How to get the best deal when exchanging TWD for JPY? Practical analysis of four major channels and cost comparison

Why is the Japanese Yen worth exchanging? A comprehensive view from travel to hedging

When it comes to common foreign currency exchange needs among Taiwanese, the yen definitely ranks among the top three. But this is not solely because of Japan’s popularity as a travel destination; more importantly, the yen holds a dual identity as both a practical daily currency and a financial asset.

Three Main Usage Scenarios in Daily Life

For travelers frequently visiting Japan, the demand for cash is quite significant. Popular spots like shopping districts in Tokyo and Osaka, Hokkaido ski resorts, Okinawa resorts, etc., many small shops still primarily accept cash (credit card usage around 60%), which is why it’s very necessary to exchange yen before departure. Secondly, purchasing groups and online shoppers also drive yen demand—paying directly to Japanese sellers for cosmetics, clothing, anime merchandise, etc., is often more convenient in yen. Thirdly, students or working holiday travelers heading to Japan usually exchange yen in advance in batches to lock in exchange rates and avoid the costs caused by sudden fluctuations.

Financial Perspective: One of the Three Global Safe-Haven Currencies

From an investment market standpoint, the yen has long been ranked alongside the US dollar and Swiss franc as one of the three major global safe-haven currencies. Japan’s economy is stable, and government debt management is relatively conservative. Therefore, during global market turmoil (such as during the Russia-Ukraine conflict in 2022), capital flooded into the yen. During that event, the yen appreciated by as much as 8% in a single week, offsetting about half of the stock market decline. For Taiwanese investors, allocating part of their funds into yen assets adds a layer of protection against Taiwan stock market volatility.

Additionally, the Bank of Japan has maintained an ultra-low interest rate policy (recently raised to 0.75%, still historically low), making the yen a typical “funding currency.” Many international investment institutions borrow low-interest yen to invest in higher-yielding US dollars for arbitrage, with the US-Japan interest rate differential once exceeding 4%. This characteristic also influences the long-term trend of the yen exchange rate.

Four Major Currency Exchange Channels Complete Practical Guide

As of December 2025, the TWD/JPY exchange rate has reached around 4.85, making the timing for exchanging yen increasingly attractive. But choosing the right method is key to truly saving money. We analyze the costs and convenience of each exchange method.

Method 1: Bank Counter Cash Transactions — Traditional but Higher Cost

This is the most common approach: bringing cash in TWD directly to a bank branch or airport counter. The process is simple and transparent; you receive yen cash on the spot without waiting. However, the cost is the “cash selling rate,” usually 1-2% worse than the spot rate. For example, Taiwan Bank’s rate on December 10, 2025, is about 0.2060 TWD/JPY (equivalent to 4.85), meaning exchanging 50,000 TWD results in a loss of about 1,500 to 2,000 TWD.

Some banks also charge an additional counter handling fee, ranging from 100 to 200 TWD per transaction, further increasing costs. This method is suitable for travelers unfamiliar with online operations or those needing small amounts urgently at the airport.

Major banks’ cash selling rates as of December 2025 (for reference, actual rates may vary): Taiwan Bank 0.2060, Mega Bank 0.2062, CTBC Bank 0.2065, First Bank 0.2062, E.SUN Bank 0.2067 (+100 TWD fee), Bank SinoPac 0.2058 (+100 TWD fee), Hua Nan Bank 0.2061, Cathay United Bank 0.2063 (+200 TWD fee), Taipei Fubon Bank 0.2069 (+100 TWD fee).

Method 2: Online Currency Exchange + Counter or ATM Cash Withdrawal — Moderate Cost, Suitable for Long-term Holding

Online banking offers more favorable “spot selling rates,” usually 1% better than cash rates. The process involves transferring TWD to a foreign currency account via app or website, then withdrawing cash at the counter or ATM as needed. Withdrawal incurs additional exchange fees (around 100 TWD or more), but overall costs are still lower than pure counter transactions.

The biggest advantage is the ability to observe exchange rate trends and time your entry. When TWD/JPY drops below 4.80, buying in batches can effectively average the cost. Also, online operations are not limited by bank hours, allowing 24/7 transactions. After exchanging, the yen can be invested in yen fixed deposits (current annual interest rate around 1.6-1.8%) to grow idle funds.

Disadvantages include the need to open a foreign currency account (free at most banks), and cross-bank ATM withdrawals may incur 5 to 100 TWD fees. This method is most suitable for investors with forex experience who want to hold yen assets long-term.

Method 3: Online Pre-Order Currency Exchange + Airport Pickup — Most Convenient, Best Exchange Rate

This service is offered by Taiwan Bank (Easy Purchase) and Mega Bank. The core process: log into the bank’s website, input the amount, date, and designated branch (including airport locations), complete the online transaction and payment, then bring ID and transaction notice to pick up cash at the scheduled time.

Taiwan Bank’s Easy Purchase is especially affordable: about 0.5% better exchange rate, and if paid via Taiwan Pay, it costs only 10 TWD (or free), far below the cash selling rate. Taoyuan Airport has 14 Taiwan Bank counters, with 2 open 24 hours, allowing travelers to withdraw before early flights—very convenient.

The only limitation is the need for prior reservation (usually 1-3 working days in advance), and the pickup branch cannot be changed on short notice. Best suited for travelers with a fixed schedule and confirmed departure date. An estimated cost for exchanging 50,000 TWD is about 300 to 800 TWD, making it the most economical among the four methods.

Method 4: Foreign Currency ATM Immediate Withdrawal — Most Flexible but Limited Locations

Using chip-enabled bank cards at foreign currency ATMs to withdraw yen cash, the advantage is 24/7 availability, very low cross-bank fees (only 5 TWD), and no need for reservation. Mega Bank’s foreign currency ATMs allow daily withdrawal limits up to 150,000 TWD equivalent, with no extra exchange fee.

However, there are fewer than 300 foreign currency ATMs across Taiwan, distribution is limited, and cash denominations are fixed (mainly 1,000, 5,000, 10,000 yen notes). During peak times (holidays, airport busy seasons), cash may run out quickly. It’s recommended not to wait until the last minute to withdraw to avoid missing out.

This method is most suitable for urgent, last-minute needs without time to visit the bank. Estimated cost: 800 to 1,200 TWD.

Quick Comparison Table of the Four Exchange Methods

Based on actual scenarios, if your total budget is between 50,000 and 200,000 TWD, a mixed strategy is recommended: mainly online pre-order pickup for optimal rates, supplemented by foreign currency ATMs for sudden needs or schedule changes.

Current Timing for Exchanging Yen

As of December 10, 2025, the TWD/JPY rate is about 4.85, meaning 1 TWD can buy 4.85 JPY. Compared to the beginning of the year at 4.46, this is an 8.7% appreciation for the year, providing substantial forex gains for Taiwanese investors. Under the long-term depreciation pressure on the TWD, timely allocation into yen assets has become a popular asset diversification choice. The forex demand in Taiwan in the second half of the year increased by about 25% compared to the same period last year, driven by both travel recovery and hedging needs.

Short-term Volatility and Mid-term Trends

Currently, the yen faces a dual outlook: on one hand, the US Federal Reserve is entering a rate cut cycle, which could support yen appreciation; on the other hand, the Bank of Japan is actively raising interest rates. BOJ Governor Ueda Kazuo recently made hawkish comments, and the market expects the December 19 policy meeting to raise rates by 0.25 basis points to 0.75% (a 30-year high), with the 10-year Japanese government bond yield reaching 1.93% (a 17-year high).

USD/JPY has fallen from the high of 160 at the start of the year to around 154.58 now, with short-term support near 155. It is expected to test this level again, but the medium to long-term trend is converging below 150. For investors, while the yen has safe-haven attributes, short-term risks include reverse unwinding of arbitrage trades, which could cause 2-5% fluctuations. It’s advisable to stagger entry and diversify timing to avoid a full one-time exchange.

After Exchanging Yen — From Conservative to Aggressive Capital Allocation

Many people leave their yen idle in accounts earning no interest, wasting potential gains. In fact, yen assets have multiple exit options.

Option 1: Yen Fixed Deposit — Conservative Capital Preservation

E.SUN Bank, Taiwan Bank, and other mainstream banks offer yen fixed deposits, starting from 10,000 yen, with annual interest rates around 1.5-1.8%. The process involves transferring yen online into a fixed deposit account for terms from 3 to 12 months. This is the lowest-risk, most conservative investment option.

Option 2: Yen Insurance Policies — Medium-term Allocation

Cathay Life, Fubon Life, and others offer yen-denominated savings insurance products, with guaranteed interest rates typically between 2-3%, plus additional declared interest mechanisms. Suitable for those willing to lock in medium-term returns and prioritize protection.

Option 3: Yen ETFs — Growth and Swing Trading

Yuanta Securities offers yen index funds (e.g., codes 00675U, 00703), tracking yen movements, which can be bought in fractional shares via broker apps. Ideal for regular dollar-cost averaging. These products have an annual management fee of about 0.4%, offering diversification and risk reduction.

Option 4: Forex Swing Trading — Advanced Trading

Trade USD/JPY or EUR/JPY directly, using forex platforms to capture short-term gains from exchange rate fluctuations. Features include long and short positions, 24-hour global markets, low transaction costs (zero commission, small spreads). Platforms often provide stop-loss, take-profit, and trailing stop tools, suitable for experienced traders.

From a capital efficiency perspective, if not just for travel, yen ETFs are a balanced choice for risk and return. For short-term trading confidence, partial allocation to forex trading can be considered.

Common Questions About Yen Exchange

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

Cash rate is the rate banks offer for physical banknotes and coins, used for travel exchange or face-to-face transactions. You get cash immediately, easy to carry, but the rate is usually 1-2% worse than the market spot rate, plus possible fees, making it the most expensive option.

Spot rate is the standard rate in the international forex market, settled T+2 (trade date plus two business days). Used for electronic transfers, bank settlements, import/export transactions without physical delivery. It’s closer to real-time market price and generally more favorable than cash rate, but requires waiting for T+2 confirmation.

Q: How much yen can I get with 10,000 TWD?

Based on the current rate. For example, Taiwan Bank’s cash sell rate on December 10, 2025, is about 0.2060 TWD/JPY (roughly 4.85). So, 10,000 TWD can buy approximately 48,500 JPY. Using the spot sell rate (about 4.87), it’s roughly 48,700 JPY—about 200 JPY difference (~40 TWD). Actual amounts vary depending on the rate and fees used.

Q: What do I need to bring to the bank counter?

Taiwanese citizens: ID card and original passport; foreigners: passport and residence permit. If representing a company, also bring business registration documents. If pre-ordered online, bring the transaction notice.

Special note: minors (under 20) must be accompanied by a guardian with signed consent. Large exchanges over 100,000 TWD may trigger the “Large-Amount Reporting System” by the Financial Supervisory Commission, requiring proof of source of funds.

Q: What is the limit for foreign currency ATM withdrawals in Taiwan?

Banks have adjusted limits due to new regulations (effective October 2025). CTBC Bank: single transaction limit equivalent to 120,000 TWD; daily limit 120,000 TWD. Taishin Bank: single and daily limit 150,000 TWD. E.SUN Bank: single transaction 50,000 TWD (50 notes), daily 150,000 TWD (including POS). Other banks vary; most have daily limits between 100,000 and 150,000 TWD equivalent.

It’s recommended to check your bank’s specific rules before withdrawal to avoid disappointment. During peak times (holidays, airports), cash may be short, so plan ahead to reduce risk.

Summary: From Pocket Money to Asset Allocation

In the past, most people exchanged yen mainly for travel. But in today’s volatile global financial environment, the yen has transformed into an asset with both hedging and appreciation potential. The ongoing depreciation of the TWD and the start of the BOJ’s rate hike cycle make yen allocation increasingly attractive.

The key is “batch exchange, don’t leave idle.” Beginners should start with Taiwan Bank’s online pre-order or foreign currency ATMs, then, as familiarity grows, consider yen fixed deposits or ETF investments. This way, you can enjoy the convenience of travel, add a layer of asset protection during market turbulence, and generate steady returns through interest rate and price differentials. Seize the current exchange rate window and plan your yen holdings rationally.