Gun'yō tehyō — The Economic Strategy of Wartime and Its Impact

In 1937, with the outbreak of the China Incident (Sino-Japanese War), Japan was exploring new strategies. One of the strategies designed to strengthen economic control was the issuance of military banknotes, commonly known as "gun'yō tehyō," in occupied territories. From 1937 to 1945, they were issued in occupied regions like the Philippines, Malaya, and the Dutch East Indies, forming a key part of the Japanese military's economic policies. For instance, in the Philippines, following the invasion in 1942, military notes marked "Issued under Philippine Military Administration" were introduced the following year. These notes were forcibly exchanged with local pesos, although residents distrusted the new currency, stalling economic activity. Behind this was the fact that the notes were nominally yen but lacked substantive backing. Additionally, with shortages and inflation progressing, the stability of these notes deteriorated further. These measures were part of an attempt to complement military control with economic strategy under the Co-Prosperity Sphere ideology, but they failed to win over local sentiments. The issuance of military notes was a significant policy of the Japanese government at the time and positioned as part of the war effort, yet it fell far short of gaining popular support.

The issuance of military notes was not solely about printing money but involved complex minting processes and the cooperation of related parties. The Japanese military often utilized local printing offices in occupied territories to issue military notes with different designs and denominations. For example, in Malaya, the printing office in Kuala Lumpur was used in 1942, followed by production in Singapore's printing facilities. Local technicians and workers were reportedly mobilized to mass-produce under military orders. The material was paper, and strict quality control was maintained, but due to wartime shortages and technological limits, counterfeiting measures had limitations. Consequently, counterfeit military notes began to circulate, further eroding the currency's credibility. Moreover, the circulation of military notes was enforced within the local economy as a part of the Japanese military's occupation policy. Exchange rates were unilaterally set by the military, mandating exchanges with local currencies. However, this resulted in price surges and economic turmoil, severely impacting local inhabitants' lives. The issuance and circulation of military notes symbolized the Japanese military's economic strategy at the time but were riddled with numerous issues in practice.

When military notes were introduced to occupied territories, they significantly impacted local economies and daily life. Military notes issued in 1942 in Malaya and the Philippines required obligatory exchanges with local currencies, leaving residents no choice but to comply. In the Philippines, for example, 1 Philippine peso was equated to 1 yen, advancing the exchange with military notes. However, as inflation proceeded, prices soared. By 1944, rice prices had tripled, making it challenging to acquire essential goods. Amid such economic chaos, the trust in military notes plummeted, and residents turned to the black market. In the black market, tangible assets like gold and silver were traded, and military notes were treated as mere pieces of paper. Residents understood the military notes held no real value and began to avoid using them in daily life. Additionally, local merchants increasingly refused to accept military notes, further stalling economic activity. These circumstances provoked resistance against Japanese occupation policies and eventually contributed to movements of local resistance. Although military notes aimed to economically control occupied territories, they ultimately failed to gain public confidence and became worthless overnight once the war ended.

As the war ended and Japan faced defeat, military notes became worthless overnight. Following the day Japan ended the war on August 15, 1945, these notes became mere pieces of paper, causing significant economic harm to local populations. In regions like the Philippines and Malaya, residents had their entire holdings of military notes invalidated, resulting in the tragedy of immediate loss of savings. Consequently, many who lost their livelihoods fell into hardship, posing a significant hurdle to post-war recovery. In modern times, these military notes are traded as historical relics among collectors. Their value varies based on condition and rarity, often ranging from a few hundred to several tens of thousands of yen in transactions. Particularly, unused items or those in good preservation condition can fetch high prices. Military notes, issued as part of wartime economic policies, serve as a valuable material for understanding their historical background and the economic conditions of the time. For collectors, knowing about coin grading standards and how to identify fakes and processed items is crucial knowledge. These notes continue to convey the horrors of war as a testament, ensuring their story is passed down.