A Detailed Explanation of Money in Japan

 

　Table of Contents

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

Introduction

Japan, a country with a rich history and culture, has long relied on the Japanese Yen (JPY) as the cornerstone of its domestic economy. This article provides a detailed explanation of the different types of Japanese yen and their features, as well as an overview of how the yen has evolved over time.

We will also explore the various payment methods available within Japan, offering insights into their convenience and proper usage to help you navigate financial transactions in the country effectively.

1. Types of Japanese Yen 

The Japanese Yen (JPY) is the currency of Japan, consisting of both banknotes and coins, which are issued by the Bank of Japan and used for all domestic transactions.

 ■ Banknotes

here are currently four types of Japanese yen banknotes in circulation:

　・10,000 Yen Note

• Front: Portrait of Yukichi Fukuzawa
  
• Back: Phoenix Hall of Byodoin Temple
  
• Dimensions: 76mm × 160mm
  
• Details: The highest denomination banknote, featuring Yukichi Fukuzawa, a prominent thinker of the Meiji era and the founder of Keio University. He played a significant role in spreading Western knowledge in Japan and greatly influenced modern Japanese education and society. The back depicts the Phoenix Hall of Byodoin Temple, located in Uji, Kyoto.

　・5,000 Yen Note

• Front: Portrait of Ichiyo Higuchi
  
• Back: "Kakitsubata-zu" (Irises) by Korin Ogata
  
• Dimensions: 76mm × 156mm
  
• Details: Ichiyo Higuchi, known as Japan's first professional female writer, is featured on the front. She is famous for her works that focus on themes of poverty and social inequality. The back depicts the "Kakitsubata-zu," a famous painting by Edo period artist Korin Ogata.

　・1,000 Yen Note

• Front: Portrait of Hideyo Noguchi
  
• Back: Mount Fuji and Cherry Blossoms
  
• Dimensions: 76mm × 150mm
  
• Details: The front features Hideyo Noguchi, a bacteriologist known for his research on syphilis and yellow fever. The back depicts Mount Fuji and cherry blossoms, symbols of Japan.

 ■ Coins

There are six types of Japanese yen coins in circulation:

　・500 Yen Coin

• Material: Nickel Brass
  
• Details: One of the highest-value coins globally, featuring advanced anti-counterfeiting technology. The obverse has the paulownia crest, and the reverse features bamboo and tachibana branches. The latest design was introduced in 2021, with enhanced security features, including latent images that change when viewed from different angles.

　・100 Yen Coin

• Material: Cupronickel
  
• Details: Featuring cherry blossoms, a widely recognized symbol of Japanese culture, this is one of the most commonly used coins in daily life.

　・50 Yen Coin

• Material: Cupronickel
  
• Details: Distinguished by a hole in the center, with chrysanthemum flowers on the obverse, representing the Imperial family.
  ​

　・10 Yen Coin

• Material: Bronze
  
• Details: Features the Phoenix Hall of Byodoin Temple on the obverse, with evergreen trees on the reverse. This coin is widely circulated and highly durable.

　・5 Yen Coin

• Material: Brass
  
• Details: Also has a hole in the center, with designs representing agriculture, fisheries, and industry. The coin is considered lucky due to its pronunciation, "go-en," meaning "good fortune."

　・1 Yen Coin

• Material: Aluminum
  
• Details: The lightest Japanese coin, featuring a young tree, symbolizing Japan's growth and future.

■ New Banknotes and Coins

In 2024, new Japanese banknotes and coins were introduced with significant updates in design and security features, aiming to enhance anti-counterfeiting measures and durability. These notes are designed with universal design principles, making them easily identifiable by touch and sight.

10,000 Yen Note: Features Eiichi Shibusawa, known as the "father of Japanese capitalism," who contributed to the founding of many companies and emphasized the harmony between ethics and economy.

5,000 Yen Note: Features Tsuda Umeko, a pioneer in women's education and founder of Tsuda University.

1,000 Yen Note: Features Shibasaburo Kitasato, known as the "father of modern Japanese medicine," who made significant contributions to bacteriology.

2. History of the Japanese Yen 

The history of the Japanese yen is closely linked to Japan's modernization efforts during the Meiji era. The yen was introduced as Japan's official currency in 1871 with the enactment of the "New Currency Act." This reform aimed to modernize and unify the currency system, which had previously been fragmented with feudal lords issuing their own notes and various coins from the Edo period.

　1. Introduction during the Meiji Era and the Gold Standard
The yen was initially defined as 1 yen being equivalent to 1.5 grams of gold or 24.26 grams of silver, and was further subdivided into 100 sen or 1,000 rin. Initially, the yen was backed by both gold and silver, but in 1897, Japan adopted the gold standard, linking the yen exclusively to gold. This system remained in place until 1931, when it was abandoned due to the global economic turmoil of the Great Depression.

　2. Changes After World War II
Following World War II, the yen lost much of its value, leading to the establishment of a fixed exchange rate of 1 dollar = 360 yen in 1949. This rate was part of the Bretton Woods Agreement, which aimed to stabilize Japan's economy. However, when the Bretton Woods system collapsed in 1971, Japan moved to a floating exchange rate system, allowing the yen's value to fluctuate over time.

　3. From the 1980s to the Present
In the 1980s, the Plaza Accord led to a significant appreciation of the yen, with its value briefly reaching the 80 yen per dollar range. This sharp rise in the yen had a profound impact on Japan's economic growth. Today, the yen remains one of the most traded currencies in the global financial markets and is widely used as the third major reserve currency after the US dollar and the euro.

3. How to Use Banks and ATMs in Japan 

Japanese Banks
Japan is home to many banks, with major ones being Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank. These "megabanks" have branches all across Japan and offer a wide range of banking services. Additionally, Japan Post Bank (Yucho Bank) and online banks like Rakuten Bank and Seven Bank are also popular among users.

Opening a Bank Account
To open a bank account, you'll need identification, such as a residence card or passport. Many banks traditionally require a personal seal (hanko) for opening an account, but recently, more banks are allowing accounts to be opened without a seal. Once your account is set up, you will receive a cash card, enabling you to conduct transactions at ATMs and use online banking services.

Using ATMs
ATMs are widely available across Japan, from urban areas to rural regions. They allow you to withdraw cash, make deposits, transfer money, and check balances. Notably, ATMs at 7-Eleven and Japan Post Bank accept international credit and debit cards, and they also offer English-language menus.

■ How to Operate an ATM:

1. Insert your card.
   
2. Select your preferred language (e.g., English).
   
3. Enter your PIN.
   
4. Choose the type of transaction (withdrawal, deposit, etc.).
   
5. Enter the amount you wish to transact.
   
6. Review the transaction details and complete the process.

n Japan, cash is still a primary method of payment. In particular, small shops and rural areas may not accept credit cards, so it's advisable to carry some cash. Additionally, when using an ATM with a foreign card, be aware that transaction fees may apply, so it's important to check your bank's fees before using the ATM.

4. Types of Payment Methods in Japan 

Japan offers a variety of payment methods, so it's important to choose the appropriate one depending on the situation and location. Below is an overview of the most common payment methods in Japan.

　1. Cash
Japan remains a cash-based society, with many stores and restaurants primarily accepting cash. In small local shops or street vendors, cash is often the only accepted payment method, so carrying some cash is recommended. The preference for cash is partly due to Japan's safety and traditional cultural practices.

　2. Credit Cards
Credit cards are widely accepted in urban areas, especially in stores and hotels. Major cards such as Visa, Mastercard, JCB, and American Express are commonly used, particularly in tourist areas and large chain stores. However, in rural areas and smaller shops, credit cards may not be accepted, so it's important to have cash as a backup.

　3. Electronic Money & IC Cards
IC cards like Suica and PASMO are convenient not only for public transportation but also for use in convenience stores and vending machines. These cards can also be linked to your smartphone, allowing payments through Apple Pay or Google Pay.

　4. Smartphone Payment Apps

Smartphone-based payments are rapidly gaining popularity, with apps like PayPay, LINE Pay, Rakuten Pay, and d-barai (from NTT Docomo) being widely used. These apps allow users to make payments by scanning QR codes, and many stores accept them. The apps are especially popular among younger generations due to perks such as cashback and coupons.

 In Conclusion 

Understanding Japanese currency, the financial system, and the various payment methods available is essential for ensuring a smooth and comfortable experience, whether you are living in or traveling through Japan.

By using the information provided in this article, you can confidently handle everyday transactions and shopping. Additionally, having this knowledge will enhance your overall experience in Japan, making your time there more enriching and enjoyable.