A Detailed Guide to Japanese Money

 

　Table of Contents

1. Types of Japanese Yen
2. History of the Japanese Yen
   
3. How to Use Japanese Banks and ATMs
4. Types of Payment Methods in Japan
   

Introduction

Japan is a country with a long history and rich culture, and within that context, the Japanese Yen (JPY) has played a vital role as the foundation of the domestic economy. This article provides a detailed explanation of the types and characteristics of Japanese Yen, as well as how the currency has developed over time.

We will also introduce the various payment methods available within Japan, helping you understand the convenience and proper use of each.

Types of Japanese Yen

The Japanese Yen (JPY) is the currency of Japan and is divided into two categories: banknotes and coins. These are issued by the Bank of Japan and are used for all transactions within the country.

 ■ Banknotes

Currently, four types of Japanese Yen banknotes are in circulation.

　・10,000 Yen Banknote

・Front: Fukuzawa Yukichi
・Back: Byodoin Phoenix Hall
・Dimensions: 76mm x 160mm
・Features: As the highest denomination banknote, it features the portrait of Fukuzawa Yukichi. He was a prominent thinker of the Meiji era and the founder of Keio University. He introduced Western knowledge to Japan and had a significant influence on modern Japanese education and social systems. The back depicts the Byodoin Phoenix Hall in Uji City, Kyoto Prefecture.

　・5,000 Yen Banknote

・Front: Higuchi Ichiyo
・Back: Ogata Korin’s “Kakitsubata-zu” (Irises)
・Dimensions: 76mm x 156mm
・Features: Higuchi Ichiyo, known as Japan’s first professional female author, is depicted on the front. Despite her short life, she left behind many literary works exploring themes of poverty and social inequality. Her works had a profound impact on Japanese literature. The back features “Kakitsubata-zu” (Irises) by the Edo-period painter Ogata Korin.

　・1,000 Yen Banknote

・Front: Noguchi Hideyo
・Back: Mount Fuji and Cherry Blossoms
・Dimensions: 76mm x 150mm
・Features: Noguchi Hideyo, known as a bacteriologist, is depicted on the front. He is renowned for discovering the pathogen of syphilis. He also conducted research on yellow fever and other infectious diseases, and his achievements have been recognized worldwide. The back features Mount Fuji and cherry blossoms, symbols of Japan.

 ■ Coins

Six types of Japanese Yen coins are in circulation.

　・500 Yen Coin

・Material: Nickel brass
・Features: The 500-yen coin is one of the highest-value coins in the world and incorporates advanced anti-counterfeiting technology. The front features the paulownia crest, while the back is designed with bamboo and mandarin orange branches. In 2021, a new design was introduced with a complex structure for enhanced security. It also features latent image technology that changes when viewed from different angles.

　・100 Yen Coin

・Material: Cupronickel
・Features: Decorated with cherry blossoms and widely recognized as a cultural symbol of Japan, it is one of the most commonly used coins in daily life.

　・50 Yen Coin

・Material: Cupronickel
・Features: Distinguished by the hole in its center, the front features a chrysanthemum flower. The chrysanthemum is also the symbol of the Imperial family, making it a historically prestigious design.

　・10 Yen Coin

・Material: Bronze
・Features: The front depicts the Byodoin Phoenix Hall, while the back features an evergreen tree. This coin is extremely widely circulated throughout Japan and is highly durable.

　・5 Yen Coin

・Material: Brass
・Features: The 5-yen coin also has a hole in its center and features designs of rice ears, water, and a gear. These symbolize agriculture, fisheries, and industry. Because “go-en” (5 yen) sounds the same as “go-en” (good fortune/connection), it is considered a lucky coin and is popular as an offering at shrines.

　・1 Yen Coin

・Material: Aluminum
・Features: The lightest coin in Japan, featuring a young tree on the front. The young tree symbolizes Japan’s growth and future.

■ New Banknotes and Coins
In 2024, new Japanese banknotes and coins were issued with significantly updated designs and security features. This change aims to strengthen anti-counterfeiting technology and extend the lifespan of banknotes. Additionally, they are designed to be easily identifiable by sight and touch. These banknotes and coins adopt a universal design, making them easy for everyone to use.

10,000 Yen Note: Features Shibusawa Eiichi. Known as the “Father of Japanese Capitalism,” Shibusawa Eiichi was an industrialist who contributed to the founding of numerous companies and valued the harmony between morality and economics. His portrait was deemed fitting for the new 10,000-yen note.

5,000 Yen Note: Features Tsuda Umeko. She was a pioneer in women’s education and is known as the founder of Tsuda University. The new 5,000-yen note was adopted in honor of her achievements.

1,000 Yen Note: Features Kitasato Shibasaburo. Kitasato is considered the “Father of Modern Japanese Medicine” and was a scientist who made significant contributions to the field of bacteriology.

History of the Japanese Yen

The history of the Japanese Yen is closely linked to Japan’s modernization policies during the Meiji era. Through the “New Currency Act” enacted in 1871, the Yen was introduced as Japan’s official currency. This was intended to modernize and unify the monetary system, replacing the paper money issued by feudal lords and the coinage system of the Edo period.

　1. Introduction During the Meiji Era and the Gold Standard
The Yen was set at 1 yen equivalent to 1.5 grams of gold or 24.26 grams of silver, subdivided into 100 sen or 1,000 rin. Initially backed by both gold and silver, the gold standard was adopted in 1897, linking the Yen directly to gold. This system continued until 1931, when it was abandoned due to the effects of the Great Depression.

　2. Changes After World War II
After World War II, the Japanese Yen lost much of its value, and in 1949 a fixed exchange rate of 1 dollar = 360 yen was established. This rate was adopted as part of the Bretton Woods Agreement and aimed to stabilize the Japanese economy. However, when the Bretton Woods system collapsed in 1971, the Yen transitioned to a floating exchange rate, and its value began to fluctuate.

　3. From the 1980s to the Present
In the 1980s, the Plaza Accord led to a significant appreciation of the Yen, temporarily reaching the 80-yen-per-dollar range. Such rapid appreciation had a major impact on Japan’s economic growth. Since then, the Yen has continued to be traded as one of the major currencies in global financial markets and is currently widely used as the third-largest reserve currency after the dollar and euro.

How to Use Japanese Banks and ATMs

Japanese Banks: Japan has many banks, with the major ones being MUFG Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank. These “megabanks” have branches throughout Japan and offer a wide range of banking services. Japan Post Bank (Yucho Bank) and online banks (such as Rakuten Bank and Seven Bank) are also popular among users.

Opening an Account: To open a bank account, identification documents such as a residence card or passport are required. While many banks traditionally require a hanko (personal seal) for account opening, an increasing number of banks no longer require one. Once an account is opened, a cash card is issued, enabling ATM transactions and online banking.

How to Use ATMs: ATMs in Japan are widely available from urban areas to rural regions, allowing cash withdrawals, deposits, transfers, and balance inquiries. Seven-Eleven ATMs and Japan Post Bank ATMs are particularly convenient as they support foreign-issued credit and debit cards and offer English-language menus.

■ ATM Operating Steps:

1. Insert your card
   
2. Select language (English, etc.)
   
3. Enter your PIN
   
4. Select transaction type (withdrawal, deposit, etc.)
   
5. Enter the desired amount
   
6. Confirm the transaction details and complete the transaction

Important Notes: Cash remains the primary payment method in Japan. Especially at small shops and in rural areas, credit cards may not be accepted, so it is recommended to always carry cash. Additionally, fees may apply when using foreign cards at ATMs, so it is important to check your bank’s fee schedule before use.

Types of Payment Methods in Japan

Since payment methods in Japan are diverse, it is important to choose the appropriate method depending on the situation and location. Below is a detailed explanation of the common payment methods in Japan.

　1. Cash
Japan remains largely a cash-based society, with many shops and restaurants using cash as the primary payment method. Especially in rural areas and at small shops and food stalls, cash may be the only accepted form of payment, so it is recommended to carry a certain amount of cash. The prevalence of cash usage can be attributed to Japan’s high level of safety and traditional culture.

　2. Credit Cards
Credit cards are widely accepted at many shops and hotels in urban areas. Visa, Mastercard, JCB, and American Express are commonly used, and credit card payment is available at tourist spots and large chain stores. However, in rural areas and small shops, credit cards may still not be accepted, so caution is needed.

　3. Electronic Money and IC Cards  
IC cards such as Suica and PASMO are not only convenient for using public transportation but can also be used at convenience stores and vending machines. Additionally, these cards can be registered on smartphones for payment via Apple Pay or Google Pay.

　4. Smartphone Payment Apps
Smartphone-based payments are rapidly gaining popularity, with services such as PayPay, LINE Pay, Rakuten Pay, and d-barai (Docomo) being widely used. These apps work by scanning QR codes to process payments and are supported at many stores. They are also popular among younger demographics due to benefits such as point rewards and coupons.

Summary

Finally, deepening your understanding of the Japanese Yen, Japan’s financial system, and its payment methods is essential for making your life or travel in Japan smoother and more comfortable.

Please use the information presented in this article as a reference for conducting everyday transactions and shopping with confidence. Having this knowledge will make your time in Japan even more fulfilling and enable richer experiences.