The Japanese invaded Burma in January 1942. They conquered Mandalay on 21 May 1942, forcing the British to retreat into India. The Japanese held Burma until the second Allied campaign of 1944, although an official surrender did not take place until August 1945. In 1942, the Japanese issued paper sculpture currency of 1, 5, and 10 cents and Re. 1/4, Re. 1/2, Re. 1/-, Rs. 5/-, and Rs. 10/-. Like most Japanese colonial currency from this period, a letter code was used on the notes. The first or top letter “B” indicates the note was printed and issued for Burma. The second letter or letters indicate the block (or printing batch) of the note, there are single letter blocks and double letter blocks for Burma, with the latter two letter blocks being identified by a hyphen separating the letter "B" from the block letters.

In 1943, the Japanese commuted the sentence of Dr Ba Maw, an outspoken advocate for Burmese self-rule, and installed him as the head of the puppet government. From 1943 onward the Japanese issued paper sculpture currency of Re. 1/-, Rs. 5/-, and Rs. 10/- with a Rs. 100 note/- in 1944. The Japanese characters in the oblong box at the bottom of each note read “Government of Great Imperial Japan” and the contents of the seal comprise the Japanese symbol for the Minister of Finance.