The smartest way to exchange Japanese Yen is to compare the costs of the four major options.

In December, the Japanese yen exchange rate warmed up, with the TWD/JPY rate surpassing 4.85. Many people are starting to plan for currency exchange. But do you know? Choosing the wrong exchange channel can cost you over 2,000 TWD in spread alone. Today, we will break down the latest four methods of exchanging JPY to help you quickly find the most cost-effective option.

Is it really time to exchange JPY now?

From 4.46 at the beginning of this year to now 4.85, the yen has appreciated by 8.7%. For Taiwanese investors, this exchange gain is quite significant, especially during times when the TWD faces depreciation pressure.

From the market perspective, demand for JPY has surged 25% in the second half of the year, driven by three factors: a rebound in tourism, corporate import/export needs, and investors’ hedging strategies. As one of the world’s three major safe-haven currencies, the yen has a unique hedging value—when geopolitical risks increase or market volatility intensifies, funds flow into the yen seeking refuge. This was especially evident during the Russia-Ukraine conflict in 2022.

Would it be wiser to enter in batches? The answer is yes. The yen is still fluctuating within a relatively large range. The Bank of Japan Governor Ueda Kazuo recently signaled a hawkish stance, with an 80% expectation of interest rate hikes, and the upcoming December 19 meeting is expected to raise the benchmark rate to 0.75% (a 30-year high). USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, with a short-term rebound possibly to 155, but the medium to long-term trend is expected to correct below 150.

For investors, it is recommended to adopt a batch entry strategy, investing 30-40% of the total budget each time. This can effectively average costs and reduce the risk of exchange rate fluctuations from a lump-sum conversion.

Practical comparison of four JPY exchange methods

Many people think that exchanging JPY just involves going to a bank, but the type of exchange rate matters. We have summarized four most practical channels, showing you the cost differences with real rates.

Option 1: Bank counter cash exchange—most secure but most expensive

Bring cash TWD directly to a bank branch or airport counter to exchange for JPY cash on the spot. The process is straightforward, but the cost is the highest—because banks use the “cash selling rate,” which is usually 1-2% worse than the market spot rate.

For example, Taiwan Bank’s rate on December 10 was about 0.2060 TWD/JPY (equivalent to 1 TWD = 4.85 JPY). Some banks also charge a fixed fee of 100-200 TWD. In other words, you might lose 1,500-2,000 TWD on a 50,000 TWD exchange to get cash JPY.

This method is suitable for three types of people: elderly who are not familiar with online operations, travelers needing emergency cash, or those who decide to exchange at the airport on the spot.

Major banks’ cash selling rates (December 10): Taiwan Bank 0.2060, Mega Bank 0.2062, CTBC Bank 0.2065, First Bank 0.2062, E.SUN Bank 0.2067, Bank SinoPac 0.2058, Hua Nan Bank 0.2061.

Option 2: Online account transfer—has thresholds but better rates

Using bank app or online banking, convert TWD to JPY at the “spot selling rate” (about 1% discount) and deposit into a foreign currency account. To withdraw cash, you need to go to a counter or foreign currency ATM, incurring an additional fee of about 50-100 TWD.

This option is suitable for those experienced in forex investment and who frequently use foreign currency accounts. You can buy continuously when the TWD/JPY rate is low (below 4.80), averaging a better cost. After conversion, you can also deposit JPY into a fixed deposit account (annual interest rate 1.5-1.8%) or purchase JPY insurance policies (guaranteed interest rate 2-3%), allowing idle funds to grow.

Converting 50,000 TWD via this method results in an overall loss of about 500-1,000 TWD, half the cost of counter exchange.

Option 3: Online currency settlement + airport pickup—most cost-effective planning option

No need to open a foreign currency account. Simply fill out an online form on the bank’s official website to make an appointment, specify pickup location and date, and after remittance, pick up with ID and transaction notification at the counter. Taiwan Bank’s “Easy Purchase” system offers this service, with about 0.5% rate discount, and only 10 TWD fee if paid via Taiwan Pay.

What’s the key advantage? Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, allowing you to pick up cash JPY at the last minute before departure, completely eliminating worries about carrying cash on the road.

Suitable for travelers with a planned schedule, knowing their departure date 1-3 days in advance. The cost for 50,000 TWD is about 300-800 TWD, making it the most economical among the four options.

Option 4: 24-hour foreign currency ATM—flexible but with limitations

Use a chip-enabled debit card to withdraw JPY at foreign currency ATMs, which operate 24/7. Cross-bank transfers cost only 5 TWD. E.SUN Bank’s foreign currency ATM has a daily withdrawal limit of 150,000 TWD equivalent, with no exchange fee.

It sounds very convenient, but there is a practical issue: there are only about 200 foreign currency ATMs across Taiwan, and during peak times (especially at airports), cash may run out. Also, the denominations available are only 1,000, 5,000, and 10,000 JPY bills; 2,000 JPY bills cannot be obtained directly from ATMs.

If you need JPY urgently and don’t have time to visit a bank, this is a good backup. Estimated cost for 50,000 TWD is about 800-1,200 TWD.

Quick decision table

After exchanging for JPY? Don’t let your money sit idle

Once you have cash JPY, instead of letting it earn zero interest, consider these four allocation options:

JPY Fixed Deposit: The most secure choice. E.SUN or Taiwan Bank offer foreign currency accounts, with a minimum deposit of 10,000 JPY and annual interest rates of 1.5-1.8%.

JPY Savings Insurance: Cathay or Fubon Life offer JPY insurance policies with guaranteed interest rates of 2-3%, suitable for medium-term holding (3-5 years).

JPY ETFs (e.g., 00675U, 00703): Investors seeking growth can buy Yuanta 00675U, which tracks the JPY index, and purchase fractional shares via broker apps.

Forex Swing Trading: Sensitive to exchange rate fluctuations, traders can consider trading USD/JPY or EUR/JPY on platforms like Mitrade, with zero commissions, low spreads, and 24-hour long/short trading.

Although JPY is a strong hedge, global arbitrage unwinding or geopolitical conflicts may depress the exchange rate. For investment purposes, JPY ETFs have an annual management fee of 0.4%, offering better risk diversification.

Quick FAQs

Q. What’s the difference between cash rate and spot rate?
Cash rate applies to physical cash transactions, delivered on the spot but with a 1-2% spread. Spot rate is used for interbank settlement and electronic transfers, offering better rates but settling T+2.

Q. How much JPY can I get with 10,000 TWD?
Based on Taiwan Bank’s cash selling rate of 4.85 on December 10, about 48,500 JPY. Using the spot rate of 4.87, about 48,700 JPY, a difference of only 200 JPY.

Q. What ID do I need for counter exchange?
Taiwanese should bring ID card + passport; minors under 20 need a parent present; large amounts (over 100,000 TWD) may require source declaration. For online reservations, also bring transaction notification.

Q. What is the daily withdrawal limit at foreign currency ATMs?
Post-2025 regulations, most banks set limits of 100,000-150,000 TWD equivalent per day. CTBC allows 120,000 TWD/day, Taishin 150,000 TWD/day. It’s recommended to withdraw in multiple transactions or use your own bank card to avoid cross-bank fees.

Summary: The core logic of exchanging JPY

The Japanese yen has evolved from being just “travel pocket money” to an asset with both hedging and investment functions. Whether planning to travel next year or to hedge against TWD depreciation by entering JPY, as long as you follow the principles of “batch exchange + reallocation after exchange,” you can minimize costs and maximize returns.

For beginners, starting with “Taiwan Bank’s online currency settlement + airport pickup” or “foreign currency ATM” is recommended. After familiarizing yourself with the process, you can advance to fixed deposits or ETF investments. This way, you can save money when traveling abroad and add an extra layer of asset protection during global market turbulence.