## Under the pressure of TWD depreciation, is it really cost-effective to exchange for JPY now?

As of December 10, 2025, the TWD to JPY exchange rate is about 4.85, up approximately 8.7% from 4.46 at the beginning of the year. With ongoing TWD depreciation pressure and increasing global asset allocation demand, exchanging for JPY has become a popular choice. But the real question isn't "whether to exchange," but "how to do it most cost-effectively."

According to the latest survey, Taiwan's foreign exchange demand increased by 25% in the second half of the year, mainly driven by tourism recovery and hedging needs. Compared to RMB, which requires additional conversion procedures, JPY is one of the three major safe-haven currencies (along with USD and CHF), and can be conveniently exchanged directly within Taiwan's banking system, with relatively transparent exchange rate fluctuations.

## Why is JPY worth paying attention to?

JPY is not just "pocket money" for travel abroad. From an economic fundamentals perspective, Japan's debt remains stable, and central bank policies are clear. The Bank of Japan Governor Ueda Kazuo recently made hawkish comments, pushing up the rate hike expectation to 80%, with the market expecting a 0.25 bps increase at the December 19 meeting to 0.75% (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. This indicates that the JPY faces long-term appreciation pressure.

More importantly, as a safe-haven currency, JPY has a negative correlation with Taiwan stocks and emerging markets like RMB. During the Russia-Ukraine conflict in 2022, JPY appreciated by 8% in one week, buffering a 10% decline in the stock market. In the current environment of TWD depreciation pressure, allocating JPY can effectively hedge against asset volatility risks.

## 4 exchange channels—who is most cost-effective?

Banks, airports, ATMs, online platforms—Taiwanese have many options for exchanging JPY. But just the difference in exchange rates can cost you several cups of bubble tea.

**Option 1: In-person cash exchange (traditional but highest fee)**

Go directly to a bank branch or airport counter to exchange TWD cash for JPY cash. Using Taiwan Bank's rate on December 10, 2025, the cash selling rate is about 0.2060 TWD/JPY (roughly 4.85 JPY per TWD). This method is safe, reliable, with full denominations, and staff assistance on-site. However, because it uses the "cash selling rate" (about 1-2% worse than the spot rate), plus some bank handling fees (e.g., E.SUN 100 TWD per transaction, Cathay United 200 TWD), exchanging 50,000 TWD might result in a loss of 1,500-2,000 TWD. Suitable only for small, urgent, or last-minute airport needs.

**Option 2: Online exchange + in-person withdrawal (balanced approach)**

Use online banking app to convert TWD into JPY and deposit into a foreign currency account, using the "spot selling rate" (about 4.87, roughly 1% discount). If cash is needed, withdraw in person at a branch or foreign currency ATM. This approach is suitable for monitoring exchange rate trends and making staggered entries (e.g., when TWD/JPY drops below 4.80). For 50,000 TWD, the cost is about 500-1,000 TWD in losses, and you can also invest in JPY fixed deposits (current annual interest rate around 1.5-1.8%), ideal for readers with forex experience.

**Option 3: Online currency settlement + airport pickup (lowest time cost)**

No foreign currency account needed. Fill in currency, amount, pickup branch, and date on the bank's website, then bring ID and transaction notice to pick up in person. Taiwan Bank's "Easy Purchase" online settlement is fee-free (pay with Taiwan Pay, only 10 TWD), with about 0.5% exchange rate advantage. Taoyuan Airport has 14 Taiwan Bank outlets (2 open 24 hours), making it the best pre-departure reservation method. For 50,000 TWD, the cost is about 300-800 TWD in losses. Suitable for planned travelers who want to pick up cash directly at the airport. Remember to book 1-3 days in advance; pickup is only during bank hours.

**Option 4: Foreign currency ATM instant withdrawal (most flexible but limited locations)**

Use a chip-enabled financial card to withdraw JPY cash at bank foreign currency ATMs, operational 24/7. E.SUN Bank's foreign currency ATMs allow withdrawal from TWD accounts with a daily limit of 150,000 TWD, and only a 5 TWD cross-bank fee (the lowest among options). For 50,000 TWD, the cost is about 800-1,200 TWD in losses. However, only about 200 such ATMs nationwide, and cash can run out during peak times. Denominations are fixed (1,000/5,000/10,000 JPY). Don't wait until the last minute; suitable for urgent needs or those who can't visit a branch.

## Best approach for small investors

For those with a budget of 50,000-200,000 TWD, we especially recommend a hybrid method: "online currency settlement + foreign currency ATM." Lock in favorable rates via online settlement, withdraw some cash for emergencies, and deposit the rest into a foreign currency account for fixed deposits or ETFs. This reduces transaction costs and retains flexibility.

## After exchanging for JPY, where should the money go?

Don't let the JPY sit idle without interest. Depending on investment goals, four common options are:

**JPY fixed deposit** — Most stable, via E.SUN/TAIWAN BANK foreign currency accounts, starting from 10,000 JPY, with annual interest rates of 1.5-1.8%. Suitable for conservative investors.

**JPY insurance policies** — Medium-term holding, such as Cathay or Fubon savings insurance, with guaranteed interest rates of 2-3%, combining protection and returns.

**JPY ETFs (00675U, 00703)** — Growth-oriented, e.g., Yuanta 00675U tracking JPY index, can be bought as fractional shares via broker apps, with an annual management fee of 0.4%, for risk diversification.

**Forex trading USD/JPY, EUR/JPY** — Directly trade JPY currency pairs on forex platforms, suitable for short-term trading, capturing volatility with long/short positions, 24-hour trading.

## Future risk warnings

While JPY remains a strong safe-haven, there are risks of two-way fluctuations. Long-term rate hikes by the Bank of Japan are positive, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait/Middle East) could temporarily depress the currency. USD/JPY has fallen from a high of 160 at the start of the year to 154.58 now; short-term fluctuations may bring it back to 155, but medium to long-term forecasts are below 150. For investment purposes, it’s advisable to stagger entries and avoid all-in exchanges to cope with 2-5% short-term volatility.

Compared to RMB, which requires complex foreign exchange control approvals, JPY's convenience and transparency are definitely superior. Overall, as long as you follow the two principles of "staggered exchange" and "not leaving money idle after exchange," you can minimize costs and maximize returns.