Banking, Money and Taxes in Japan

The Japanese banking system is one of the best and most reliable in the world. Expats banking in Japan have a variety of international and local banks to choose from. This makes opening an account an easy process. 

However, expats may be surprised to learn that Japan remains a largely cash-based society. Most transactions are done in cash and credit cards are usually reserved for very large purchases. Luckily, it's quite safe to walk around with a considerable amount of cash, although the usual precautions should always be taken.

Japanese currency

The local currency is the Japanese Yen, usually abbreviated to JPY or ¥. It's one of the most traded currencies in the world, alongside the US Dollar and the Euro.

The Japanese Yen is available in the following denominations:

  • Notes: 1,000 JPY, 2,000 JPY (increasingly rare), 5,000 JPY and 10,000 JPY

  • Coins: 1 JPY, 5 JPY, 10 JPY, 50 JPY, 100 JPY and 500 JPY

Banking in Japan

Both local and international banks offer a range of services to expats in Japan, with the most prominent local banks being Mitsubishi, Japan Post Bank, Mizuho and Sumitomo banks, while international banks in Japan include CitiBank, HSBC and Barclays.

Opening a bank account

Expats can open a bank account quite easily at any of the local or international banks once they have their Zairyu Card (residence card). It may also be necessary for expats to bring along their passport and visa, but this depends on the bank.

It's highly recommended that expats get a hanko, an official stamp with their name in characters, before opening a bank account. In Japan, the hanko is the equivalent of a Western signature and it will make life much easier. Although a hanko isn't required at all Japanese banks, there have been reports of debit orders being rejected because the signature on the permission form does not match the signature on the bank’s records exactly.

Banking hours in Japan are generally from 9am to 3pm Monday to Friday. Most banks are closed on weekends and public holidays.

Most banks don’t require a minimum deposit amount to open an account. Interest rates on normal bank accounts are generally also quite low. Not all banks have English-speaking staff or English service offerings, such as for online banking. Expats should shop around to find the best bank suited to their particular needs.

ATMs and credit cards

ATMs never used to be open after 11pm, with many maintaining normal business hours. However, an increasing number are now operational 24/7. Many ATMs in Japan don’t accept foreign-issued bank cards. If located outside of Tokyo it's helpful to write down the important characters in order to be able to use the ATM, as not all machines have English options.

As mentioned, Japan remains a largely cash-based society and credit cards are not a popular means of payment. Nevertheless, credit cards are accepted at most large hotels, restaurants and retailers.

Taxes in Japan

Expats will be required to pay two types of tax while in Japan – income tax, which is usually worked out as a percentage of one’s salary (ranging from five percent to the maximum 45 percent), and the annual resident tax, which depends on where an expat lives. The resident tax is worked out on an annual basis and is only applicable if living in Japan for longer than a year.

A person's tax residency status is determined by a number of factors, with tax residents liable for paying tax on their worldwide income and non-resident taxpayers only liable for tax on their income earned in Japan. It's a good idea to see a tax advisor on arrival in Japan, as the tax system is quite complicated and can change at short notice. There might also be a treaty between one’s home country and Japan which could affect the taxes payable.

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