Is exchanging TWD for JPY really cost-effective? Should I make a move now or wait a bit?

Recently, the NT dollar has fallen below 4.85 against the Japanese Yen, and many people are starting to consider currency exchange. But honestly, many don’t even know what exchange rate they are using—whether at the bank counter, online remittance, or foreign currency ATMs—the cost difference can be up to 2000 NT dollars—which is enough to buy several meals in Japan.

This year, the Yen appreciated by 8.7%, rising from 4.46 at the start of the year to 4.85 now, which is a decent return. But whether now is a good time to exchange depends not just on the exchange rate itself, but on whether you’ve chosen the right method.

4 Ways to Exchange Yen, Cost Differences Are Huge

Many think exchanging Yen is simple—just find a bank and hand over cash. But they don’t realize that the exchange rate spread alone can eat into your profit. Let’s use 50,000 NT dollars as an example:

Counter Cash Transaction: Loss of 1,500-2,000 NT dollars

This is the most traditional and expensive method. Banks sell cash at a “cash selling rate,” which is about 1-2% worse than the spot rate. For example, Taiwan Bank’s cash selling rate is about 0.2060 NT$/Yen (which is 4.85 Yen/NT$). Some banks also charge handling fees. Exchanging 50,000 NT dollars this way results in the biggest loss.

This method is only suitable if: you’re at the airport and realize an hour before your flight that you haven’t exchanged cash. Otherwise, it’s not cost-effective.

Online Currency Exchange + Cash Pickup: Loss of 500-1,000 NT dollars

First, use bank apps or online banking to convert NT dollars to Yen at a more favorable spot rate, then go to the counter or foreign currency ATM to withdraw cash. This skips the spread from cash exchange, but you’ll still pay a withdrawal fee (starting at 100 NT dollars).

This method is suitable for those with foreign currency accounts or frequent forex dealings. You can also stagger your entries and withdrawals to buy at lower points.

Online Remittance with Scheduled Pickup: Loss of 300-800 NT dollars

Taiwan Bank’s “Easy Purchase” series and Mega Bank offer this service: fill out a form online, specify a branch for pickup, and bring ID to collect. Taiwan Bank even waives the handling fee (using Taiwan Pay costs only 10 NT dollars), with about 0.5% better exchange rate.

The clever part— you can schedule a pickup at Taoyuan Airport’s Taiwan Bank branch and collect cash before departure. This is perfect for well-planned travelers.

Foreign Currency ATM Instant Withdrawal: Loss of 800-1,200 NT dollars

Use a bank card at ATMs to withdraw cash, available 24/7. Interbank withdrawal fee is only 5 NT dollars (free at your own bank), making it the cheapest among the four methods. The downside: limited locations (about 200 nationwide), fixed denominations, and cash shortages during peak times.

Is Now a Good Time to Exchange Yen?

As of December 10, 2025, 1 NT dollar equals 4.85 Yen. This rate has increased by 8.7% from the start of the year, and with the NT dollar under depreciation pressure, exchanging Yen now could be catching a bottom.

But don’t be naive—think it’s a low point. The Bank of Japan’s Governor Ueda recently made hawkish comments, and the market expects a 0.25 to 0.75 percentage point rate hike on December 19—its highest in 30 years. Japanese bond yields have risen to 1.93% (a 17-year high), and the USD/JPY spread is narrowing.

In the short term, USD/JPY has fallen from 160 to 154.58 and may fluctuate around 155. But in the medium to long term, it’s expected to fall below 150. So, the Yen still has room to appreciate, but the short-term risk involves closing arbitrage positions—potentially swinging 2-5%.

The real situation: Exchanging Yen now is somewhat advantageous, but not the best timing.

In the second half of the year, Taiwan’s forex demand increased by 25%, mainly driven by tourism recovery and hedging needs. If you’re purely traveling, don’t overthink the rate—using “online remittance + airport pickup” is the easiest. If investing, consider staggered entries, 50,000 to 100,000 NT dollars each time, to diversify risk.

After Exchanging Yen, Don’t Let It Sit Idle

Once you’ve exchanged Yen, don’t just leave it sitting. You can channel this money into several options:

Yen Fixed Deposit: Most Stable

Banks open foreign currency accounts with a minimum of 10,000 Yen, offering annual interest rates of 1.5-1.8%. E.Sun Bank and Taiwan Bank are options. Money comes in quickly, but returns are limited—suitable for capital preservation.

Yen ETFs: Growth Potential

Yuanta 00675U, 00703, etc., track the Yen index and can be bought as fractional shares via brokerage apps. Management fee is 0.4% annually. Suitable for dollar-cost averaging. Slightly more volatile than fixed deposits, but long-term Yen appreciation potential looks promising.

Yen Insurance Policies: Medium-term Holding

Cathay and Fubon life offer savings insurance with guaranteed interest rates of 2-3%. Lock-in periods are usually 5-10 years, but they provide assured returns—good for those avoiding market volatility.

Forex Swing Trading: High Risk, High Return

Trade USD/JPY or EUR/JPY directly on forex platforms, engaging in intraday or swing trades. Both long and short positions, 24-hour trading, low capital threshold, but high risk. Suitable only for experienced investors.

While BOJ rate hikes favor Yen, global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) could suppress its value. If unsure about your risk tolerance, ETFs and fixed deposits are safer options.

Major Bank Exchange Rates (as of December 10, 2025)

The cheapest is SinoPac at 0.2058 plus 100 NT$ fee; the most expensive is Fubon at 0.2069. But with online remittance, these differences narrow significantly.

Foreign Currency ATM Withdrawal Limits (2025 New System)

Post-new system, daily limits are mostly reduced to 100,000-150,000 NT dollars. During peak times (like at the airport), don’t wait until the last minute to withdraw—cash may run out.

What to Bring to the Bank

For counter cash transactions, locals should bring ID card + passport; foreigners should bring passport + residence permit. For scheduled online pickups, don’t forget the transaction notification.

For large exchanges (over NT$100,000), banks will require source of funds declaration. Under 20, you need parental consent.

Regarding denominations, banks provide 1,000, 5,000, and 10,000 Yen notes, and some even have small change like 50 Yen coins for emergencies.

Cash Rate vs Spot Rate, What’s the Difference?

Cash Rate: The rate banks offer for physical cash buying and selling. Payment is immediate, easy to carry, but typically 1-2% worse than the spot rate, possibly with handling fees.

Spot Rate: The foreign exchange market rate for T+2 settlement, used for electronic transfers and non-cash settlement. More favorable, close to international market prices, but requires waiting for settlement.

Using Taiwan Bank’s cash rate (4.85 Yen/NT$), 10,000 NT dollars exchanges for about 48,500 Yen; at the spot rate (4.87 Yen/NT$), about 48,700 Yen—difference of 200 Yen (roughly NT$40). Not huge for small amounts, but significant for large sums.

Final Advice

Yen is no longer just “pocket money” for travel; it’s also a hedge, a fixed income asset, and an investment potential.

For beginners, the fastest way is Taiwan Bank’s online remittance + airport pickup—low fees and convenient. Remember—if you’re using forex ATMs for the first time, your own bank card saves fees; cross-bank withdrawals cost only 5 NT dollars, but watch out for ATM locations to avoid running out of cash.

For investors, staggered entries and dollar-cost averaging are recommended. No need to exchange everything at once—weekly or monthly purchases help spread risk, and the Yen’s long-term appreciation trend remains.

Whatever your approach, keep this principle in mind: Don’t just exchange and leave it idle. Either put it into fixed deposits earning 1.6-1.8% annually, buy ETFs betting on Yen appreciation, or do swing trading. The key is to avoid just converting and leaving the money untouched, as costs will eat into your gains over time.

Under NT dollar depreciation pressure, exchanging Yen is a defensive move. But to do it smartly, start by choosing the right method.