Japan has introduced new banknotes for the first time in 20 years. The new bills feature three-dimensional portraits of influential figures from the financial, female education, and technology sectors, and employ innovative holographic technology to deter counterfeiters.
These new banknotes are being introduced as the Japanese economy enters a phase of growth after three decades. Some key companies are raising workers’ wages at the fastest rate in 33 years. However, persistent inflation, driven by the rapid weakening of the yen currency, continues to impact consumption and business sentiment.
While existing bills will remain in circulation, various businesses, including train stations, parking lots, and ramen shops, are upgrading their payment machines to adapt to the government’s push for a less cash-reliant economy. The new 10,000-yen note features Eiichi Shibusawa, known as “the father of Japanese capitalism,” who established the first bank and stock exchange. The 5,000-yen bill showcases educator Umeko Tsuda, the founder of one of the first women’s universities in Japan, and the 1,000-yen bill highlights pioneering medical scientist, Shibasaburo Kitasato.
Despite the emphasis on new security technology, counterfeiting is not a major issue in Japan. In 2023, the police only detected 681 fake banknotes, a significant decrease from the record high of 25,858 in 2004. Authorities aim to print around 7.5 billion of the newly-designed bills by the end of the current fiscal year, adding to the 18.5 billion banknotes, worth 125 trillion yen, in circulation by December 2023.
The Bank of Japan has been exploring digital currencies, but the government has not yet made a decision on whether to issue a digital yen. The renewal of paper money has prompted businesses to upgrade their payment machines to accommodate customers who prefer cashless transactions. While cashless payments have seen significant growth in Japan, they still only represent 39% of consumer spending in 2023. The government aims to increase this to 80% to boost productivity.
While nearly 90% of bank ATMs, train ticket machines, and retail cash registers are ready for the new bills, the Japan Vending Machine Manufacturers Association reports that only half of restaurant and parking ticket machines, as well as 80% of the nation’s 2.2 million drink vending machines, require upgrades. Some business owners, particularly those in the fast-food industry, are facing challenges with the additional costs associated with upgrading their machines, especially amid rising labor and ingredient costs.