Japanese Yen Exchange Guide | Breakdown of costs across 4 major channels, how to exchange most cost-effectively?

The NT$ to JPY exchange rate has risen to 4.85, and the demand for yen continues to increase. Many people think currency exchange can only be done at banks, but just the difference in fees can cost you thousands of dollars more. This article summarizes the four most practical exchange channels in Taiwan, breaking down costs with real market prices to help you accurately grasp the most economical way to exchange currency.

Why is it worth exchanging for yen? Not just for travel needs

Besides traveling and shopping abroad, the role of the Japanese yen in the financial markets deserves more attention. Japan, as one of the world’s three major safe-haven currency issuing countries (the other two are USD and Swiss Franc), has long-term exchange rate stability. When market risks increase, capital often flows into yen for hedging—for example, during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in one week, while the stock market fell by 10%, effectively buffering portfolio volatility.

For Taiwanese investors, holding yen not only hedges Taiwan stock market risks but also allows participation in arbitrage mechanisms. The Bank of Japan maintains ultra-low interest rates (only 0.5%), and many traders borrow low-interest yen to convert into higher-yield USD investments, with the current USD/JPY interest rate differential reaching 4.0%. When risk environments change and these arbitrage positions are closed, demand for yen surges, causing exchange rate fluctuations.

Additionally, under Japan’s long-term deflation environment, the yen retains purchasing power, making it suitable for hedging against global inflation expectations.

Complete comparison of 4 yen exchange channels in Taiwan

Option 1: Bank counter cash exchange (highest cost)

Carry NT$ cash directly to a bank branch or airport counter to receive yen cash on the spot. This is the most traditional but most costly method, as banks use the “cash selling rate,” which is about 1-2% worse than the spot rate, plus possible handling fees, resulting in the greatest overall loss.

For example, Taiwan Bank’s cash selling rate on December 10, 2025, was 0.2060 TWD/JPY (about 4.85 yen per NT$). Some banks charge fixed handling fees. For NT$50,000, estimated loss is NT$1,500-2,000.

Suitable for: Urgent small cash needs at the airport, unfamiliar with online operations, requiring large denomination yen bills (1,000/5,000/10,000).

Option 2: Online banking currency conversion + foreign currency account withdrawal (preferred for investors)

Use bank app or website to convert NT$ to yen and deposit into a foreign currency account, using the “spot selling rate” (about 1% better than cash selling rate). If physical cash is needed, you can withdraw, but this incurs exchange spread handling fees (starting around NT$100).

This method suits investors wanting to buy in stages, observe exchange rate fluctuations. For example, when NT$ to yen is below 4.80, buying in parts can effectively lower average costs. Withdrawal fees range from NT$5-100, significantly lower than counter exchange.

For NT$50,000, estimated loss is NT$500-1,000, which can be further invested in yen fixed deposits (annual interest 1.5-1.8%) or yen ETFs to increase returns.

Suitable for: Those with forex experience, long-term yen holdings, planning to allocate yen fixed deposits or investment products.

Option 3: Online reservation for currency exchange + airport pickup (best for travelers)

No need to open a foreign currency account. Fill in currency, amount, pickup branch, and date directly on the bank’s official website. Taiwan Bank’s “Easy Purchase” online currency exchange is fee-free (NT$10 for TaiwanPay payment), with an exchange rate advantage of up to 0.5%. After booking, bring ID and transaction notification to the designated branch for pickup.

Taoyuan Airport has 14 Taiwan Bank outlets, including 2 offering 24-hour service, ideal for pre-departure planning. Estimated cost is the lowest, with a loss of only NT$300-800 for NT$50,000.

Suitable for: Well-planned trips, clear departure dates, wanting to pick up cash directly at the airport to avoid extra trips.

Option 4: Foreign currency ATM instant withdrawal (emergency option)

Use a chip-enabled bank card to withdraw yen cash from foreign currency ATMs, open 24/7. Deducts directly from NT$ account, with cross-bank fee of NT$5, no exchange handling fee. Fubon Bank’s foreign currency ATMs have a daily withdrawal limit of NT$150,000.

However, there are only about 200 foreign currency ATMs nationwide, and cash supply is limited. During peak times (airports, holidays), they may run out. Plan ahead and avoid last-minute withdrawals. Estimated loss for NT$50,000 is NT$800-1,200.

Suitable for: Urgent needs, no time for counter transactions, amounts under NT$150,000, in areas far from banks.

Is now a good time to exchange for yen?

In the second half of 2025, Taiwan’s currency exchange demand is expected to grow by 25%, mainly driven by travel recovery and hedging needs. The NT$ to yen rate was 4.46 at the start of the year, appreciating by 8.7% so far, making the exchange gains quite significant for Taiwanese investors.

Bank of Japan Governor Ueda Kazuo recently made hawkish comments, pushing up rate hike expectations to 80%, with a projected 0.25 basis point increase in December to 0.75% (a 30-year high). Japanese government bond yields have hit a 17-year high of 1.93%. Meanwhile, USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, with short-term fluctuations possibly reaching 155, but medium to long-term forecasts suggest it will stay below 150.

Advice: Use staggered entry. Avoid exchanging all at once; spreading out over time reduces volatility risk. For investment purposes, yen hedging is strong, but short-term arbitrage closing may cause 2-5% fluctuations.

As for EUR to TWD, the current euro exchange rate is more volatile than yen and not the first choice for hedging. However, combined with cross-currency arbitrage strategies, it can serve as a diversified allocation.

Post-exchange yen value-adding strategies

After exchanging yen, letting the money sit idle earns no interest. You can choose from the following based on your risk appetite:

1. Yen fixed deposit: The most stable option, with annual interest of 1.5-1.8%, starting from 10,000 yen.
2. Yen insurance products: Medium-term holding, guaranteed interest rates of 2-3%.
3. Yen ETFs (e.g., Yuanta 00675U, 00703): Track yen indices, suitable for dollar-cost averaging.
4. Forex swing trading: Use forex platforms to trade USD/JPY, EUR/JPY, capturing exchange rate movements.

Forex trading offers advantages like two-way trading, 24-hour operation, and small starting amounts, but requires risk management skills. Yen ETFs provide passive diversification with an annual management fee of 0.4%.

Quick FAQs

What’s the difference between cash rate and spot rate?
Cash rate applies to physical cash transactions, settled immediately, with about 1-2% difference; spot rate is used for electronic transfers (T+2 settlement), closer to market price.

How much yen for NT$10,000?
Based on Taiwan Bank’s rate of 4.85 on December 10, 2025, NT$10,000 ≈ 48,500 yen; using spot rate 4.87, about 48,700 yen, difference around 200 yen.

What to bring for counter exchange?
Taiwanese: ID + passport; foreigners: passport + residence permit. For amounts over NT$100,000, a source of funds declaration form is required. For online booking, bring transaction notification.

Foreign currency ATM withdrawal limit?
Varies by bank. CTBC, Taishin: NT$120,000-150,000/day; E.SUN: NT$50,000 per transaction, NT$150,000 per day. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees.

Summary: Master the exchange rhythm, let yen become an asset

Yen has surpassed the “travel pocket money” role, now also serving as a hedge and investment asset. By mastering the core principles of “staggered exchange + not leaving funds idle after exchange,” you can minimize costs and maximize returns.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or forex swing trading based on needs. This not only makes traveling more cost-effective but also adds a layer of asset protection amid global market volatility.