JPY Exchange Strategy 2025: Cost Comparison of 4 Plans, Is Now the Right Time to Enter?

Why is it worth exchanging for Japanese Yen? Not just for travel abroad

When it comes to foreign currency investment and travel expenses, the Japanese Yen has long been the top choice in Taiwanese hearts. Besides the booming Japanese tourism market, the Yen itself plays a crucial role in the financial markets.

From a lifestyle perspective, traveling to Japan, purchasing Japanese goods, studying abroad, or working holiday all require Yen cash. Japan’s consumer market relies heavily on cash (credit card penetration is only 60%), which means many people need to exchange currency in advance.

But the deeper investment logic is: The Yen is one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc). Japan’s economy is stable, government bond risk is relatively low, and during market turbulence, funds tend to flow into Yen for safety. For example, during the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% within a week—while the stock market dropped 10%—indicating that holding some Yen assets can hedge against Taiwan stock fluctuations.

Additionally, Japan’s long-term ultra-low interest rate environment (currently only 0.5%) makes Yen a “funding currency.” Many arbitrage traders borrow low-interest Yen to invest in higher-yield USD or other currencies, with a US-Japan interest rate differential of about 4.0%. When global risks rise, these arbitrage trades unwind, impacting Yen’s trend.

Is it worthwhile to exchange Yen now? Timing analysis

As of December 10, 2025, the TWD/JPY exchange rate is about 4.85, meaning 1 TWD can buy 4.85 Yen.

Compared to 4.46 at the start of the year, the Yen has appreciated by 8.7% over the year, which is a significant exchange gain for Taiwanese investors. Under the backdrop of the TWD facing depreciation pressure, the attractiveness of exchanging for Yen has clearly increased.

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

But whether it’s worthwhile depends on short-term trends: Currently, the Yen is in a relatively volatile range. The US has entered a rate-cut cycle, which supports the Yen. Meanwhile, the Bank of Japan’s stance has shifted hawkish—Governor Ueda recently made hawkish comments, pushing rate hike expectations to 80%, with a projected 0.25 basis point increase at the December 19 meeting (a 30-year high), and Japanese government bond yields have hit a 17-year high of 1.93%.

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, with a short-term rebound possibly to 155, but medium to long-term forecasts suggest below 150. This indicates that in the short term, Yen may fluctuate by 2-5% (especially when unwinding arbitrage positions), but the long-term trend remains positive.

Conclusion: It’s okay to exchange Yen now, but operate in batches—don’t exchange everything at once.

Exchange rates of Yen versus other foreign currencies

When planning foreign currency allocations, many choose between Yen, USD, and EUR. For example, 1 Euro equals about 32-33 TWD (around 32.5 TWD), while the low denomination feature of Yen makes small investments more flexible.

Although EUR is also a mainstream safe-haven currency, Europe’s economic growth is slower than the US, and the interest rate environment is less clearly in a rate hike cycle like Japan’s. Yen, due to the high certainty of the BOJ’s rate hike expectations, has recently performed relatively strongly.

Four practical Yen exchange methods compared

Taiwan offers many channels for Yen exchange, but costs vary greatly. Using 50,000 TWD as an example, here’s a breakdown:

Method 1: Bank counter cash exchange

The most traditional way—bring cash to a bank or airport counter to exchange for Yen notes.

Cost structure: Banks use “cash selling rate” (about 1-2% worse than spot rate), plus some banks charge fixed handling fees. For example, Taiwan Bank’s cash selling rate on December 10, 2025, is 0.2060 TWD/JPY (1 TWD = 4.85 Yen), with no handling fee. CTBC’s rate is 0.2065, E.SUN charges an additional 100 TWD fee.

Estimated loss on 50,000 TWD exchange: 1,500–2,000 TWD

Pros & Cons

• ✓ Safe and reliable, denominations available (1,000/5,000/10,000 Yen)
• ✓ Staff assistance on-site
• ✗ Worse exchange rate, limited to business hours (9:00-15:30)
• ✗ Handling fees may add to costs

Suitable for: Those unfamiliar with online operations, needing small amounts for urgent airport use

Method 2: Online exchange + cash withdrawal at counter or ATM

Use online banking or app to convert TWD to Yen, deposit into a foreign currency account, and sell at the “spot selling rate” (about 1% better than cash rate). If cash is needed, withdraw at counters or foreign currency ATMs, but will incur exchange spread and handling fees (from 100 TWD).

Features: 24/7 operation, can buy in batches to average costs, suitable for observing favorable rates (e.g., TWD/JPY below 4.80) and entering gradually. E.SUN Bank’s app offers exchange, with withdrawal fees based on the rate difference; interbank withdrawals cost about 5-100 TWD.

Estimated loss on 50,000 TWD exchange: 500–1,000 TWD

Pros & Cons

• ✓ Operate anytime, no restrictions
• ✓ Better rates, can average costs over time
• ✗ Need to open a foreign currency account first
• ✗ Withdrawal fees for cash are additional

Suitable for: Those experienced with forex, using foreign currency accounts, considering Yen deposits (current annual interest 1.5-1.8%) or Yen ETFs

Method 3: Online currency exchange + designated airport pickup

Most popular pre-trip method. No need for a foreign currency account—fill in currency, amount, pickup branch, and date on the bank’s website. After online transfer, bring ID and transaction notice to pick up in person.

Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay via TaiwanPay, only 10 TWD), with about 0.5% better rates. Mega Bank also offers similar service, with pickup reservations at Taoyuan Airport (14 locations, 2 open 24 hours).

Estimated loss on 50,000 TWD exchange: 300–800 TWD

Pros & Cons

• ✓ Better rates, often no handling fee
• ✓ Can specify airport pickup, more convenient for travel
• ✗ Need to book in advance (at least 1-3 days)
• ✗ Pickup during bank hours, branch location fixed

Suitable for: Planned travelers who want to pick up cash directly at the airport

Method 4: Foreign currency ATM 24-hour withdrawal

Use chip-enabled bank cards at foreign currency ATMs to withdraw Yen cash directly, supporting 24/7 operation and interbank withdrawals. Deducts only about 5 TWD per transaction from TWD account, no exchange fee.

Limitations: Limited locations (~200 nationwide), only major currencies supported, fixed denominations (1,000/5,000/10,000 Yen), cash may run out during peak times. For example, E.SUN’s foreign currency ATM allows withdrawal of up to 150,000 TWD per day from TWD accounts.

Estimated loss on 50,000 TWD exchange: 800–1,200 TWD

Pros & Cons

• ✓ Instant withdrawal, high flexibility
• ✓ Deduct from TWD account, no exchange fee
• ✗ Limited locations and denominations
• ✗ Cash may be sold out during peak times

Suitable for: Those who don’t have time to visit banks or need emergency cash on short notice

Cost comparison table of four methods

Quick check of cash exchange rates at Taiwanese banks (2025/12/10)

After exchanging Yen, don’t let your money sit idle

If you’ve already exchanged Yen, don’t let it sit idle without earning interest. Based on your risk appetite, here are some options:

1. Yen fixed deposit (conservative)
Open a foreign currency account online and deposit Yen, starting from 10,000 Yen, with annual interest rates of 1.5-1.8%. Suitable for conservative investors.

2. Yen insurance policies (mid-term)
Yen savings insurance products with guaranteed interest rates of 2-3%, offering both protection and returns.

3. Yen asset allocation (growth)
Participate via funds or ETFs that track Yen appreciation or Japanese assets. For example, buy fractional shares via broker apps for dollar-cost averaging.

4. Forex swing trading
Experienced investors can trade Yen currency pairs (like USD/JPY, EUR/JPY) on regulated forex platforms, capturing exchange rate fluctuations. Advantages include two-way trading and 24-hour operation; disadvantages require technical analysis and risk management skills.

Reminder: Yen is a safe-haven, but it also fluctuates bidirectionally. BOJ rate hikes are positive, but global arbitrage unwinding or geopolitical risks (Taiwan Strait, Middle East) may weaken Yen. Proper asset allocation and risk management are key.

Quick FAQs

Q: What’s the difference between cash exchange rate and spot rate?
Cash rate is the rate banks offer for physical bills and coins, convenient for immediate cash, but 1-2% worse than spot rate, with higher costs.
Spot rate is the FX market’s T+2 settlement rate, used for electronic transfers and non-cash settlement, closer to international prices but requires waiting.

Q: How much Yen can I get for 10,000 TWD?
Based on Taiwan Bank’s cash rate of 0.2060 (1 TWD = 4.85 Yen), 10,000 TWD ≈ 48,500 Yen. Using spot rate 4.87, it’s about 48,700 Yen, difference around 200 Yen (~40 TWD).

Q: What ID do I need for counter exchange?
Taiwanese citizens: ID card + passport; foreigners: passport + residence permit. If pre-booked online, bring transaction notice. Under 20 need parent’s consent; large exchanges over 100,000 TWD may require source declaration.

Q: Are there limits for foreign currency ATM withdrawals?
Post-2025, limits vary by bank. CTBC equivalent of 120,000 TWD/day, Taishin 150,000 TWD/day, E.SUN 150,000 TWD/day (including card spending). Cross-bank withdrawals depend on issuing bank; using your own bank card is recommended to avoid 5 TWD per transaction fee.

Summary: The best path for Yen allocation

Yen has long surpassed the role of “pocket money for travel” and has become an asset with both hedging and investment value.

Whether you plan to visit Japan next year or want to hedge against TWD depreciation, the key is to follow the principle of “batch exchange + don’t let it sit idle after exchange” to 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, funds, or swing trading based on needs. This way, you can enjoy more cost-effective travel and add an extra layer of asset protection during market turbulence.