Japanese Yen Exchange Practical Guide: Comparing the Costs of Four Methods, Which Is the Most Cost-Effective?

Is it worthwhile to exchange for Japanese Yen now?

As of December 10, 2025, the TWD/JPY quote is 4.85, meaning 1 TWD can be exchanged for 4.85 JPY. Compared to the early-year level of 4.46, the yen has appreciated by 8.7% annually. For Taiwanese investors looking to allocate hedging assets, exchanging for yen now indeed offers potential gains.

However, it’s important to note that the yen’s fluctuation range remains quite large. The Bank of Japan Governor Ueda Kazuo recently signaled a hawkish stance, and the market expects the December 19 meeting to raise interest rates to 0.75% (a 30-year high), providing short-term support for the yen. But with the US rate cut cycle starting and global arbitrage unwind risks, the yen may fluctuate between 154-155 in the short term. In other words, now may not be the absolute high point, but waiting isn’t necessary either. Gradual entry is the key.

The Four Major Currency Exchange Channels Cost Comparison

Many believe that exchanging at a bank counter is the simplest, but in reality, the difference in exchange rates alone can amount to several thousand NT dollars. Below is a breakdown of the four most common methods in Taiwan:

Method 1: Bank Counter Cash Exchange (Most traditional but most expensive)

Bring cash TWD to a bank or airport branch to exchange for JPY banknotes. It’s straightforward, but uses the “cash selling rate,” which is about 1-2% worse than the spot rate, plus some banks charge handling fees, making it the most costly option.

For example, Taiwan Bank’s cash selling rate is 0.2060 (about 0.2060 TWD per JPY). No handling fee at the counter, but E.SUN Bank, E.SUN Bank, and others may charge an extra 100-200 NT. Exchanging 50,000 NT results in a loss of about 1,500-2,000 NT.

Suitable for: Travelers unfamiliar with online operations or in urgent need (e.g., at the airport discovering insufficient cash).

Method 2: Online Currency Exchange + Foreign Currency Account (Suitable for small investors entering gradually)

Use bank apps or online banking to convert TWD to JPY at the “spot selling rate,” saving about 1% on the cash exchange rate. If you need to withdraw cash, go to an ATM or counter, incurring additional withdrawal fees (from around 100 NT).

Advantages include 24-hour operation, observing exchange rate trends, and entering at low points (e.g., TWD/JPY below 4.80) for average cost. Disadvantages are the need to open a foreign currency account and additional fees for cash withdrawal. Exchanging 50,000 NT is estimated to lose 500-1,000 NT.

Suitable for: Those with some forex knowledge or planning to buy JPY time deposits (currently 1.5-1.8% annual interest) for long-term investment.

Method 3: Online Currency Purchase Reservation + Airport Pickup (Best for office workers)

No foreign currency account needed. Reserve directly on the bank’s website, fill in currency, amount, branch, and date. After transferring funds, bring ID and transaction notice to pick up in person. Taiwan Bank’s “Easy Purchase” online currency purchase is fee-free (pay with Taiwan Pay, only 10 NT), with about 0.5% exchange rate advantage, and 14 pickup points at Taoyuan Airport (including 2 24-hour locations).

Ideal for pre-trip planning, avoiding exchange rate fluctuations, no queueing at counters, and picking up cash at the airport. Exchanging 50,000 NT is estimated to lose 300-800 NT. The downside is needing to book 1-3 days in advance, with pickup limited to business hours.

Suitable for: Travelers with clear schedules and seeking convenience, such as business travelers and tourists.

Method 4: Foreign Currency ATM Withdrawal (Most flexible but fewer locations)

Use a chip-enabled financial card at foreign currency ATMs to withdraw JPY cash 24/7. Deducts directly from TWD account with a cross-bank fee of only 5 NT. E.SUN Bank’s foreign currency ATM limit is 150,000 NT per day, with no exchange fee.

However, there are only about 200 such ATMs nationwide, with fixed denominations (1,000/5,000/10,000 JPY). During peak times (like at airports), they may run out of cash. Not recommended for last-minute needs. Exchanging 50,000 NT is estimated to lose 800-1,200 NT.

Suitable for: Urgent needs, no time to visit banks, and okay with denomination restrictions.

Cost Comparison Table of the Four Methods

After exchanging for yen, don’t let your money sit idle

If you’ve already exchanged for yen, instead of letting it sit earning 0%, consider making it work for you:

JPY Time Deposit: The most stable, E.SUN Bank and Taiwan Bank offer foreign currency accounts starting from 10,000 JPY, with annual interest rates of 1.5-1.8%. Break-even in about 6 months to recoup the exchange cost.

JPY Insurance Policy: Medium-term holding, savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2-3%, 6-10 years, suitable for retirement planning.

JPY ETFs: Growth-oriented, Yuanta 00675U tracks the JPY index, can be bought as fractional shares via broker for dollar-cost averaging, with a management fee of 0.4% annually. Volatility is higher than deposits but benefits from rising interest rates long-term.

Forex Swing Trading: Advanced approach, directly trade USD/JPY or EUR/JPY, 24/7 trading, long and short positions, suitable for experienced traders.

Quick FAQs

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

Cash rate is the buy/sell price banks offer for physical bills and coins. You get cash immediately, but the rate is usually 1-2% worse than the spot rate, suitable for small, urgent exchanges. Spot rate is the price for electronic transfers or account transfers, close to international market rates, but settlement takes T+2 days, suitable for large or long-term holdings.

Q: How much JPY can I get with 10,000 NT?

Using Taiwan Bank’s cash selling rate of 4.85: 10,000 NT × 4.85 = 48,500 JPY. Using the spot rate of 4.87: 48,700 JPY. The difference is about 200 JPY (roughly 40 NT).

Q: What do I need to bring for counter currency exchange?

ID + passport (foreigners bring passport + residence permit). If online reservation is made, also bring transaction notice. For amounts over 100,000 NT, source of funds declaration may be required. Under 20, minors need a parent present.

Q: How does BOJ rate hike affect me?

Rate hikes usually strengthen the yen, benefiting those who already hold yen, and yen deposit rates may rise accordingly. But short-term arbitrage unwinding can cause 2-5% volatility, so gradual entry and long-term holding are recommended for steady gains.