Japanese Yen Exchange Guide: Hedging Strategies Amid TWD Depreciation in 2025

Market Overview: Yen’s Rapid Rise, Batch Buying Is the Right Time

On December 10, 2025, the TWD/JPY exchange rate stood at 4.85, up about 8.7% from 4.46 at the beginning of the year. This may seem like a small number, but for small-scale currency exchanges, the difference can amount to hundreds or thousands of NT dollars. More importantly, the Bank of Japan Governor Ueda Kazuo recently adopted a hawkish stance, with market expectations of a rate hike to 0.75% on December 19 (a 30-year high). USD/JPY has fallen from a high of 160 at the start of the year to 154.58, with short-term volatility still present but a positive outlook in the medium to long term.

Against the backdrop of the TWD facing depreciation pressure, many investors are re-evaluating their JPY allocations. According to data from the second half of the year, Taiwan’s currency exchange demand has grown by about 25%, mainly driven by tourism recovery and risk hedging strategies — this is no longer just travel demand but also asset allocation considerations.

In comparison, the Hong Kong dollar remains relatively stable due to Hong Kong’s financial stability, making it suitable for short-term reserves but lacking the risk hedging momentum of the yen.

Why Is the Yen Worth Including in Asset Allocation?

One of the three major safe-haven currencies, hedging against Taiwan stocks volatility

The yen has long been ranked alongside the US dollar and Swiss franc as a global safe-haven currency. During market turbulence, funds flow into the yen for refuge — during the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in a single week, effectively buffering stock market declines of 10%. For Taiwanese investors, this means converting to yen is not only for travel preparations but also a defensive tool for their investment portfolios.

Yield spread arbitrage opportunities still exist

Although Japan maintains a low-interest-rate policy (0.5%), the interest rate differential with the US at 4.5% still attracts arbitrage trading. Many institutions borrow low-interest yen to exchange for higher-yielding USD, then close positions when risks increase, buying back yen. This volatility offers opportunities for swing traders and also reminds long-term holders to beware of short-term declines caused by arbitrage unwinding.

Practical daily applications remain essential

Whether for travel shopping (Japan credit card penetration is only 60%, cash remains mainstream), purchasing代理, or studying abroad, the practical demand for yen has not diminished. However, now when exchanging currency, there is an added “investment consideration” value.

Five Practical Currency Exchange Channels Compared

1. Counter Cash Exchange — The Most Traditional but Costliest

Bring cash directly to a bank or airport counter to exchange for yen bills. Using cash selling rates (1-2% above spot), plus possible handling fees, results in higher overall costs. As of 9:18 AM on December 10, 2025, Taiwan Bank’s cash selling rate was approximately 0.2060 TWD/JPY (1 TWD = 4.85 JPY).

Some banks’ fee structures:

• Taiwan Bank: No handling fee, rate 0.2060
• Mega International Bank: No handling fee, rate 0.2062
• E.SUN Bank: 100 TWD per transaction, rate 0.2067
• Fubon Bank: 100 TWD per transaction, rate 0.2058

Suitable for: Urgent airport needs, unfamiliar with online methods.

2. Online Currency Exchange to Foreign Currency Account — Flexible Batch Buying

Via bank app or online banking, use the spot sell rate (about 1% better than cash) to convert TWD to yen, depositing into a foreign currency account. If cash withdrawal is needed, it can be done via ATM or counter, but with a currency conversion fee (starting around 100 TWD).

This method is especially suitable for monitoring exchange rates, entering in batches at low points (e.g., TWD/JPY below 4.80), and holding the foreign currency account long-term with fixed deposit rates (currently about 1.5-1.8% annual interest).

Suitable for: Those with forex investment experience and willing to hold long-term.

3. Online Pre-Order Currency Exchange for Airport Pickup — The Best Pre-Travel Option

No need to open a foreign currency account. Simply fill in the amount, currency, pickup branch, and date on the bank’s website. After completion, bring ID and transaction notification to the counter for pickup. Taiwan Bank’s “Easy Purchase” online currency exchange is fee-free (pay only 10 TWD via TaiwanPay), with about 0.5% better rates. The biggest advantage is the ability to pre-book airport pickup, with 2 of the 14 Taiwan Bank locations open 24 hours.

Suitable for: Planned travelers who want to pick up yen directly at the airport.

4. Foreign Currency ATMs — 24/7 Unlimited Withdrawals

Use chip-enabled debit cards at foreign currency ATMs to withdraw yen cash, operational 24 hours. Cross-bank withdrawals cost only 5 TWD. Fubon Bank’s foreign currency ATMs allow withdrawals from TWD accounts, with a daily limit of 150,000 TWD and no currency exchange fee. However, locations are limited (about 200 nationwide), and denominations are fixed (1,000/5,000/10,000 JPY). During peak times, cash may run out.

Bank withdrawal limits (as of October 2025):

• CTBC Bank: Single and daily limit of 120,000 TWD
• Taishin Bank: Single and daily limit of 150,000 TWD
• E.SUN Bank: Single limit 50,000 TWD, daily 150,000 TWD

Suitable for: Those with no time to visit banks or urgent needs.

5. Hong Kong Dollar as a Benchmark — Why Do Investors Prefer Yen?

Although the HKD is also a mainstream Asian currency, it differs fundamentally from the yen in asset allocation. The HKD exchange rate is relatively stable (pegged to USD), with limited interest rate space, and weaker risk hedging properties compared to the yen. NT10,000 exchanges for about HKD1,250 (current rate around 1:7.8), but lacks the yen’s appreciation potential and arbitrage opportunities. Therefore, for currency exchangers with both lifestyle and investment considerations, the yen remains the top choice.

Actual Cost Calculation for 50,000 TWD Exchange

Quick FAQs

Q: What’s the difference between cash exchange rate and spot rate?
Cash rate applies to physical bills and coins, usually 1-2% worse than spot; spot rate is used for electronic transfers (T+2 settlement) and is closer to market price. For small travel expenses, cash is fine; for large amounts or investments, spot is more cost-effective.

Q: How much yen can I get for 10,000 TWD?
Using Taiwan Bank’s rate of 4.85 on December 10, 2025, about 48,500 JPY. With the spot rate (~4.87), about 48,700 JPY, roughly 40 TWD difference.

Q: What documents do I need?
Locals: ID card + passport; foreigners: passport + residence permit. For online booking, also bring transaction notification. Under 20 years old need parental consent; large exchanges (over 100,000 TWD) may require fund declaration.

Q: How to hedge against yen depreciation risk?
Batch exchange is fundamental. It is recommended to use “online currency exchange + periodic review,” entering in 3-4 installments within the 155-150 range, reducing single transaction costs and volatility risk.

Asset Allocation Suggestions After Buying Yen

Once you have yen, avoid “lying flat” with zero-interest holding. Consider the following allocations:

Conservative: Yen fixed deposit (E.SUN / Taiwan Bank foreign currency account, 1.5-1.8% annual interest, starting from 10,000 yen)

Mid-term: Yen insurance policies (Cathay / Fubon savings insurance, guaranteed 2-3% interest)

Growth: Yen ETFs (Yuan Da 00675U, 00703, etc., tracking yen index, fractional investing, management fee 0.4% annually)

Swing Trading: Forex trading (USD/JPY or EUR/JPY, with zero-commission platforms offering long/short, 24-hour trading, low spreads)

While the yen is a strong hedge, short-term declines can occur due to global arbitrage unwinding or geopolitical conflicts (usually 2-5% volatility). Beginners should start with fixed deposits or ETFs, then gradually try swing trading as experience grows.

Conclusion: Batch Deployment, Let Yen Work for You

The yen has evolved from simple travel “pocket money” to an asset with hedging and appreciation potential. Mastering the principles of “batch currency exchange” and “immediate allocation after exchange” allows you to lower costs and amplify returns even amid market fluctuations.

For investors planning to travel next year or to position during TWD depreciation, now is the time to prepare. Start with the simplest methods like “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then upgrade to fixed deposits, ETFs, or swing trading based on your needs. Not only can you enjoy cost-effective travel, but you also gain an extra layer of protection during global market turbulence.