Is it worth exchanging Japanese Yen now? The Taiwan dollar exchange rate has dropped. Four methods of currency exchange tested and compared.

The NT dollar against the Japanese yen has reached 4.85, and more people are starting to exchange for yen again. But do you know? Just choosing the wrong currency exchange method can cost you hundreds of dollars more. More importantly— is it really worth it to exchange now?

Don’t rush to exchange, first look at the exchange rate trend

By December 2025, signals of the NT dollar’s depreciation have already appeared. The yen has risen from 4.46 at the beginning of the year to 4.85 now, an accumulated appreciation of 8.7%. This is good news for those wanting to buy yen, but for investors, short-term volatility risks need to be carefully considered.

According to the latest forecast, the Bank of Japan has already signaled a hawkish stance, with a rate hike imminent on December 19—Governor Ueda Kazuo hinted at raising the rate to 0.75% (a 30-year high), which will support the yen. However, the USD/JPY may fluctuate between 154-155 in the short term, with a medium to long-term expectation of falling below 150.

The answer is: You can exchange now, but in installments—don’t exchange all at once.

For travel needs, the depreciation of the NT dollar makes going abroad more cost-effective; for investment, the yen is one of the three major safe-haven currencies, suitable for hedging Taiwan stocks, but arbitrage closing risks can cause exchange rate fluctuations of 2-5%.

Why exchange for yen? It’s not just for traveling in Japan

Many people think the yen is only used for travel, but that’s not true.

Travel and consumption: Japan has a strong cash culture, and many places in Tokyo, Osaka, and Hokkaido only accept cash (credit card penetration is about 60%). Plus, demand for yen is high due to purchasing agents, online shopping in Japan, studying abroad, and part-time work.

Financial market perspective: The yen is the third-largest safe-haven currency after the US dollar and Swiss franc. When global stock markets fluctuate (like during the Russia-Ukraine war in 2022), capital flows into the yen—during that week, the yen appreciated 8%, while stocks fell 10%, creating a hedging effect. For Taiwanese investors, exchanging yen isn’t just for leisure; it can also buffer against Taiwanese stock declines.

Additionally, Japan’s ultra-low interest rate policy (0.5%) makes the yen a “financing currency.” Many traders borrow low-interest yen to buy dollars (with a US-Japan interest rate differential of 4.0%), then close positions when risks increase and buy back yen. This is a classic arbitrage strategy, but it also means short-term pressure on the yen due to position unwinding.

4 ways to exchange currency, which is the most cost-effective?

Banks, ATMs, online exchanges… with so many options, how much do they differ in cost? Let’s test with 50,000 TWD.

1. Counter cash exchange: the most traditional, highest cost

Go directly to a bank or airport to exchange TWD for yen in cash. It seems simple, but the “cash selling rate” is usually 1-2% worse than the international market, plus handling fees, making it the most expensive.

For example, Taiwan Bank’s cash selling rate is about 0.2060 TWD/yen (i.e., 4.85 yen/TWD). With 50,000 TWD, you get about 242,500 yen, losing roughly 1,500-2,000 TWD. Also, it requires matching bank hours (weekday 9:00-15:30), suitable only for urgent cash needs.

Suitable for: Urgent airport needs, people unfamiliar with online operations.

2. Online exchange + counter withdrawal: a balanced choice

Use bank app to exchange online at “spot selling rate” (about 1% better than cash selling rate). When cash is needed, withdraw at counter or foreign currency ATM. Withdrawal incurs a fee (about 100 TWD).

For example, E.SUN Bank app’s spot rate might be 0.2070 TWD/yen, better than cash selling. With 50,000 TWD, you get about 241,500 yen, plus 100 TWD withdrawal fee, total loss around 500-1,000 TWD.

This method suits those with foreign exchange accounts, allowing for staggered entry at low points to average costs. If NT dollar/yen drops below 4.80, you can buy in installments.

Advantages: 24/7 operation, better rates, flexible entry. Disadvantages: Need to open a foreign currency account first, withdrawal fee applies. Suitable for: Experienced forex investors, long-term holders.

3. Online currency exchange + airport pickup: favorite for travelers

No need to open a foreign currency account. Reserve online via bank website, fill in currency, amount, branch, and date. After online payment, bring ID and transaction notice to pick up in person. Taiwan Bank and Mega Bank offer this service.

Taiwan Bank’s “Easy Purchase” online exchange has no fee (if using Taiwan Pay, only 10 TWD), with about 0.5% better rates. The key is—Taoyuan Airport has 14 Taiwan Bank counters, 2 of which operate 24 hours, allowing pre-booked airport pickup.

With 50,000 TWD, the loss is about 300-800 TWD, making it the best pre-trip plan. The only downside is needing to book 1-3 days in advance; branches cannot modify the reservation.

Suitable for: Well-planned travelers who want to pick up yen directly at the airport before departure.

4. Foreign currency ATM: 24-hour flexible withdrawal

Use a bank card to withdraw yen cash directly from ATMs, operating around the clock, with only 5 TWD fee for interbank transactions. Limited locations (~200 nationwide), and denominations are fixed (1,000, 5,000, 10,000 yen).

Fubon Bank’s foreign currency ATMs allow withdrawal from TWD accounts with a daily limit of 150,000 TWD, no exchange fee. However, during peak times (especially at airports), cash may run out, so plan ahead.

With 50,000 TWD, the loss is about 800-1,200 TWD, between counter and online methods.

Suitable for: People with no time to visit banks, needing quick, temporary cash.

A quick overview of four methods

After exchanging yen, what next? Don’t let your money sit idle

Once you have yen, don’t leave it idle without interest. Here are some investment options:

1. Yen fixed deposit: The safest, deposit into E.SUN or Taiwan Bank’s foreign currency accounts, starting from 10,000 yen, with annual interest rates of 1.5-1.8%. Just treat it as a fixed-term deposit.

2. Yen insurance policies: Savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2-3%, but with longer lock-in periods (5-10 years).

3. Yen ETFs (00675U, 00703): Want to catch short-term gains? Yuanta 00675U tracks the yen index, can be bought as fractional shares via brokerage apps, with an annual management fee of 0.4%. Suitable for small-scale dollar-cost averaging.

4. Forex trading USD/JPY: Directly trade yen currency pairs to capture intraday or swing movements. Advantages include two-way trading, 24-hour market, and small capital requirements. Disadvantages are the need for technical skills and risk management.

While the yen is a strong hedge, the Bank of Japan’s rate hikes are bullish for the currency. Global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) could be bearish. For low-risk tolerance, consider fixed deposits or ETFs; for higher returns, consider forex swing trading.

FAQs

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

Cash rate is the rate banks offer for physical cash (bills and coins), applicable for on-site transactions. It’s usually 1-2% worse than the spot rate. Spot rate is the exchange rate for settlement within two business days in the forex market, mainly for electronic transfers, closer to international market prices, but involves T+2 settlement.

Q: How much yen can I get with 10,000 TWD?

Using the formula: Yen amount = TWD amount × current rate. For example, with Taiwan Bank’s cash selling rate of 4.85, 10,000 TWD ≈ 48,500 yen.

Q: What’s the daily limit for foreign currency ATMs?

Varies by bank. CTBC allows equivalent of 120,000 TWD/day, Taishin 150,000 TWD/day, E.SUN 150,000 TWD/day but with a single transaction limit of 50,000 TWD. It’s recommended to split withdrawals or use your own bank card to save on interbank fees.

Conclusion: Exchange in installments, don’t leave money sitting idle

Yen is no longer just for travel “pocket money,” but also an asset with hedging and investment value. Whether preparing for a trip to Japan or taking advantage of the NT dollar’s depreciation to hedge, following the principles of “staged exchange + immediate allocation after exchange” can minimize costs.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits, ETFs, or swing trading based on needs. This way, you not only save on travel costs but also add a layer of protection during global market fluctuations.