How to choose when exchanging Japanese Yen at the counter? Cost analysis of the four main channels from banks to ATMs

The Japanese Yen has always been the most commonly exchanged foreign currency among Taiwanese people. Whether planning a trip to Japan, shopping and purchasing on behalf of others, or using yen as a hedge asset allocation, choosing the right currency exchange method can save you a lot of money. However, many believe that exchanging yen at the counter is the only option, but this decision alone could cost you several cups of bubble tea. This article compares the advantages and disadvantages of four channels—counter, online, ATM, and others—to help you find the most cost-effective currency exchange strategy.

Is Holding Yen Worth It? Three Main Reasons

Before exchanging yen, ask yourself if it’s worth it. The answer is actually more complicated than you might think.

Travel Expenses and Living Needs

Cash remains the main payment method when traveling in Japan. Shopping malls in Tokyo and Osaka, ski villages in Hokkaido, resort areas in Okinawa—many stores still only accept cash (credit card penetration is about 60%). Additionally, for purchasing Japanese cosmetics, fashion, anime merchandise, or planning to study or work in Japan, you need to prepare yen in advance. Choosing the right exchange channel can make your trip expenses more manageable.

Financial Hedging

From an investment perspective, the yen is one of the three major safe-haven currencies globally (the other two are USD and Swiss Franc). When global stock markets fluctuate or geopolitical tensions rise, capital often flows into the yen for safety. During the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in a week, buffering a 10% decline in global stock markets. For Taiwanese investors, holding some yen assets can hedge against the risk of Taiwanese stocks falling.

Arbitrage Opportunities

The Bank of Japan has maintained an ultra-low interest rate policy (around 0.5% annually), making the yen a “funding currency.” Many international investors borrow low-interest yen to invest in higher-yield USD (the USD/JPY interest rate differential can exceed 4%). When global risk appetite decreases, these arbitrage trades are unwound, which can actually strengthen the yen. If you can anticipate these fluctuations, you might even profit from them.

Counter vs Online vs ATM: Cost Comparison

Many people think exchanging yen at the counter is “safe and reliable,” but it’s often the most expensive. Here are the core differences among four channels:

1. Counter Exchange: Traditional but Most Expensive

Visiting a bank branch or airport counter to exchange yen is the most direct method. Bring cash in TWD, show your ID and passport, and the teller will give you yen notes on the spot. The process is simple, but what’s the cost? You’ll be using the “cash selling rate,” which is about 1-2% worse than the spot rate.

For example, Taiwan Bank (as of December 10, 2025) offers a cash selling rate of about 0.2060 TWD per yen, meaning 1 TWD can buy approximately 4.85 yen. Using the spot rate, you could get about 4.87 yen per TWD—small difference but accumulative. Plus, some banks charge fixed handling fees (100-200 TWD). Exchanging 50,000 TWD at the counter could result in a loss of 1,500-2,000 TWD.

When is counter exchange most suitable? Only in urgent situations (like last-minute airport needs) or very small amounts (less than 1,000 TWD). For planned trips or investments, it’s generally not recommended.

Taiwan Bank, Mega International, CTBC Bank, and First Bank all offer counter services; check with each branch for specific fees.

2. Online Exchange + Pickup at Counter: A Middle Ground

This is a practical method many overlook. Use your bank’s app to exchange at the “spot selling rate” (about 1% better than cash selling rate), then deposit the yen into a foreign currency account. When cash is needed, pick it up at the counter or withdraw via foreign currency ATM, with withdrawal fees around 100-200 TWD.

Advantages: 24/7 operation, ability to buy in installments based on exchange rate trends. For example, when TWD/JPY drops below 4.80, you can buy in parts to average your cost. Compared to pure counter exchange, you can save 800-1,000 TWD. Disadvantages: need to open a foreign currency account first, and cash withdrawal may require coordinating with bank hours or visiting ATMs.

E.SUN Bank and Taishin Bank have mature foreign currency account systems, suitable for experienced forex users.

3. Online FX Settlement + Airport Pickup: Best Pre-Travel Option

This is the most convenient for travelers. Taiwan Bank and Mega Bank offer “online FX settlement”—fill in currency, amount, pickup branch, and date on their website. After remittance, bring your ID and transaction notice to pick up the yen at the counter. Many banks waive handling fees for this service, especially Taiwan Bank’s “Easy Purchase,” which costs only 10 TWD via Taiwan Pay, with a 0.5% favorable rate.

Taoyuan Airport has 14 Taiwan Bank counters (including 2 open 24 hours), so you can pick up yen notes the night before departure. Usually, booking takes 1-3 days, so plan immediately after confirming your itinerary.

Estimated cost: exchanging 50,000 TWD results in only 300-800 TWD loss, saving 60-70% compared to counter exchange.

4. Foreign Currency ATM: The Most Flexible 24/7 Option

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen notes. These operate 24/7, with cross-bank fees of about 5 TWD (deducted directly from your TWD account). E.SUN, E.SUN Bank, and CTBC Bank have about 200 ATMs nationwide. Daily withdrawal limits vary, typically around 100,000-150,000 TWD equivalent.

Disadvantages: limited locations, fixed denominations (usually 1,000/5,000/10,000 yen), and cash shortages during peak times (holidays, airports). If you have time and small amounts, ATMs are the most convenient.

Cost estimate: 50,000 TWD withdrawal costs about 800-1,200 TWD in losses, between online and counter methods.

Summary of Cost and Suitable Scenarios

Timing Your Yen Exchange

As of December 2025, TWD/JPY is about 4.85, up from 4.46 at the start of the year—an 8.7% appreciation. This indicates yen has strengthened against the TWD. For investors, this is significant, but “is now the right time?” depends on your time horizon.

Short-term fluctuations

The Bank of Japan started raising interest rates at the end of 2025, with expectations of a 0.25 basis point hike in December to 0.75%. Japanese bond yields hit a 17-year high of 1.93%. Such rate hikes usually support the yen short-term, but if global recession fears grow, large arbitrage unwinds could weaken the yen.

Smart dollar-cost averaging

Instead of exchanging all yen at once, split into 3-4 installments every 2-4 weeks. Even with 2-5% exchange rate fluctuations, your average cost can be lowered. If you have foreign currency in your account, online installment buying offers maximum flexibility.

Three Ways to Use Yen After Acquisition

Once you have yen, don’t just let it sit idle in your account. Here are three options, each with pros and cons:

Yen Fixed Deposit—Stable, conservative. Open a foreign currency account with E.SUN or Taiwan Bank, deposit yen online. Minimum 10,000 yen, annual interest rate around 1.5-1.8%. Very low risk, low return. Suitable for conservative investors.

Yen ETFs—Small growth. ETFs like Yuanta 00675U or Fubon 00703 track yen-related indices. Buy fractional shares via brokerage apps, low entry barrier, suitable for diversification. Management fee about 0.4%, more transparent than forex trading.

Forex Trading—Swing trading. Trade USD/JPY or EUR/JPY directly on platforms like Mitrade. 24/7, long/short positions, small capital needed. Fast to capture rate movements, but high risk and requires experience.

Common Misconceptions About Counter Yen Exchange

Misconception 1: Counter exchange is always safest

Online FX settlement + airport pickup is equally safe and cheaper. The risk with counters is mainly carrying large cash, which increases theft or loss risk.

Misconception 2: Small exchange rate differences are negligible

For 50,000 TWD, the difference between cash selling rate and spot rate (about 0.0002-0.0004 TWD per yen) adds up to 100-300 TWD. If you exchange 5 times a year, that’s 500-1,500 TWD annually. Long-term, it’s not trivial.

Misconception 3: Large amounts should be exchanged all at once

Actually, splitting large amounts reduces risk of locking in unfavorable rates. If the rate moves against you next day, you lose. Staggered exchange lowers the risk of being stuck with a single rate.

Misconception 4: Fixed deposits are the best destination

Interest rates are low; the real gain comes from yen appreciation. If yen appreciates 5-10%, a 1.5% deposit yield is insignificant. Flexibility in strategy is key.

Conclusion

Counter exchange isn’t necessarily bad, but it’s only cost-effective in specific situations—urgent needs or very small amounts. For planned trips or investments, online FX + airport pickup or installment online exchange can save you 500-1,200 TWD.

If you’re unsure where to start, here’s a suggested approach:

Step 1: Confirm your exchange amount and time frame (short-term travel vs. long-term investment).

Step 2: Choose the channel based on amount—small amounts with ATM, medium with online FX + airport pickup, large with staggered online exchange.

Step 3: After exchanging, don’t leave the yen idle. Invest according to your risk appetite—fixed deposit, ETFs, or forex trading—to let your yen appreciate further.

Yen is no longer just pocket money for travel; it’s also a hedge and investment asset. By following the principles of “staggered entry + proper utilization,” you can minimize costs and maximize returns.