In case you are planning to travel to Japan, you must understand the basics of the Japanese yen in order to properly make purchases, paying for your meals and accommodations, shopping in one of the many famous commercial districts of the country and even for paying your cabs and services in Japan’s many cities.
The word “yen” means “round object” or “circle” in Japanese and it comes in four denominations of bills while coins come in six denominations. In 1871 the Meiji government of Japan officially adopted the yen as Japan’s currency and since that time the yen has remained its primary form of money. The yen is the third most used and traded currency in the foreign exchange market after the United States dollar and the euro. Due to its relatively low interest rates in the world market, the Japanese Yen is often used in carry trades with the US Dollar and the Australian Dollar. A carry trade is a strategy often used in the international market in which a currency with low interest rate is sold in order to buy a currency with a higher interest rate.
1 JAPANESE YEN EQUALS 0.62 INDIAN RUPEES
History of Japanese Currency
The history of Japanese currency began in the 8th Century when silver and copper coins, named Wado Kaichin, began to be minted in 708. These coins often imitated Chinese coins, and at the time when Japan was no longer able produce their own coins, Chinese currency was imported from China to Japan. The inflow of Chinese coins did not meet the demand over the next few centuries, so to counter this problem, two privately minted Japanese coins (Toraisen and Shichusen) entered circulation from the 14th to 16th century. In the 15th century, the minting of silver and gold coins named as Koshu Kin was encouraged and gold coinage was soon made into the new standard currency of Japan. Later the government established a unified monetary system that consisted of gold, silver and copper currency.
Around the 19th century, Spanish Dollars were being used in Japan, along with local Japanese currencies. In order to simplify and standardize the different coins being used at that time, the Yen was created in 1871. Until 1987, Yen operated under a bimetallic standard of silver and gold, when it was left under a sole gold standard. After World War II, the Japanese Yen lost much of its value and in 1971, exchange rate to the US Dollar at a rate of 308 JPY to 1 USD were fixed. This lasted until 1973 when it was switched to a floating exchange rate.
Money Tips for Travelers to Japan
In Japan, at most large hotels and duty-free shops traveler’s checks and some foreign currencies can be used but most businesses only accept the Japanese yen. Many places including shops, hotels, and restaurants mainly take credit cards. The 2020 Tokyo Olympic and Paralympic Games will bring more tourists with the easing of visa requirements, therefore more places will start accepting credit cards. Whether you own a credit card or not, you definitely need to have some local currency. For the best rates, you can exchange your money at the airport, authorized foreign exchange bank or at post office before you start your Japanese adventure.
You must carry cash when traveling to small cities and rural areas. It’s also advisable to use cash if the price is a very small amount. In other words, you will need to have small denominations for taxis, small restaurants, shops and tourist attractions. Coins are easy to have on hand for travel lockers, vending machines and public transportation.
Do not rely on ATMs as most Japanese ATMs might be closed at night or on the weekend and do not accept foreign cards. You must find an ATM that you can use in 7-Eleven stores, post offices, the airports, or other international establishments that often accommodate foreign travelers. In Japan, IC cards or “integrated circuit” cards, which are also called prepaid transportation cards, can have value or money added to them and are handy to have for public transportation fares, vending machines and lockers.
The value of the Japanese yen fluctuates like the dollar but to give you a sense of what a normal meal costs in Japan, you can definitely buy a bowl of ramen for 500 to 1,000 yen. Although, a dinner can cost you about 3,000 yen. A subway ride costs approximately 200 yen. A taxi ride averages about 700 yen and to rent a bike for a day can cost about 1,500 yen. Entrance fees to many museums and attractions can cost about 300 to 1000 yen per person.