The Japanese currency is the Japanese yen, abbreviated ¥ (or JPY in foreign exchange contexts). The symbol 円 (pronounced en) is used in the Japanese language itself. As of US$1 = ¥116 (as of 20 Mar 2006).

- Coins: 1, 5, 10, 50, 100, 500 yen. There are two 500 yen coins, distinguishable by their color. (The new ones are gold, the old ones are silver).

- Bills: 1000, 2000, 5000, and 10000 yen. 2000 yen bills are rare. New designs for all the bills except 2000 yen were introduced in November 2004, so there are now two versions in circulation. Most merchants will not object to receiving a 10000 bill even for a small purchase.

Japan's consumer economy is heavily based on cash, rather than credit. Although stores and hotels serving foreign customers take credit cards, many smaller businesses such as cafes, bars, and grocery stores do not. Even businesses that do take cards often have a minimum as well as a small surcharge over cash. Carrying around the equivalent of hundreds of dollars in cash is common, reasonably safe, and almost a necessity, especially in smaller towns and more isolated areas.

Almost any major bank in Japan will provide foreign currency exchange from US dollars (cash and traveler's checks). Rates are basically the same whichever bank you choose. Having to wait 15-30 minutes, depending on how busy the branch gets, is not unusual. Other currencies accepted are Euros, Canadian, Australian, and New Zealand dollars, and British Pound Sterling. Other Asian currencies are generally not accepted. Japanese post offices also can cash traveler's checks or exchange cash for yen, at a slightly better rate than the banks. Traveler's checks also have a better rate of exchange than cash.

Japanese ATMs, known locally as cash corners (kyasshu kōnā), generally do not accept foreign cards and the availability of credit card advances, known as cashing (kyasshingu), is spotty. The major exceptions are Citibank, which has only limited network (see here for a list) but does have ATMs at the major airports, and more usefully the post office, which also does banking and has a branch in almost every village. Most postal ATMs provide instructions in English as well as Japanese. Accepted cards are a Visa, Mastercard, American Express or Diners Club credit card, or ATM card in the Plus or Cirrus networks, or debit cards in the Visa Electron or Maestro Networks. One thing to beware: many Japanese ATMs are closed at night and during the weekends, so it's best to get your banking done during office hours!

Vending machines in Japan are known for their pervasiveness and the (notorious) variety of products they sell. Most will take 1,000 yen bills, and some types such as train ticket machines will take up to 10,000; none accept 1 or 5 yen coins, nor 2000 yen notes. And even the most high-tech vending machines do not take credit cards.

Prepaid electronic cards are quite popular in Japan for small purchases. There are cards for train fares, convenience stores purchases, and public telephones, though they aren't interchangeable.

There is a 5% consumption tax on all sales in Japan. As of April 2004, the tax must now be included in all displayed prices.

Tips are not customary, but some expensive restaurants will add a 10% service charge.

Costs

Japan has a reputation for being extremely expensive — and it can be. However, many things have become significantly cheaper the last decade. Japan need not be outrageously expensive if you plan carefully. For long-distance travel, in particular, the Japan Rail Pass and Visit Japan flights can save you a bundle.

As rough guidelines, you will find it very difficult to travel on less than ¥5,000 per day (but if you plan carefully, it's certainly not impossible), and can only expect a degree of comfort if you double the budget to ¥10,000. Staying in hotels, eating fancy meals or just traveling long-distance will easily double this yet again.

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