Is it time to invest in Japanese Yen? The ultimate guide to converting Taiwanese Dollars to Japanese Yen explained in one article

In December 2025, the Taiwanese dollar (TWD) against the Japanese yen (JPY) reached a critical level of 4.85. Compared to 4.46 at the beginning of the year, the yen has appreciated by 8.7%. For Taiwanese individuals planning to travel to Japan or looking to allocate hedging assets, this is a signal worth paying close attention to.

Is it worthwhile to exchange for yen now? How much do the costs differ across various exchange channels? After exchanging, how can idle yen generate returns? We will analyze these questions one by one.

Why Yen is Worth Watching — From Travel to Asset Allocation

When it comes to foreign exchange, many people instinctively think of the yen. But the underlying logic is much more complex than just “cash needed for travel in Japan.”

In daily life, about 40% of merchants in Japan only accept cash, so travelers will inevitably need yen cash; enthusiasts of purchasing on behalf of others or those staying long-term in Japan also need yen for settlement.

In the financial markets, the yen is one of the world’s three major safe-haven currencies alongside the USD and Swiss franc. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a single week, while the stock market fell 10% — this demonstrates the yen’s safe-haven characteristic. For Taiwanese investors, exchanging for yen is not just for travel needs but also a tool to hedge systemic risks in the Taiwan stock market.

Additionally, the Bank of Japan has maintained an ultra-low interest rate policy (currently 0.5%) for a long time, making the yen a “financing currency” for international arbitrage trading. Investors borrow low-interest yen, convert to higher-yield USD (the USD-JPY interest rate differential is about 4%), and invest, which is a common operation. When risks increase, arbitrage positions are closed, causing the yen to rebound.

The Cost Difference in Converting TWD to Yen Can Be Significant

Many assume that visiting a bank counter is the only option, but in reality, differences in exchange rates and handling fees can cost you an extra or less 1,000-2,000 TWD (based on an estimated exchange of 50,000 TWD).

Method 1: Traditional cash exchange at the counter — safest but most expensive

Bring TWD to a bank or airport to exchange for yen cash. The advantage is immediate delivery with full denominations (1,000, 5,000, 10,000 yen options), with staff assistance. However, they use the “cash selling rate” (1-2% worse than the market spot rate), making this the most costly option.

For example, Taiwan Bank’s rate on December 10, 2025, was a cash selling rate of 0.2060 (meaning 1 TWD = 4.85 yen). Some banks also charge an additional handling fee of 100-200 TWD. Exchanging 50,000 TWD this way could result in a loss of about 1,500-2,000 TWD.

This method is suitable only for “urgent airport needs or small amounts.”

Method 2: Online currency exchange to foreign currency account — flexible but requires patience

Open a yen account via online banking, then convert at the spot sell rate (about 1% better than cash rate). If cash is needed later, you can withdraw at the counter or via foreign currency ATM, but there will be exchange spread handling fees (starting around 100 TWD).

Advantages include 24-hour operation and the ability to average costs through multiple entries. Disadvantages are the need to open an account in advance and additional fees for cash withdrawal. Exchanging 50,000 TWD costs about 500-1,000 TWD, suitable for those experienced in forex investments.

Further, if you transfer into yen fixed deposits (currently with annual interest rates of 1.5-1.8%), you can earn interest while holding.

Method 3: Online reservation for currency exchange, pick-up at the airport — best for travelers

This is a recent favorite. No need for a foreign currency account; simply fill in the amount and branch (or airport) on the bank’s website. After remittance, pick up with ID and transaction notification at the counter.

Taiwan Bank’s “Easy Purchase” online currency exchange is particularly advantageous: paying via Taiwan Pay costs only 10 TWD, with about 0.5% exchange rate discount. The key benefit is deposit of foreign currency cash without handling fees. Taoyuan Airport has 14 Taiwan Bank outlets (including 2 open 24 hours), ideal for pre-trip planning.

The downside is that you need to book 1-3 days in advance, and pickup times are limited by bank hours (branches cannot change). For well-planned travelers, this offers the best cost-performance ratio — only 300-800 TWD for 50,000 TWD exchanged.

Method 4: Foreign currency ATM — fastest but limited locations

Use a chip-enabled financial card at a foreign currency ATM to withdraw yen cash directly, supporting 24-hour and interbank withdrawals (interbank fee only 5 TWD). E.SUN Bank’s foreign currency ATM has a daily withdrawal limit of 150,000 TWD, with no currency exchange fee.

Advantages include instant access and high flexibility; disadvantages are limited locations (about 200 nationwide), fixed denominations (only 1,000/5,000/10,000 yen), and frequent sell-outs during peak times. Exchanging 50,000 TWD costs about 800-1,200 TWD. Suitable for urgent needs or those who don’t want to visit a bank.

Exchange Rate Trends: Is Now a Good Time to Enter?

As of December 10, 2025, the TWD/JPY rate stands at 4.85. What does this number signify?

By the second half of this year, Taiwan’s foreign exchange demand grew by 25%, mainly driven by travel recovery and increased hedging needs. From 4.46 at the start of the year to 4.85 now, the yen has appreciated by 8.7%, making currency exchange gains quite attractive.

In the short term, expectations of the Bank of Japan raising interest rates have pushed the yen higher. Recently, Governor Ueda’s hawkish comments increased market expectations of a rate hike to 0.75% at the December 19 meeting (a 17-year high), with Japanese government bond yields reaching 1.93%. The USD/JPY has fallen from a high of 160 at the start of the year to 154.58, reflecting yen’s relative strength.

In the medium to long term, under the backdrop of the US entering a rate-cut cycle, the yen is expected to be supported. Short-term fluctuations may return to around 155, but the forecast is that it will stabilize below 150 in the medium to long term.

Advice for investors: Now is indeed a reasonable window to exchange for yen, but it’s recommended to do so in batches to avoid the risk of a sudden market reversal. Closing arbitrage positions could cause 2-5% volatility; a gradual approach can effectively mitigate such short-term risks.

After Receiving Yen — Making Your Money Work

Many people leave their yen idle in accounts after exchanging, which is a missed opportunity. Here are four common ways to grow your yen:

Yen fixed deposit: The most stable option. Open accounts at E.SUN, Taiwan Bank, etc., with a minimum of 10,000 yen, offering annual interest rates of 1.5-1.8%. Suitable for conservative investors.

Yen savings insurance: Issued by life insurance companies, with guaranteed interest rates of 2-3%, suitable for medium-term holding (3-5 years).

Yen ETFs (e.g., 00675U, 00703): Track the yen index, growth-oriented tools with low management fees (as low as 0.4%), supporting fractional investment, suitable for long-term allocation.

Forex swing trading: Trade USD/JPY or EUR/JPY directly on trading platforms, with zero commissions and 24-hour trading. Suitable for risk-tolerant traders. Many platforms offer stop-loss, take-profit, and trailing stop tools to reduce risks.

Remember: although the yen is a safe-haven currency, it also fluctuates bidirectionally. Global arbitrage unwinding or geopolitical risks (such as Taiwan Strait tensions) can temporarily weaken the yen. Passive strategies like fixed deposits and ETFs help diversify risk; active trading requires discipline and proper tools.

Common Q&A Quick Answers

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

Cash exchange rate is the rate offered by banks for physical banknotes, with the advantage of immediate delivery but usually 1-2% worse than the market spot rate. The spot rate is the foreign exchange market’s T+2 settlement rate, closer to international prices but requires waiting for settlement. In short: cash rate is convenient but costly; spot rate is cheaper but slower.

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

Using the Taiwan Bank cash selling rate of 4.85, 10,000 TWD ≈ 48,500 yen. Using the approximate spot sell rate of 4.87, it’s about 48,700 yen — a difference of only 200 yen (roughly 40 TWD).

Q: What documents are needed for cash exchange at the counter?

Locals need ID card and passport; foreigners need passport and residence permit; companies need business registration. If booked online, also bring transaction notification. Minors require parent’s accompaniment and consent; large amounts (over 100,000 TWD) may need source of funds declaration.

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

As of October 2025, limits vary by bank. CTBC Bank’s card limit is equivalent to 120,000 TWD per day; Taishin Bank’s is 150,000 TWD; E.SUN Bank’s is 150,000 TWD (including credit card). Digital accounts have lower limits, around 100,000 TWD/day. It’s advisable to split withdrawals or use your own bank card to avoid cross-bank fees.

Final Recommendations

The yen has evolved from a “travel pocket money” to an “asset allocation tool.” Whether for next year’s trip to Japan or to hedge against TWD depreciation, following the principles of “batch exchange + post-exchange asset allocation” can minimize costs.

For beginners, the most practical starting points are “Taiwan Bank online exchange + airport pick-up” or “temporary foreign currency ATM withdrawal.” Then, based on needs, transfer yen into fixed deposits, ETFs, or swing trading. This approach makes traveling more cost-effective and adds a layer of protection during global market turbulence.