I am travelling to Japan in April staying 5 days in Tokyo before travelling to Universal Studios in Osaka (2days) then to Hiroshima (1 day) ending in Kyoto (4 days). Would I be best to buy a 7 day JR Rail Pass activating on day to Osaka or buy point to point tickets? Also for travel in Tokyo I intend to use a Pasmo Card, can this card be used in Osaka/Kyoto area?
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You should definitely take at least half a day and see Nara as well - it has some of Japan's best sights.
For the IC card, there is no problem with that either. Complete info is at:
http://www.japan-guide.com/e/e2359_003.html