Is exchanging Japanese Yen really cost-effective? Three practical methods tested during Taiwan dollar depreciation

Why Should You Pay Attention to the Japanese Yen Now?

By the end of 2025, the NT$ to JPY exchange rate has reached 4.85, appreciating by 8.7% compared to 4.46 at the beginning of the year. But exchanging for yen is not just for traveling abroad; more importantly, the yen itself has investment attributes.

The yen is listed as one of the world’s three major safe-haven currencies (the other two are USD and Swiss Franc). When the market is turbulent, funds tend to flow into safe-haven assets. Taking the Russia-Ukraine conflict as an example, the yen appreciated by 8% within a week, successfully hedging the 10% decline in the stock market during the same period. For Taiwanese investors, this means that exchanging for yen is not just for travel needs but also a tool to hedge against Taiwan stock market risks.

Additionally, the Bank of Japan is on the verge of raising interest rates. Recent hawkish comments from Governor Ueda Kazuo have increased market expectations of a rate hike to 80%. The December 19 meeting is expected to raise rates by 0.25 bps to 0.75% (a 30-year high), with Japanese government bond yields reaching a 17-year high of 1.93%. This will further boost the value of the yen.

In comparison, the exchange rate fluctuation between RMB and NT$ is relatively stable, while the yen is more flexible under changes in BOJ policy. This is the main reason attracting investors.

The Top Three Ways Taiwanese People Exchange for Yen

The market offers a variety of currency exchange methods, but only three core options are worth considering. Based on real exchange rates, using NT$50,000 as an example, the actual cost difference among these methods can reach over NT$1,700.

Option 1: Bank Counter Cash Exchange — The Most Traditional but Costliest

Carry NT$ cash directly to a bank or airport counter to exchange for yen cash on the spot. This is the most common method but also the most expensive.

Banks use the “cash selling rate,” which is about 1-2% worse than the spot rate. For example, Taiwan Bank’s rate on December 10, 2025, was approximately 0.2060 NT$ per yen (meaning NT$1 = 4.85 yen). Plus, some banks charge fixed handling fees (NT$100-200 per transaction), making the actual cost for NT$50,000 up to NT$1,500-2,000 in losses.

Cash selling rates (NT$ per yen) and counter handling fees:

• Taiwan Bank: 0.2060, free
• Mega Bank: 0.2062, free
• CTBC Bank: 0.2065, free
• E.SUN Bank: 0.2067, NT$100 per transaction
• E.SUN Bank: 0.2058, NT$100 per transaction
• Taipei Fubon Bank: 0.2069, NT$100 per transaction

Advantages: safe, reliable, full denominations, staff assistance. Disadvantages: limited to bank hours (weekday 9:00-15:30). Suitable for those unfamiliar with online operations or needing small, urgent exchanges (e.g., at the airport).

Option 2: Online Currency Purchase + Airport Pickup — The Balance of Efficiency and Cost

No need to open a foreign currency account. Simply fill in currency, amount, pickup branch, and date on the bank’s official website. After completing the remittance, bring your ID and transaction notification to the counter for pickup. Taiwan Bank’s “Easy Purchase” online currency purchase has no handling fee (pay via TaiwanPay, only NT$10), with about 0.5% better exchange rate.

This is the best pre-departure reservation method, especially since Taoyuan Airport has 14 Taiwan Bank outlets (including 2 open 24 hours). The overall cost loss is about NT$300-800, much lower than cash exchange at counters.

Advantages: relatively favorable exchange rates, often no handling fee, can specify airport pickup, ample 24-hour planning. Disadvantages: requires prior reservation (at least 1-3 days), pickup limited to bank hours, branch cannot be changed.

Option 3: Foreign Currency ATM Instant Withdrawal — The Most Flexible Emergency Solution

Use a chip-enabled debit card at a foreign currency ATM to withdraw yen cash. Supports 24-hour operation and interbank transactions (only NT$5 fee for deduction from NT$ account). E.SUN Bank’s foreign currency ATMs allow withdrawal from NT$ accounts with a daily limit of NT$150,000, no currency exchange fee.

This method costs about NT$800-1,200 in losses, between the first two options. Its biggest advantage is high flexibility — no restriction by bank hours, immediate solution for urgent needs. But the drawbacks are limited locations (about 200 nationwide), fixed denominations of 1,000/5,000/10,000 yen, and cash may run out during peak times.

Cost comparison of the three methods (based on NT$50,000, December 2025 data)

After Exchanging for Yen, Don’t Let Your Money Lie Idle

Exchanging for yen is just the first step; the key is how to generate returns from this money.

Yen fixed deposit is the most conservative choice — open a foreign currency account with E.SUN or Taiwan Bank, deposit online, starting from 10,000 yen, with an annual interest rate of 1.5-1.8%. Ideal for conservative investors.

Yen ETFs (such as 00675U, 00703) are suitable for those wanting to participate in exchange rate fluctuations — Yuanta 00675U tracks the yen index, can be bought as fractional shares via brokerage apps, with an annual management fee of 0.4%, supporting dollar-cost averaging.

Yen insurance policies offered by Cathay or Fubon Life guarantee 2-3% interest, suitable for medium-term holding (3-5 years).

Forex trading is for advanced players — directly trade USD/JPY or EUR/JPY on forex platforms, capturing short-term volatility, but with higher risks.

The International Linkage of Yen, RMB, and NT$

Interestingly, the exchange rate movements of yen, NT$, and RMB are often correlated. For example, how much is 5,000 RMB in NT$? Based on mid-December 2025 rates, RMB to NT$ is about 4.4-4.5, so 5,000 RMB is approximately NT$22,000-22,500.

All three currencies are influenced by USD fluctuations and Asian central bank policies. When the yen appreciates, it often reflects a hawkish stance from the Bank of Japan; simultaneously, the RMB may face depreciation pressure. This cross-currency volatility presents arbitrage opportunities for investors.

Is It a Good Time to Exchange for Yen Now?

Simply put: Yes, but in installments.

The yen exchange rate is currently quite volatile. The US is in a rate-cut cycle, but the BOJ is on the verge of raising rates, providing upward support for the yen. USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now, with short-term fluctuations possibly returning to 155. But the medium to long-term forecast is below 150.

For travel purposes, exchanging now is indeed cost-effective — cheaper than at the start of the year. For investment purposes, the yen as one of the three major safe-haven currencies is suitable for hedging Taiwan stock market volatility, but short-term risks include potential 2-5% fluctuations during arbitrage closing. It’s recommended to buy in installments, avoiding all at once, to capture low rates and diversify risk.

Common Questions About Exchanging for Yen

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

Cash rate is the rate banks offer for physical cash (banknotes/coins), convenient for immediate delivery and carrying, but usually 1-2% worse than the spot rate. The spot rate is the foreign exchange market rate for settlement within two business days (T+2), mainly used for electronic transfers and non-cash transactions, and is more favorable (closer to international market prices).

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

Calculation formula: 【Yen amount = NT$ amount × current exchange rate (TWD/JPY)】

Using Taiwan Bank’s December 10, 2025, cash selling rate of about 4.85, NT$10,000 can exchange for approximately 48,500 yen. Using the spot selling rate (about 4.87), it’s about 48,700 yen, a difference of roughly 200 yen (about NT$40).

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

For foreign currency cash transactions, Taiwanese need to bring ID card and passport; foreigners need passport and residence permit. If pre-booked online, also bring transaction notification. Minors under 20 need parental consent and ID; large exchanges over NT$100,000 may require source of funds declaration.

Q: Are there limits for foreign currency ATM withdrawals?

Starting October 2025, many banks have strengthened anti-fraud measures, reducing digital account limits to NT$100,000 per day. China Trust and others have a daily limit of NT$120,000; Taishin Bank NT$150,000; E.SUN Bank NT$150,000 (including credit card). It’s advisable to split withdrawals or use your own bank card to avoid cross-bank fees (NT$5 per transaction). Cash may run out during peak times, so plan ahead.

Summary

The yen has surpassed the role of “travel pocket money” and has become an asset with both hedging and investment value. Whether for next year’s trip to Japan or asset allocation amid NT$ depreciation pressure, following the principles of “buy in installments + don’t leave money lying idle after exchange” can minimize costs and maximize returns.

Beginners are recommended to start with “Taiwan Bank online currency purchase + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits, ETFs, or even try forex trading based on needs. This way, you can enjoy more cost-effective travel and add a layer of protection during global market turbulence.