After the Japanese Yen rises by 8.7%, how can Taiwanese investors buy the dip? Four major currency exchange channels tested and compared

2025 will usher in a yen appreciation cycle. The TWD/JPY exchange rate has reached 4.85, an 8.7% increase from 4.46 at the beginning of the year. This rally not only attracts travelers but also sparks a wave of risk-averse allocations. According to the latest statistics, foreign exchange demand in the second half of the year increased by 25%, driven mainly by two forces: the recovery of Japanese tourism and investors rushing into the three major safe-haven currencies amid global economic instability.

So, is it really cost-effective to buy yen now? The answer depends on choosing the right channel. The same 50,000 TWD, exchanging at the counter might result in a loss of 1,500 yuan, while online remittance costs only 300 yuan—a difference equivalent to a month of bubble tea.

Why has the yen become the new favorite? A dual role from safe haven to arbitrage

When it comes to foreign currencies, many still think only of “needing it for travel.” But the yen has long surpassed a travel tool, becoming a safe-haven asset for professional investors.

Safe-haven attribute is the core reason. Japan’s economy is stable, government debt is manageable, and the yen ranks alongside the US dollar and Swiss franc as one of the three major global safe-haven currencies. When the Russia-Ukraine conflict erupted in 2022, the market panicked, stock markets fell 10%, but the yen appreciated 8% within a week, successfully buffering investment portfolio risks. For Taiwanese investors, exchanging for yen is like adding insurance to Taiwan stocks.

Interest rate differential arbitrage attracts short-term capital. The Bank of Japan maintains an ultra-low interest rate (currently 0.5%), while the US federal funds rate is as high as 5.5%, a 5% spread. Many hedge funds borrow low-interest yen, convert to USD to invest in high-yield assets, and when risks rise, they unwind the position—this is the famous “yen arbitrage trade.”

However, the Bank of Japan is on the verge of raising interest rates. Governor Ueda Kazuo recently adopted a hawkish tone, pushing market expectations to 80%. The December 19 meeting is expected to raise rates by 0.25 bps to 0.75% (a 30-year high), and Japanese bond yields have hit a 17-year high of 1.93%. In the short term, USD/JPY has fallen from the high of 160 at the start of the year to 154.58, and may fluctuate around 155 in the future, but medium to long-term forecasts are below 150.

Comparing exchange costs: 4 channels with real data

There are multiple ways to exchange for yen in the market. We collected the latest rates from various banks and used a model of exchanging 50,000 TWD to reveal hidden costs.

Category 1: Traditional counter cash exchange—least cost-effective but most secure

Carrying TWD cash to a bank or airport counter to buy yen notes seems simple but is the most expensive. Banks use “cash selling rate” (1-2% worse than spot rate), plus possible handling fees, pushing total losses to 1,500-2,000 yuan.

For example, Taiwan Bank’s rate on December 10, 2025, is 0.2060 TWD/JPY (1 TWD = 4.85 JPY). If withdrawing cash, additional fees apply, increasing costs further. Some banks like E.SUN, E.SUN, Cathay United Bank charge an extra 100-200 TWD for counter service, turning small exchanges into a “loss-making business.”

When to use? Only for urgent airport needs or for seniors unfamiliar with online operations.

Category 2: Online remittance + on-site pickup—balancing efficiency and cost

This is the choice of many rational investors. Using bank websites or apps to convert TWD to JPY, which adopts the “spot selling rate” (about 1% better than cash selling rate), saving a large spread. If cash is needed, pick it up at counters or foreign currency accounts via ATM, with handling fees only in the tens of yuan.

Taiwan Bank’s “Easy Purchase” online remittance is representative—no handling fee (pay with TaiwanPay, only 10 TWD), with about 0.5% better rate, and reservation for pickup at 14 Taoyuan Airport locations, including 2 24-hour branches. Mega International Bank offers similar services. For 50,000 TWD, costs drop to 300-800 yuan, about one-third of the above counter method.

The downside is needing to book 1-3 days in advance, and pickup times are limited by bank hours; branches cannot change the schedule. But for well-planned travelers, these small restrictions bring significant savings, making it quite cost-effective.

Category 3: Online remittance + foreign currency account—designed for long-term holders

Not wanting to run to the counter? Transfer TWD into a foreign currency account via online banking (no counter fee for currency exchange within the account), with funds staying in the account. To withdraw cash, cross-bank ATM fees are about 5-100 TWD. The advantage is 24-hour operation, allowing for phased purchases at an average exchange rate, especially when the TWD/JPY is below 4.80.

After opening a foreign currency account, you can transfer yen into a fixed deposit. Currently, yen fixed deposit annual interest rates are 1.5-1.8%, starting from 10,000 yen. For 50,000 TWD exchanged into about 240,000 yen, annual interest can reach 3,600-4,320 yen (about 700-850 TWD), which is over 3 times higher than TWD fixed deposit rates of 0.5%.

Who should use? Investors with forex experience planning long-term holdings or yen deposits.

Category 4: Foreign currency ATM—speed as the top priority, the last resort

Using a chip-enabled debit card at foreign currency ATMs to withdraw yen cash, 24/7, with only 5 TWD cross-bank fee per transaction. Sounds perfect, but many restrictions exist: about 200 ATMs nationwide (mainly in urban areas), with fixed denominations of 1,000/5,000/10,000 yen, often out of cash during peak times.

Fubon Bank’s foreign currency ATM has a daily limit of 150,000 TWD equivalent. Note that Japan ATM withdrawal services will be adjusted by the end of 2025, requiring international cards (Mastercard/Cirrus) to operate.

When to use? For urgent, small amounts (under 150,000 TWD), when unable to visit counters, suitable for office workers.

Cost comparison table of 4 channels

Is it cost-effective to buy yen now? Timing and phased strategy

Short answer: Yes, but with phased purchases.

Long answer depends on three dimensions. Exchange rate position: 4.85 is relatively high, up 8.7% from early this year. But with divergence in global central bank policies (US rate cuts, Japan rate hikes), volatility remains. Short-term fluctuations may be between 154-156 JPY/USD, with medium to long-term approaching 150—yen appreciation still expected.

Market demand: Second-half demand increased by 25%, tourism recovery drives small-volume needs, but risk-hedging is the main driver. Geopolitical risks (Taiwan Strait, Middle East) persist, and institutional investors continue to accumulate yen as insurance.

Personal needs: Differentiate three groups:

• Travelers: Book online remittance 1-2 weeks before departure for the best cost, no phased approach needed
• Investors: Enter in 3-4 batches, spaced 2 weeks apart, to avoid all-in at a rate that might continue to appreciate
• Hedgers: Don’t need to chase the bottom; allocate according to plan

Next steps after getting yen: Don’t let foreign currency accounts sit idle

After exchanging yen, if you just leave it there, you miss the potential for asset appreciation. Here are four common outlets with foreign currency accounts:

Yen fixed deposit—steady cash flow. E.SUN Bank and Taiwan Bank support online deposits, minimum 10,000 yen, annual interest 1.5-1.8%, risk-free. Suitable for capital preservation.

Yen insurance policies—medium-term yield lock-in. Cathay and Fubon offer yen savings insurance with guaranteed rates of 2-3%, policy terms 3-6 years, with protection. Suitable for conservative investors seeking higher returns than fixed deposits.

Yen ETFs—growth swing. Yuanta 00675U, Capital 00703 tracking yen index, can be bought as fractional shares via brokerage apps, for dollar-cost averaging yen appreciation. Management fee 0.4% annually, suitable for those optimistic about medium-term yen rise.

Forex trading—short-term swings. Trade USD/JPY, EUR/JPY on platforms like Mitrade, with 24/7 trading, long/short options, zero commissions, low spreads, suitable for experienced traders.

Yen’s dual-direction volatility still warrants caution—BOJ rate hikes are positive, but global arbitrage unwinding or geopolitical risks could temporarily weaken the currency. Investors should choose strategies aligned with their risk tolerance.

Quick Q&A on currency exchange

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

Cash rate (Cash Rate) applies to physical cash transactions, with the advantage of immediate delivery but a 1-2% spread plus fees, making it costly. Spot rate (Spot Rate) is used for electronic transfers, settled T+2, closer to international market prices, saving costs. In short: cash rate suits urgent cash needs; spot rate is better for account deposits or investments.

Q: How much yen for 10,000 TWD?

Formula: Yen amount = TWD amount × current rate

Using Taiwan Bank’s spot sell rate of 4.87 on Dec 10, 2025, 10,000 TWD ≈ 48,700 yen. With cash rate 4.85, about 48,500 yen, a difference of 200 yen (~40 TWD). Choosing the right channel makes a bigger difference.

Q: What to bring for counter exchange?

Taiwanese: ID card + passport. Foreigners: Passport + residence permit. If pre-booked online, bring transaction notice. Under 20 years old need parent accompaniment. Large amounts over 100,000 TWD may require source of funds declaration.

Q: Are there limits on foreign currency ATM withdrawals?

Yes. Starting October 2025, banks will adjust limits:

It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees. During peak times (airports, holidays), cash may run out; plan ahead.

Summary: The complete roadmap for yen investment

Yen is no longer just “travel pocket money” but an asset with dual roles—hedging and investment. Whether you plan to visit Japan next year or want to hedge against TWD depreciation, mastering these principles will make your approach more effective:

Principle 1: Phased exchange. Avoid all-in at a rate that might continue to appreciate. For amounts over 50,000 TWD, consider 3 installments spaced 2-3 weeks apart.

Principle 2: Don’t leave it idle after exchange. Use foreign currency deposits (annual 1.5-1.8%) or ETF dollar-cost averaging to generate cash flow or growth.

Beginner path recommendation: Start with Taiwan Bank’s online remittance + airport pickup (lowest cost), then choose fixed deposit or ETF based on needs. This reduces exchange costs and adds a layer of protection during global market volatility. The yen appreciation cycle has just begun—enter now to play cost-effectively and invest wisely.