Japan’s modern currency, the Yen, only came into use during the Meiji period. The Meiji Government passed the New Currency Act in 1871. This both established the Yen as Japan’s currency and pegged its value to gold. Japanese currency before the 1870s was rather complicated. During the Tokugawa period (1603–1868), regional domains has different currencies. Commodities were commonly used as currency for much of Japanese history with rice being one of the most important. For example, the Tokugawa Shogunate collected taxes in the form of rice (koku). This article will explore early Japanese currency during the period in which the nascent Yamato State began to consolidate its power during the seventh and eighth centuries.
Photo: By PHGCOM — Own work, photographed at Japan Currency Museum, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=9579952
Before the 600s, commodity money (rice, gold powder, and arrowheads) was by far the most common medium of exchange. This replaced earlier barter systems. Rice, in particular, was instrumental in the development of taxation. When farmers planted rice, it would take time for them to get the return on their labor. Regional clans, growing in power, were increasingly able to tax people. As minted Japanese currency declined after the early-Heian period, taxes were increasingly paid in rice (a system common up until the Meiji period).
Japan’s first minted currency came about during a period of intense selective borrowing from China. Japanese chieftains had been sending embassies and tribute to China for centuries before this time and Chinese ambassadors had visited Japan as well (see the Wei Zhi). Early records show that a Japanese currency existed since at least the 600s. There is an excerpt from the Nihon Shoki, dated 15 April 683, in which the Emperor Tenmu recommends the use of copper coins instead of silver. Emperor Tenmu ranks as one of the few powerful Japanese monarchs (as most were figureheads). He presided over an expanding Japanese polity. This was a time in which imperial chronicles (what would eventually become the Kojiki and Nihongi) were being compiled so as to bolster claims of Yamato legitimacy over central Honshu.
The oldest official Japanese coinage in Japan is the Wadōkaichin (708). Empress Genmei ordered the minting of the coin, which entered circulation on 29 August 708. The coins themselves were silver and based on a Tang Chinese coin called Kai Yuan Tong Bao. Both were of similar size and design (with a hole in the middle). Earlier, in 707, deposits of copper were found in Musashi Province. This, coupled with the establishment of a mine in the area early in 708, probably served as the impetus for a copper currency. The Wadōkaichin remained in circulation until the tenth century. Debasement and imitation coins were serious problems. The government addressed these problems with currency reform in 760. New copper and silver coins were introduced.
Coin minting in Japan declined in the tenth century. As the central government weakened during the later-Heian period, rice began a primary medium of exchange once again. A strong centralized government in Japan was less necessary as the regional power (China) was in the midst of civil war (the Tang Dynasty having collapsed in 907). The imperial Court became increasingly detached from the realities in the countryside. From the tenth century to the late-sixteenth, rice and imported Chinese coins were used. Japanese coins were minted once again in the 1580s as Japan was unified under the power of Toyotomi Hideyoshi.