During the era of Taiwanese dollar depreciation, how to smartly invest in Japanese Yen?

In December 2025, the Taiwan dollar (TWD) against the Japanese yen (JPY) reached a level of 4.85. This is not only good news for traveling abroad but also a moment for investors to reassess their JPY asset allocation. Compared to the exchange rate of 4.46 at the beginning of the year, the yen has appreciated by a total of 8.7% this year. For Taiwanese investors, this wave of exchange gains is already quite substantial.

Interestingly, in the second half of this year, Taiwan’s demand for currency exchange increased by 25%. It is no longer just travelers; more and more investors are beginning to view the yen as a hedging tool against Taiwan stock market volatility, even considering advanced trading strategies like exchanging yen for US dollars.

Why reconsider the yen now?

The yen has long surpassed its role as “travel pocket money.” From an economic fundamentals perspective, Japan is one of the world’s three major safe-haven currencies (alongside the US dollar and Swiss franc). During market turbulence, funds often flow into the yen for safety—during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in a single week, enough to buffer stock market declines.

More importantly, the Bank of Japan (BOJ) is shifting its stance. Governor Ueda Kazuo’s recent hawkish comments have pushed up rate hike expectations to 80%, with a projected increase of 0.25 bps to 0.75% at the December 19 meeting (a 30-year high). Japanese government bond yields have risen to 1.93%, a 17-year high. This indicates that the yen’s role as a “funding currency” is changing, gradually moving from a long-term ultra-low interest rate environment toward normalization.

For Taiwanese investors, under the pressure of TWD depreciation, allocating some assets in yen has become a basic risk management move.

From 50,000 to 200,000 TWD, which currency exchange method should you choose?

Different currency exchange methods have their pros and cons, depending on your purpose and timing. Here is a comparison of the actual costs of four mainstream channels:

Method 1: Online currency exchange + airport pickup (most recommended for beginners)

Taiwan Bank’s “Easy Purchase” online currency exchange has no handling fee (pay with Taiwan Pay for only 10 TWD), with about 0.5% favorable exchange rate. No need to open a foreign currency account; simply fill in the currency, amount, branch, and date on the official website. After completing the transfer, bring your ID and transaction notification to pick up in person.

Taoyuan Airport has 14 Taiwan Bank counters (including 2 open 24 hours), allowing reservation for direct pickup—most convenient before departure. For an exchange of 50,000 TWD, the estimated cost loss is about 300-800 TWD, making it the most economical among the four methods.

Disadvantage: Requires prior reservation (at least 1-3 days), pickup time limited by bank hours.

Method 2: Foreign currency ATM (most flexible)

Use a chip-enabled financial card to withdraw yen cash at bank foreign currency ATMs, supporting 24-hour operation and interbank withdrawals (only 5 TWD cross-bank fee from TWD accounts). E.SUN Bank’s foreign currency ATMs allow withdrawals from TWD accounts with a daily limit of 150,000 TWD and no exchange handling fee.

Approximately 200 locations nationwide, but cash may run out during peak times (like airports). Planning ahead is recommended. For 50,000 TWD, estimated cost loss is about 800-1,200 TWD.

Advantages: Instant withdrawal, lowest cross-bank fee. Disadvantages: Fixed denominations (1,000/5,000/10,000 yen), limited locations.

Method 3: Online exchange + in-branch or ATM cash withdrawal

Use bank app or online banking to convert TWD into yen and deposit into a foreign currency account, using the “spot selling rate” (about 1% better than cash selling rate). If cash is needed, withdraw in person or at foreign currency ATMs, incurring a spread fee (starting around 100 TWD).

E.SUN, Cathay United Bank, and others offer this service. Suitable for experienced forex investors, allowing phased entry when TWD/JPY is low (e.g., below 4.80), averaging costs. Estimated cost loss: 500-1,000 TWD.

Advantages: 24/7 operation, ability to buy in installments, transfer into fixed deposits or ETFs. Disadvantages: Need to open a foreign currency account first; cash withdrawal fees apply.

Method 4: In-branch cash exchange (backup only)

Bring cash TWD directly to bank branches or airport counters to exchange for yen cash. Although simple, it uses the “cash selling rate” (about 1-2% above spot rate), plus possible handling fees, making it the most costly.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, was 0.2060 (about 4.85 yen per TWD). Exchanging 50,000 TWD results in a loss of about 1,500-2,000 TWD. Some banks also charge fixed fees (e.g., E.SUN 100 TWD per transaction, Cathay United Bank 200 TWD).

Advantages: Safe, reliable, full denominations, staff assistance. Disadvantages: Higher costs due to spread and fees, limited operating hours.

Bank cash selling rates and in-branch fees on December 10, 2025:

After exchanging yen, don’t let it just sit idle

Currency exchange is only the first step. The key is how to generate returns from yen. Beginners can consider the following four allocations:

1. Yen fixed deposit: The most stable choice. E.SUN and Taiwan Bank allow online deposits into foreign currency accounts starting from 10,000 yen, with annual interest rates of 1.5-1.8%, completely risk-free.

2. Yen insurance policies: Medium-term allocation. Cathay Life and Fubon Life offer savings insurance with guaranteed interest rates of 2-3%, suitable for investors seeking security.

3. Yen ETFs: Growth-oriented option. Yuanta 00675U tracks the yen index and can be bought as fractional shares via broker apps, with an annual management fee of only 0.4%, suitable for dollar-cost averaging.

4. Forex trading: Advanced play. Directly trade USD/JPY or EUR/JPY currency pairs to capture exchange rate fluctuations. The advantage of exchanging yen for US dollars or euros is the ability to go long or short, 24-hour trading, and small capital requirements—ideal for experienced traders.

Currently, USD/JPY fluctuates around 154.58, with a short-term rebound to 155 possible, but medium to long-term forecasts are below 150. If you are confident in exchange rate movements, forex trading is a classic way to seize such opportunities.

Additional exchange rate knowledge

What is the difference between cash rate and spot rate?

Cash rate is the buy/sell rate banks offer for physical cash (bills/coins). The advantage is immediate delivery and portability, but it is 1-2% higher than the spot rate, making it more costly.

Spot rate is the exchange rate for transactions settled within two business days (T+2) in the forex market. Mainly used for electronic transfers and foreign currency account transfers, with more favorable rates close to international market prices.

How much yen can I get for 10,000 TWD?

Calculation formula: Yen amount = TWD amount × current rate (TWD/JPY)

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

What do I need to bring for foreign currency exchange?

For in-branch cash transactions, Taiwanese citizens need to bring ID + passport; foreigners need passport + residence permit; companies need business registration documents. If pre-booked online (online currency exchange), also bring transaction notification.

Minors under 20 need parental consent and approval; large exchanges over 100,000 TWD may require source of funds declaration.

What is the limit for foreign currency ATM withdrawals in Taiwan?

From October 2025, the limits are adjusted as follows:

Most banks have lowered daily limits to 100,000-150,000 TWD. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees (5 TWD per transaction). During peak times, cash may run out quickly—plan ahead for safety.

Summary: Phased currency exchange, don’t let it sit idle

Yen is no longer just travel pocket money but an asset with hedging and investment value. In an era of ongoing TWD depreciation, appropriate allocation of yen has become a basic risk management move.

Whether you plan to travel to Japan next year or want to hedge Taiwan stock market fluctuations with yen, following the principles of “phased exchange + not letting it sit idle” can minimize costs and maximize returns.

Beginners are advised to start with “Taiwan Bank online exchange + 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 hedging protection during global market turbulence.