Is investing in Japanese Yen still essential for travel? The truth about currency exchange you need to know in 2025

The pressure of the Taiwanese dollar’s depreciation continues, and the Japanese yen, as one of the world’s three major safe-haven currencies, is experiencing a significant increase in exchange demand. As of December 10, 2025, the exchange rate is approximately 4.85 TWD per JPY, meaning 1 TWD can be exchanged for 4.85 JPY. Compared to 4.46 at the beginning of the year, this represents an accumulated appreciation of about 8.7%, which is a considerable foreign exchange gain for Taiwanese investors.

But the question is: Is it cost-effective to exchange for yen now? How can you exchange most cheaply? This article will thoroughly analyze five different currency exchange strategies to help you make the smartest decision in various situations.

Why are Taiwanese people rushing to exchange for yen?

The reason yen has become the top choice for currency exchange in Taiwan goes far beyond travel.

Everyday applications: Japan travel still mainly uses cash (credit card penetration is only 60%), and purchasing agents need to pay Japanese sellers directly in yen. Students and working holidaymakers also need to lock in the exchange rate in advance to avoid fluctuations that could increase expenses.

Financial allocation: The yen, along with the US dollar and Swiss franc, ranks among the world’s three major safe-haven currencies. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% within a week, while global stock markets fell 10%, demonstrating its safe-haven power. For Taiwanese investors, allocating some yen assets during volatile Taiwan stock market swings can effectively hedge risks.

Arbitrage opportunities: The Bank of Japan has maintained an ultra-low interest rate policy (only 0.5%) for a long time, making the yen a “financing currency” for international arbitrage trading. Investors often borrow yen at low interest and invest in higher-yielding US dollars, with a US-Japan interest rate differential of up to 4.0%. When market risks increase, they close positions to realize profits.

Is exchanging yen now really cost-effective?

Brief answer: Yes, but with strategies.

The yen is currently in a medium-term appreciation cycle. The Bank of Japan Governor Ueda Kazuo recently made hawkish comments, pushing up market expectations for 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). Meanwhile, Japanese bond yields have hit a 17-year high of 1.93%.

The USD/JPY exchange rate has fallen from a high of 160 at the start of the year to around 154.58. Short-term fluctuations of 2-5% may occur (technically, it could return to 155), but the medium to long-term trend is forecasted to fall below 150.

Advice for different users:

• If for travel purposes, the current exchange rate is sufficient to depart, no need to wait. Taiwan’s currency exchange demand increased by 25% in the second half of the year, mainly due to travel recovery, indicating the market recognizes the current rate.

• If for hedging investments, yen as one of the three major safe-haven currencies is suitable for hedging Taiwan stock market volatility, but be sure to gradually enter and avoid exchanging all at once. Closing arbitrage positions may cause short-term volatility; diversification is key.

Complete comparison of 5 yen exchange methods

Taiwanese people have more options for exchanging yen than you might think, and the costs vary greatly—using the same 50,000 TWD, losses can range from 300 to 2,000 TWD.

Method 1: Bank counter cash exchange — the most traditional but most expensive

Carry Taiwanese cash to a bank or airport counter to exchange for yen cash. Simple to operate, but using the “cash selling rate” (about 1-2% worse than the market spot rate), overall costs are highest.

Taiwan Bank reference rate (2025/12/10): Cash selling rate about 0.2060 TWD/JPY, meaning 1 TWD = 4.85 JPY. Some banks also charge fixed handling fees.

Pros: Safe, reliable, full denominations, staff assistance available.
Cons: Exchange rate spread, limited business hours, possible handling fees.
Suitable for: Urgent airport needs, small temporary transactions.
Estimated cost (50,000 TWD): Loss of 1,500–2,000 TWD.

Method 2: Online currency exchange + in-person withdrawal — a balanced approach

Use online banking or apps to convert TWD to yen and deposit into a foreign currency account. Use the “spot sell rate” (about 1% better than cash selling rate). If cash is needed, withdraw at counters or foreign currency ATMs, which incurs additional exchange spread fees (starting around 100 TWD).

For example, after currency exchange via E.SUN Bank app, withdrawing yen cash incurs a fee equal to the difference between spot and cash rates, at least 100 TWD. Suitable for observing exchange rate trends and entering gradually at low points.

Pros: 24-hour operation, allows averaging costs through batch purchases, better rates.
Cons: Need to open a foreign currency account first, additional withdrawal fees.
Suitable for: Experienced forex users, those with foreign currency accounts, can also invest in yen deposits (annual interest about 1.5-1.8%).
Estimated cost (50,000 TWD): Loss of 500–1,000 TWD.

Method 3: Online currency exchange + airport pickup — highly recommended

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, bring ID and transaction notice to pick up in person. Taiwan Bank and Mega International Bank offer this service, with appointment options at airports.

Taiwan Bank’s “Easy Purchase” online exchange has no handling fee (only 10 TWD if paid via TaiwanPay), with about 0.5% better rates. Taoyuan Airport has 14 Taiwan Bank outlets (2 open 24 hours). Pick up before departure, saving time and effort.

Pros: Better rates, often no handling fee, can specify airport pickup.
Cons: Need to book in advance (at least 1-3 days), pickup during bank hours.
Suitable for: Planned travelers who want to pick up at the airport.
Estimated cost (50,000 TWD): Loss of 300–800 TWD.

Method 4: Foreign currency ATM — most flexible

Use chip-enabled financial cards to withdraw yen cash from foreign currency ATMs, supporting 24-hour and interbank withdrawals. Deducts only 5 TWD per transaction from TWD accounts, no currency exchange fee.

SinoPac Bank’s foreign currency ATMs allow withdrawal of yen with a daily limit equivalent to 150,000 TWD from TWD accounts. Although the number of ATMs is limited (~200 nationwide), they are highly flexible.

Pros: Instant withdrawal, high flexibility, low interbank fee.
Cons: Limited locations, fixed denominations (1000/5000/10000 JPY), may run out during peak times.
Suitable for: People who need quick cash without visiting a bank.
Estimated cost (50,000 TWD): Loss of 800–1,200 TWD.

Method 5: Best for beginners — combined online exchange + foreign ATM

For budgets of 50,000–200,000 TWD, the most cost-effective approach is: Use online exchange for large amounts at the airport, and foreign currency ATMs for small emergencies. This reduces costs while maintaining flexibility.

How much yen for 10,000 TWD or 20,000 USD?

Exchange formula: Yen amount = TWD amount × current exchange rate

Using Taiwan Bank’s cash selling rate of 4.85:

• 10,000 TWD = 10,000 × 4.85 = 48,500 JPY
• Using spot rate 4.87, it would be 10,000 × 4.87 = 48,700 JPY, about 200 JPY (roughly TWD 40) more.

Extended calculation: How much yen for 20,000 USD?

Based on USD/TWD exchange rate around 31-32, 20,000 USD ≈ 620,000–640,000 TWD. Converting to yen (using 4.85), roughly 3,000,000–3,100,000 JPY. This amount is comparable to a month’s living expenses in a medium-sized Japanese city.

Next steps after exchanging yen — don’t let your money sit idle

Many people exchange yen and leave it untouched, missing out on potential appreciation. Here are four options suitable for small-scale beginners:

1. Yen fixed deposit — steady and safe
E.SUN and Taiwan Bank offer foreign currency accounts, with online deposits. Minimum 10,000 yen, annual interest rate 1.5-1.8%. Suitable for risk-averse investors.

2. Yen savings insurance — medium-term holding
Cathay and Fubon Life offer yen insurance policies with guaranteed interest rates of 2-3%, suitable for 5-10 year plans.

3. Yen ETFs — growth allocation
Yuan Da 00675U tracks yen indices, purchasable in broker apps via fractional shares. Management fee 0.4% annually, suitable for dollar-cost averaging.

4. Forex swing trading — advanced
USD/JPY or EUR/JPY are classic volatility trading pairs, with two-way movement and 24-hour trading, suitable for experienced investors for short-term swings.

While yen is a safe-haven, its two-way volatility is unavoidable. Rate hikes by the Bank of Japan are positive for yen, but global arbitrage closing or geopolitical conflicts (Taiwan Strait, Middle East) may suppress it. Proper risk management is essential.

Quick answers to common yen exchange questions

Q: What’s the difference between cash rate and spot rate?
Cash rate applies to physical banknotes/coins, with the advantage of immediate delivery but typically 1-2% worse than the spot rate, plus possible fees. Spot rate is the electronic settlement price within T+2 days, offering better rates but requiring waiting.

Q: What documents are needed for foreign currency exchange?
In-person: ID + passport (for foreigners, passport + residence permit). If booked online, bring transaction notice. Under 20 years old requires a parent. For amounts over 100,000 TWD, a source of funds declaration may be required.

Q: What’s the daily withdrawal limit at foreign currency ATMs?
From 2025, many banks have adjusted limits: CTBC etc. allow equivalent to 120,000 TWD; Taishin and E.SUN allow 150,000 TWD (including debit cards). Use your own bank card to avoid 5 TWD per cross-bank fee. Plan ahead as cash may run out during peak times.

Summary: Smart ways to exchange yen in 2025

Yen is no longer just for travel “pocket money” but also a valuable asset for hedging and investment.

Whether preparing for a trip to Japan next year or taking advantage of TWD depreciation to hedge by converting to yen, following the principles of “batch exchange + don’t leave money idle” can minimize costs and maximize gains.

Beginners are advised to start with the simplest options like Taiwan Bank’s online exchange + airport pickup or foreign currency ATMs, then gradually move into 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 global market fluctuations.