Yen exchange cost breakdown: A practical guide to 4 major channels

Recently, the exchange rate of the New Taiwan Dollar (NTD) against the Japanese Yen (JPY) has reached 4.85, appreciating over 8% from 4.46 at the beginning of the year. Many people are starting to seriously consider exchanging for Yen. Whether planning a trip to Japan, purchasing goods online, or wanting to allocate assets into one of the three major safe-haven currencies, the key question remains the same—how to exchange at the lowest cost?

We have summarized the four most mainstream currency exchange channels in Taiwan, using real market rates to reveal the hidden costs of each method, ensuring you don’t spend a single unnecessary dollar.

Why focus on the Yen now?

When it comes to foreign currency exchange, many people’s first thought is the Yen, but the real reasons are much more complex than just “wanting to visit Japan.”

Everyday life: Most businesses in Japan still rely on cash payments (credit card penetration is only 60%), and activities like purchasing goods online, shopping on auction sites, studying abroad, and part-time work all require frequent use of Yen.

Financial investment: The Yen, along with USD and Swiss Franc, is one of the three major safe-haven currencies. Whenever global markets fluctuate, capital tends to flow into the Yen as a safe harbor—during the Russia-Ukraine conflict in 2022, the Yen appreciated 8% in a single week, offsetting a 10% decline in the stock market. For Taiwanese investors, holding Yen is like buying insurance against Taiwan stock market risks.

Additionally, Japan’s long-term ultra-low interest rate policy (currently only 0.5%) has fostered an arbitrage trading ecosystem: investors borrow cheap Yen and invest in higher-yield USD (the USD-JPY interest rate differential is about 4.0%), then close positions when risks increase. This dynamic makes Yen fluctuations somewhat predictable.

Comparison of four currency exchange methods

Method 1: Over-the-counter cash exchange (Traditional banks)

Bringing cash directly to a bank or airport counter to exchange for Yen is the most straightforward method but not necessarily the most cost-effective.

Banks offer “cash selling rates,” which are 1-2% worse than real-time international rates. For example, Taiwan Bank’s cash selling rate on December 10, 2025, was 0.2060 TWD per Yen (i.e., 1 TWD = 4.85 Yen). Some banks also charge an additional handling fee of 100-200 TWD.

Calculating for 50,000 TWD, this method results in a loss of about 1,500-2,000 TWD.

When to choose this: For travelers unfamiliar with online operations, or in urgent need of small cash amounts (e.g., at the airport when cash runs out).

Method 2: Online transfer + foreign currency account withdrawal

Using bank apps or online banking, convert TWD to Yen at the “spot selling rate” (about 1% better than cash selling rate), and deposit into a foreign currency account. To withdraw cash, you can use foreign currency ATMs or visit a branch, but there will be an additional fee starting from 100 TWD.

The advantage of this method is the ability to enter the market gradually: observe exchange rate trends, and convert in installments when rates are favorable (e.g., when TWD/JPY drops below 4.80), averaging a lower cost.

For 50,000 TWD, estimated loss is 500-1,000 TWD. Coupled with Yen fixed deposits (annual interest rate around 1.6-1.8%), you can also earn interest income.

When to choose this: For those experienced in forex operations, planning to hold Yen long-term.

Method 3: Online currency exchange + airport pickup (Most recommended)

The most efficient approach: fill out the exchange amount, currency, branch, and date on the bank’s official website. After completing the online currency exchange, bring your ID and transaction notification to the designated branch to pick up the cash. Taiwan Bank’s “Easy Purchase” service has no handling fee (pay via TaiwanPay for only 10 TWD), and offers about 0.5% better rates.

Key advantage: You can reserve at Taoyuan Airport’s Taiwan Bank branches (14 locations, 2 of which are open 24 hours), and pick up cash directly at the airport before departure—no need to visit the bank separately. Estimated cost loss for 50,000 TWD is only 300-800 TWD.

When to choose this: For well-planned travelers who want to withdraw cash at the airport with favorable rates.

Method 4: Foreign currency ATM withdrawal (24/7 flexibility)

Using a chip-enabled bank card to withdraw Yen at foreign currency ATMs, operational around the clock, with only a 5 TWD fee for cross-bank transactions. E.SUN Bank’s foreign currency ATMs allow withdrawals from TWD accounts, with a daily limit of 150,000 TWD, and no currency exchange fee.

The downside is limited locations (about 200 nationwide), fixed denominations (1,000, 5,000, 10,000 Yen), and potential cash shortages during peak times. Estimated cost loss for 50,000 TWD is 800-1,200 TWD.

When to choose this: For busy professionals with little time, or travelers needing immediate cash.

Cost comparison of each method

Is now a good time to exchange for Yen?

As of December 10, 2025, the TWD/JPY rate is about 4.85, indicating a clear depreciation trend of the TWD. Since the beginning of the year, the TWD has appreciated by 8.7%, showing that Yen is on an appreciation trajectory—very favorable for Taiwanese currency exchange.

Short-term volatility factors: The Bank of Japan’s Governor Ueda Kazuo has signaled a hawkish stance, with market expectations of a rate hike to 0.75% on December 19 (a 30-year high). Japanese government bond yields have surged to a 17-year high of 1.93%. USD/JPY has fallen from a high of 160 at the start of the year to 154.58, with a mid-term rebound possibly to 155, but long-term outlook remains below 150.

Investor insights: As a safe-haven asset, Yen faces short-term pressure from arbitrage unwinding (potential volatility of 2-5%), but from a hedge against Taiwan stock market fluctuations, holding Yen remains a prudent choice.

Suggested approach: Enter gradually, avoiding full conversion at once, to allow flexibility in both psychology and finances.

Asset allocation after exchanging for Yen

Once you have Yen, the key is not to leave cash idle without earning interest. Here are four options suitable for beginner investors:

Yen fixed deposit: The most stable choice. Banks like E.SUN and Taiwan Bank offer foreign currency accounts, with online deposits starting from 10,000 Yen, and annual interest rates of 1.5-1.8%.

Yen insurance policies: Cathay and Fubon Life offer savings-type insurance with guaranteed interest rates of 2-3%, suitable for medium-term holding.

Yen ETFs: Such as Yuanta 00675U (tracking Yen index), with management fees as low as 0.4%, suitable for regular installment investments.

Forex trading: Trade USD/JPY or EUR/JPY on trading platforms to capture exchange rate movements. These trades offer the advantage of long and short positions, 24-hour trading, and low costs, but come with higher risks.

Quick FAQs

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

Cash rate (Cash Rate) is the buy/sell rate for physical banknotes, settled immediately, convenient but costly (cash selling rate is about 1-2% worse than spot rate). Spot rate (Spot Rate) is the T+2 settlement rate in the financial markets, offering better rates but requiring electronic settlement.

Q. How much Yen can I get for 10,000 TWD?

Using Taiwan Bank’s cash selling rate of 4.85 on December 10, 2025, 10,000 TWD can buy about 48,500 Yen; with the spot rate of 4.87, about 48,700 Yen—only a 200 Yen difference (~40 TWD).

Q. What documents are needed for in-branch exchange?

Taiwanese citizens: ID card + passport; foreigners: passport + residence permit. If pre-booked online, bring transaction notification. Under 20 years old requires a parent’s accompaniment; for large amounts (over 100,000 TWD), a source of funds declaration is required.

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

As of October 2025, limits vary by bank. CTBC Bank’s daily limit is equivalent to 120,000 TWD, Taishin Bank’s is 150,000 TWD, E.SUN Bank’s is 150,000 TWD (including debit). It’s recommended to split withdrawals or use your bank’s card to avoid cross-bank fees.

Summary

Yen is no longer just “travel pocket money”; it has become an asset class with hedging properties and small-scale investment potential. Whether for next year’s trip or asset allocation amid TWD depreciation pressure, following the principles of “phased exchange + immediate asset allocation” can minimize costs and maximize returns.

Beginners can start with “Taiwan Bank’s online exchange + airport pickup” or “foreign currency ATM,” then gradually transfer Yen into fixed deposits, ETFs, or even try short-term trading. This way, you can enjoy more cost-effective travel and add a layer of risk hedging during global market turbulence.