Letter Յ denotes the sound [y]. At first, its phonetic meaning was confined to this, but with the lapse of time it changed. Apparently, no later than the XIII century, letter Յ got to be pronounced as [h] at the beginning of words, while in final position it was not uttered at all, except for a few words, such as հայ – “Armenian”, վայ – the exclamation "oh”, բայ – “verb”. This situation persisted until the year 1922 when, as a result of orthographic reform, letter Յ at the beginning of words was replaced by letter Հ. However, the reform affected only the Eastern Armenian language, while speakers of the Western Armenian adhered to the traditional orthography.
There are several theories about the origin of graphic form Յ. One of them belongs to linguist Ashot Abrahamyan. According to him, Յ was shaped by means of rotating the Greek letter omega (ω). From the linguistic viewpoint, this version seems strange, because there is no phonetic affinity between the two letters. However, they can be assumed to be connected at the level of symbolism. In Semitic languages, letter yod, which is consonant with Յ, is the smallest in size and is shaped like a comma. Hence comes the famous phrase of the Gospel: “Till heaven and earth pass, one jot or one tittle shall in no wise pass from the law” (Matthew 5. 18). Being the first in the Latin interpretation of the name of Jesus (Iesus), letter I in the Middle Ages was linked with the symbolism of the Son of God and was a part of many monograms of the Christ – littera minima in forma, sed maxima in sacramento, which means “the letter, the smallest in shape, but the greatest in its mysterious meaning”. Although in the Armenian alphabet letter Յ is not the smallest in size, its symbolism is similar to the Latin. In the alphabetical acrostic written by Mashtots, letter Յ stands for the word Յիսուս (Jesus) and the next letter is Ն [n], which stands for “Նազովրեցի” (Nazareth).
According tolinguist Poghos Poghosyan, Mashtots placed these two letters side by side intentionally, so that they would form the phrase "Jesus of Nazareth”. The sum of the numeric values of Յ (300) and Ն (400) equals to 700. This is the number of Chrismon, the literal symbol of Christianity since the times of Constantine the Great – the monogram, composed of the Greek letters X (chi) and Ρ (rho) – the first letters of the word Christ.
See more at Aram Khachaturians "Armenian Alphabet. History and Symbolism" book