Invest starting from 25,000 JPY? A complete guide to four exchange channels and hedging strategies

Why the Japanese Yen is Worth Paying Attention To

When it comes to exchanging foreign currency in Taiwan, the yen is often the first choice. But this is not just for traveling abroad. From daily consumption to financial planning, the role of the yen is more important than you might imagine.

Travel and Daily Needs

Whether you’re shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, cash remains the mainstream payment method (credit card acceptance is only about 60%). Additionally, scenarios such as Japanese purchasing agents, studying abroad, or working holidays all require direct settlement in yen.

Strategic Asset in Financial Markets

The yen is recognized globally as one of the three major safe-haven currencies (alongside the US dollar and Swiss franc). During market turbulence, funds tend to flow into the yen—during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in one week, effectively hedging a 10% decline in the stock market. For Taiwanese investors, holding yen is not just for entertainment expenses but also an effective hedge against Taiwan stock market risks.

Japan has maintained an ultra-low interest rate policy (currently only 0.5%), making the yen a “funding currency.” Many traders borrow low-interest yen to convert into higher-yielding USD investments (the USD/JPY interest rate differential reaches 4.0%), then close positions when risks increase. This means yen fluctuations often reflect global risk sentiment.

Is Now a Good Time to Exchange Yen? Market Signal Interpretation

As of December 2025, the NT$ to JPY rate is about 4.85, meaning 1 NT$ can be exchanged for 4.85 yen. Compared to the beginning of the year at 4.46, the yen has appreciated by approximately 8.7%, which is quite attractive for Taiwanese investors. In the second half of the year, foreign exchange demand in Taiwan increased by 25%, mainly driven by travel recovery and hedging needs.

Bank of Japan Rate Hike Expectations

Governor Ueda Kazuo’s recent hawkish comments have pushed the rate hike expectation to 80%, with the market expecting a 0.25 bps increase at the December 19 meeting to 0.75% (a 30-year high). Japanese government bond yields have hit a 17-year high of 1.93%, further supporting the yen. USD/JPY has fallen from the high of 160 at the start of the year to 154.58; in the short term, it may fluctuate around 155, but in the medium to long term, it is forecasted to fall below 150.

Investment Advice: Gradual Entry

Although the yen has strong safe-haven characteristics, there is a short-term risk of arbitrage closing, which could cause 2-5% volatility. Therefore, the most prudent approach is to enter gradually, avoiding full exchange at once. The current exchange rate environment is relatively favorable, but volatility should still be approached cautiously.

Practical Comparison of 4 Yen Exchange Channels

Many people mistakenly think that exchanging yen only requires going to a bank counter, but the costs can differ by thousands of NT$ depending on the channel.

Option 1: Bank Counter Cash Exchange

Bring NT$ cash directly to a bank branch or airport counter to exchange for yen cash. The operation is simple, but the “cash selling rate” (about 1-2% worse than the spot rate) results in higher overall costs.

Using Taiwan Bank’s December 10, 2025 rate as an example, the cash selling rate is approximately 0.2060 NT$/JPY (i.e., 1 NT$ = 4.85 yen). Some banks also charge fixed handling fees.

Advantages: Safe, reliable, full denominations, staff assistance on-site
Disadvantages: Worse exchange rate, limited business hours (9:00-15:30), handling fees may increase costs
Suitable for: Travelers unfamiliar with online operations, small urgent exchanges (e.g., at the airport)

Option 2: Online Banking Exchange + Counter/ATM Withdrawal

Use app or online banking to convert NT$ into yen and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash selling rate). If cash is needed, withdraw at counters or foreign currency ATMs, but this incurs exchange spread handling fees (starting from NT$100).

For example, after E.SUN Bank app exchange, withdrawing yen cash incurs a fee equal to the difference between spot and cash rates, with a minimum of NT$100. This method is suitable for observing exchange rate trends and entering gradually at low points (e.g., NT$ to JPY below 4.80).

Advantages: 24-hour operation, allows averaging costs through multiple entries, relatively favorable rates
Disadvantages: Need to open a foreign currency account first, withdrawal fees (interbank about NT$5-100)
Suitable for: Experienced forex investors, frequent foreign currency account users, can also invest in yen deposits (annual interest rate about 1.5-1.8%)

Option 3: Online Currency Conversion + Designated Branch Pickup

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

Taiwan Bank’s “Easy Purchase” online currency exchange is fee-free (pay with Taiwan Pay, only NT$10), with about 0.5% better rates. This is the best pre-departure reservation method, with 14 Taiwan Bank locations at Taoyuan Airport (2 open 24 hours).

Advantages: Better rates, often no handling fee, can specify airport pickup
Disadvantages: Need to book in advance (1-3 days), pickup during bank hours, branch cannot be changed
Suitable for: Planned travelers who want to pick up at the airport

Option 4: Foreign Currency ATM Immediate Withdrawal

Use chips financial card at foreign currency ATMs to withdraw yen cash, supporting 24-hour operation and interbank transactions (from NT$ account with only NT$5 fee). Currency options are mainly mainstream like yen, but locations are limited (~200 nationwide).

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

Advantages: Instant withdrawal, high flexibility, low fee from NT$ account
Disadvantages: Limited locations and denominations (fixed 1,000/5,000/10,000 yen), cash may run out during peak times
Suitable for: Those with no time to visit banks, needing urgent cash

Cost comparison of 4 methods (based on NT$50,000 exchange)

Investment Options for Yen Over 25,000 NT$

After exchanging yen, if you don’t want the money to sit idle without interest, consider stable income or growth investments. The following 4 options are suitable for small beginners; with NT$25,000, you can activate some of these.

Yen Fixed Deposit: Stable, open foreign currency accounts with E.SUN/Bank of Taiwan, deposit online, minimum 10,000 yen, annual interest rate 1.5-1.8%. With NT$25,000, annual interest can reach NT$375-NT$450.

Yen Insurance Policy: Medium-term holding, buy savings insurance from Cathay or Fubon Life, with guaranteed interest rates of 2-3%, suitable for 3-5 year planning.

Yen ETFs (00675U, 00703): Growth-oriented, Yuanda 00675U tracks yen index, can buy fractional shares via broker app, suitable for dollar-cost averaging. Management fee 0.4% annually, relatively manageable risk.

Forex Swing Trading: Advanced option, trade USD/JPY or EUR/JPY directly on forex platforms, with the advantage of both long and short positions, 24-hour trading. Although volatile, small capital can operate.

While yen has strong safe-haven features, it still carries two-way volatility risks. The BOJ rate hike is bullish, but global arbitrage closing or geopolitical conflicts (Taiwan Strait/Middle East) may suppress it. For investment, yen ETFs are good for risk diversification; for short-term trading, forex is a classic way to capture exchange rate movements.

Quick FAQs

Q. What is the difference between cash rate and spot rate?

Cash rate (Cash Rate) refers to the buying and selling of physical cash, suitable for travel currency exchange. Its advantage is immediate delivery and portability, but the rate is about 1-2% worse than the spot rate, resulting in higher costs.

Spot rate (Spot Rate) is the exchange rate settled within two business days (T+2) in the forex market, mainly used for electronic transfers, import/export, or foreign currency account transfers. It offers more favorable rates close to international market prices but requires T+2 settlement.

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

Exchange formula: Yen amount = NT$ amount × current rate (TWD/JPY)

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

Q. What do I need to bring for counter exchange?

Taiwanese need to bring ID card + passport; foreigners need passport + residence permit. For company exchange, business registration proof is required. If pre-booked online, bring transaction notification. Minors under 20 need parental consent and ID; large amounts (over NT$100,000) may require source of funds declaration.

Q. What is the limit for foreign currency ATM withdrawal?

Regulations vary by bank due to new policies (from October 2025, many banks strengthen anti-fraud measures, with third-party digital accounts limited to NT$100,000/day).

It is recommended to diversify withdrawals or use your own bank card to avoid interbank fees. During peak times, cash may run out quickly; plan ahead.

Core Advice: Seize Opportunities, Exchange Wisely

The yen has evolved from “travel pocket money” to an asset with both hedging and investment value. Whether for next year’s travel or hedging against NT$ depreciation, mastering “gradual exchange + don’t leave money idle after exchange” can minimize costs and maximize returns.

Beginners are advised to start with “Taiwan Bank online currency exchange + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits, ETFs, or forex swing trading based on needs. This way, you not only save on travel costs but also add a layer of financial protection in volatile global markets.