In the era of Taiwanese dollar depreciation, Japanese yen allocation becomes a must-have course — a complete analysis of four major currency exchange strategies

Why Now Is the Time to Exchange for Yen? The Truth Behind NT$ to Yen Reaching 4.85

On December 10, 2025, the NT$ to Yen exchange rate surged to 4.85. This is not just good news for travelers but also a signal that investors cannot ignore.

From 4.46 at the beginning of the year to now 4.85, the Yen has appreciated by 8.7%, hiding a major shift in global capital flows. In an era where the NT$ continues to face depreciation pressure, knowing when and how to exchange for Yen has become an essential part of asset allocation.

Yen Is Not Just for Travel—A Hedge Against Taiwan Stocks

Many think exchanging for Yen is just for going abroad. But from a financial market perspective, Yen plays a more critical role.

Yen is one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc). Japan’s economy is stable, and government debt is well-managed. Whenever global markets are turbulent, capital flows into Yen for safety. For example, during the Russia-Ukraine conflict in 2022, Yen appreciated 8% in a single week, successfully buffering a 10% decline in the stock market. For Taiwanese investors, exchanging for Yen is not just about increasing pocket money but also adding a protective layer to the overall asset portfolio.

The Bank of Japan’s rate hike cycle has begun, opening arbitrage opportunities

For a long time, Japan maintained ultra-low interest rates (even negative rates), making Yen the cheapest “financing currency” globally. But this situation is changing. BOJ Governor Ueda Kazuo recently signaled a hawkish stance, with market expectations that the December 19 meeting will raise rates by 0.25 bps to 0.75% (a 30-year high). With Japanese government bond yields reaching a 17-year high of 1.93%, the Japan-US interest rate differential is narrowing, and USD arbitrage trades are facing unwind pressure—meaning investors holding Yen may see appreciation opportunities in the short term.

Four Ways to Exchange for Yen: Cost Differences Can Reach Up to NT$2000

Many people are used to going directly to banks for cash exchange, but just choosing different methods can make your costs vary by as much as NT$1500-2000 (based on exchanging NT$50,000).

Method 1: In-branch cash exchange—convenient but expensive

Bring NT$ cash to a bank or airport counter to buy Yen cash. This uses the “cash selling rate,” which is about 1-2% worse than the spot rate, plus some banks’ handling fees, making it the most costly.

For example, Taiwan Bank’s rate on December 10, 2025, is 0.2060 NT$ per Yen (i.e., NT$1 exchanges for 4.85 Yen). E.SUN Bank, Cathay United Bank, and others may add NT$100-200 handling fee.

Estimated cost: NT$50,000 loses NT$1500-2000

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

Method 2: Online currency exchange + foreign currency account—Preferred by investors

Use bank app or online banking to convert NT$ to Yen at the “spot sell rate” (about 1% better than cash selling rate), then deposit into a foreign currency account. If cash is needed, withdraw in person or via foreign currency ATM.

Advantages include 24-hour operation, dollar-cost averaging, and better exchange rates. When NT$ to Yen drops below 4.80, batching purchases can effectively lower the average cost.

Withdrawal of cash incurs a currency exchange fee (around NT$100+), but still cheaper than in-branch exchange. Plus, after exchange, funds can be directly invested in Yen fixed deposits (currently 1.5-1.8% annual interest) or Yen ETFs, generating passive income.

Estimated cost: NT$50,000 loses NT$500-1000

Suitable for: Experienced forex investors planning long-term holdings

Method 3: Online currency exchange + airport pickup—Best pre-travel plan

No need to open a foreign currency account. Fill in amount, branch, and date online, complete the exchange, then bring ID and transaction notice to pick up in person. Taiwan Bank’s “Easy Purchase” service offers this, often with no handling fee (NT$10 if paid via TaiwanPay), and about 0.5% better rates.

The biggest advantage is booking pickup at Taoyuan Airport or other branches, ideal for planned travelers who want to pick up Yen directly at the airport on departure day, avoiding pre-visit to the bank.

Estimated cost: NT$50,000 loses NT$300-800

Suitable for: Travelers preparing to go abroad, wanting to withdraw at the airport

Method 4: Foreign currency ATM—24/7 emergency option

Use chip-enabled debit cards at foreign currency ATMs to withdraw Yen cash, available 24 hours. Direct withdrawal from NT$ account, with only NT$5 interbank fee, is the cheapest handling option.

Mega International Bank’s foreign currency ATMs have a daily limit of NT$150,000 (about NT$15,000 in Yen). No exchange fee, but limited locations (~200), fixed denominations (1000, 5000, 10000 Yen), and cash may run out during peak times.

Estimated cost: NT$50,000 loses NT$800-1200

Suitable for: Urgent needs, no time for in-branch visit

Exchange Cost Comparison: Same NT$50,000, Save Up to NT$1200

Is It Worth Exchanging NT$ to Yen Now? Staggered Entry Is the Key

It’s indeed advantageous now, but requires strategy

NT$ to Yen at 4.85, compared to 4.46 at the start of the year, appreciates by 8.7%. Against the backdrop of long-term NT$ depreciation, exchanging now is quite favorable from a currency gain perspective.

But don’t go all-in at once. Recent market data shows Taiwan’s forex demand increased by 25% in the second half, mainly due to travel recovery and hedging needs. This reflects a renewed recognition of Yen’s value.

Short-term volatility risk should not be ignored

Although BOJ rate hike expectations support Yen, USD/JPY has fallen from 160 to around 154.58. Short-term fluctuations may bring it back to 155, but long-term forecasts suggest below 150. Arbitrage unwind risks could cause Yen to fluctuate 2-5%.

A recommended strategy is to split into 3-4 entries, buying in batches when NT$ to Yen is between 4.80-4.90, reducing the average cost. During sharp drops, add more in parts to avoid putting all eggs in one basket.

After Exchanging for Yen, Make It Work for You—Four Ways to Grow Your Yen

Don’t let your Yen sit idle. Here are four beginner-friendly ways to grow small amounts:

1. Yen Fixed Deposit
Open a foreign currency account, deposit Yen online, with a minimum of 10,000 Yen, current annual interest 1.5-1.8%. Very low risk, suitable for conservative investors. E.SUN Bank, Taiwan Bank, and others offer this.

2. Yen Savings Insurance
Cathay Life, Fubon Life offer Yen savings policies with guaranteed 2-3% interest, medium-term holdings, can be combined with fixed deposits for diversification.

3. Yen ETFs
Yuanta 00675U, Cathay 00703 track Yen indices, can be bought as fractional shares via broker apps, suitable for periodic investment. Management fee only 0.4%, diversified risk.

4. Forex Trading in Yen
Trade USD/JPY or EUR/JPY directly, capturing exchange rate movements, 24-hour trading, long/short positions. Suitable for risk-tolerant traders, starting with small capital.

While Yen has safe-haven attributes, it also faces two-way volatility. BOJ rate hikes support Yen, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) may depress the rate. Long-term, Yen’s safe-haven value remains stable, but short-term trading requires caution.

Quick FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate is the bank’s rate for physical bills, settled immediately, usually 1-2% worse than spot rate. Spot rate is the FX market’s T+2 settlement rate, more favorable but requires waiting.

Q: How much Yen for NT$10,000?
Using Taiwan Bank’s cash selling rate of 4.85, NT$10,000 exchanges for about 48,500 Yen. At spot rate 4.87, about 48,700 Yen.

Q: What to bring for in-branch exchange?
Locals: ID + passport; foreigners: passport + residence permit. If booked online, also bring transaction notice. Under 20 needs guardian; over NT$100,000 may require source of funds declaration.

Q: Daily limit for foreign currency ATM withdrawal?
Varies by bank. CTBC: NT$120,000 equivalent/day; Taishin: NT$150,000. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees. Cash may run out during peak hours, so plan ahead.

Summary: Seize the NT$ to Yen Exchange Opportunity and Diversify Assets

Yen is no longer just pocket money for travel but a core asset with hedging and investment value. In an era of ongoing NT$ depreciation, appropriate Yen allocation can protect assets and hedge risks.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then move into fixed deposits, ETFs, or small-scale trading based on needs. The key is mastering “batch exchange + don’t stay flat after exchange,” minimizing costs and adding a layer of protection during market turbulence.

Whether for next year’s travel or hedging against NT$ depreciation, now is a good time to capitalize on the NT$ to Yen exchange rate.