How to get the best deal when buying Japanese Yen vs. US Dollar? Complete analysis of 2025 currency exchange strategies

This year’s Taiwan dollar continues to face depreciation pressure. On December 10, the TWD/JPY exchange rate surged to 4.85, with an annual appreciation of 8.7%. Many are starting to consider allocating foreign currency assets—but the question is: should they rush into JPY or USD? Which currency exchange method has the lowest cost? Based on the latest market data, we break down this dilemma for you.

JPY vs USD: Which is more worth buying now?

Attractiveness of the JPY

Bank of Japan Governor Ueda Kazuo recently made hawkish comments, boosting interest rate hike expectations to 80%. The December 19 meeting is expected to raise rates by 0.25 bps to 0.75% (a 30-year high). This signal is significant—the yield on Japanese government bonds has hit a 17-year high of 1.93%, and USD/JPY has fallen from the early-year high of 160 to around 154.58 now.

As one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc), the JPY offers defensive qualities during global turmoil. During the Russia-Ukraine conflict in 2022, the JPY appreciated 8% in a week, successfully offsetting stock market declines. For Taiwanese investors, converting into JPY is like adding an extra layer of insurance against Taiwan stock market volatility.

Practical considerations for USD

The USD presents a “high interest rate + strong” combination. The current interest rate differential between Japan and the US is 4.0%, attracting large arbitrage flows. However, if global risks increase, such low-interest borrowing (borrowing JPY to buy USD) could face liquidation pressure, causing short-term volatility of 2-5%.

In simple terms: JPY is suitable for hedging, USD is good for earning interest—key is to consider your investment purpose.

Four ways to exchange JPY, with vastly different costs

Don’t think currency exchange only involves going to the bank. Just choosing different methods can mean spending an extra 1,500 NT$ or saving 800 NT$ on a 50,000 NT$ transaction.

Method 1: Traditional cash exchange at counter—easiest but most expensive

Bring cash NT$ to a bank or airport counter to buy JPY cash notes. No complicated steps, but banks sell at a “cash selling rate” (1-2% worse than spot rate), plus possible handling fees, making this the most costly option.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, was about 0.2060 NT$/JPY (exchanging NT$50,000 yields about 242,500 JPY). Some banks also charge an additional 100-200 NT$ handling fee.

Recommended scenario: Urgent need at the airport, unfamiliar with online options. Estimated loss: NT$1,500-2,000.

Method 2: Online currency exchange + airport pickup—best pre-departure plan

No need for a foreign currency account. Fill in the amount online, select the airport branch, and reserve pickup date. After completing, pick up at counter. Taiwan Bank’s “Easy Purchase” online exchange has no handling fee (pay via TaiwanPay for just NT$10), with about 0.5% better rates.

Taoyuan Airport has 14 Taiwan Bank outlets, 2 of which operate 24 hours—most convenient.

Recommended scenario: Planned travelers, those wanting to ensure cash before departure. Estimated loss: NT$300-800.

Method 3: Foreign currency ATM withdrawal—highest flexibility 24/7

Use a chip-enabled debit card at foreign currency ATMs to withdraw JPY, operating around the clock. Deducts only NT$5 cross-bank fee from your NT$ account (much lower than counter fees). E.SUN Bank’s foreign currency ATMs have a daily withdrawal limit of NT$150,000.

Note: By the end of 2025, Japan’s ATM withdrawal services will change, requiring international cards (Mastercard/Cirrus). Also, foreign currency ATMs are limited (~200 nationwide), and cash may run out during peak seasons at airports—plan ahead.

Recommended scenario: Busy schedule, urgent need. Estimated loss: NT$800-1,200.

Method 4: Online currency exchange + account transfer—investor’s choice

Use online banking to convert NT$ into JPY and deposit into a foreign currency account, using the “spot sell rate” (about 1% discount). If cash is needed, withdraw at counter or ATM, but this incurs exchange spread and handling fees (from NT$100).

Ideal for those monitoring exchange rates and making phased entries. E.SUN Bank’s app allows 24/7 operation.

Recommended scenario: Experienced in forex, long-term holding of JPY. Estimated loss: NT$500-1,000.

Cost comparison among four major banks (based on NT$50,000)

Is it cost-effective to buy JPY now? Conditionally yes.

With the NT$ under depreciation pressure, the 8.7% annual appreciation is quite significant. But the key is to buy in phases, avoiding full conversion at once. Recent data shows Taiwan’s forex demand increased by 25% in the second half of the year, mainly driven by travel recovery and hedging needs.

In the short term, JPY may fluctuate between 150-155 due to rate hike expectations; medium to long-term forecasts suggest it will stay below 150. Investors can consider entering in three installments (each NT$15,000-20,000) to reduce costs.

Next step after exchanging for JPY: making your money work

Don’t let your JPY just sit idle. Here are four options suitable for small-scale beginners:

Fixed deposit: Open a foreign currency account, deposit JPY into a fixed deposit. Minimum NT$10,000, annual interest rate 1.5-1.8%, risk-free return.

Insurance: Cathay/ Fubon life insurance JPY savings policies, with guaranteed rates of 2-3%, suitable for medium-term holding.

ETF: Yuanta 00675U tracks JPY index, can buy fractional shares via brokerage app, annual management fee 0.4%, suitable for dollar-cost averaging.

Trading: Trade USD/JPY or EUR/JPY directly on forex platforms to catch exchange rate swings. Both long and short positions available 24/7, with small capital.

Quick answers to common questions

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

Cash rate applies to physical banknotes exchange, with worse quotes (including risk premium), higher costs. Spot rate is used for electronic transfers (T+2 settlement), close to international market prices, more favorable. For example, NT$50,000 at 4.85 yields about 4.85万 JPY; at spot rate (~4.87), about 4.87万 JPY. The difference is roughly 200 JPY (~NT$40).

Q: How much JPY do I get for NT$10,000?

Using the December 10 cash selling rate of 4.85, NT$10,000 ≈ 48,500 JPY. Using spot rate (~4.87), ≈ 48,700 JPY. Difference about 200 JPY (~NT$40).

Q: What documents are needed for counter exchange?

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

Q: What’s the ATM withdrawal limit in 2025?

Most banks will lower daily limits to NT$100,000-150,000. E.g., CTBC: NT$120,000/day, Taishin: NT$150,000/day, E.SUN: NT$150,000/day (including card spending). It’s recommended to split withdrawals or use your bank’s card to avoid cross-bank fees.

Final advice

The JPY is no longer just for travel “pocket money” but also a hedging and small investment asset.

Whether you’re preparing for a trip to Japan next year or want to hedge against NT$ depreciation by converting funds into JPY, the key is to buy in phases and avoid full conversion at once to minimize costs.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on needs. This way, you can enjoy cost-effective travel and add a layer of protection during global market turbulence.