Japan's Monetary System

Hello everyone! I hope you all had a great week! Now I'm going to catch myself up to speed and talk about Japan's Monetary System. Most of this information is taken from Japan-zone.com which offers extensive information on Japan.

Japan's monetary system is based on the yen. The yen was introduced to Japan in 1871. The term "yen" means round in Japanese. This was because the Japanese coins were round. Yen have been issued as coins and bank notes. In 1885, bank notes were issued by the Bank of Japan.



There are different types of Japanese bank notes. There is the 1,000 sen-en bank note, which is worth approximately 11.25 U.S. Dollars. The pre-2004 1,000 yen note has featured the writer, Natsume Soseki, and the post-2004 1,000 yen note features the bacteriologist, Noguchi Hideyo. There is also a 5,000 yen note, which is worth approximately 56.26 U.S. Dollars. The pre-2004 5,000 yen note has featured the Meiji/Taisho Period educatior Nitobe Inazo. The post-2004 5,000 yen note features female novelist, Higuchi Hideyo. Finally, there is the 10,000 yen note that is worth approximately 112.52 U.S. Dollars. Both the pre-2004 and the post-2004 10,000 yen note features the Meiji Period educator Fukuzawa Yukichi. Besides these 3 different types of yen notes, the Japan government issued the 2,000 yen note to spark the economy in 2000. The 2,000 yen note is worth approximately 22.50 U.S. Dollars. However, it is rare to see these notes in action. This is similar to the U.S. $2 bill. It was issued, and you can spend it; however, no one really uses it.

The thing that is fascinating about the Japanese Yen notes, is that it is similar, but different to the United States dollar. What is similar about it is the 1000 bank note is similar to the U.S. $10 bill, the 5000 note is similar to the U.S. $50 bill, and the 10000 note is similar to the U.S. $100 bill, however these Japanese notes are worth more than those bills. Also, the Japanese notes do not have the presidents on them, like the United States. The Japanese have their educators and their scientists on their bank notes, which says something about the Japanese. We have our war heroes and our presidents on ours.



The Japanese has the same amount of coins as the United States does. The United States has the penny, nickel, dime, quarter, half-dollar, and dollar coins, whereas the Japanese have the 1, 5, 10, 50, 100, and 500 yen coins. The 1 yen coin is made of aluminum, and is pictured on the far right. The 1 yen coin is worth a little bit more than 1 American penny. The 5 yen coin is made of copper, and is the fifth coin pictured. The 5 yen coin is worth almost 6 American cents. The 10 yen coin is made of bronze (the fourth on the picture above), and is worth 11 American cents. The 50, 100, and 500 yen are all made of nickel, and they are also worth more than their American counterpart. The 50 yen is worth 56 American cents, the 100 yen is worth $1.12 in United States dollars and the 500 yen is worth $5.62 U.S. dollars. These values are very interesting, because when you start comparing the U.S. Dollar to the Japanese Yen, the Yen is actually worth more. Also the Yen starts at 1 where as the USD starts at .01. That also fools people in thinking that the U.S. Dollar is worth more than the Yen.

Well, thank you for reading my post. Stay tuned for next week!

Sources:

Japan-Zone (http://www.japan-zone.com/new/money.shtml
XE:The World's Favorite Currency Site (http://xe.com)

Toyota Recall: Part Two

Last week, I talked about the Toyota recall and how it has been affecting this economy. This week I've decided to talk more about that and the opinions of what should happen after this crisis.

The Japan Times reports that some economists think that this crisis with the Toyota recall was actually a good thing, because it may drive the economy away from manufacturing and more toward services. However, in my opinion, that would be a bad idea. The United States loves to get things that are manufactured in Japan, China, and Taiwan. It would change the nation. However, Japan Times reports that Toyota's amazing reputation for good vehicles is crushed. They think that since Toyota's reputation was destroyed with recalls, what will people think of the other manufacturers?

However, The Japan Times reports that it's "not the time to junk the factories". Meaning that Japan gets its money through exports and manufacturing. Like I said, the United States is a huge consumer in Japanese manufacturing. It is reported that since 1990, Japan manufacturing has decreased from 28 to 22 percent of the gross domestic product. But, in order to switch to services, Japan just can't do it. Japan "lacks the flexibility, imagination, and openness" to switch to services. Besides, Japan's population is regressing. Their population is aging with people that don't know what they want to do in the world. If they switched out of manufacturing, they wouldn't be a world power anymore.

My opinion is that they should just keep the manufacturing. After reading this, it looks as if manufacturing is what some of these Japanese do best. Japanese culture allow the people to practice precision and control. They want everything to be perfect. That's why this whole Toyota crisis is so blown out of proportion. Manufacturing creates jobs for people that don't necessarily have a skill. They just do whatever they have to do to watch the machines going and operating them. Manufacturing will keep the money flowing and keep people with jobs.

Source: Rafferty, K. (2010). Not the time to junk the factories. The Japan Times: Online. Accessed on February 20, 2010 from http://search.japantimes.co.jp/cgi-bin/eo20100221a1.html

Toyota Recall

Foreign cars have been popular in American culture. More and more people nowadays are buying manufactured cars such as Audi, Toyota, Kia, and so much more. Recently, in Japan, Toyota has faced a recall in their Corolla model. The problem is the unintended acceleration and the braking problem with the cars. Toyota is blamed for their slow response to this problem. So 8.5 million cars are being recalled.

Source:

(2010). Toyota announces hybrid recall. The Chosen Ilbo (English Edition). Retrieved on February 14, 2010 from http://english.chosun.com.

Economists report that Toyota's massive recall crisis could lead to an overhaul in the Japanese economy. In Japan, Toyota has been one of the companies leading the Japanese automobile economy. However, due to this whole recall business, their image is pretty much shattered. In the beginning, the recall only happened in the United States where one of their cars fitted with U.S. parts was recalled, so the Japanese blamed the U.S. However, since the Prius was also recalled, that just shows that the perfect craftmenship or called "monozukuri" has been shattered. Japan is also struggling with China and Korea with their cheaper labor costs with their automobiles. It has been said that Japan should just switch back to their IT technology and software. In my opinion, Japan should just stop trying because they seem to be hitting their limits. This recall has been shattering their image, and instead of wasting all that money to revive their good image, they should surrender to the competition and focus more on different products. The other option is that they could re-do their whole manufacturing process to put some new freshness out there. It seems as if in the past decade products from Japan and China have been recalled for either defects or some other problems. I think that they should pay more attention and put some more effort in what they are making. Maybe do some more simulations. That might revive their image and increase their profits.

There is one more point I want to make on this post. Image is very important in the economy. For example, most consumers would buy a well-named respectable product like a Sony product because of the name and reliability attached, than a generic product that they know nothing about or a company that is known for problems. Image means a lot to the economy. It also relates to one of the lectures in Macroeconomics a week or so ago about coffee. What would consumers buy? Starbucks coffee or McDonald's coffee? Since Starbucks has good reliable coffee that they have been producing for many years, it would be hard for consumers to shift away from one company to the other.

Japan's Agricultural Importance

Last week, I introduced Japan and included an introduction to their agriculture. This post, I've decided to go more in depth with Japan's agriculture. Japan has a history of agricultural boom, but since that time, agriculture has been declining drastically.

The history started in the late 19th century, when agriculture was an important part of Japan. This was because 80 percent of Japan's employment came from agriculture. However, from the late 19th century to post-World War II, Country Studies reports that 80 percent fell down to 50 percent. Now, the agricultural importance has fallen so low that farmers own most of their income from non-farming activities.

Source: R. Dolan & R. Worden (1994). Japan: A Country Study. Retrieved on February 7, 2010 from

Japan's Ministry of Agriculture, Forestry, and Fisheries plays an administrative role on the agriculture, forestry, and fishing industries. Their duties include: production, consumption, rural development, and promotion. The MAFF is worried about the future of agriculture. This is because the population is no longer engaged in agriculture, because obviously it doesn't pay as well as being a doctor. The MAFF predicts that when the elderly farmers retire, there will be a drastic economic shortage. I expect this to happen with our country too. People are so dedicated to having a better life, wanting to make more money, that they go to school to be doctors and lawyers, just so they can live a comfortable life. We are going to see that there will be an increase of people for these really profitable jobs, where you will see less of farmers. Without food, the country can't survive, so every country needs farmers. So to try to fix this problem, the Ministry of Agriculture, Forestry, and Fisheries wants to promote rice farming, fruit farming, vegetable farming, and livestock farming, because the country needs these to survive.

I think that this problem of decrease in agriculture isn't going to only affect Japan, I think we need to watch this problem with other countries too. Not to meanfully incorporate politics in this blog, but perhaps what President Obama says to the students, to do your best in school, is not exactly the best thing in the world. Our society craves on the weak students, the ones that don't want to be anything more than farmers or burger-flippers. It's how our society stays at peak-efficiency. We all rely on each other, especially farmers. Sure, it's not the ideal profession in the world; however, we need them. Japan needs to fix this problem.

Stay tuned for more posts!
Source: Ministry of Agriculture, Forestry, and Fisheries (2007).