4 Tips for Japanese Yen Exchange: 2025 Latest Exchange Rates and Cost Analysis

Is it really worthwhile to exchange for Japanese Yen now?

The TWD/JPY exchange rate has surged to 4.85, up from 4.46 at the beginning of the year, a total appreciation of 8.7%. This is not only a signal of the peak travel season but also reflects the increasing attractiveness of the yen as a safe-haven asset. According to statistics, Taiwan’s foreign exchange demand in the second half of the year grew by 25%. Besides the travel recovery, many investors are also looking to allocate yen positions to hedge against TWD depreciation pressures.

But what are the prerequisites for it to be worthwhile? It’s choosing the right exchange channels. Different methods may cost you an extra 1,500 TWD or save you 800 TWD. So, before taking action, you need to understand the pros and cons of each route.

Why are yen investment and hedging value considered promising?

The yen is not just pocket money for travel; it plays a more important role in the global financial markets.

Strong hedging characteristics: The yen is one of the world’s three major safe-haven currencies alongside the USD and Swiss Franc. During market turmoil, funds flow into the yen for safety—during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, while the stock market fell 10%, demonstrating its hedging effect. For Taiwanese investors, holding yen can buffer against fluctuations in the Taiwan stock market.

Funding currency for arbitrage trading: The Bank of Japan has maintained ultra-low interest rates (currently 0.5%) for a long time, making the yen a “funding currency.” Investors often borrow low-interest yen to buy higher-yield USD for arbitrage (the USD/JPY interest rate differential is about 4%), but when risks increase, they close positions and buy back yen, which can cause exchange rate fluctuations of 2-5%.

Expectations of Bank of Japan rate hikes: Ueda Hideo’s recent hawkish comments have pushed market expectations of rate hikes to 80%. The December 19 meeting is expected to raise rates by 0.25 basis points to 0.75% (a 30-year high), with Japanese bond yields reaching a 17-year high of 1.93%. USD/JPY has fallen from 160 at the start of the year to 154.58, and in the short term, it may test 155 again, but medium to long-term forecasts suggest it will stay below 150.

For daily consumption, the yen is also very practical—whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, most places still only accept cash (credit card penetration is only 60%); purchasing Japanese cosmetics, clothing, or anime merchandise often requires yen payments.

What are the 4 channels in Taiwan to exchange for yen?

First: Bank counter or airport cash exchange

This is the most traditional and safest method—bring TWD cash directly to a bank or airport counter for exchange. It’s simple, with denominations available (1,000, 5,000, 10,000 yen), and staff assist on-site.

But the obvious downside: it uses the “cash selling rate,” which is 1-2% worse than the spot rate. For example, Taiwan Bank’s rate on December 10, 2025, was about 0.2060 (1 TWD = 4.85 yen). Plus, some banks charge handling fees, making the cost the highest. Exchanging 50,000 TWD could result in a loss of 1,500-2,000 TWD.

Suitable for urgent needs (like sudden cash shortage at the airport) or those uncomfortable with online operations.

Bank comparison (as of December 10, 2025):

Second: Online exchange, withdrawal at counter or ATM

Using bank app or online banking, convert TWD to yen at the “spot selling rate” (about 1% better than cash rate). If cash is needed, go to the counter or foreign currency ATM to withdraw, but withdrawal fees apply (around 5-100 TWD cross-bank).

This method suits those with forex investment experience who want to buy in batches for average cost. For example, when TWD/JPY drops below 4.80, buy gradually to catch the low point. After withdrawal, you can also invest in yen fixed deposits (current annual rate 1.5-1.8%).

Exchanging 50,000 TWD costs about 500-1,000 TWD less than at the counter. The downside is the need to open a foreign currency account first.

Third: Online currency settlement, pick-up at airport or designated branch

No need for a foreign currency account—fill in currency, amount, and branch online, then bring ID and transaction notice to the counter to pick up cash. Taiwan Bank’s “Easy Purchase” service and Mega Bank offer this, with the option to reserve pickup at Taoyuan Airport (14 locations, 2 open 24 hours).

Advantages include better exchange rates (about 0.5%), often no handling fee, and airport pickup. Especially suitable for planned travelers who want to pick up cash at the airport the night before or early morning. Cost for 50,000 TWD is about 300-800 TWD, offering good value.

Disadvantages: need to book 1-3 days in advance, pickup time limited by bank hours, branches cannot be changed on short notice.

Fourth: 24-hour foreign currency ATM withdrawal

Use a chip-enabled bank card to withdraw yen cash at foreign currency ATMs, no time restrictions. Deduct directly from TWD account, cross-bank fee only 5 TWD. E.SUN Bank’s foreign currency ATM limit is 150,000 TWD per day, with no exchange fee.

Most flexible, suitable for those without time to visit the bank or needing cash urgently. Limited locations (~200 nationwide), fixed denominations (1,000/5,000/10,000 yen), and cash may run out during peak times. Cost for 50,000 TWD is about 800-1,200 TWD.

Recommended for small amounts: a hybrid approach—online exchange + foreign currency ATM—reserve part at the airport, and top up with ATM cash as needed, balancing favorable rates and flexibility.

Cost overview of 4 exchange methods

Is it a good time to exchange yen now? Recommended approaches

Short-term view: Yen is in a volatile range. The US rate cut cycle and BOJ rate hike expectations tug in opposite directions. USD/JPY may fluctuate between 154-155 short-term. For small travel amounts, exchanging now is fine; for large investment allocations, consider staggered entry.

Medium to long-term view: Yen remains a safe-haven asset amid rising global uncertainties. Under TWD depreciation pressure, holding yen for hedging is reasonable, but avoid converting everything at once.

Operational suggestions:

1. Travel use (5-20 million TWD): “Online currency settlement + airport pickup” or “foreign currency ATM”
2. Investment allocation (over 20 million TWD): buy in 3-4 batches, watch for lows below 4.80
3. Small forex trial: use USD/JPY or other yen pairs for swing trading, but bear the risks

How to utilize yen after exchange? Don’t let your money sit idle

If you just hold cash, it’s a waste. Consider these options:

Yen fixed deposit: Most stable, open a foreign currency account at E.SUN or Taiwan Bank, starting from 10,000 yen, with annual interest of 1.5-1.8%.

Yen insurance policy: Medium-term holding, savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2-3%.

Yen ETFs: Growth options like Yuanta 00675U tracking yen index, available for fractional investment via brokerage apps.

Forex swing trading: Trade USD/JPY or EUR/JPY directly on forex platforms, with 24-hour long/short trading. Low capital needed but higher risk.

Quick FAQ

Q. How much is the difference between cash rate and spot rate?

Cash rate is the physical cash exchange rate offered by banks, convenient for immediate cash but 1-2% worse than the spot rate. Spot rate (T+2 settlement) is used in electronic transfers, closer to international market prices. For 50,000 TWD, the difference might be 200-400 yen.

Q. How much yen can 10,000 TWD buy?

Based on Taiwan Bank’s rate on December 10, 2025: cash sell rate at 4.85, about 48,500 yen. Using the spot sell rate at 4.87, about 48,700 yen—difference of 200 yen (~40 TWD).

Q. What to bring for counter exchange?

Taiwanese: ID + passport; foreigners: passport + residence permit; company accounts: business registration; online booking + transaction notice. Under 20 need parent accompaniment; over 100,000 TWD may require source of funds declaration.

Q. What is the limit for foreign currency ATM withdrawal?

Varies by bank. CTBC: equivalent to 120,000 TWD per transaction/day; Taishin: 150,000 TWD; E.SUN: 50,000 TWD per transaction, 150,000 TWD per day. Post-2025 regulations generally reduce limits to 10-15 million TWD, so consider splitting withdrawals or using your own bank card to avoid cross-bank fees.

Q. How does the cost of exchanging yen compare to USD/KRW?

Yen banks have the most transparent and abundant channels, suitable for large investments; Korean won has fewer channels and more volatility. Yen is better for staggered holdings and periodic investments; won is more for short-term speculation. For Taiwanese investors, yen offers more convenience than won.

Summary

The yen is no longer just small cash for travel; it’s an asset with both hedging and investment value. Under the pressures of TWD depreciation, rising BOJ rates, and increasing global safe-haven demand, yen allocation becomes more attractive.

Mastering “batch exchange + don’t leave money idle” principles can minimize costs and maximize benefits. Beginners can start with “Taiwan Bank online settlement + airport pickup” or “foreign currency ATM,” then allocate to fixed deposits, ETFs, or swing trading based on needs. This way, you can enjoy more cost-effective travel and add a layer of protection during market fluctuations.