What was Japan's economy primarily based on prior to 1871?

Prior to 1871, Japan's economy was primarily based on bartering. During this period, particularly in the Edo period (1603-1868), the economy was largely agrarian, with most goods and services exchanged through direct trade rather than monetary transactions. Villages often relied on barter systems because cash currency was not widely circulated or used outside of certain urban areas. The farming communities exchanged surplus produce among themselves to obtain necessary goods, which illustrates how deeply rooted bartering was in everyday life.

While industrial production began to take shape later in the 19th century as Japan opened up to Western influences, the country had not yet transitioned into a fully industrialized economy by 1871. Cash currency started to gain prominence in the Meiji period (from 1868 onward), as reformists sought to modernize the economy by introducing a national currency and banking system. Trade with neighbors also existed but was limited and did not form the foundation of the economy until much later with Japan's gradual shift toward modernization and international trade relations.