NTD to JPY exchange rate isn't the only factor; the cost differences across four major channels can exceed 2,000 yen

Why Should You Pay Attention to the Yen Now? Not Just for Traveling Abroad

By the end of 2025, the TWD/JPY exchange rate has risen to 4.85, and this is no coincidence. Besides the resurgence of travel to Japan, more importantly, the yen is becoming a hedging tool for savvy investors.

From travel expenses to financial investments, the role of the yen is transforming. You might not know that the yen ranks among the world’s three major safe-haven currencies (alongside the USD and Swiss Franc), often outperforming during market turbulence. For example, during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in one week, while the Taiwan stock market dropped by 10%—this demonstrates the power of safe-haven allocation.

For Taiwanese investors, exchanging for yen is not just for shopping in Tokyo, Osaka, or vacationing in Okinawa. The deeper logic is that the yen can help hedge against Taiwan stock market risks. Especially under the continuous depreciation pressure on the TWD, gradually converting some funds into yen adds an extra layer of protection.

Do You Really Understand the Costs of Converting TWD to JPY?

Many people go to banks or airports to exchange currency without asking about the exchange rate. Little do they realize that choosing the wrong channel can result in a loss of NT$1,500-2,000 on a NT$50,000 exchange.

The exchange rate for TWD to JPY may seem simple, but it actually involves three hidden variables:

Difference Between Cash Selling Rate and Spot Rate
For example, Taiwan Bank’s rate on December 10, 2025, is about NT$0.2060 per JPY (meaning NT$1 exchanges for 4.85 JPY), but the online spot rate is about 4.87. The difference seems small, but exchanging NT$50,000 results in a 200 JPY difference, equivalent to NT$40. This gap is magnified with larger amounts.

Hidden Fees Trap
Some banks offer free in-person currency exchange, but others charge NT$100-200 per transaction. Cross-bank ATM withdrawals cost NT$5 per transaction, which seems cheap, but multiple withdrawals accumulate fees. After online currency conversion, withdrawing cash at the counter incurs a spread fee (minimum NT$100).

Withdrawal Channels and Time Costs
Airport branches open 24 hours are limited (only 2 at Taoyuan Airport for Taiwan Bank), and cash can run out during peak hours. Changing the withdrawal location or time on short notice may mean losing reservation benefits.

Actual Comparison of Taiwan’s 4 Major Yen Exchange Channels

Option 1: In-Person Bank Exchange — Traditional but Most Expensive

Bring NT$ cash to a bank or airport counter to exchange for yen cash. The process is straightforward, safe, but uses the “cash selling rate,” which is the most costly.

Sample rates (2025/12/10):

• Taiwan Bank: NT$0.2060/JPY, no fee
• CTBC Bank: NT$0.2065/JPY, no fee
• E.SUN Bank: NT$0.2067/JPY, NT$100 per transaction
• Cathay United Bank: NT$0.2063/JPY, NT$200 per transaction

Cost for NT$50,000: Taiwan Bank loses about NT$1,500; Cathay United Bank about NT$1,700 (including fees).

Suitable for: Urgent airport needs, unfamiliar with online operations, small cash requirements.

Option 2: Online Currency Exchange + Counter Withdrawal — Balanced Approach

Use bank app or online banking to convert NT$ into JPY at the spot rate, depositing into a foreign currency account. When cash is needed, withdraw at the counter or ATM. This method offers about 1% better exchange rate than cash selling, but still incurs spread fees when withdrawing cash.

For example, E.SUN Bank’s app allows online exchange and cash withdrawal, with a fee equal to the difference between the spot rate and cash rate (minimum NT$100).

Cost for NT$50,000: Loss of NT$500-1,000.

Advantages: Can be done in installments, averaging costs when the exchange rate is low (below 4.80); 24/7 online operation, no banking hours restrictions.

Suitable for: Those experienced with forex accounts, timing their entry; also for investors interested in yen deposits (current annual interest rate 1.5-1.8%).

Option 3: Online Currency Conversion + Airport Pickup — Best Planning

No need to open a foreign currency account in advance. Fill in currency, amount, pickup branch, and date on the bank’s website. After confirmation, bring ID and transaction notification to pick up in person.

Taiwan Bank’s “Easy Purchase” online currency conversion service is especially convenient, with no fee (if paid via Taiwan Pay, only NT$10), about 0.5% better rate, and reservation options at 14 locations at Taoyuan Airport (including 2 open 24 hours).

Cost for NT$50,000: Loss of NT$300-800, the most cost-effective among the four channels.

Disadvantages: Requires advance reservation (at least 1-3 days), pickup time limited to banking hours, and reservations cannot be changed once made.

Suitable for: Travelers with time planning before departure who want to pick up cash directly at the airport.

Option 4: Foreign Currency ATM — 24/7 Convenience but Limited

Use chip-enabled debit/credit cards at foreign currency ATMs to withdraw yen cash, supporting 24-hour operation, with NT$ deducted directly from your TWD account. Cross-bank fee is NT$5.

For example, E.SUN Bank’s foreign currency ATM has a daily withdrawal limit of NT$150,000 equivalent, with no forex conversion fee. However, there are only about 200 such ATMs nationwide, and cash may run out during peak times (airports, department stores).

Cost for NT$50,000: Loss of NT$800-1,200.

Advantages: Instant withdrawal, maximum flexibility; no cross-bank fee if using the bank’s own card.

Disadvantages: Fixed denominations (only 1,000/5,000/10,000 JPY), limited locations, cannot withdraw large amounts.

Suitable for: Urgent cash needs, last-minute travelers; not recommended as the main channel.

Summary of Costs and Suitable Scenarios for the 4 Methods

Recommended Strategy: For NT$200,000-NT$1,000,000 budget, prioritize “Online currency conversion + airport reservation”; over NT$200,000 or for flexible entry, use “Online exchange + installment”; reserve ATM or in-person exchange for emergencies.

Is It Worth Exchanging Yen Now? Market Signal Analysis

By the end of 2025, the TWD/JPY rate has reached 4.85, appreciating 8.7% since the start of the year (from 4.46). This increase is significant for Taiwanese investors.

Data from the second half shows a 25% increase in forex demand compared to the first half, driven by:

• Resurgence of travel-related spending
• Hedging needs amid TWD depreciation

However, the future trend of the yen is not one-directional. The Bank of Japan’s Governor Ueda Kazuo recently made hawkish comments, raising rate hike expectations to 80%, with a scheduled increase of 0.25 basis points to 0.75% at the December 19 meeting (a 30-year high). JGB yields have hit a 17-year high of 1.93%. This suggests the yen may further appreciate in the short term.

On the other hand, USD/JPY has fallen from a high of 160 at the start of the year to 154.58, with a short-term rebound possibly touching 155, but medium to long-term forecasts point below 150—bearish for the TWD/JPY.

Conclusion: It’s advantageous to exchange now, but not all at once. Use installment strategies to avoid buying at the high.

After Exchanging Yen, Don’t Let Your Money Sit Idle

Holding yen is not just for travel expenses; it should generate returns. Here are four suitable small-scale options for beginners:

Yen Fixed Deposit (Conservative, annual interest 1.5-1.8%)
Open a foreign currency account at E.SUN or Taiwan Bank, transfer yen online, and start a fixed deposit. Minimum NT$10,000 investment, suitable for capital preservation.

Yen Insurance Policy (Medium-term holding, guaranteed interest 2-3%)
Cathay Life and Fubon Life offer yen savings insurance, providing both protection and interest, but require 3-10 year commitments.

Yen ETFs (Growth-oriented, e.g., 00675U, 00703)
Yuan Da’s 00675U tracks the yen index, can be bought as fractional shares via broker apps, suitable for dollar-cost averaging; annual management fee 0.4%, moderate risk.

Yen Forex Trading (Swing trading)
Trade USD/JPY or EUR/JPY directly to capture exchange rate fluctuations. Advantages include two-way trading, 24/7 operation, and small capital requirements; risks are higher, not suitable for beginners.

While the yen has hedging advantages, it still faces two-way volatility risks. The BOJ’s rate hikes are bullish, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait/Middle East) could reverse the trend.

Quick FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate applies to physical cash transactions, usually 1-2% worse than the spot rate, plus possible fees, making it more expensive. Spot rate is the official foreign exchange market price settled T+2, used for electronic transfers and foreign currency accounts, offering better rates but requiring settlement time.

Q: How much JPY can I get with NT$10,000?
Using Taiwan Bank’s cash selling rate of 4.85, NT$10,000 gets about 48,500 JPY. Using the spot rate of 4.87, about 48,700 JPY—difference of only 200 JPY (NT$40). Larger amounts magnify this gap.

Q: What do I need to bring for in-person exchange?
Local residents: ID + passport; foreigners: passport + residence permit; companies: business registration. If pre-booked online, bring transaction notification. Under 20: parental consent and ID; exchanges over NT$100,000 may require source declaration.

Q: What’s the daily withdrawal limit at foreign currency ATMs in 2025?
Post-regulation, most banks limit to NT$100,000-150,000 per day (to prevent fraud). E.SUN’s limit is NT$150,000 per day; other banks like CTBC are NT$120,000. Consider multiple withdrawals or using your own bank card to avoid cross-bank fees.

Final Advice: From Currency Exchange to Advanced Asset Allocation

The yen is no longer just for travel “pocket money,” but a currency with hedging and asset allocation value.

Beginners should start with “Taiwan Bank online exchange + airport pickup” or “Foreign currency ATM” for simplicity. After exchanging yen, don’t let the funds sit idle—immediately transfer into fixed deposits or ETFs, which can yield 1.5-2% annually, better than idle cash.

If interested in exchange rate fluctuations, consider yen deposits (better interest) or ETF dollar-cost averaging. Only after fully understanding market mechanisms should you attempt forex swing trading.

The core principle is simple: follow the two main strategies of “batch exchange + immediate allocation,” minimizing costs and adding protection during global market turbulence. This way, traveling becomes more cost-effective, and your investments smarter.