Is now really a good time to exchange Japanese Yen? Analysis of the exchange timing and costs amid the Taiwanese dollar depreciation

The tipping point for exchanging yen by the end of 2025 has already opened. The TWD/JPY exchange rate has reached 4.85, appreciating by 8.7% since the beginning of the year. This exchange rate level is closing the window for those who want to travel abroad and also want to allocate small amounts for hedging assets. But the key question is: What is the best way to exchange to minimize costs?

How much JPY can you get for 10,000 TWD? Different channels vary greatly

Let’s start with the most practical question. If you exchange 10,000 TWD for yen, how much cash will you ultimately receive? The answer depends on which route you choose.

Using Taiwan Bank’s cash selling rate (around 4.85 as of December 2025), 10,000 TWD can be exchanged for 48,500 JPY. But this is just a theoretical value. If you use the online spot rate (about 4.87), you can get 48,700 JPY, which is 200 yen more.

The difference seems small, but when you prepare to exchange 50,000 or 100,000 TWD, the same exchange rate error can wipe out several cups of bubble tea.

Real cost comparison of 4 currency exchange methods

The market offers mainly these four ways to exchange yen. Let’s calculate using a real scenario of 50,000 TWD:

Method 1: In-person currency exchange (most traditional, most expensive)

Go directly to a bank or airport branch, pay cash to get cash. Safe, convenient, with assistance, but the cost is using the “cash selling rate,” which is 1-2% worse than the international market rate. For example, Taiwan Bank might lose NT$1,500-2,000 on a NT$50,000 exchange, and it’s limited to business hours (weekday 9:00-15:30). This method is only suitable for urgent airport needs or people unfamiliar with online transactions.

Method 2: Online currency exchange + foreign currency account withdrawal (suitable for regular investors)

Open your bank app or website, convert TWD to JPY and deposit into a foreign currency account, using the “spot selling rate.” If you want cash, withdraw via ATM or in person, but an additional withdrawal fee (usually NT$100+) applies. Using this method, the loss on NT$50,000 is NT$500-1,000. The advantage is 24/7 operation, allowing for staggered entries and averaging costs, ideal for those who want to buy in stages when the TWD/JPY drops below 4.80.

Method 3: Online currency purchase reservation + airport pickup (best for office workers)

A lazy pre-departure plan. Select currency, amount, and airport branch on the bank’s website, complete the transaction, then pick up with the notification and ID. Taiwan Bank’s “Easy Purchase” online currency purchase even waives handling fees (using Taiwan Pay costs only NT$10), with about 0.5% better exchange rate, so NT$50,000 only loses NT$300-800. The most convenient is Taoyuan Airport, which has 14 Taiwan Bank branches, including 2 open 24 hours, fully compatible with flight times. The downside is needing to book 1-3 days in advance; branches cannot accommodate last-minute changes.

Method 4: Foreign currency ATM withdrawal anytime (for maximum flexibility)

Use a chip-enabled debit card to withdraw yen at bank ATMs 24/7 with no limit, and cross-bank fee as low as NT$5. E.SUN Bank’s foreign currency ATM has a daily limit of NT$150,000 equivalent, with no exchange fee. Sounds very cost-effective, but in reality, there are only about 200 such ATMs nationwide, and during peak times (holidays, before flights), cash often runs out. With NT$50,000, the withdrawal cost is NT$800-1,200.

Is there still room for the yen to appreciate?

This is the key question for whether to exchange now or not.

From a technical perspective, USD/JPY is around 154.58, down from the year’s high of 160. However, the Bank of Japan’s Governor Ueda Kazuo recently signaled a hawkish stance, and the market expects a 0.25 bps rate hike at the December 19 meeting to 0.75% (a 30-year high). Japanese government bond yields have hit a 17-year high of 1.93%. This indicates short-term support for the yen, but long-term forecasts suggest it will fluctuate below 150.

From a Taiwanese perspective, the TWD/JPY has risen from 4.46 at the start of the year to 4.85 now, an 8.7% appreciation. In the context of TWD depreciation, this is a good timing. But the risk is: if global arbitrage unwinds or geopolitical shocks occur (such as Taiwan Strait or Middle East tensions), the yen could fluctuate 2-5% in the short term.

The smartest approach is to buy in stages, rather than exchanging all at once.

After exchanging yen, don’t let your money sit idle

Getting yen is just the first step; whether you profit depends on how you use it.

Yen fixed deposits are the most stable option. Major banks offer foreign currency accounts with a minimum of 10,000 yen, with annual interest rates around 1.5-1.8%, earning about NT$1,200-1,500 per year.

For slightly higher returns, consider yen insurance policies with guaranteed rates of 2-3%, which are more cost-effective for medium-term holding.

Those interested in market fluctuations can look at yen ETFs (such as Yuanta 00675U, 0070B), tracking the yen index, with fractional shares available, and an annual management fee of only 0.4%. Dollar-cost averaging works well here.

Risk-takers can directly trade forex, operating USD/JPY or EUR/JPY on regulated platforms, with 24-hour long/short trading, using small capital to capture exchange rate movements. But this involves risk awareness and is not suitable for beginners.

While yen is a strong hedge, it remains a two-way asset. Rate hikes are positive, but global risks can change the situation instantly. For investment, yen ETFs are best for diversification; for travel, exchanging and then holding is simpler.

Three common pitfalls when exchanging yen

Pitfall 1: Confusing cash exchange rate vs. spot rate

Cash exchange rate is the bank’s quote for physical banknotes, usually 0.8-1.2% worse than the spot rate. The spot rate is the FX market’s T+2 settlement price, closer to the international price. Both are “exchange rates,” but the difference is like the price of a coffee. Online currency purchase uses the spot rate, while in-person exchanges use the cash rate—this is the key difference.

Pitfall 2: Foreign currency ATM limits

Many think foreign currency ATMs have unlimited withdrawal. But since October 2025, new regulations have significantly lowered limits for third-party digital accounts, with most banks now capping at NT$100,000-150,000 per day. CTBC, Taishin are around NT$120,000-150,000; E.SUN only NT$50,000. For large amounts, use your own bank card to avoid cross-bank fees or withdraw over multiple days.

Pitfall 3: Cash shortages during peak times

During Chinese New Year, summer vacations, or before long weekends, foreign currency ATMs at airports and stations often run out of cash. For large withdrawals, it’s best to call the bank in advance to confirm stock, or pre-arrange online currency purchase for pickup, ensuring you get the cash.

Summary: Smart timing for exchanging yen

If you are a traveler: use online pre-order 5-7 days in advance, then pick up at the airport branch—this is the most convenient combo.

If you are a small investor: split into 3-4 transactions, each 1-2万, using online exchange, foreign currency ATMs, and fixed deposits, to reduce timing risk.

If you are a large-scale investor: contact your bank to negotiate, confirm the exchange rate and daily quota before proceeding, to avoid last-minute disappointment.

Regardless of your role, the key is to not wait until the last minute to exchange. The window for TWD depreciation and JPY appreciation is open, but no one knows when it will close. Stagger your entries, choose the right channels, and allocate your funds after exchange—this is the correct way to capitalize on the current yen rally.