Japanese Yen Allocation Beginner's Guide: Practical Comparison of 4 Major Exchange Channels, Master the Best Exchange Rates

The Japanese Yen has become the standard asset for Asian investors, especially during times of continuous TWD depreciation and rising global economic uncertainties. In December 2025, the TWD/JPY exchange rate reached 4.85, appreciating by 8.7% since the beginning of the year, creating significant currency exchange profit opportunities. Many ask: Is it worthwhile to exchange for JPY now? The answer is yes, but the key lies in choosing the right exchange channel—one decision could save you an extra 2,000 NT dollars.

Why has the JPY become a new favorite? Three perspectives

Essential for travel and daily expenses

Shopping in Tokyo, skiing in Hokkaido, vacationing in Okinawa—travel to Japan has become a collective habit for Taiwanese. Unlike Europe and America, cash still accounts for about 60% of retail transactions in Japan, with credit card penetration relatively low. Resellers and Japanese online shoppers also need to pay directly in JPY, making currency exchange a necessity. For young people planning to study or work in Japan, exchanging in advance can avoid sudden exchange rate fluctuations.

Stable status as one of the world’s top three safe-haven currencies

The Japanese Yen, alongside the US dollar and Swiss franc, enjoys a unique safe-haven aura. Japan’s economy is stable, debt is manageable, and central bank policies are transparent. During global market turbulence, funds tend to flow into the Yen. During the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% in a week, successfully buffering stock market declines. For Taiwanese investors, holding JPY is not only for travel but also a hedging tool against Taiwan stock volatility and asset protection. Compared to the one-way depreciation pressure of other Southeast Asian currencies like MYR, the Yen’s two-way fluctuations offer more arbitrage opportunities.

Arbitrage mechanisms under low interest rates

Japan’s long-term ultra-low interest rate policy (currently 0.5%) makes the Yen an ideal “funding currency.” Many global investors borrow low-interest Yen to convert into higher-yield USD for arbitrage investments, with the US-Japan interest rate differential now reaching 4.0%. However, this also means that when risks increase or arbitrage trades are closed, the Yen may face short-term fluctuations of 2-5%.

Practical comparison of 4 exchange channels

1. Bank counter cash exchange: traditional but most costly

Carrying cash in TWD to a bank or airport counter to receive JPY cash on the spot—this is the most common method but often the least economical. Banks use “cash selling rates,” which are about 1-2% worse than the spot rate, plus some banks charge handling fees, resulting in a total loss of NT$1500-2000 (based on NT$50,000).

As of December 10, 2025, according to bank rates, Taiwan Bank’s cash selling rate is 0.2060 TWD/JPY (4.85 JPY/TWD), Mega Bank is 0.2062, and CTBC Bank is 0.2065. E.SUN and Taipei Fubon offer slightly better rates but charge NT$100 and NT$200 handling fees respectively.

When to use? For urgent airport needs, amounts under NT$10,000, or unfamiliar with online procedures.

2. Online currency exchange + airport pickup: best for pre-trip planning

No need to open a foreign currency account in advance. Simply fill in the amount, specify the pickup branch and date via bank app, transfer the funds, and then bring ID and transaction notification to pick up at the counter. Taiwan Bank’s “Easy Purchase” service is especially convenient—pay with Taiwan Pay for just NT$10 handling fee, with an exchange rate 0.5% better. The best part is you can reserve at 14 locations at Taoyuan Airport, including 2 open 24 hours—no need to rush to the bank at the airport.

This method’s loss is controlled within NT$300-800, much lower than cash exchange at counters. The downside is needing to book 1-3 days in advance, and pickup times are limited by bank hours; branches cannot make last-minute changes.

When to use? For planned travelers, those wanting to withdraw cash directly at the airport, or amounts over NT$50,000.

3. Foreign currency ATM: 24-hour flexible withdrawal

Use a chip-enabled bank card at foreign currency ATMs to withdraw JPY, supporting 24-hour operation, with only NT$5 cross-bank fee. E.SUN Bank’s foreign currency ATMs limit daily withdrawal to NT$150,000 equivalent, with no currency exchange fee. Losses are controlled within NT$800-1200, making it a medium-cost option.

However, only about 200 foreign currency ATMs nationwide support this, with limited denominations (only 1,000, 5,000, 10,000 JPY bills). During peak times (like at airports), cash may run out. Planning ahead is recommended—avoid last-minute emergencies.

When to use? When you don’t have time to visit a bank, need small amounts temporarily, or happen to pass by an ATM.

4. Online exchange + foreign currency account: the best choice for investors

Use online banking or app to convert TWD into JPY and deposit into a foreign currency account. Using the “spot sell rate” (about 1% better than cash selling rate), overall losses are kept within NT$500-1000. E.SUN and Taiwan Bank offer this service, allowing multiple entries over 24 hours for an average cost.

If cash is needed later, you can withdraw via counter or foreign currency ATM, but extra fees may apply. The advantage is observing exchange rate trends and buying in batches at low points. More importantly, after exchanging JPY, you can directly transfer into JPY fixed deposits (annual interest 1.5-1.8%) or JPY ETFs.

When to use? For those with forex investment experience, planning long-term holdings, or wanting to exchange and invest simultaneously.

Cost comparison table of 4 methods

Is it worthwhile to buy JPY now? Exchange rate trend analysis

The TWD/JPY rate at 4.85 in December 2025 is already quite favorable. Since the start of the year at 4.46, appreciating by 8.7%, the currency gains for Taiwanese investors are significant. Especially under the environment of continuous TWD depreciation, exchanging for JPY is worth considering from both travel and hedging perspectives.

However, note that JPY is currently experiencing considerable volatility. The Bank of Japan (BOJ) is on the verge of raising interest rates—Governor Ueda’s hawkish comments have pushed market expectations to 80%, with a rate hike of 0.25 basis points to 0.75% expected at the December 19 meeting (a 17-year high), and Japanese bond yields reaching 1.93%. This supports the Yen, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait/Middle East) could suddenly push the rate lower.

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may bring it back to 155, but medium to long-term forecasts suggest below 150. For investment purposes, JPY as a safe-haven currency is suitable for hedging Taiwan stock volatility, but short-term risks include arbitrage unwinding. It’s advisable to enter gradually rather than all at once.

Post-exchange JPY asset allocation for appreciation

After exchanging for JPY, don’t let your money sit idle without interest—consider stable income or growth investments. Here are four common options:

JPY fixed deposit: Most stable, open an online foreign currency account with E.SUN/Taiwan Bank, starting from 10,000 JPY, with an annual interest rate of 1.5-1.8%. Suitable for conservative investors.

JPY insurance policy: Medium-term holding plan, such as Cathay or Fubon’s JPY savings insurance, with guaranteed interest rates of 2-3%, combining protection and returns.

JPY ETFs (00675U, 00703): Growth-oriented options, Yuanta 00675U tracks the JPY index, can be bought as fractional shares via broker apps, with an annual management fee of 0.4%. Suitable for young investors.

Forex swing trading: Direct trading of currency pairs like USD/JPY or EUR/JPY on forex platforms, with two-way trading 24/7, requiring minimal capital but needing technical analysis skills.

Quick FAQ

Q: What’s the difference between cash rate and spot rate?
Cash rate is the bank’s buy/sell rate for physical cash, usually 1-2% worse than the international spot rate, with immediate delivery; spot rate is the forex market rate for settlement within two business days, closer to international prices but involves T+2 settlement.

Q: How much JPY can I get with NT$10,000?
Using Taiwan Bank’s cash selling rate of 4.85, NT$10,000 ≈ 48,500 JPY; with the spot rate of 4.87, about 48,700 JPY—difference of roughly 200 JPY (NT$40).

Q: What ID do I need to exchange foreign currency?
For locals: ID card + passport; foreigners: passport + residence permit; companies: business registration. Online booking also requires transaction notification. Under 20 years old need parental accompaniment; amounts over NT$100,000 may require source declaration.

Q: What’s the limit for foreign currency ATM withdrawals?
From 2025, most banks set a daily limit of NT$100,000-150,000 equivalent for their own cards; other banks follow their issuing bank’s rules. Consider splitting withdrawals or using your own bank card to avoid cross-bank fees.

Final advice

The JPY is no longer just “travel pocket money”—it’s an asset with hedging and investment value. Whether you’re planning to visit Japan next year or shifting into JPY to hedge against TWD depreciation, mastering “batch exchange + not sitting idle after exchange” can minimize costs and maximize returns. Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on needs. This way, you’ll not only save on travel costs but also add a layer of asset protection during global market turbulence.