Japanese Yen Exchange Guide: Breakdown of the Four Major Plans in 2025, Which One Is the Most Cost-Effective?

Is it worth exchanging for yen? First, look at these reasons

In December, the TWD/JPY exchange rate has reached 4.85, and compared to other foreign currencies like HKD, the demand for exchanging yen is particularly strong. However, the reasons for wanting to exchange yen vary widely—some for travel, some for investment hedging, and others purely for asset allocation.

From a lifestyle perspective, Japan’s cash consumption culture remains strong. Tourists shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa mostly pay with cash (credit card penetration is only 60%). Purchasing agents and Japanese online shopping enthusiasts often need to pay directly in yen. International students and working holidaymakers also exchange currency in advance to lock in exchange rates.

From a financial perspective, the yen is recognized globally as one of the three major safe-haven currencies (the other two are USD and Swiss Franc). Japan’s economy is stable, and government debt pressure is relatively mild. Whenever international tensions rise or stock markets plunge, capital flows into the yen. During the week of the Russia-Ukraine conflict outbreak in 2022, the yen appreciated 8% in one week, enough to offset a 10% stock market decline. For Taiwanese investors, holding some yen is like buying insurance for their Taiwan stock holdings.

Additionally, the Bank of Japan maintains an ultra-low interest rate environment (only 0.5%), making the yen a “financing currency.” Many international investors borrow low-interest yen, convert to higher-yield USD for investment (the USD/JPY interest rate differential reaches 4.0%), and when risks increase, close positions to buy back yen—this is the logic behind arbitrage trading.

Is now a good time to exchange yen? Timing analysis

Back to the timing issue. As of December 2025, the TWD/JPY rate is at 4.85, compared to 4.46 at the start of the year, an 8.7% increase. For those exchanging currency, this indicates yen is becoming more valuable; exchanging now suggests limited upside for appreciation. But from another perspective, as a safe-haven asset, the yen’s performance already reflects global risk premiums, and its short-term stability remains strong.

The key lies in the Bank of Japan’s interest rate hike path. Governor Ueda Kazuo recently signaled a hawkish stance. The market expects a 0.25 bps rate hike at the December 19 meeting to 0.75% (a 30-year high), with Japanese government bond yields reaching 1.93% (a 17-year high). The USD/JPY has fallen from a high of 160 at the start of the year to 154.58. Short-term fluctuations around 155 are possible, but the medium- to long-term trend is forecasted below 150.

In the second half of the year, Taiwan’s foreign exchange demand grew by 25%, mainly driven by travel recovery and investment hedging. If you are investing, staggered entry is essential; a single large exchange could hit volatility pitfalls.

Four major yen exchange options, revealing costs

Many people habitually go to banks for face-to-face exchange, but just the exchange rate difference can make your pocket thinner. Here’s a practical comparison of four mainstream exchange channels:

Option 1: Bank counter cash exchange

Bring cash TWD to a bank branch or airport counter to exchange for yen cash. This is the most traditional method. Banks use “cash selling rate,” which is 1 to 2% worse than the spot rate, making the overall cost higher. For example, Taiwan Bank’s rate on December 10, 2025, is about 0.2060 TWD per yen (which corresponds to 4.85).

Some banks also charge handling fees. E.g., E.SUN Bank and E.SUN Bank charge 100 TWD; Cathay United Bank charges 200 TWD. Taiwan Bank, Mega International Bank, CTBC Bank, First Bank, and Hua Nan Bank waive handling fees.

Advantages are safety, full denominations (1000, 5000, 10000 yen), and on-site guidance from staff. Disadvantages include limited operating hours (weekday 9:00 to 15:30), worse exchange rates, and suitability for small, urgent needs. Exchanging 50,000 TWD could result in a loss of about 1,500 to 2,000 TWD.

Option 2: Online currency exchange, pick up at airport or branch

No need for a foreign currency account. Fill in the amount, currency, pickup branch, and date via bank app or website. After completing, bring ID and transaction notification to pick up in person. Taiwan Bank’s “Easy Purchase” service is fee-free (pay with TaiwanPay for only 10 TWD), with about 0.5% better rates. Mega Bank also offers similar options.

This is most suitable for pre-trip planning. Taoyuan Airport has 14 Taiwan Bank branches, two of which operate 24 hours, allowing cash pickup before departure. Disadvantages include needing to book at least 1-3 days in advance, limited pickup hours, and inability to change the branch on short notice. Exchanging 50,000 TWD costs about 300 to 800 TWD.

Option 3: Foreign currency ATM withdrawal

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen cash 24/7. Cross-bank withdrawals cost only 5 TWD, and debiting from a TWD account incurs no transfer fee. Mega Bank’s foreign currency ATMs have a daily limit of 150,000 TWD equivalent, with no exchange fee.

Advantages are instant withdrawal and high flexibility—no need to wait for bank hours. Disadvantages include only about 200 ATMs nationwide, fixed denominations of 1000, 5000, 10000 yen, and cash shortages during peak times (like at airports). Exchanging 50,000 TWD costs approximately 800 to 1,200 TWD.

Option 4: Online currency exchange transfer, then cash withdrawal

Use online banking app to convert TWD into yen and deposit into a foreign currency account, using “spot selling rate” (about 1% better than cash selling rate). To get cash, you need to visit a bank or ATM again, incurring additional exchange spread and handling fees (starting around 100 TWD).

This method suits those observing exchange rate trends and buying in batches for average cost. E.SUN Bank’s foreign currency account requires a minimum deposit of 10,000 yen, with an annual interest rate of 1.5-1.8%. After exchange, you can also do fixed deposits. Estimated costs are 500 to 1,000 TWD, suitable for experienced forex investors holding long-term.

Cost comparison table of four options

Practical tips: Cash rate vs. spot rate

Cash rate is the price banks offer for physical banknotes, convenient for carrying cash but usually 1-2% worse than the spot rate. The spot rate is the price in the forex market for settlement within two business days, used for electronic transfers and interbank settlements, and is closer to international market prices with better rates.

For example, exchanging 10,000 TWD at Taiwan Bank’s cash selling rate (4.85) yields about 48,500 yen; using the spot selling rate (4.87) yields about 48,700 yen. The difference of 200 yen is roughly 40 TWD.

After exchanging yen, don’t let it sleep idle

If you’ve exchanged for yen, don’t leave the cash idle without interest. Consider these options:

Yen fixed deposit is the most stable. E.SUN and Taiwan Bank offer foreign currency accounts, with online deposits starting at 10,000 yen, annual interest rates of 1.5-1.8%.

Yen insurance policies for medium-term holding, such as Cathay Life and Fubon Life savings insurance, with guaranteed interest rates of 2-3%.

Yen ETFs (like 00675U, 00703) for growth-oriented allocation. Yuanta 00675U tracks the yen index and can be bought as fractional shares via broker apps with an annual management fee of 0.4%.

Forex trading involves directly trading currency pairs like USD/JPY on forex platforms, allowing long and short positions 24/7. It requires less capital but carries higher volatility risk.

While yen is a strong hedge, it also has two-way volatility risk. BOJ rate hikes are positive, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) could push prices down. For investment purposes, prioritize fixed deposits or ETFs for risk diversification.

Common forex exchange Q&A

Q: How much yen can I get with 10,000 TWD?

Based on current rates. Taiwan Bank’s rate on December 10, 2025, is 4.85 cash selling, so 10,000 TWD ≈ 48,500 yen; spot selling rate at 4.87 yields about 48,700 yen.

Q: What ID do I need to bring for face-to-face exchange?

Taiwanese nationals need ID card and passport; foreigners need passport and residence permit. If pre-booked online, also bring transaction notification. Under 20 requires parental consent and approval; amounts over 100,000 TWD may require source of funds declaration.

Q: Is there a withdrawal limit at foreign currency ATMs?

Post-October 2025, most bank cards have a daily limit of 100,000 to 150,000 TWD equivalent. CTBC Bank’s own card limit is 120,000 TWD, with 20,000 TWD per transaction. Taishin Bank’s own card allows 150,000 TWD, with 20,000 TWD per transaction. E.SUN Bank’s own card allows 50,000 TWD per withdrawal (50 banknotes), with a daily limit of 150,000 TWD. It’s recommended to diversify withdrawals or use your own bank card to avoid cross-bank fees.

Final reminder

The two golden rules for exchanging yen in 2025 are: staggered exchange and investing after exchange. Don’t exchange everything at once, and don’t leave yen idle. Use fixed deposits, ETFs, or other allocations to grow your funds. Beginners can start with the simplest options like “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits or ETFs based on needs. This approach makes traveling more cost-effective and provides extra protection during global market fluctuations.