Yen investment is booming! A detailed analysis of the four major currency exchange methods and their costs in 2025

By the end of 2025, the Japanese Yen against the Taiwan Dollar reached 4.85, hitting a new annual high. Compared to 4.46 at the beginning of the year, the Yen appreciated by over 8% in just 11 months. Behind this rally are factors such as the influx of global safe-haven funds, rising expectations of Bank of Japan interest rate hikes, and continued depreciation pressure on the Taiwan Dollar. Whether for travel abroad or asset allocation, now is a great time to reassess your Yen holdings.

Why Did the Yen Suddenly Become Hot? The Double Appeal of Safe-Haven Assets

The Yen plays a key role as one of the three major safe-haven currencies in the global financial market (alongside the US Dollar and Swiss Franc), which is no coincidence. Japan’s economy is stable, government debt is relatively manageable, and whenever geopolitical tensions rise or markets become volatile, funds tend to flow into the Yen for safety.

In 2022, when the Russia-Ukraine conflict erupted, the Yen appreciated 8% within a week, while global stock markets fell by 10% during the same period. This exemplifies the Yen’s safe-haven characteristic. For Taiwanese investors, this means holding Yen is not just for travel but also for hedging against Taiwan stock market volatility.

From an interest rate perspective, Japan maintains ultra-low interest rates (only 0.5%), making it a funding currency for arbitrage trades. Many institutional investors borrow Yen at low interest and convert into higher-yield USD or other assets (the USD-JPY interest rate differential is about 4%), then unwind positions and buy back Yen when risks increase. This Yen rally signals a global reallocation of funds.

Four Currency Exchange Options, Cost Differences Up to ### NT$2000

There are many ways to exchange Yen in Taiwan, but the costs vary significantly. For example, exchanging NT$50,000 can differ by over NT$1500 depending on the method.

Option 1: Bank Counter Cash Exchange — The Traditional but Most Expensive

Carrying NT$ cash to a bank or airport counter for exchange is the most common method. Banks use the “cash selling rate,” which is 1-2% worse than the international spot rate, plus possible service fees, making it the most costly.

For example, Taiwan Bank’s rate on December 10, 2025, shows a cash selling rate of 0.2060 NT$/Yen (i.e., NT$1 = 4.85 Yen). Some banks like E.Sun and Cathay United also charge an additional NT$100-200 fee. Exchanging NT$50,000 this way costs about NT$1500-2000 more.

Suitable for: Urgent airport needs, unfamiliar with online methods, requiring various denominations

Option 2: Online Currency Conversion to Account, then Withdrawal — Preferred by Investors

Using bank apps or online banking, convert NT$ to Yen and deposit into a foreign currency account, using the “spot sell rate,” which is about 1% cheaper than cash exchange. If cash is needed later, you can withdraw at a branch or via foreign currency ATM, but will pay an additional exchange spread fee (from NT$100).

This method suits investors wanting to observe exchange rate trends, buy in stages at low points, or plan to transfer funds into Yen deposits or ETFs. E.Sun Bank and Taiwan Bank’s apps support 24-hour online currency exchange, costing about NT$500-1000, half the cost of counter exchange.

Suitable for: Experienced forex investors, averaging costs over time, planning to buy Yen deposits or ETFs

Option 3: Online Currency Purchase + Airport Pickup — The Best Pre-Travel Solution

A new hybrid approach: no need for a foreign currency account, just book online via the bank’s website, specify the airport branch for pickup. Taiwan Bank’s “Easy Purchase” online currency purchase is fee-free (pay NT$10 via TaiwanPay), with about 0.5% better exchange rate.

Taoyuan Airport has 14 Taiwan Bank branches, including 2 open 24 hours, very convenient. Cost is about NT$300-800, ideal for planned travelers.

Suitable for: Well-planned trips, fixed travel dates, wanting to pick up Yen directly at the airport

Option 4: Foreign Currency ATM Withdrawal — Maximum Convenience

Use a chip-enabled bank card at foreign currency ATMs to withdraw Yen cash, available 24/7. E.Sun Bank’s foreign currency ATMs allow withdrawal from NT$ accounts, with a daily limit of NT$150,000, no exchange fee, only NT$5 interbank fee.

Disadvantages include limited locations (around 200 nationwide), fixed denominations of 1000/5000/10000 Yen, and cash shortages during peak times. Cost is about NT$800-1200, suitable for urgent cash needs.

Suitable for: No time to visit a bank, immediate cash requirement, accustomed to ATM self-service

Cost Comparison Table of the 4 Methods

Should You Exchange Now? Staggered Strategy Is Key

Yen has appreciated 8.7% since the start of the year, but there’s still room to grow. Bank of Japan Governor Ueda has recently signaled a hawkish stance, with market expectations of a 25 basis point rate hike at the December 19 meeting (a 30-year high), and Japanese government bond yields have hit 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 now. The market generally expects a short-term retest of 155, but the medium to long-term trend points below 150. This indicates Yen still has room to appreciate, but short-term volatility risk is around 2-5%.

Recommended Strategy: Don’t convert all at once. Instead, buy in stages. For example, convert NT$20,000 via online purchase, add NT$20,000 via ATM at any time, and keep NT$10,000 as reserve. This way, you can average your cost and respond flexibly to exchange rate fluctuations.

Meanwhile, observe other emerging market currencies like MYR against TWD as benchmarks, but Yen’s safe-haven property remains unmatched.

After Converting Yen: Don’t Let Your Money Lie Idle

Having converted Yen doesn’t mean the investment ends. The following four allocation options each have pros and cons; beginners can choose based on risk appetite:

1. Yen Fixed Deposit (Conservative)
E.Sun and Taiwan Bank offer foreign currency accounts starting from 10,000 Yen, with annual interest rates of 1.5-1.8%, risk-free. Interest can be reinvested into ETFs for compound growth.

2. Yen Insurance (Mid-term)
Cathay and Fubon Life offer USD or Yen savings insurance with guaranteed interest rates of 2-3%, suitable for 3-5 year funds planning.

3. Yen ETFs (Growth)
Yuanta 00675U, Fubon 00703, and other Yen-related ETFs track Yen indices or Japanese stock trends. Brokerage apps support fractional trading, suitable for regular investment.

4. Forex Swing Trading
Trade USD/JPY or EUR/JPY directly on platforms like Mitrade, with zero commissions, low spreads, and 24-hour trading, suitable for experienced traders capturing short-term moves.

While Yen is a safe-haven asset, global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) may still depress its value. Core holdings should be in fixed deposits or ETFs, with smaller amounts for swing trading.

Quick FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate applies to physical cash, with 1-2% worse rates but immediate cash pickup. Spot rate is the electronic market rate, more favorable but settlement takes T+2.

Q: How much Yen can NT$10,000 buy?
Based on Taiwan Bank’s rate of 4.85 on December 10, 2025, NT$10,000 can buy about 48,500 Yen in cash or 48,700 Yen at spot.

Q: What do I need for large exchanges?
Counter exchange requires ID + passport; amounts over NT$100,000 may need source of funds declaration. Online booking needs transaction notice.

Q: Is there a limit for foreign currency ATM withdrawals?
Banks vary; most cards allow NT$120,000-150,000 per day. Using your own bank’s card can avoid cross-bank fees.

Final Advice

The Yen has evolved from a simple “travel pocket money” to an asset with hedging and investment value. By late 2025, it faces both short-term volatility and medium-term appreciation opportunities.

Beginners can start with “Taiwan Bank online purchase + airport pickup” to save costs and reduce risk. Experienced investors can adopt a “staged exchange + ATM topping-up” strategy, gradually entering the market, and transfer Yen into fixed deposits or ETFs to boost returns.

Mastering the principles of staggered exchange and not letting your money sit idle will minimize costs and maximize gains. Whether for travel or asset allocation, you can benefit from the Yen’s upward trend.