Paper short abstract:

A monetary token during wartime occupation is an example how the currency market can be enacted by force and coercion. This paper is an archival research on the circulation of Japanese military yen notes in Hong Kong during World War II.

Paper long abstract:

A monetary token during wartime occupation is an example how the currency market, as the economic side of a battle frontline, can be enacted by force and coercion. This paper is an archival research on the circulation of Japanese military yen notes in Hong Kong during World War II. What happened when the love of money and resentment against a wartime enemy rest upon the same symbolic token? Wartime civilians had to risk brutal violence if they chose to hide away invalidated pre-war Hong Kong dollars, but holding military yens implied high risk of deflation. During the last months of Japanese occupation, the exchange rate of military Japanese yen with commodities and other currencies underwent extreme fluctuations. The printed pledge clause about equivalent exchange for Japanese yens was nullified under most contexts, but occasionally honoured under contingent conditions. One month after Japan surrendered in 1945, the British announced that Hong Kong dollars would become legal tender again on 13 September 1945. The decision literally turned 1.9 billion military yens into waster paper overnight. Japan was exempted from indemnity to civilian holders of military yen notes by the Treaty of San Francisco in 1951, while wartime survivors in Hong Kong weeping upon chests of military yens had become a typical image of war memorial days for decades. Archival sources include three Chinese daily newspapers in HK in 1941-45, archival documents from the HK Public Records Office, government gazettes during the wartime occupation period, plus various biographies and historical titles.