Tokugawa coinage

[2] Tokugawa coinage lasted for more than two centuries, and ended with the events of the Boshin war and the establishment of the Meiji restoration.

Initially, the coinage was used essentially for export purposes in order to pay for imports of luxury goods from China, such as silk.

Upon Arai Hakuseki's suggestion the government increased again the gold and silver content of coinage in 1714–1715, but this led to crippling deflation this time.

[5] In the early 19th century, budgetary problems resulting from natural disasters and large Tokugawa governmental expenditures led the government to increase the money supply and the seigneurage associated to it.

[5] Tokugawa coinage worked according to a triple monetary standard, using gold, silver and bronze coins, each with their own denominations.

[7] There were then Nishuban (二朱判) and Isshuban (一朱判) small denominations of silver or gold, before getting to the Mon or Sen bronze coins.

[8] This put an end to more than four centuries during which Chinese copper coins, obtained through trade or Wakō piracy, had been the main currency of Japan.

This permitted an increase of monetary circulation without actual production of more bullion, and provided great profit (seigniorage) for the Bakufu.

[15] In 1858, Western countries, especially the United States, France and Great Britain imposed through "unequal treaties" (Treaty of Amity and Commerce") free trade, free monetary flow, and very low tariffs, effectively taking away Japanese control of its foreign exchange:[15] The 1715 export embargo on bullion was thus lifted: "All foreign coin shall be current in Japan and pass for its corresponding weight of Japanese coin of the same description… Coins of all description (with the exception of Japanese copper coin) may be exported from Japan"This created a massive outflow of gold from Japan, as foreigners rushed to exchange their silver for "token" silver Japanese coinage and again exchange these against gold, giving a 200% profit to the transaction.

The Bakufu instead responded to the crises by debasing the gold content of its coins by two thirds, so as to match foreign gold-silver exchange ratios.