Japanese Yen Investors Must Read | The 2025 Yen Exchange Cost Revealed, Doing This Can Save the Most

The NT dollar to Japanese Yen exchange rate has approached 4.85, appreciating 8.7% from 4.46 at the beginning of the year. Converting to Yen is no longer just a travel necessity; it has become an investment hedge for investors to offset Taiwan stock market volatility. But the issue is, Taiwan offers four different exchange channels, with cost differences potentially exceeding NT$1,000 — have you really chosen the right one?

Converting Yen is More Than Just for Travel

Many think Yen is only used for overseas trips. In fact, there are deeper investment reasons behind holding Yen.

As one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc), Yen has an astonishing ability to attract capital during market turbulence. During the Russia-Ukraine conflict in 2022, Yen appreciated 8% in one week, while the stock market fell 10%, providing a buffer against portfolio swings. For Taiwanese investors, holding Yen is like buying a low-cost “insurance.”

Another reason is arbitrage opportunities. The Bank of Japan has maintained ultra-low interest rates (only 0.5%) for a long time, compared to the US rate of 4.5%. This allows many investors to borrow Yen at low interest and convert into higher-yield USD investments, earning about 4% from the interest rate differential. Of course, when risks rise, closing positions and buying back Yen can cause short-term fluctuations.

For everyday consumers, Yen is also practical—most shopping in Tokyo and Osaka still only accepts cash (credit card penetration is about 60%), and purchasing Japanese cosmetics and clothing often requires direct Yen payment. Those planning to study abroad or work holiday should exchange in advance to hedge against exchange rate risks.

Cost Differences Up to NT$1,500 — Four Ways to Exchange Yen Explained

Many think exchanging Yen just involves queuing at banks, but exchange rate differences can cost you several cups of bubble tea. Using the real-time rate on December 10, 2025, we calculated the costs of four methods clearly.

Method 1: Over-the-counter cash exchange — Traditional but most expensive

Bring NT cash directly to a bank branch or airport counter to exchange. While simple, banks use “cash selling rate,” which is about 1-2% worse than the spot rate. For example, Taiwan Bank’s cash selling rate on that day was 0.2060 Yen per NT dollar (i.e., NT$1 = 4.85 Yen).

Some banks also charge fixed handling fees. Exchanging NT$50,000 could cost NT$1,500–2,000, the highest loss.

Suitable for: Those unfamiliar with online procedures or needing small cash amounts urgently at the airport.

Method 2: Online currency exchange + in-person pickup — Best balance of time and cost

Ideal before departure. Use bank website or app to select currency, amount, and pickup branch. After completing, bring ID and transaction notification to pick up in person. No need to open a foreign currency account beforehand, process is simple.

Taiwan Bank’s “Easy Purchase” online currency exchange has no handling fee (pay NT$10 via Taiwan Pay), with about 0.5% better exchange rate. For NT$50,000, cost is about NT$300–800. Even better, Taoyuan Airport has 14 Taiwan Bank counters, including 2 open 24 hours, allowing reservation for airport pickup.

Suitable for: Planned travelers who want to reserve cash within a week before departure.

Method 3: Foreign currency ATM withdrawal — 24/7 flexibility but limited locations

Use chip-enabled debit card at foreign currency ATMs to withdraw Yen cash, available 24 hours. Cross-bank fee is NT$5 (deducted directly from NT account). E.SUN Bank’s foreign currency ATMs have a daily withdrawal limit of NT$150,000 equivalent, with no currency exchange fee.

Drawback: limited locations (about 200 nationwide), with fixed denominations of 1,000, 5,000, and 10,000 Yen. Cost for NT$50,000 is about NT$800–1,200. During peak times (like airports), cash may run out, so plan ahead.

Suitable for: Urgent needs or those who can’t wait in line.

Method 4: Online currency conversion into foreign currency account — For investors

Use bank app or online banking to convert NT$ into Yen and deposit into a foreign currency account, using “spot sell rate” (about 1% better than cash rate). If cash is needed later, withdraw in person or via ATM, incurring a fee starting around NT$100.

This suits investors wanting to observe exchange rates and buy in stages. E.SUN Bank’s foreign currency account requires a minimum deposit of 10,000 Yen, with an annual interest rate of 1.5–1.8%. Cost for NT$50,000 is about NT$500–1,000.

Suitable for: Those experienced in forex, planning to dollar-cost average into Yen or invest in fixed deposits or ETFs.

Is Now a Good Time to Exchange? Timing and Risk Analysis

By the end of 2025, Yen exchange rate is at a critical juncture. On one hand, the US has started a rate-cut cycle, providing support for Yen. On the other, recent hawkish comments from Bank of Japan Governor Ueda Kazuo have pushed market expectations of rate hikes to 80%, with a 0.25 basis point increase to 0.75% expected at the December 19 meeting (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%.

USD/JPY has fallen from a high of 160 at the start of the year to 154.58 now, likely to fluctuate around 155 in the short term, but medium to long-term forecasts suggest it could fall below 150.

For investors, converting Yen now is quite advantageous—appreciated 8.7% overall, which is significant, and the NT dollar continues to weaken. But avoid converting all at once; short-term arbitrage closing could cause 2-5% volatility. Gradual conversion is key to diversify risk and average costs.

In the second half of the year, Taiwan’s forex demand grew by 25%, mainly driven by travel recovery and hedging needs, indicating strong market confidence in Yen.

After Converting Yen, Don’t Let It Sit Idle

Many people hold Yen in their wallets after exchange, missing out on interest rate gains. Here are four options even beginners can try:

Yen fixed deposit: Most stable. Open a foreign currency account online, deposit at least 10,000 Yen, with an annual interest rate of 1.5–1.8%, risk-free.

Yen insurance policy: Medium-term holding. Cathay and Fubon Life offer Yen savings insurance with guaranteed rates of 2–3%, providing both savings and protection.

Yen ETFs (00675U, 00703): Growth-oriented. Yuanta’s 00675U tracks Yen index, can be bought as fractional shares via brokerage app, suitable for regular investment. Management fee is 0.4% annually, diversifies risk.

Forex trading USD/JPY: Advanced. Trade Yen directly on forex platforms, with long and short options, 24-hour trading, capturing short-term fluctuations. Benefits include zero commission, low spreads, and low entry barrier.

While Yen is a strong hedge, it also experiences significant two-way volatility. Rate hikes by the BOJ are positive for Yen, but global arbitrage closing or geopolitical conflicts (Taiwan Strait, Middle East) could suppress it. For investment purposes, Yen ETFs are a smart way to diversify risk.

Common Questions About Converting Yen

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

Cash rate is the bank’s selling price for physical bills and coins, convenient for immediate use but usually 1-2% worse than the spot rate. The spot rate is the foreign exchange market’s T+2 settlement price, used for electronic transfers and import/export transactions, more favorable and aligned with international markets.

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

Using the formula: Yen amount = NT$ amount × current rate. With Taiwan Bank’s December 10, 2025, cash selling rate of 4.85, NT$10,000 = approximately 48,500 Yen. Using the spot rate of 4.87, it’s about 48,700 Yen, a difference of about 200 Yen (NT$40).

Q: What do I need to bring for in-person currency exchange?

Bring ID and passport. Foreigners should bring passport and residence permit. If booked online, also bring transaction notification. Under 20 requires parental consent and accompanying adult. Large exchanges over NT$100,000 may require source of funds declaration.

Q: Is there a limit on ATM withdrawals in foreign currency?

Starting October 2025, banks have adjusted limits. CTBC and Taishin Bank’s cards have a daily limit of about NT$150,000 equivalent; E.SUN Bank’s limit is also NT$150,000. Limits vary by bank and card; using your own bank’s card is recommended to avoid cross-bank fees (NT$5 per transaction). Plan ahead during peak times to prevent cash shortages.

Summary

Yen is no longer just for travel “pocket money”; it’s an asset with hedging and investment value. Whether you’re traveling to Japan next year or hedging against NT dollar depreciation, applying the principles of “gradual exchange + post-exchange investment” can minimize costs and maximize returns.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or small forex trades based on needs. This way, you not only enjoy cost-effective travel but also add a layer of protection during global market turbulence.