The yen is named for round coins, and spelled with a lost Y
Yen means round, a name that traces back to Spanish and Mexican silver coins the Chinese called silver rounds. Japanese people actually say en. The English spelling comes from a pronunciation that faded centuries ago, preserved by an American doctor's dictionary that kept yen even after correcting everything else.
Silver once traded in China as heavy ingots, so when circular Spanish and Mexican coins arrived via the Philippines they earned a name meaning silver rounds. The word travelled to Japan along with the coins. China later switched to a different character, while Japan kept the old one, simplified after the Second World War. When Portuguese missionaries reached Japan in the 16th century, some Japanese vowels were pronounced with a y sound, and they wrote them that way. By the mid-18th century the sound had shifted to a plain e. Walter Medhurst, who never visited Japan, still used ye in an 1830 word list, and James Curtis Hepburn followed him in his 1867 dictionary, the first full-scale Japanese-English one. Hepburn later dropped most of those spellings, but not yen.
The currency itself grew out of chaos. After the shogunate fell, eastern Japan still counted gold coins while the west weighed silver, and mismatched exchange ratios drained gold abroad. Emperor Meiji put Ōkuma Shigenobu in charge of reform, working with figures including Itō Hirobumi and Shibusawa Eiichi. Ōkuma proposed making coins round rather than square and folding the old units, ryō, bu and shu, into one yen.
The New Currency Act of 1871 set the yen at 1.5 grams of gold or 24.26 grams of silver, split into 100 sen or 1,000 rin, replacing Tokugawa coins and the paper notes of feudal domains. The Bank of Japan followed in 1882 with sole control of the money supply. After the Second World War, debt and hyperinflation wiped out much of its value, and it was pegged to the dollar under Bretton Woods.
That system collapsed in 1971; after a brief fixed-rate interlude under the Smithsonian Agreement, the yen has floated since February 1973. Japanese authorities have stepped in at times, cooling a speculative surge in the yen from 1998 to 2003 and in 2010 and 2011, then slowing speculative selling in 2022 and 2024. It now ranks third among traded and reserve currencies, behind the dollar and the euro.
Source: Japanese yen
