Yen investment is booming! Complete guide to Japan's exchange rate trends and currency exchange strategies in 2025

In December 2025, the TWD to JPY exchange rate reached 4.85, a significant increase of 8.7% from 4.46 at the beginning of the year. This wave of appreciation has not only attracted tourists to plan their trips in advance but also prompted many investors to consider JPY as a safe-haven asset. But is exchanging for JPY really cost-effective? The key lies in choosing the right currency exchange channel.

Why is JPY worth exchanging? The dual value from daily life to investment

The demand for JPY in Taiwan comes from two dimensions.

Everyday consumption: Traveling to Japan remains a popular choice for locals, with shopping in Tokyo, skiing in Hokkaido, and vacations in Okinawa still relying largely on cash (credit card penetration is only 60%). Additionally, scenarios like purchasing Japanese cosmetics and clothing, studying abroad, working holidays, etc., all require direct payment in JPY.

Financial attributes: JPY is one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc) due to Japan’s stable economy and low debt levels. During the Russia-Ukraine conflict in 2022, the JPY appreciated by 8% in a week, while the stock market fell by 10%, demonstrating effective hedging. For Taiwanese investors, holding JPY can effectively balance the risk of the Taiwan stock market.

Furthermore, the Bank of Japan has maintained an ultra-low interest rate of only 0.5% for a long time, making JPY a benchmark for borrowing. Arbitrage traders often finance in low-interest JPY to invest in higher-yield USD (the USD/JPY interest rate differential exceeds 4%). Currently, BOJ Governor Ueda Kazuo has signaled a hawkish stance, with market expectations of a rate hike to 0.75% on December 19 (a 30-year high). The yield on Japanese government bonds has hit a 17-year high of 1.93%, further supporting the JPY’s upward trend.

Practical comparison of 4 currency exchange channels

The cost of exchanging JPY in Taiwan varies far more than expected. Exchanging NT$50,000 through the wrong channel could cost an extra NT$1,500–2,000. Here’s a detailed analysis.

Method 1: Bank counter cash exchange — the most traditional but most expensive

Carrying NT$ cash directly to a bank or airport counter to exchange for JPY cash. The main issue is using the “cash selling rate,” which is usually 1-2% worse than the spot rate.

For example, Taiwan Bank’s rate on December 10, 2025, is approximately 0.2060 NT$/JPY (about 4.85 JPY per NT$). Some banks charge additional handling fees. Exchanging NT$50,000 yields about 485,000 JPY, but costs an extra NT$1,500–2,000.

Comparison of cash exchange rates across banks:

Advantages: Safe, reliable, full denominations, teller assistance.

Disadvantages: Worst exchange rate, limited to business hours (9:00-15:30).

Suitable for: Small, urgent cash needs, airport exchanges, those unfamiliar with online banking.

Method 2: Online currency exchange to deposit account — moderate cost, suitable for investors

Using online banking or apps to transfer NT$ into JPY and deposit into a foreign currency account, at the “spot selling rate” (about 1% better than cash). If cash is needed later, withdraw at counters or foreign currency ATMs, paying withdrawal fees (usually NT$100+).

Advantages: 24/7 operation, flexible for multiple small purchases, better rates.

Disadvantages: Need to open a foreign currency account first, withdrawal incurs additional fees.

Suitable for: Experienced forex investors, those with existing foreign currency accounts. Current JPY fixed deposit annual interest rates are about 1.5-1.8%, generating passive income.

Method 3: Online currency exchange with airport pickup — must-have for travelers

No need for a foreign currency account. Simply book online via bank website, specify amount, branch, and date. After transfer, present ID and transaction notification at the counter to pick up. Taiwan Bank’s “Easy Purchase” online exchange has zero handling fee (using Taiwan Pay costs only NT$10), with about 0.5% better rates.

Key advantage: Can reserve at 14 Taiwan Bank branches at Taoyuan Airport (including 2 24-hour branches), pick up directly before departure, saving queue time.

Advantages: Better rates, no fee, airport pickup.

Disadvantages: Must book 1-3 days in advance, branch changes not allowed.

Suitable for: Planned travelers needing immediate cash at the airport.

Method 4: Foreign currency ATMs — the most flexible emergency option

Using chips financial cards at foreign currency ATMs to withdraw JPY cash, available 24 hours. With NT$ accounts, withdrawal costs only NT$5 per transaction, cheaper than other channels.

E.SUN Bank’s foreign currency ATMs allow NT$ account holders to withdraw JPY, with a daily limit of NT$150,000, no exchange fee. However, only about 200 ATMs nationwide, and cash may run out during peak times (e.g., airports).

Advantages: Instant withdrawal, high flexibility, low cross-bank fees.

Disadvantages: Limited locations, fixed denominations (1000/5000/10000 JPY), possible stock shortages.

Suitable for: Those who cannot visit a branch or need quick, on-the-spot cash.

Quick reference table for the four methods:

Is now a good time to exchange for JPY?

Current rate: TWD/JPY at 4.85, up 8.7% from the start of the year. Historically, not at a peak but at a yearly high.

Central bank outlook: The Bank of Japan has an 80% chance of raising rates in December, likely to 0.75% (a 30-year high), supporting JPY strength. USD/JPY has fallen from 160 to 154.58 since the start of the year, with short-term fluctuations around 155, but medium to long-term forecasts suggest a move below 150.

Investment advice:

• Travel use: Exchanging now is quite cost-effective, with obvious gains from currency appreciation.
• Hedging: Consider staggered entry to avoid all-in risk. Although JPY is a safe-haven currency, short-term profit-taking may cause 2-5% volatility.
• Arbitrage trading: Watch the US-Japan interest rate spread; if the US cuts rates more than expected, JPY arbitrage attractiveness may decline.

How to increase value after exchanging for JPY?

Don’t let your JPY sit idle with no interest. Consider these four options:

1. JPY fixed deposit — Stable annual interest 1.5-1.8%
Open foreign currency accounts at E.SUN, Taiwan Bank, etc., with a minimum of 10,000 JPY, earning monthly interest.

2. JPY insurance policies — Savings insurance, guaranteed interest 2-3%
Cathay, Fubon Life offer JPY-denominated savings policies, suitable for mid-term (3-5 years) holding.

3. JPY ETFs — Growth-oriented allocation
Yuanta 00675U, 00703 track JPY indices, can be bought as fractional shares via broker apps, with an annual management fee of 0.4%, providing diversification.

4. Forex swing trading — Capture exchange rate fluctuations
Trade USD/JPY, EUR/JPY directly, with long and short positions, 24-hour trading. Suitable for small capital but requires risk awareness.

Common currency exchange Q&A

Q: What’s the difference between cash exchange rate and spot rate?

Cash rate (cash selling rate) applies to physical cash transactions, usually 1-2% worse than spot rate; advantage is immediate cash. Spot rate is used for electronic transfers (T+2 settlement), offering better rates but requiring waiting. It’s a trade-off between convenience and cost.

Q: How much JPY do I get for NT$10,000?

Using Taiwan Bank’s cash rate of 4.85, NT$10,000 ≈ 48,500 JPY. With the spot rate of 4.87, about 48,700 JPY, difference roughly 200 JPY (NT$40).

Q: What do I need to bring for counter exchange?

ID + passport (for locals); passport + residence permit (for foreigners). For online booking, also bring transaction notification. Large amounts (over NT$100,000) require source of funds declaration.

Q: What is the daily withdrawal limit at foreign currency ATMs?

Post-2025 regulations, limits vary: CTBC NT$120,000/day, Taishin NT$150,000/day, E.SUN NT$150,000/day. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees.

Practical three-step guide to exchanging for JPY

Step 1: Choose the right exchange channel
Based on needs: for travel, “online exchange + airport pickup” is most cost-effective; for urgent cash, “foreign currency ATM” is most flexible; for investment, “online exchange” has the lowest cost.

Step 2: Stagger entries to reduce risk
Exchanging all at once can be risky; doing 3-5 small transactions can average costs and hedge against exchange rate fluctuations.

Step 3: After exchange, don’t just leave it idle
Use JPY for fixed deposits, ETFs, or forex swing trading to generate returns, maximizing hedging and appreciation benefits.

Overall, JPY is no longer just for travel “pocket money” but also a valuable asset for hedging and investment. By mastering “channel selection + staggered entry + post-exchange growth,” you can minimize costs and maximize gains when exchanging for JPY. Now is a good time to enter, whether for Japan trips next year or for Taiwan stock market hedging.