Terminal uses the ASCII character set to represent English and English-based programming languages. To represent foreign language characters, Terminal uses different single-byte and multi-byte character encodings. These encodings can use characters with the high-bit set, for example, ISO Latin 1, Shift JIS, or UTF-8.
Before changing your character set encodings, be sure that programs running in Terminal (shells, editors, and so on) support the character encodings you want to use.
Choose Terminal > Preferences and click Settings.
Click Advanced.
Select a setting from the Settings list, located on the left side of the Settings pane.
In the Emulation section, deselect “Escape non-ASCII input.”
In the International section, choose the character set you want from the “Character encoding” pop-up menu.
Select “Set locale environment variable on startup.”
“Escape non-ASCII input” works in tcsh and bash shells, but it doesn’t work with zsh shell.