Is now the right time to invest in Japanese Yen? An article covering the best bank exchange options and exchange rate trends

The NT dollar has risen to 4.85 against the Japanese Yen, attracting more and more people to pay attention to currency exchange opportunities. Whether planning to travel to Japan, purchasing goods via proxy shopping, or allocating hedging assets, choosing the right currency exchange channel can save a significant cost. This article provides an in-depth analysis of the current four major bank currency exchange methods, combined with the latest exchange rate data and investment perspectives, to help you find the most suitable solution.

Why Has the Japanese Yen Become the First Choice for Currency Exchange? A Triple Value Interpretation

Practical needs in consumer aspects

When traveling to Japan, major cities like Tokyo, Osaka, and Hokkaido still primarily use cash transactions (credit card penetration is only 60%), so travelers need to exchange Japanese Yen cash in advance. Additionally, overseas proxy purchasing of Japanese drugstore products, clothing, and anime peripherals often requires direct payment in Yen. International students and working holidaymakers also need to plan their currency exchange in advance to lock in exchange rate costs.

Strategic Position in Financial Markets

The Yen is one of the world’s three major safe-haven currencies alongside the US dollar and Swiss franc. Japan’s economic fundamentals are stable, and debt is manageable. During market volatility, large capital flows into Yen as a hedge—when the Russia-Ukraine conflict erupted in 2022, the Yen appreciated 8% in a single week, while the stock market fell by 10%. For Taiwanese investors, holding Yen not only supports travel expenses but also hedges against Taiwan stock market risks.

The Bank of Japan’s ultra-low interest rate policy (recently at 0.5%) makes Yen a currency for arbitrage financing. Investors often borrow Yen at low interest, convert to higher-yield USD for arbitrage (USD-JPY interest rate differential about 4.0%), and when risks rise, close positions to buy back Yen, which also boosts Yen demand.

Four Major Bank Currency Exchange Paths in Taiwan Fully Analyzed

Many people think bank currency exchange is a single method, but in fact, the exchange rates across different channels can differ by 1-2%. Exchanging 50,000 to 100,000 NT dollars can result in a cost difference of several thousand NT dollars. Below is a detailed analysis.

Method 1: In-branch Cash Exchange — Traditional but Higher Cost

Going directly to a bank branch or airport counter to exchange NT dollars for Yen cash is the most basic bank currency exchange method. However, this method uses the “cash selling rate” (about 1-2% worse than the spot rate), resulting in higher costs. It is recommended as a backup option.

For example, Taiwan Bank’s rate as of December 10, 2025, is approximately 0.2060 NT$/Yen (meaning 1 NT$ = 4.85 Yen). Different banks have slight variations in denominations and handling fees.

Advantages: Simple operation, full denominations (1,000, 5,000, 10,000 Yen options), on-site assistance from staff.
Disadvantages: Lower exchange rate levels, limited by bank operating hours (weekday 9:00-15:30), some banks charge additional handling fees.
Suitable for: People unfamiliar with online operations, urgent small amounts needed (e.g., at the airport).

Comparison table of cash costs across banks

Method 2: Online Currency Exchange + In-branch Cash Pickup — For Advanced Users

Using bank online banking or app to perform currency exchange, adopting the “spot sell rate” (about 1% better than cash rate), converting NT dollars into Yen and depositing into a foreign currency account. If physical cash is needed, it can be withdrawn at the counter or ATM, but additional handling fees apply (from NT$100).

E.SUN Bank’s app allows currency exchange and cash withdrawal, with handling fees equal to the difference between spot and cash rates, minimum NT$100. This method suits those observing exchange rate trends, entering in batches at low points (e.g., below 4.80), averaging the cost.

Advantages: 24/7 operation, allows batching to average costs, more favorable rates.
Disadvantages: Requires opening a foreign currency account in advance, withdrawal incurs additional fees (around NT$5-100 per transaction).
Suitable for: People experienced in forex operations, who frequently use foreign currency accounts, and can further invest in Yen deposits (annual interest rate about 1.5-1.8%).

Method 3: Online Currency Conversion + Designated Branch Pickup — The Best Pre-Travel Plan

No need for a foreign currency account, just fill in currency, amount, pickup branch, and date on the bank’s official website to complete the currency exchange reservation. Then, bring ID and transaction notification to pick up in person. Taiwan Bank and Mega Bank offer this service, with options to reserve airport branches for pickup, allowing travelers to get Yen before departure.

Taiwan Bank’s “Easy Purchase” online currency exchange is fee-free (pay only NT$10 via Taiwan Pay), with about 0.5% exchange rate advantage. Taoyuan Airport has 14 Taiwan Bank outlets (including 2 open 24 hours), enabling seamless pickup.

Advantages: Large exchange rate advantage, often fee waivers, can specify airport pickup.
Disadvantages: Requires advance reservation (1-3 days), pickup time limited by bank hours, branch locations cannot be changed.
Suitable for: Well-planned travelers who want to pick up at the airport.

Method 4: Foreign Currency ATM Withdrawal — The Most Flexible 24-Hour Solution

Using a chip-enabled financial card to withdraw Yen cash at foreign currency ATMs, supporting 24-hour operation and interbank transactions (with only NT$5 interbank fee from NT$ accounts). Main currencies include Yen, but locations are limited (about 200 units nationwide).

Fubon Bank’s foreign currency ATMs allow Yen withdrawal from NT$ accounts, with a single-day limit of NT$150,000 and no currency exchange fee. However, Japan’s ATM withdrawal services will be adjusted by year-end, requiring international cards (Mastercard/Cirrus).

Limited ATM locations, especially in busy areas like airports, may run out of cash. Planning ahead is recommended.

Advantages: Instant withdrawal without queuing, high flexibility, low fees from NT$ accounts.
Disadvantages: Few locations, fixed denominations (only 1,000/5,000/10,000 Yen), cash shortages during peak hours.
Suitable for: People in urgent need or with time constraints.

Four-Method Cost Comparison Overview

Is It Cost-Effective to Exchange Yen Now? Interpretation of Exchange Rates and Investment Timing

As of December 10, 2025, the NT dollar to Yen rate is 4.85, meaning 1 NT$ = 4.85 Yen. Compared to the beginning of the year at 4.46, Yen has appreciated about 8.7%, making currency exchange gains quite attractive, especially amid expected NT$ depreciation. Market observations show a 25% increase in Taiwan’s currency exchange demand in the second half of the year, driven mainly by travel recovery and increased hedging.

Exchange Rate and Policy Outlook

The Yen is currently in a relatively volatile range. With the US easing cycle underway, the Yen receives support. Meanwhile, the Bank of Japan is on the verge of raising interest rates—recent hawkish comments by Governor Ueda Kazuo pushed market expectations for a rate hike to 0.75% at the December 19 meeting (a 30-year high), with Japanese government bond yields reaching 17-year highs of 1.93%.

The USD/JPY has fallen from a high of 160 at the start of the year to around 154.58, with short-term tests of 155 possible, but the medium-to-long-term downward trend points below 150.

Investment Directions and Risk Tips

As one of the three major safe-haven currencies, Yen is suitable for hedging Taiwan stock market volatility. However, short-term risks include a 2-5% fluctuation from arbitrage closing positions. It is recommended to batch your investments rather than convert all at once to reduce timing risks.

Paths to Value-Adding After Receiving Yen

After exchanging Yen, do not let the funds idle without interest. You can consider steady income or growth allocations. Here are four options suitable for small-scale beginners.

Yen Fixed Deposit — Conservative allocation. After opening foreign currency accounts with E.SUN Bank or Taiwan Bank, deposit online. Minimum 10,000 Yen, annual interest rate 1.5-1.8%.

Yen Insurance Policy — Medium-term holding. Cathay Life and Fubon Life offer savings insurance with guaranteed interest rates of 2-3%.

Yen ETFs (00675U, 00703) — Growth-oriented. Yuanta 00675U tracks Yen index, can buy fractional shares via brokerage apps for dollar-cost averaging.

Yen Forex Trading — Direct trading of USD/JPY or EUR/JPY on forex platforms like Mitrade, supporting intraday or swing trading, with zero commissions, low spreads, long/short options, 24-hour trading, advanced tools like stop-loss, take-profit, trailing stops.

Yen exhibits clear two-way volatility. While rate hikes are bullish, global arbitrage unwinding or geopolitical risks (Taiwan Strait, Middle East) may suppress it. For conservative investors, Yen ETFs (e.g., 00675U, with 0.4% annual management fee) can diversify risk; for swing trading, USD/JPY and EUR/JPY are classic choices.

Common Questions About Bank Currency Exchange

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

Cash exchange rate is the buy/sell rate banks offer for physical banknotes and coins, suitable for travel exchange or on-site transactions. It’s convenient for immediate cash delivery but is 1-2% worse than the spot rate and may include handling fees.

Spot rate is the exchange rate for transactions settled within two business days (T+2) in the forex market, used for electronic transfers, non-cash settlements (interbank settlement, import/export, personal foreign currency transfers). It is closer to international market levels.

Q: How much Yen can I get with 10,000 NT$?

Calculation: 【Yen amount = NT$ amount × current rate】. As of December 10, 2025, Taiwan Bank’s cash sell rate is about 4.85, so 10,000 NT$ ≈ 48,500 Yen; using spot sell rate about 4.87, it’s approximately 48,700 Yen, a difference of only 200 Yen (about NT$40).

Q: Do I need to bring ID for in-branch currency exchange?

Yes. Citizens need to bring ID card + passport; foreigners need passport + residence permit. For corporate exchanges, business registration proof is required. For online reservations, transaction notification is needed. Minors under 20 require parental consent. Large exchanges over NT$100,000 may require source of funds declaration.

Q: What are the limits for foreign currency ATM withdrawals?

Banks have different limits due to the new anti-fraud regulations starting October 2025.

Post-regulation, daily limits are mostly reduced to NT$100,000-150,000. It’s advisable to split withdrawals or use your bank’s card to avoid cross-bank fees (NT$5 per transaction). During peak hours, cash may run out; plan ahead.

Final Recommendations

The Yen has transformed into an asset with three functions: consumption, hedging, and investment, far beyond just “travel pocket money.” Whether planning to travel to Japan next year or hedging against NT$ depreciation by moving into Yen, mastering the core principle of “batch exchange + post-exchange appreciation” can lower costs and increase returns.

For beginners, starting with “Taiwan Bank online reservation + airport pickup” or “foreign currency ATM” is the simplest. Then, based on needs, convert Yen into fixed deposits, ETFs, or swing trading. This not only makes travel more cost-effective but also adds a layer of risk hedging during global market turbulence.