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Japanese paper money comes in denomination of 1000, 5000 and 10000yen, and coins come in denomination of 1, 5, 10, 50, 100 and 500yen. Although credit cards are accepted at most hotels and some high-end restaurants, Japan is largely a case-based society.
In Japan, currency exchange is usually handled by banks, post offices, some larger hotels and a handful of licensed money changers found especially at international airports.
Whether or not it is better to change for yen before coming into Japan depends on the currency that you hold. For example, the US dollar is a highly traded foreign currency in Japan, and partly for this reason you might get a favorable rate if you change US dollars into yen in Japan. On the other hand, in some Southeast Asian countries, the foreign exchange market is very competitive and money changers take a smaller cut, therefore it might be better to do the exchange there before coming into Japan. Also you can exchange at Major airport.