JPY 4.85 hits a yearly high! Is it a good time to exchange now? Choosing the right method for 50,000 TWD can save you 2,000 yuan

NTD to JPY has surged to 4.85, compared to 4.46 at the beginning of the year, an increase of 8.7% in just one year. For investors, the yen’s rally is fierce; for travelers, exchanging for yen now gets you more. But the question is: what’s the most cost-effective way to exchange?

Why is it worth exchanging for yen? Not just for travel

Many people think the yen is only for travel purposes, but it’s much more than that.

Travel and daily consumption: Most stores in Japan still primarily use cash (credit card penetration is only 60%). Whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, carrying yen cash is standard. Additionally, those purchasing Japanese cosmetics, anime merchandise, or online Japanese products often need to pay directly in yen.

From an investment perspective: it’s even more interesting. The yen is one of the world’s three major safe-haven currencies (alongside USD and Swiss Franc). When markets are turbulent, funds tend to flow into the yen for safety—during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in a week, buffering stock market declines. For Taiwanese investors, holding yen can hedge against Taiwan stock risks.

Plus, the Bank of Japan (BOJ) recently signaled a rate hike, with Governor Ueda Kazuo’s hawkish comments pushing market expectations of a rate increase to 80%, with a 0.25 bps hike to 0.75% expected on December 19 (a 30-year high). This indicates a long-term increase in the yen’s attractiveness.

How should you exchange? Four methods with different costs

Choosing the right currency exchange channel alone can make a difference of NT$1,500 on NT$50,000. Let’s analyze each.

Option 1: Bank counter cash exchange | The most traditional but most costly

Bring NT$ cash to a bank or airport to exchange for yen cash. It’s the simplest method. However, this uses the “cash selling rate,” which is 1-2% worse than the international market rate. According to Taiwan Bank’s rates on December 10, the cash selling rate is about 0.2060 yen per NT$1 (i.e., NT$1 = 4.85 yen). Some banks also charge an additional NT$100-200 handling fee.

Actual cost for NT$50,000: Loss of NT$1,500-2,000.

Suitable for: Those unfamiliar with online operations or needing small, urgent exchanges (e.g., at the airport).

Option 2: Online currency settlement + airport pickup | The smartest choice

No foreign currency account needed. Simply fill in the amount, currency, pickup branch, and date on the bank’s website. After remittance, bring ID and transaction notification to pick up at the counter. Taiwan Bank’s “Easy Purchase” online settlement is fee-free (using Taiwan Pay costs only NT$10), and the exchange rate can be about 0.5% better.

The best part is Taoyuan Airport has 14 Taiwan Bank counters, including 2 open 24 hours, ideal for planning before departure.

Actual cost for NT$50,000: Loss of NT$300-800.

Suitable for: Planned travelers who want to pick up yen directly at the airport before departure.

Option 3: Foreign currency ATM withdrawal | The most convenient temporary solution

Use a chip-enabled financial card to withdraw yen cash from foreign currency ATMs. 24-hour operation, with only NT$5 cross-bank fee deducted from your NT$ account. E.SUN Bank’s foreign currency ATMs have a daily limit of NT$150,000 equivalent, with no currency exchange fee.

However, this method has a limitation: there are only about 200 foreign currency ATMs nationwide, and denominations are fixed (1,000/5,000/10,000 yen). During peak hours (like at airports), cash may run out.

Actual cost for NT$50,000: Loss of NT$800-1,200.

Suitable for: Those who don’t have time to visit a branch and need a quick withdrawal.

Option 4: Online exchange + foreign currency account | Best for investors

Use online banking or app to convert NT$ into yen and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash selling rate). If you want to withdraw cash later, you can do so at a counter or foreign currency ATM, which may incur a spread fee (around NT$100+).

This method allows 24-hour operation, and by entering at low exchange rates (e.g., NT$ to JPY below 4.80), you can buy in batches to average your cost. E.SUN Bank’s app allows opening a foreign currency account starting from 10,000 yen, and you can also invest in yen fixed deposits (annual interest rate 1.5-1.8%).

Actual cost for NT$50,000: Loss of NT$500-1,000.

Suitable for: Those experienced in forex, holding yen long-term, and wanting to invest while saving.

Is now a good time to exchange? Staggered entry is best

Answer: Yes, but stagger your entries.

On December 10, the NT$ to JPY rate reached 4.85, a pretty good level. Observations show that Taiwan’s forex demand has grown by 25% in the second half of the year, mainly due to travel recovery and hedging needs.

However, risks include: the US rate cut cycle has strengthened the yen, and the BOJ’s rate hike signals could trigger a 2-5% arbitrage closing wave in the short term. USD/JPY has fallen from a high of 160 at the start of the year to around 154.58 now. Long-term forecasts suggest it could drop below 150, but short-term volatility might push it back to around 155.

Advice: Don’t exchange all at once. Use a “staggered entry” strategy—buy some weekly or monthly—to reduce timing risk.

After exchanging yen, what next? Don’t let your money sit idle

Once you’ve exchanged for yen, don’t let your money sit without earning interest. Based on your needs, here are four common options:

1. Yen fixed deposit (conservative)
Open a foreign currency account at E.SUN or Taiwan Bank, deposit yen online, starting from 10,000 yen, with an annual interest rate of 1.5-1.8%. Suitable for risk-averse investors.

2. Yen insurance policy (medium-term holding)
Buy savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2-3%, locking in returns. Suitable for medium-term allocation.

3. Yen ETF (growth-oriented)
For example, Yuanta 00675U tracking the yen index. You can buy fractional shares via brokerage apps, suitable for dollar-cost averaging. Management fee is 0.4% annually, diversifying risk.

4. Yen exchange rate swing trading (advanced)
Trade USD/JPY or EUR/JPY directly on forex platforms. Advantages include two-way trading, 24-hour operation, and small capital requirements. Suitable for those familiar with swing strategies.

While the yen is a safe-haven asset, it also has two-way volatility. Rate hikes are positive, but global arbitrage closing or geopolitical conflicts (Taiwan Strait/Middle East) could push the rate down. For investment purposes, ETFs are a good way to diversify risk.

Common Q&A about yen exchange

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

Cash rate is the rate banks offer for physical cash transactions, paid immediately; it’s usually 1-2% worse than the spot rate, with higher handling fees.

Spot rate is the foreign exchange market rate for T+2 settlement, mainly used for electronic transfers or non-cash settlement. It’s close to the international market price but requires waiting for settlement.

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

According to Taiwan Bank’s rate on December 10, the cash selling rate is about 4.85, so NT$10,000 can buy approximately 48,500 yen. Using the spot selling rate (~4.87), it’s about 48,700 yen, a difference of about 200 yen (roughly NT$40).

Q: What do I need to bring for counter exchange?

Taiwanese: ID + passport; foreigners: passport + residence permit. If pre-booked online, also bring transaction notification. Under 20 years old need parental consent and ID; large exchanges (over NT$100,000) may require source of funds declaration.

Q: Are there limits for foreign currency ATMs?

Starting October 2025, many banks have adjusted limits. CTBC Bank’s card limit is NT$120,000 equivalent per day; E.SUN Bank’s limit is NT$50,000 per transaction and NT$150,000 per day; Taishin Bank’s limit is NT$150,000 per day. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees (NT$5 per transaction).

Summary: Yen is now an asset, not just travel money

The yen has evolved from “travel pocket money” to an asset with hedging and investment value. Whether you plan to visit Japan next year or hedge against NT$ depreciation by converting funds into yen, following the principles of “staggered exchange” and “not leaving money idle after exchange” can minimize costs.

Beginners are advised to start with “Taiwan Bank online settlement + airport pickup” or “foreign currency ATM,” then move into fixed deposits, ETFs, or swing trading based on needs. This way, you can enjoy more cost-effective travel and add a layer of protection during market turbulence. Similar strategies can be applied to other currencies like RMB against NT$.