Best strategy for exchanging TWD to JPY: 3 steps to find the most cost-effective plan

In December 2025, the exchange rate of the New Taiwan Dollar (NTD) against the Japanese Yen (JPY) reached the 4.85 mark, prompting many to reconsider the most cost-effective way to exchange for Yen. From the beginning of the year at 4.46 to now, the Yen has appreciated by over 8%. Whether for travel or asset allocation, choosing the right currency exchange method can save a significant amount of costs.

Why Exchange for Yen? Not Just for Travel

When it comes to foreign currency exchange, Yen is often the first choice, but the reasons go far beyond just visiting Japan.

Practical daily use: In Japan, cash remains the primary payment method (credit card penetration is only 60%). Shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa all require cash in Yen. Additionally, purchasing agents and students studying abroad often need to exchange currency in advance to avoid fluctuations at the last minute.

Financial allocation perspective: The Yen is recognized globally as one of the three major safe-haven currencies, alongside the US Dollar and Swiss Franc. During market turbulence, funds tend to flow into Yen for safety—during the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% in one week, successfully offsetting stock market declines. For Taiwanese investors, holding Yen is equivalent to adding risk insurance to Taiwan stocks.

Furthermore, with the Bank of Japan’s interest rate hikes imminent and the long-standing ultra-low interest rate policy, a large arbitrage trading mechanism has formed, making Yen an attractive liquid investment target.

Four Main Ways to Exchange Yen, with Varying Costs

Many people mistakenly believe that the only option to exchange Yen is through banks, but the difference in exchange rates can significantly impact overall costs. Here are the four latest methods in 2025:

Method 1: Traditional in-branch cash exchange—Safe but costly

Carry NT$ cash directly to a bank branch or airport counter to exchange for Yen notes. This method is straightforward but uses the “cash selling rate” (1-2% worse than the spot rate), resulting in higher costs.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, was approximately NT$0.2060 per Yen (meaning NT$1 = 4.85 Yen), with some banks charging fixed handling fees. Exchanging NT$50,000 could incur a loss of NT$1,500-2,000 due to exchange rate spread.

Advantages: Safe, full denominations, assistance from staff
Disadvantages: Less favorable rates, limited operating hours, possible extra fees
Suitable for: Travelers unfamiliar with online operations or needing small, urgent exchanges

Method 2: Online currency exchange to deposit account—Flexible and suitable for batch entry

Use online banking or apps to convert NT$ into Yen and deposit into a foreign currency account, using the “spot selling rate” (about 1% better than cash rate). If cash is needed, it can be withdrawn at counters or via foreign currency ATMs, but will incur a currency conversion fee (starting around NT$100).

This method is suitable for monitoring exchange rates and entering at low points in batches to average costs. If only holding the account, pairing with Yen fixed deposits (current annual interest rate 1.5-1.8%) allows for holding without withdrawal and enjoying fee-free deposit of foreign currency cash.

Exchanging NT$50,000 results in a loss of about NT$500-1,000, making it the lowest-cost option for long-term investors.

Advantages: 24/7 operation, favorable rates, suitable for batch investments
Disadvantages: Need to open a foreign currency account first, withdrawal fees apply
Suitable for: Forex-savvy investors planning Yen deposits or investments

Method 3: Online currency settlement with airport pickup—Best pre-departure option

No need for a foreign currency account; simply fill in currency, amount, pickup branch, and date on the bank’s website. Taiwan Bank and Mega International Bank offer this service, with appointment options at airport branches.

Taiwan Bank’s “Easy Purchase” online settlement is fee-free (pay NT$10 via Taiwan Pay), with about 0.5% better rates. The key advantage is that depositing foreign cash into the account incurs no fee, suitable for buying cash beforehand and transferring later.

Taoyuan Airport has 14 Taiwan Bank outlets (2 open 24 hours), making it the best choice for pre-departure reservations. Exchanging NT$50,000 results in a loss of only NT$300-800.

Advantages: Favorable rates, often fee-free, airport pickup options
Disadvantages: Requires prior reservation (1-3 days), pickup limited to operating hours
Suitable for: Planning travelers who want to withdraw directly at the airport

Method 4: Foreign currency ATM withdrawal—Best for urgent, on-the-spot needs

Use chip-enabled bank cards at foreign currency ATMs to withdraw Yen cash 24/7. Cross-bank withdrawals cost only NT$5 per transaction, with denominations limited to common bills (1,000/5,000/10,000 Yen). However, ATM locations are limited (about 200 nationwide).

SinoPac Bank’s foreign currency ATMs allow NT$ account holders to withdraw Yen with a daily limit of NT$150,000 and no currency exchange fee. Be aware that during peak times (like airports), cash may run out; plan accordingly. Exchanging NT$50,000 results in a loss of NT$800-1,200.

Advantages: Instant withdrawal, high flexibility, low cross-bank fees
Disadvantages: Limited locations and denominations, possible cash shortages during peak hours
Suitable for: Last-minute needs or no time for in-branch exchange

Practical Cost Comparison of Four Methods (Based on NT$50,000)

Is Now a Good Time to Exchange Yen? Timing Considerations

Short-term view: The exchange rate of NT$4.85 against Yen remains within a fluctuation range. The Bank of Japan’s rate hike expectations are rising (market anticipates an 80% chance of a December rate increase to 0.75%, a 30-year high), which will support Yen. Meanwhile, the US is entering a rate-cut cycle, potentially narrowing the US-Japan interest rate gap, but Yen’s safe-haven attribute remains resilient.

Medium-term view: USD/JPY has fallen from a high of 160 at the start of the year to 154.58. Short-term rebounds to around 155 are possible, but the long-term trend is expected below 150. For investors, Yen as a safe-haven currency is suitable for hedging Taiwan stock volatility, but watch out for 2-5% fluctuations when arbitrage positions close.

Advice: Staggered entry is wiser than a lump sum. Combining “online settlement + airport pickup” or “online exchange + Yen fixed deposits” allows capturing favorable rates while reducing timing risks.

Storing Foreign Cash in a Fee-Free Way—A Winning Strategy After Exchange

Many people leave Yen cash idle without earning interest after exchanging. A smarter approach is available.

If you hold foreign cash after online exchange or settlement, many banks offer fee-free deposit services. This way, you can enjoy better exchange rates and further transfer the cash into Yen fixed deposits (interest rates 1.5-1.8%) or Yen ETFs (like Yuanta 00675U, 00703), generating returns on idle funds.

This strategy is especially suitable for long-term Yen holders—saving on cash deposit fees and preventing capital waste.

Next Steps After Exchanging Yen: 4 Ways to Grow Your Assets

Don’t let Yen sit idle. Here are four common allocation options:

1. Yen Fixed Deposit: The most stable, with minimum NT$10,000 at banks like E.Sun or Taiwan Bank, offering 1.5-1.8% annual interest, plus fee-free foreign cash deposit benefits.

2. Yen Insurance Policy: Medium-term holding, such as Cathay or Fubon savings insurance, with guaranteed 2-3% interest.

3. Yen ETFs: Growth-oriented, like Yuanta 00675U tracking Yen index, purchasable via broker apps for fractional or regular investment.

4. Forex Trading: Swing trading USD/JPY or EUR/JPY to capture exchange rate movements, supporting 24-hour trading.

Quick FAQs

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

Cash rate is the bank’s buy/sell rate for physical cash, usually 1-2% worse than the spot rate. The spot rate is the foreign exchange market’s T+2 settlement rate, closer to international market prices, suitable for electronic transfers and foreign currency accounts.

Q: How much Yen can NT$10,000 buy?

Using Taiwan Bank’s cash selling rate of 4.85, NT$10,000 can buy about 48,500 Yen; with the spot rate (~4.87), about 48,700 Yen—roughly 200 Yen difference.

Q: What ID do I need for in-branch exchange?

Taiwanese: ID card + passport; foreigners: passport + residence permit. For online reservations, bring transaction confirmation. Under 20 requires parental accompaniment.

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

Varies by bank; as of 2025, most banks set limits around NT$120,000-150,000 per day. Using your own bank’s card is recommended to avoid cross-bank fees.

Final Summary

Yen is no longer just for travel “pocket money”; it’s an asset with hedging and investment value. Whether preparing for next year’s trip or asset allocation, following the three principles of “batch exchange,” “using fee-free foreign cash deposits,” and “subsequent asset growth strategies” can minimize costs and maximize benefits.

Beginners are advised to start with “Taiwan Bank online settlement + airport pickup” or “online exchange + foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on needs. This way, you not only enjoy cost-effective travel but also add a layer of asset protection amid global market fluctuations.