Before I go, I just wanted to post an excerpt of an email I got from Saru the other day.
* * * * *
With regard to your question about the historic value of the yen. It
was set at 360 to the dollar during the occupation. There is a story
that attributes the choosing of this value because “yen” means round
and someone thought it would be appropriate since there are 360
degrees in a circle. At any rate, this may be apocryphical.
It stayed at 360 until August 1970, when Nixon pulled the US off of
the gold standard, effectively ending the Bretton Woods System. The
Japanese call this “nixon shock.” By this point, because the Japanese
were running substantial current account surpluses, the yen was
considerably undervalued. The Japanese government tried to keep it at
Bretton Woods levels, but eventually gave up and let it float. Since
it was undervalued, it rose pretty quickly from about 360 at the start
of 1971 to stabilize around the 300 mark until the mid-1970s. It hit a
high of 183 in the late 1970s and then fell again back to the mid-200s
by 1980. Then it skyrocketed in the mid-90s. You can check out the
detailed numbers yourself at the address below if you’re interested.
The Bank of Japan used to have great stats, but I checked today and
for some reason they only have effective exchange rates indexed at 100 for March 1973.
Incidentially, when my boss first went to Japan back in 1971, he said
it was his first real lesson in economics because the yen just kept
getting more expensive and more expensive. On a similar note, 94-95
would have been a great time to have been teaching English and getting
paid in yen. Jesus I wish I were six or seven years older sometimes!