Money & Buying Things
Japan’s currency is the Yen (often pronounced “en”). Unlike in the US, where dollars are divided into cents, there's no higher or lower denomination of currency, everything is in Yen. At the moment, the Yen is doing very well so $1 is equal to around 82 Yen. Though, during my first stay in Japan, it ranged between 100 and 120 Yen to a dollar. While it’s not always accurate, if you want a quick estimate, just pretend 1 Yen is equal to 1 cent and go from there. You can get Yen at any major US bank (though they may have to order it for you), the money exchange counter in any international airport, or from international ATMs in Japan itself.
There are 1, 5, 10, 50, 100, and 500 yen coins (all of which except the 5 have English numbers) and it's pretty useful to have a nice little stock of them (with the possible exception of 1's and 5's), especially if you plan to get a lot of local train/subway/bus tickets or buy drinks from vending machines, all of which can easily be paid for with a little bit of change. For higher denominations you've got 1000, 2000, 5000, and 10,000 Yen bills. Though it’s worth noting that the 2000 Yen bill is rather uncommon (much like the US $2 bill). In fact, I only saw two 2000 Yen bills during my entire eight month stay in Japan a couple years back. Oddly enough, when getting some Yen from Wells Fargo in preparation for my current Japan trip, I was given a whole stack of them.
Unlike in the US, cash is the preferred method of payment and it's perfectly normal to pull out a bunch of 10,000 yen bills to pay for an expensive item. Since robbery and pickpocketing are so rare, it’s not only safe but very convenient to carry around a large amount of cash to pay for your purchases. How much you should carry depends on where you’re staying and what you plan to do, but I generally keep around 20,000 or 30,000 Yen on me and make the vast majority of my purchases with cash. If you find yourself running low on Yen, all post offices and 7-11 stores (which are extremely common in much of Japan) have international ATMs. Just put in your debit card, push the button for English, and follow the instructions on screen. Note that, while the ATMs themselves don’t charge a transaction free, your bank might.
Buying things in Japan is usually pretty simple. Sales tax is 5% and it’s almost always added into the price shown on the tag or sign, so you always know exactly how much you’re paying. Many larger stores will even refund the sales tax on purchases of 10,000 Yen or more if you show them your passport. Even better, there is absolutely no tipping Japan (be it for restaurants, hotels, taxis, or whatever), so there’s no need to worry about that. Occasionally it can be rather hard to find the price tag on some item or another, and once in a while you’re run into a little restaurant that has all its prices written in Japanese numbers, but those are minor problems. If you ever do have trouble determining the cost of an item, you can use the phrase “ikura desu ka” (ee-kew-rah de-sue kah), which means “How much is it?” If you still can’t figure out the cost, or just don’t have much small change on hand, it’s usually ok to pay with 5000 or even 10,000 Yen bills, regardless of the cost of your item.
If you have an aversion to paying for everything in cash, are making a really expensive purchase, or just can’t find an ATM when you need one, most large and medium sized stores, restaurants, and hotels take credit cards. Visa lives up to its billing of working just about anywhere and my Visa credit card has worked at nearly every place I’ve used it (with my Visa debit card serving as a reliable backup on the rare occasions when the credit card failed). Mastercard is accepted at many of the same places as Visa but American Express and Discover usually aren’t. Just be sure to let your credit card company know that you’ll be traveling abroad first, or they might think your card was stolen and lock it down. And remember that smaller stores, restaurants, and hotels often don’t except credit cards so you’ll still need to keep some Yen on hand.
Besides cash and credit cards, you really don’t have many payment options in Japan outside of prepaid cards for things like trains and buses. Personal checks are rarely used and only the biggest and most tourist friendly stores and hotels will take travelers’ checks (though some major banks will cash them for you), so make sure you plan accordingly and bring enough money (or a suitable ATM card) for your trip.