The Japanese yen (sign: ¥) is the official currency of Japan.
It is the third most-traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling. As is common when counting in East Asia, large quantities of yen are often counted in multiples of 10,000 in the same way as values in Western countries are often quoted in thousands.
Yen is pronounced "en" in Japanese. The word literally means "round object" in Japanese, as yuán does in Chinese or won in Korean.
After World War II, the value of the yen was fixed at ¥360 per US$1 through a United States plan, which was part of the Bretton Woods System, to stabilize prices in the Japanese economy. That exchange rate was maintained until 1971, when the United States abandoned the gold standard, which had been a key element of the Bretton Woods System, and imposed a 10 percent surcharge on imports, setting in motion changes that eventually led to floating exchange rates in 1973.
Historically, the Bank of Japan, the country's central bank, has kept interest rates low in order to spur economic growth. Low interest rates since the mid 1990s combined with a ready liquidity for the Yen prompted investors to borrow money in Japan and invest it in other countries (a practice known as the carry trade). This has helped to keep the value of the Yen low compared to other currencies. The Bank of Japan maintains a policy of keeping the Yen weak against other currencies and is expected to intervene should it rise above ¥90 per dollar.
Always remember that trading foreign exchange on margin carries a HIGH LEVEL OF RISK
, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.