Although the Japanese yen has no subunits in circulation (the smallest physical denomination is the ¥1 coin), financial markets quote JPY with two decimal places to allow for more precise pricing in wholesale currency markets where billions of dollars worth of yen are traded daily. This precision is important for institutional traders and large corporations dealing with significant volumes. For everyday retail transactions in Japan, these fractions are irrelevant, but in forex trading, even tiny price movements can represent substantial value when trading in large quantities.

USD/JPY exchange rates are constantly fluctuating in the international forex market, which operates 24 hours a day, five days a week. Prices can change multiple times per second in response to trades, economic data releases, news events, and algorithmic trading activities. The forex market opens on Monday morning in Asia (Sunday evening in the US) and closes on Friday evening in New York. During major economic announcements or geopolitical events, volatility can increase dramatically, causing larger and more frequent price movements. Our converter updates rates regularly to reflect these market changes, though there may be a slight delay between market movements and displayed rates.

The spot rate is the wholesale exchange rate at which large financial institutions trade currencies in the interbank market. The rate displayed on our converter is closer to this spot rate. However, when exchanging physical currency at a bank or currency exchange service, you’ll typically receive a less favorable rate because these providers add a margin (sometimes called a spread) to cover their costs and generate profit. Additionally, they may charge explicit fees. The difference between the spot rate and the retail rate can range from 2-10% depending on the provider, amount exchanged, and currency pair. Banks often offer worse rates than specialized currency exchange services, and tourist-focused locations like airports typically provide the least competitive rates.

The Japanese yen is considered a safe-haven currency for several historical and economic reasons. Japan has a large current account surplus, significant foreign exchange reserves, and is a major creditor nation. During times of global economic uncertainty or market turmoil, investors often sell higher-risk assets and convert funds to currencies perceived as stable, including the yen. Additionally, the unwinding of the “carry trade” (where investors borrow in low-interest currencies like the yen to invest in higher-yielding assets) during risk-off periods creates demand for yen. Japan’s stable political environment and relatively predictable monetary policy also contribute to this status. This safe-haven tendency explains why the yen sometimes strengthens during global economic crises, even when Japan’s own economy isn’t necessarily outperforming.

Japan remains a relatively cash-oriented society compared to other developed economies, though credit card acceptance has improved in recent years, especially in major cities and tourist areas. As a general guideline, having ¥5,000-10,000 (approximately $35-70) per day for casual spending is advisable for most travelers. This would cover meals, local transportation, and small purchases. For a 7-day trip, having ¥35,000-70,000 (approximately $250-500) in cash is reasonable. Higher-end travelers should adjust accordingly. Keep in mind that many smaller restaurants, local shops, and rural areas may still be cash-only. You can use our converter to calculate the exact amount in yen based on your budget. Major expenses like hotels and shopping at department stores can typically be paid by credit card, reducing the need to carry large amounts of cash.

One of the most dramatic single-day moves in USD/JPY history occurred on October 7, 1998, when the exchange rate moved approximately 15 yen (from around ¥131 to ¥116 per dollar), representing more than a 10% change in a single day. This extraordinary movement was triggered by the unwinding of the carry trade during the global financial turmoil surrounding the Long-Term Capital Management crisis. Another significant historical period was following the 1985 Plaza Accord, when coordinated central bank intervention drove the dollar down against the yen, with the yen strengthening from around ¥240 to ¥120 per dollar over approximately two years. More recently, significant volatility occurred during the early stages of the COVID-19 pandemic in March 2020, and when the Bank of Japan adjusted its yield curve control policy in December 2022, though these moves were less extreme than the historical examples mentioned.