Japan currency guide: The Japanese yen (JPY)

With a rich cultural heritage, natural and historical landmarks, and some of the world’s best cuisine, it’s no wonder why more than 100,000 American tourists choose Japan as a travel destination each month. Not to mention the thousands of people who travel to the country to conduct business in its massive technology and automotive industries.

Any trip to Japan must start with understanding the country’s currency, the yen (JPY). This guide will teach you about the history of Japan’s currency, tips for exchanging US dollars (USD) for JPY, and how to send money to Japan.

Note: Before making travel plans, check the US Department of State website for the latest travel advisory information.

What is the currency in Japan?

Japan’s currency is abbreviated as JPY and is internationally recognized by the symbol “¥.” The yen trades widely and plays a significant role in international trade. It’s the third-most traded currency in the foreign exchange market after the euro and US dollar.

The Bank of Japan (BOJ) is the country’s central bank, issuing and managing the yen. Japanese currency banknotes and coins come in several denominations and feature the country’s historical figures, national landmarks, and cultural symbols.

Banknote	Color	Obverse image	Reverse image
¥1,000	Blue	Shibasaburo Kitasato – Physician and bacteriologist	Mount Fuji
¥2,000	Green	Shureimon Gate, Okinawa	The Tale of Genji and Murasaki Shikibu
¥5,000	Purple	Ichiyo Higuchi – Writer	Wisteria flowers
¥10,000	Brown	Yukichi Fukuzawa – Philosopher and writer	Phoenix statue – Byodoin Temple

 

Coin	Year of first issue	Front image	Back image
¥1	1955	Young tree	“1”
¥5	1959	Ear of rice, gear, water	Sprouting plant
¥10	1959	Byodoin Phoenix Hall, arabesque	Evergreen tree, “10”
¥50	1967	Chrysanthemum	“50”
¥100	1967	Cherry blossoms	“100”
¥500	2021	Paulownia	Bamboo, citrus tachibana

 

The BOJ uses security features like watermarks, microprinting, and edge designs on its banknotes and coins to help ensure no one can easily counterfeit them. Enhanced security features protect high-value banknotes, including holographic images that change appearance from different angles.

History of the Japanese yen

The history of money in Japan spans a millennium, with the yen emerging as the nation’s official currency in the late 19th century. This brief history traces the evolution of Japanese currency from ancient times to the modern yen.

Ancient and Medieval Times

Japan’s first official coin, the Wado Kaichin, was minted in 708 during the Nara period. Over the following centuries, Japan used a variety of currencies, including imported Chinese coins, commodity money like rice and silk, and privately minted Japanese coins.

Edo Period (1603-1868)

The Tokugawa Shogunate established a complex monetary system based on gold, silver, and copper coins. Notable coins included the gold Koban and Oban, silver coins traded by weight, and copper coins like the Kan’ei Tsuho. Paper money called hansatsu, issued by local domains, also circulated during this period.

Meiji Restoration and the Birth of the Yen

In 1871, the new Meiji government enacted the New Currency Act, introducing the “yen,” “sen,” and “rin” as official Japan currency units. At first, the yen was theoretically on a gold standard but effectively operated on a silver standard due to limited gold reserves. Here’s how the weight of gold broke down into yen, sen, and rin:

• 1.5 grams of gold equaled 1 yen
• 1 yen equaled 100 sen
• 1 yen equaled 1,000 rin

Establishment of the Central Bank

The BOJ was founded in 1882 to stabilize the currency and establish a modern monetary system. It began issuing convertible banknotes in 1885, which were initially exchangeable for silver coins. In 1897, Japan formally adopted the gold standard, aligning its currency with major Western economies.

20th Century Developments

The yen faced several challenges in the 20th century:

• During World War I, demand for Bank of Japan notes increased significantly.
• The 1923 Great Kanto Earthquake and the 1927 financial crisis led to monetary instability.
• Japan abandoned the gold standard in 1931 amidst the global Great Depression.
• In 1942, Japan officially adopted a managed currency system, which continues today.

Post-World War II Era

After World War II, the yen experienced severe inflation. In 1949, it was pegged to the US dollar at a fixed rate to stabilize the currency. This system lasted until 1973 when the yen shifted to a floating exchange rate.

In 1954, the sen and rin subdivisions were officially discontinued due to their diminishing value, leaving the yen as the sole denomination of the Japanese currency.

Today, the yen remains one of the world’s major currencies, reflecting Japan’s significant role in the global economy.

7 tips for exchanging US dollars to yen

Between the exchange rate, fees, and finding a reputable currency conversion service, there’s much to know when exchanging dollars for Japanese currency. The following tips can help you when converting USD to JPY.

1. Research and compare exchange rates

In Japan, money exchangers are free to set their own exchange rates. To ensure you get the most Japanese currency for your exchange, it’s wise to shop around and compare rates from various sources, including banks, exchange offices, post offices, and reliable online platforms like Western Union. Western Union often offers competitive exchange rates, making it a valuable option when comparing.

By taking the time to research and compare rates, you can make an informed decision and potentially save money on your currency exchange.

2. Notify your bank ahead of traveling

While Japan is a common destination for American tourists and businesspeople alike, you should still inform your bank about your travel plans ahead of time. Provide your bank with your trip details, including where you are traveling and on what dates. This can help your bank give you access to money in Japan without them declining your card or freezing your bank account.

3. Avoid exchanging money at airports, hotels, and tourist areas

Whether you’re flying into Osaka, Tokyo, Okinawa, or any other Japanese airport, hold off exchanging your dollars for yen until later. Japanese airports typically won’t have great exchange rates, but if you need some yen banknotes to get you by, you can always exchange for a small amount of Japanese money to get started on your travels. The same goes for your hotel.

When traveling around the country, you may encounter unlicensed money exchangers offering favorable rates for Japan’s currency but don’t be fooled. These businesses lure in foreigners and take advantage of them by charging hidden fees or using counterfeit banknotes.

4. Consider commissions and fees

Another crucial factor in choosing a currency conversion service is their fees. Fees can vary across exchanges, but can include:

• Transaction fees
• Commissions
• International processing fees
• Dynamic currency conversion (DCC) fees

Always ask about specific fees associated with your transaction to maximize the Japanese yen you receive. Consider comparing fees across different providers. For example, Western Union is known for its transparent fee structure. This enables you to make an informed decision and avoid any unpleasant surprises.

5. Withdraw Japanese currency instead of US dollars from ATMs

Many ATMs in Japan allow you to use your American debit card to withdraw Japanese currency. The best way to exchange currency when using an ATM is to choose yen instead of dollars for your transaction. Doing so allows your bank to conduct the currency conversion. Otherwise, you might incur a DCC fee, making your transaction more expensive.

6. Exchange money in Japan instead of the US

While the yen is a widely traded currency, your local bank might not have it on hand. Instead of going out of your way to exchange Japanese currency in the US, wait until you arrive in Japan to exchange dollars for yen.

Or, if you prefer to make your exchange digitally, you can exchange USD for JPY online using Western Union.

7. Use reputable exchanges

Only trust exchanges that the Japanese Ministry of Finance (MOF) licenses. Licensed money exchangers, such as banks, post offices, and exchange kiosks, adhere to strict regulatory standards that keep you safe when converting currency.

Unlicensed money exchangers may lure you in with a favorable rate for Japanese currency but then charge you high fees. Also, they might give you counterfeit bills or incorrect change, leaving you no recourse later. That’s why you should stick with licensed exchangers.

For added convenience and peace of mind, consider using Western Union. Whether you visit a Western Union agent location in Japan or use their online platform, you’ll benefit from features like touch ID (using the Western Union^® mobile app), transfer tracking, and encryption. Plus, our adherence to PCI DSS and other compliance standards ensures your transactions are protected.

Using money in Japan

Japanese culture is different than US culture. This is also true for money. It’s important to know these cultural differences when using money in Japan.

Can you use US dollars in Japan?

Japan considers itself a strong, independent economic power. As such, most of Japan does not accept dollars for transacting. Instead, you’ll need Japanese money to make everyday purchases.

If you don’t have any yen, you can withdraw the currency at a local ATM using your debit card, exchange your USD for JPY at a local currency exchange service, or use an online platform like Western Union to exchange it digitally.

Tipping etiquette in Japan

People in Japan don’t customarily tip. In fact, if you attempt to leave a tip, service staff may see it as impolite and reject it. This is because the Japanese consider high-quality service standard and include this in the cost of their services.

The main exception to this rule can be at a ryokan (a traditional Japanese inn), where the staff may leave an empty envelope for you to leave Japanese money as gratuity if you wish.

Where to get Japanese yen near me?

You can find reliable and reputable currency exchange offices like Western Union throughout Japan, where you can exchange USD for JPY. Look for a currency exchange near you, including:

• Banks
• Post offices
• Licensed currency exchange offices
• ATMs