NTD to JPY has reached 4.85! Four quick ways to understand JPY exchange rates

Latest Data as of December 10, 2025: The Taiwan dollar has appreciated to 4.85 against the Japanese yen, an 8.7% increase since the beginning of the year. What does this mean? For investors, now is a good time to consider positioning in yen.

Why is it worth exchanging for yen? Not just for travel, but also for investment

Many people think exchanging for yen is only for going abroad, but in reality, there is a deeper value behind the yen.

Three scenarios that make you need yen

Travel and Consumption Scenarios

Japan still has many merchants that only accept cash (credit card penetration is only 60%), whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, cash yen is essential. Additionally, Japan purchasing agents and overseas shopping sites often require direct settlement in yen. Those planning to study abroad or work holiday need to exchange currency in advance to lock in the exchange rate and reduce variable costs.

Asset Allocation Perspective

The yen is one of the world’s three major safe-haven currencies (alongside the USD and Swiss Franc). Japan’s economy is stable with low debt. During global market volatility, funds tend to flow into yen for hedging—during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, successfully buffering a 10% stock market decline. For Taiwanese investors, holding yen adds a layer of protection against Taiwan stock market fluctuations.

Interest Rate Arbitrage Opportunities

Although the Bank of Japan has started raising interest rates, rates are still far below the US. The current USD/JPY interest rate differential is about 4.0%, allowing many investors to borrow low-interest yen, convert to higher-yield USD or other assets, and earn the spread. When risks increase, they close the position by buying back yen to lock in arbitrage gains.

Four channels to exchange TWD to JPY, with surprising cost differences

Choosing the right exchange channel can cost you thousands of NT dollars more or less. Based on the latest 2025 rates, we break down the costs and suitable scenarios for four major methods.

Method 1: Bank Counter Cash Exchange — Most traditional, highest cost

Bring cash NT dollars to a bank branch or airport counter and exchange for yen cash on the spot. This is the most straightforward method, but using the “cash selling rate” usually results in a 1-2% difference from the market spot rate, plus possible handling fees, making it the most expensive.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, is about 0.2060 TWD/JPY (1 TWD = 4.85 JPY). Some banks also charge a fixed fee of NT$100-200. Exchanging NT$50,000 could result in a loss of NT$1,500-2,000 just from the exchange rate difference.

Suitable for: Those unfamiliar with online operations, needing small urgent cash (e.g., at the airport), or preferring face-to-face service.

Pros and Cons:

• ✓ Safe and reliable, cash on the spot
• ✓ Denominations intact (1,000, 5,000, 10,000 yen)
• ✗ Poor exchange rate, limited to bank hours (Weekdays 9:00-15:30)
• ✗ Handling fees may increase total cost

Method 2: Online Banking Exchange, Holding in Foreign Currency Account — Flexible, suitable for batch purchases

Use bank app or online banking to convert NT dollars into yen and deposit into a foreign currency account, enjoying the “spot sell rate” (about 1% better than cash selling rate). If you need cash, you can withdraw at counters or via foreign currency ATMs, but handling fees apply (from NT$100).

This method allows continuous monitoring of exchange rates, enabling you to buy in batches at low points for an average cost. For example, when TWD/JPY drops below 4.80, buy in parts to save costs compared to one-time exchange.

Suitable for: Those experienced in forex investment, frequently using foreign currency accounts, or planning to accumulate yen in phases. Also suitable for transferring yen into fixed deposits (current annual interest rate 1.5-1.8%) or ETFs for extra gains.

Pros and Cons:

• ✓ Operable 24/7, no banking hours restriction
• ✓ Better exchange rates, allows averaging costs
• ✓ Opportunity to combine with yen fixed deposits or investments
• ✗ Need to open a foreign currency account first
• ✗ Withdrawal of cash incurs additional fees

Method 3: Online Currency Settlement with Branch Pickup — Most convenient, airport withdrawal preferred

No need for a foreign currency account, just fill in currency, amount, pickup branch, and date via bank website or app. After completing online settlement, bring ID and transaction notification to the counter for pickup. Taiwan Bank and Mega Bank offer this service, with appointment options at airport branches.

Taiwan Bank’s “Easy Purchase” online settlement is fee-free (pay NT$10 via TaiwanPay), with about 0.5% better rates. Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, allowing last-minute pickups before departure.

Suitable for: Planned travelers who want to withdraw directly at the airport, especially working travelers preparing to go abroad.

Pros and Cons:

• ✓ Better rates, often no handling fee
• ✓ Can specify airport branch pickup, very convenient
• ✓ Fast online operation, no queues
• ✗ Need to book in advance (at least 1-3 days prior)
• ✗ Pickup during bank hours only

Method 4: Foreign Currency ATM 24/7 Withdrawal — Fastest for urgent needs

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen cash 24/7, cross-bank operation supported. Deducts NT dollars directly from your account with only NT$5 cross-bank fee, no forex handling fee. Daily withdrawal limit at these ATMs is about NT$150,000 equivalent yen.

Disadvantages include limited locations (about 200 nationwide), fixed denominations (1,000, 5,000, 10,000 yen), and potential stockouts during peak times (e.g., at airports). Not recommended to wait until the last minute.

Suitable for: Those with no time to visit banks, needing emergency cash, or during after-hours.

Pros and Cons:

• ✓ Instant withdrawal, 24/7 operation
• ✓ Low cross-bank fee (NT$5), deducted directly from account
• ✓ Highly flexible, no banking hours restriction
• ✗ Limited locations (~200)
• ✗ Fixed denominations, limited quantity, possible stockouts during peak times

Cost comparison table for the four methods

Assuming exchange NT$50,000, estimated costs and exchange rate losses:

Cost differences stem from exchange rate levels, handling fees, cross-bank charges, etc.

Is it worthwhile to exchange for yen now? Exchange rate analysis and strategy suggestions

Short-term data looks promising

TWD/JPY has risen from 4.46 at the start of the year to 4.85 now, an 8.7% appreciation. In other words, with the same NT amount, you can now buy more yen. This is a positive signal for those accumulating yen assets. In the second half of the year, Taiwan’s forex demand increased by 25%, mainly driven by travel recovery and hedging needs.

Mid-term trend analysis

The Bank of Japan’s rate hike expectations are rising—recent hawkish comments from Governor Ueda have pushed market expectations to 80%. The December 19 meeting is expected to raise rates by 0.25 basis points to 0.75% (a 30-year high), with Japanese bond yields reaching a 17-year high of 1.93%. This favors yen appreciation.

On the other hand, USD/JPY has fallen from the high of 160 at the start of the year to around 154.58, with a short-term rebound possibly to 155, but medium to long-term forecasts suggest it could fall below 150. This indicates that from a USD/JPY perspective, the yen has room to appreciate.

Investment advice

Is it worth it? The answer is conditionally worthwhile. But since the exchange rate still fluctuates within a large range, it’s recommended to:

• ✓ Buy in batches, avoid all-in one shot
• ✓ Diversify risk, yen can be used for fixed deposits, ETFs, forex trading, etc.
• ⚠ Beware of short-term volatility, closing arbitrage positions may cause 2-5% swings

After exchanging for yen, four ways to make the money “work”

Holding yen but letting it sit idle without interest is a missed opportunity. Here are four common ways to grow your yen, suitable for small beginners:

1. Yen Fixed Deposit — Stable, annual interest rate 1.5-1.8%

Open a foreign currency account at E.Sun or Taiwan Bank, deposit yen online, with a minimum of 10,000 yen. Current annual interest rate around 1.5-1.8%. This is the lowest-risk option, suitable for conservative investors with no risk appetite.

2. Yen Insurance Policy — Medium-term holding, guaranteed interest 2-3%

Cathay, Fubon, and other life insurers offer yen-denominated savings insurance, with guaranteed interest rates of 2-3%, usually tied to 3-5 years. Slightly higher risk than fixed deposits but better returns.

3. Yen ETFs — Growth-oriented, e.g., 00675U, 00703

For example, Yuanta 00675U tracks the yen index, can be bought as fractional shares via brokerage apps, suitable for dollar-cost averaging. Management fee is 0.4% annually, with lower costs and diversified risk compared to individual stocks.

4. Forex Swing Trading — Active, USD/JPY, EUR/JPY

Trade yen currency pairs directly on forex platforms, such as USD/JPY or EUR/JPY. This allows profit from both long and short positions, 24-hour trading, leverage, but also highest risk, suitable for experienced traders.

Reminder: BOJ rate hikes are positive for yen, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) may exert downward pressure. Yen is a safe-haven, but still subject to two-way volatility.

Common questions about yen exchange

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

Cash rate is the rate banks offer for physical cash (notes/coins), advantageous for immediate delivery and portability, but usually 1-2% worse than the spot rate, plus handling fees, making it the most expensive.

Spot rate is the foreign exchange market rate for settlement within two business days (T+2), mainly used for electronic transfers, import/export, or personal foreign currency accounts. It is closer to international market prices but requires waiting for settlement.

Q. How much yen can I get for NT$10,000?

Using the formula: Yen amount = NT$ amount × exchange rate

At Taiwan Bank’s cash selling rate of 4.85 on December 10, 2025, NT$10,000 ≈ 48,500 yen. Using the spot selling rate of 4.87, about 48,700 yen, a difference of 200 yen (~NT$40).

Q. What ID do I need to bring for counter exchange?

National ID + passport are mandatory. Foreigners need passport + residence permit. Company transactions require business registration proof. If pre-booked online, bring transaction notification. Special notes: minors under 20 need parental consent + authorization; large exchanges over NT$100,000 may require source of funds declaration.

Q. What is the limit for foreign currency ATM withdrawals?

From October 2025, banks have adjusted limits for new accounts with enhanced security. Most banks set daily limits at NT$100,000-150,000 equivalent. Cross-bank cards depend on issuing bank. It’s recommended to diversify withdrawals or use your own bank card to avoid cross-bank fees. During peak times (e.g., airports), cash may run out, so plan ahead.

Final recommendations: Yen allocation strategies

If you have a budget of NT$50,000-200,000
A combined approach of online settlement + foreign currency ATM is most cost-effective. Reserve airport pickup via online booking for favorable rates, supplement with ATM withdrawals as needed. Total costs can be controlled within NT$800-1,200.

For long-term holding
Gradually accumulate yen via online exchange, deposit into foreign currency accounts for fixed deposits or transfer into ETFs. This way, you benefit from exchange rate appreciation and earn interest from deposits or investments—double gains.

For pure investment purposes
Yen, as one of the major safe-haven currencies, is suitable for hedging Taiwan stock market volatility. Allocate about 5-10% of total assets, via yen ETFs for diversification, or use interest rate differentials for arbitrage strategies.

In summary, yen is no longer just for travel pocket money but also a tool for hedging and investment. Following principles of phased exchange and not letting your money sit idle can help minimize costs and maximize returns.