Is it the right time to invest in Japanese Yen? The ultimate guide to currency exchange in 2025 and cost breakdown

The Critical Moment When TWD to JPY Reaches 4.85

In December 2025, the Japanese yen against the TWD hit a historical low of 4.85. Compared to 4.46 at the beginning of the year, it has appreciated by 8.7%. What does this signal mean for asset allocators? Simply put, the yen is no longer just a travel currency but one of the world’s top three safe-haven assets. Meanwhile, the fluctuation of the TWD to HKD exchange rate also reminds us that the importance of Asian currency allocation is increasing.

Why Enter the Yen Market Now? Three Core Reasons

1. Safe-haven attribute has activated

Japan’s stable economy and low debt levels make the yen long-term a top safe-haven currency alongside the USD and Swiss Franc. During the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in one week, successfully hedging stock market declines. For Taiwanese investors, exchanging to yen is not just for fun but a risk management strategy.

2. Central bank rate hike expectations are imminent

Bank of Japan Governor Ueda Kazuo recently signaled a hawkish stance, with rate hike expectations reaching 80%. The December 19 meeting is expected to raise rates by 0.25 bps to 0.75% (a 30-year high), with Japanese government bond yields hitting a 17-year high of 1.93%. USD/JPY has fallen from 160 at the start of the year to 154.58, with medium- to long-term forecasts below 150. Short-term volatility is limited.

3. Hedging tool under TWD depreciation pressure

In the second half of the year, Taiwan’s foreign exchange demand increased by 25%, mainly for safe-haven allocation rather than travel. Compared to the stability of TWD against HKD, the liquidity and investment returns of yen are more attractive.

Four Exchange Path Cost Tests (Based on 50,000 TWD)

In reality, with the same 50,000 TWD, choosing the wrong exchange method could cost an extra 1,500 yuan—equivalent to a month’s worth of bubble tea. We analyze each method:

Method 1: Bank Counter Cash Exchange — The most traditional but most expensive

Bring cash TWD to a bank or airport counter and exchange at the “cash selling rate” for yen notes. Taiwan Bank’s rate as of December 10, 2025, is about 0.2060 TWD/JPY (i.e., 1 TWD = 4.85 JPY), but some banks add a handling fee of 100-200 TWD.

Cost Breakdown: 50,000 TWD ≈ 242,500 JPY, losing 1,500-2,000 TWD.

Suitable for: Urgent airport needs, people unfamiliar with online operations.

Method 2: Online Exchange + In-Person Cash Pickup — Preferred for Advanced Users

Use bank app/online banking to convert at “spot selling rate”(about 0.2063) into a foreign currency account, then pick up cash at the counter or foreign currency ATM. The rate advantage is about 1%, but withdrawal incurs a currency conversion fee (starting at 100 TWD).

Advantages: Can stagger entries to average costs, observe low exchange rate points (e.g., TWD/JPY below 4.80) to buy.

Cost Breakdown: 50,000 TWD ≈ 243,500 JPY, losing 500-1,000 TWD.

Advanced Usage: After exchange, don’t just hold; transfer into E.SUN’s JPY fixed deposit (annual interest rate 1.6%) or buy JPY ETFs(00675U) for dollar-cost averaging.

Method 3: Online Currency Exchange + Airport Pickup — The Workday Commuter’s Tool

No need for a foreign currency account. Book via bank website, select currency, amount, airport branch, pickup date. After completion, bring ID and transaction notification to pick up in person. Taiwan Bank’s “Easy Purchase” has no handling fee (pay via TaiwanPay for only 10 TWD), with a 0.5% rate advantage.

Main Benefit: Taoyuan Airport has 14 Taiwan Bank outlets (2 open 24 hours). Book before travel, pick up at the airport the next day—completely painless.

Cost Breakdown: 50,000 TWD ≈ 244,300 JPY, losing 300-800 TWD.

Suitable for: Planned travelers, those deciding a week before departure.

Method 4: Foreign Currency ATM — The Most Immediate but Location-Dependent

Use a chip-enabled financial card at foreign currency ATMs to withdraw yen directly. 24-hour operation, interbank fee only 5 TWD. E.SUN’s foreign currency ATM daily limit is 150,000 TWD, with no exchange fee.

Key Drawback: Only about 200 ATMs nationwide, with fixed denominations(1,000/5,000/10,000 JPY), potential cash shortages during peak hours.

Cost Breakdown: 50,000 TWD ≈ 242,500 JPY, losing 800-1,200 TWD.

Suitable for: Emergency needs, no time for counter visits, living near dense ATM locations.

Core Advice: Staggered Exchange + Don’t Just Hold

Based on current exchange rate fluctuations and central bank rate hike expectations, our best practical plan is:

Step 1: Use “online currency exchange + airport booking” to lock in a basic position (5-10K TWD), lowest cost.

Step 2: Keep 2-3K TWD flexible, add in batches via foreign currency ATMs or online exchange, aiming to buy when TWD/JPY drops below 4.80.

Step 3: After acquiring yen, transfer into fixed deposits(1.6%) or ETFs(00675U, with annual management fee 0.4%), to make yen work for you.

Step 4: If interested in swing trading, use forex platforms(like Mitrade) to trade USD/JPY or EUR/JPY, with zero commission and 24-hour trading, capturing 2-5% short-term volatility.

Four Ways to Grow Your Yen Holdings After Conversion

Don’t let your yen just sit idle:

1. Yen Fixed Deposit: The most stable, with annual interest of 1.5-1.8%. Open accounts online at E.SUN or Taiwan Bank, starting from 10,000 yen.

2. Yen Insurance Policy: Medium-term holding, Cathay/Fubon savings insurance, with guaranteed 2-3% interest.

3. Yen ETFs(00675U, 00703): Growth-oriented, Yuanta 00675U tracks yen index, can buy fractional shares via broker app for dollar-cost averaging.

4. Forex Trading USD/JPY: Swing profits, Mitrade platform offers zero commission and low spreads, suitable for intraday or swing strategies, with long/short 24-hour trading.

Quick FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate(Cash Rate) is used for physical cash transactions, usually 1-2% worse than spot rate; spot rate(Spot Rate) is used for electronic transfers, settled T+2, with better rates.

Q: How much JPY for 10,000 TWD?
Using Taiwan Bank’s cash selling rate of 4.85, about 48,500 JPY; with spot rate, about 48,700 JPY—roughly 40 TWD difference.

Q: What to bring for counter exchange?
ID + passport (foreigners need passport + residence permit). For online booking, also bring transaction notification. Under 20 needs parental consent; over 100K TWD may require source of funds declaration.

Q: What’s the daily withdrawal limit at foreign currency ATMs?
Post-October 2025, many banks lowered limits. CTBC equivalent to 120,000 TWD/day, Taishin 150,000 TWD/day, E.SUN 150,000 TWD/day (including credit card). It’s recommended to split withdrawals to avoid hitting the cap.

Final Reminder

While the yen remains a strong safe-haven, it still fluctuates bidirectionally. Rate hikes by the Bank of Japan are positive, but global arbitrage unwinding or geopolitical conflicts may suppress gains. Compared to the regional stability of TWD against HKD, yen offers more growth potential but with higher volatility.

The core strategy: Staggered entry, diversified allocation, don’t just hold. Whether for travel or investment, mastering the timing and method of exchange minimizes losses and maximizes gains. Choose the most suitable channels now and start your yen allocation journey.