Japanese Yen Exchange Guide: Testing the Costs of 4 Major Channels, Which Bank Offers the Best Exchange Rate?

Yen Appreciates by 8.7%, Now Is a Good Time to Exchange Currency

On December 10, 2025, the Taiwan dollar (TWD) against the Japanese yen (JPY) surpassed the 4.85 level. Compared to the beginning of the year at 4.46, the yen has appreciated over 8.7% in just one year. This already presents a relatively good entry point for Taiwanese investors looking to allocate into JPY.

According to the latest market data, Taiwan’s foreign exchange demand in the second half of the year increased by 25% annually, driven mainly by two factors: first, the recovery of the travel market with many tourists preparing to visit Japan; second, the inflow of hedging funds, as the yen remains one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc).

But the key question is: The same 50,000 TWD can yield a difference of 1,500-2,000 TWD in JPY depending on the bank and channel used. This is not a small amount and can significantly influence your currency exchange decision.

Why Is It Worth Exchanging for JPY? Three Main Reasons

1. Travel and Daily Expenses

Japan’s tourism market is booming, but the reality is: most Japanese merchants still primarily use cash (credit card penetration is only 60%), especially small shops, convenience stores, and parking lots. If you plan to shop in Tokyo, ski in Hokkaido, or vacation in Okinawa, it’s essential to prepare cash in advance.

Additionally, consumers purchasing via proxy services, online shopping for anime merchandise, or cosmetics also need to settle directly in yen. International students and working holidaymakers usually exchange currency beforehand to reduce the risk of sudden fluctuations.

2. Hedging and Asset Allocation

The hedging properties of the yen should not be underestimated. When the Russia-Ukraine conflict erupted in 2022, global stock markets fell by 10%, but the yen appreciated by 8% within a week—classic risk aversion buying. For Taiwanese investors, exchanging for yen is not just for leisure but also a tool to hedge against Taiwan stock market volatility.

3. Interest Rate Arbitrage

The Bank of Japan has maintained ultra-low interest rates (currently 0.5%) for a long time, while the US Federal Funds Rate is about 4.5%, creating a 4% interest rate differential. Many institutions and individual investors borrow yen to buy USD, then close positions when risks rise, creating significant arbitrage opportunities.

Four Major Currency Exchange Channels Cost Comparison

Many assume “exchanging at the bank counter” is the simplest method, but it is often the most expensive. Here is a detailed analysis:

Channel ①: Bank Counter Cash Exchange

Method: Bring cash in TWD to a bank branch or airport counter to exchange directly for yen cash.

Cost Components:

• Using the “cash selling rate” (1-2% worse than the spot rate)
• Some banks charge an additional 100-200 TWD handling fee
• For 50,000 TWD, estimated loss is about 1,500-2,000 TWD

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

Suitable for: Urgent, small amounts, unfamiliar with online operations, or immediate airport needs.

Channel ②: Online Exchange + In-Person Withdrawal

Method: Use bank app or online banking to convert TWD to JPY and deposit into a foreign currency account (using spot rate). When cash is needed, withdraw at counters or foreign currency ATMs.

Cost Components:

• Spot rate is about 1% better than cash rate
• Withdrawal fees (minimum 100 TWD)
• For 50,000 TWD, estimated loss is about 500-1,000 TWD

Features:

• 24/7 operation, allows batch purchases to average costs
• Suitable for observing rate trends, entering gradually at low points (e.g., TWD/JPY below 4.80)
• The exchanged yen can be directly placed into yen fixed deposits (current annual interest 1.5-1.8%)

Suitable for: Investors with forex experience, long-term holders, willing to buy in installments.

Channel ③: Online Currency Conversion + Airport Pickup (Most Recommended)

Method: Fill in currency, amount, pickup branch, and date on the bank’s website. After completing online currency conversion, bring ID and transaction notification to pick up yen cash at the counter. Taiwan Bank and Mega International Bank offer this service.

Cost Components:

• 0.5% better exchange rate
• Taiwan Bank’s “Easy Purchase” online currency conversion fee waived (only 10 TWD via TaiwanPay)
• For 50,000 TWD, estimated loss is only 300-800 TWD

Main Advantages:

• Taoyuan Airport has 14 Taiwan Bank branches, 2 of which operate 24 hours
• Pre-booking available, pick up on departure day, no extra hassle
• Favorable exchange rates, often no handling fee

Suitable for: Well-planned travelers preparing in advance; those wanting the lowest cost exchange before departure.

Channel ④: Foreign Currency ATM Withdrawal

Method: Use a chip-enabled bank card at foreign currency ATMs to withdraw yen cash, operational 24 hours.

Cost Components:

• Only 5 TWD cross-bank fee deducted from TWD account
• No currency exchange fee
• For 50,000 TWD, estimated loss is about 800-1,200 TWD

Real Example: Mega International Bank’s foreign currency ATM allows withdrawal of yen from TWD account, with a single-day limit of 150,000 TWD, completely fee-free for currency exchange.

Limitations:

• Only about 200 ATMs nationwide
• Fixed denominations (1,000/5,000/10,000 yen), no flexible choices
• During peak times (especially airports), cash may run out; plan ahead

Note: Japan ATM withdrawal services will be adjusted by the end of 2025, future use requires international cards (Mastercard/Cirrus).

Suitable for: Busy professionals with no time to visit banks, needing immediate cash, valuing flexibility.

Cost Comparison Table of Four Channels

Conclusion: If you have sufficient budget and time for planning, online currency conversion + airport pickup offers the lowest cost and best experience.

Yen Exchange Rate Trend Analysis: Is Now a Good Time to Exchange?

Short-term Trend

As of December 10, 2025, USD/JPY trades around 154.58. Compared to the high of 160 at the start of the year, the yen has appreciated by 3.4%.

Key Drivers:

Bank of Japan Rate Hike Expectations BOJ Governor Ueda Kazuo recently made hawkish comments, boosting market expectations of an interest rate hike to 0.75% at the December 19 policy meeting, a 30-year high. Meanwhile, Japanese government bond yields have risen to a 17-year high of 1.93%.

US Dollar Under Pressure The US is entering a rate-cut cycle, with Fed rate expectations gradually declining, providing support for the yen.

Short-term Volatility Range Technically, USD/JPY may fluctuate around 155 in the short term, but medium to long-term forecasts suggest a move below 150.

What Should Investors Do?

Gradual Approach: Do not exchange all at once. Although the yen is a strong safe-haven, it still has two-way volatility. It’s recommended to buy in 3-4 installments weekly or monthly to average the exchange rate.

Risk Warnings:

• Global arbitrage unwinding may trigger short-term corrections (2-5% fluctuation)
• Geopolitical tensions (Taiwan Strait, Middle East) could temporarily depress the yen
• Unexpected deterioration of Japan’s economy could also impact safe-haven buying

Investment Horizon: For hedging Taiwan stocks or long-term asset allocation, gradual exchange is best; for travel, don’t overthink timing—exchange as needed.

After Exchanging Yen, Don’t Let It Sit Idle

Once you have yen, instead of leaving it unused, consider generating returns:

Option ①: Yen Fixed Deposit (Conservative)

The simplest choice. E.SUN Bank, Taiwan Bank, and others offer foreign currency fixed deposits, open online. Minimum 10,000 yen, annual interest 1.5-1.8%. Suitable for conservative investors.

Option ②: Yen Insurance Policy (Medium-term Hold)

Cathay Life, Fubon Life, and others offer yen-denominated savings insurance, with guaranteed interest rates of 2-3%, combining protection and returns. Drawback: longer lock-in periods (3-6 years), early termination may incur interest loss.

Option ③: Yen ETFs (Growth-oriented)

For example, Yuanta 00675U tracks the yen index, can be bought as fractional shares via brokerage apps, suitable for dollar-cost averaging. Management fee 0.4% annually, participate long-term in yen appreciation.

Option ④: Forex Trading (Advanced Swing Trading)

Trade USD/JPY or EUR/JPY directly. Advantages: long and short positions, 24-hour trading, flexible leverage. Risks: high, not suitable for beginners.

Common Currency Exchange FAQs

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

Cash Rate: The rate banks offer for physical banknotes/coins, applicable at counters. Advantage: immediate delivery of cash; disadvantage: 1-2% worse than spot rate, higher cost.

Spot Rate: The exchange rate for settlement within two business days (T+2) in the forex market, used for electronic transfers and corporate settlements. More favorable but takes 2 days to settle.

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

Using Taiwan Bank’s December 10, 2025 cash selling rate of 0.2060:

10,000 TWD × 4.85 = 48,500 yen

Using spot selling rate 0.2053, about 48,700 yen, slight difference but saves a few dozen TWD.

Q. What documents are needed for counter exchange?

Taiwanese: ID card + passport
Foreigners: Passport + residence permit
Company exchange: Business registration certificate

If booked online, also bring transaction notification. Under 20 years old requires parental accompaniment; large amounts (over 100,000 TWD) may require source of funds declaration.

Q. Are there withdrawal limits at foreign currency ATMs?

Different banks have different limits. As of 2025 standards:

Advice: Use your own bank card to avoid cross-bank fees; plan ahead during peak times as cash may run out.

Final Reminder

Yen is no longer just pocket money for travel; it’s an asset with hedging and income potential. Whether for travel, investment, or asset allocation, the core principle is: Exchange gradually, don’t leave it sitting idle after conversion.

Start with “Taiwan Bank online currency conversion + airport pickup” or “Foreign currency ATM,” then move into fixed deposits, ETFs, or forex trading as needed. This adds a layer of protection during global market turbulence and makes your trips more cost-effective.

With the yen appreciating by 8.7%, now is a good timing. But remember, gradual entry is always more prudent than buying all at once.