Hedging options amid the depreciation of the New Taiwan Dollar: Now is the right time to exchange for Japanese Yen

The NT dollar has already reached a level of 4.85 against the Japanese Yen. This exchange rate is somewhat unfamiliar to many—because last year, no one even considered exchanging for Yen. But this year, the situation is different.

The NT dollar faces long-term depreciation pressure, the US dollar is strong, and the Yen has been pushed into an interest rate hike cycle by the central bank. Simply put, exchanging for Yen now is not just for traveling to Japan; more people see it as a hedging tool against Taiwan stock market volatility. According to the latest data, Taiwan’s foreign exchange demand in the second half of the year increased by 25%, mainly driven by two forces: tourism recovery and hedging allocations.

So, the question is—Is it really cost-effective to exchange for Yen? When is the best time to do it?

We have summarized the four most practical currency exchange methods and calculated them with the latest rates for you.

Traditional Counter Exchange: The Most Expensive Method

Walking into a bank or airport to exchange NT dollars for Yen cash. This is most people’s first instinct and also the most costly option.

Why? Because banks use the “cash selling rate,” which is about 1-2% worse than the spot rate. For example, as of December 10, 2025, Taiwan Bank’s rate is 0.2060 NT$ per Yen (meaning 1 NT$ can buy about 4.85 Yen). Some banks also charge additional handling fees, so exchanging 500,000 NT$ could lose about 1,500-2,000 NT$ just on the exchange margin.

The advantages of this method are straightforward: safety, full denominations, and assistance from staff. The disadvantages are the unfavorable exchange rate, limited business hours, and possible additional fees. Only recommended in urgent, last-minute situations where planning isn’t possible.

Online Exchange + In-Branch Cash Pickup: A Balanced Approach

Don’t want to wait and want a better rate? Try online currency exchange.

Using bank apps or online banking, convert NT dollars to Yen and deposit into a foreign currency account. This uses the “spot selling rate,” which is about 1% better than the cash selling rate. If you need cash, you can pick it up in person or withdraw from a foreign currency ATM, which may incur additional exchange fees (usually starting at 100 NT$).

The biggest advantage of this method is the ability to operate in batches, entering when NT$/Yen drops below 4.80, gradually averaging the cost. E.SUN Bank and Bank of Taiwan support this, and the operation is not complicated. The downside is that you need to open a foreign currency account first, and cash withdrawals may incur extra charges.

Suitable for those with foreign exchange experience or those looking to buy Yen fixed deposits (currently with an annual interest rate of 1.5-1.8%).

Online Currency Conversion + Airport Pickup: The Best Strategy Before Traveling Abroad

This method is especially suitable for those planning to go abroad.

No need for a foreign currency account. Simply fill in the currency, amount, pickup branch, and date on the bank’s official website. After completing the transfer, bring your ID and transaction notification to pick up in person. Taiwan Bank’s “Easy Purchase” service and Mega International Bank support this, and you can specify an airport branch for pickup.

Taiwan Bank even waives the handling fee (using Taiwan Pay costs only 10 NT$), with about 0.5% better exchange rate. Taoyuan Airport has 14 Taiwan Bank branches, two of which operate 24 hours. In total, exchanging 50,000 NT$ results in a loss of only 300-800 NT$, much lower than in-branch exchange.

The downside is that you need to make an appointment 1-3 days in advance, and pickup times are limited by bank hours. But if you are already planning to travel, this is hardly a disadvantage.

Foreign Currency ATMs: The Most Flexible but Most Limited

Available 24/7, using a chip-enabled debit card at foreign currency ATMs outside banks, deducting directly from your NT account, with a cross-bank fee of only 5 NT$. Sounds convenient, but there are many restrictions.

First, limited locations (about 200 nationwide), limited currencies (only Yen, USD, etc.), fixed denominations (only 1,000, 5,000, 10,000 Yen bills). Mega International Bank’s foreign currency ATM has a daily limit of 150,000 NT$, and during peak times (especially at airports), cash often runs out.

If you only need cash temporarily and don’t have time to visit a bank branch, foreign currency ATMs are a good emergency tool. But don’t wait until the last minute before your trip to withdraw, as you might find it sold out.

Is Exchanging Yen Now Really Cost-Effective?

The NT$/Yen rate is 4.85, compared to 4.46 at the beginning of the year, an appreciation of 8.7%. Just from this exchange gain, it’s already quite significant, especially considering the overall NT dollar depreciation environment.

But the deeper logic of exchanging for Yen is: Yen is one of the three major safe-haven currencies globally (the other two are USD and Swiss Franc). When global markets are turbulent, funds flow into Yen for safety. During the Russia-Ukraine conflict in 2022, Yen appreciated 8% in a week, while stocks fell 10%. For Taiwanese investors, exchanging for Yen is not just for leisure but also as a hedge against Taiwan stock market risks.

Recently, the Bank of Japan has shown a hawkish stance, with Governor Ueda Shinji signaling rate hikes. The market expects a 0.25 percentage point increase to 0.75% at the December 19 meeting (a 30-year high), and Japanese bond yields have hit a 17-year high of 1.93%. USD/JPY has fallen from 160 at the start of the year to around 154.58 now. Short-term, it may return to 155, but medium to long-term forecasts suggest it could go below 150.

So, the answer is: Exchanging Yen now is cost-effective, but don’t do it all at once. Gradually enter the market, diversify risk—that’s the right approach.

After Exchanging Yen, Don’t Let It Sit Idle

Once you’ve exchanged Yen, the key is how to use it next.

The simplest way is Yen fixed deposits, starting from 10,000 Yen, with an annual interest rate of 1.5-1.8%, available at E.SUN Bank or Taiwan Bank. Slightly more aggressive options include Yen ETFs (such as Yuanta 00675U), tracking Yen indices, with an annual management fee of 0.4%, suitable for dollar-cost averaging.

If you want to be closer to the market, you can directly trade Yen currency pairs, such as USD/JPY or EUR/JPY. This is a classic way to capture exchange rate fluctuations, with the advantage of being both long and short, 24-hour trading, and requiring only a small amount of capital. However, arbitrage trading carries risks—during global arbitrage unwinding, fluctuations of 2-5% are possible, so risk awareness is essential.

Final Recommendations

According to the latest regulations from various banks in 2025, the daily withdrawal limit for foreign currency ATMs is mostly between 100,000 and 150,000 NT$ (adjusted under the new rules). It’s advisable to split withdrawals or use your own bank card to avoid cross-bank fees.

For beginners, the simplest approach is “Taiwan Bank online currency exchange + airport pickup” or “foreign currency ATM for emergency.” Following the principles of “batch exchange + don’t let your currency sit idle” can minimize costs.

Not only does this make traveling abroad more affordable, but it also adds a layer of protection during global market turbulence.