Japan introduces banknotes with hologram images By Reuters

Written by Irene Wang and Kantaro Komiya

TOKYO (Reuters) – Japan began issuing its first banknotes in 20 years on Wednesday, featuring portraits of the founders of financial institutions and women in a bid to thwart fraudsters.

The notes use printed patterns to create holograms of images facing in different directions, depending on the viewing angle, using technology that Japan’s National Printing Bureau says is the first in the world for paper money.

“The faces of those who stand for Japanese capitalism, women’s empowerment and technological innovation are in the new charges,” Prime Minister Fumio Kishida said at the event.

The move comes as the economy moves into a growth-driven phase for the first time in three decades, he added.

While existing bills are still valid, train stations, parking lots and ramen shops are scrambling to upgrade payment machines as the government pushes consumers and businesses to spend less in its bid to digitize the economy.

The new 10,000-yen ($62) note features Eiichi Shibusawa (1840-1931), the founder of the first bank and stock exchange, who is often called the “father of Japanese capitalism”.

The new 5,000 yen bill depicts the educator Umeko Tsuda (1864-1929), who founded one of Japan’s first women’s universities, while the 1,000 yen bill depicts the pioneering medical scientist, Shibasaburo Kitasato (1853-1931).

The monetary authorities plan to print about 7.5 billion of newly designed bonds by the end of the current fiscal year. They will add to the 18.5 billion paper money worth 125 trillion yen that has been in circulation since December 2023.

“Cash is a secure payment method that can be used by anyone, anywhere, at any time, and it will continue to play an important role” despite other alternatives, said Kazuo Ueda, governor of the Bank of Japan.

The central bank has been experimenting with digital currencies, but the government has not made a decision on whether to issue a digital yen.

‘NO MARKETING IMPACT’

The first renaissance of paper money since 2004 has encouraged businesses to develop payment devices for cash-conscious customers.

Cashless payments in Japan have nearly tripled over the past decade to make up 39% of consumer spending by 2023, but still lag behind global peers and must rise to 80% to boost productivity, the government said.

About 90% of bank ATMs, train ticket machines and shop cash registers are ready for the new bills, but only half of restaurant and parking ticket machines, the Japan Vending Machine Manufacturers Association said.

About 80% of the world’s 2.2 million beverage vending machines also need upgrading, it added.

“It may take until the end of the year to respond to this,” said Takemori Kawanami, an executive at ticket machine company Elcom. “That’s very slow, but we’re running out of parts,” he added, as customer orders for upgrades exceeded expectations.

Many Japanese fast-food restaurants such as ramen shops and steakhouses rely on ticket machines to cut labor costs, but some small business owners battling inflation aren’t happy about the additional investment that comes with the new loans.

“The replacement of the machine has no effect on sales, so it’s only bad for us, in addition to the increased cost of labor and ingredients,” said Shintaro Sekiguchi, who spent about 600,000 yen on ticket machines at the three ramen shops he runs in Tokyo.

($1=161.6500 yen)