Reversion sparked yen swap frenzy

Nearly 200 bank branches and post offices strained to exchange Okinawans' dollars in 1972


Immediately after Okinawa’s return to Japanese control 40 years ago, Yoshikuni Horiuchi led the Bank of Japan’s on-site work to convert U.S. currency held by local residents into yen.

“I fondly remember working for Okinawa day and night,” Horiuchi, now 84, said on a recent visit to the BOJ’s branch office in Naha, his former workplace in the prefectural capital.

As the branch’s first deputy manager, Horiuchi oversaw the currency conversion after Okinawa reverted to Japan on May 15, 1972.

In 1971, Japan allowed the dollar’s exchange rate to be lowered from the long-fixed level of ¥360, after President Richard Nixon suddenly severed the link between the dollar and gold in August that year, putting an effective end to the Bretton Woods system of international financial and monetary management.

Before Okinawa’s reversion, the Ryukyu government, as the local government was known, had asked the central government to set the conversion rate at ¥360 to the dollar.

“The people of Okinawa were abuzz (with the new exchange rate) because they had estimated their personal asset values after the reversion at an exchange rate of ¥360,” Horiuchi said. “I knew so well their uneasy feelings.”

Three days before the reversion, the central government fixed the conversion rate for the people of Okinawa at ¥305 to the dollar. For the six-day conversion period that started May 15, the BOJ had ¥54 billion in cash ready for Okinawa and transported the money to the prefecture aboard a Self-Defense Forces ship.

Scrambling to acquire yen, Okinawa residents brought their dollars to 190 bank branches and post offices around the prefecture.

The entire staff of the BOJ’s Naha branch worked into the nights, hauling yen to financial institutions, collecting and tallying up dollars, and examining whether the greenbacks were authentic.

Over the six-day conversion period, the Naha branch accepted $103 million.

Horiuchi still remembers the SDF ship departing from Naha carrying the mountain of U.S. currency to the mainland.

“I was deeply moved to see it off,” he said.

Looking back over the 40 years since the reversion, Horiuchi is frustrated by the lack of political will that has allowed issues over the U.S. military bases to fester.

“I am upset and angry,” he said. “If we do not have political stability, Okinawa’s economy will not go well.”