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Banking and Currency in Japan

Banking and Currency in Japan

By CarolUpdated Jul. 15, 2021

In spite of its technology-driven economy, Japan is still very much a cash-based society. Make sure you always carry enough yen on you when traveling around in Japan. You can change money at the airport, the bank, the bureau de change or the post office. Or simply draw your money with your country’s debit card at an ATM, but be aware that you may be charged international withdrawal fees.

Credit cards are accepted at big hotel chains, nice restaurants or shops in larger cities. Many places, including hostels, markets, small restaurants, or places in more rural towns still only accept cash.

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Quick Facts

  • Japan is still very much a cash-based society, so it is best to prepare enough cash before you travel around.
  • Exchanging money in Japan has become a lot easier with the acceptance of international ATM cards and credit cards.
  • Change your money to yen at ATMs in convenience stores, banks, at the airport and the bureau de change.
  • Use a credit card when you are making a large purchase because you will get a much better rate of exchange.
  • Japan is known as an expensive country, but you can press the budget with the choices of accommodation and meals.

The Japanese Currency — Yen

Yen is the official currency in Japan; it means circle or round object. This currency was officially adopted by the Meiji government with the “New Currency Act” in 1871, in the hope of stabilizing the monetary situation of the country at the time. Nowadays the yen has become the third most traded currency in the world, after U.S dollar and euro.

The abbreviation for yen is JPY or ¥. It is available as coins in denominations of ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500. Bank notes are available for larger amounts in denominations of ¥1.000, ¥2.000, ¥5.000 and ¥10.000. The coins in Japan are deliberately minted to have different styles, sizes and patterns to make them easily distinguishable from each other.

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Changing Money

Japan is very much a cash-driven economy, with a lot of places still only accepting cash. Be sure to exchange enough cash to cover incidentals such as meals, vending machines, taxis, entrance fees. Many small shops and restaurants, especially in rural areas, may not accept credit cards. Japan is the safest country in the world so it is okay to carry large amounts of cash with you at all times.

Most banks in Japan offer currency exchange services, as do post office banks (Yucho). Keep in mind that business hours are very limited. Most currency exchange counters at commercial banks are open on weekdays from 9am to 3pm, and post office banks offer their service until 4pm. Mega Banks (MUFG, Mizuho Bank, SMBC) may stay open longer, some even on weekends.

Changing your money at a bureau de change is also an accessible and reliable option. The World Currency Shop is the most famous bureau de change in Japan, operated by a subsidiary of the Bank of Tokyo-Mitsubishi UFJ. It is located in commercial districts, shopping malls, at tourist attractions, and near train stations. They are open on weekdays from 9am to 5pm, and weekends from 11am to 5pm.

Plan to exchange your money at the airport when you arrive in Japan. The rates are the same as at the banks, and you want to have Japanese yen once you leave the airport. This is the most convenient option because it is difficult to exchange cash once you leave the airport. It is possible to exchange money at major hotels, but the rates are usually not as good.

Since Japan is known as a technologically advanced country, even exchanging currency has gone high-tech with the emergence of money exchange machines. You can find these “money vending machines” at airports, hotels, malls, and selected convenience stores. Exchanging cash is convenient and does not incur any fees, but you get a lower rate of exchange than withdrawing money from an ATM.

Banks and Banking Hours

Banking in Japan is dominated by three large Mega Banks: the MUFG (Mitsubishi UFJ Financial Group) or Bank of Tokyo, the Mizuho Bank, and the SMBC (Sumitomo Mitsui Banking Corporation). These institutions have branches throughout the country, so they are probably the most useful places to head to if you are looking to exchange cash or access other services.

Most banks offer similar services, including deposits and withdrawals with bank book and cash cards, transferring funds, foreign currency exchange. Normal banking hours for banks on weekdays are from 9am to 3pm. Keep in mind that if you are in Japan on a tourist visa, you won’t be able to open a bank account.

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International ATM cards only work on selected machines in Japan. You can use international ATM cards at 7-Eleven convenience stores and Japan Post ATMs. Japan Post has 27,200 ATM machines all over the country at Japan Post offices. The maximum withdrawal limit is ¥50,000 per transaction/day. Seven Bank has 23,000 ATM machines all over Japan at 7-Eleven convenience stores. They are open 24 hours and the maximum limit is ¥100,000 per transaction/day.

Once you have inserted your card, you will usually be given the option to use the machine in English. Just be aware that you may be charged international withdrawal fees from your bank at home. ATMs in Japan also charge fees depending on the time of day and the day of the week. So take note before withdrawing money.

Credit Cards and Traveler’s Checks

Credit cards and traveler’s checks are the most convenient options for use in Japan. Credit cards get the best exchange rates, but they are not widely accepted. Most major hotels, department stores, restaurants, and convenience stores will take credit cards. Transaction fees are around 3% of the amount charged.

Traveler’s checks used to be the best method of exchange because they offer a better rate than cash. Many people also use it as an emergency back-up. Just be aware that it may take a few days to order traveler’s checks in your home country. If getting traveler’s checks is the better option for you, then treat them like cash and exchange all of them at the airport.

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Local Prices

Japan is not cheap compared to other Asian countries. For accommodation, a 3-star hotel usually charges US$ 100 per nigh. Take meals at noodle bars which can be found on every street corner in Japan. You get a big bowl of ramen, udon, or soba for US$ 15. The consumption tax of 8 percent is included in the quoted tax.

Explore Japan with Asia Highlights

If you are planning a trip to the land of the rising sun, then you are going to need some cash. Life in Japan isn’t cheap, but the unique experience is worth it. Get an accurate banking and currency guide for Japan from Asia Highlights, so you can enjoy your holiday without worry.

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