The official currency of Japan is the Japanese yen, designated by the symbol ¥ and the ISO code JPY. The yen has been the national currency since the Meiji government established it through the New Currency Act of 1871, replacing the complex monetary system of the Edo period that used multiple denominations of gold, silver, and copper coins. The Bank of Japan, founded in 1882 and headquartered in Nihonbashi, Tokyo, issues all yen banknotes and coins. Current banknotes in circulation include denominations of ¥1,000, ¥2,000, ¥5,000, and ¥10,000. The ¥2,000 note, introduced in July 2000 to commemorate the Okinawa G8 Summit and featuring Shureimon gate on its reverse, circulates rarely and most Japanese residents encounter it infrequently in daily transactions. Coins circulate in denominations of ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500. The ¥5 and ¥50 coins are distinguished by center holes, a design feature that aids tactile recognition. In April 2024, the Japanese government introduced redesigned banknotes featuring new portraits: Eiichi Shibusawa on the ¥10,000 note, Umeko Tsuda on the ¥5,000 note, and Shibasaburo Kitasato on the ¥1,000 note, replacing the previous designs that had circulated since 2004.
Japan maintains one of the world's most cash-dependent advanced economies despite widespread technological infrastructure. A 2023 survey by the Bank of Japan found that cash accounted for approximately 60 percent of all payment transactions by volume, though this percentage has declined from approximately 70 percent in 2019. The survey further indicated that the value of cash transactions represented about 20 percent of total transaction value, with larger purchases increasingly conducted through electronic means. This preference for physical currency contrasts sharply with neighboring South Korea, where cash transactions fell below 20 percent of total volume by 2022. The persistence of cash usage in Japan stems from multiple factors including near-zero crime rates regarding physical currency theft, an extensive ATM network maintained even in rural locations, and institutional acceptance patterns that developed over decades. Many small restaurants, traditional accommodations, temples, shrines, and rural businesses operate on cash-only bases. The 2019 consumption tax increase from 8 percent to 10 percent included government incentives for cashless payment adoption, offering rebates up to 5 percent for electronic transactions at participating merchants, yet cash dominance persisted even after the incentive program ended in June 2020.
ATMs in Japan operate under distinctive restrictions compared to other developed economies. Most bank ATMs, including those operated by major institutions such as Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, close during nighttime hours and remain unavailable on Sundays and national holidays. Standard operating hours typically run from 8:00 or 9:00 until 18:00 or 19:00 on weekdays, with reduced hours on Saturdays. Japan Post Bank, which operates approximately 30,000 ATMs across postal facilities nationwide, maintains similarly restricted hours at most locations. Convenience store ATMs, particularly those operated by Seven Bank (located in 7-Eleven stores) and Lawson Bank (located in Lawson stores), provide 24-hour access but charge time-based fees that increase outside standard banking hours. A Seven Bank ATM withdrawal completed at 3:00 on a Sunday incurs higher fees than the same transaction at 14:00 on a Tuesday. These temporal restrictions and fee structures reflect Japanese banking practices where same-day settlement cycles and risk management protocols prioritize controlled transaction windows over continuous access.
Foreign-issued credit and debit cards experienced limited acceptance in Japan until recently, though coverage has expanded significantly since 2015. Visa and Mastercard represent the most widely accepted international networks, with American Express and Discover cards functioning at fewer establishments. Japan Credit Bureau (JCB), a Japanese card network founded in 1961, maintains the largest domestic acceptance footprint and operates internationally through partnerships. Many small merchants, particularly outside Tokyo and Osaka, continue to accept JCB exclusively among card networks, creating situations where foreign visitors cannot complete electronic payments. Major restaurant chains including Ichiran, Ippudo, and Yoshinoya accepted cash exclusively at most locations until approximately 2018-2020, with contactless payment integration still incomplete at some franchise locations as of 2024. The 2020 Tokyo Olympics prompted significant infrastructure investment in payment terminals, increasing contactless payment acceptance at hotels, major retailers, and tourist sites. However, a 2023 survey by the Ministry of Economy, Trade and Industry found that approximately 35 percent of retail establishments with annual revenues below ¥50 million still operated cash-only, compared to less than 5 percent of establishments exceeding ¥500 million in annual revenue.
Currency exchange services in Japan operate through banks, post offices, authorized currency exchange shops, and hotels. Banks typically offer the most favorable exchange rates but restrict services to account holders or apply them only during banking hours, generally 9:00 to 15:00 on weekdays. Japan Post Bank, which does not require account holding for currency exchange, processes foreign currency transactions at approximately 20,000 post office locations nationwide, though many smaller rural post offices lack this service. Exchange rate margins at Japan Post Bank typically range from 2 to 4 percent above the interbank rate depending on currency pair and transaction size. Dedicated currency exchange shops cluster around international airports and major tourist districts, with chains such as Travelex, World Currency Shop, and SBJ Bank operating multiple Tokyo locations in areas including Shinjuku, Shibuya, and Asakusa. These shops generally offer extended hours compared to banks, with some locations near Narita Airport and Haneda Airport maintaining operations until 21:00 or 22:00. Exchange rate margins at airport and tourist-focused exchange shops typically range from 3 to 7 percent above interbank rates. Hotels provide currency exchange services but apply margins typically ranging from 5 to 10 percent, representing the least economically favorable option for most travelers.
ATM withdrawal using foreign-issued cards functions reliably at specific ATM networks but fails at others due to international network connectivity. Seven Bank ATMs, installed in approximately 26,000 7-Eleven locations throughout Japan, accept cards from most international networks including Visa, Mastercard, American Express, China UnionPay, and Discover networks through the Plus and Cirrus systems. Japan Post Bank ATMs, numbering approximately 30,000 across post office locations, similarly accept major international cards and provide English-language interface options. Standard Japanese bank ATMs operated by Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho frequently reject foreign-issued cards even when those cards carry Visa or Mastercard logos, as the machines connect only to domestic networks. This technical limitation has frustrated foreign visitors for decades and persists at many locations despite gradual infrastructure upgrades. Seven Bank ATMs charge a fixed fee of ¥220 per withdrawal transaction regardless of amount, with additional fees applied by the card-issuing bank based on that institution's foreign transaction policies. Daily withdrawal limits at Seven Bank ATMs range from ¥50,000 to ¥100,000 depending on the card network and issuing bank, with some cards restricted to ¥30,000 per transaction. Japan Post Bank ATMs apply similar per-transaction fees but may impose different maximum amounts based on card type.
Electronic payment systems in Japan evolved through a fragmented ecosystem of competing platforms rather than consolidating around dominant standards. Suica and Pasmo, contactless prepaid cards originally designed for Tokyo-area train and bus systems, expanded into general retail payment acceptance across convenience stores, vending machines, restaurants, and retailers. These cards utilize FeliCa, a contactless smart card technology developed by Sony in 1994, which operates on NFC protocols but differs from the NFC Type A/B standards common in Europe and North America. East Japan Railway Company (JR East) introduced Suica in November 2001, initially for fare payment on JR East lines in the Tokyo metropolitan area. The system recorded 90 million issued cards by 2020, with card balances loaded in increments ranging from ¥500 to ¥10,000 at station ticket machines, convenience stores, and authorized retailers. Interoperability between regional transit cards improved through partnerships, allowing Suica cards to function on train systems in Osaka, Kyoto, Fukuoka, Sapporo, and other major cities, though some rural rail lines continue to operate independent systems without cross-compatibility. ICOCA (JR West), Kitaca (JR Hokkaido), TOICA (JR Central), SUGOCA (JR Kyushu), and Nimoca (Nishitetsu) represent other major regional transit card systems that achieved interoperability through the nationwide mutual usage service established in March 2013.
Mobile payment platforms in Japan developed separately from transit card systems, creating additional fragmentation. PayPay, launched in October 2018 by SoftBank and Yahoo Japan, became Japan's largest QR code-based payment platform by user count, reporting 55 million registered users by October 2023. The platform gained market share through aggressive cashback campaigns that offered 20 percent rebates up to specified monthly limits during initial launch periods. Line Pay, integrated into the Line messaging application used by approximately 85 percent of Japanese mobile phone users, represents another major mobile payment system. Rakuten Pay, connected to the Rakuten e-commerce ecosystem, and d Payment (operated by NTT Docomo) comprise additional significant platforms. These systems generally operate through QR code scanning at merchant locations, where customers either scan a merchant-displayed static code or generate a dynamic code that merchants scan. Adoption rates for these mobile payment systems increased significantly during 2020-2023, with a 2023 Bank of Japan survey indicating that approximately 30 percent of respondents reported using mobile payment applications at least once per week, compared to approximately 10 percent in a similar 2019 survey. However, merchant acceptance remains inconsistent, with many establishments accepting specific platforms but not others, requiring travelers to potentially maintain multiple applications or carry cash alternatives.
Apple Pay functions in Japan but with distinctive limitations compared to other markets. iPhones purchased outside Japan and brought to the country can add Suica cards to the Wallet application and use them for transit and retail payments through NFC terminal contact. However, iPhones sold in Japanese markets include enhanced FeliCa chip integration that enables fuller functionality with Japanese contactless systems. This regional hardware variation means that foreign-purchased iPhones may encounter payment terminals where transactions fail despite the terminal displaying contactless payment symbols. Credit cards added to Apple Pay on both Japanese and foreign iPhones function at terminals equipped with contactless credit card readers, which represent a subset of Japan's contactless payment infrastructure. Google Pay on Android devices faces similar regional compatibility challenges, with full functionality requiring Android phones purchased in Japan that include FeliCa chip integration.
The consumption tax in Japan, equivalent to value-added tax in other jurisdictions, applies at a standard rate of 10 percent to most goods and services. The government implemented this rate on October 1, 2019, increasing from the previous 8 percent rate that had been in effect since April 1, 2014. A reduced rate of 8 percent applies to food and beverages excluding alcohol and restaurant dining, as well as to newspaper subscriptions. The distinction between takeout food (taxed at 8 percent) and restaurant dining (taxed at 10 percent) creates complexity, particularly at establishments offering both service modes. A hamburger purchased at a fast-food restaurant and consumed in the seating area incurs 10 percent tax, while the identical item purchased for takeout incurs 8 percent tax. Retailers display prices either tax-inclusive (zei-komi) or tax-exclusive (zei-nuki), with tax-inclusive pricing mandatory for consumer-facing retail since April 2021 but with significant variation in implementation during the transition period. Confusion persists at some establishments where shelf labels display tax-exclusive prices while registers calculate tax-inclusive totals, creating discrepancies that surprise customers unfamiliar with the practice.
Duty-free shopping in Japan operates under specific eligibility criteria and documentation requirements established by Japan Customs. Foreign visitors staying in Japan under temporary visitor status qualify for consumption tax exemption on purchased goods meeting minimum thresholds. Consumable items including food, beverages, cosmetics, and medicine qualify for tax exemption when the same-day purchase total from a single store exceeds ¥5,000 and remains below ¥500,000. General goods including electronics, clothing, and accessories qualify when the same-day purchase total from a single store exceeds ¥5,000 with no upper limit. Stores authorized to process tax-free transactions display "Japan Tax-free Shop" logos and require passport presentation at the time of purchase. Staff create purchase records that they staple into the passport, with travelers required to maintain these records and present goods for potential customs inspection upon departure. Consumable items purchased tax-free must remain sealed in special packaging until departure from Japan, with customs officials authorized to collect consumption tax on opened items. Major retailers including Bic Camera, Yodobashi Camera, Takashimaya, Isetan, and Mitsukoshi maintain dedicated tax-free counters processing these transactions, while smaller shops may lack authorization or staff training to execute the procedure.
Tipping does not exist as a practice in Japan and actively creates confusion or discomfort when attempted. Service charges are either included in stated prices or added as explicit line items on bills, particularly at higher-tier hotels and restaurants where service charges typically range from 10 to 15 percent. A restaurant bill showing ¥8,000 for food and ¥800 as a service charge communicates complete payment obligation, with leaving additional cash or attempting to tip serving staff considered inappropriate. The cultural framework treats professional service as standard performance rather than meritorious behavior requiring additional compensation. This applies across sectors including restaurants, taxis, hotels, tour guides, and personal services. Taxi drivers in Tokyo, Osaka, and other cities expect exact fare payment or change return, with attempting to wave off change potentially met with persistent insistence that the driver make proper change. High-end ryokan, traditional Japanese inns where staff provide extensive personal service, operate within the same non-tipping framework despite service intensity that would typically generate significant gratuity expectations in other cultures. Some Western-operated hotels and restaurants in major tourist districts have begun displaying "no tipping necessary" signage in English to prevent foreign visitors from creating awkward interactions through tipping attempts.
Cash remains necessary for certain transaction categories even in highly developed urban areas. Many taxi companies in Tokyo, Kyoto, and Osaka equipped vehicles with credit card terminals only during 2015-2020, with some smaller taxi operators still operating cash-only as of 2024. Temple and shrine entry fees universally require cash payment, with offering boxes designed specifically for coin and bill deposits. The standard practice of throwing ¥5 coins into offering boxes before prayer at Shinto shrines continues at tens of thousands of sites where no electronic alternative exists. Small restaurants, particularly those with fewer than 20 seats operated by one or two people, predominantly function cash-only, with approximately 40 percent of establishments in this category lacking card terminals according to a 2023 survey by the National Restaurant Association of Japan. Traditional accommodations including many family-operated minshuku (guesthouse-style lodgings) and some mid-tier ryokan request cash payment for room charges, onsen fees, and meal costs. Street food vendors at festivals, weekly morning markets in cities including Takayama and Kanazawa, and many food stalls at major tourist sites operate exclusively in physical currency.
ATM availability in rural areas of Japan, while more extensive than in many countries, still creates challenges for travelers relying entirely on card-based cash access. Seven Bank ATMs concentrate in urban and suburban areas where 7-Eleven stores maintain profitable operations, with store density decreasing significantly in mountain regions, isolated coastal areas, and depopulated rural districts. Japan Post Bank provides the most extensive rural ATM network through the national postal system, but even post office locations in very small villages may operate limited hours, potentially closing by 17:00 on weekdays and remaining closed on weekends. A traveler visiting mountain temples in the Kii Peninsula, hiking sections of the Kumano Kodo pilgrimage routes, or exploring rural onsen towns in Tohoku may encounter multi-day periods where accessible ATMs require significant detours. The town of Takayama in Gifu Prefecture, a popular tourist destination, has Seven Bank ATMs and Japan Post Bank ATMs, but travelers proceeding to smaller villages in the surrounding Hida region for traditional farmhouse stays may find the nearest functioning ATM requires a 30-minute to one-hour bus journey.
Vending machines in Japan, numbering approximately 4 million units nationwide according to the Japan Vending Machine Manufacturers Association, predominantly accept ¥10, ¥50, ¥100, and ¥500 coins, with many units also accepting ¥1,000 bills. Machines vend beverages, snacks, ice cream, hot food items, and various other products at price points typically ranging from ¥100 to ¥500 for beverages and ¥100 to ¥1,000 for food items. Approximately 30 percent of vending machines integrated contactless payment capability through Suica, Pasmo, and other transit card systems by 2023, allowing users to tap cards for purchases. This integration progressed slowly compared to predictions made during the early 2010s that suggested near-universal contactless vending machine coverage by 2020. Cash-only machines remain standard in residential neighborhoods, along rural highways, and at small stations on regional train lines.