The 1-yen coin (一円硬貨, Ichi-en kōka) is the smallest denomination of the Japanese yen currency. The first Japanese one-yen coins were made of both silver and gold in the early 1870s. Issues facing the Japanese government at the time included wanting to adopt the gold standard, and competing against the Mexican dollar for use in foreign trade. The decision was made to use silver one yen coins exclusively outside of Japan for trade, while gold coins were minted and used in mainland Japan. Gold and silver coins were eventually allowed to co-circulate in mainland Japan from 1878 to 1897 when they were demonetized. Millions of former one yen silver coins were countermarked by the Japanese government for use outside of the mainland. Silver one yen coins continued to be minted until 1914 for backing up currency.
One yen coins were not made again until after World War II in the late 1940s. These were made up of a brass alloy and were only minted for three years. The current one yen coin dates to 1955, is made up of pure aluminium, and has a young tree design which has been used since. In the early 2010s increasing usage of electronic money led to a lack of demand, and production of the coin was confined to mint sets until 2014. Regular production only lasted until 2016, when new one yen coins were again confined only to mint sets. Like with the U.S. penny, the Japan Mint has minted one-yen coins at a loss due to the rising cost of the base metal used in the coins.
Early yen (1870–1914)
The first Japanese one-yen coins were minted between 1871 and 1872 using both silver and gold alloys. This came at a time when a new decimal system was put into place, and a modern mint was established at Osaka. The yen was officially adopted by the Meiji government in an act signed on June 27, 1871. While silver one yen coins are dated 1870, mint records show they were minted between 1871 and 1872 at the San Francisco Mint. Meanwhile, the first gold one yen coins dated 1871 were not minted until 1872 at the newly formed Osaka mint. No silver one yen coins were struck in 1873 as the year was devoted to turning out gold pieces domestically. The exclusive minting of gold coins during this time was reflective of the Japanese government's wish to switch to the gold standard in order to keep up with countries in North America and Europe. The Japanese government eventually came to the conclusion that issuing silver one yen coins alongside standard gold coins was in the best interest of foreign trade. Silver one yen coinage was resumed in 1874 for use outside of Japan to compete with the silver Mexican dollar.
Japan ultimately went with a bimetallic standard in 1878, which gave the one yen silver coin legal tender status throughout the country. Silver one yen coins continued to be minted every year afterwards until 1897. Large amounts of coins were struck between 1878 and 1897 as the value of silver declined, which increased their demand. The fluctuations over the price of silver eventually made trade with Europe and the United States unreliable. Japan officially switched to the gold standard on October 1, 1897 and all of the silver one yen coins were demonetized. Leeway time was granted until July 31, 1898 for those wanting to trade the coins for gold. Many former one yen silver coins were then melted down to provide bullion for subsidiary coins. Others were countermarked "Gin" for use in Japanese-occupied Taiwan, Korea, and Lüshunkou. Silver one yen coins were not stuck again until 1901 when they served as a reserve fund for "Bank of Formosa" notes. This practice ended in 1904 due to the fluctuations in price between silver and gold. The production of silver one yen coins eventually ended in 1914 during the 3rd year of Emperor Taishō's reign.
Modern yen (1948–)
Japanese coinage was reformed in 1948 with the issue of a brass one-yen coin. 451,170,000 coins were minted until production stopped in 1950. The obverse of these brass coins features a numeral "1" with "State of Japan" above, and the date below, while the reverse reads "One Yen" with a floral pattern below it.[13] The current aluminium coin was first introduced in 1955 with a floral design. The obverse has a young tree, intended to symbolize the healthy growth of Japan. The reverse side of the coin has a figure "1" in a circle that represents one yen; below the digit is the year of issue which is written in kanji.[14] The one yen coin remains the oldest modern denomination coin with an unchanged design; throughout its minting history the coin was fully halted only once in 1968 due to excessive production.In 1989 a national consumption tax (set at 3%) was put into place resulting in many prices that were not multiples of 5 or 10 yen, causing the Japan Mint to produce one yen coins in huge numbers.
This consumption tax rate was raised in 1997 to 5%, reducing demand for the coin. By the turn of the century other factors such as rising metal costs and increasing usage of electronic money began to come into play. It was reported in 2003 that it cost 13 yen for the mint to produce a rolled plate[b] for one yen coins. The rising price of aluminum had started to generate a commercial loss for the Japan Mint. In 2009, unsuccessful measures that included raising money from the private sector were tried in order to lower the cost. From 2011 to 2013 the Ministry of Finance stopped issuing new one yen coins for circulation. There was a small production run of 500,000 to 700,000 coins in mint sets for coin collectors. Production resumed in 2014 when the consumption tax was raised again to 8%, causing sums to be less rounded.
The cost of producing each one yen coin was reported to be 3 yen as early as 2015.[23] In the following year, more cashless transactions caused the ministry to stop issuing new one yen coins for circulation again. It was reported in October 2017 though, that one yen coins remained popular in places like Osaka, where the coins are traditionally used for merchant transactions.[24] Despite their localized popularity, no coins have been made since 2016 apart from those in collectable mint sets. The Japanese government has set a goal of increasing cashless transactions to 40% of all transactions by 2025.
According to correspondent Leo Lewis of the Financial Times, the overall use of cash will not be "broken easily" in Japan. Lewis says that elderly Japanese people have not been eager for innovation, and conditions such as "low street crime, low interest rates and a reduced threshold on inheritance tax" remain in place that increase the appeal of carrying cash. One-yen coins have also seen non monetary usage; since all 1-yen coins weigh just one gram, they are sometimes used as weights. If placed carefully on the surface of still water, 1-yen coins will not break surface tension and thus can also float.
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