Currency

A Kan'ei tsûhô coin from the Edo period (date unknown, left), a replica Keichô koban (center), and a Meiji 14 (1881) one sen coin (right)

A number of different modes of currency were used throughout Japanese history, including, in the pre-modern period, the heavy use of Chinese coins. By the Edo period, a relatively standardized system of gold and silver coinage was in place, though it experienced dramatic inflation and devaluation, among other financial crises, at times. Systems which served as precursors for a "modern" system of banks and paper currency, along with futures markets and other such economic/financial developments, emerged in the 18th-19th centuries, and beginning in the Meiji period, "modern" systems based on the Western model were established.

Early Coinage

An example of a wadô kaichin coin, on display at the British Museum

It was long believed that the first currency to be produced in Japan was minted in the Wadô era (708-715), an era named after the discovery of copper in Musashi province (Wadô 和銅 literally means "Japanese copper"). These coins, with a face value of one mon, were based on the kai yuan tong bao (開元通宝) coinage then circulating in Tang Dynasty China, and were minted in order to pay laborers for their work in building the new capital of Heijô-kyô. These small round coins with square holes in the middle would serve as the standard model for the shape or form of coins in both China and Japan for many centuries. Recent discoveries since the 1990s, however, have unearthed earlier, unlabeled (mumon 無文) silver coins, as well as coins known as fuhonsen 富本銭. The latter seem to have emerged in the 680s, during the period of Fujiwara-kyô; in contrast to the mumon ginsen which were valued by their actual weight in silver, and which Emperor Temmu outlawed in 683, the fuhonsen were fiat money (face value).

After the so-called Wadô kaihô ("Wadô coins"), other currencies continued to be produced until 958. Known as the "Twelve Imperial Coinages" (皇朝十二銭, kôchô jûnisen), each was named after the Imperial reign era in which they were produced. These included the Mannen tsûhô, Jinkô kaihô, Ryûhei eihô, Fûju shinpô, Shôwa shôhô, Chônen taihô, Jôeki shinpô, Jôgan eihô, Kanpyô taihô, and Engi tsûhô.

Coinage at this time was used only by the aristocracy or religious elites, and chiefly only for official court expenditures, while the rest of the population functioned on a barter system in which value or buying power tended to be expressed in terms of silk, cloth, or rice. One hiki 疋 of silk was generally valued as equal to one koku of rice (1 koku = 10 to 斗 = 100 shô 升), though this varied. Still, on average, from the Heian period through the Sengoku period, one koku of rice was considered equivalent to one kanmon, or 1000 mon in coins; one hiki remained steadily equivalent to ten mon of coins through the Edo period. The direct association of goods, especially rice, with value, would continue through the mid-19th century; in the Edo period (1600-1868), lands would be valued in terms of their agricultural production, taxes would be paid in rice (or equivalents), and samurai would be paid their stipends in rice.

The court stopped producing new coin in 958. By the time of the issuing of the Engi taihô ("Great Laws of Engi," c. 901-923), the currency had become debased, meaning that a given coin, despite officially having a certain denomination, actually contained less precious metal than its nominal value. In other words, there was severe inflation, as a given amount of currency no longer had the value (or buying power) it once did. And so, people lost confidence in the currency, and the government stopped minting coins for a time. With silk, rice, and other commodities as far more widely standard, widely used, modes of exchange or measures of value, the court realized there simply was not a need - or an advantage - in making the effort and expenditures to produce hard currency. Around 1068-1074, the court then instituted official exchange values (kokahô, 沽価法) for silk, gold, rice, and certain other commodities, in order to standardize the amounts paid to the court in tribute by court nobles and others.

Several centuries later, beginning in the 12th century, Song dynasty Chinese coins began to be imported in considerable volumes, as a natural result of increased trade with China, and increased market desire for a convenient currency. The Northern Song, in fact, minted more copper coins than any other Chinese dynasty, and though the export of coinage from China was banned, Chinese coins nevertheless flowed throughout the East Asia region. The court noble Saionji Kintsune alone is known to have imported as much as 100,000 kan of Song coins, enough to fund the construction of a dozen or more buildings. However, this great influx of Chinese coins caused the prices (or values) of rice, silk, and certain other commodities to drop, disrupting the kokahô system and having a significant and negative impact on court revenues and landholding aristocrats' wealth. The court banned the use of coin in 1193, but once the end of the Genpei War brought peace and greater inter-regional economic integration (thus diminishing troublesome regional disparities in exchange values), the Kamakura shogunate reversed these bans in 1226.

Muromachi Period and Ming Trade

Chinese coins continued to be a major presence in Japanese markets - at least among the elites - into the Muromachi period (1333-1573). The Ashikaga shogunate entered into formal trade relations with Ming Dynasty China in the late 14th century, and maintained relations until the mid-16th. Coins associated with the reign of the Yongle Emperor (1403-1425) were particularly numerous in Japan due to the close Sino-Japanese relations during that period, under Shogun Ashikaga Yoshimitsu, but coins issued in the Hongwu (1368-98) and Xuande (1425-35) reigns in particular have also been found in considerable numbers. The export of gold, silver, and copper from China remained forbidden in this period, but copper coins ended up being taken back to Japan by the tribute envoys anyway, after selling their cargoes in China.

The use of currency expanded considerably in Japan in the Kamakura (1185-1333) and Muromachi periods. Taxes previously paid in rice or other crops were now increasingly paid in Chinese coinage (though payment in crops was still very common), and coins circulated more widely. Systems of moneylenders called kariage or dosô emerged. But the currency being used was almost exclusively Chinese coins.

Japanese coins first began to re-appear, and the volume of Chinese coins in circulation in Japan to drop, in the mid-15th century. Due to price fluctuations, Japanese merchants / tribute envoys in China found it more profitable to purchase goods - such as silk - in China to resell in Japan, rather than bringing Chinese coin back. Some areas in western Japan even began minting their own coins in imitation of the Chinese ones, and sending traders with Japanese coins to China to buy Chinese goods. Chinese coins from the late 15th century, e.g. those minted in the Hongzhi (1488-1505) reign, are quite rare finds for archaeologists in Japan today, and those from later reigns are almost entirely absent.

In the Sengoku period (1467-1600), and especially as Japan began to become more integrated in the mid-to-late 16th century, regional daimyô began to expand their mining efforts, and gold and silver came to be more widely circulated, and exported. Gold dust had long been a common element in gifts (tribute) paid by samurai lords and shogunates to the Imperial Court; bags of gold dust of a designated size, called nô (納), were valued at 20 ryô. In the central regions of the country, where mining was most prevalent, taxes came to increasingly be paid in gold and silver; this was then exchanged for coins or rice. Kin'ya and gin'ya (gold and silver dealers) emerged and enabled these conversion (exchange) transactions. These dealers, along with firms officially licensed by the local lord, called ginza or tenbinza, also dealt in producing, and certifying, pieces of gold and silver with a designated level of refinement or quality. Certified pieces, called hankin or gokuin-gin would be marked with numbers, kanji, kaô (monograms), or crests, indicating the firm's certification. The term hankin would later be used in the Edo period to refer chiefly to ôban coins, but in fact the term could be applied to all certified & marked pieces of gold.

In the Edo period, the ryô would become one of the more common monetary denominations, and would become intricately tied into the koku, a measure of rice. However, prior to that time, the ryô was more closely related to a Japanese adaptation of the Tang system of measuring precious metals. In Tang China, precious metals were measured in "big" chin (J: kin, 斤) and "small" chin, and in "big" liang (J: ryô) and "small" liang, with the smaller denomination being one-third that of the "large" denomination. In the Nara and Heian periods, Japan simply made use of the "small" Chinese denominations as a standard denomination, omitting the "small" designation. But by the end of the 13th century, the Japanese implemented their own system of denominations, equating one ryô of gold to four monme and five bu.

For the sake of convenience, the ryô was, for a time in the late 16th century, devalued to four monme four bu. Around the same time, the denomination mai, equal to ten ryô, was briefly used.

Coins were minted from time to time in the Sengoku period by various local/regional power-holders, including lesser daimyô, as well as the likes of Oda Nobunaga. Toyotomi Hideyoshi, after securing control over most of the archipelago, minted coins as well. The so-called Tenshô-hishi-ôban, an ôban coin shaped like a chestnut (hishi), was first minted in 1588, the sixteenth year of the Tenshô era; similar coins continued to be made for several years afterwards. However, the vast majority of such coins produced in the 16th century were ten ryô coins, produced to be given as gifts to loyal commanders, or for other similar purposes, and not for general circulation.

Edo Period

Two ten ryô ôban, one five ryô ôban, and a one ryô koban coin, on display at the British Museum

Samurai stipends in the Edo period were paid out in koku, i.e. in rice. However, gold and silver coinage was used in everyday exchanges (especially among chônin/commoners - peasants, merchants, artisans, etc.). In Edo, gold was more widely circulated, while in Kamigata (the Kyoto-Osaka area), silver was more commonly the mode of exchange. Gold was exchanged in relatively standardized coins issued by the shogunate, known as koban, and worth one ryô apiece.

A ryô was considered to be roughly equal to one koku, which in turn is said to have been roughly the amount of rice needed to feed a man for a year. However, rice and gold prices fluctuated dramatically over the course of the period, with 19 separate incidents of currency devaluation between 1819 and 1837 alone, and the exact amount of rice that comprised a koku is, in any case, a subject of debate. Over the course of the Edo period, the cost of rice dropped dramatically relative to the value of gold, making samurai (who relied on stipends paid in koku) less and less wealthy than members of the merchant class who earned their incomes in gold and silver.

The use of the gold koban, however, was most common in and around Edo, and the farther one traveled from Edo, the less standard it became. At the beginning of the Edo period, there were over one hundred types of gold coins in circulation, and so in many parts of the country, particularly the active commercial centers of Kyoto and Osaka, and other areas at a considerable distance from Edo, currency continued to be valued by weight, and not by face value. While gold coins were particularly standard in Edo, in the rest of the country, silver and copper coins remained quite common, and were valued by their weight, in momme. One momme of silver was a little less than 4 grams. The most common denomination of silver was a 43 momme nugget called a chôgin. One hundred momme of copper coins were worth roughly one momme of silver, and one thousand momme was called one kanme. Weights, previously not fully standardized, were in the Edo period restricted to those produced by the Gotô school, whose weights were to be used in all transactions for weighing out, for example, gold or silver. (Rice was measured by volume, not by weight.) Gotô Tokujô, who produced weights and coins for Oda Nobunaga, and gold engraver Gotô Yûjô (1440-1512) were members/ancestors of this family.

The Edo period monetary system, or at least its foundations, was established quite early in the period. In 1601 (Keichô 6), the Tokugawa oversaw the minting of a series of coins, in fairly large quantities, explicitly for circulation. The largest was the Keichô ôban, worth 10 ryô; the Keichô koban and ichibuban, gold coins worth 1 ryô and 1 bu respectively, were "face value" coins, with the value of one bu dependent not directly on the weight of the gold coin, but rather tied to the rising or falling value of the koban. Silver chôgin and mameita-gin coins continued to be valued by weight, and circulated in paper wrappings.

Regional currencies continued to be used for a time, along with hankin and gokuin-gin certified bullion. Merchants in the Ise-Yamada area began producing paper money as early as 1600. Many domains produced their own paper notes; the oldest known today in its original form was a variety produced in Fukui han in 1661. Kaga han (Ishikawa prefecture), which is still known today for its precious metals, was one of a number of places which had its own systems of certified bullion (mainly in silver), including what was called shuhô-gin - certified silver in a vermillion wrapper. Bullion sent to Edo or other parts of the country from these mining areas was often stamped or otherwise designated by marking for that region. To take just one example, bars from Niigata were stamped with the character ei/sakae (栄, prosperity). Akita han was also a major mining and minting area, producing gold and silver sen (coins in the same form as copper coins traditionally), along with koban, crude silver ore (jô-gin), and certified silver (gokuin-gin). Akita employed its own producers of weights and scales.

By the end of the 17th century, the shogunate took control of the silver mines and the minting of currency, and established shogunate-controlled ginza, kinza, and copper mints in Osaka and Edo. The Kan'ei tsûhô was first minted in 1670, and the system was standardized, eliminating regional variant currencies, at least in theory. Though this might seem on the surface like it might stifle economic development, in fact, the opposite occurred, as regional differences in currency systems, and protective policies put in place by the various domains, were eliminated, allowing freer circulation of money and goods throughout the country, especially in and out of the major economic centers of Edo and Osaka. Despite the shogunal ban, many domains continued to produce their own fiat money, at least at times. Akita han issued its own fiat money in 1755, in an effort to monopsonize rice; the project was short-lived, however, being shut down a mere two years later after tea merchants from Mino province complained to the shogunate about the non-convertible currency. In another example, Tokushima han issued paper money beginning in the 1680s in an effort to make up for an insufficient supply of silver. Most domainal efforts to print their own money resulted in unintended inflation.

Meanwhile, precious metals, especially silver, flowed out of the country in great volume, especially through Nagasaki. In the 16th century Japanese silver mines had become much more productive just as Chinese ones began to wane, spurring this considerable outflow. Copper mines similarly saw a considerable increase in their output in the 17th century, but by the end of that century, Japan's silver mines were already beginning to run dry. This led to dramatic devaluations in the coinage, and rampant inflation, at various times over the course of the Edo period, as the shogunate attempted to implement financial/monetary policies to address the declining supply of precious metal. The Keichô koban weighed four momme, eight fun, and was 862 parts gold to 132 parts silver. After 1695, it was debased to 564 parts gold to 432 parts silver, with the total weight of the coin remaining the same. One of the most significant instances of this came in 1718, when the value of the gold ryô dropped by about 20 percent. One gold ryô had been equal to roughly 60 momme of silver, and was now worth roughly 50 momme; one chôgin (43 momme), therefore, had been equivalent to roughly 71% of a gold ryô, but was now worth closer to 83% of a ryô. Meanwhile, the Genroku-gin pieces of silver (issued 1695-1706), made of 646 parts silver to 352.6 parts copper and 1.4 parts gold, were replaced by the Hôeigin in 1706-1710, made up of 507 parts silver 490.6 parts copper and 1.2 parts gold.

The debasement of coinage in the Genroku period was the first major debasement in the period; the change to minting coins of only 57% gold and ingots of only 64% silver may have created as much as five million ryô in savings (or profits) for the shogunate, providing a much-needed boost to the shogunate's finances.

Prices

Though prices varied widely, of course, over time, from place to place, and depending on the quality of the goods or other factors, the following figures might provide a rough idea of prices (i.e. the value of the ryô) in the "high" Edo period (18th to early 19th centuries).

• 8 mon - a single piece of relatively low-quality sushi.
• 16 mon - a bowl of soba.
• 2 or 3 momme - a cheap ukiyo-e print
• 300-500 mon - one night with a prostitute at a post-station or port town in the Kansai or Inland Sea regions.
• 20 momme - an ukiyo-e print of good quality.
• 32 momme - the cost of seeing a play at Ryôgoku in 1820.
• 75 momme - the cost of the journey from Osaka to Nagasaki by boat (roughly 14-20 days).
• 90 momme - the cost of a multi-volume illustrated book, such as Soga Monogatari.
• 1 bu or 1/4 ryô - a night with a particularly expensive prostitute at a post-station near Edo.
• 1000 momme or 1/4 ryô - the cost of sending a child to terakoya (temple school) for a year
• 1 ryô - the cost for a man's formal kamishimo outfit, including hakama, haori, and kosode.
• 1 ryô - the cost of commissioning a scroll painting by a well-known painter; a screen painting by the same painter might cost roughly 6-10 ryô.
• 2-3 ryô - the cost of hiring a maid for a year (i.e. the income made by a maid in a year)
• 4 ryô - the cost of a print imported from Europe
• 6 ryô - a typical annual wage for a laborer. There does not seem to have been a large disparity in wages between male and female workers.
• 6 to 10 ryô - the fee to commission a major artist for a single set of lavish byôbu (folding screen) paintings; could be as much as even 40 ryô depending.
• 10 ryô - the cost of a first visit to a Yoshiwara establishment, including tips for the nakai and taikomochi.
• 200 ryô - A month in the Yoshiwara could cost as much as this.
• 360 ryô - the cost of buying a small room (80 sq yards) in Edo.
• 483 ryô - The annual salary of a typical hatamoto in 1711.
• 500 ryô - The cap on kabuki actors' salaries, imposed by the Kansei Reforms in 1794.
• 800 ryô The salary of kabuki actor Ichikawa Danjūrō I (1660-1704) peaked at this amount.
• 1000 ryô - Yoshizawa Ayame I (1663-1729) was the first kabuki actor to attain an annual salary of this amount.

Denominations Chart

Gold
1 ryô 両	4 bu 分	16 shu 朱	1 koku of rice
1 bu	1/10 monme　匁	.375 grams
1 monme	10 bu	3.75 grams
Silver
1 kan 貫	100 ryô	1000 monme
Copper
1 kanmon 貫文	1000 mon 文
Rice
1 koku 石	10 to 斗	100 shô 升	1 ryô of gold	1 hiki of silk 疋
Silk
1 hiki	1 koku of rice

Meiji Period

The Meiji government began printing its own money almost immediately, in 1868. These first notes were called Dajôkansatsu, after the Dajôkan (Imperial Council of State). A new Currency Act was passed in 1871, establishing the yen as the core denomination of currency. The first national bank notes to feature a person's portrait depicted Empress Jingû, and came out in 1881. The first one-yen coin was quite large by today's standards, possibly in emulation of the standard size of the internationally standard trade dollar. The one-yen coin used today is dramatically smaller in size, and dramatically smaller in value (in terms of real purchasing power), due to inflation and other economic shifts over the years. Made of aluminum, it is made to be precisely two centimeters in diameter and one gram in weight.

The Bank of Japan was established in 1882, and issued its first notes in 1885; these notes, known as Daikoku satsu, featured images of Daikoku, one of the Seven Lucky Gods. A Coinage Law passed in 1897 set the economy onto the gold standard.

The five-yen coin bears designs of sheaves of wheat, waves of water, and gear spokes, representing the agricultural, maritime, and industrial strengths of Japan.

References

• Crawcour, E.S. and Kozo Yamamura. "The Tokugawa Monetary System, 1787-1868." Economic Development and Cultural Change 18:4, part 1 (1970). pp489-518.
• Kobata Atsushi. "Coinage from the Kamakura Period through the Edo Period." Acta Asiatica 21 (1971). pp98-108.

See Also

• Chinese currency
• Korean currency
• Ryukyuan currency
• Spanish dollar

External Links

• 一文と一両の価値 (The Value of a Mon and a Ryô). Lists and charts of incomes and typical costs for goods and services in the Edo period. (In Japanese)
• 装備品 (Equipment). Costs for typical goods in the Edo period. (In Japanese)