New options for NT dollar preservation: JPY, USD, and multiple currency exchange layout guide

The Taiwanese dollar faces an appreciation dilemma, with continued asset devaluation pressure. As of December 10, 2025, the TWD has fallen to 4.85 against the Japanese Yen, and the trend against the US dollar remains under pressure. In the context of diverging global central bank policies and rising geopolitical risks, holding only New Taiwan Dollars is no longer sufficient to cope with exchange rate fluctuations. Knowing how to flexibly allocate between strong currencies like JPY and USD has become an essential skill for smart investors.

Why Exchange Foreign Currencies? Asset Protection in the Era of TWD Depreciation

Global Safe-Haven Asset Rebalancing

The US dollar remains the top choice, but the Japanese Yen, as one of the world’s three major safe-haven currencies (alongside the USD and Swiss Franc), performs outstandingly during market turbulence. During the Russia-Ukraine conflict in 2022, the Yen appreciated 8% in one week, while the stock market dropped 10%, demonstrating the value of safe-haven assets.

For Taiwanese investors, the logic of exchanging JPY differs from USD. USD is mainly used for overseas investments and multinational business; JPY serves both consumption and hedging purposes—used for travel and shopping in Japan, and as a hedge during Taiwan stock market volatility.

Interest Rate Arbitrage and Long-term Appreciation

The Bank of Japan (BOJ) is entering a rate hike cycle. Recent hawkish comments from Governor Ueda have driven market expectations to 80%, with a December 19 meeting expected to raise interest rates by 0.25 bps to 0.75% (a 30-year high). Japanese government bond yields have risen to 1.93% (17-year high), meaning the yield on Japanese fixed deposits will increase to over 1.5-1.8%, offering a clear advantage over TWD fixed deposits.

Meanwhile, the interest rate differential between Japan and the US remains around 4.0%. Many arbitrage traders borrow low-interest Yen to invest in higher-yield USD, and when risks rise, they close their positions. This liquidity creates buying opportunities for those who want to hold Yen long-term.

Practical Foreign Currency Exchange: Breakdown of 4 Major Channels and Costs

Exchanging foreign currencies is not just a matter of going to the bank. The differences in exchange rates, fees, and operation times across channels are significant. Choosing the wrong method could cost over ### 2,000 more.

Method 1: Bank Counter Cash Transactions

How it works

Bring cash TWD to a bank or airport branch, and sell it on the spot at the cash selling rate to get Yen cash. This is the traditional and most straightforward method but also the most expensive.

Taiwan Bank’s rate as of December 10, 2025, shows a cash selling rate of about 0.2060 TWD/Yen (i.e., 1 TWD = 4.85 Yen), while the spot rate is approximately 0.2065 TWD/Yen. This roughly 1% spread, plus some banks’ handling fees of 100-200 TWD, means exchanging 50,000 TWD results in a loss of 1,500-2,000 TWD.

Comparison of cash rates across banks (as of 2025/12/10)

Suitable for: Unfamiliar with online operations, urgent needs (e.g., at the airport), small amounts (within 10,000-20,000 TWD).

Disadvantages: Limited by bank hours (weekday 9:00-15:30), less favorable rates, possible handling fees.

Method 2: Online Currency Exchange + Foreign Currency Account Withdrawal

How it works

Use the bank’s website or app to convert TWD to Yen at the spot rate, depositing into an external currency account. To withdraw cash, go to the bank or foreign currency ATM, incurring additional withdrawal fees (starting at 100 TWD).

This method’s advantage is 24-hour operation, suitable for observing rate movements and entering in batches at low points. For example, E.SUN Bank’s app offers a spot rate about 0.2065, roughly 1% better than cash selling.

Cost calculation

Exchanging 50,000 TWD online (costs about 500 TWD in losses), plus 100-200 TWD for withdrawal, totals 500-1000 TWD. If funds stay in the foreign currency account for deposit or ETF investments, no withdrawal fee applies.

Suitable for: Investors with foreign currency experience, planning long-term holdings, not needing immediate cash.

Advantages: Allows dollar-cost averaging, better rates, high flexibility.

Method 3: Online Currency Purchase Reservation + Airport/Branch Pickup

How it works

No need to open a foreign currency account. Fill in currency, amount, pickup branch, and date online. After transfer, bring ID and transaction notice to pick up in person. Taiwan Bank’s “Easy Purchase” online currency purchase is fee-free (using Taiwan Pay costs only 10 TWD), with about 0.5% rate advantage.

Key benefit: You can reserve pickup at Taoyuan Airport’s Taiwan Bank branches (14 branches, 2 open 24 hours), ideal for planning before travel.

Cost and timing

Exchanging 50,000 TWD costs about 300-800 TWD depending on rate fluctuations, with 1-3 days’ advance reservation.

Suitable for: Well-planned travelers with fixed departure dates who want to pick up cash at the airport.

Disadvantages: Branches cannot be changed, pickup limited to banking hours.

Method 4: 24-hour Foreign Currency ATM Instant Withdrawal

How it works

Use a chip-enabled bank card at foreign currency ATMs to withdraw Yen cash directly. Supports 24-hour operation and interbank use. Deducts from TWD account with only 5 TWD interbank fee.

E.SUN Bank’s foreign currency ATM daily withdrawal limit is 150,000 TWD equivalent, with no currency exchange fee. About 200 ATMs nationwide, mainly in urban areas and airports.

Costs and limitations

Cost is around 800-1200 TWD (based on 50,000 TWD), with the advantage of instant cash and no reservation needed. Drawbacks include fixed denominations (only 1,000/5,000/10,000 Yen bills) and possible shortages during peak hours.

Suitable for: Busy professionals needing quick cash without visiting the bank.

Risk tip: During peak times (e.g., 3-6 pm at airports), cash may run out. Plan ahead.

Summary of 4 Methods: Costs and Target Users

Our recommendation: For budgets of 50,000-200,000 TWD, the most cost-effective approach is a hybrid of “Online currency purchase + ATM withdrawal”—convert online at low rates, then use ATMs for emergencies or risk diversification.

Is it worthwhile to exchange Yen now? Analysis of Rates and Central Bank Policies

Current exchange rate and trend

As of December 10, 2025, 1 TWD = 4.85 Yen, up from 4.46 at the start of the year, appreciating about 8.7%. From an investment perspective, this appreciation is significant, especially under ongoing TWD depreciation pressure.

Market data shows Taiwan’s forex demand increased by 25% in the second half of the year, driven by tourism recovery (post-pandemic travel surge) and institutional hedging.

BOJ policy boosting Yen attractiveness

The BOJ is expected to raise interest rates at the December 19 meeting to 0.75% (a 30-year high). Japanese bond yields have surged to 1.93%. This will significantly increase yields on Yen assets.

Meanwhile, the US-Japan interest rate differential remains around 4.0%. Arbitrage traders borrowing Yen at low rates to invest in higher-yield USD may face short-term volatility of 2-5%. Long-term, USD/JPY is expected to stabilize below 150; the current rate is 154.58. Short-term, it may rebound to 155, but the long-term downward trend remains.

Timing for currency exchange

It’s advantageous but should be done gradually. Use dollar-cost averaging to mitigate rate fluctuations. Key timing points include:

• When TWD is relatively strong (appreciating against Yen)
• Before BOJ meetings (risk re-pricing)
• During significant US stock declines (rising safe-haven demand)

After exchanging Yen: 4 ways to grow your assets

Exchanging Yen is just the beginning; the real gains come from subsequent allocations. Here are four options suitable for small-scale beginner investors.

1. Yen Fixed Deposit: Conservative Choice

Open foreign currency accounts at E.SUN Bank, Taiwan Bank, etc., with a minimum of 10,000 Yen. Current annual interest rates are 1.5-1.8% (expected to surpass 2% as the BOJ hikes rates). Risk-free, suitable for 1-3 year medium-term idle funds.

2. Yen Savings Insurance: Security + Returns

Cathay Life, Fubon Life offer Yen insurance policies with guaranteed interest rates of 2-3%, plus dividend bonuses reaching over 3.5%. Suitable for 2-5 years of medium-term holding with insurance coverage.

3. Yen ETFs: Growth-oriented Allocation

Yuanta 00675U (tracking Yen index), 00703, can be bought in securities apps as fractional shares. Management fee 0.4% annually, suitable for dollar-cost averaging, participating in Yen appreciation, and diversifying currency risk.

4. USD/JPY Forex Trading: Swing Trading

Trade USD/JPY or EUR/JPY directly on platforms like Mitrade, with zero commissions, low spreads, and 24-hour support. Suitable for experienced traders to capture rate swings, with both long and short positions.

Quick FAQs

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

Cash rate is the buy/sell rate banks offer for physical cash (bills/coins), convenient but usually 1-2% worse than spot rate.

Spot rate is the electronic trading rate settled within two business days (T+2), used for interbank settlements, imports/exports, or account transfers, and is closer to international market prices.

Q. How much Yen can I get with 10,000 TWD?

Using Taiwan Bank’s cash selling rate of 4.85, 10,000 TWD ≈ 48,500 Yen. At the spot rate of 4.87, about 48,700 Yen, a difference of 200 Yen (~40 TWD).

Q. What do I need to bring for counter transactions?

Taiwanese citizens: ID card + passport; foreigners: passport + residence permit; companies: business registration. For online reservations, bring transaction notice. Under 20 years old: parental consent and ID; amounts over 100,000 TWD may require source declaration.

Q. What’s the limit for foreign currency ATM withdrawals?

Post-2025 regulations, bank limits are approximately:

It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees (5 TWD per transaction). Plan ahead during peak hours to avoid shortages.

Summary: The New Era of Foreign Currency Allocation

Yen has evolved from a simple travel “pocket money” to an asset class with hedging and appreciation functions. Amid TWD’s difficulty in appreciating and diverging global central bank policies, diversifying through USD and Yen conversions is a necessary asset protection strategy.

For beginners, starting with “Taiwan Bank online currency purchase + airport pickup” or “foreign currency ATM” is recommended. Then, based on investment goals, transfer Yen into fixed deposits, ETFs, or swing trading to achieve “cost-effective travel and asset hedging.” Batch conversions, avoiding passive holding, and flexible allocation are key principles to turn exchange rate fluctuations into active management.