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The Japanese yen is the official currency of Japan and is the third most traded currency in the global foreign exchange market.
Answer: True
Explanation: The Japanese yen is the official currency of Japan. It ranks as the third most traded currency in the global foreign exchange market, following the US dollar and the Euro.
The ISO 4217 code for the Japanese yen is JPY, and its commonly used symbol is ¥.
Answer: True
Explanation: The official ISO 4217 code for the Japanese yen is indeed JPY, and its commonly used symbol is ¥.
The Japanese yen's share in the IMF's Special Drawing Rights (SDR) valuation has decreased significantly since 2000.
Answer: True
Explanation: The Japanese yen's share in the SDR valuation has seen a notable decline since 2000, reflecting shifts in the global composition of reserve currencies.
What is the Japanese yen's position in global foreign exchange market trading volume?
Answer: It is the third most traded currency after the US dollar and the euro.
Explanation: The Japanese yen holds the position of the third most traded currency in the global foreign exchange market, following the US dollar and the Euro.
Which code is the official ISO 4217 designation for the Japanese yen?
Answer: JPY
Explanation: The official ISO 4217 code designated for the Japanese yen is JPY.
How has the Japanese yen's share in the IMF's Special Drawing Rights (SDR) valuation changed since 2000?
Answer: It has decreased significantly.
Explanation: The Japanese yen's share in the IMF's Special Drawing Rights (SDR) valuation has experienced a notable decrease since the year 2000.
Japan's modern currency system, the yen, was introduced in 1871 and was initially defined by its weight in gold and silver.
Answer: True
Explanation: The New Currency Act of 1871 established the yen as Japan's modern currency. Initially, its value was based on specific weights of gold and silver.
Upon its introduction in 1871, the yen replaced the Tokugawa coinage system and the feudal domain paper currencies known as hansatsu.
Answer: True
Explanation: The introduction of the yen in 1871 unified Japan's monetary system by replacing the disparate Tokugawa coinage and the various paper currencies issued by feudal domains (hansatsu).
During the early Meiji Restoration, Japan's monetary system was ununified, featuring co-existing gold and silver standards and various regional currencies before the introduction of the yen.
Answer: True
Explanation: Prior to the introduction of the yen in 1871, Japan's monetary system was characterized by a lack of unification, with different regions using distinct systems and standards, leading to complexity and inefficiency.
Okuma Shigenobu, not Inoue Kaoru, was appointed by Emperor Meiji to lead Japan's monetary reform program.
Answer: True
Explanation: Emperor Meiji appointed Okuma Shigenobu to lead Japan's monetary reform program. Inoue Kaoru was also involved in financial matters but Okuma held the primary leadership role in this specific reform initiative.
In 1870, Japan began minting gold coins in denominations of 2, 5, and 20 yen, alongside silver coins in sen denominations.
Answer: True
Explanation: In 1870, Japan commenced minting gold coins in denominations of 2, 5, and 20 yen, concurrently producing silver coins denominated in sen.
The Satsuma Rebellion led to significant inflation due to the issuance of non-redeemable currency, prompting reforms in Japan's currency system.
Answer: True
Explanation: The Satsuma Rebellion in 1877 resulted in massive inflation caused by the government's issuance of non-redeemable fiat currency notes to finance the conflict, necessitating subsequent currency reforms.
Under the gold exchange standard adopted in 1897, the yen was valued at 0.75 grams of fine gold.
Answer: True
Explanation: In 1897, Japan adopted a gold exchange standard, defining the yen's value at 0.75 grams of fine gold.
The 'sen' and 'rin' denominations were demonetized in 1953 due to inflation diminishing their value.
Answer: True
Explanation: The 'sen' (one-hundredth of a yen) and 'rin' (one-thousandth of a yen) were subsidiary denominations. Coins in denominations less than 1 yen were officially demonetized at the end of 1953 due to inflation diminishing their monetary value.
When was Japan's modern currency system, featuring the yen, established?
Answer: 1871
Explanation: Japan's modern currency system, with the yen as its unit, was established by the New Currency Act of 1871.
What did the Japanese yen replace upon its introduction in 1871?
Answer: Both the Tokugawa coinage system and the feudal domain paper currencies (hansatsu).
Explanation: Upon its introduction in 1871, the yen replaced the disparate Tokugawa coinage system and the various paper currencies known as hansatsu that were issued by feudal domains.
What monetary situation characterized Japan during the early Meiji Restoration period (1868-1876)?
Answer: An ununified system with co-existing gold and silver systems.
Explanation: During the early Meiji Restoration, Japan's monetary system was ununified, characterized by the coexistence of eastern and western standards (gold and silver) and various regional currencies, leading to monetary confusion.
Okuma Shigenobu, not Inoue Kaoru, was appointed by Emperor Meiji to lead Japan's monetary reform program.
Answer: True
Explanation: Emperor Meiji appointed Okuma Shigenobu to lead Japan's monetary reform program. Inoue Kaoru was also involved in financial matters but Okuma held the primary leadership role in this specific reform initiative.
What was the consequence of the Satsuma Rebellion (1877) on Japan's currency?
Answer: It caused massive inflation due to the issuance of non-redeemable fiat currency.
Explanation: The Satsuma Rebellion in 1877 resulted in massive inflation caused by the government's issuance of non-redeemable fiat currency notes to finance the conflict, necessitating subsequent currency reforms.
Under the gold exchange standard adopted in 1897, what was the defined value of the yen in grams of fine gold?
Answer: 0.75 grams
Explanation: When Japan adopted the gold exchange standard in 1897, the yen was defined as having a value equivalent to 0.75 grams of fine gold.
What led to the demonetization of 'sen' and 'rin' denominations after 1953?
Answer: Inflation had diminished their monetary value.
Explanation: The 'sen' and 'rin' denominations were demonetized because inflation had significantly reduced their purchasing power, making them impractical for everyday transactions.
The Bank of Japan, established in 1882, was granted a monopoly over the issuance of banknotes and the control of the overall money supply.
Answer: True
Explanation: The Bank of Japan was established in 1882 and was granted a monopoly over the issuance of banknotes and the control of the overall money supply, centralizing monetary policy.
After World War II, the Japanese yen experienced hyperinflation and was pegged to the US dollar under the Bretton Woods system until 1971.
Answer: True
Explanation: Following World War II, the yen underwent a period of instability and inflation before being pegged to the US dollar under the Bretton Woods system, a fixed rate maintained until 1971.
The Nixon Shock of 1971 led to the abandonment of the fixed exchange rate regime for the Japanese yen against the US dollar.
Answer: True
Explanation: The Nixon Shock in 1971 marked the end of the Bretton Woods system's fixed exchange rates, leading to the eventual transition to floating rates for the yen and other major currencies.
The Ministry of Finance and the Bank of Japan have intervened in the currency market at various times to influence the yen's value.
Answer: True
Explanation: Contrary to the assertion that they have never intervened, the Ministry of Finance and the Bank of Japan have intervened in the currency market on multiple occasions to manage the yen's value, particularly during periods of rapid appreciation or depreciation.
The Bank of Japan was established to centralize currency issuance and manage the nation's monetary policy.
Answer: True
Explanation: The Bank of Japan was established in 1882 with the primary purpose of centralizing the issuance of banknotes and managing the nation's monetary policy, rather than overseeing regional currencies.
The Smithsonian Agreement attempted to establish a fixed exchange rate of ¥308 per US dollar for the yen after the Nixon Shock, but this proved unsustainable.
Answer: True
Explanation: The Smithsonian Agreement, reached in December 1971, aimed to re-establish fixed exchange rates, including a rate of ¥308 per US dollar for the yen. However, market pressures led to its eventual failure and the move to floating rates.
The 'currency confirmation' measure in Okinawa in 1971 allowed residents to convert their US dollar holdings to yen at a preferential rate prior to Okinawa's reversion to Japanese administration.
Answer: True
Explanation: The 'currency confirmation' in Okinawa on October 9, 1971, was a measure allowing residents to declare their dollar holdings, entitling them to convert these dollars to yen at a preferential rate of ¥360 per US dollar when the yen officially replaced the dollar in 1972.
The yen's value in foreign exchange markets is determined by a combination of market forces (supply and demand) and, at times, government policy and intervention.
Answer: True
Explanation: While government policy and intervention can influence the yen's value, its primary determination in foreign exchange markets stems from the interplay of supply and demand, driven by trade, investment, and speculative activities.
A fixed exchange rate of 360 yen per US dollar was established in 1949 and maintained until 1971.
Answer: True
Explanation: Following World War II, the US occupation government established a fixed exchange rate of 360 yen per US dollar on April 25, 1949. This rate was maintained as part of the Bretton Woods system until 1971.
The real effective exchange rate measures a currency's value relative to a basket of other currencies, adjusted for inflation differentials.
Answer: True
Explanation: The real effective exchange rate provides a more accurate measure of a currency's international purchasing power by accounting for both nominal exchange rates and inflation rates relative to a basket of trading partners' currencies.
The yen's significant depreciation starting in 2022 is primarily attributed to Japan's prolonged low-interest-rate policy contrasting with rising interest rates globally.
Answer: True
Explanation: The yen's depreciation from 2022 onwards is largely due to the Bank of Japan maintaining ultra-low interest rates while other central banks raised rates to combat inflation. This widening interest rate differential makes yen-denominated assets less attractive, leading to depreciation.
The yen's value against the US dollar has experienced significant fluctuations since its introduction.
Answer: True
Explanation: The yen's value against the US dollar has undergone substantial changes throughout history, influenced by economic policies, global events, and shifts in exchange rate regimes, rather than remaining stable.
Yellow highlighting in the historical exchange rate table indicates periods of significant exchange rate movements or notable peaks/troughs.
Answer: True
Explanation: The yellow highlighting in the historical exchange rate table serves to draw attention to specific periods of significant change, such as the yen's peak strength against the US dollar in March 1995.
What significant role was granted to the Bank of Japan upon its founding in 1882?
Answer: A monopoly over the control of the money supply.
Explanation: The Bank of Japan, established in 1882, was granted a monopoly over the control of the money supply, centralizing monetary policy and establishing its role as the nation's central bank.
Which system pegged the Japanese yen to the US dollar following World War II until 1971?
Answer: The Bretton Woods system
Explanation: Following World War II, the Japanese yen was pegged to the US dollar under the Bretton Woods system, a regime that lasted until 1971.
What major event in 1971 significantly impacted the yen's exchange rate regime by leading to the abandonment of fixed rates?
Answer: The Nixon Shock
Explanation: The Nixon Shock in 1971 marked the end of the Bretton Woods system's fixed exchange rates, leading to the eventual transition to floating rates for the yen and other major currencies.
What was the purpose of the 'currency confirmation' in Okinawa in 1971?
Answer: To allow residents to exchange dollars for yen at a fixed rate before reversion.
Explanation: The 'currency confirmation' in Okinawa on October 9, 1971, was a measure allowing residents to declare their dollar holdings, entitling them to convert these dollars to yen at a preferential rate of ¥360 per US dollar when the yen officially replaced the dollar in 1972.
What is a primary factor influencing the yen's value in foreign exchange markets, according to the source?
Answer: The desire of yen holders to exchange it for other currencies.
Explanation: The yen's value in foreign exchange markets is significantly influenced by the demand from holders wishing to exchange it for other currencies to purchase goods, services, or assets globally.
What was the fixed exchange rate established for the yen against the US dollar in April 1949?
Answer: ¥360 per US dollar
Explanation: In April 1949, a fixed exchange rate of 360 yen per US dollar was established, which remained in effect until 1971.
What does the 'real effective exchange rate' take into account when measuring a currency's value?
Answer: Inflation rates and a basket of other currencies.
Explanation: The real effective exchange rate measures a currency's value relative to a basket of other currencies, adjusted for inflation differentials, providing a more comprehensive view of its purchasing power.
Which factor is cited as a primary reason for the yen's significant depreciation starting in 2022?
Answer: Japan's prolonged low-interest-rate policy contrasting with global rate hikes.
Explanation: The yen's depreciation from 2022 onwards is largely attributed to the Bank of Japan maintaining ultra-low interest rates while other central banks raised rates to combat inflation, creating a widening interest rate differential.
Currently circulating Japanese coins include denominations of ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500.
Answer: True
Explanation: The standard denominations for currently circulating Japanese coins are ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500.
The 1 yen coin is made of aluminum, while the 50 yen and 100 yen coins are composed of cupronickel.
Answer: True
Explanation: The 1 yen coin is made of 100% aluminum. The 50 yen and 100 yen coins are composed of cupronickel, an alloy of copper and nickel.
Imperial portraits are not typically displayed on Japanese coins due to their sacred nature.
Answer: True
Explanation: Imperial portraits are not depicted on Japanese coins because the Emperor's image is considered sacred and is treated with reverence, remaining separate from everyday currency.
Currently issued Japanese banknotes include denominations of ¥1,000, ¥2,000, ¥5,000, and ¥10,000.
Answer: True
Explanation: Japan currently issues banknotes in denominations of ¥1,000, ¥2,000, ¥5,000, and ¥10,000. While the ¥2,000 note has lower circulation, it is still an officially issued denomination.
The latest Series F banknotes feature historical figures like Kitasato Shibasaburō and Umeko Tsuda.
Answer: True
Explanation: The Series F banknotes, introduced in July 2024, feature prominent historical figures such as Kitasato Shibasaburō (¥1000), Umeko Tsuda (¥5000), and Shibusawa Eiichi (¥10000).
Which of the following is NOT a currently circulating denomination of Japanese coins?
Answer: ¥1000
Explanation: Currently circulating Japanese coins include denominations of ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500. The ¥1000 denomination exists as a banknote, not a coin.
What material is the 1 yen coin primarily made of?
Answer: Aluminum
Explanation: The 1 yen coin is made of 100% aluminum.
Why are imperial portraits absent from Japanese coins?
Answer: The Emperor's image is considered sacred and revered.
Explanation: Imperial portraits are not depicted on Japanese coins because the Emperor's image is considered sacred and is treated with reverence, remaining separate from everyday currency.
Which denomination is mentioned as having low circulation among the currently issued Japanese banknotes?
Answer: ¥2,000
Explanation: The ¥2,000 banknote is noted for its low circulation compared to other denominations, although it remains an officially issued currency.
Which historical figure is featured on the ¥10,000 Series F banknote introduced in July 2024?
Answer: Shibusawa Eiichi
Explanation: The ¥10,000 Series F banknote, introduced in July 2024, features Shibusawa Eiichi, a prominent figure in Japan's modernization.
The word 'yen' originates from the Japanese word 'en', meaning 'circle', influenced by the Chinese term 'yuan'.
Answer: True
Explanation: The name 'yen' is derived from the Japanese word 'en' (円), meaning 'round', which itself was influenced by the Chinese term 'yuan', reflecting the circular shape of early silver coins.
The English spelling 'yen' dates back to the 16th century when Europeans pronounced Japanese sounds similar to 'e' and 'we' as 'ye'.
Answer: True
Explanation: The English spelling 'yen' originated in the 16th century due to European phonetic interpretations of Japanese sounds, where 'e' and 'we' were often rendered as 'ye'.
From which Japanese word, meaning 'round', does the name 'yen' originate?
Answer: En
Explanation: The name 'yen' is derived from the Japanese word 'en' (円), which means 'round'.
Why did Europeans begin spelling the currency 'yen' instead of 'en' historically?
Answer: It reflected a phonetic pronunciation of Japanese sounds by Europeans in the 16th century.
Explanation: The spelling 'yen' in English dates back to the 16th century when Europeans encountered Japanese sounds similar to 'e' and 'we', which they pronounced as 'ye', leading to the adoption of this spelling.