4 essential tips for exchanging TWD to JPY: understanding the cost difference through the 4.85 exchange rate

In mid-December, how much is 1 JPY in TWD? About 0.206 TWD, which means the TWD to JPY exchange rate has reached 4.85. What is hidden behind this exchange rate? For those wanting to exchange for Japanese yen, is now the right time to get in?

Is it really cost-effective to exchange JPY now? Let the data speak

This year, the Japanese yen has appreciated remarkably. At the beginning of the year, the TWD to JPY rate was only 4.46, and in just 11 months, it has risen to 4.85, an 8.7% appreciation of the yen. In other words, exchanging for yen now allows you to get nearly 9% more than at the start of the year.

But that’s not all. The movement of the Bank of Japan is the most worth watching—the governor recently continued hawkish comments, pushing up expectations of interest rate hikes, with the market expecting a rate increase to 0.75% at the December meeting, a 30-year high. Meanwhile, USD/JPY has fallen from the high of 160 at the start of the year to around 154, with short-term fluctuations possibly returning to 155, but the medium- to long-term trend points below 150.

In other words, as one of the world’s three major safe-haven currencies, the yen is in an appreciation cycle supported by geopolitical risks and central bank policies. For Taiwanese investors, exchanging for yen is not just for travel but also a good tool to hedge against Taiwan stock market volatility and diversify assets.

4 ways to exchange JPY, with cost differences up to 2000 NT dollars

Many think exchanging yen only requires a quick trip to the bank, but in reality, choosing the right channel can save a lot of money. For example, with 50,000 TWD, the cost difference among methods can reach 1,500–2,000 NT dollars.

Method 1: On-site cash exchange — most straightforward but most expensive

Exchange cash TWD for JPY at banks or airports, using the cash selling rate (1-2% higher than the spot rate). For example, Taiwan banks’ cash selling rate is about 0.2060 TWD/JPY, with some banks charging an additional 100–200 NT dollars handling fee.

Advantages: safe, denominations available. Disadvantages: highest cost (estimated loss of 1,500–2,000 NT dollars), limited by business hours. Suitable for travelers needing small amounts temporarily.

Method 2: Online currency exchange + foreign currency ATM — flexible and quick

Use bank app to convert TWD to foreign currency at the spot rate (about 1% better than cash), then withdraw cash via a financial card at foreign currency ATMs when needed. Foreign currency ATMs support 24-hour operation, with interbank fees as low as 5 NT dollars.

Ideal for those without time to visit the bank or needing urgent cash. Estimated loss: 800–1,200 NT dollars, cheaper than on-site cash exchange. Note: foreign currency ATMs are not widespread (about 200 nationwide), and cash may run out during peak times, so don’t wait until the last minute to withdraw.

Method 3: Online currency purchase + airport pickup — best for planned trips

No need a foreign currency account. Fill in amount, pickup branch, and date on the bank’s official website, then pick up at the counter. Taiwan Bank’s “Easy Purchase” online currency purchase has no handling fee (pay with TaiwanPay for only 10 NT dollars), with about 0.5% better exchange rate. You can also reserve pickup at Taoyuan Airport branches (14 locations, 2 open 24 hours).

Estimated loss: only 300–800 NT dollars, making it the best option for pre-trip planning. Disadvantages: requires reservation 1–3 days in advance, pickup time is limited.

Method 4: Foreign currency account + periodic investment — professional route

Open a foreign currency account, buy in batches at low points (when TWD/JPY is below 4.80), averaging costs while also investing. Not only saving on fees, but after depositing yen, you can enjoy deposit interest (annual rate about 1.5–1.8%). Estimated loss: 500–1,000 NT dollars, but with long-term appreciation potential.

Who should use which method? Quick reference table

After exchanging yen, sit back and consider 4 ways to increase value

Once you have yen, instead of letting it sit without interest, consider investing.

Yen fixed deposit: Most stable. E.g., E.Sun Bank, Taiwan Bank offer online foreign currency accounts, with a minimum of 10,000 yen, annual interest rate 1.5–1.8%.

Yen insurance policy: Medium-term holding. Cathay, Fubon Life sell yen savings insurance, with guaranteed interest rates of 2–3%, combining protection and appreciation.

Yen ETFs: Growth-oriented. Yuanta 00675U, 00703, etc., track yen indices, available as fractional shares via broker apps, suitable for regular investment.

Forex swing trading: Advanced players. Directly trade USD/JPY or EUR/JPY, with long and short positions, 24-hour operation, capturing exchange rate fluctuations.

The BOJ’s rate hikes are positive for the yen, but global arbitrage unwinding or geopolitical conflicts may cause short-term volatility. Beginners are advised to start with fixed deposits or ETFs, adjusting according to risk tolerance.

5 common misconceptions among currency exchange beginners

Misconception 1: Only banks can exchange yen
Wrong. Foreign currency ATMs and online currency exchange are options, often cheaper.

Misconception 2: Lower exchange rate is more cost-effective
Not entirely true. You should consider total costs (exchange rate + fees + time costs). Sometimes a slightly higher rate is more economical.

Misconception 3: On-site cash is safest
Safe, yes, but also most expensive. If just storing value, online accounts are not risky.

Misconception 4: Exchange all at once
Risky. Yen is a safe-haven currency but still fluctuates 2–5% in the short term. Gradual entry reduces risk.

Misconception 5: After exchange, do nothing
Missed opportunity. Yen fixed deposits and ETFs have growth potential, much more profitable than holding cash.

Final advice

The yen is no longer just travel money; it’s an asset allocation tool with hedging and investment value. Whether for next year’s Japan trip or to hedge against TWD depreciation, mastering “batch exchange + post-exchange appreciation” can minimize costs.

Beginners are recommended to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then shift to fixed deposits, ETFs, or swing trading based on needs. The current rate of 4.85 is relatively high for the year; consider adding more on dips next time for smarter yen exchange.