Must-read before exchanging TWD to JPY: Comparison of 4 major channels' costs and the best timing

By the end of 2025, the NT dollar to Japanese Yen exchange rate hovers around 4.85, appreciating over 8% compared to 4.46 at the beginning of the year. This rally has attracted many to consider exchanging for Yen, but the key question is: Which method of exchange will prevent unnecessary extra costs?

Why is now a good time to consider exchanging for Yen?

The appeal of the Yen has long gone beyond just travel. As one of the world’s three major safe-haven currencies (alongside the US dollar and Swiss franc), the Yen tends to strengthen countercyclically during market turbulence—during the Russia-Ukraine conflict in 2022, the Yen appreciated 8% in a week, while global stock markets fell 10%. For Taiwanese investors, this means holding Yen is not just for leisure trips to Japan but also for hedging Taiwan stock market risks.

From a financial perspective, the Bank of Japan (BOJ) is shifting its policy stance. BOJ Governor Ueda Kazuo recently made hawkish comments, pushing up rate hike expectations to 80%, with a projected 0.25 basis point increase at the December 19 meeting to 0.75% (a 30-year high). Japanese government bond yields have broken a 17-year high of 1.93%. In contrast, the US-Japan interest rate differential has narrowed from 4.0%, reducing the attractiveness of arbitrage trades. This benefits medium- to long-term Yen holders, but in the short term, investors should watch out for 2-5% volatility due to the narrowing interest rate gap.

In the second half of the year, Taiwan’s foreign exchange demand increased by 25%, mainly driven by travel recovery and hedging needs.

Real-world test of costs for exchanging 50,000 TWD via different channels

Many believe that exchanging Yen at banks is sufficient, but choosing the wrong method for the same 50,000 TWD could cost over 1,500 TWD more. Based on actual rates from December 10, 2025, at various banks:

Counter cash exchange is the most traditional method—safe and reliable but also the most expensive. Taiwan Bank’s cash selling rate is about 0.2060 TWD/Yen (i.e., 1 TWD = 4.85 Yen). Exchanging 50,000 TWD yields about 242,718 Yen, but some banks charge an additional 100-200 TWD handling fee, resulting in a total loss of about 1,500-2,000 TWD. This method is only suitable for urgent airport needs or very small amounts.

Online currency exchange with in-person pickup is the best pre-departure option. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (using Taiwan Pay, only 10 TWD), with about 0.5% better rates. For 50,000 TWD, you get approximately 244,714 Yen, with only 300-800 TWD loss. Taoyuan Airport has 14 Taiwan Bank branches (including 2 24-hour locations), allowing reservation for direct airport pickup, saving time during banking hours. The downside is needing to book 1-3 days in advance, and the branch for pickup cannot be changed.

Foreign currency ATM withdrawal is suitable for last-minute needs or when you don’t have time to visit a bank. Using a chip-enabled financial card at foreign currency ATMs, which operate 24 hours and charge only 5 TWD per transaction, with a daily limit of 150,000 TWD at E.SUN Bank. Losses are about 800-1,200 TWD, sitting between counter cash and online exchange. Note that ATM locations are limited (about 200 nationwide), and cash may run out during peak times—don’t wait until the last minute to withdraw.

Online currency exchange into a foreign currency account is investment-oriented. First, convert TWD to Yen via bank app into a foreign currency account (using spot selling rate, about 1% better than cash selling). If you need cash later, you can withdraw in person or at ATMs, with a loss of 500-1,000 TWD for 50,000 TWD. The advantage is being able to buy in batches at an average cost, with 24/7 flexibility—good for observing exchange rate trends and buying in dips (when TWD/JPY is below 4.80). The downside is needing to open a foreign currency account first, and withdrawal fees apply.

Summary of 4 exchange methods

Is now a good time compared to EUR to TWD exchange?

From the exchange rate perspective, now is relatively advantageous to buy Yen. Yen has appreciated 8.7% since the start of the year, making it a good entry point amid TWD depreciation pressure. But beware of “buying at a high” risk.

USD/JPY has fallen from 160 at the start of the year to around 154.58, with a short-term retest of 155 possible, but medium- to long-term forecasts suggest below 150, indicating that arbitrage trades are unwinding and Yen may further appreciate. Meanwhile, if you’re considering multi-currency allocation, EUR to TWD is currently around 36-37, which is more volatile than Yen’s steady appreciation, offering less effective hedging.

It’s recommended to buy in batches, avoiding full conversion at once. The first batch can lock in rates via online exchange, and the second can be bought at a weaker TWD when the rate is more favorable, using ATM withdrawals. This approach captures exchange rate advantages while spreading risk.

After exchanging Yen, don’t let it sit idle

If you’ve exchanged 50,000 Yen and only plan to travel for 3-7 days, holding cash is enough. But for long-term holdings (investment or study abroad), consider the following options:

Yen fixed deposit is the safest. E.SUN and Taiwan Bank offer foreign currency accounts with a minimum of 10,000 Yen, with annual interest rates of 1.5-1.8%. This turns “dead money” into a source of annual income.

Yen ETFs (like 00675U, 00703) are suitable for regular investment, tracking Yen or Japanese assets. You can buy fractional shares via broker apps, with an annual management fee of about 0.4%. Compared to holding cash with zero yield, this diversifies risk and participates in Yen appreciation.

Yen insurance policies are medium-term options. Cathay and Fubon offer Yen savings insurance with guaranteed interest rates of 2-3%, suitable for moderate risk investors.

Forex trading USD/JPY or EUR/JPY is an advanced approach, directly trading on currency fluctuations. Both long and short positions are available 24/7, ideal for short-term swings, but with higher risk—unsuitable for beginners.

5 questions to ask before exchanging

Q: How much is the difference between cash rate and spot rate?
Cash rate is used for physical cash transactions, settled immediately at the bank; spot rate is for electronic transfers or foreign currency accounts, settled T+2. The difference is about 1-2%, with spot rates more favorable.

Q: How much Yen can I get for 10,000 TWD?
Using Taiwan Bank’s cash selling rate of 4.85, 10,000 TWD yields about 48,500 Yen. Using the spot selling rate (~4.87), it’s about 48,700 Yen—roughly 200 Yen difference.

Q: What do I need to bring for counter exchange?
Taiwanese: ID card + passport; foreigners: passport + residence permit. If pre-booked online, bring transaction notice. Under 20 years old needs parental accompaniment; large amounts (>100,000 TWD) may require source of funds declaration.

Q: Are there limits for foreign currency ATM withdrawals?
Post-2025, many banks have lowered daily limits to 100,000-150,000 TWD. CTBC’s limit is equivalent to 120,000 TWD; other banks vary. It’s recommended to use your own bank’s card to avoid cross-bank fees and plan ahead during peak times to prevent cash shortages.

Q: Which method should I choose?
50,000-200,000 TWD with planned approach → online exchange + airport pickup; urgent needs → foreign currency ATM; long-term investment → online exchange + foreign currency account; quick and cost-effective → counter cash.

Final reminder

Yen is no longer just for travel pocket money; it has become an asset with hedging and investment potential. With the BOJ’s rate hikes imminent, short-term volatility is inevitable, but the medium- to long-term appreciation space remains. By following the two principles of “batch exchange + full allocation after exchange,” you can reduce costs and maximize your capital’s potential.

Beginners are advised to start with Taiwan Bank’s online exchange + airport pickup or foreign currency ATM, then gradually move into fixed deposits, ETFs, or swing trading. This way, you can enjoy cost-effective travel and also gain a layer of protection during global market turbulence.