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First Makeover of Bills for Two Decades (December 16, 2004)

new banknotes
Japan's new banknotes
For the first time in 20 years, Japan rolled out a newly designed set of banknotes in November 2004. The revamped money is in the denominations of ¥1,000, ¥5,000 and ¥10,000 and incorporates the latest technologies to thwart the mounting problem of counterfeiting. On November 1, the day the banknotes went into circulation, Bank of Japan Governor Fukui Toshihiko expressed the hope that the new notes would lift people's spirits and contribute to revitalizing Japanese society.

New Faces
Two of the new bills feature the faces of famous Japanese who have previously not been celebrated on banknotes. On the ¥5,000 note is the image of Higuchi Ichiyo, an author of the Meiji era and the first woman to be prominently featured on Japanese currency. The ¥1,000 note, meanwhile, bears the image of Noguchi Hideyo, the world-renowned bacteriologist. The ¥10,000 note retains the image of Yukichi Fukuzawa, a prominent educator and philosopher of the Meiji era.

Behind the decision to create new notes was growing concern over counterfeiting. Due to the proliferation of home-use scanners, high-precision printers, and other such technologies, forging money is now easier than ever before. Between January and August 2004, authorities in Japan reportedly discovered more than 15,000 counterfeit notes. What is more, many of the bogus notes were not even that well crafted, and they could be determined as fakes by the untrained human eye. More importantly to their forgers, however, this counterfeit money was capable of fooling machines that sort and identify cash.

The new notes contain holograms that reveal patterns of cherry blossoms, the denomination amounts, and the Bank of Japan's insignia, depending what angle the holograms are viewed at. Another feature is the "latent pearl pattern," which appears to make the colors of numerals and writing on the notes change when the notes are tilted in different directions. The third innovation is a watermark bar pattern.

The use of the latent pearl pattern is unique to the new Japanese notes. American dollar notes use none of these technologies, while Euro notes incorporate holograms and watermark bar patterns. Thanks to the use of all three of these technologies, vending and other machines that handle cash can identify and verify the new notes with much greater accuracy than before.

The large-scale circulation of counterfeit money can wreak havoc on a country's economy. In Japan, the authorities were concerned the country could become a target of shadowy international counterfeiting organizations if they failed to act swiftly.

A ¥1 Trillion Economic Boost
November 1, when the new notes were rolled out, was an extremely busy day for Japan's monetary and financial officials. About 420 million of the new notes, 8 percent of the total 5 billion notes the Bank of Japan had prepared, were transferred to financial institutions that day. This was a record both in terms of the number of bills and of the amount of currency handed over in one day.

Banks and other institutions had set up special counters to deal with the notes' debut, drawing long lines of customers eager to get their hands on the new money. The bills were so popular that institutions were forced to limit the number of new notes to five per person. The ¥5,000 notes were in particularly short supply, as their printing got under way later than scheduled, and only about 200 million notes were ready for circulation on the day. Some institutions reported running out of the ¥5,000 notes on their first day of circulation.

According to an estimate by a major think tank, the new money's introduction will create economic spin-offs totaling around ¥1 trillion ($10 billion at 100 yen to the dollar), boosting Japan's gross domestic product in fiscal 2004 (April 2004 to March 2005) by 0.1%. This is expected to be achieved through such moves as modifications to vending machines and the replacement of the old notes, as well the procurement of paper and ink used to produce the new notes.

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Copyright (c) 2004 Web Japan. Edited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.

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