.

The Gold Standard was abandoned by Japan because of the Great Depression of 1930. Things took a turn for the worse in World War II when Japan suffered super inflation causing the yen to lose over 99% of its value making it what it is today.

The US imposed the Bretton Woods System in Japan making 360 yen worth a dollar. With this exchange rate, the sen and rin fell into disuse and were officially discontinued in 1953 with the aforementioned law.

When the Bretton Woods System collapsed in 1971, Japan's currency began to fluctuate. All this thanks to the country's effort to become one of the world's greatest economic and industrial powers.

Responsive Table: Scroll the table sideways with your finger >>
DateYen = $1 US
19142
194615
194750
1948270
1949360
1971308
1998115
200892
201180
201890

So the Yen has actually run out of cents because of currency devaluation and inflation. Like the real plan, this strategy worked and improved the country's economy. But in this case the Japanese decided to eliminate the decimal and fractional values of their currency once and for all.

I hope this article has answered all your questions about the yen having no cents and about the devaluation of the Japanese currency and how Japan turned around making its currency valuable again. If you liked the article, share it and leave your comments.

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