JPY Exchange Strategy: Hedging options amid TWD depreciation, how to exchange 50,000 TWD most cost-effectively

Why is the Japanese Yen worth paying attention to? Not just for travel, but also for hedging risks

At the end of the year, the TWD/JPY exchange rate has reached 4.85, appreciating about 8.7% from the beginning of the year at 4.46. For those planning to travel abroad or allocate foreign currency assets, this is a timing worth serious consideration.

The value of the yen extends far beyond travel expenses. On a daily level, traveling in Japan still mainly relies on cash (credit card penetration is only 60%), and purchasing, online shopping for Japanese goods, or long-term studying abroad all require yen. More importantly, on a financial level, the yen is one of the three globally recognized safe-haven currencies (alongside USD and Swiss Franc).

When global markets are turbulent, funds tend to flow into the yen seeking protection. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% within a week, while the stock market fell by 10%—this inverse volatility characteristic makes it an effective tool for Taiwanese investors to hedge against Taiwan stock risk. Moreover, the Bank of Japan has maintained ultra-low interest rates (only 0.5%) for a long time, making the yen a “funding currency.” Many international investors borrow yen to invest in higher-yield USD assets, creating a large-scale carry trade in the market.

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

Four tested currency exchange channels: cost differences exceed NT$2000

Many people habitually go to banks for over-the-counter currency exchange, but in reality, the difference in exchange rates alone can cause costs to vary greatly. Below are the latest four options as of December 10, 2025:

Option 1: Bank over-the-counter cash exchange — the most traditional and expensive

Bring NT$ cash directly to the bank or airport counter to exchange for yen cash. Simple operation, immediate delivery, full denominations (choose from 1000/5000/10000 yen), assisted by staff. The downside is using the “cash selling rate,” which is about 1-2% worse than the spot rate, and some banks also charge handling fees.

For example, Taiwan Bank’s rate on December 10, 2025, at 9:18 AM, cash selling rate is about 0.2060 TWD per yen (roughly 4.85 yen per NT$). Exchanging NT$50,000, estimated cost loss is about NT$1500-2000.

Comparison of cash selling rates and counter handling fees across banks (2025/12/10):

Suitable for: Small, urgent exchanges (e.g., at the airport), or for those unfamiliar with online operations.

Option 2: Online transfer then over-the-counter or ATM withdrawal — balanced approach

Use bank app or online banking to transfer NT$ into a foreign currency account at the “spot sell rate” (about 1% better than cash selling rate). If cash is needed, go to counter or foreign currency ATM to withdraw yen, but additional exchange fee applies (starting around NT$100).

Advantages include batch operations, observing exchange rate trends, and averaging costs at low points. For example, using E.SUN Bank app to exchange and withdraw yen cash, with handling fee equal to the difference between spot and cash rates, minimum NT$100. Suitable for those experienced in forex investment, planning to build positions gradually. Estimated loss for NT$50,000 is NT$500-1000.

After withdrawal, don’t let the money sit idle—consider yen fixed deposits (current annual interest rate 1.5-1.8%, starting from 10,000 yen).

Suitable for: Those with forex experience, wanting to build positions gradually, or planning to invest in yen deposits or ETFs.

Option 3: Online currency exchange with direct appointment for withdrawal — most hassle-free

No need to open a foreign currency account in advance. Fill in currency, amount, branch, and date on the bank’s website. After completing online exchange, bring ID and transaction notification to the designated branch to pick up. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay NT$10 via TaiwanPay), with about 0.5% exchange rate advantage.

This is the best pre-departure reservation method, especially at Taoyuan Airport, which has 14 Taiwan Bank outlets, including 2 open 24 hours. Requires 1-3 days reservation; pickup time is limited by branch hours and cannot be changed. Estimated loss for NT$50,000 is NT$300-800.

Suitable for: Planned travelers, those wanting to pick up at the airport, or seeking the lowest handling fee.

Option 4: Foreign currency ATM instant withdrawal — most flexible

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen cash, supporting 24-hour operation, cross-bank withdrawals with only NT$5 fee. E.SUN Bank’s foreign currency ATMs allow direct withdrawal from NT$ accounts, with a daily limit of NT$150,000 and no exchange fee. Drawbacks include limited locations (~200 nationwide), fixed denominations (1000/5000/10000 yen), and possible cash shortages during peak times. Estimated loss for NT$50,000 is NT$800-1200.

Note: Starting in 2025, new regulations reduce the daily withdrawal limit for third-party digital accounts to NT$100,000 at many banks, so plan accordingly or use your own bank card to avoid cross-bank fees.

Suitable for: Those with no time to visit banks, needing urgent cash, or without prior planning.

Cost comparison table of four exchange methods

Is it worthwhile to exchange for yen now? Mid-term opportunities amid short-term fluctuations

As of December 10, 2025, TWD/JPY is 4.85, meaning NT$1 can buy 4.85 yen. Compared to the beginning of the year at 4.46, this is an 8.7% appreciation—quite a substantial gain for those exchanging now.

But deciding “whether to exchange now” requires understanding where the yen stands currently. USD/JPY, which peaked at 160 earlier this year, has fallen to around 154.58. The logic behind this is that the Bank of Japan is about to raise interest rates. Governor Ueda Kazuo recently made hawkish comments, boosting market expectations of rate hikes to 80%, with a 0.25 basis point increase to 0.75% expected at the December 19 meeting (a 17-year high), and Japanese bond yields hitting 17-year highs of 1.93%.

Meanwhile, the US is entering a rate-cut cycle, narrowing the interest rate gap between Japan and the US. In the short term, USD/JPY may oscillate around 155, but in the medium to long term, it is expected to decline further below 150.

Core advice: Operate in batches, avoid exchanging all at once. Consider this strategy—

If the purpose is investment (not just travel), yen as a safe-haven currency carries short-term risks of 2-5% volatility due to arbitrage unwinding. But in the long run, under the pressure of TWD depreciation, shifting some funds into yen is a reasonable hedge. Entering in 3-5 installments at different times can average costs and reduce timing risk.

If purely for travel, the current rate is not bad. It’s recommended to lock in the rate 1-2 weeks in advance via “online currency exchange,” saving at least NT$500 compared to over-the-counter cash exchange.

After exchanging for yen: four options to make your money work

Once you have yen, depending on your risk appetite, you can consider the following allocations:

1. Yen fixed deposit (conservative) — Open a foreign currency account with E.SUN Bank or Taiwan Bank, transfer online into a fixed deposit. Minimum 10,000 yen, annual interest 1.5-1.8%, safe and stable.

2. Yen insurance policy (medium-term hold) — Cathay Life, Fubon Life offer yen savings insurance with guaranteed interest rates of 2-3%, suitable for holding 3-5 years.

3. Yen ETF (growth-oriented) — Yuanta 00675U, 00703 tracking yen indices, can be bought as fractional shares via broker apps for dollar-cost averaging. Moderate risk, suitable for long-term yen appreciation outlook. Management fee 0.4% annually.

4. Forex swing trading (advanced) — Trade USD/JPY or EUR/JPY directly on forex platforms (like Mitrade) for intraday or swing trading. Benefits include two-way trading, 24-hour market, small capital required, suitable for sensitive investors.

BOJ rate hikes are positive for the yen, but global arbitrage unwinding or geopolitical conflicts (e.g., Taiwan Strait, Middle East) may still suppress the currency. Holding cash alone yields no interest; it’s best to choose appropriate asset channels based on your timeline.

Quick FAQs

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

Cash rate (Cash Rate) is the buy/sell rate banks offer for physical bills and coins, convenient for immediate exchange but 1-2% worse than the spot rate, plus handling fees.

Spot rate (Spot Rate) is the exchange rate for settlement within two business days (T+2) in the forex market, mainly used for electronic transfers or non-cash settlement. It’s more favorable, close to international market prices, but requires waiting for settlement.

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

Formula: Yen amount = NT$ amount × current rate (TWD/JPY)

Using Taiwan Bank’s December 10, 2025, 9:18 AM cash sell rate (~4.85), NT$10,000 can buy about 48,500 yen. Using the spot sell rate (~4.87), about 48,700 yen, difference roughly 200 yen (NT$40).

Q. What ID do I need for over-the-counter exchange?

Taiwanese: ID card + passport; Foreigners: passport + residence permit; Company: business registration. If pre-booked online, bring transaction notification. Under 20 needs parent’s consent; large exchanges over NT$100,000 may require source of funds declaration.

Q. What is the daily limit for foreign currency ATM withdrawals in Taiwan?

From October 2025, new rules lower the daily limit for third-party digital accounts to NT$100,000 at many banks. Latest regulations:

Plan ahead during peak times (e.g., airports), as cash may run out quickly.

Conclusion: Yen is more than travel money—it’s an asset allocation

The yen has evolved from “travel pocket money” to an asset with hedging functions and small-scale investment value. Whether preparing for next year’s trip or seeking hedging amid TWD depreciation, mastering the right exchange channels and timing is crucial.

Two core principles: staggered exchange to reduce timing risk, and after exchange, move into fixed deposits, ETFs, or swing trading to avoid idle cash. Beginners can start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then upgrade investment strategies as needed. This way, you not only save on travel costs but also add a layer of protection during global market turbulence.