Japanese Yen Appreciates by 8.7%! The 3 Most Important Currency Exchange Tips to Master When Converting to Yen This Year

Entering the fourth quarter of 2025, the Taiwanese dollar against the Japanese yen has reached a high of 4.85. Compared to 4.46 at the beginning of the year, the yen has appreciated by 8.7% in just 11 months. For Taiwanese holding yen or planning to invest in Japanese yen, this presents both opportunities and challenges.

What many overlook is that choosing the wrong currency exchange method can cost an extra NT$2,000. We have compiled the most comprehensive comparison of currency exchange options in the market, so you can see the actual differences across channels at a glance.

Why is the exchange rate rising so quickly? The story behind the yen

The logic behind the yen’s appreciation isn’t complicated. The Bank of Japan (BOJ) is on the verge of an interest rate hike cycle, with hawkish comments from Governor Ueda Kazuo pushing market expectations for a rate hike decision on December 19 to 80%. If interest rates rise by 0.25 basis points to 0.75% (a 30-year high), it will further push up Japanese government bond yields (currently approaching 1.93%, a 17-year high).

Meanwhile, the US has entered a rate cut cycle, narrowing the US-Japan interest rate differential. This narrowing typically leads to yen appreciation—after all, arbitrage trades involving holding high-yield USD to buy low-yield yen are less attractive than in previous years, and closing these positions will further support the yen.

Market data shows USD/JPY has fallen from a high of 160 at the start of the year to 154.58. Short-term fluctuations may rebound to 155, but the medium- to long-term trend is expected below 150. For Taiwanese investors, the yen, as one of the three major safe-haven currencies (along with USD and CHF), has become a tool to hedge against Taiwan stock market volatility. In the second half of the year, Taiwan’s yen exchange demand increased by 25%, mainly driven by tourism recovery and hedging needs.

A comparison of 4 currency exchange methods: how much can costs be saved?

There are many channels for currency exchange, but the cost differences are striking. For example, with NT$50,000, actual expenses can differ by over NT$1,700 depending on the method.

First type: In-person currency exchange (traditional but most expensive)

Carrying NT$ cash to banks or airports to exchange for yen cash, using the “cash selling rate.” This rate is usually 1-2% worse than the spot rate, plus some banks charge counter service fees, making it the most costly.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, was about 0.2060 (NT$1 = 4.85 yen), with no handling fee. Cathay United Bank’s cash rate was 0.2065, and E.SUN Bank adds a NT$100 fee per transaction (about 486 yen extra).

Advantages: Safe, reliable, full denominations, staff assistance on-site
Disadvantages: Poor exchange rate, limited operating hours, possible fees
Estimated cost (NT$50,000): Loss of NT$1,500–2,000
Suitable for: Urgent airport needs, unfamiliar with online operations

Second type: Online exchange + in-person withdrawal (balanced approach)

Using bank apps or online banking to convert NT$ into yen and deposit into a foreign currency account, at the “spot sell rate” (about 1% discount). If cash is needed, go to a counter or foreign currency ATM to withdraw, but fees apply for the withdrawal.

E.SUN Bank charges a fee equal to the difference between the spot and cash rates, starting at NT$100. This method allows observing exchange rate trends and entering the market in batches at lower costs.

Advantages: 24/7 operation, averaging costs over multiple entries, better rates
Disadvantages: Need a foreign currency account, withdrawal fees (NT$5–100 cross-bank)
Estimated cost (NT$50,000): Loss of NT$500–1,000
Suitable for: Experienced forex traders, long-term holders

Third type: Online remittance + airport pickup (best for travelers)

No foreign currency account needed. Fill in the amount and pickup branch on the bank’s website, complete remittance, then bring ID to pick up in person. Taiwan Bank’s “Easy Purchase” online remittance is fee-free (NT$10 via Taiwan Pay), with about 0.5% rate advantage.

Taoyuan Airport has 14 Taiwan Bank outlets (2 open 24 hours), ideal for pre-trip planning. This is currently the most cost-effective way to exchange currency before traveling abroad.

Advantages: Favorable rates, often no fees, designated airport pickup
Disadvantages: Need prior reservation (1-3 days), limited to bank operating hours
Estimated cost (NT$50,000): Loss of NT$300–800
Suitable for: Planned travelers

Fourth type: Foreign currency ATM withdrawal (temporary solution)

Using a chip-enabled debit card at foreign currency ATMs to withdraw yen cash, supporting 24-hour access, with only NT$5 cross-bank fee. E.SUN Bank’s foreign currency ATMs allow NT$15 million daily withdrawal limit from NT$ accounts, with no exchange fee.

Limited locations (~200 nationwide), cash may run out during peak times. By late 2025, Japanese ATM withdrawal services will require international cards (Mastercard/Cirrus).

Advantages: 24/7 access, flexible, low cross-bank fees
Disadvantages: Few locations, fixed denominations, possible shortages during peak times
Estimated cost (NT$50,000): Loss of NT$800–1,200
Suitable for: Urgent, impromptu needs

Is now a good time to exchange yen? A batch strategy is key

Answer: Yes, but with a strategic approach.

The yen remains relatively high with significant volatility. Technical analysis suggests USD/JPY may fluctuate around 155 in the short term, but the medium- to long-term outlook remains below 150. This indicates further appreciation potential, but short-term risks include a 2-5% correction from arbitrage unwinding.

Therefore, staggered entry is the most prudent approach. Divide your NT$50,000–200,000 budget into 2-3 parts, entering at these times:

• First batch (30%): Now, locking in current high levels
• Second batch (40%): When the rate drops below 4.80
• Third batch (30%): Next January, aligned with travel plans

This approach allows participation in potential appreciation while reducing risk from single-entry timing.

After exchanging yen: 4 ways to make your money work

Exchanging yen alone isn’t enough; the key is to generate returns from this capital. Here are four common small-scale investment options:

1. Yen fixed deposit (conservative income)

Open a foreign currency account with E.SUN or Taiwan Bank, deposit yen online, with a minimum of 10,000 yen, annual interest rate 1.5–1.8%. 100,000 yen yields about 1,500–1,800 yen annually, stable but limited returns.

2. Yen insurance policy (mid-term allocation)

Cathay or Fubon life insurance yen savings policies, with guaranteed interest rates of 2–3%, 3-5 year terms, combining protection and returns.

3. Yen ETFs (growth-oriented)

Yuan Da 00675U and other yen-related ETFs tracking the yen index, purchasable in fractional shares via broker apps, suitable for dollar-cost averaging. Management fee around 0.4%, higher risk and potential than deposits.

4. Forex trading (swing strategy)

Trade USD/JPY or EUR/JPY directly on platforms like Mitrade. Benefits include zero commissions, low spreads, 24-hour trading, and both long/short positions. Tools like stop-loss, take-profit, and trailing stops are available, suitable for investors with risk appetite.

While yen is a safe-haven asset, it still faces two-way volatility. Rate hikes are positive, but geopolitical conflicts (Taiwan Strait, Middle East) or recession fears could weaken the yen. Adjust your allocations based on investment horizon and risk tolerance.

Practical knowledge: common questions about currency exchange

Q: What’s the difference between cash exchange rate and spot rate?
Cash rate is the rate banks offer for physical bills, settled immediately, convenient but usually 1-2% worse than the spot rate. The spot rate is the interbank market rate, settled T+2, closer to international prices, suitable for electronic transfers but not cash. In short, spot is more favorable but not for cash transactions.

Q: How much yen can NT$10,000 buy?
Using Taiwan Bank’s cash selling rate of 4.85, NT$10,000 ≈ 48,500 yen. At the spot rate of 4.87, about 48,700 yen, a difference of 200 yen (~NT$40).

Q: What’s the daily withdrawal limit at foreign currency ATMs?
Varies by bank. CTBC: NT$120,000 per day for own card, NT$20,000 for others; Taishin: NT$150,000, others depend on issuing bank; E.SUN: NT$50,000, total NT$150,000 including card transactions. It’s advisable to split withdrawals or use your own bank card to avoid cross-bank fees.

Conclusion

The yen is no longer just for travel pocket money but an asset with hedging and investment potential. Whether for international travel, hedging Taiwan stock volatility, or testing forex swings, mastering “batch exchange + diversified allocation” can minimize costs.

Beginners are advised to start with “Taiwan Bank online remittance + airport pickup” or “foreign currency ATM,” then allocate into deposits, ETFs, or forex trading based on needs. This way, you can enjoy this year’s yen appreciation and prepare for future market fluctuations.