Banking and financial services in Japan: Japanese Yen (JPY) is the national currency. Major banks: Mitsubishi UFJ, Mizuho, Sumitomo Mitsui. ATMs often have limited hours. Cash is preferred over cards. Bank accounts require residency proof. International bank transfers can be costly. Online banking services in Japanese. Credit card acceptance is growing. Tax system: Consumption and income tax. Deposit insurance up to Y=10 million.
Japanese Yen (JPY) is the national currency.
The Japanese Yen (JPY) serves as Japan's national currency, having been introduced in 1871. It ranks as the third most traded currency within the global forex market and also functions as a reserve currency. Current denominations encompass a range of coins and banknotes, notably including the 1,000 JPY, 2,000 JPY, 5,000 JPY, and 10,000 JPY notes. To explore more about the significance and history of the yen, visit the Corporate Finance Institute website for comprehensive insights.
Major banks: Mitsubishi UFJ, Mizuho, Sumitomo Mitsui.
In Japan, the major banking sector is dominated by three large financial groups: Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group. These megabanks, including Mizuho Bank, provide a wide range of financial services such as deposits, loans, securities trading, foreign exchange transactions, and various corporate and retail banking services, with extensive networks both domestically and internationally.
ATMs often have limited hours.
When traveling in Japan, it's important to note that not all ATMs are available around the clock. For instance, Japan Post ATMs operate with limited hours, typically from 7am to 11pm on weekdays, and 7am to 9pm on Sundays and holidays. Similarly, most bank ATMs are functional from 8am or 9am to 9pm on weekdays but have reduced hours during weekends, and might even be closed on Sundays and public holidays. On the other hand, it's reassuring that ATMs located at 7-Eleven convenience stores, part of the Seven Bank network, are generally accessible 24/7, offering a more convenient option for withdrawing money. For more detailed information, please visit Japan Experience.
Cash is preferred over cards.
In Japan, cash is preferred over cards due to its perceived security and reliability, with over 90% of respondents naming cash as their most-used payment method. This preference is driven by concerns over personal information leakage and the desire for better control over spending. To explore more about this cultural inclination, visit the detailed analysis on Cash Matters. The insight highlights why cash continues to dominate in a society that deeply values privacy and personal data protection.
Bank accounts require residency proof.
To open a bank account in Japan, foreign residents must provide a Residence Card (Zairyu Card), proof of address, and other documents such as a passport, personal seal (Inkan/Hanko), and verification of their telephone number. For a detailed guide on this process, visit the Tokyo Portfolio website, which offers comprehensive information on banking for expats in Japan.
International bank transfers can be costly.
International bank transfers from Japan can be costly, with high fees and poor exchange rates, especially through traditional banks which may charge up to Y=4,000 per transfer and apply unfavorable exchange rates. This makes services like Wise and OFX more economical and efficient alternatives.
Online banking services in Japanese.
Online banking services in Japan provide a convenient way for users to manage their finances without the need for numerous physical visits to the bank. Services offered by companies like MUFG enable users to execute a wide array of transactions, including changing their address or telephone number, conducting fund transfers, and applying for one-time password cards via their secure internet banking platforms. Additionally, opening new bank accounts has become more seamless, as users can fill out application forms at branch offices and schedule appointments online, thereby enhancing the overall customer experience.
Credit card acceptance is growing.
Credit card acceptance in Japan is growing significantly, with credit and charge cards accounting for 96.5% of all card payment transaction values in 2023. This growth is driven by attractive reward programs, wide merchant acceptance, and the rise of e-commerce, supported by government initiatives to promote electronic transactions and improve payment infrastructure. For more detailed insights into this trend, you can visit the article on Japan's Card Payments Market. As digitization becomes increasingly vital, Japan's focus on enhancing its payment systems is expected to sustain this upward trajectory.
Tax system: Consumption and income tax.
In Japan, the tax system features a progressive personal income tax with rates varying from 5% to 45%, according to the taxable income, along with a surtax of 2.1% on national income tax. Moreover, there is a local inhabitant's tax levied at a consistent rate of 10%. While the consumption tax is an integral part of Japan's overall tax framework, it is addressed separately from these components. For detailed information, the PwC Japan Tax Summary provides comprehensive insights into the structure and rates applicable, ensuring individuals are well-informed about their tax obligations in Japan.
Deposit insurance up to ¥10 million.
In Japan, the Deposit Insurance Corporation (DIC) provides a safety net by protecting deposits up to Y=10 million per depositor. For amounts exceeding this limit, depositors have the option to receive repayment on a pro rata basis from the recovery of the failed bank's assets. Alternatively, the DIC can make early repayment by purchasing these deposits at an estimated liquidation value. For more details, you can explore the Deposit Insurance Corporation through their informational resources.