Apple Pay is live in Japan and works on public transport
The release of iOS 10.1 has brought with it support for Apple Pay in Japan, one of Apple's largest markets and a country where mobile payments have been commonplace for well over a decade. The expansion into Japan required significant work from Apple to get its payment system working on the existing infrastructure
In Japan, Apple Pay is actually more like two systems. There's the system that works like it does everywhere else, where you add a card from a supported bank and pay at the register by authenticating your fingerprint with Touch ID. But Japan is still a largely cash-based society when it comes to typical store payments — many places don't take credit cards at all. It's the second system that will prove more useful for most Japanese iPhone users: Suica.
Suica is a contactless card that is most often used on Japanese public transport; you charge it with money at a ticket machine, then tap the gates at any train station or the readers inside buses and taxis. It's based on Felica technology, an early form of NFC developed by Sony, and is also widely supported by vending machines, convenience stores, and other retailers. With today's launch of Apple Pay, Japanese iPhone users can create a virtual card in a new Suica app, charge it (either through Apple Pay or another method), and add it to Apple Wallet. The Suica app can also be used to buy reserved tickets for services like the shinkansen bullet train and store them in Wallet.
Touch ID is turned off by default for transit use, so as not to hold up other commuters when passing through busy stations; the regular cards work more or less instantly. Security for Suica cards is less of an issue than it is with credit cards, since they can only be charged with up to 20,000 yen (about $192) and essentially function as electronic cash. Once created, a virtual Suica card can be added to the Apple Watch, though this removes it from the iPhone — Suica cards can't be cloned. (You can just make separate cards for each device, though.)
While Apple Pay works with the iPhone 6 and later as well as the original Apple Watch, you'll need an iPhone 7 or Apple Watch Series 2 bought in Japan to use it there; Apple had to create special Japan-specific models with Felica chips inside to work with existing readers.