Japanese Yen Investment and Currency Exchange Practical Guide: Comparing 4 Methods and the Best Timing

Is it cost-effective to exchange for Japanese Yen now?

As of December 10, 2025, the TWD/JPY exchange rate reached 4.85, appreciating 8.7% from 4.46 at the beginning of the year. The Bank of Japan Governor Ueda Kazuo recently made hawkish comments, pushing up interest rate hike expectations to 80%, with the market expecting a 0.25 basis point increase to 0.75% at the December 19 meeting (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. The USD/JPY has fallen from the year’s high of 160 to 154.58, with short-term fluctuations possibly around 155, but medium to long-term forecasts suggest below 150.

For Taiwanese investors, exchanging for JPY at this stage is quite cost-effective—not just for travel needs but also as a good hedging opportunity. In the second half of the year, Taiwan’s foreign exchange demand increased by 25%, mainly driven by travel recovery and hedging strategies. The yen, as one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc), offers long-term appreciation potential and risk hedging functions.

Why exchange for JPY now?

Travel and consumption demand recovery

Japan remains the top destination for Taiwanese travelers. Shopping in Tokyo and Osaka, skiing in Hokkaido, and vacations in Okinawa are popular. Most merchants still only accept cash (credit card penetration is only 60%). For those who love Japanese cosmetics, fashion, and anime merchandise, direct payment in yen is often necessary.

Yen’s hedging and investment value

Japan’s economy is stable with low debt, and the yen has long served as an international safe-haven currency. During market turbulence, funds flow into the yen—for example, during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, buffering a 10% stock market decline. For Taiwanese investors, exchanging for yen isn’t just for leisure; it also helps hedge against Taiwan stock market volatility.

At the same time, Japan’s ultra-low interest rate policy (only 0.5%) makes the yen a “funding currency.” Many investors borrow low-interest yen to invest in higher-yield USD (USD/JPY interest rate differential of 4.0%), and profit from yen appreciation when they close their positions.

Four ways to exchange for JPY in Taiwan — a full analysis

Many think exchanging yen is just going to the bank, but the exchange rate difference can cost you several cups of bubble tea. Below are the real costs of four channels.

1. In-person cash exchange: safest but most expensive

Carry Taiwanese cash to a bank branch or airport counter to exchange for yen cash. Simple and safe, but using the “cash selling rate” (1-2% worse than spot rate), the overall cost is highest. For example, Taiwan Bank’s cash selling rate on December 10, 2025, is about 0.2060 TWD/JPY.

Advantages: Safe, full denominations, staff assistance
Disadvantages: Worse exchange rate, limited business hours (9:00-15:30 on weekdays), additional handling fees increase costs
Suitable for: Those unfamiliar with online operations, needing small amounts for urgent travel

Comparison of cash selling rates and fees on December 10, 2025:

Estimated cost (NT$50,000): loss of NT$1,500–2,000

2. Online exchange + in-person withdrawal: balanced choice

Use online banking or app to convert TWD to JPY and deposit into a foreign currency account, using “spot selling rate” (about 1% better than cash selling rate). If cash is needed, withdraw at counters or foreign currency ATMs, but there will be exchange spread and withdrawal fees (from NT$100+).

This method suits those monitoring exchange rates, entering in batches when rates are low (e.g., TWD/JPY below 4.80), to lower average costs.

Advantages: 24/7 operation, averaging costs through batch buying, better rates
Disadvantages: Need to open a foreign currency account first, withdrawal fees apply
Suitable for: Those experienced in forex, frequently using foreign currency accounts

Estimated cost (NT$50,000): loss of NT$500–1,000

3. Online currency settlement + airport pickup: must-have before traveling

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, bring ID and transaction notice to pick up in person. Taiwan Bank and Mega International offer this service, with appointment options at airport branches.

Taiwan Bank’s “Easy Purchase” online settlement is fee-free (pay NT$10 via TaiwanPay), with about 0.5% better exchange rate. Taoyuan Airport has 14 Taiwan Bank counters (2 open 24 hours), making it the best pre-departure booking method.

Advantages: Better rates, often no fees, airport pickup options
Disadvantages: Need to book in advance (1-3 days), branch cannot be changed
Suitable for: Planned travelers who want to pick up cash at the airport

Estimated cost (NT$50,000): loss of NT$300–800

4. Foreign currency ATM withdrawal: most flexible 24/7

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

Locations are limited (about 200 nationwide), with limited currencies and denominations, mostly mainstream currencies. During peak times (like at airports), cash may run out quickly, so don’t wait until the last minute.

Advantages: Instant withdrawal, high flexibility, low fees from TWD accounts
Disadvantages: Limited locations and denominations (fixed at 1,000/5,000/10,000 JPY), cash may be sold out during peak times
Suitable for: Those with no time to visit banks, needing urgent cash

Estimated cost (NT$50,000): loss of NT$800–1,200

Cost comparison table of the 4 methods

Recommended strategy: For a budget of NT$50,000–NT$200,000, a mix of “online settlement + ATM withdrawal” is most cost-effective.

Investment options after exchanging for JPY

After acquiring yen, don’t let your money sit idle without interest. Here are four common options suitable for small-scale beginners.

JPY fixed deposit: Stable, open at E.SUN or Taiwan Bank, minimum NT$10,000, annual interest rate 1.5–1.8%.

JPY insurance policy: Medium-term holding, purchase savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2–3%.

JPY ETFs (e.g., 00675U, 00703): Growth-oriented, track JPY indices, can buy fractional shares via broker apps, suitable for dollar-cost averaging.

JPY forex trading: Direct trading of currency pairs (e.g., USD/JPY, EUR/JPY), with long and short positions, 24-hour trading, small capital required. Benefits include low commissions, narrow spreads, and setting stop-loss/take-profit orders.

While yen is a safe haven, it also experiences two-way volatility. BOJ rate hikes are positive, but global arbitrage unwinding or geopolitical conflicts may suppress the yen. For investment purposes, ETF (annual management fee 0.4%) can diversify risk.

FAQs

Q. What is cash rate and spot rate?

Cash rate (Cash Rate) refers to the rate for physical cash transactions, with the advantage of immediate delivery but 1-2% worse than spot rate. Spot rate (Spot Rate) is the exchange rate for FX market settlement within two business days, mainly used for electronic transfers, offering better rates but requiring T+2 settlement.

Q. How much JPY can I get for NT$10,000?

Calculation: JPY amount = NT$ amount × current rate. Using the December 10, 2025, cash selling rate of 4.85, NT$10,000 ≈ 48,500 JPY; with spot rate 4.87, about 48,700 JPY, a difference of roughly 200 JPY (NT$40).

Q. What do I need to bring for foreign currency exchange?

For in-person cash exchange, bring ID and passport. For online booking, also bring transaction notice. Under 20 years old requires a parent’s accompaniment; large exchanges over NT$100,000 may require source declaration.

Q. What are the limits for foreign currency ATM withdrawals in Taiwan?

From October 2025, several banks have adjusted limits. CTBC: NT$120,000/day, Taishin: NT$150,000/day, E.SUN: NT$150,000/day (including card transactions). Per-transaction limits vary by bank; it’s recommended to split withdrawals or use your own bank card to avoid interbank fees.

Summary

The yen is no longer just “pocket money” for travel but an asset with hedging and investment value. Whether preparing for a trip to Japan next year or shifting into yen to hedge against TWD depreciation, following the principles of “batch exchange + not leaving money idle” can lower costs and maximize gains.

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