Must-read before going abroad: The 3 major pitfalls and solutions for exchanging Japanese Yen

Under the trend of Taiwanese dollar appreciation, the USD/JPY exchange rate has already reached 4.85, an 8.7% increase since the beginning of the year, making it a critical time for traveling abroad or allocating assets in Japanese yen. However, many people unknowingly spend more when exchanging yen—simply because they choose the wrong exchange channels. The cost difference for a NT$50,000 transaction between in-branch bank exchange and online remittance can be as high as NT$1,200, enough for two extra days of travel in Japan.

Why is it worth exchanging for yen? Two main reasons

1. Daily necessities

Tokyo, Osaka, Hokkaido—whether shopping, dining, or experiencing vacations, up to 40% of merchants in Japan only accept cash (credit card penetration about 60%). For purchasing agents, online shopping, studying, working holidays, it’s essential to plan ahead for yen exchange to avoid increased costs due to sudden exchange rate fluctuations.

2. Global safe-haven asset option

The yen, along with the USD and Swiss Franc, ranks among the top three global safe-haven currencies. Japan’s economic fundamentals are stable, and debt is manageable. During global market turbulence (such as the Russia-Ukraine conflict in 2022), capital flows into the yen as a safe haven, with an appreciation of 8% within a week, successfully buffering stock market declines. For Taiwanese investors, exchanging yen is not just for travel but also a strategic hedge against Taiwan stock market volatility.

Your budget determines the best approach

The key question is not “where to exchange yen,” but “which channel suits your exchange amount.”

Small, urgent needs (NT$5,000–20,000)

→ Foreign currency ATM is the best choice

24-hour instant withdrawal, cross-bank fee only NT$5, no appointment needed, deducted directly from NT$ account. Disadvantages: only about 200 ATMs nationwide, fixed denominations (1,000/5,000/10,000 yen), possible out-of-stock during peak times. Recommendation: don’t wait until the day before departure to withdraw.

Estimated cost: NT$20,000 exchange costs about NT$100–200.

Moderate budget travelers (NT$50,000–200,000)

→ Online remittance + airport pickup is most cost-effective

Taiwan banks’ “Easy Purchase” online remittance with no handling fee (pay via TaiwanPay, only NT$10), with about 0.5% favorable exchange rate, can reserve pickup at 14 Taoyuan Airport locations (including 2 24-hour branches). Mega Bank offers similar service. Ideal for planned travelers—reserve online 3-7 days in advance, pick up cash directly at the airport on departure day, saving time and money.

Estimated cost: NT$50,000 exchange costs about NT$300–500.

Forex investors (above NT$200,000)

→ Online exchange + foreign currency account for phased entry

Use online banking app to sell NT$ at the spot rate (about 1% better than cash selling rate) into a foreign currency account, allowing you to observe exchange rate trends and buy in batches at low points for an average cost. Withdrawal of cash incurs additional fees (minimum NT$100). Suitable for those experienced in forex trading, planning to invest in yen deposits (annual interest 1.5–1.8%) or yen ETFs.

Estimated cost: NT$200,000 exchange costs about NT$800–1,200, but can be offset by phased entry and subsequent deposit yields.

Complete comparison of 4 exchange methods

Sources: Various bank websites, updated December 2025

Is it really cost-effective to exchange yen now?

Yes, but with phased operations.

As of December 10, 2025, the USD/JPY rate is 4.85 (1 TWD = 4.85 JPY), up 8.7% from 4.46 at the start of the year, making the exchange gains quite substantial. In the second half of 2025, Taiwan’s yen demand increased by 25%, mainly due to travel recovery and safe-haven allocation.

Short-term trend analysis: The Bank of Japan Governor Ueda’s hawkish comments pushed up rate hike expectations to 80%, with a 0.25 basis point increase to 0.75% expected at the December 19 meeting (a 17-year high). Japan’s bond yields hit 1.93%, the highest in 17 years. USD/JPY has fallen from the high of 160 at the start of the year to around 154.58, with a short-term test of 155 possible, but medium to long-term forecasts suggest a retreat below 150.

Investment suggestions:

• For travel: exchange as needed, no need to wait for perfect timing
• For investment: consider 3-4 entries spaced 1-2 weeks apart to reduce risk from exchange rate volatility
• Risk hedging: closing arbitrage positions may cause 2-5% fluctuation; hold for over 3 months for better stability

After exchanging yen, don’t let your money “sit idle”

Once you’ve successfully exchanged yen, the next step is to generate returns. Four common advanced options:

1. Yen fixed deposit (conservative) E.SUN Bank, Bank of Taiwan offer foreign currency accounts, deposit yen online, minimum NT$10,000, annual interest 1.5–1.8%. Suitable for low-risk, conservative investors.

2. Yen insurance policies (medium-term hold) Cathay, Fubon Life offer yen-denominated savings insurance, guaranteed interest 2–3%, suitable for 3-5 year planning.

3. Yen ETFs (growth-oriented, requires how much yen to go abroad)) Yuanta 00675U, Cathay 00703, tracking yen indices, buy fractional shares via broker apps, suitable for regular investment. Management fee about 0.4% annually.

4. Yen forex swing trading (professional) Trade USD/JPY, EUR/JPY directly on forex platforms, capturing short-term fluctuations. Advantages: long and short positions, 24-hour trading, small capital needed, but requires risk tolerance and technical skills.

Quick FAQ

Q. How big is the difference between cash rate and spot rate?

Cash rate (Cash Rate) applies to physical cash transactions, usually 1-2% worse than market prices; spot rate (Spot Rate) is the T+2 settlement price in forex market, closer to real market value. Example: Taiwan Bank cash sell rate 0.2060 (4.85 JPY/TWD), vs. spot sell rate 0.2062 (4.87 JPY/TWD), a NT$10,000 difference of 200 JPY (~NT$40).

Q. How much yen for NT$10,000?

At the latest rate 4.85, NT$10,000 ≈ 48,500 JPY. Using spot rate 0.2062, ≈ 48,700 JPY, difference of 200 JPY. Recommend online remittance or ATM withdrawal to avoid cash selling spread.

Q. What to bring for in-branch exchange?

Taiwanese: ID + passport; foreigners: passport + residence permit. If pre-ordered online, bring transaction notice. Under 20 need legal guardian’s consent. Large amounts (>NT$100,000) may require source declaration.

Q. Daily withdrawal limit at foreign currency ATMs?

From October 2025, bank adjustments:

• CTBC, Taishin: equivalent NT$120,000–150,000/day
• E.SUN: NT$50,000 per transaction, NT$150,000/day
• Others: NT$20,000 per transaction, daily limit per bank rules

Use your own bank card to avoid cross-bank fees (NT$5 per transaction). Plan ahead during peak times (airports, malls), as cash may run out.

Summary: Three steps to master yen exchange

Step 1: Assess your needs
Small travel (NT$5k–20k): ATM → Planned travel (NT$50k–200k): online remittance → Investment (NT$200k+): account phased entry

Step 2: Choose the best channel
Not everyone suits in-branch. Select tools based on your budget to save NT$500–2000 in fees.

Step 3: After exchange, don’t let your money sit idle
Idle yen is wasted; transfer to fixed deposits or ETFs, with 1.5–3% annual yield, enough to offset exchange costs.

Yen is no longer just for travel pocket money but also a hedge and investment asset. By mastering “precise channel selection + phased entry + value-added after exchange,” you can minimize costs and maximize returns, making your trips more cost-effective and providing extra protection during market fluctuations.