What is the difference between Japanese Yen cash and spot exchange rates? The 4 most common currency exchange mistakes made by Taiwanese people

December 10, 2025, the TWD/JPY exchange rate has risen above 4.85, up 8.7% from 4.46 at the beginning of the year, making it a good time for many to reconsider allocating funds into Japanese yen. But did you know? Just choosing the wrong currency exchange method could cost you an extra NT$2,000.

Why is it worth exchanging for JPY?

Many think exchanging for yen is just for traveling abroad, but in fact, there are more hidden values behind the yen.

Travel and daily consumption: Japan’s cash culture still dominates; shopping in Tokyo, Osaka, skiing in Hokkaido, or vacationing in Okinawa mostly only accept cash (credit card penetration is only 60%). Buyers of Japanese cosmetics, fashion, and anime merchandise often need to pay directly in yen.

Financial investment: The yen is one of the three major safe-haven currencies globally (alongside USD and Swiss Franc). Japan’s economy is stable with low debt, and during market turbulence, funds often flow into yen for safety. For example, during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, effectively buffering a 10% stock market decline. For Taiwanese investors, exchanging for yen isn’t just for leisure but also for hedging Taiwan stock market volatility.

Additionally, Japan maintains ultra-low interest rates (only 0.5%), making the yen a “funding currency”—many investors borrow low-interest yen to buy higher-yield USD investments. Currently, the US-Japan interest rate differential is 4.0%, offering significant arbitrage opportunities.

Four common ways for Taiwanese to exchange for yen

1. Bank or airport counter exchange

Bring NT$ cash directly to a bank branch or airport counter to exchange for cash yen. This is the most traditional method.

Exchange rate issue: 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, is approximately NT$0.2060 per yen (1 NT$ = 4.85 yen). Some banks also charge handling fees.

Cost estimate (using NT$50,000 as an example): You get about 242,500 yen, but due to exchange rate spread and fees, the actual cost results in a loss of NT$1,500-2,000.

Major banks’ cash selling rates and counter fees comparison (2025/12/10):

Advantages: Safe, reliable, denominations available (1,000, 5,000, 10,000 yen), staff assistance on site.

Disadvantages: Large spread, limited to bank hours (weekday 9:00-15:30), additional handling fees increase costs.

Suitable for: Those unfamiliar with online operations or needing small, urgent cash exchanges (e.g., at the airport).

2. Online currency exchange into foreign currency accounts

Use online banking or apps to convert NT$ into yen and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash selling rate). If cash withdrawal is needed, you can do so at counters or foreign currency ATMs, but extra spread and handling fees (~NT$100) apply.

Example: After currency exchange via E.SUN Bank app, withdrawing cash incurs a fee equal to the difference between spot and cash rates, minimum NT$100.

Cost estimate (NT$50,000): Convert online to yen, then withdraw cash—total loss about NT$500-1,000, saving 40-50% compared to counter exchange.

Advantages: 24/7 operation, allows batch purchases for average cost, favorable rates.

Disadvantages: Need to open a foreign currency account first; withdrawal fees (NT$5-100 cross-bank).

Suitable for: Those experienced with forex, frequently using foreign currency accounts, and interested in investing in yen deposits (current annual interest 1.5-1.8%).

3. Online currency settlement with airport pickup

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 the counter for pickup. Taiwan Bank’s “Easy Purchase” and Mega Bank offer this service, with appointment options at airports.

Taiwan Bank’s online settlement is fee-free (pay NT$10 via TaiwanPay), with about 0.5% favorable exchange rate. Taoyuan Airport has 14 Taiwan Bank counters, 2 of which operate 24 hours.

Cost estimate (NT$50,000): Loss of NT$300-800, the lowest-cost cash pickup method.

Advantages: Better rates, often no fees, can specify airport pickup, saving time.

Disadvantages: Need to book 1-3 days in advance, pickup only during bank hours, appointments cannot be changed.

Suitable for: Planned travelers who want to pick up cash directly at the airport—best pre-trip booking.

4. 24-hour foreign currency ATM withdrawal

Use a chip-enabled financial card at foreign currency ATMs to withdraw yen cash, supporting 24/7 operation and interbank services. Fubon Bank’s foreign currency ATMs allow withdrawal from NT$ accounts, with a daily limit of NT$150,000, no exchange fee, and a cross-bank fee of NT$5.

Denominations: Fixed combinations of 1,000, 5,000, 10,000 yen, about 200 units nationwide.

Cost estimate (NT$50,000): Loss of NT$800-1,200, between counter and online settlement.

Risks: Cash may run out during peak times (e.g., at airports during holidays). Not recommended to wait until the last minute.

Advantages: Instant withdrawal, high flexibility, deducts from NT$ account, low fees.

Disadvantages: Limited locations, fixed denominations, cash shortages possible during peak hours.

Suitable for: Those with no time to visit banks or needing urgent cash.

Complete comparison of the four yen exchange methods

Is it worthwhile to exchange yen now? How to time the market?

Current exchange rate: TWD/JPY has risen to 4.85, up 8.7% from 4.46 at the start of the year. Travel and small yen investments are heating up. Observations show a 25% increase in Taiwan’s forex demand in the second half, mainly from travel recovery and hedging needs.

Short-term trend: Yen remains volatile. US rate cuts support the yen, while the Bank of Japan (BOJ) is on the verge of raising rates. BOJ Governor Ueda recently made hawkish comments, pushing market expectations for a 0.25 bps hike to 0.75% at the December 19 meeting (30-year high), with Japanese bond yields reaching 17-year highs of 1.93%.

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may touch 155, but medium to long-term forecasts suggest below 150.

Investment advice: Yen, as a major safe-haven currency, is suitable for hedging Taiwan stock market fluctuations. However, short-term risks include unwinding arbitrage trades, causing 2-5% volatility. It’s strongly recommended to buy in batches to avoid converting all at once.

Conclusion: Exchanging yen now is indeed advantageous, but a phased approach is best.

What’s the difference between cash and spot exchange rates?

Many confuse “cash rate” with “spot rate,” which is the main reason banks hide hidden fees.

Cash rate: The rate offered by banks or forex dealers for physical cash (bills/coins). Used for personal travel exchange or on-site transactions. Advantages are immediate delivery and portability; disadvantages are that it’s usually 1-2% worse than the spot rate plus handling fees, making it more costly.

Spot rate: The exchange rate for transactions settled within two business days (T+2) in the forex market, mainly for electronic transfers or non-cash settlements. It’s more favorable (close to international market prices) but requires T+2 settlement.

Actual difference: Using the NT$50,000 example, cash exchange yields about 242,500 yen, while spot exchange yields about 243,500 yen—roughly NT$200 difference. The larger the amount, the more significant the difference.

Holding onto yen after exchange is a missed opportunity

If you just keep the yen cash idle, you miss out on potential gains. Here are four options suitable for small beginners:

1. Yen fixed deposit: The safest choice. Open a foreign currency account at E.SUN or Taiwan Bank, deposit yen online, with a minimum of 10,000 yen, annual interest 1.5-1.8%. After 3-6 months, auto-renew or withdraw.

2. Yen insurance policy: Medium-term holding. Cathay or Fubon offer yen savings insurance with guaranteed interest rates of 2-3%, suitable for 3-10 years.

3. Yen ETFs: Growth-oriented. Yuanta 00675U tracks the yen index, can be bought as fractional shares via broker apps, suitable for periodic investment. Others like 00703 are options. Management fee about 0.4%, relatively low.

4. Forex swing trading: Advanced players. Trade currency pairs like USD/JPY or EUR/JPY on forex platforms, capturing rate fluctuations. Benefits include two-way trading, 24 hours, with small capital.

While yen is a safe haven, its two-way volatility also carries risks. BOJ rate hikes are positive for yen, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) could weaken it. For investment, ETFs diversify risk; for intra-day or swing trading, forex trading USD/JPY or EUR/JPY can seize volatility.

Common questions about currency exchange

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

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

Using Taiwan Bank’s rate on December 10, 2025, about NT$0.2060 per yen, NT$10,000 can get approximately 48,500 yen. Using spot rate (~NT$0.2055), about 48,700 yen—difference of roughly 200 yen (~NT$40).

Q: What documents are needed for counter currency exchange?

Taiwanese: ID + passport; foreigners: passport + residence permit. For company exchange, business registration documents. If pre-booked online (online settlement), bring transaction notice. Under 20, need parent’s consent; large amounts (>NT$100,000) may require source declaration.

Q: What is the daily withdrawal limit for foreign currency ATMs in Taiwan?

Limits vary by bank and recent regulations (since October 2025, many banks have strengthened anti-fraud measures, reducing digital account limits to NT$100,000/day).

Specifics:

It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees (NT$5 per transaction). During peak times (e.g., airports), cash may run out; plan ahead.

Summary: Two key principles for smart yen exchange

Yen is no longer just pocket money for travel but a safe-haven and investment asset.

Whether you plan to visit Japan next year or want to hedge against NT$ depreciation by converting some funds into yen, following the “batch exchange + don’t sit idle after exchange” principles can minimize costs and maximize gains.

Beginners should start with the simplest “Taiwan Bank online settlement + airport pickup” or “foreign currency ATM,” then transfer yen into deposits, ETFs, or even try forex swing trading based on your needs. This way, you can enjoy more cost-effective travel and add an extra layer of asset protection during market turbulence.