How to choose the best way to exchange Japanese Yen without losing out? An in-depth analysis of four cost-effective methods

December 10, 2025, the Taiwan dollar against the Japanese yen reaches a level of 4.85, and the demand for travel to Japan and yen investments surges again. But do you know? Just choosing different exchange channels can cost you an extra NT$2,000 or more. Today, we will explain from an investor’s perspective the costs, risks, and suitable scenarios of four yen exchange methods, and teach you how to interpret exchange rates for buying and selling.

How to read buy and sell exchange rates? First understand these two concepts

Many people find that the result of exchanging money at the bank and withdrawing at an ATM for the same amount differs, and this is due to the difference between buy and sell exchange rates.

Cash exchange rate vs. Spot exchange rate

The cash exchange rate (also called banknote exchange rate) is the rate provided by banks for physical cash transactions, usually 1-2% higher than the international market rate, reflecting the bank’s risk premium. For example, Taiwan Bank’s cash selling rate on December 10 is 1 JPY = NT$0.2060, which means NT$1 can be exchanged for 4.85 JPY.

The spot exchange rate is used for interbank settlement and online transfers, closer to the real market price, and is often 0.5-1% cheaper than the cash rate. For example, the same bank’s spot rate might be 4.87 JPY/NT$, which seems only slightly different, but with NT$500,000, you can get an extra 1,500 JPY.

Buying vs. selling, think in reverse perspective

Many people get this backwards—when you exchange NT$ for JPY at the bank, the bank is “buying” NT$ and “selling” JPY, so you should look at the bank’s “selling rate.” Conversely, if you want to convert JPY back to NT$, you look at the “buying rate.” Remember this logic to avoid confusion from the price list.

For example, Taiwan Bank’s buying rate (NT$ to JPY) is about 4.84, and the selling rate is about 4.85; the difference is the bank’s profit.

Which of the four yen exchange methods is the cheapest?

Method 1: Counter cash exchange — the most traditional but highest cost

Go to a bank or airport counter, hand over NT$ cash to exchange for yen cash. This is the most familiar method for many. Advantages are safety, full denominations (1,000/5,000/10,000 yen), and on-site assistance from staff.

But the cost is significant. The cash selling rate at counters is usually 1-2% worse than the market rate. For NT$500,000, the exchange difference alone results in a loss of NT$1,500-2,000. Some banks also charge handling fees (NT$100-200 per transaction), increasing costs further.

Major banks’ cash selling rates (2025/12/10):

Suitable for: urgent airport needs, small amounts (around NT$10,000), those unfamiliar with online operations

Method 2: Online exchange + counter withdrawal — a balanced approach

Use bank app or online banking to convert NT$ to JPY at the spot selling rate, depositing into a foreign currency account. When cash is needed, withdraw at the counter or via foreign currency ATM, but there will be withdrawal fees (minimum NT$100).

This method allows you to monitor exchange rate fluctuations, and when the NT$ is relatively strong (JPY exchange rate below 4.80), you can buy in batches to average costs. For example, early this year, NT$ could only buy 4.46 JPY, now it’s up to 4.85, an 8.7% appreciation year-to-date.

Note that you need to open a foreign currency account first (can be done online instantly), and cross-bank withdrawals incur an additional NT$5-100 fee.

Suitable for: experienced forex investors, those planning to buy in installments, long-term yen holders

Method 3: Online currency exchange with direct pickup — the best airport solution

No need for a foreign currency account. Fill in amount, branch, and pickup date on the bank’s website, then go in person with ID and transaction notice to pick up yen. Taiwan Bank’s “Easy Purchase” service is fee-free (only NT$10 with TaiwanPay), and offers about 0.5% better rates.

The biggest advantage is the ability to reserve pickup at Taoyuan Airport branch — currently 14 Taiwan Bank locations, with 2 open 24 hours, ideal for last-minute travel plans.

Disadvantages include needing to book 1-3 days in advance, limited operating hours, and no changes once booked.

Suitable for: well-planned travelers, those wanting to pick up yen directly at the airport

Method 4: Foreign currency ATM — 24-hour flexible withdrawal

Use a chip-enabled bank card at foreign currency ATMs to withdraw yen, supporting 24/7 operation and interbank transactions. The key benefit is NT$5 cross-bank fee deduction from your NT$ account, much cheaper than counter.

E.SUN Bank’s foreign currency ATMs have a daily withdrawal limit of NT$150,000, with no currency exchange fee. However, there are about 200 such ATMs nationwide, and denominations are fixed (1,000/5,000/10,000 yen). During peak times (especially at airports), cash may run out.

Suitable for: urgent needs, no time for bank visits, seeking flexible withdrawals

Cost comparison of the four methods

Based on NT$500,000 exchange:

Conclusion: For beginners with NT$50,000-200,000, the most cost-effective approach is a mix of “online currency exchange + airport pickup” or “foreign currency ATM”.

Is now really a good time to exchange yen?

From early this year’s rate of 4.46 to today’s 4.85, the NT$ has depreciated against the yen by 8.7%. What does this reflect?

The Bank of Japan is about to raise interest rates

BOJ Governor Ueda Kazuo recently took a hawkish stance, boosting market expectations of a rate hike to 0.75% at the December 19 meeting (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. This indicates increasing attractiveness of the yen — higher interest rates attract arbitrage capital inflows.

USD/JPY faces adjustment

USD/JPY has fallen from a high of 160 early this year to 154.58, possibly testing 155 in the short term, but medium to long-term forecasts suggest it will break below 150. This is positive for Taiwanese investors, as a strengthening NT$ against USD makes JPY relatively more attractive.

Yen remains a safe-haven currency

JPY, USD, and Swiss Franc are the three major safe-haven currencies globally. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, buffering stock declines. For Taiwanese investors, buying yen is not just for travel but also for hedging Taiwan stock market volatility.

But watch out for arbitrage unwinding

Japan’s ultra-low interest rate era is over. If the global economy weakens, high-interest arbitrage trades will unwind, causing volatility of 2-5%. It’s advisable to buy in installments to avoid a big one-time exchange.

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

Many people leave their yen idle after exchange, which is a missed opportunity. Here are some simple ways to grow your yen:

1. Yen fixed deposit — steady returns

Open a foreign currency account at E.SUN or Taiwan Bank, deposit yen fixed deposits. Minimum NT$10,000, annual interest rate 1.5-1.8%. Better than NT$ deposits, and provides hedging.

2. Yen insurance policies — medium-term holding

Cathay, Fubon life offer yen savings insurance with guaranteed interest rates of 2-3%, suitable for 1-3 year holding periods.

3. Yen ETFs — growth allocation

Yuanta 00675U (tracking yen index), 00703, can be bought as fractional shares via brokerage apps, suitable for regular investment. Management fee only 0.4%, diversifies risk.

4. Yen forex trading — swing trading

Use forex platforms (like Mitrade) to trade USD/JPY or EUR/JPY directly. Advantages include two-way trading, 24-hour operation, small capital, suitable for experienced traders to catch exchange rate swings.

Quick FAQ

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

A: Using Taiwan Bank’s December 10 rate, cash selling rate 4.85, NT$10,000 ≈ 48,500 JPY. Using spot rate 4.87, ≈ 48,700 JPY, difference about 200 JPY (NT$40).

Q: What to bring for counter exchange?

A: ID + passport (for foreigners, passport + residence permit). For online reservation, also bring transaction notice. For amounts over NT$100,000, may need to declare source of funds.

Q: Is there a limit for foreign currency ATM withdrawal?

A: Yes. CTBC Bank equivalent NT$120,000/day, Taishin NT$150,000/day, E.SUN NT$50,000 per transaction, NT$150,000/day. New regulations in 2025 generally reduce limits to NT$100,000-150,000; consider splitting withdrawals.

Q: When should I look at buy/sell exchange rates?

A: Always confirm the direction before exchanging. When converting NT$ to JPY, look at the “selling rate” (bank sells yen to you). When converting JPY to NT$, look at the “buying rate” (bank buys your yen). Compare rates across banks.

Final advice

Yen has evolved from a simple travel pocket money to an asset with hedging and investment value. Given rising global uncertainties and ongoing NT$ depreciation, gradually converting and holding yen is a wise move.

Remember two principles: buy in installments, and don’t just hold after exchanging. Choosing the right exchange method and subsequent allocations (fixed deposits, ETFs, forex trading) can help you earn FX gains and hedge risks simultaneously.

For beginners, starting with Taiwan Bank’s online currency exchange and airport pickup or foreign currency ATM is the safest; experienced investors can try regular yen ETF investments or swing forex trading. This way, you can enjoy cost-effective travel and protect your assets amid market volatility.