The era of Japanese Yen investment is coming: The 2025 exchange rate conversion costs revealed

The NT$ to Japanese Yen exchange rate has reached a relatively high level of 4.85. This is not only a concern for travelers but also a popular option for asset allocation. Converting to Yen is no longer just a small pre-trip action but an important decision involving cost optimization and risk hedging.

Why is now a good time to exchange for Yen?

As one of the world’s three major safe-haven currencies, the Japanese Yen holds a position comparable to the US dollar and Swiss franc. From the beginning of the year at 4.46 to now at 4.85, the Yen has appreciated approximately 8.7%, which is a considerable exchange gain for Taiwanese investors.

Practical applications of hedging properties

Japan’s stable economic fundamentals and low debt levels make the Yen highly sought after during global market turbulence. During the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% in a single week, while the stock market fell by 10% in the same period. This is a real example of Yen hedging against Taiwanese stock market risks. Compared to emerging currency pairs like the Malaysian Ringgit exchange for Yen, the Yen’s stability is clearly superior.

New opportunities in interest rate arbitrage

Japan has maintained an ultra-low interest rate of only 0.5%, but recent developments have changed this. The Bank of Japan Governor Ueda Kazuo recently made hawkish comments, pushing up rate hike expectations to 80%. The December 19 meeting is expected to raise rates to 0.75% (a 30-year high), and Japanese government bond yields have surged to a 17-year high of 1.93%. This will change the previous role of the Yen as a “financing currency.” The US-Japan interest rate differential, once at 4.0%, is gradually narrowing, which is actually positive for long-term Yen holders.

Real cost comparison of five currency exchange channels

Many exchange methods circulate in the market, but the costs vary greatly. Using a NT$50,000 exchange as a baseline, we analyze each:

Counter cash exchange: The most traditional but most costly

Carrying cash to a bank or airport counter to exchange for cash, using the “cash selling rate,” which is usually 1-2% worse than the spot rate. For example, some banks offer a cash selling rate of about 0.2060 NT$/Yen (i.e., 1 NT$ = 4.85 Yen), with an additional fixed handling fee of NT$100-200. Estimated loss is NT$1,500-2,000.

• Advantages: Safe, full denominations, assistance from staff
• Disadvantages: Exchange rate spread, limited operating hours, possible handling fees
• Suitable for: Urgent needs, travelers unfamiliar with online operations

Online currency exchange + ATM withdrawal: Flexible but with fees

Convert NT$ to Yen via bank app into a foreign currency account, using a favorable “spot selling rate” (about 4.87). However, cash withdrawal incurs additional spread fees (usually NT$100+) plus interbank transfer fees (NT$5-100). Estimated loss NT$500-1,000.

• Advantages: Can enter the market gradually for average cost, 24-hour operation, relatively favorable exchange rate
• Disadvantages: Need to open a foreign currency account first, withdrawal fees apply
• Suitable for: Experienced forex users planning to deposit or invest

Online currency exchange + airport pickup: The best planning option

No need for a foreign currency account. Reserve online via bank website for currency exchange and pickup at branch (including airport locations). After completion, present ID and transaction notification to pick up in person. For example, Taiwan Bank’s “Easy Purchase” offers free online exchange (NT$10 for Taiwan Pay payment), with about 0.5% better rate. Estimated loss NT$300-800.

• Advantages: Favorable rates, often no handling fee, can specify airport pickup (available at 24-hour branches)
• Disadvantages: Need to book 1-3 days in advance, branch cannot be changed, pickup limited to operating hours
• Suitable for: Planned travelers who want to pick up cash at the airport before departure

Foreign currency ATM instant withdrawal: Most convenient for emergencies

Use a chip-enabled bank card to withdraw Yen cash at 24-hour foreign currency ATMs, directly debiting from NT$ account, with only NT$5 interbank fee. For example, with E.SUN Bank, daily withdrawal limit is NT$150,000 equivalent, no currency exchange fee. Estimated loss NT$800-1,200.

• Advantages: Instant withdrawal, 24/7 availability, minimal interbank fee
• Disadvantages: Limited locations (~200 nationwide), fixed denominations, high demand periods may run out
• Suitable for: Readers with no time to plan ahead or for urgent needs

International transfer to local bank: Ideal for long-term holders

For those planning to stay long-term in Japan or make large investments, international transfer directly to a Japanese bank account using the mid-market rate offers the lowest cost. However, opening an account in Japan is required. Suitable for students or working holiday travelers.

Best timing for exchanging Yen now

Exchange rate trend analysis

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may test 155, but with the Bank of Japan’s rate hikes, it is expected to stabilize below 150 in the medium to long term. For NT$ to Yen, this indicates the Yen’s appreciation trend has not reversed. Currently, exchanging remains relatively advantageous.

The necessity of a phased approach

Although Yen has hedging properties, there is a risk of two-way fluctuations. Global arbitrage unwinding or geopolitical conflicts (Taiwan Strait/Middle East) could temporarily weaken the Yen. It is recommended not to exchange all at once but to enter gradually when NT$ to Yen drops below 4.80. This approach locks in gains and avoids single-point risks.

Compared to high-volatility currency pairs like the Malaysian Ringgit, Yen’s phased strategy is easier to implement due to ample liquidity and transparent market conditions.

Asset allocation after exchanging Yen

Yen should not just be stored passively but further allocated into income or growth assets:

Conservative: Yen fixed deposit

Open a foreign currency account at E.SUN, Taiwan Bank, etc., deposit Yen online. Minimum NT$10,000 equivalent, with current annual interest rates of 1.5-1.8%. Offers liquidity and stable returns.

Mid-term: Yen savings insurance

Cathay, Fubon, and other insurers offer Yen-denominated savings policies with guaranteed interest rates of 2-3%. Suitable for 3-5 year holding periods.

Growth: Yen ETFs

Yuan Da 00675U and similar Yen index-tracking ETFs with an annual management fee of 0.4%. Can be purchased in broker apps for fractional investing, diversifying market risk.

Advanced: Forex swing trading

For experienced investors, directly trade USD/JPY or EUR/JPY currency pairs. 24-hour markets, long/short positions, small capital required. Use low-commission, low-spread platforms and implement stop-loss and take-profit risk controls.

Frequently Asked Questions

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

Cash exchange rate refers to buying and selling physical cash (bills/coins), usually 1-2% worse than the spot rate. The spot rate is the foreign exchange market’s T+2 settlement rate, used for electronic transfers or cashless transactions, and is closer to the international market price, offering better rates.

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

Based on current rates. Using the cash selling rate of 4.85, NT$10,000 can buy about 48,500 Yen. Using the spot selling rate of 4.87, about 48,700 Yen, a difference of roughly 200 Yen (NT$40).

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

Taiwanese citizens need to bring ID card + passport. If booked online, also bring transaction notification. Under 20 requires a parent or guardian. For large amounts (over NT$100,000), may need to declare source of funds.

Q: What’s the limit for foreign currency ATM withdrawals?

From October 2025, banks will adjust limits. Our bank’s debit card typically has a daily limit of NT$120,000-150,000 equivalent. Other banks depend on their policies. It is recommended to split withdrawals or use your bank’s card to save on interbank fees.

Conclusion

The Yen has entered a new era. Whether for travel, hedging, or small investments, understanding the costs and timing of currency exchange allows every NT$ to maximize its value. Beginners are advised to start with “online currency exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on needs. This way, not only can you reduce travel costs, but also add an extra layer of asset protection amid global market shifts.