Currency in Japan Explained: From History to Modern Use

Japan has a rich history of currency, with the first coins minted in the 7th century.

The yen was introduced in 1871, replacing the traditional Japanese currency, the ryo and bu.

The yen was initially pegged to the US dollar at a rate of 1:1, but this was later changed to a managed float in 1973.

The Japanese currency has undergone several design changes over the years, with the current yen featuring a goldfish on the 500 yen note.

You can send money to Japan through various methods, including bank transfers and alternative services.

SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is a network of international banks that facilitates international transfers.

International transfer services, money order services, and peer-to-peer transfer services like PayPal are also options for sending money to Japan.

There are several factors to consider when choosing a method, including security, cost, and delay.

Consider your specific objectives and situation when selecting a method to send money to Japan.

Here are some popular options for sending money to Japan:

Wise is a popular online money transfer service that offers fast, low-cost, and secure transfers from the United Kingdom to Japan.

In Japan, you have several options for making payments, and it's essential to consider your specific objectives and situation when selecting a method. Each option has its pros and cons, so take the time to weigh your choices carefully.

Cash is still king in Japan, and it's a good idea to have small denominations (10 yen and 100 yen coins, as well as 1,000 yen notes) handy, as many ticket and vending machines will not accept larger denominations. This is especially true in rural areas or when visiting small, independent businesses.

You can also use credit and debit cards, which are increasingly accepted across Japan. Most commonly accepted cards are MasterCard, Visa, and JCB, followed by American Express and Diner's Club. However, it's always a good idea to check in advance whether a place solely accepts credit cards.

If you have a Japanese phone number, you can use digital payment apps like PayPay, MerPay, Line Pay, or R (Rakuten) Pay. These apps can be topped up at ATMs or via connecting a bank account, credit card, or mobile service provider. Payments can be made via contactless terminals or having a vendor scan your QR code.

Digital payments in Japan are incredibly convenient. With a Japanese phone number, you can use a variety of local apps to make payments.

These digital payment apps can be topped up at ATMs or via connecting a bank account, credit card, or mobile service provider. This makes it easy to get started.

You can use digital payment apps to make payments via contactless terminals or by having a vendor scan your QR code. Services like PayPay, MerPay, Line Pay, and Rakuten Pay are all available.

Here are some of the digital payment apps you can use in Japan:

These apps are widely accepted in Japan, making it easy to get around and make purchases.

In Japan, credit and debit cards are widely accepted, but it's always a good idea to check if a place accepts credit cards before you go, as some businesses may only accept cash.

Most credit card companies charge a surcharge for foreign-issued cards, which can range from 1-3%. However, with a Wise card, you can avoid foreign transaction fees and get a real exchange rate when using local ATMs.

The most commonly accepted cards in Japan are MasterCard, Visa, and JCB, followed by American Express and Diner's Club. You'll often be asked to swipe, insert, or tap your card for payment, and in some cases, you may still be asked to sign for payments.

It's a good idea to carry or have access to sufficient cash, even if you plan to mainly use a credit card. This way, you'll be prepared for any situation where credit cards aren't accepted.

Here are the most commonly accepted credit cards in Japan:

If you're planning to spend in Japanese currency, consider getting a Wise Japanese yen card. This card lets you top up in your local currency and switch to yen when you're in Japan, giving you the best rate for spending in Japanese yen.

Credit and debit cards are increasingly accepted across Japan, but it's always a good idea to check in advance if a place solely accepts credit cards.

Most credit card companies will charge a surcharge (usually 1–3%) for foreign-issued cards, but a Wise card lets you avoid foreign transaction fees and convert at the real exchange rate.

The most commonly accepted cards are MasterCard, Visa, and JCB, followed by American Express and Diner’s Club.

Credit card readers typically support one of swipe, insert or tap/contactless (referred to as "touch" in Japan).

In some cases, you may still be asked to sign for payments, but it's rare for the vendor to check the authenticity of this.

Here are the most commonly accepted cards in Japan:

It's still recommended to carry or have access to sufficient cash, even if you decide to mainly use a credit card.

The Japanese yen has a rich history, and its currency denominations are a fascinating aspect of it. Tokugawa coinage was established in 1601 and consisted of gold, silver, and bronze denominations.

The Tokugawa shōgun, Tokugawa Ieyasu, introduced this monetary system, which lasted until 1867. The coinage was initially minted with gold and silver from mines across Japan, such as the Sado and Toi gold mines in the Izu Peninsula.

The Tokugawa coinage system was later modified to include the Kan'ei Tsuho coin, which replaced Chinese copper coins and became the legal tender for small denominations.

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In 1871, Japan adopted the gold standard with the New Currency Act, making 1 yen equivalent to 1.5g of pure gold. This marked a significant shift in Japan's currency system.

The Meiji government issued new notes called Meiji Tsūhōsatsu in 1872, printed in Germany. These notes were the first of their kind in Japan.

A de facto gold-silver standard was established due to the issuance of silver coins for trade with Asian countries. This allowed for a dual currency system to accommodate different regional preferences.

The first Japanese note to feature a portrait was the Empress Jingū note, issued in 1881.

The Japanese yen has a wide range of denominations, from 1 yen to 10,000 yen. These denominations have changed over time, with the lowest-valued banknote being the 1,000 yen note since 1984.

Coins in circulation include 1 yen, 5 yen, 10 yen, 50 yen, 100 yen, and 500 yen. These coins have been issued by the Japan Mint since 1871.

The Bank of Japan has been the exclusive note issuing authority since the end of World War II. It has issued five series of banknotes since then.

Japanese banknotes feature portraits of people from the Meiji period and later. This is because precise photographs are used as originals to prevent forgery.

Here are the denominations of Japanese banknotes:

The issuance of yen banknotes began in 1872, two years after the currency was introduced.

During the Tokugawa period, Japan's currency system was established by shōgun Tokugawa Ieyasu in 1601 and lasted until 1867.

The Tokugawa currency system consisted of gold, silver, and bronze denominations, with fixed rates but fluctuating exchange rates on the market.

In 1601, Tokugawa Ieyasu started minting Keicho gold and silver coins, replacing Chinese copper coins with Kan'ei Tsuho coins in 1670.

The material for the coinage came from gold and silver mines across Japan, with new gold mines like the Sado and Toi gold mines in the Izu Peninsula being opened.

Kan'ei Tsūhō coins replaced Chinese coins and privately minted coins, becoming the legal tender for small denominations.

Yamada Hagaki, Japan's first notes, were issued around 1600 by Shinto priests working as merchants in the Ise-Yamada region.

The first feudal note was issued by the Fukui clan in 1661, and during the 17th century, feudal domains developed a system of feudal notes, giving currency to pledged notes issued by the lord of the domain.

Tokugawa coinage remained in use during the Sakoku period of seclusion, but it was progressively debased to manage government deficits, with the first debasement called the Genroku Recoinage in 1695.

Here's a brief overview of the Tokugawa coinage system:

The Bakumatsu period in Japan was a time of significant currency changes. It lasted from 1854 to 1868.

During this time, the Tokugawa coinage collapsed due to the reopening of Japan to the West in 1854. This led to the export of large quantities of gold.

The silver-gold exchange rates gave foreigners huge opportunities for arbitrage, as gold traded for silver in Japan at a 1:5 ratio, while that ratio was 1:15 abroad.

Mexican dollars were even given official currency in Japan in 1859, with marks in Japanese and an official exchange rate of three "Bu". They were called Aratame Sanbu Sadame (Fixed to the value of three bu).

Local governments issued their own currency chaotically, leading to a 2.5 times expansion of the nation's money supply between 1859 and 1869. This caused crumbling money values and soaring prices.

The system was eventually replaced after the conclusion of the Boshin War, with the onset of the Meiji government in 1868.

The historical exchange rate of the yen is a fascinating topic. In 1854, the Tokugawa coinage collapsed after Japan reopened to the West, leading to a huge opportunity for arbitrage, which resulted in the export of large quantities of gold. The silver-gold exchange rate in Japan was 1:5, while abroad it was 1:15, creating a significant discrepancy.

The Bakumatsu period saw the introduction of Mexican dollars as official currency in Japan, with an exchange rate of three "Bu" to one Mexican dollar. This was marked with "Aratame sanbu sadame" (Fixed to the value of three bu) from 1859.

In 1945, the yen traded at an average of 3.6 yen to the dollar. After the war, the yen went as low as 600 yen per USD in 1947 due to currency overprinting. The official conversion rate was decreed at 15 yen to the USD by MacArthur and the US forces when they entered Japan in 1945.

The yen's value continued to plummet, reaching 50 yen to the USD in 1946 due to ongoing inflation. It eventually stabilized at 270 yen to the dollar in 1948, before being adjusted again to 360 yen to the dollar from 1949 to 1971.

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The rin was a small bronze coin introduced in 1873, measuring 15.75 mm in diameter and 0.3 mm in thickness.

It was first introduced as a coin worth one-one thousandth of a yen, but its small size made it unpopular and it was eventually abandoned in 1884.

One rin coins were very small and co-circulated with mon coins of the old currency system, but their small size was a major drawback.

Five rin coins, worth one-two hundredth of a yen, were introduced later, using a bronze alloy and were successor coins to the half sen coin.

However, these coins were also discontinued after only four years of production due to their sharp decline in monetary value.

Coins worth 1 and 5 rin were eventually officially taken out of circulation at the end of 1953 and demonetized.

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