Japanese Yen Investment and Travel Currency Exchange Guide: Breakdown of Costs for 4 Major Channels

Why Should You Pay Attention to Yen Exchange Rates Now?

Entering the second half of 2025, the TWD/JPY exchange rate has risen to 4.85. This not only affects travel costs abroad but also reflects deep shifts in the global economic cycle and monetary policies. As one of the three major safe-haven currencies, the yen’s exchange rate fluctuations are often closely related to global inflation expectations—while changes in the Consumer Price Index (CPI) directly influence central bank policies. When the CPI calculation incorporates exchange rate factors, we find that yen appreciation cycles often coincide with rising global economic uncertainty.

For Taiwanese consumers, the decision to exchange for yen at this stage should consider three aspects: travel needs, asset allocation, and exchange gains.

The Dual Identity of the Yen: Living Tool and Investment Asset

Daily Application Scenarios

Travel to Japan remains the main driver for currency exchange. Retail stores in Tokyo and Osaka still predominantly use cash (credit card penetration is only 60%), whether shopping, dining, or transportation, cash yen is essential. Additionally, groups involved in purchasing on behalf of others, cross-border online shopping, studying abroad, and working holidays continue to drive yen exchange demand.

Significance in Financial Markets

Japan’s economy is stable, with a relatively healthy debt structure, maintaining the yen’s status as a safe-haven asset in the long term. When global risks rise—such as the Russia-Ukraine conflict in 2022—funds rapidly flow into the yen, appreciating 8% within a week, while stock markets fell by 10%. For Taiwanese investors, holding yen is equivalent to hedging against fluctuations in Taiwanese stocks.

The Bank of Japan has maintained an ultra-low interest rate policy (currently 0.5%) for a long time, creating arbitrage opportunities: investors borrow low-interest yen, convert to higher-yield USD or other currencies, with the Japan-US interest rate spread remaining above 4% in recent years. However, when global risks increase, closing these positions can exert downward pressure on the yen.

Practical Comparison of Yen Exchange Channels

Many people habitually choose bank counter exchanges but may not realize that exchange rate differences can accumulate to thousands of NT dollars. The following four channels each have their applicable scenarios.

Method 1: Bank Counter Cash Exchange

This is the most straightforward method—bring NT cash to a bank branch or airport counter to exchange for yen cash on the spot. Simple, safe, and reliable, with denominations available (1,000, 5,000, 10,000 yen). Staff will assist.

However, counter exchanges use the “cash selling rate,” usually 1-2% worse than the international spot rate. For example, Taiwan Bank’s rate on December 10, 2025, was 0.2060 (1 TWD = 4.85 JPY), with some banks adding fixed handling fees (100-200 NT). Latest rates vary from 0.2058 to 0.2069, with different fee policies. For 50,000 NT, total costs range from about 1,500 to 2,000 NT.

Suitable for: Small, urgent needs, airport emergency exchanges, users unfamiliar with online operations.

Method 2: Online Currency Conversion + Foreign Currency Account

Using bank apps or websites, convert TWD to JPY and deposit into a foreign currency account, with a more favorable “spot sell rate” (about 1% better than cash selling rate). If cash is needed, withdraw at counters or ATMs, but additional FX fees may apply (usually starting at 100 NT).

Ideal for investors wanting to buy in stages. When the rate drops below 4.80, buy gradually to lower average costs. Taiwan Bank and Mega International Bank offer this service, with options to pre-arrange airport branch pickups for convenience before travel.

Taiwan Bank’s “Easy Purchase” online currency conversion is fee-free (pay via Taiwan Pay, only 10 NT), with rates about 0.5% better than counter rates. For 50,000 NT, costs are approximately 500-1,000 NT.

Suitable for: Those with FX investment experience, planning to hold foreign currency deposits, or interested in investing in yen assets.

Method 3: Designated Branch Pickup

No need to open a foreign currency account in advance—fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, bring ID and transaction notice to pick up. Mega Bank and Taiwan Bank support pickup at Taoyuan Airport branches (14 branches, 2 open 24 hours), ideal for pre-travel arrangements.

Taiwan Bank often waives service fees for this (only basic transfer fee of 10 NT), with rates about 0.5% better than counter exchange. For 50,000 NT, total costs are around 300-800 NT. Requires prior appointment (at least 1-3 days), and pickup location cannot be changed.

Suitable for: Planned trips, confirmed itineraries, travelers wanting to pick up at the airport.

Method 4: Foreign Currency ATMs for 24/7 Withdrawal

Use a chip-enabled bank card at foreign currency ATMs to withdraw yen cash, operational 24 hours. Using other bank cards incurs only 5 NT cross-bank fee. There are about 200 ATMs nationwide, offering maximum flexibility—no need to follow business hours or make appointments.

E.SUN Bank’s foreign currency ATMs allow direct withdrawal from TWD accounts, with a daily limit of 150,000 NT and no FX fee. Denominations are fixed (1,000/5,000/10,000 yen), but cash may run out during peak times (e.g., airports).

For 50,000 NT, costs are about 800-1,200 NT. Suitable for spontaneous decisions, urgent needs, or travelers/investors requiring 24-hour access.

Cost Comparison Table

Exchange Rate Analysis: Is Now a Good Time to Buy Yen?

Yearly Growth & Market Background

By December 2025, TWD/JPY reached 4.85. Compared to 4.46 at the start of the year, this is an appreciation of about 8.7%—a significant return for yen investors. This appreciation reflects the BOJ’s policy shift and rising global risk aversion.

Based on forex data, Taiwan’s forex demand increased by 25% in the second half, mainly driven by travel recovery (post-pandemic rebound) and institutional hedging.

BOJ Rate Hike Expectations

BOJ Governor Ueda Kazuo recently made hawkish comments, boosting market expectations of rate hikes to 80%. The market anticipates a 0.25 basis point increase at the December 19 meeting to 0.75%, a 30-year high. Meanwhile, the 10-year Japanese government bond yield has risen to 1.93% (17-year high).

This suggests yen attractiveness will further increase: yen assets with yields higher than USD will become popular, but this may also reduce arbitrage appeal.

Short- & Mid-term Exchange Rate Outlook

USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may bring it back to 155, but medium- to long-term forecasts point to further decline below 150—good news for yen holders.

It’s recommended to buy in stages rather than all at once. With the US continuing to cut rates and Japan gradually raising rates, the yen’s relative strength is expected to persist.

After Buying Yen: Asset Allocation Options

Once you have yen, avoid letting funds sit idle without interest; instead, consider stable income or growth-oriented allocations.

Yen Fixed Deposits: The safest choice. E.SUN Bank, Taiwan Bank, and others offer foreign currency fixed deposits, starting from 10,000 yen, with annual interest rates of 1.5-1.8%. Less liquidity but safe and stable.

Yen Insurance Policies: Medium-term holding. Cathay Life, Fubon Life offer yen savings insurance with guaranteed rates of 2-3%. Contract terms typically 3-10 years; plan accordingly.

Yen ETFs: Growth-oriented. Yuanta 00675U tracks yen exchange rate trends, with an annual management fee of 0.4%. Can buy fractional shares via brokerage apps, suitable for dollar-cost averaging. Other options include 00703.

Forex Trading: Advanced. Trade USD/JPY or EUR/JPY directly on platforms like Mitrade, with zero commissions, low spreads, and 24-hour trading. Both long and short positions, small capital required, suitable for active traders. Platforms also offer stop-loss, take-profit, trailing stops, and other advanced tools.

While yen has safe-haven attributes, it also involves two-way volatility: rate hikes are bullish, but closing arbitrage trades or geopolitical risks (Taiwan Strait, Middle East) could cause short-term declines.

FAQs

Q: What is the difference between cash rate and spot rate?

Cash Rate applies to physical cash transactions; banks use this rate when exchanging cash on-site. It’s convenient but usually 1-2% worse than the international spot rate, plus handling fees.

Spot Rate is the standard forex market rate, settled within two business days (T+2). Used for electronic transfers and non-cash transactions, closer to international market rates, with lower costs.

Q: How much yen can I get for 10,000 NT?

Yen amount = NT amount × current rate (TWD/JPY)

Using Taiwan Bank’s December 10, 2025, cash selling rate of 4.85, 10,000 NT ≈ 48,500 JPY. With the spot rate of 4.87, it’s about 48,700 JPY—difference of roughly 200 JPY (about NT$40).

Q: Do I need to bring ID for counter exchange?

Citizens: ID card + passport; foreigners: passport + residence permit; companies: business registration. Pre-booked transactions require the notice. Under 20 need parental consent and ID. Large exchanges over 100,000 NT may require source of funds declaration.

Q: Are there withdrawal limits at foreign currency ATMs?

Limits vary by bank due to anti-fraud policies. CTBC: 120,000 NT/day; Taishin: 150,000 NT/day; E.SUN: 50,000 NT per transaction, 150,000 NT/day. Cross-bank withdrawal limits depend on issuing bank. It’s advisable to split withdrawals or use your own bank card to avoid extra fees. Cash shortages may occur during peak times; plan ahead.