What is Japanese Yen in Forex Trading?

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The Yen is an official currency of Japan with code JPY and symbol ¥. After United State dollar and euro, yen is 3rd most traded currency in foreign exchange market. It also broadly used as reserve currency in the world after euro, US dollar and pound sterling. During the 2nd World War, yen lost much of its value. To alleviate the Japanese economy, yen exchange rate was fixed at ¥360 per US$1 as part of Bretton Woods System. The yen became undervalue when system was abandoned in 1971. The Japanese people and government was very concerned due to depreciation of yen, it will hurt exports growth and damage the industrial products. In order to stabilize the value of yen, Japanese government continue to mediate in foreign exchange market by selling and buying dollar.

Despite the intervention of government in foreign exchange market, the yen continue to rise in value. From 1974 to 1976 the increased cost of imported oil raise the value to yen from ¥290 to ¥300. In 1978 Japanese trade surplus drove the value of yen back to ¥211.

Yen was introduced as an official currency of Japan in 1870, but the issuance of banknotes began in 1872. During and after the 2nd World War, various bodies issued banknotes of yen including Imperial Japanese National Bank, Ministry of Finance and Allied forces. Shortly after the war, the Bank of Japan is the only responsible authority for issuing banknotes. The current series that is generally in circulation in Japanese economy was introduced in 2004.

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