Japanese Yen Investment is Booming! A Guide to Selected Exchange Timing and Cost Analysis

Why Now Is the Time to Seriously Consider Yen Exchange?

On December 10, 2025, the TWD/JPY exchange rate surged to 4.85, hitting a yearly high. Compared to 4.46 at the beginning of the year, this represents an appreciation of 8.7% in just one year. For Taiwanese investors looking to buy the dip in the yen, this presents a significant entry opportunity.

Data shows that Taiwan’s foreign exchange demand in the second half of the year increased by 25%, driven by three factors: a rebound in outbound travel, asset hedging strategies, and expectations of Bank of Japan rate hikes. Ueda Kazuo’s hawkish comments last month heightened market expectations of rate hikes to 80%, with the December 19 meeting expected to raise rates by 0.25 bps to 0.75% (a 30-year high). Japanese bond yields have risen to a 17-year high of 1.93%.

All these signals point in one direction: Now is a good time to exchange for yen, but it’s crucial to choose the right timing and method.

Key Market Signals You Need to Know to Time Your Currency Exchange

Short-term exchange rate forecast

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58. Short-term fluctuations may bring it back to 155, but medium to long-term predictions suggest it will stay below 150. For TWD against JPY, this indicates the yen is likely to continue appreciating.

When is the best time to exchange? Batch strategy is smartest

Instead of waiting for the perfect moment, adopt a batch entry currency management approach:

• First batch (now): Under TWD depreciation pressure, exchange 30-50% of your budget now at the current rate of 4.85.
• Second batch (within 1-2 weeks): Observe market reactions after the BOJ rate hike (December 19). If the yen retraces to below 4.80, buy the remaining 50%.
• Third batch (before the end of the month): If geopolitical risks or arbitrage unwinding occur, top up the remaining amount during sharp declines.

This approach helps average costs and avoids psychological disappointment from a second dip in the exchange rate.

Practical Comparison of 4 Currency Exchange Methods: Cost and Efficiency Analysis

Method 1: Traditional Cash Exchange at Counter

Carry TWD cash to a bank branch or airport counter to buy JPY cash. This is the most straightforward method but also the most costly.

Banks use the “cash selling rate” (1-2% worse than spot rate), plus some handling fees, resulting in a total cost often losing NT$1,500-2,000 (based on NT$50,000). For example, Taiwan Bank’s cash selling rate is about 0.2060 TWD/JPY.

Suitable for: Elderly, those unfamiliar with online transactions, or urgent small cash needs at the airport.

Major bank rates as of December 2025 (cash selling rate and counter fee):

Method 2: Online Currency Conversion to Account, then ATM Withdrawal

Use bank app or online banking to convert TWD to JPY at the “spot selling rate” (about 1% better than cash rate), deposit into a foreign currency account. If cash is needed, withdraw via foreign currency ATM or counter, incurring additional exchange fees (from NT$100).

Cost is approximately NT$500-1,000 (based on NT$50,000), about 50% cheaper than counter exchange. Suitable for experienced forex investors planning to buy in batches. After conversion, funds can be transferred directly into a yen fixed deposit (current annual interest 1.5-1.8%) to generate passive income.

Suitable for: Those familiar with foreign currency accounts and looking to invest in yen deposits.

Method 3: Online Currency Settlement, Pick Up at Airport or Designated Branch

No need for a foreign currency account. Fill in amount, pickup location, and date online, then pick up cash in person with ID and transaction notice. Taiwan Bank’s “Easy Purchase” online settlement is fee-free (pay NT$10 via TaiwanPay), with about 0.5% favorable exchange rate.

Lowest cost, about NT$300-800 (NT$50,000). Can reserve pickup at Taoyuan Airport’s 14 locations (including 2 24-hour branches), ideal for travel planning. Requires 1-3 days advance booking; pickup times are limited by business hours.

Suitable for: Well-planned travelers with confirmed schedules who want to pick up cash at the airport.

Method 4: 24-Hour Foreign Currency ATM Withdrawal

Use a chip-enabled financial card at foreign currency ATMs to withdraw cash in yen, supporting interbank withdrawals (only NT$5 fee). E.SUN Bank’s foreign currency ATM limit is NT$150,000 per day, no exchange fee.

Cost is about NT$800-1,200 (NT$50,000), offering maximum flexibility, especially for urgent needs. Limited to about 200 locations nationwide; during peak times (like airports), cash may run out. Denominations are fixed at 1,000/5,000/10,000 yen.

Suitable for: Busy professionals who need quick, on-the-spot cash without visiting counters.

Summary of 4 Exchange Methods: Cost Comparison

How to Allocate Funds After Exchange: Let Yen Generate Passive Income

Don’t let your yen sit idle after exchange. Here are 4 options suitable for small investors:

1. Yen Fixed Deposit: Stable Returns

Open foreign currency accounts at E.SUN Bank or Taiwan Bank, deposit yen online, minimum NT¥10,000, annual interest 1.5-1.8%.

2. Yen Insurance Policies: Medium-term Holding

Cathay and Fubon offer yen savings insurance with guaranteed interest rates of 2-3%, suitable for medium-term planning.

3. Yen ETFs: Growth Allocation

Yuanta 00675U, 00703 track the yen index, can be bought as fractional shares via broker apps with an annual management fee of 0.4%, diversifying risk.

4. Forex Trading: Swing Trading

Trade USD/JPY or EUR/JPY on forex platforms (like Mitrade), with zero commissions, low spreads, support for long/short positions, 24-hour trading, suitable for swing or intraday strategies.

Quick FAQs

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

Cash rate applies to physical bills/coins, traded on the spot but with worse rates (1-2% difference). Spot rate is used for electronic transfers without physical delivery, settled T+2, offering more favorable rates close to international market prices.

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

Calculate using 【Yen amount = TWD amount × exchange rate】. For example, at Taiwan Bank’s cash selling rate of 4.85, NT$10,000 ≈ 48,500 yen; at spot rate 4.87, about 48,700 yen. The difference is only about 200 yen (~NT$40).

Q. What ID do I need for counter exchange?

Taiwanese: ID card + passport; foreigners: passport + residence permit. If pre-booked online, also need transaction notice. Large amounts (over NT$100,000) may require source of funds declaration.

Q. Are there limits on foreign currency ATM withdrawals?

Different banks have different limits (as of October 2025, with increased anti-fraud measures). CTBC: NT$120,000/day; Taishin: NT$150,000; E.SUN: NT$50,000 per card, with a daily limit of NT$150,000 on statements. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees. During peak times (like airports), cash may run out; plan ahead.

Final Tips: Three Principles for Smart Currency Exchange

Principle 1: Use batch entry to average costs

Don’t try to exchange everything at once. Based on market signals, enter in 3-4 batches, even if you miss the lowest point, to keep average costs reasonable.

Principle 2: Choose the right timing and method

If you have time, online settlement for airport pickup offers the lowest cost; for urgent needs, foreign currency ATMs are most convenient; for investment, convert online into accounts and then into fixed deposits for the best returns.

Principle 3: After exchange, keep funds working

Yen, as one of the three major safe-haven currencies, can be used not only for travel but also to hedge against Taiwan stock market volatility. Moving funds into deposits, ETFs, or forex trading can maximize your exchange gains.

Mastering the timing and method of currency exchange not only makes your travel more cost-effective but also adds a layer of protection amid global market fluctuations.