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Money & costs



Japan is generally considered an expensive country in which to travel. Certainly, this is the case if you opt to stay in top-end hotels, take a lot of taxis and eat all your meals in fancy restaurants. But Japan does not have to be expensive, indeed it can be cheaper than travelling in other parts of the world if you are careful with your spending. And in terms of what you get for your money, Japan is good value indeed.

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There is little tipping in Japan. If you want to show your gratitude to someone, give them a gift rather than a tip. If you do choose to give someone a cash gift (a maid in a ryokan, for instance), place the money in an envelope first.

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The Japanese ‘economic miracle’ is one of the great success stories of the postwar period. In a few short decades, Japan went from a nation in ruins to the world’s second-largest economy. The rise of the Japanese economy is even more startling when one considers Japan’s almost total lack of major natural resources beyond agricultural and marine products.

There are many reasons for Japan’s incredible economic success: a hardworking populace; strong government support for industry; a strategic Pacific-rim location; infusions of cash during the Korean War (during which Japan acted as a staging point for the American military); and, some would say, protectionist trade policies. What is certain is this: when free-market capitalism was planted in the soil of post-war Japan, it was planted in extremely fertile soil.

Of course, it has not always been smooth sailing for the Japanese economy. During the 1980s, the country experienced what is now known as the ‘Bubble Economy’. The Japanese economy went into overdrive, with easy money supply and soaring real-estate prices leading to a stock market bubble that abruptly burst in early 1990. In the years that followed, Japan flirted with recession, and the jobless rate climbed to 5%, an astonishing figure in a country that had always enjoyed near full employment.

Fortunately, the new millennium has brought good economic news to Japan. In the last three months of 2006, the Japanese economy grew by an astonishing 4.8%. This expansion led the Bank of Japan to abandon its long-held zero interest policy, finally raising its prime lending rate to a modest 0.25% in July 2006, followed by another incremental increase in February 2007. At the same time, the stock market enjoyed a near-record year and companies reported robust profits. Despite the rosy figures, many ordinary Japanese contend that corporate profits aren’t filtering down to the person on the street. And when Japanese travel abroad, they may indeed wonder if they come from the world’s second-richest country: at the time of writing, the yen stood at a 20-year low in terms of real purchasing power (which is, conversely, good news for travellers to Japan).

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The Japanese postal system has linked its ATMs to the international Cirrus and Plus networks, and 7-11 convenience stores have followed suit, so getting money is no longer the issue it once was for travellers to Japan. Of course, it always makes sense to carry some foreign cash and some credit cards just to be on the safe side. For those without credit cards, it would be a good idea to bring some travellers cheques as a back-up.

The currency in Japan is the yen (¥) and banknotes and coins are easily identifiable. There are ¥1, ¥5, ¥10, ¥50, ¥100 and ¥500 coins; and ¥1000, ¥2000, ¥5000 and ¥10, 000 banknotes (the ¥2000 notes are very rarely seen). The ¥1 coin is an aluminium lightweight coin, the ¥5 and ¥50 coins have a punched hole in the middle (the former is coloured bronze and the latter silver). Note that some vending machines do not accept older ¥500 coins (a South Korean coin of much less value was often used in its place to rip off vending machines).

The Japanese pronounce yen as ‘en’, with no ‘y’ sound.

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Automated teller machines are almost as common as vending machines in Japan. Unfortunately, most of these do not accept foreign-issued cards. Even if they display Visa and MasterCard logos, most accept only Japan-issued versions of these cards.

Fortunately, Japanese postal ATMs accept cards that belong to the following international networks: Visa, Plus, MasterCard, Maestro, Cirrus American Express and Diners Club cards. Check the sticker (s) on the back of your card to see which network (s) your card belongs to. You’ll find postal ATMs in almost all post offices, and you’ll find post offices in even the smallest Japanese village.

Most postal ATMs are open 9am to 5pm on weekdays, 9am to noon on Saturday, and are closed on Sunday and holidays. Some postal ATMs in very large central post offices are open longer hours.

Note that the postal ATMs are a little tricky to use: first press ‘English Guidance’ on the lower right-hand side of the screen and then press the withdrawal button. The post office has a useful online guide to using its ATMs at www.jp-bank.japanpost.jp/en/ias/en_ias_index.html. Click ‘International ATM service’ for an explanation of postal ATMs.

In addition to postal ATMs, you will find a few international ATMs in big cities like Tokyo, Osaka and Kyoto, as well as major airports like Narita and Kansai International Airport. International cards also work in Citibank Japan ATMs. Visit www.citibank.co.jp/en/branch/index.html for a useful branch index.

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Credit cards

Except for making cash withdrawals at banks and ATMs, it is best not to rely on credit cards in Japan. While department stores, top-end hotels and some restaurants do accept cards, most businesses in Japan do not. Cash-and-carry is still very much the rule. If you do decide to bring a credit card, you’ll find Visa the most useful, followed by MasterCard, Amex and Diners Club.

The main credit-card offices are in Tokyo:

Amex (0120-020-120; 4-30-16 Ogikubo, Suginami-ku; 24hr)

MasterCard (03-5728-5200; 16th fl, Cerulean Tower, 26-1 Sakuragaoka-chō, Shibuya-ku)

Visa (03-5275-7604; 7th fl, Hitotsubashi Bldg, 2-6-3 Hitotsubashi, Chiyoda-ku)

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Exchanging money

Banks, post offices and discount ticket shops will change all major currencies and travellers cheques. As with most other countries, you’ll find that US dollars are the easiest to change, although you should have no problems with other major currencies. Note, however, that the currencies of neighbouring Taiwan (New Taiwan dollar) and Korea (won) are not easy to change, so you should change these into yen or US dollars before arriving in Japan.

You can change cash or travellers cheques at most banks, major post offices, discount ticket shops, some travel agents, some large hotels and most big department stores. Note that discount ticket shops (known as kakuyasu kippu uriba in Japanese) often have the best rates. These can be found around major train stations.

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International transfers

In order to make an international transfer you’ll have to find a Japanese bank associated with the bank transferring the money. Start by asking at the central branch of any major Japanese bank. If they don’t have a relationship with your bank, they can usually refer you to a bank that does. Once you find a related bank in Japan, you’ll have to give your home bank the exact details of where to send the money: the bank, branch and location. A credit-card cash advance is a worthwhile alternative.

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Japan has a 5% consumer tax. If you eat at expensive restaurants and stay in top-end accommodation, you will encounter a service charge which varies from 10% to 15%.

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