In the era of NT dollar depreciation, how to buy Japanese yen most cost-effectively? Understand four major allocation strategies in this article

The NT dollar to Japanese Yen has reached 4.85, hitting a new annual high. Compared to 4.46 at the beginning of the year, the Yen has appreciated by 8.7%, which is both a warning and an opportunity for investors holding NT dollars.

Still debating whether to exchange for Yen? This article summarizes the latest 4 Yen allocation channels in Taiwan to help you find the most cost-effective solution. Whether you’re planning to travel abroad next year or want to allocate assets while the NT dollar is under pressure, you can get started quickly.

Why allocate Yen now?

1. Hedging properties are timely

The Yen is one of the world’s three major safe-haven currencies (the other two are USD and Swiss Franc). When global markets are turbulent, funds tend to flow into Yen for safety. Take the Russia-Ukraine conflict in 2022 as an example: Yen appreciated 8% in a week, while the stock market fell 10%, creating an excellent hedging effect.

For Taiwanese investors, allocating Yen is not just for overseas spending but also a tool to hedge against Taiwan stock market volatility.

2. Bank of Japan interest rate hikes are imminent

BOJ Governor Ueda Kazuo recently signaled a hawkish stance, with market expectations of an 80% probability of raising interest rates to 0.75% at the December 19 meeting (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. This means fixed deposits and insurance policy yields in Yen are expected to improve. Locking in Yen assets now could yield better returns in the future.

3. Asset protection amid NT dollar depreciation pressure

The NT dollar faces long-term depreciation expectations, with the US-Japan interest rate differential expanding to 4.0%. Compared to that, allocating Yen not only helps avoid NT dollar risk but also allows participation in arbitrage opportunities under Japan’s low interest rates.

The 4 most cost-effective Yen allocation options

Based on the latest exchange rates and fee standards as of December 2025, we have summarized the costs and advantages of each method.

Option 1: Online currency exchange + airport pickup (best for beginners)

No need to open a foreign currency account in advance. Simply fill in the amount and pickup branch on the bank’s website, then bring your ID and transaction notification to the counter for pickup. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay with Taiwan Pay for only NT$10), with an exchange rate about 0.5% better than cash selling rate.

Core advantages:

• Can plan ahead, buy in installments at low exchange rates (e.g., NT$ to Yen below 4.80)
• Can specify airport branches for pickup (Taoyuan Airport has 14 Taiwan Bank outlets, 2 open 24 hours)
• Lowest handling fee, best exchange rate

Hidden costs: Need to make an appointment in advance (at least 1-3 days), pickup only during bank hours

Suitable for: Planned travelers or investors, best to pre-order a week before departure

Estimated cost (NT$50,000): Loss NT$300-800

Option 2: Foreign currency ATM instant withdrawal (savior for office workers)

Use a chip-enabled financial card to withdraw Yen cash at foreign currency ATMs, available 24/7. Deducts from NT dollar account with only NT$5 interbank fee. Fubon Bank’s foreign currency ATM daily limit is NT$150,000, with no currency exchange fee.

Core advantages:

• Withdraw anytime, anywhere, no reservation needed
• Lowest interbank fee (NT$5 per transaction)
• Suitable for last-minute needs or last-minute realization before travel

Hidden costs: Limited locations (about 200 nationwide), cash may run out during peak times (e.g., airports)

Suitable for: Office workers with no time for counter visits, needing last-minute withdrawals

Estimated cost (NT$50,000): Loss NT$800-1,200

Option 3: Online exchange + counter or ATM withdrawal (dedicated for investors)

Use online banking or app to convert NT dollars into Yen and deposit into a foreign currency account, with “spot selling rate” about 1% better than cash selling. If cash withdrawal is needed, do so at counters or foreign currency ATMs, with additional handling fees (from NT$100).

Core advantages:

• 24-hour operation, can buy in installments for average cost
• Exchange rate better than cash exchange, second only to online currency exchange
• After opening a foreign currency account, can invest in Yen fixed deposits (current annual interest 1.5-1.8%) or Yen ETFs

Hidden costs: Need to open a foreign currency account first; cash withdrawal incurs extra fees

Suitable for: Readers with forex experience planning long-term Yen holdings or investing in Yen financial products

Estimated cost (NT$50,000): Loss NT$500-1,000

Option 4: Bank counter cash exchange (backup plan)

Bring NT dollar cash directly to bank branches or airport counters to exchange for Yen cash. The simplest operation, but using “cash selling rate,” which is about 1-2% worse than spot rate, plus some banks’ handling fees, results in higher overall costs.

For example, Taiwan Bank’s December 10, 2025, cash selling rate is about NT$0.2060 per Yen (1 NT$ = 4.85 Yen). Some banks like E.Sun and Fubon charge an additional NT$100 per transaction.

Core advantages:

• Safe and reliable, with various denominations (1,000/5,000/10,000 Yen)
• On-site assistance from staff, suitable for elderly or those unfamiliar with online operations

Hidden costs: Worst exchange rate, highest fees, limited to bank hours (weekday 9:00-15:30)

Suitable for: People unfamiliar with online banking, needing small amounts for urgent airport use (e.g., NT$10,000-20,000)

Estimated cost (NT$50,000): Loss NT$1,500-2,000

Overview of cash selling rates at various banks

Below are the cash selling rates and counter fees as of December 10, 2025 (subject to actual bank website updates):

Is exchanging Yen now worth it?

Brief answer: Yes, but in installments.

The NT$ to Yen rate at 4.85 is already at this year’s high. Travel and small Yen investment demands are rising. Compared to 4.46 at the start of the year, appreciating 8.7%, the exchange gains for Taiwanese are quite significant.

In the second half of the year, Taiwan’s foreign exchange demand increased by 25%, mainly driven by tourism recovery and asset hedging.

Short-term trend outlook:

USD/JPY dropped from a high of 160 at the start of the year to around 154.58 now, with a short-term retest of 155 possible, but medium to long-term forecast below 150. Yen appreciation is driven by two factors: the Fed entering a rate cut cycle and expectations of BOJ rate hikes.

For investors, Yen as a safe-haven currency is suitable for hedging Taiwan stock market fluctuations. However, short-term risks include profit-taking in arbitrage trades, causing 2-5% volatility. It’s recommended to buy in installments to avoid a full conversion at once.

Suggested strategies:

• For travel: book online 2-3 weeks in advance, pick up at the airport for the lowest cost
• For investment: buy in 3-4 batches, average the cost, and consider Yen fixed deposits or ETFs
• For emergencies: keep an ATM card as backup for sudden needs

Next steps after exchanging Yen: don’t let your money sit idle

If you’ve already allocated Yen, the next step is to let it appreciate, not just leave it in your account.

Option 1: Yen fixed deposit (conservative) E.Sun and Taiwan Bank open foreign currency accounts online, deposit from NT$10,000 minimum, annual interest 1.5-1.8%. Suitable for risk-averse investors.

Option 2: Yen insurance policy (medium-term hold) Cathay and Fubon life insurance savings plans, with guaranteed interest rates of 2-3%, combining protection and returns.

Option 3: Yen ETFs (growth-oriented) For example, Yuanta 00675U tracking Yen index, can be bought as fractional shares via broker apps, suitable for dollar-cost averaging. Management fee 0.4% annually, balancing risk and reward.

Option 4: Forex trading in Yen (swing trading) Trade Yen currency pairs like USD/JPY or EUR/JPY directly on forex platforms. Advantages include two-way trading, 24-hour operation, small capital requirement, suitable for experienced swing traders.

Quick FAQs

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

Cash rate is the rate banks offer for physical cash (bills/coins), when exchanging cash on the spot. It’s convenient but about 1-2% worse than the spot rate, with higher fees.

Spot rate is the exchange rate for settlement within two business days (T+2) in the forex market, used for electronic transfers, import/export, or personal foreign currency accounts. It’s more favorable and close to international market prices but involves waiting for settlement.

Q. How much Yen can I get with NT$10,000?

Calculation: Yen amount = NT$ amount × current rate

Using Taiwan Bank’s December 10, 2025, cash selling rate 0.2060 (1 NT$ = 4.85 Yen), NT$10,000 can get about 48,500 Yen.

Using the spot rate (about 4.87), it’s approximately 48,700 Yen, a difference of about 200 Yen (NT$40).

Q. What documents are needed for counter exchange?

Taiwanese: ID + passport; foreigners: passport + residence permit; company: business registration.

If pre-ordered online (online exchange), also bring transaction notification.

Minors under 20 need parental consent and ID; large exchanges over NT$100,000 may require source of funds declaration.

Q. What’s the daily withdrawal limit at foreign currency ATMs?

Post-2025 updates, the limits are:

It’s recommended to diversify withdrawals or use your own bank card to avoid cross-bank fees (NT$5 per transaction). Plan ahead during peak times (e.g., airports) as cash may run out.

Summary: Follow the two principles of installment + appreciation

Yen is no longer just for travel “pocket money” but also a hedging and small investment asset. Whether you plan to visit Japan next year or want to hedge against NT dollar depreciation by moving some funds into Yen, following the principles of “installment purchase + not letting your money sit idle” can minimize costs and maximize returns.

Beginners are advised to start with the simplest options like “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transfer Yen into fixed deposits, ETFs, or even try forex swing trading based on your needs. This way, you can enjoy more cost-effective travel and add a layer of protection during global market turbulence.