Japan’s new yen notes have a story to tell

By Gearoid Reidy for Bloomberg Opinion

Considering the yen’s value these days, visitors to Japan are probably spending their cash so quickly that they’re not stopping to examine it too carefully.

But its banknotes say a surprising amount about the country. And on Wednesday, for the first time in four decades, Japan will get an entirely new series of bills featuring a trio of 19th- and early-20th century intellectual and cultural titans.

The world’s most traded currencies have little new to say. The familiar faces on US bills haven’t changed in a century. The euro, reflecting the compromise inherent in its origin, not only shuns people but even real places, featuring instead fictional bridges and buildings. The UK’s new notes have 75-year-old King Charles III; China’s renminbi still depicts Chairman Mao. The Swiss franc once portrayed local personalities such as the architect Le Corbusier, but has recently opted for more generic hands, globes and Alpine landscapes.

But the yen still tells a story about the modern country it serves. Today’s notes are the first redesign in 20 years, introducing three new portraits: Eiichi Shibusawa, the “father of Japanese capitalism”; Umeko Tsuda, a pioneering educator and women’s rights activist; and Shibasaburo Kitasato, a groundbreaking microbiologist.

The first redesign in 20 years. Photographer: Kiyoshi Ota/Bloomberg

Why these three? Politicians have appeared on notes in the past, but in recent years the preference has been for famous figures from the Meiji era (1868-1912), when modern Japan was formed. Serial businessman Shibusawa is on the ¥10,000 bill. He may have founded Japan’s first joint-stock corporation, introduced modern accounting to the country and helped form some 500 companies including Tokyo Gas Co., Oji Holdings Corp., the predecessor of Mizuho Bank and the forerunners of brewers Kirin and Sapporo, but he was no cutthroat capitalist.

He believed that morality and the economy were inseparable — one was needed for the other — and that profits should come second to the public interest. He wrote that wealth must be sustainable, and that its broader creation to benefit society should not just be the role of the government, but of the private sector — believing that affluence itself would itself improve morality. His philosophy is a forerunner of today’s ethical investing, and still informs the ideal of the country’s capitalism today. In a curious quirk of timing, the current Prime Minister Fumio Kishida is believed to be a fan. Kishida incorporated much of this thinking in his “New Capitalism” framework announced at the beginning of his term, and one of his early allies was Shibusawa’s descendant, Ken Shibusawa.

On the ¥5,000 note is Umeko Tsuda. Her predecessor on the bill, the writer Ichiyo Higuchi, was the first woman to have her portrait on Japan’s modern banknotes. Tsuda is an obvious successor, credited as the first Japanese woman to study overseas.

She left the country at the age of just six as one of five young girls accompanying the Iwakura Mission, a fact-finding journey of over 100 scholars aimed at modernizing the nation with western advances (which Shibusawa also joined). She stayed in the US for a decade. Then, unhappy with her prospects in Japan, she returned to attend Bryn Mawr College near Philadelphia. Tsuda was published in British academic journals and became a pioneering educator and advocate for women’s education and rights. She founded what is now Tsuda University, which would later educate generations of women who became pioneering lawyers, cabinet ministers and diplomats.

Lastly, on the ¥1,000 bill, is Shibasaburo Kitasato, a microbiologist who discovered the bacteria that cause tetanus and the bubonic plague. Studying in Japan under a Dutch doctor and then moving to Berlin to learn from the world’s best, he likely should have won the Nobel Prize for his work on antitoxins. He was cruelly denied for reasons that remain unclear; some charitably assume it to be because the committee had not yet begun the practice of sharing prizes among more than one person; others suspect turn-of-the-century racism against Asians.

The nation of today can continue to learn from the experiences of all three. The first takeaway is the value of exposure to new ideas. The trio had formative international education, assimilating what was then cutting-edge knowledge before bringing it back home. Today, the number of Japanese studying overseas is falling, and had already started to plateau before Covid and the weak yen. Authorities should learn from the trio’s experience and double down on efforts to reverse that trend.

Secondly, create things. When Japan’s economic bubble burst in the early 1990s, the culture of graduates favoring working at safe, large corporations became entrenched. In recent years that’s just beginning to unwind: Let these lessons accelerate that trend. Tsuda’s women’s school would become a prestigious university. Kitasato created a pioneering center for infectious disease research, and co-founded what would become today’s $24 billion maker of medical devices, Terumo Corp. Shibusawa left the safety of the Finance Ministry to become a serial founder and proto-venture capitalist, setting up institutions including the Tokyo Stock Exchange in the process.

Finally, it’s never too late to change. Tsuda didn’t get to attend university until her mid 20s, and was well into her 30s by the time she founded her school. In his youth, Shibusawa threw in with anti-foreign extremist views, but later became one of the staunchest proponents of bringing western thought to Japan. Today, the country is becoming more receptive to different paths to success, but the fear of following the wrong path still persists.

Wealth, health, education and advocacy: youth in the Japan of today can find much to learn from this trio — assuming, of course, they’re not reaching for their cashless payment-equipped smartphones instead.