Paypal is fine and if it wasn't for paypal you probably wouldn't even be ordering from CDJapan anyway.
Most major banks and credit card companies update their currency exchange rate once a day. If it fluctuates during the day, it's not reflected. xe.com updates real time. You can't use xe.com for an accurate picture of what the exchange rate with paypal will be like at the time of order. Only paypal will tell you. I'm sure they have a FAQ outlining that somewhere.
Here it is:
https://www.paypal.com/webapps/helpc...ID=12900&m=SRE
Most banks charge a currency conversion fee, just like PayPal.
Welcome to real life.