How to exchange Japanese Yen most cost-effectively? Cost testing of various methods

In December 2025, the NT dollar has fallen to around 4.85 against the Japanese Yen, and demand for JPY is heating up. Whether you’re preparing to travel abroad or want to hedge your positions, the key isn’t just “whether to exchange,” but “how to exchange most economically.”

We tested four of the most common currency exchange channels in Taiwan to show you how much cost you lose per 1,000 NT dollars and which method is best for you.

Why is it worth exchanging for JPY?

In Taiwan’s foreign currency world, the Japanese Yen is always the main character. This is not only because everyone loves to travel to Japan, but also because the Yen has a dual identity.

Travel and daily use

Japan cash usage rate remains above 60% (credit card penetration is relatively low), so travel expenses often require cash payments. At the same time, people buying on behalf, shopping on Japanese websites, studying abroad, or working part-time all need Yen to complete transactions. Poor exchange rates can add 2,000-3,000 NT dollars to your trip costs.

Financial investment

The Yen is one of the world’s three major safe-haven currencies (USD, CHF, JPY). When global risks rise, funds flow into Yen seeking refuge. During the Russia-Ukraine conflict in 2022, the Yen appreciated 8% in just one week, successfully buffering a 10% decline in the stock market. For Taiwanese investors, moderate Yen holdings can hedge against Taiwan stock market volatility.

Additionally, Japan’s long-term ultra-low interest rate policy (only 0.5%) makes Yen a “funding currency.” Many professional investors borrow Yen at low interest to buy higher-yield USD investments, earning interest rate spreads (currently about 4.0% US-Japan interest differential). This arbitrage scale is huge and influences the Yen’s long-term trend.

Is it cost-effective to exchange Yen now?

Short answer: Yes, but operate in batches.

In 2025, the Yen exchange rate is around 4.85, up 8.7% from 4.46 at the start of the year. This indicates the NT dollar is depreciating, and holding Yen itself is a form of exchange gain. Market observations show that Taiwan’s currency exchange demand increased by 25% in the second half of the year, mainly driven by two forces: travel recovery and hedging.

However, short-term fluctuations are worth noting. The US has entered a rate-cut cycle, while the Bank of Japan (BOJ) is at a critical point of rate hikes. BOJ Governor Ueda recently made hawkish comments, with market expectations of an 80% chance of a rate hike at the December 19 meeting, raising rates by 0.25 bps to 0.75% (a 30-year high). Japanese bond yields have risen to 1.93% (17-year high).

Looking at USD/JPY, after reaching a high of 160 early in the year, it has retraced to 154.58. Short-term fluctuations may bring it to around 155, but the medium- to long-term trend points below 150. For investors, buying in batches can average costs and avoid the risk of a continued exchange rate decline after a lump sum exchange.

Cost comparison of four major currency exchange methods in Taiwan

Currency exchange methods are diverse, but the cost differences are huge. Using 50,000 NT dollars as a reference, we compare the actual losses of each method.

Method 1: Bank counter cash exchange — the most traditional but most expensive

Bring NT cash directly to the bank or airport, where staff exchange for Yen cash. This is the most familiar method but also the least economical.

Banks use “cash selling rate,” which is about 1-2% worse than the “spot rate.” For example, as of December 10, 2025, Taiwan Bank’s cash selling rate is about 0.2060 NT$/JPY (about 4.85 Yen per NT$). Plus, some banks charge an additional 100-200 NT$ handling fee. Exchanging 50,000 NT$ results in a loss of about 1,500-2,000 NT$.

While the cash selling rates among major banks vary slightly (0.2058-0.2069), the difference isn’t large. Choosing the bank with the lowest handling fee (free or 100 NT$) is key.

Suitable for: Urgent airport needs, unfamiliar with online operations, small cash amounts.

Method 2: Online exchange + cash withdrawal — a balanced choice

Use bank app or online banking to convert NT$ to Yen and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash). Then, withdraw cash at a branch or foreign currency ATM as needed. Withdrawal incurs a spread fee (minimum 100 NT$).

Advantages include observing exchange rate trends and entering in batches at low points (e.g., below 4.80) to lower costs. Exchanging 50,000 NT$ this way results in a loss of about 500-1,000 NT$, much better than cash exchange.

Suitable for: Those with foreign exchange investment experience, frequent foreign currency account users, long-term Yen holders. Note: online accounts usually need to be opened in advance.

Method 3: Online currency exchange + airport pickup — highly recommended for office workers

No need to open a foreign currency account. Simply fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, bring ID and transaction notice to the designated branch for pickup. Taiwan Bank’s “Easy Purchase” online exchange service is fee-free (pay via TaiwanPay, only 10 NT$), with about 0.5% better rates.

The biggest advantage is the ability to reserve pickup at Taoyuan Airport branches, which have 14 Taiwan Bank outlets (including 2 24-hour branches). No need to go to the bank physically. Exchanging 50,000 NT$ results in a loss of only 300-800 NT$.

The only downside is the need to make a reservation 1-3 days in advance; branches cannot change the pickup. For planners, this is the best option before traveling.

Suitable for: Travelers deciding 1-3 days before departure, wanting to pick up cash at the airport.

Method 4: Foreign currency ATM withdrawal — emergency use

Use a chip-enabled debit card at foreign currency ATMs to withdraw Yen cash 24/7, with interbank fee as low as 5 NT$. E.SUN Bank’s foreign currency ATMs support direct withdrawal from NT$ accounts, with a daily limit of 150,000 NT$, and no currency exchange fee.

Disadvantages include limited locations (about 200 nationwide) and cash shortages during peak times. Exchanging 50,000 NT$ results in a loss of about 800-1,200 NT$, between cash counter and online methods.

Suitable for: Those with no time to visit banks, needing emergency cash. Plan ahead to avoid last-minute issues.

1000 NT$ exchange for Yen — practical test

At the current rate of 4.85, exchanging 1000 NT$ yields:

• Cash at bank counter: about 4,750 Yen (loss of about 150-200 Yen, i.e., 30-40 NT$)
• Online exchange: about 4,800 Yen (loss of about 50-100 Yen, i.e., 10-20 NT$)
• Online currency exchange: about 4,820 Yen (loss of about 30-50 Yen, i.e., 6-10 NT$)
• Foreign currency ATM: about 4,790 Yen (loss of about 60-110 Yen, i.e., 12-22 NT$)

The difference for 1000 NT$ isn’t large, but when exchanging 50,000 NT$, the savings become significant.

After exchanging Yen, what next? Don’t let your money sit idle

Many people just spend the Yen they exchanged in Japan, but smarter allocation options exist.

Yen fixed deposit: The most stable. E.SUN, Taiwan Bank offer foreign currency accounts, with a minimum deposit of 10,000 Yen, annual interest rates of 1.5-1.8%, suitable for conservative investors.

Yen insurance policies: Medium-term holding. Cathay, Fubon offer Yen savings insurance with guaranteed rates of 2-3%, combining savings and protection.

Yen ETFs (00675U, 00703): Growth-oriented. Yuanta 00675U tracks Yen index, can buy fractional shares via broker apps, suitable for regular investment. Management fee is 0.4% annually.

Forex trading: High volatility. Trade USD/JPY, EUR/JPY directly on forex platforms, 24/7 trading, both long and short, requiring risk tolerance.

While Yen is a safe-haven currency, it also fluctuates bidirectionally. BOJ rate hikes are bullish, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) may push the rate down again. For pure investment, Yen ETFs can diversify risk effectively.

Quick FAQs

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

Cash rate is the actual buy/sell rate for physical bills and coins, with on-the-spot delivery but worse rates (1-2% difference). Spot rate is the foreign exchange market rate for settlement within two days, used for electronic transfers, closer to international market prices, but settled T+2.

Q. What documents are needed for currency exchange?

Locals: ID + passport; foreigners: passport + residence permit; under 20: accompanied by parent; large amounts (over 100,000 NT$) may require source declaration. Online booking requires transaction notice.

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

Varies by bank. CTBC: equivalent to NT$120,000/day; Taishin: NT$150,000/day; E.SUN: NT$150,000/day (including debit). Use your own bank card to avoid cross-bank fees; plan ahead during peak times.

Final advice

Yen is no longer just travel pocket money but an asset class with hedging and investment value. Whether for travel or investment, mastering “batch exchange + don’t leave money idle” principles can minimize costs and maximize returns.

Beginners are recommended to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transition into fixed deposits, ETFs, or swing trading based on needs. This way, you not only enjoy more cost-effective travel but also add a layer of financial protection during global market turbulence.