The Japanese currency is the yen (~, en). One yen corresponds to 100 sen. However, sen are usually not used in everyday life anymore, except in stock market prices. Bills come in 1,000 yen, 2,000 yen (very rare), 5,000 yen and 10,000 yen denominations. Coins come in 1 yen, 5 yen, 10 yen, 50 yen, 100 yen and 500 yen denominations. Counterfeit money is not an issue in Japan.
Japan has a reputation of being a cash-based society, but trends have gradually been changing, and there has been a significant increase in the acceptance of other payment methods. Below are the modes of payment that you might use when visiting Japan:
Cash is still the most common payment method, especially when it involves small amounts. Big bills are readily used and accepted in Japan; you are unlikely to be frowned upon for using a 10,000 yen bill to pay even for low-cost items, although smaller denominations are appreciated for payments made in taxis, smaller shops, temples and shrines. The likelihood that credit cards are accepted decreases in small cities and towns, and thus it is advisable to keep cash at hand when visiting rural areas.
Cash is usually the only way to pay for small entrance fees at tourist sights, at smaller restaurants and small shops. Many lockers also require coins. Preparing coins in advance when using buses and trams is a good idea. Buses generally do not accept bills above 1000 yen, and the bus driver may not carry any larger bills. Vending machines typically accept 10, 50, 100 and 500 yen coins and 1,000 yen bills. Newer machines typically also accept 5,000 and 10,000 yen bills.
The last few years have seen a big increase in other mobile payment options available besides the IC cards mentioned above. Most come in form of mobile phone apps that allow for payments at selected stores by tapping an NFC reader or scanning a QR code.
Among them are a large number of domestic services, such as Edy, Rakuten Pay, Paypay, Line Pay and Origami Pay, which target residents of Japan and tend to be difficult or impossible to use by foreign tourists. Apart from the domestic services, Alipay, WeChat Pay and Apple Pay (iphone 8 and later) are some of the services enjoying increasing acceptance. Google Pay, on the other hand, won't work on most phones sold outside of Japan.
How to get your Yen
Having seen the main payment methods in Japan, you should have a basic idea of how you should prepare money for your trip. Cash is handy because it is accepted under all situations, but credit cards can be a convenient alternative at appropriate locations. Theft and robberies are very rare in Japan, so with regards to keeping large amounts of cash with you, security is less of a concern than your propensity to lose money by accident. Here are ways to get your yen:
Whether or not it is better to change for yen before coming into Japan depends on the currency that you hold. For example, the US dollar is a highly traded foreign currency in Japan, and partly for this reason you might get a favorable rate if you change US dollars into yen in Japan. On the other hand, in some Southeast Asian countries, the foreign exchange market is very competitive and money changers take a smaller cut, therefore it might be better to do the exchange there before coming into Japan.
Many ATMs in Japan do not accept cards that are issued outside of Japan. The big exception are the ATMs found at the over 20,000 post offices and over 10,000 7-Eleven convenience stores across the country. Exchange rates offered at ATMs tend to be competitive, but service fees vary widely depending on the card. Inquire with your card issuer in advance. Note that many ATMs in Japan are out of service during the night, and some are unavailable on weekends.
Traveler's Checks (T/C) tend to yield a more favorable exchange rate than the above two methods. The shortfall is the trouble of having to obtain them in your home country before you travel and then having to locate a place to change them in Japan. Whether you are getting more value for your money depends on your home currency and if your bank charges fees to issue the checks. Note that T/Cs are accepted in very limited currencies in Japan. International airports and leading banks are generally where you can change your T/C for yen.
Money-related tourist attractions
Below are a few money related sites in Japan that may be of interest to tourists:
Maintained by the Bank of Japan, the Currency Museum recollects the history of money in Japan. It also shows some unique examples of money from around the world. English explanations and pamphlets are available. The Museum is located just across the street from the Bank of Japan's main building in Tokyo's Nihonbashi district.
Hours: 9:00 to 16:30 (entry until 16:00) Closed: Weekends, national holidays, December 31 to January 3 Admission: Free
The Tokyo Stock Exchange is located in the Nihonbashi district and is open to the public on trading days. Visitors can view the trading center from the visitors' gallery located one story above, participate in a simulated stock trading game, and learn about the history of the Japanese securities market at the TSE Historical Museum.
The Osaka Mint Bureau is the head office of Japan Mint, a governmental agency responsible for the supply of coins in Japan. The facility maintains a mint museum open to public, introducing the coin production process and the history of the mint. There are also exhibits of various precious coins and medals from Japan and elsewhere.
The former Otaru branch of the Bank of Japan near the Sakaimachi Street dates back to 1912. It was converted into a museum in 2003 and features a number of creative displays about Japanese money and the branch's local history, including an old vault where visitors can feel the weight of a hundred million yen.