What Currency Is Used in Japan?

What currency is used in Japan?

If you’re planning a holiday to Tokyo, buying from a Japanese supplier, or working with clients in Osaka, understanding Japan’s currency is essential. This article is written for travellers, online shoppers, expats, and international businesses. We’ll cover what currency Japan uses, how it works, and how to manage it effectively—especially if you're dealing with international conversions or local spending.

Japan’s official currency: the Japanese Yen (JPY)

The official currency of Japan is the Japanese Yen, abbreviated as JPY and symbolised by ¥. It has been the national currency since 1871 and remains the only legal tender accepted across the entire country. The word “yen” means “round” in Japanese, a reference to the coin’s shape.

The yen is one of the most traded currencies in the world, alongside the US dollar, euro, and pound sterling. It plays a central role in global finance and is frequently used as a safe-haven currency during periods of economic uncertainty.

Denominations in circulation:

• Coins: ¥1, ¥5, ¥10, ¥50, ¥100, and ¥500

• Banknotes: ¥1,000, ¥2,000 (rare), ¥5,000, and ¥10,000

Banknotes feature notable historical figures such as novelist Natsume Sōseki and educator Yukichi Fukuzawa. The Bank of Japan is responsible for printing currency, setting monetary policy, and managing inflation.

Where the yen is used

The yen is used throughout Japan, from major cities like Tokyo, Kyoto, and Sapporo to rural villages and islands. It is required for all payments, including:

• Shops and supermarkets

• Hotels and transport

• Restaurants and entertainment

• Government services and taxes

Foreign currencies are not accepted in Japan, even in international airports or tourist zones. All prices are listed in yen, and all payments must be made in yen unless stated otherwise (for example, online purchases that allow automatic conversion).

How the yen works

The yen is a free-floating currency, meaning its value is determined by supply and demand in global currency markets. The Bank of Japan occasionally intervenes in forex markets to control excessive volatility, especially during sharp rises or falls against the US dollar.

As of 2024, the exchange rate typically fluctuates between:

• ¥135–150 per US Dollar

• ¥160–180 per British Pound

These rates can shift due to interest rate decisions, trade balances, inflation data, and global economic trends.

Benefits and considerations of using the yen

Advantages:

• Highly stable: Backed by one of the world’s largest economies and a trusted central bank.

• Widely accepted within Japan: From major department stores to vending machines, the yen is used everywhere.

• Recognised globally: JPY is one of the top reserve currencies worldwide.

Considerations:

• Cash is still king: Many small restaurants, temples, and rural businesses do not accept cards.

• Exchange fees: Converting to yen can involve service charges, especially outside Japan.

• Rare ¥2,000 notes: Still legal tender, but rarely seen or accepted in machines.

Common misconceptions about the yen

One common myth is that Japan is now mostly cashless. While card acceptance is growing, cash remains the preferred payment method, especially in local eateries, guesthouses, and public transport outside large cities.

Another misconception is that coins are unimportant. In fact, coins are used frequently in everyday transactions, especially in amounts under ¥1,000. Tourists are often surprised by how much change they receive and how widely coins are used.

Tips for managing your money in Japan

• Use ATMs at 7-Eleven or Japan Post branches—they accept most international cards and offer competitive exchange rates.

• Avoid exchanging money at home or at airports, where the rates are often poor.

• Withdraw moderate amounts of yen—Japan is safe, and cash handling is common, so it’s practical to carry more than you might elsewhere.

• Have coins handy for vending machines, bus fares, and temple donations.

• Pay in yen only, even if a vendor offers to accept your home currency—exchange rates are usually worse.

FAQs

Can I use US dollars or British pounds in Japan?
No. Japan only accepts Japanese yen for in-person transactions.

Are credit and debit cards accepted in Japan?
Yes, especially in cities, hotels, and large stores. However, many small shops and restaurants still prefer cash.

Is tipping customary in Japan?
No. Tipping is not expected and may even be refused. Good service is standard and included in the price.

Should I exchange currency before arriving in Japan?
You can, but better rates are usually found at ATMs or banks in Japan, especially in cities.

Real-life example

A tourist from the UK travels to Tokyo with £500. They exchange a small amount at home, then withdraw ¥40,000 from a 7-Eleven ATM using a fee-free travel debit card. They use cash for most meals, shopping, and local trains. In hotels and department stores, they use their card. By withdrawing yen in Japan and avoiding dynamic currency conversion, they stay within budget and avoid unnecessary charges.