My SIL wants to send a Christmas present of money (or a gift card) to her neice who is studying in Osaka. Can anyone suggest the best options, with pro and cons?

Easiest and cheapest is to transfer money into her bank account in her home country (US?) and she will be able to withdraw in yen from certian ATMs in Japan (Citibank, Japan Post, 7-Eleven etc).
Just send her a card telling her what is being done.
Any other option, such as wired transfer or money order costs money and exchange rate won't be so good, as well as taking more time. Also she will need a bank account in Japan.

The problem is that the neice's bank charges a fairly large sum for ATM withdrawals - something in excess of $10. So it gets expensive unless she takes out large sums - which she doesn't want to carry. Would the Visa credit card or something similar work? Or is the $10 fee from her bank for ATM the best option? (We know other banks charge less - but this is the one she has - and is stuck with.)

$10 is around 1100 yen. Charges for money transfer is typically 2-3000 yen from Japan to US, so similar for US to Japan.
If she has a (US) Visa credit card, you can put money into her card account so that she will have a positive balance. She can then make a purchase with it in Japan up to the amount deposited. She can withdraw cash, but will be charged a conversion fee of around 3% plus maybe a withdrawal fee of 1-2% by her card issuer. If she wants to avoid being charged interest from the day of withdrawal, she needs to make sure she doesn't use it for any other purchases, as most card issuers use repayment to pay off items with least amount of interest first.

How much will she be sending? If it is a 'safe' amount, put itt in her debit card account with the extra $10 and tell her to withdraw all at once.

Or open an account here with reasonable ATM fees, and send her the ATM card. Even if the account is under Aunt's name, as long as the girl has the PIN she can use it.

Or maybe a prepaid visa gift cards- with up front fees and high foreign exchange fees.

Personally, as I know that Japan's mail is really reliable, I'd get some Yen and send the equivalent of $20~$50 in a card each week. Nice to get the frequent mail and no great loss if any one of them is lost.

Or can you buy giftcards for Japanese stores on line?? KimJapan may chime in here...

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