Japanese Yen Exchange Guide: 4 Major Methods Cost Comparison and the Best Timing

Why Has the Japanese Yen Become a Popular Exchange Currency?

Entering the second half of 2025, the demand for exchanging Japanese Yen has significantly increased. As of December 10, the TWD to JPY exchange rate reached 4.85, appreciating 8.7% from 4.46 at the beginning of the year. Similar phenomena are also observed in major currency pairs such as HKD to USD, reflecting a reorganization of global capital flows. The attention on the Yen is not only due to the revival of travel demand but also because of its unique financial attributes.

Daily Application Aspects

The Japanese Yen plays an important role in daily life in Taiwan. In terms of travel expenses, cash remains the main payment method in major Japanese cities (Tokyo, Osaka, Okinawa), with credit card penetration at only 60%. Purchasing agents and online shopping also continue to drive demand for Yen, as many consumers need to pay Japanese sellers or purchasing platforms directly in Yen. Additionally, students studying or working in Japan usually exchange currency in advance to avoid costs from sudden exchange rate fluctuations.

Investment Value Drivers

From a financial perspective, the Yen is one of the world’s three major safe-haven currencies (along with the US dollar and Swiss franc). Japan’s economic fundamentals are stable, and government debt risks are relatively manageable. When global markets experience turbulence, capital tends to flow into Yen seeking safety. During the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% in a week, while the stock market fell by 10%, demonstrating its hedging effectiveness.

Japan maintains ultra-low interest rates (currently 0.5%), making the Yen a financing currency for arbitrage trading. Investors often borrow Yen at low interest to invest in higher-yield USD, with a US-Japan interest rate differential of 4.0%. When risks increase, they close positions and buy back Yen, and this arbitrage mechanism influences the Yen’s medium-term trend.

Four Main Channels and Cost Analysis for Exchanging Yen in Taiwan

Many people think exchanging Yen only requires going to a bank, but the exchange rates and handling fees across different channels can differ by NT$1,500-2,000 (based on NT$50,000). Below is a detailed comparison.

Method 1: Over-the-Counter Cash Exchange

Carrying NT$ cash directly to a bank branch or airport counter to exchange for cash Yen is simple but the most costly. Banks use the “cash selling rate,” which is usually 1-2% worse than the spot rate. For example, Taiwan Bank’s rate on December 10, 2025, was 0.2060 (about NT$4.85 per Yen), with some banks charging additional handling fees.

Major bank exchange rates and fees (December 10, 2025):

Advantages: Safe and reliable, multiple denominations available (1,000, 5,000, 10,000 Yen), staff assistance
Disadvantages: Worst exchange rate, limited business hours (Weekdays 9:00-15:30), increasing handling fees
Estimated Cost: NT$1,500-2,000 loss (based on NT$50,000)
Suitable for: Small, urgent needs, unfamiliar with online operations

Method 2: Online Exchange + In-Person Withdrawal

Using bank apps or online banking to convert NT$ to Yen in a Yen account, utilizing the “spot selling rate” (about 1% better than cash rate). If cash is needed, go to a counter or foreign currency ATM for withdrawal, incurring exchange spread handling fees (from NT$100).

Many banks, including E.SUN, offer this service. Customers can operate 24/7, allowing for phased entry to average costs. Suitable for monitoring exchange rates and gradually accumulating when the NT$ to Yen rate drops below 4.80.

Advantages: 24/7 operation, can buy in batches to lower average cost, better exchange rates
Disadvantages: Need to open a foreign currency account first, withdrawal fees (NT$5-100 cross-bank)
Estimated Cost: NT$500-1,000 loss
Suitable for: Experienced forex traders, can also combine with Yen fixed deposits (current annual interest 1.5-1.8%)

Method 3: Online Currency Conversion + Airport Pickup

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After completing the exchange, present ID and transaction notification to pick up in person. Taiwan Bank and Mega Bank promote this service, with appointment options at airport branches.

Taiwan Bank’s “Easy Purchase” online currency exchange is fee-free (using Taiwan Pay, only NT$10), with about 0.5% exchange rate advantage. Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, convenient for travelers before departure.

Advantages: Highest exchange rate advantage, often no handling fee, can choose airport pickup
Disadvantages: Need to book 1-3 days in advance, pickup during business hours only, branch location cannot be changed
Estimated Cost: NT$300-800 loss
Suitable for: Planned travelers who want to pick up cash at the airport

Method 4: Foreign Currency ATM 24-Hour Withdrawal

Using chips financial cards at foreign currency ATMs to withdraw cash Yen, supporting 24-hour service. Cross-bank withdrawals cost only NT$5 (deducted directly from NT$ account), greatly reducing costs. E.SUN’s foreign currency ATMs have a daily withdrawal limit of NT$150,000, with no exchange handling fee.

Note: Japan ATM withdrawal rules will be adjusted by the end of 2025, requiring international cards (Mastercard/Cirrus). There are about 200 foreign currency ATMs across Taiwan, mainly in large branches and airports. During peak times (like airports), cash may be insufficient, so plan ahead.

Advantages: Instant withdrawal, high flexibility, low cross-bank fee
Disadvantages: Limited locations and denominations (fixed 1,000/5,000/10,000 Yen), possible out-of-stock during peak times
Estimated Cost: NT$800-1,200 loss
Suitable for: Urgent, temporary needs

Summary of Four Exchange Methods

*Cost estimates based on NT$50,000 exchange, actual figures vary with rate fluctuations

Is Now a Good Time to Exchange for Yen?

Exchange Rate Trend Analysis

The TWD to JPY rate has risen from 4.46 at the start of the year to 4.85, an 8.7% appreciation, highly favorable for exchange. Compared to other major currency pairs like HKD/USD, the Yen’s recent performance is impressive, gradually becoming an important safe-haven asset.

Central Bank Policy Impact

The Bank of Japan (BOJ) is on the verge of raising interest rates, with market expectations reaching 80%. BOJ Governor Ueda Kazuo’s recent hawkish comments have boosted expectations, with a possible rate hike of 0.25 bps to 0.75% at the December 19 meeting (a 30-year high). Japanese government bond yields have hit a 17-year high of 1.93%, supporting the Yen’s medium-term trend.

Short-term Fluctuations vs. Medium-term Trend

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, with a short-term test of 155 possible, but the long-term forecast suggests a drop below 150. Arbitrage closing risks could cause short-term volatility of 2-5%. It’s recommended to buy in phases rather than all at once.

Suggested Strategy

For travel, exchanging now is advantageous. For investment, consider Yen’s role as a major safe-haven currency, suitable as a hedge during Taiwan stock market volatility, but beware of arbitrage closing and geopolitical risks (Taiwan Strait, Middle East). Regardless of purpose, adopting a “phased exchange” strategy helps avoid full exposure to one-way exchange rate risks.

Post-Exchange Appreciation Paths

After exchanging, don’t let the funds idle without interest. Diversify into multiple income options.

Yen Fixed Deposit: Conservative
E.SUN Bank, Taiwan Bank, etc., offer foreign currency accounts with a minimum deposit of NT$10,000, annual interest 1.5-1.8%. Suitable for risk-averse investors.

Yen Insurance Policies: Medium-term Holding
Cathay Life, Fubon Life offer Yen savings insurance with guaranteed interest rates of 2-3%, combining protection and returns.

Yen ETFs: Growth Allocation
Yuanta 00675U, 00703 tracking Yen indices can be bought in fractional shares via brokerage apps, suitable for regular investors. Management fee about 0.4%, balancing risk and reward.

Forex Trading: Swing Gains
Trade USD/JPY, EUR/JPY directly on platforms like Mitrade. Advantages include two-way trading, 24-hour operation, zero commissions, low spreads, with stop-loss, take-profit, trailing stop tools. Suitable for experienced traders to capture short-term volatility.

Yen’s two-way fluctuation nature requires caution, as global arbitrage closing or geopolitical conflicts can depress the rate. Short-term traders should use risk management tools; medium-term investors can consider ETF dollar-cost averaging.

Frequently Asked Questions

Q: What is the difference between cash rate and spot rate?

Cash rate refers to the physical bank buy/sell rate for cash notes, applicable at counters or on-site transactions, offering immediate delivery but usually 1-2% worse than the spot rate. Spot rate is the foreign exchange market rate for settlement within two business days (T+2), mainly used for electronic transfers and account conversions, closer to international market prices.

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

Based on Taiwan Bank’s rate on December 10, 2025, the cash selling rate was about 4.85 (NT$1 = 4.85 Yen), so NT$10,000 can buy approximately 48,500 Yen. Using the spot selling rate of 4.87, it’s about 48,700 Yen, a difference of 200 Yen (about NT$40).

Q: What documents are needed for over-the-counter exchange?

Citizens need to bring ID + passport; foreigners need passport + residence permit. For corporate exchange, business registration documents are required. Online booking requires the transaction notification. Minors under 20 need parental consent and ID. Large exchanges over NT$100,000 require a source of funds declaration.

Q: What are the rules for foreign currency ATM withdrawals?

Different banks have different limits. CTBC allows NT$120,000 equivalent per day, Taishin NT$150,000, E.SUN NT$150,000 (including card transactions). Other banks’ cards are subject to issuing bank restrictions. The single transaction limit for RMB is NT$20,000. Check with your bank’s official website for the latest rules.

Conclusion

The Yen has surpassed the role of “travel pocket money,” now serving as a safe-haven asset and investment allocation tool. Whether for travel or asset hedging, following the principles of “phased exchange + not idle after exchange” can reduce costs and maximize returns. Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then gradually move into Yen fixed deposits, ETFs, or forex swing trading. This way, you not only save on travel costs but also gain an extra layer of protection during global market fluctuations.