How to exchange TWD to JPY in the most cost-effective way? 4 major investment channels cost comparison every investor must know

Is now a good time to exchange for Japanese Yen?

As of December 10, 2025, the TWD/JPY exchange rate reached 4.85, appreciating about 8.7% from 4.46 at the beginning of the year. While this rate is not considered low for Taiwanese investors, from a risk hedging perspective, it is an ideal time to gradually build positions.

The Bank of Japan Governor Ueda Kazuo has signaled a hawkish stance, with market expectations of a rate hike to 0.75% by December 19 (a 30-year high), and Japanese bond yields have climbed to a 17-year high of 1.93%. After the US entered a rate-cut cycle, the yen, as one of the three major safe-haven currencies (alongside the US dollar and Swiss franc), is attracting capital. In the second half of the year, Taiwan’s foreign exchange demand increased by 25% compared to the start of the year, driven mainly by tourism recovery and hedging needs.

Key Observation: Short-term exchange rates fluctuate between 154-156, with medium to long-term forecasts suggesting a drop below 150. However, closing arbitrage positions could cause 2-5% volatility. It is recommended to enter gradually rather than exchange all at once.

Why should investors pay attention to the Japanese Yen?

Tourism and daily consumption

Japan still relies heavily on cash, with only about 60% credit card penetration. Whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, cash is in high demand. Buyers purchasing via proxy or Japanese online auction enthusiasts also need to pay directly in yen. Those planning to study or work in Japan should plan their currency exchange in advance to avoid last-minute rate fluctuations.

Financial investment: dual roles of hedging and arbitrage

Hedging attribute: Japan’s economy is stable with low debt, and the yen has long been a safe-haven asset globally. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, successfully buffering a 10% decline in the stock market. For Taiwanese investors, holding yen can effectively hedge systemic risks in Taiwan stocks.

Arbitrage mechanism: Japan’s ultra-low interest rate environment (0.5%) makes the yen a “funding currency.” Investors often borrow low-interest yen to convert into higher-yield USD investments (the US-Japan interest differential reaches 4.0%), and close positions when market risks increase for profit. This type of arbitrage involves large scale and significantly influences exchange rate fluctuations.

Four channels for exchanging yen in Taiwan and their cost analysis

Method 1: Bank counter cash exchange (most traditional)

Carry NT$ cash to a bank branch or airport counter to exchange for yen banknotes. Simple to operate but the most costly—using the “cash selling rate” (1-2% worse than the spot rate), with some banks charging fixed handling fees.

For example, Taiwan Bank’s rate on December 10, 2025, is 0.2060 TWD/JPY, meaning NT$10,000 can buy about 48,500 yen.

Overview of bank counter rates and fees (estimated for NT$50,000 exchange):

Advantages: Safe, reliable, full denomination availability, staff assistance on-site.
Disadvantages: Worst exchange rate, limited operating hours (9:00-15:30 on weekdays), possible cumulative fees.
Suitable for: Travelers unfamiliar with online operations or needing small, urgent cash exchanges (e.g., at the airport).

Method 2: Online exchange + in-person or ATM withdrawal (balanced approach)

Use online banking or app to transfer TWD into a foreign currency account holding yen, at an “instant sell rate” about 1% better than cash rate. If cash is needed, withdraw at counter or foreign currency ATM, paying additional withdrawal fees (from NT$100).

Ideal for monitoring exchange rates, entering gradually when TWD/JPY is below 4.80, averaging costs. E.SUN Bank’s app offers this service, with a minimum opening deposit of 10,000 yen and an annual interest rate of 1.5-1.8%.

Advantages: 24/7 operation, allows averaging costs, better rates than counter exchange.
Disadvantages: Need to open a foreign currency account first; withdrawal fees apply (interbank NT$5-100).
Suitable for: Experienced forex investors holding foreign currency long-term, or for setting up yen deposits or USD accounts to diversify currency risk.

Method 3: Online currency settlement + airport pickup (planning-oriented)

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, pick up in person with ID and transaction notice. Taiwan Bank’s “Easy Purchase” and Mega Bank offer this, with appointment options at airport branches.

Taiwan Bank’s online settlement is fee-free (only NT$10 via Taiwan Pay), with about 0.5% rate advantage. Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, very convenient.

Advantages: Better rates, often no fees, can specify airport pickup, simple reservation process.
Disadvantages: Need to book 1-3 days in advance; pickup times limited to banking hours; branch changes not allowed.
Suitable for: Planned travelers who want to pick up cash directly at the airport.

Method 4: Foreign currency ATM withdrawal (instant)

Use chips financial card at foreign currency ATMs to withdraw yen cash, operational 24/7, with only NT$5 fee for interbank withdrawals. Supports major currencies (JPY, USD, EUR, etc.), about 200 machines nationwide.

Fubon Bank’s foreign currency ATMs allow withdrawal from NT$ accounts, with a daily limit of NT$150,000 and no exchange fee. Note that Japan’s ATM withdrawal services will be adjusted by the end of 2025, requiring international cards (Mastercard/Cirrus).

ATM withdrawal limits (from October 2025):

Advantages: Instant access, high flexibility, low cross-bank fees.
Disadvantages: Limited locations, fixed denominations (1,000/5,000/10,000 yen), cash may run out during peak times.
Suitable for: Urgent, on-the-spot withdrawals; plan ahead during busy periods like airports.

Cost comparison of four methods (for NT$50,000 exchange estimate):

Recommended combo: For a budget of NT$50,000-200,000, combine “online settlement + ATM withdrawal” to reduce costs and maintain flexibility.

Value-added strategies after acquiring yen

Instead of letting yen sit idle without interest, consider stable income or growth investments.

1. Yen fixed deposit (conservative)

Open foreign currency accounts at E.SUN Bank or Taiwan Bank to deposit online, starting from 10,000 yen, with annual interest of 1.5-1.8%. Suitable for locking in funds for 3-6 months.

2. Yen insurance policies (medium-term holding)

Cathay and Fubon Life offer yen savings insurance with guaranteed interest rates of 2-3%, providing both protection and growth.

3. Yen-tracking ETFs (growth)

Yuanta 00675U, Cathay 00703, and others track yen indices, available as fractional shares via broker apps, suitable for periodic investment. Management fee around 0.4% annually.

4. Forex swing trading (advanced)

Trade USD/JPY or EUR/JPY directly on forex platforms to capture real-time rate movements. Benefits include two-way trading, 24-hour market, and small capital requirements. Platforms often offer zero commissions, tight spreads, and risk management tools like stop-loss and take-profit.

Risk warning: BOJ rate hikes are positive, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait/Middle East) could depress the yen. For investment, prioritize yen ETFs for diversification; for intraday trading, risk management is essential.

Quick FAQs

Q. What’s the difference between cash rate and spot rate?

Cash rate (Cash Rate) applies to physical cash transactions, provided by banks or currency exchange shops for banknotes/coins. It’s convenient for immediate delivery but 1-2% worse than the spot rate.

Spot rate (Spot Rate) is used for electronic transfers, settled within two business days (T+2). Mainly for interbank, import/export, or personal foreign currency accounts, and closer to international market prices with better rates.

Q. How much yen can I get with NT$10,000?

Calculation: Yen amount = NT$10,000 × current rate (TWD/JPY)

Using Taiwan Bank’s December 10, 2025 rate of 4.85 (cash selling rate), NT$10,000 ≈ 48,500 yen. Using spot rate 4.87, NT$10,000 ≈ 48,700 yen, a difference of about 200 yen (roughly NT$40).

Q. What documents are needed for counter exchange?

Taiwanese: ID card + passport; foreigners: passport + residence permit. For corporate exchange, business registration proof required. Online booking also requires transaction notice. Under 20 years old need parental consent; large exchanges (over NT$100,000) may require source of funds declaration.

Q. What is the daily withdrawal limit at foreign currency ATMs?

From October 2025, limits are reduced to NT$100,000-150,000 per day at several banks. It’s recommended to split withdrawals or use your own bank card to avoid cross-bank fees. During peak times (like airports), cash may run out quickly, so plan ahead.