The Japanese Yen exchange rate has reached 4.85. Converting 50,000 TWD costs up to 2,000 more. What's the most cost-effective way?

In December 2025, the NT dollar to Japanese Yen exchange rate has reached 4.85. This is not just a number that travelers should pay attention to, but also an opportunity for investors. According to market observations, the Yen has appreciated by 8.7% since the beginning of the year, and with the Bank of Japan’s interest rate hike expectations on the horizon, the Yen is shifting from a “travel pocket money” to a “hedging asset allocation.”

But here’s the question—using the same 50,000 NT dollars, some only lose about 300 NT dollars, while others lose 2,000 NT dollars. What’s the difference? The key lies in choosing the right currency exchange channel.

Why is now a good time to exchange for Yen? Three main reasons explained

First: Global safe-haven currency, hedging Taiwan stock volatility

The US dollar, Swiss franc, and Yen are known as the three major safe-haven currencies. During the Russia-Ukraine conflict in 2022, the Yen appreciated by 8% in a week, successfully buffering a 10% decline in the stock market. For Taiwanese investors, holding some Yen adds an extra layer of protection.

Second: BOJ interest rate hike expectations support the exchange rate

BOJ Governor Ueda Kazuo recently made hawkish comments fueling market expectations—on December 19, there will be a 0.25 bps rate hike to 0.75% (an 80% chance of reaching a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. These positive factors support the Yen in the short term, preventing a sharp decline.

Third: Arbitrage opportunities emerge, even fixed deposits earn interest

Japan’s long-term ultra-low interest rate (0.5%) attracts investors to borrow low-interest Yen and convert to higher-yield USD (USD-JPY spread of 4.0%). While ordinary investors may not engage in arbitrage, they can choose Yen fixed deposits (annual interest rate 1.5-1.8%) or Yen ETFs to hold and appreciate.

Four channels for Taiwanese to exchange Yen, with a maximum cost difference of 1,700 NT dollars

Exchanging Yen isn’t just about “going to the bank for cash.” The exchange rate difference alone can cost you an extra 40-200 NT dollars, not to mention the pitfalls of handling fees. Below is a breakdown of the real costs for each method.

Method 1: Bank counter exchange (most traditional, but most costly)

Bring cash NT dollars directly to a bank or airport counter to exchange for Yen cash. Looks simple, but banks use “cash selling rates,” which are about 1-2% worse than the spot rate.

Numbers in action: Taiwan Bank’s rate on December 10, 2025, is a cash selling rate of 0.2060 (meaning 1 NT dollar = 4.85 Yen). Exchanging 50,000 NT dollars costs about 1,500-2,000 NT dollars in losses.

Who is suitable? Those unfamiliar with online operations or needing urgent cash at the airport.

Method 2: Online currency exchange + foreign currency account withdrawal (flexible)

Use bank app or online banking to convert NT dollars to Yen at the “spot sell rate” (about 1% better than cash selling rate), then store in a foreign currency account. When cash is needed, withdraw via ATM or counter, but extra currency exchange fees (~100-200 NT dollars) apply.

Advantages: Can buy in batches at low points (when NT dollar to Yen is below 4.80). Disadvantages: Need to open a foreign currency account first, and withdrawal incurs fees.

Cost for exchanging 50,000 NT dollars: about 500-1,000 NT dollars, half the cost of counter exchange.

Who is suitable? Those experienced with forex operations, planning to hold Yen long-term, or investing in Yen fixed deposits or ETFs.

Method 3: Online currency settlement + airport pickup (preferred for travelers planning ahead)

No need for a foreign currency account. Select currency, amount, and airport branch on the bank’s website, then pick up in person with ID and transaction notice. Taiwan Bank’s “Easy Purchase” online settlement even waives handling fees (pay with TaiwanPay, only 10 NT dollars), with about 0.5% better rates.

Taoyuan Airport has 14 Taiwan Bank outlets, 2 of which operate 24 hours, convenient for last-minute pickups before travel.

Cost for exchanging 50,000 NT dollars: about 300-800 NT dollars, one of the most cost-effective options currently.

Who is suitable? Well-planned travelers who want to pick up Yen directly at the airport and avoid visiting banks.

Method 4: Foreign currency ATMs (24-hour convenience, but limited locations)

Use chip-enabled financial cards at foreign currency ATMs to withdraw Yen cash, supporting 24-hour operation, with only a 5 NT dollar interbank fee deducted from NT account. However, only about 200 machines nationwide, with fixed denominations (1,000/5,000/10,000 Yen), often sold out during peak times.

E.SUN Bank’s foreign currency ATMs allow Yen withdrawals with a daily limit of 150,000 NT dollars, no exchange fee, suitable for urgent needs.

Cost for exchanging 50,000 NT dollars: about 800-1,200 NT dollars.

Who is suitable? Those who can’t visit banks or need cash suddenly at night.

Cost comparison of four methods

Is now a good time to exchange? Market signals analysis

Short-term: Yen supported but with volatility risk

Expectations of BOJ rate hikes are strong. USD/JPY dropped from a high of 160 at the start of the year to 154.58, possibly bouncing back to around 155 short-term. But arbitrage closing risks exist, with potential 2-5% fluctuations.

Mid-long term: below 150 is a reasonable target

The Yen’s appreciation trend is established, and with the NT dollar under depreciation pressure, the NT dollar to Yen has risen from 4.46 to 4.85 since the start of the year, making currency gains quite attractive. In the second half of the year, Taiwan’s forex demand increased by 25%, mainly from travel recovery and hedging needs.

The smartest approach: staggered entry, avoid all-in exchange

Observe the exchange rate trend over three months, buy in increments within the 4.80-4.85 range, to average costs and avoid short-term peaks.

After exchanging Yen, how to manage the money so it doesn’t just “lie idle”?

Just holding Yen after exchange is a waste. Here are four ways, suitable even for small-scale beginners.

Yen fixed deposit: safest and simplest E.SUN, Taiwan Bank open foreign currency accounts, deposit online. Minimum 10,000 Yen, annual interest 1.5-1.8%, earning extra without effort.

Yen insurance policy: medium-term allocation Cathay, Fubon life offer Yen savings insurance with guaranteed interest rates of 2-3%, suitable for 3-5 year holding periods.

Yen ETFs: growth potential Yuan Da 00675U, 00703 and other Yen index ETFs, can be bought as fractional shares via broker apps, with periodic investments, diversifying risk.

Yen swing trading: high risk, high reward Trade USD/JPY or EUR/JPY directly on forex platforms, going long or short. Benefits include 24-hour trading, small capital requirements, but requires skill and discipline.

While Yen is a strong hedging asset, it also carries two-way risks. Global arbitrage unwinding or geopolitical conflicts may short-term depress the rate. Always assess your risk tolerance before investing.

Quick FAQ

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

Cash rate is the rate banks offer for physical cash transactions, convenient but usually 1-2% worse than the spot rate. Spot rate is the foreign exchange market rate settled T+2, closer to international prices, but involves waiting.

Q: How much Yen can I get with 10,000 NT dollars?

Using the formula: Yen amount = NT dollars × current rate. At Taiwan Bank’s December 10 rate of 4.85, 10,000 NT dollars ≈ 48,500 Yen (spot rate would give about 48,700 Yen, difference of 200 Yen, roughly NT$40).

Q: What to bring for counter exchange?

Taiwanese: ID card + passport; foreigners: passport + residence permit. If online reservation is made, bring transaction notice. Under 20 needs parent accompaniment; amounts over 100,000 NT dollars require source declaration.

Q: Are there limits on foreign currency ATM withdrawals?

From October 2025, new rules limit daily withdrawal to 100,000-150,000 NT dollars for many banks, stricter for third-party digital accounts. Consider splitting withdrawals or using your own bank card to avoid cross-bank fees. During peak times, cash may run out, so plan ahead.

Final advice

Yen is no longer just “pocket money for travel,” but an asset with hedging and investment value. Whether you’re traveling to Japan next year or shifting into hedging amid NT dollar depreciation, follow the principles of “staggered exchange + not just all-in” to minimize costs.

The simplest beginner approach: online settlement with Taiwan Bank + airport pickup, or directly use foreign currency ATMs. Then, transfer Yen into fixed deposits, ETFs, or small swing trades based on your needs. This way, you can play more cost-effectively and add a layer of protection during global market turbulence.