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At the moment £1 is 131 Yen, so why doesn't Japan just divide everything by 100, (chop off 2 0s) to bring it more inline with other currencies?

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I think Mexico did just exactly this once, but the size of the Mexican economy and the size of the Japanese economy might be a clue as to why Japan hasn't –  MrChrister Nov 28 '10 at 16:48
    
I don't have an answer, but I think it's lest confusing to have one currency unit than dividing into dollars and cents for example. –  user1175 Nov 29 '10 at 1:44
    
I think it's an interesting question. Many countries do that, usually for 3+ zeroes, but sometimes for one zero or two. (France dropped 2 zeroes in 1960, Russia dropped 1 zero in 1961). I wonder what else drives that decision. en.wikipedia.org/wiki/Denomination_(currency)#Redenomination –  Vitalik Nov 29 '10 at 2:32
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Rebasing of correncies is only really done when the numbers get huge, as in the case of the Turkish Lira. Not so long ago the exchange rate was in the many millions of Lira to the GBP. Unwieldy, for sure. An exchange rate of 100 is still pretty manageable. –  Noldorin Nov 30 '10 at 11:38
    
"At the moment 1 yen is £0.007, so why doesn't the UK just multiply everything by 100 (add two 0s)?" –  Nate Eldredge Sep 16 at 14:59

7 Answers 7

up vote 11 down vote accepted

I think the tradition within the country would outweigh any convenience it would have for the rest of the world. The US hasn't even been able to switch to the Metric system, even though it's taught in school and used in math / science. The costs involved with changing price tags, and re-organizing everything in their world would be pretty crazy.

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but loads of countries have changed to a completely new currency (all the Euro countries) so such a change wouldn't have that much affect as those countries. Also surely it bad "publicity" to say a hamburger (Eg) costs hundreds of yen makes it sound expensive to people who don't know, a more realistic example would be something to do with technology costing 100 thousands –  Jonathan. Nov 28 '10 at 16:45
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It happened with the franc in France years ago. You would than have people bitching about it and still using the "ancien francs". A bit like people bitching about the Euro now. If I was Japanese, I would want to stick to the current system. Why have numbers with dots when you can have nice integers. –  Raskolnikov Nov 28 '10 at 17:57
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The change wouldn't be as big a deal as switching to the Euro, but the Euro also eliminated the need to exchange currencies and worry about currency fluctuations and other international accounting nonsense. Unlike this proposed idea, it actually had substantial economic benefit. –  fennec Nov 29 '10 at 20:55

So their programmers don't have to deal with floating point arithmetic. This is why they're so far ahead in technology!

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Think about moving the decimal point in a bunch of accounting software and price stickers. Think about getting confused, "is that price in old yen or new yen?" - not just immediately, but every time you hear a historical price figure. Think of the inconveniences. How many billions of yen would that cost the Japanese economy? It could be a lot.

How many billions of yen would the Japanese economy save by enacting such a conversion? Because I doubt it's anywhere that much.

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A Yen is like a penny. Buy a chocolate bar 100¥ or £1.00. Should the UK get rid of pennies and only price things to the pound?

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Do they have a larger denomination? –  MrChrister Nov 28 '10 at 18:39
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no, all money is Yen. starting with a 1¥ coin going up to a 500¥ coin. Bills go from ¥1,000 to ¥10,000. secure.wikimedia.org/wikipedia/en/wiki/Japanese_yen –  Darryl Braaten Nov 28 '10 at 22:04
    
So there's no smaller denomination either? In that case we should all be multipling by 100. –  Jonathan. Nov 29 '10 at 19:11
    
The 1-yen coin must be approximately as worthless as the penny, and both should probably be abolished. :b –  fennec Nov 29 '10 at 20:57
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There used to be smaller denominations than ¥1, but they were taken out of circulation in 1953. –  Dan B. Jun 12 '11 at 19:04

Another possibly significant issue, is that the number ten thousand is very important in the Japanese language. In Japanese, you count in ones, tens, hundreds, thousands, ten thousands, BUT instead of a 'hundred thousand', you have ten ten thousands. and then one hundred ten thousands, and then a thousand ten thousands. The ten thousand yen note, equivalent roughly to the $100 bill, is the main base of Japanese currency. If you go to the bank, for example, you will almost always take out your money in ten thousand yen notes.
Knowing a little about the language, i would say it would become quite strange and un-natural to suddenly start using a hundred as the main note value. I doubt the Japanese people would ever even consider that, and my guess is the only people who are even put out by the large number of zeroes are foreigners who are used to dealing in dollars and cents.

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Currently, there is simply no reason to do so. It's not a problem. It is no more of a problem or effort to denote "5,000" than it is to denote "50.00".

But if there were a reason to do so, it wouldn't be all that difficult. Of course there would be some minor complications because some people (mostly old people presumably) would take time getting used to it, but nothing that would stop a nation from doing so. In Iceland, this has happened on several occasions in the past and while Iceland is indeed a very small economy, it shouldn't be that difficult at all for a larger one. A country would need a grace period while the old currency is still valid, new editions of already circulating cash would need to be produced, and a coordinated time would need to be set, at which point financial institutions change their balances.

Of course it would take some planning and coordination, but nothing close to for example unifying two or more currencies into one, like the did with the euro. The biggest side-effect there was an inflation shot when the currencies got changed in each country, but this can be done even with giant economies like Germany and France. Cutting off two zeros would be a cakewalk in comparison.

But in case of currencies like the Japanese Yen, there is simply no reason to take off 2 zeros yet. Northern-Americans may find it strange that the numbers are so high, but that's merely a matter of what you're used to. There is no added complication in paying 5.000 vs. 50 at a restaurant, it merely takes more space on a computer screen and bill, and that's not a real problem. Besides, most of the time, even in N-America, the cents are listed as well, and that doesn't seem to be enough of a problem for people to concern themselves with.

It's only when you get into hyper-inflation when the shear space required for denoting prices becomes a problem, that economies have a real reason to cut off zeros.

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Some answers already informed about denomination.

There are currencies, doing the cut off of two digits, for example the french franc. See http://en.wikipedia.org/wiki/French_franc#New_franc When you look to old french movies, they often talked about 'old franc' when talking about values (at least in French original, I don't know what happens in English translations).

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