Authors: Irene Wang and Kantaro Komiya
TOKYO (Reuters) – Japan on Wednesday began circulating its first recent banknotes in 20 years, featuring three-dimensional portraits of female founders of financial institutions and women’s educational institutions, in a move aimed at hampering counterfeiters.
The banknotes utilize printed patterns that create holograms of portraits facing in different directions, depending on the angle of view. This is achieved using technology that the Japanese National Printing Bureau claims is the world’s first for paper money.
“The new banknotes feature the faces of people representing Japanese capitalism, women’s empowerment and technological innovation,” Prime Minister Fumio Kishida said at the ceremony.
He added that the move comes just before the economy enters a growth-oriented phase for the first time in three decades.
Key companies are raising employee salaries at the fastest pace in 33 years, but persistent inflation, fueled by a pointed weakening of the yen, is holding back consumption and undermining business sentiment, the latest economic data shows.
Existing banknotes will continue to be used, but train stations, car parks and ramen bars are scrambling to upgrade their ATMs as the government pushes consumers and businesses to utilize cash less as it digitises its economy.
The recent 10,000 yen ($62) banknote features the portrait of Eiichi Shibusawa (1840–1931), founder of the first bank and stock exchange, often called the “father of Japanese capitalism.”
The recent 5,000 yen note features an image of educator Umeko Tsuda (1864–1929), founder of one of the first women’s universities in Japan, while the 1,000 yen note features pioneering medical scientist Shibasaburo Kitasato (1853–1931).
While Kishida touted the latest anti-counterfeiting technology, it’s not a major problem in Japan. The 681 counterfeit notes police detected in 2023 were a pointed drop from a peak of 25,858 in 2004.
Authorities plan to print about 7.5 billion recent banknotes by the end of the current fiscal year, bringing the total to 18.5 billion banknotes worth a total of 125 trillion yen in circulation by December 2023.
“Cash is a safe means of payment that can be used by anyone, anywhere, anytime. Despite the existence of alternatives, it will continue to play a significant role,” said central bank governor Kazuo Ueda.
The Bank of Japan has been experimenting with digital currencies, but the government has not yet decided whether to issue a digital yen.
NO IMPACT ON SALES
The first changeover to paper money since 2004 has encouraged businesses to upgrade their ATMs to meet the needs of customers who prefer to pay with cash.
Cashless payments in Japan have nearly tripled over the past decade and will account for 39% of consumer spending by 2023, but they still lag behind global peers and should boost to 80% to boost productivity, the government says.
According to data from the Japan Vending Machine Manufacturers Association, almost 90% of ATMs, train ticket machines and shop cash registers are adapted to handle the recent banknotes, but only half of restaurant and parking machines are adapted to handle the recent banknotes.
It added that 80% of the 2.2 million beverage vending machines in the country also require modernization.
“It could take until the end of the year to respond,” said Takemori Kawanami, executive director of ticket machine maker Elcom. “It’s too slow, but we’re short on components,” he added, as customer orders for upgrades exceeded expectations.
Many Japanese fast-food restaurants, such as ramen joints and beef joints, utilize ticket machines to cut labor costs, but some small-business owners struggling with inflation are unhappy about having to make the extra investment.
“The machine replacement has no impact on sales, so it’s negative for us, apart from the rising costs of labor and ingredients,” said Shintaro Sekiguchi, who has spent about 600,000 yen on ticket machines at three ramen shops he runs in Tokyo.
(1$=161.6500 yen)
