Yen Exchange Strategy: Comparing the Costs of 4 Methods, A Must-Read for Beginners

In December 2025, the Taiwanese dollar against the Japanese yen reached a level of 4.85, appreciating nearly 9% since the beginning of the year. Whether you’re planning to travel abroad or want to allocate hedging assets, more and more people are paying attention to the nuances of exchanging for Japanese yen. But did you know? Exchanging the same 50,000 TWD, choosing the right method can save you over 1,000 TWD—equivalent to a month’s worth of coffee money.

Why focus on the Japanese yen now?

Many people simply consider the yen as a travel expense, but it’s much more than that.

Everyday level, shopping in Japan, purchasing via proxy, studying abroad—all involve yen, and Japan’s cash culture is deeply rooted (credit card penetration is only 60%).

Investment level, the yen is recognized globally as one of the three major safe-haven currencies, alongside the US dollar and Swiss franc. When the Russia-Ukraine war broke out in 2022, the yen appreciated 8% within a week, while the stock market fell 10%—this demonstrates the power of hedging. For Taiwanese investors, holding yen is like adding an extra layer of insurance to Taiwan stocks.

Additionally, Japan’s long-term ultra-low interest rate policy has created the “arbitrage currency” characteristic. Borrowing low-interest yen to invest in higher-yield USD assets, with a spread of about 4%, attracts significant capital inflow.

4 currency exchange paths with vastly different costs and risks

Many think exchanging yen is just going to the bank, but the difference in exchange rates alone can triple the cost. Let’s break down each:

Path 1: Direct exchange at the airport or bank counter

Bring cash in TWD directly to a bank or airport counter to exchange for yen cash. It sounds most convenient, but it uses the “cash selling rate”—about 1-2% worse than the international market rate.

Actual figures: For example, Taiwan Bank’s cash selling rate on December 10 was 1 yen = 0.206 TWD (i.e., 1 TWD = 4.85 yen). Some banks also charge an additional handling fee of 100-200 TWD.

Cost for exchanging 50,000 TWD: Loss of 1,500-2,000 TWD

• Advantages: Safe, quick, denominations available
• Disadvantages: Worst exchange rate, limited by bank hours
• Suitable for: Emergency, small amounts, those unfamiliar with online operations

Path 2: Online currency exchange apps, pick up at counter or ATM

Use bank apps or online banking to convert TWD into yen and deposit into a foreign currency account, using the “spot sell” rate (about 1% better than cash selling rate). If you want cash, you can withdraw via ATM or at the counter, but additional fees apply (interbank transfer fee around 5-100 TWD).

Actual figures: E.g., E.SUN Bank’s app for cash withdrawal, with a minimum fee of 100 TWD.

Cost for exchanging 50,000 TWD: Loss of 500-1,000 TWD

• Advantages: 24-hour operation, better rates, allows for dollar-cost averaging
• Disadvantages: Need to open a foreign currency account first, withdrawal incurs fees
• Suitable for: Frequent foreign currency users, those wanting to regularly invest in yen

This method is especially suitable for gradually exchanging when the rate drops below 4.80, for example. After exchanging, don’t let the money sit idle—consider investing in yen fixed deposits (currently annual interest rate 1.5-1.8%).

Path 3: Online pre-arranged currency exchange, pick-up at designated location

The smartest approach. Reserve the exchange on the bank’s website, specify the date, amount, and pick-up branch (or even at the airport), then bring ID and transaction notification to pick up. Taiwan Bank’s “Easy Purchase” feature is a perfect example—offering 0.5% better rates and no handling fee (pay via TaiwanPay for just 10 TWD).

Taoyuan Airport has 14 Taiwan Bank branches, including 2 open 24 hours, tailored for travelers.

Cost for exchanging 50,000 TWD: Loss of 300-800 TWD

• Advantages: Best rates, often no handling fee, reservation possible at airport, most convenient
• Disadvantages: Need to book 1-3 days in advance, pick-up times limited by bank hours
• Suitable for: Travelers planning to go abroad, those wanting to minimize costs

Path 4: Foreign currency ATMs for 24/7 self-service withdrawal

Use a financial card at foreign currency ATMs to withdraw yen. Some banks like E.SUN Bank offer this service, deducting directly from your TWD account, with a cross-bank fee of only 5 TWD. Available 24/7, very flexible.

But note, there are only about 200 such ATMs nationwide, mostly supporting mainstream currencies, with denomination limits (usually only 1,000/5,000/10,000 yen). During peak times, cash often runs out.

Cost for exchanging 50,000 TWD: Loss of 800-1,200 TWD

• Advantages: Instant cash, 24/7 operation, lowest cross-bank fee (5 TWD)
• Disadvantages: Limited locations, fixed denominations, cash shortages
• Suitable for: Urgent needs, busy professionals without time to visit banks

Summary table of the four exchange methods

Is it worthwhile to exchange yen now?

Short answer: Yes, but do it gradually.

On December 10, the TWD/JPY rate was 4.85, up 8.7% from the start of the year at 4.46. From an investment perspective, this appreciation is significant, especially under the pressure of TWD depreciation. In the second half of the year, Taiwan’s currency exchange demand increased by 25%, mainly driven by travel recovery and hedging needs.

How to interpret the exchange rate trend?

The Bank of Japan’s governor recently made hawkish comments, with market expectations of a 0.25 basis point rate hike on December 19 to 0.75% (a 30-year high), with Japanese government bond yields reaching 1.93%. The USD/JPY has fallen from the high of 160 at the start of the year to 154.58. Short-term fluctuations may bring it back to 155, but the medium to long-term trend is expected below 150.

Investment risk considerations: While the yen is a safe-haven currency, closing arbitrage trades can cause short-term volatility (around 2-5%). Geopolitical conflicts (Taiwan Strait, Middle East) also exert pressure. It’s advisable to exchange gradually rather than all at once.

After exchanging for yen, how to utilize the money?

Don’t let the yen sit idle after exchange. Based on your risk appetite, here are four options:

Conservative: Yen fixed deposit

• Available in various banks’ foreign currency accounts, starting from 10,000 yen
• Annual interest rate 1.5-1.8%
• Suitable for conservative investors seeking guaranteed returns

Mid-term: Yen insurance policy

• Yen savings insurance from Cathay, Fubon Life, etc.
• Guaranteed interest rate 2-3%
• Suitable for those with long-term planning

Growth: Yen ETFs

• Yuanta 00675U tracks the yen index
• Annual management fee 0.4%
• Can buy fractional shares or set up regular investments via brokerage apps
• Suitable for those wanting to participate in yen appreciation

Advanced: Forex trading

• Direct trading of USD/JPY or EUR/JPY
• Long and short positions, 24-hour trading, small capital required
• Suitable for experienced traders aiming to capture volatility

The BOJ’s rate hikes are positive, but global arbitrage closing risks exist. Beginners are advised to start with ETFs, while advanced traders can consider USD/JPY swing trading to seize exchange rate movements.

Quick FAQ

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

Cash rate is the bank’s buy/sell price for physical banknotes, used for travel exchange, paid on the spot, but with a large spread (1-2% worse than market rate).

Spot rate is the foreign exchange market’s T+2 settlement price, used for electronic transfers, with a smaller spread closer to international prices.

Q: How much yen do I get for 10,000 TWD?

Using the rate: Yen amount = TWD amount × current rate

Taiwan Bank’s cash selling rate at 4.85 yields about 48,500 yen for 10,000 TWD; using the spot rate 4.87 yields about 48,700 yen, a difference of 200 yen (~40 TWD).

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

Taiwanese: ID card + passport; foreigners: passport + residence permit; under 20 need parent’s accompaniment; amounts over 100,000 TWD may require source of funds declaration. For online reservations, bring transaction notification.

Q: What’s the limit for foreign currency ATM withdrawals?

Different banks have different limits. CTBC Bank’s card allows up to the equivalent of 120,000 TWD per day; Taishin Bank up to 150,000 TWD; E.SUN Bank from 50,000 to 150,000 TWD (including 50 banknotes). Cross-bank cards usually have lower limits; using your own bank’s card is recommended to save on fees.

Conclusion

The yen has long surpassed the “travel pocket money” role, becoming an asset class with both hedging and investment value.

Whether you plan to visit Japan next year or want to hedge against TWD depreciation, follow the principles of “gradual exchange + don’t leave the money idle after exchange” to minimize costs and maximize returns.

For beginners, start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or forex swing trading based on your needs. This approach saves costs and adds a layer of protection amid global market fluctuations.