Japanese Yen Exchange Rate Hits New High: Complete Analysis of 2025 TWD and HKD Exchange Strategies

December 2025, the Japanese Yen appreciates at an accelerated pace, with the TWD/JPY exchange rate reaching 4.85. This not only affects travel costs to Japan but also influences risk-hedging asset allocations. Meanwhile, the Taiwanese dollar continues to face depreciation pressure, prompting many investors to consider whether to exchange for JPY or HKD now. This article details four major channels for currency exchange, helping you find the most cost-effective solution.

Three Reasons Behind the Yen Appreciation

Why should you pay attention to JPY exchange rates? The answer is far more than just travel.

First, the Bank of Japan is about to raise interest rates. BOJ Governor Ueda Kazuo recently made hawkish statements, with market expectations of a 0.25 basis point hike to 0.75% at the December 19 meeting (a 30-year high). Japanese government bond yields have risen to a 17-year high of 1.93%. This breaks Japan’s “zero interest rate” era and directly boosts the yen’s safe-haven appeal.

Second, the TWD faces depreciation pressure. Compared to 4.46 at the start of the year, the TWD has depreciated about 8.7% against the yen this year. For Taiwanese investors, this means delaying currency exchange will gradually increase costs. In the second half of the year, Taiwan’s demand for currency exchange surged by 25%, mainly driven by travel recovery and risk hedging.

Third, the yen is one of the three major global safe-haven currencies. During times of geopolitical risk escalation, USD, Swiss Franc, and JPY are all considered safe havens. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, effectively hedging stock market declines. Compared to the HKD’s limited appreciation potential (pegged to USD with no independent appreciation space), the yen’s safe-haven attribute is more prominent.

Four Practical Methods for Yen Exchange Compared

Many think exchanging yen is just going to the bank, but exchange rate differences can cost you the price of a few bubble teas. Below are the latest four methods in 2025, with actual rates to illustrate.

Option 1: Cash exchange at the counter (highest cost)

Carry TWD cash to a bank or airport counter and complete the transaction using the “cash selling rate.” This is the most traditional and straightforward method, but cash rates are usually 1-2% worse than spot rates, making it more expensive overall.

For example, Taiwan Bank’s rate on December 10, 2025, is about 0.2060 TWD/JPY (1 TWD = 4.85 JPY). E.Sun Bank and Taipei Fubon charge an additional NT$100-200 per transaction, further increasing costs.

Suitable for: Urgent airport needs, elderly unfamiliar with online operations, travelers exchanging small amounts.

Estimated cost (for NT$50,000): Loss of NT$1,500-2,000.

Option 2: Online transfer + cash withdrawal (moderate cost)

Use bank app to convert TWD into JPY and deposit into a foreign currency account, using the “spot selling rate” (about 1% better than cash rate). Then withdraw cash at a counter or foreign currency ATM, incurring a currency conversion fee (from NT$100+).

E.Sun Bank offers this service, allowing 24-hour online operation. Withdrawal fees are the difference between spot and cash rates, with a minimum NT$100. Suitable for those experienced with forex accounts, wanting to stagger entries for average costs.

Suitable for: Experienced forex investors, those monitoring exchange rates for low points, considering JPY fixed deposits for interest.

Estimated cost (for NT$50,000): Loss of NT$500-1,000.

Option 3: Online reservation for currency exchange (most cost-effective)

No need to open a foreign currency account in advance. Fill out currency, amount, branch, and date on the bank’s website. After submitting online, bring ID and transaction notice to the branch for pickup. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay NT$10 via TaiwanPay), with about 0.5% better rates.

This is the best pre-departure reservation method. Especially since airport branches are plentiful and some operate 24 hours, offering convenience.

Suitable for: Well-planned travelers, those scheduling in advance, wanting to pick up cash directly at the airport.

Estimated cost (for NT$50,000): Loss of NT$300-800.

Note: Book at least 1-3 days in advance. Pickup times are limited by bank hours. Branches cannot be changed on short notice.

Option 4: 24-hour foreign currency ATM withdrawal (most flexible)

Use a chip-enabled bank card at foreign currency ATMs to withdraw JPY cash, available 24/7 and across banks. Withdrawal from TWD account costs only NT$5 cross-bank fee, with no additional exchange fee. E.Sun Bank’s foreign currency ATMs have a daily limit of NT$150,000 (~JPY equivalent), with about 200 machines nationwide.

Suitable for: No time to visit the bank, urgent cash needs, uncertain travel plans.

Estimated cost (for NT$50,000): Loss of NT$800-1,200.

Note: Denominations are fixed (1,000/5,000/10,000 JPY). During peak times, cash may run out quickly. Avoid last-minute withdrawals.

Summary Table of Four Methods

Is Now a Good Time to Exchange for Yen? Staggered Strategy Recommended

Conclusion: Yes, but with staggered operations.

Currently, TWD/JPY fluctuates between 4.82 and 4.90. Market analysis suggests a short-term revisit to around 155 USD/JPY (about NT$4.85), but medium to long-term forecasts indicate USD/JPY may approach below 150, implying potential yen appreciation.

Investment strategy:

• First batch (now): Exchange 30-40% to lock in current rates.
• Second batch (mid-December): If BOJ rate hike is confirmed, JPY may fluctuate temporarily; wait for stabilization before entering another 20-30%.
• Third batch (January onward): Based on global rate cut cycles, use remaining 20-30% to stagger entries.

Risk note: Arbitrage closing may cause 2-5% volatility, but this has limited impact on long-term holders.

Post-Exchange Yen Appreciation Options

Once you have JPY, let your money work for you:

JPY Fixed Deposit: Most stable, deposit online into E.Sun or Taiwan Bank foreign currency accounts, starting from 10,000 JPY, with annual interest rates of 1.5-1.8%.

JPY Insurance Policies: Medium-term allocation, Cathay or Fubon savings insurance, with guaranteed interest of 2-3%.

JPY ETFs: Growth-oriented options like Yuanta 00675U tracking JPY index, purchasable via broker apps for fractional shares, suitable for dollar-cost averaging.

Forex Swing Trading: Advanced approach, trade USD/JPY or EUR/JPY directly on forex platforms, 24/7 two-way trading, but requires risk awareness.

Quick FAQs

Q: How much is the difference between cash rate and spot rate?

Cash rate (for physical bills/coins) is usually 1-2% worse than spot rate (T+2 electronic settlement). For NT$50,000, the difference can be NT$800-1,600.

Q: How many JPY can NT$10,000 buy?

Using Taiwan Bank’s cash sell rate of 4.85, NT$10,000 ≈ 48,500 JPY. Using spot rate 4.87, about 48,700 JPY, a difference of roughly 200 JPY.

Q: Is converting TWD to HKD more cost-effective?

HKD is pegged to USD, with relatively stable rates and limited appreciation potential. If TWD depreciates, HKD may also depreciate. Yen, with its safe-haven status and BOJ rate hikes, offers more upside now.

Q: Are there limits on foreign currency ATM withdrawals?

Different banks have different limits. CTBC and Taishin Bank’s cards have daily limits of NT$120,000-150,000; E.Sun’s cards have NT$50,000 per transaction and NT$150,000 per day. Other banks’ limits depend on issuing bank. It’s advisable to diversify withdrawals to avoid hitting limits.

Final Recommendations

The yen has evolved from a “travel petty cash” to a “risk-hedging asset.” Whether preparing for travel next year or capitalizing on TWD depreciation by hedging in yen, following the principles of “staggered exchange + post-exchange appreciation” can minimize costs and maximize gains.

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