Doesn't everyone just use their home country bank ATM card at any random ATM in Japan, like Mizuho bank or MUFG, etc? You withdraw the amount in JPY and your own bank calculates the exchange rate, plus a small fee on top from the ATM operator. Or am I missing something and am getting screwed without knowing it?
Yes, you are missing that the vast majority of Japanese ATM's do not accept foreign cards. The machines at all post offices and the 7-11 bank machines do accept foreign cards as well as a few others. Fortunately, it's fairly easy to find a usable ATM in urban areas, usually 7-11 bank.