Japanese Yen Exchange Guide: The most cost-effective method right now is actually unknown to most people

NTD to JPY has reached 4.85. When it comes to exchanging yen, many people still only think of bank counter transactions. Little do they know, just choosing the wrong currency exchange method can cost you the price of several cups of bubble tea.

Why exchange for JPY? Not just for traveling abroad

When mentioning yen, most people think of traveling to Japan. But in reality, the yen has long been more than just “travel pocket money” in Taiwanese financial life.

Daily usage: Japanese purchasing agents and online shopping require direct yen payments. Shopping in Tokyo and Osaka mostly only accepts cash, and Hokkaido skiing or Okinawa vacations also rely on cash. Those planning to study abroad or work holiday programs often exchange in advance to avoid sudden exchange rate fluctuations.

From an investment perspective: The yen is globally recognized as a safe-haven currency, alongside the US dollar and Swiss franc. During market turbulence (like the Russia-Ukraine conflict in 2022), funds flooded into the yen for safety—during that week, the yen appreciated by 8%, effectively buffering stock market declines. For Taiwanese investors, exchanging for yen is like insuring against Taiwan stock market volatility.

Additionally, Japan’s ultra-low interest rate environment (only 0.5%) makes the yen a “funding currency.” Many investors borrow low-interest yen to invest in higher-yielding US dollars, with a interest rate differential of about 4.0%. This is also why the yen has always been a favorite among hot money.

Four practical methods to exchange for yen

Method 1: Bank counter — safest but most expensive

Bring cash NT$ to a bank or airport counter and exchange it for yen cash on the spot. This is the most traditional and reassuring method—denominations are complete (1,000, 5,000, 10,000 yen options), with staff assistance, safe and reliable.

But the cost is the poorer exchange rate. Banks use the “cash selling rate,” which is about 1-2% worse than the market spot rate. For example, Taiwan Bank’s cash selling rate on December 10, 2025, was about 0.2060 TWD/JPY (meaning NT$1 exchanges for 4.85 yen). Some banks also charge an additional NT$100-200 handling fee. Exchanging NT$50,000, the exchange margin alone results in a loss of NT$1,500-2,000.

This method is suitable for urgent needs (like realizing you forgot to bring yen at the airport) or for readers who distrust online operations.

Method 2: Online banking exchange + cash withdrawal

Use bank app or online banking to convert NT$ into yen and deposit into a foreign currency account. Here, the bank uses the “spot selling rate,” which is about 1% better than the cash selling rate. If you want to withdraw cash, you can choose at counters or foreign currency ATMs, but extra exchange fee (usually NT$100+) applies.

E.SUN Bank, Bank of Taiwan, and others support this operation. The advantage is 24/7 flexibility—observe the exchange rate and buy in batches (e.g., when NT$ to JPY drops below 4.80). The loss cost is relatively low, about NT$500-1,000 for NT$50,000.

Suitable for those experienced in forex investment or with foreign currency accounts. After withdrawal, you can also transfer yen into fixed deposits (currently around 1.5-1.8% annual interest), extending the investment function.

Method 3: Online reservation — smartest way for travel

No need to open a foreign currency account. Fill in the amount and branch (including airport branches) on the bank’s official website. After remittance, bring ID and transaction notification to pick up at the counter. Taiwan Bank’s “Easy Purchase” online currency exchange has no handling fee (if paid via TaiwanPay, only NT$10), and offers a 0.5% rate discount.

Reserve 3-7 days before departure, and you can pick up yen directly at 14 Taiwan Bank locations at Taoyuan Airport (including 2 24-hour branches), no extra trip needed. Cost loss is about NT$300-800 for NT$50,000, making it the most cost-effective option. The only downside is the need for advance planning; last-minute exchange is not feasible.

Method 4: Foreign currency ATM — most flexible but most limited

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen cash anytime, 24/7. Interbank withdrawal fee is NT$5. E.SUN Bank and others support this, with daily withdrawal limits usually around NT$150,000 equivalent.

However, there are only about 200 foreign currency ATMs in Taiwan, and denominations are fixed (1,000, 5,000, 10,000 yen). During peak times (especially near airports), cash may run out. For NT$50,000, the loss cost is about NT$800-1,200.

Suitable for urgent needs with no time to visit banks, but not recommended for last-minute panic withdrawals—cash may run out unexpectedly.

Is now a good time to exchange yen? Timing analysis

As of December 10, 2025, NT$ to JPY is 4.85, compared to 4.46 at the start of the year, appreciating about 8.7%. There have been gains from exchanging yen. This appreciation mainly stems from global arbitrage unwinding and the Bank of Japan’s rate hike expectations.

BOJ Governor Ueda Kazuo recently signaled a hawkish stance, with market expectations that the December 19 meeting will raise rates to 0.75% (a 30-year high), with Japanese government bond yields reaching a 17-year high of 1.93%. USD/JPY has fallen from 160 at the start of the year to around 154.58 now, possibly testing 155 in the short term, but in the medium to long term, it’s expected to fall below 150.

Conclusion: It’s okay to exchange yen now, but do it in batches. The yen is in a volatile range; full conversion at once carries risks. It’s recommended to buy in 3-4 installments, averaging the cost, to enjoy appreciation gains while avoiding short-term fluctuations (which could oscillate 2-5%).

After exchanging yen, do these next

Once you have yen, instead of letting the money sit idle without interest, consider more stable or growth-oriented allocations.

Yen fixed deposit is the most conservative choice. E.SUN, Bank of Taiwan, and others offer deposits starting from NT$10,000 with annual interest rates of 1.5-1.8%. After a year, you earn interest income.

Yen ETFs (00675U, 00703) are suitable for those wanting exposure to yen appreciation without direct trading. For example, Yuanta 00675U tracks the yen index, and you can buy fractional shares via brokerage apps. Management fee is 0.4% annually, and dollar-cost averaging works well.

Yen insurance policies are medium-term holdings. Cathay and Fubon Life offer savings insurance with guaranteed interest rates of 2-3%.

Forex trading with yen is an advanced approach. Trade USD/JPY or EUR/JPY directly, with long and short options, 24-hour trading, and market-based volatility. Small capital can be used, suitable for experienced traders to catch short-term opportunities.

Common questions answered

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

Cash rate is the rate banks offer for physical cash transactions, convenient but usually 1-2% worse than the market spot rate, plus handling fees—most costly. Spot rate is the foreign exchange market rate for T+2 settlement, mainly used for electronic transfers, closer to international market prices, and more cost-effective.

Q: How much yen can NT$10,000 buy?

Calculate based on current rates. For example, Taiwan Bank’s cash selling rate on December 10 is 4.85, so NT$10,000 can buy about 48,500 yen. Using the online spot rate (~4.87), it’s about 48,700 yen. The difference is about 200 yen (~NT$40).

Q: What documents are needed for counter exchange?

For locals: ID card + passport. For foreigners: passport + residence permit. If pre-booked online, bring transaction notification. Under 20 years old need parental accompaniment. Large exchanges (over NT$100,000) may require source of funds declaration.

Q: Are there limits on foreign currency ATM withdrawals?

From 2025, regulations vary by bank. CTBC, Taishin Bank, etc., have daily limits around NT$120,000-150,000 equivalent. E.SUN’s limit is about NT$50,000 (50 banknotes). RMB withdrawals have special limits, max NT$20,000 per transaction. Use your own bank card to avoid cross-bank fees, plan ahead during peak times to prevent cash shortages.

Final advice

The yen has surpassed “travel pocket money” status and now functions as an asset with hedging and investment value. Whether preparing for next year’s trip or capitalizing on NT$ depreciation to shift into safe assets, following the principles of “batch exchange” and “don’t leave the money idle after exchange” can minimize costs and maximize gains.

Beginners are recommended to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits or ETFs as needed. This approach makes traveling more economical and adds a layer of protection during global market turbulence.