Managing your money in Japan can at first feel a tad overwhelming. With a little planning and awareness though, it doesn’t need to be.
Being prepared to tackle your budget and finances on a trip can make it a whole lot easier. With good money management, it might even mean a return trip to Japan is a lot closer than you think.
So how do you best prepare yourself, your wallet and your budget for a trip to the land of the rising sun? Read on to find out how best to keep your yen in check, and some insights around how much we spent on our recent trip to Japan.
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How much do I need to spend on a trip to Japan?
This age old question is going to be determined by so many factors. None moreso than your own budget. Some folks are happy staying in capsule hotels. For others, nothing less than the Park Hyatt will suffice. No matter your budget, Japan has you covered.
Noting all of this, on our most recent trip we kept a detailed expense diary. Nerdy much? Of course, but we felt it the best way to share with our readers with unerring accuracy exactly how much we spent. We’ve included an infographic below with details of where our money went.
It might not be to your budget, but hopefully gives an indication of how much things cost. Finding cheap eats can be a sport in itself. Cheap eats exist in every convenience store. Those who prefer to dine in style will find many Michelin starred restaurants. And of course there is everything in between.
We’d describe our visit as a comfortable mid-budget trip. Our one night in Hakone was a splurge thanks to a rewards voucher we’d earned. This meant our visit here was actually free.
One of the key things we realised when speaking with other travellers, was the importance of keeping costs down when it comes to money management. There are some easy things you can do to keep the cost of accessing money minimal. Read on to find out how to best manage your money in Japan.
Read more of our articles about Japan
4 days in Tokyo itinerary
One day in Osaka
A day trip from Osaka to Nara
Managing your money in Japan: how should I pay for things?
There are a number of misnomers surrounding payment options in Japan. I see many of these shared on blogs and Facebook groups daily. On our very first trip to Japan in 2013, there were fewer payment options for visiting travellers.
In 2020 however, things are changing. The 2019 Rugby World Cup had MasterCard as a lead sponsor. The 2020 Tokyo Olympics sees the payment sponsorship torch handed over to Visa. There is a significant push by these companies to increase digital payments usage as a result.
Having worked in banking for over 15 years, I can assure you, the ability to pay with card is only increasing.
A credit card is a useful payment option
Many merchants now accept Visa, Mastercard and American Express in stores. Lawson, 7/11 and Family Mart all accept international cards. More restaurants than you expect will accept cards. You can of course use cash in these stores, but there’s really no need to.
I utilise an ANZ Travel Adventures credit card when abroad. Aside from the ability to earn a small amount of Velocity points, this card can also be used to withdraw cash. Keep your account in credit (eg not below your credit limit) and you can withdraw from an ATM without incurring interest or cash advance fees.
Card usage is only increasing around the world and Japan is no different.
Cash – you’ll still need it
It doesn’t matter which country we visit, we always have a small denomination of local currency. That said, working out how best to equip yourself with cash can be fraught with challenges. Getting cash is one thing, but doing so whilst avoiding fees is something else altogether.
Our trusty ING Orange Everyday Debit card
When abroad, we utilise an ING Orange Everyday Debit card. It’s an Australian issued card that comes with no international transaction or ATM fees. That means whenever we take out cash at an ATM, we are refunded the ATM fee if there is one. And let’s face it, there always is. The exchange rate on the currency from an ATM is at the wholesale rate of the day. These rates are set by Visa, MasterCard or American Express depending on which card you are using.
Disclosure: As of February 2020, I have been employed by ING Australia.
Each and every international ATM fee is rebated, as well as any international transaction fees.
Whether we need ¥5000 or ¥20000, this account is the simplest, easiest and cheapest way of accessing our money in Japan or elsewhere.
There are some reasonable minimum hurdles required with this account. So best to visit ING’s website and check the terms and conditions for yourself.
Please note: the commentary above applies to products based in Australia. These are products I use, but are not personal recommendations. For those based outside of Australia, most major markets including the UK, Canada, New Zealand the US all have similar products. Wherever you are located, I encourage you to conduct your own research on products of this nature.
Hole in the wall currency exchanges
Like a good restaurant tucked around a side street, the best currency exchanges tend to be harder to find. If we’re visiting with some cash and want to exchange, we seek out the ones that tend to be a little more hidden. They aren’t paying exorbitant rents and tend to take a lower margin. In Japan, you can find exchanges that take as low as 1-4%. If the margin is higher, I’d encourage you to look elsewhere.
Avoid the airport currency exchanges
I’ll be blunt. Airport exchanges offer the worst value. Period. Avoid using them at all costs unless completely desperate. It’s the biggest scam in travel.
Time and time again, I see people handing over their hard earned cash to the global foreign currency provider that resides in a lot of airports. These guys may tell you they don’t charge fees, which technically may be true. Their exchange rates however have this built in. I’ve seen exchange rates taking up to a 25% margin. That means you’re paying one in every $4 in a hidden commission. Yuck.
You probably shopped around for hotels and flights. Why would you give a currency exchange a quarter of your hard earned spending money? In these instances, even a non-fee waiving Debit or credit card may prove better value.
If you must transfer at an airport, do the sums with a currency exchange app like xe.com. They provide a real time wholesale exchange rate so you know exactly what you’re getting yourself into. If you’re desperate to exchange, aim for a smaller amount to limit the damage.
ATMs in Japan
You may have read that getting cash out at an ATM can be difficult. On our first visit to Japan in 2013, it certainly was a little more challenging. On that trip, 7/11 and Citibank ATMs were the most reliable options. There were a lot of ATMs that just didn’t like our international cards.
With the growth of digital payments and Japan’s tourism boom, ATMs accepting international cards continues to grow.
There are ATMs that still accept only local cards. In the major cities and airports, there are plenty of ATMs accepting international cards. If you come across an ATM that doesn’t accept your card, don’t despair. Move onto the next one, the numbers continue to grow in your favour.
First time to Japan? Check out our guide to the top things to know before travelling to Japan.
Prepaid cards (Suica, Pasmo, Icoca)
If you’ve done any level of reading, you’ll have heard that prepaid cards are well utilised in Japan. These cards allow you to carry currency to be used in a handful of stores and primarily the train and metro system.
Cards can be purchased at the major train stations. We purchased our Icoca cards at Shin Osaka station. Your first load will need to be ¥2000. ¥500 of this is refundable when you return the card on departure (along with any unused balance).
Pasmo and Suica are available for purchase in Tokyo. Like the Icoca card, they can be used in different regions of Japan.
We found these cards to be our best bet to get around on public transport. The only catch being that we needed to top these up with cash. Not a big deal, but it does require some level of cold, hard yen on hand.
Why else would I need to use cash in Japan?
We found a number of restaurants and most entrance fees to temples would only accept cash.
The vending machines synonymous with Japan require coins to operate.
Are there any other options to get Japanese Yen in Japan?
Yes there is. You may encounter money exchange machines around the major cities in Japan. We also found one in Hakone.
We noticed many of these in metro stations. They allow you to deposit foreign currency (notes only) and provide Japanese Yen in return. I used it to exchange a small amount of Korean won, and the margin on this was 10%. This is really handy for small amounts of currency you want to exchange. The margin is a little too high for me to get excited about. If you’re in a bind, it likely works out better than exchanging at the airport.
What about 7/11 and Lawson?
Convenience stores offer up much more than drinks and snacks. Take note that at some of these stores, they will also exchange foreign currency as well. It’s not a service I have used, but it’s another option.
What’s the absolute best way to pay for things in Japan?
We like to keep our wallets thin, but cover all of our bases. We take a limited amount of cash, and try and utilise as little as possible. Wherever we can, we utilise our credit card. We don’t need to think too much about how much in cash we’ve got. We can check our spending instantly on our apps. We earn points on cards that helps us travel in comfort from time to time.
When we need cash, our debit card comes to the rescue with no fees on international ATMs or transactions.
If I do want to stick to cash, do you have any other tips?
Maybe it’s being cash adverse for so many years, but I do find that the Japanese coins are quite large and bulky. They take up room in my wallet and weigh down my pocket. So think about a coin purse if your preference remains cash.
We hope this managing your money in Japan guide has helped debunk some myths about managing your money in Japan. Save those pennies for a nice ramen, another activity or maybe even a hotel upgrade!
Have you visited Japan? Have we missed any tips when it comes to managing your money here?
Lots of useful information here. The ING Orange Debit Card is one I’ll certainly look into for all my OS travels in future.