Everything You Should Know About Money in Japan 💰

The Japanese currency is called the yen. Banknotes come in denominations of ¥1,000, ¥2,000 (very rare), ¥5,000, and ¥10,000. Coins come in denominations of ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500.

Payment Methods in Japan

Japan has a reputation for being a cash-based society, but then COVID came along and changed the game. The pandemic led to a significant increase in the number of businesses adopting digital payment methods. According to Statista, before the pandemic about 70% of all transactions in Japan were made in cash, compared to 30% using other methods (credit cards, IC cards, and apps). As of 2023, it’s roughly a 50/50 split.

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So how do you pay in Japan? 🤔

• Cash

  About 50% of transactions in Japan are still made in cash, making it a very common payment method, especially for smaller amounts. Large bills are used daily, and it’s perfectly normal to use them even for very small purchases like gum. The likelihood of credit cards being accepted drops in smaller towns, so it’s recommended to keep some cash on hand when visiting rural areas. Theft and pickpocketing are extremely rare in Japan, so carrying larger amounts of cash is generally safe, aside from the risk of losing it.

  
  

  Cash is often the only way to pay at smaller restaurants, local shops, and some tourist sites.
  

• Credit Cards

  Credit cards are widely accepted in Japan, especially in major cities. Most hotels accept credit cards, as do department stores, mid- to high-end restaurants, outlet malls, and large retail chains.

  
  

  Many train stations, convenience stores, supermarkets, and more also accept credit cards.

• IC Cards (Highly Recommended)

  IC cards such as Suica and Pasmo are very popular rechargeable cards. They are a convenient way to pay for trains, buses, and many shops and restaurants. You can get one at the airport or from machines in train stations for a small initial fee. For more details, check the dedicated IC card guide.

  As an alternative to a physical card, iPhone users can add a digital card through the Wallet app and pay using Apple Pay. For Android users - Google Pay will not work on most phones purchased outside Japan, as they typically don’t support the required Japanese standard.

  
  

  *Good to know:

  a. Unlike a physical card, money loaded onto a digital wallet cannot be withdrawn back as cash

  b. Physical cards are usually recharged using machines that accept cash only

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How to Get Yen 💴

• Currency Exchange (Before Your Trip)

  There are many options in the U.S., from exchange offices to banks. Some travelers prefer to have cash ready upon arrival at the airport.

  
  

  How Much Cash Should You Bring? This depends on your travel style.

  
  

  If you want to save money, the most cost-effective approach is to bring a reasonable amount of cash, since credit card use often comes with foreign transaction fees. The average traveler spends around ¥10,000 (~$65–70 USD) per day (excluding accommodation). So, assuming hotels are paid by credit card, you can multiply ¥10,000 by the number of days and travelers.

  
  

  And if you prefer convenience? Personally, I don’t like carrying large amounts of cash. So I try to maximize credit card usage and only use cash where necessary. I usually bring around ¥100,000 (~$650–700 USD) and withdraw more if needed during the trip using ATMs in convenience stores (which are everywhere in Japan).

• Currency Exchange in Japan

  In Japan, currency exchange is usually done at banks, post offices, and licensed exchange counters, especially at major airports.

• ATM Withdrawals

  ATMs are widely available across Japan, especially inside convenience stores. Exchange rates are generally competitive, and ATM fees vary - usually ranging from free to a few dollars. Note that many ATMs are closed at night, and some may not be available on weekends.

  
  

  Here are typical fees at 7-Eleven ATMs:

  ¥110 (~$0.75 USD) for withdrawals up to ¥10,000

  ¥220 (~$1.50 USD) for withdrawals of ¥20,000 and above

  
  

  Important:

  Check your bank’s foreign transaction and ATM fees. If you’re not sure, there’s a good chance you’re paying around 3%, which is quite high. Many U.S. credit cards offer 0% foreign transaction fees, so it’s worth choosing the right card.

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• Credit Card or Cash?

  It depends on personal preference, but even if you plan to use a credit card most of the time, it’s still recommended to carry some cash, especially when traveling outside major cities.

  
  

• Exchange Everything in Advance or Withdraw in Japan?

  If we ignore convenience and focus purely on cost - and assuming your bank fees are reasonable - the most cost-effective option is usually to withdraw yen from ATMs in Japan.

  Personally, I prefer to arrive with a small amount of cash (around ¥20,000 / ~$130 USD), use my credit card for most purchases, and withdraw additional cash as needed