The Japanese Yen appreciated by 8.7%. Will the currency exchange window still be open in 2025?

In December 2025, the Taiwanese dollar against the Japanese yen rose above 4.85, a 8.7% increase compared to 4.46 at the beginning of the year. Ten thousand TWD can be exchanged for about 48,500 JPY. It seems like an opportunity, but is now really the time to act?

Why exchange for JPY now? Three main reasons

1. The hard-core value of safe-haven assets

The Japanese yen is ranked alongside the US dollar and Swiss franc as one of the world’s three major safe-haven currencies. When market panic occurs, funds flow into the yen for safety—during the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a single week, successfully buffering a 10% decline in the stock market. For Taiwanese investors, holding yen is like buying insurance for the Taiwan stock market.

2. Strong expectations of rate hikes by the Bank of Japan

Recent hawkish comments from BOJ Governor Ueda Kazuo have pushed the rate hike expectations to 80%, with a decision expected on December 19 to raise rates by 0.25 basis points to 0.75% (a 30-year high), with Japanese government bond yields reaching a 17-year high of 1.93%. This will increase the attractiveness of the yen and continue to attract international capital inflows.

3. Arbitrage trading opportunities

Japan’s ultra-low interest rate (0.5%) compared to the US’s high interest rate creates a large US-Japan interest rate differential of 4.0%. Many investors borrow in low-interest yen to buy higher-yielding USD for arbitrage. When risks increase, closing positions and repurchasing yen will form buying support in the short term.

How to exchange 50,000 to 200,000 TWD most cost-effectively?

Large amounts of currency exchange incur significant cost differences. Exchanging 50,000 TWD may result in losses ranging from 300 to 2,000 TWD depending on the method. Here are the latest options as of December 2025:

Option 1: Over-the-counter cash exchange (highest cost 1,500-2,000 TWD)

Bring TWD directly to a bank or airport counter to get cash. Using the “cash selling rate” (which is 1-2% worse than market rate), Taiwan Bank’s cash selling rate is about 0.2060 TWD per JPY. Exchanging 50,000 TWD yields approximately 242 million JPY in cash.

Advantages: Denominations are complete, safe, and reliable. Disadvantages: Exchange rate spread, limited operating hours, possible handling fees.

Option 2: Online currency exchange + airport pickup (lowest cost 300-800 TWD)

Pre-arrange currency exchange via bank website, specify airport branch for pickup, using near-market “spot selling rate” (about 0.2070). Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay with TaiwanPay, only 10 TWD), with a favorable rate advantage of 0.5%.

Suitable for: Planned trips with pre-arranged pickup. Taoyuan Airport has 14 Taiwan Bank branches (2 open 24 hours).

Option 3: Foreign currency ATM withdrawal (cost 800-1,200 TWD)

Use a chip-enabled financial card to withdraw yen cash at foreign currency ATMs, available 24/7 with no time limit. Cross-bank withdrawal fee is only 5 TWD. E.SUN Bank’s daily withdrawal limit is 150,000 TWD.

Suitable for: Urgent needs, busy professionals without time for counter transactions, but limited locations (about 200 nationwide).

Option 4: Online currency conversion into a foreign currency account (cost 500-1,000 TWD, suitable for long-term holding)

Convert TWD into JPY within bank apps and deposit into foreign currency accounts, using favorable spot rates. For cash withdrawal, additional handling fees apply (minimum 100 TWD).

Suitable for: Those with forex experience, not in a hurry to withdraw cash, planning to invest in JPY deposits or ETFs.

Recommended combo: Online currency exchange + foreign currency ATM

First, exchange part of the funds online to avoid queues at counters. If cash is needed suddenly, supplement with ATM withdrawals. Overall costs are minimized this way.

Is it worthwhile to exchange now? Short-term volatility vs. medium-long-term upward trend

Short-term risk: 2-5% arbitrage closing pressure

USD/JPY has fallen from a high of 160 at the start of the year to 154.58. Short-term rebound to 155 is possible, but as the US continues to cut rates and the BOJ hikes, yen short positions will be heavily closed, causing 2-5% volatility.

Medium-long-term outlook: support below 150

Forecasts suggest the yen will stabilize below 150 due to:

• The start of the BOJ rate hike cycle
• Continued depreciation pressure on TWD, making yen relatively stronger
• Rising global safe-haven demand

Strategy suggestion: staggered entry

Avoid exchanging all at once. Recommend dividing into 3-4 batches to average costs, and add more when the TWD/JPY rate drops below 4.80. This approach mitigates short-term volatility risk and captures medium-term appreciation.

After exchanging for yen, four ways to increase asset value

It would be a waste to leave yen idle after exchange. Based on risk appetite, options include:

1. Yen fixed deposit (conservative, annual interest 1.5-1.8%)

E.SUN Bank, Taiwan Bank offer foreign currency accounts, with online deposits starting from 10,000 yen. Annual interest rates of 1.5-1.8%, higher than TWD deposits, with maximum safety.

2. Yen savings insurance (mid-term, guaranteed interest 2-3%)

Cathay and Fubon Life’s yen savings insurance, with guaranteed interest of 2-3%, and expected total interest exceeding 3.5%. Suitable for holding 2-5 years.

3. Yen ETF dollar-cost averaging (growth-oriented)

Yuan Da 00675U, 00703, and other yen ETFs tracking the yen index. Can buy fractional shares via broker apps, suitable for monthly DCA. Management fee 0.4%. Lower risk than pure exchange rate speculation, combining growth and hedging.

4. Forex swing trading (advanced, two-way profit)

Trade USD/JPY, EUR/JPY, etc., on forex platforms with zero commissions, low spreads, 24-hour trading, long and short positions. Small capital can start. Suitable for experienced swing traders.

Currency exchange quick reference

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

Cash rate is the bank’s buy/sell rate for physical bills, 1-2% worse than spot rate, with the advantage of immediate cash. Spot rate is settled T+2, more favorable but requires waiting. The difference for 50,000 TWD is about 200-400 JPY.

Q: How much TWD for 2000 USD?

Rough estimate at current rates: about 62,000-65,000 TWD (USD/TWD around 31-32.5). If converted to yen, 2000 USD equals approximately 300-310 million JPY, depending on bank rates.

Q: What to bring for counter currency exchange?

Taiwanese nationals need ID card + passport; online booking also requires transaction notification. Under 20 needs parent’s consent and ID. For large amounts (over 100,000 TWD), may need to declare source of funds.

Q: What’s the daily withdrawal limit at foreign currency ATMs?

Varies by bank. Since October 2025, many banks set limits at 100,000-150,000 TWD equivalent per day. CTBC and Taishin are more lenient (up to 150,000), E.SUN is stricter (5,000 TWD but combined with debit card up to 150,000). Consider spreading withdrawals or using your own bank card to avoid cross-bank fees.

Final advice

The yen has evolved from a simple “travel pocket money” currency to an asset with both hedging and investment functions. With TWD under pressure to depreciate and BOJ rate hikes imminent, holding yen is no longer optional but necessary.

For beginners, the best entry combo is: Taiwan Bank online exchange (airport pickup) + yen fixed deposit or ETF DCA. This way, you get the best exchange rate and let your funds grow through deposits or ETFs, creating a safe and efficient asset allocation.

Remember: Staggered entry rather than lump sum, early planning rather than last-minute, allocation rather than sitting idle—master these principles to profit steadily during the yen’s appreciation cycle.