Yen Investment is Timely: Cost List and Optimal Path for Converting TWD to Yen

December 2025, the NT$ to JPY exchange rate stands at 4.85, the highest level this year. Compared to 4.46 at the beginning of the year, the yen has appreciated by 8.7%. For Taiwanese investors, this surge is enough to attract attention. Converting to yen is no longer just an option for travel abroad; it also becomes a practical consideration for hedging Taiwan stock market volatility and allocating risk assets.

But the key question is: Is it cost-effective to exchange for yen now? How much is the difference in cost?

Hidden Costs of the Four Major Currency Exchange Channels

Many people think exchanging yen is just walking into a bank or airport. In reality, just choosing different channels can result in a cost difference of over NT$1,500 for NT$50,000 exchanged. Let’s break it down one by one.

Counter cash exchange: The most traditional but most expensive

Using cash directly at bank branches or airport counters to exchange for yen is the most common method and also the most costly.

Banks’ “cash selling rate” is usually 1-2% worse than the market spot rate. For example, Taiwan Bank’s cash selling rate on December 10, 2025, was 0.2060 TWD/JPY (about 4.85 JPY/TWD). Some banks also charge an additional NT$100-200 handling fee.

Exchanging NT$50,000 at this rate results in an estimated loss of NT$1,500-2,000. The advantage is safety and immediacy; the disadvantages are the exchange rate spread and limited operating hours. This method is most suitable for small, urgent needs or those unfamiliar with online services.

Overview of cash selling rates and handling fees at various banks (2025/12/10):

• Taiwan Bank 0.2060 TWD/JPY | No fee
• Mega International Bank 0.2062 TWD/JPY | No fee
• CTBC Bank 0.2065 TWD/JPY | No fee
• First Commercial Bank 0.2062 TWD/JPY | No fee
• E.SUN Bank 0.2067 TWD/JPY | NT$100 per transaction
• SinoPac Bank 0.2058 TWD/JPY | NT$100 per transaction
• Hua Nan Bank 0.2061 TWD/JPY | No fee
• Cathay United Bank 0.2063 TWD/JPY | NT$200 per transaction
• Taipei Fubon Bank 0.2069 TWD/JPY | NT$100 per transaction

Online banking currency exchange and counter pickup: A compromise

Many choose to use bank apps or official websites for “online currency exchange,” then go to a branch or airport counter to pick up cash. This method uses the “spot selling rate,” which is about 1% better than cash selling, and avoids queues at counters.

Taiwan Bank’s “Easy Purchase” service is typical: using Taiwan Pay with a NT$10 handling fee, offering about 0.5% better rates. If cash pickup is needed, additional withdrawal fees (NT$5-100 cross-bank) apply.

Estimated cost for NT$50,000 ranges from NT$300-800, ideal for pre-planning before travel or for those wanting to pick up yen directly at the airport.

Benefits include selecting pickup locations (Taoyuan Airport has 14 Taiwan Bank outlets and 2 24-hour branches); drawbacks are the need to book 1-3 days in advance and limited pickup hours.

Foreign currency account exchange: The top choice for investors

After opening a foreign currency account at a bank, you can convert NT$ directly to yen via online banking, enjoying the best “spot selling” rate. If no cash is needed, this is the lowest-cost option; for cash withdrawal, additional fees apply.

E.SUN Bank and others offer this service, with a minimum deposit of 10,000 yen, and you can also enjoy yen fixed deposits (current annual interest rate around 1.5-1.8%). This method is especially suitable for those with forex investment experience planning to hold yen long-term.

Estimated cost for NT$50,000 is NT$500-1,000, suitable for investors wanting to enter gradually and average their costs.

Foreign currency ATM withdrawal: 24/7 emergency option

Using a chip-enabled debit card at foreign currency ATMs to withdraw yen supports 24-hour operation, with a cross-bank fee of only NT$5. Fubon Bank’s foreign currency ATMs allow yen withdrawals with a daily limit of NT$150,000 and no currency exchange fee.

Advantages include flexibility for emergencies; disadvantages are limited locations (about 200 nationwide), fixed denominations (1,000/5,000/10,000 yen), and potential cash shortages during peak times.

Estimated cost for NT$50,000 is NT$800-1,200, best for those without time for counter exchange or needing immediate cash.

Why is the yen worth paying attention to?

The yen is not just a travel currency; its status in the global financial market is rising.

One of the three major safe-haven currencies: Yen, along with USD and Swiss Franc, is one of the world’s top safe-haven currencies due to Japan’s stable economy and low government debt. During market turbulence, funds flow into the yen for safety—during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, effectively buffering global stock declines. For Taiwanese investors, this means yen can hedge against Taiwan stock market volatility.

Interest rate hike cycle approaching: The Bank of Japan’s Governor Ueda Kazuo recently adopted a hawkish tone, with market expectations of a rate hike to 0.75% at the December 19 meeting (a 30-year high), with Japanese government bond yields reaching a 17-year high of 1.93%. USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, reflecting a relatively strong yen.

Arbitrage trading risks and opportunities: Japan has maintained ultra-low interest rates for a long time, making the yen a “funding currency”—many investors borrow yen at low rates to invest in higher-yield USD (about 4.0% interest rate differential). When risks increase, these carry trades are unwound en masse, potentially pushing the yen lower in the short term. Therefore, staggered exchange and avoiding full position entry at once are key to risk mitigation.

Investment allocation after exchanging for yen

If you just hold yen without doing anything, you won’t earn returns. Consider the following four options:

1. Yen fixed deposit: Conservative, offered by E.SUN/Taiwan Bank foreign currency accounts, with a minimum of 10,000 yen and an annual interest rate of 1.5-1.8%. Suitable for conservative investors.

2. Yen insurance policy: Medium-term holding, such as Cathay or Fubon savings insurance, with guaranteed interest rates of 2-3%, providing insurance coverage.

3. Yen ETFs: Growth-oriented, such as Yuanta 00675U tracking the yen index, which can be bought as fractional shares via brokerage apps for dollar-cost averaging, with relatively diversified risk.

4. Swing trading: Advanced option, directly trading USD/JPY or EUR/JPY, suitable for those with good judgment of exchange rate movements.

While the yen has strong hedging qualities, it also carries two-way volatility risk. Global geopolitical conflicts or arbitrage unwinding can short-term depress the yen. Investors should choose suitable allocations based on their risk tolerance.

Frequently Asked Questions

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

Cash rate is the buy/sell rate banks offer for physical cash (banknotes and coins). It’s convenient for immediate exchange but usually 1-2% worse than the spot rate. The spot rate is the foreign exchange market rate for settlement within two business days (T+2), mainly used for electronic transfers and corporate settlements, and is more favorable, closer to international market prices.

Q: How much yen can NT$10,000 buy?

Based on Taiwan Bank’s rate on December 10, 2025, with a cash selling rate of 4.85 (NT$1=4.85 yen), NT$10,000 can buy about 48,500 yen; using the spot selling rate of 4.87, about 48,700 yen—difference of roughly 200 yen (about NT$40).

Q: What do I need to bring for counter currency exchange?

Taiwanese citizens need ID card + passport; foreigners need passport + residence permit. If pre-booked online (online currency exchange), also bring transaction notification. Minors under 20 need parental consent; large exchanges (over NT$100,000) may require source of funds declaration.

Q: What’s the daily limit for foreign currency ATM withdrawals?

As of 2025, limits vary by bank: China Trust and other banks’ debit cards have a daily limit equivalent to NT$120,000; Taishin Bank about NT$150,000; E.SUN Bank about NT$150,000. 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.

Final recommendations

The yen has evolved into an asset with travel, hedging, and investment value. If you plan to exchange yen, follow the principles of “staggered exchange + not holding all at once” to effectively reduce costs and maximize gains.

For beginners, start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on your needs. This way, you not only enjoy more cost-effective travel but also gain an extra layer of protection during global market turbulence.