How should Taiwanese investors precisely position themselves amid fluctuations in the Japanese Yen exchange rate?

In December 2025, the TWD/JPY exchange rate reached 4.85, appreciating 8.7% since the beginning of the year. Is now the right time to exchange for yen—an opportunity or a risk? We analyze the yen cash allocation strategy in depth from three dimensions: investment cost, timing judgment, and operational methods.

Why is now a good time to pay attention to exchanging for yen?

The exchange rate advantage window is narrowing

The Bank of Japan is on the verge of raising interest rates—Governor Ueda Kazuo’s hawkish remarks have pushed market expectations for rate hikes to 80%, with a 0.25 basis point increase to 0.75% expected at the December 19 meeting (a 30-year high). Japanese government bond yields have hit a 17-year high of 1.93%, indicating long-term yen appreciation pressure is established.

Meanwhile, USD/JPY has fallen from a high of 160 at the start of the year to around 154.58. Short-term fluctuations may return to 155, but medium to long-term forecasts suggest it will stay below 150. For Taiwanese investors, this wave of exchange rates is already near a high point; staggered entry is wiser than waiting for a rebound.

The necessity of risk-hedged asset allocation

The yen ranks among the world’s three major safe-haven currencies (alongside USD and Swiss Franc), attracting capital during market turbulence. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, effectively buffering stock market declines. Taiwanese investors face dual pressures of stock market volatility and TWD depreciation; appropriately allocating yen assets can build a defensive fortress.

Observations show that in the second half of 2025, Taiwan’s currency exchange demand increased by 25%, mainly driven by tourism recovery and hedging needs, reflecting strong market demand for yen.

Five key decisions: choosing the right exchange method to save costs

Rather than asking “which method is cheapest,” it’s more about understanding “which method suits you best.” Based on capital size, timing flexibility, and risk tolerance, strategies vary greatly.

Method 1: Cash window exchange—most traditional, highest cost

Carry TWD cash directly to a bank branch or airport counter to exchange for yen cash. Banks use the “cash selling rate” (about 1-2% worse than the spot rate), making this the most expensive method.

For example, Taiwan Bank’s rate on December 10, 2025, is approximately 0.2060 TWD per yen (about 4.85 yen per TWD). Some banks charge additional fixed fees, further increasing costs.

Estimating for 50,000 TWD exchanged, the loss is about 1,500–2,000 TWD, equivalent to paying about 1.2% more on the rate. Suitable for urgent, temporary needs (like sudden cash requirement at the airport) or those unfamiliar with online operations.

Comparison of cash selling rates (2025/12/10):

• Taiwan Bank: 0.2060 (no fee)
• E.SUN Bank: 0.2058 (fee 100 TWD)
• E.SUN Bank: 0.2067 (fee 100 TWD)
• Cathay United Bank: 0.2063 (fee 200 TWD)
• Taipei Fubon Bank: 0.2069 (fee 100 TWD)

Method 2: Online spot exchange + airport pickup—smartest, reservation-based

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 notification to the counter for pickup. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay only 10 TWD via TaiwanPay), with about 0.5% better rates.

This is the best pre-departure reservation method. Taoyuan Airport has 14 Taiwan Bank outlets (including 2 24-hour branches), allowing direct cash pickup before departure. Suitable for planners who want to pick up cash at the airport.

Estimated loss: 300–800 TWD, about 0.6–1.6% extra fee. Requires 1–3 days’ advance reservation; pickup time limited by bank hours.

Method 3: Foreign currency ATM withdrawal—most flexible, 24/7 operation

Use a chip-enabled debit card at foreign currency ATMs to withdraw yen cash, supporting 24-hour operation and interbank transactions (only 5 TWD cross-bank fee from TWD account). E.SUN Bank’s foreign currency ATMs allow withdrawal from TWD accounts with a daily limit of 150,000 TWD, no exchange fee.

Estimated loss: 800–1,200 TWD (including exchange rate difference and fees). Advantages include instant withdrawal and high flexibility; disadvantages are limited locations and denominations (fixed at 1,000/5,000/10,000 yen), with cash often sold out during peak times. Not recommended to wait until the last minute to withdraw.

Daily withdrawal limits at foreign currency ATMs (2025 new system):

• CTBC Bank: equivalent to 120,000 TWD
• Taishin Bank: equivalent to 150,000 TWD
• E.SUN Bank: equivalent to 150,000 TWD (including debit card)

Method 4: Online exchange to foreign currency account—best for investors

Use online banking or app to convert TWD into yen and deposit into a foreign currency account, using “spot sell rate” (about 1% better than cash sell). If cash is needed later, can withdraw at branches or foreign currency ATMs, but with additional FX spread fees (starting around 100 TWD).

Suitable for those monitoring exchange rates, entering in batches at low points (e.g., TWD/JPY below 4.80). Estimated loss: 500–1,000 TWD. Advantages include 24/7 operation and averaging costs over multiple entries; requires opening a foreign currency account first.

Ideal for readers experienced with forex and regularly using foreign currency accounts, and for investing in yen deposits (current annual interest rate about 1.5–1.8%).

Quick decision table for four exchange methods

Advanced strategies for yen cash allocation

After exchanging yen, don’t let your money sit idle without interest. Based on your goals and risk appetite, there are four advanced allocation methods.

Yen fixed deposit: Conservative option, open foreign currency accounts at E.SUN/ Taiwan Bank, deposit online. Minimum 10,000 yen, annual interest 1.5–1.8%. Suitable for capital preservation.

Yen insurance policy: Medium-term holding, buy savings insurance from Cathay Life or Fubon Life, with guaranteed interest rates of 2–3%. Suitable for medium-term wealth management.

Yen ETFs: Growth-oriented, Yuanta 00675U tracks yen index, can buy fractional shares via broker apps, suitable for dollar-cost averaging. Management fee 0.4% annually, diversifies risk.

Forex swing trading: Directly trade USD/JPY or EUR/JPY currency pairs on forex platforms. Advantages include two-way trading, 24/7 operation, and small capital requirements. Suitable for capturing exchange rate fluctuations.

FAQs about exchanging for yen

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

Cash rate (Cash Rate) applies to physical cash buying and selling, with the advantage of immediate delivery but usually 1–2% worse than the spot rate, plus possible higher fees.

Spot rate (Spot Rate) is the exchange rate for transactions settled within two business days in the forex market, mainly used for electronic transfers and non-cash settlements. It offers more favorable rates (close to international market prices) but requires T+2 settlement.

How much yen can I get for 10,000 TWD?

Calculation formula: 【Yen amount = TWD amount × current rate (TWD/JPY)】

Using Taiwan Bank’s cash sell rate (~4.85), 10,000 TWD can be exchanged for about 48,500 yen. Using the spot sell rate (~4.87), about 48,700 yen, a difference of roughly 200 yen.

What do I need to bring for counter service?

Taiwanese citizens: ID card + passport; foreigners: passport + residence permit. For corporate exchange, bring business registration proof. If pre-booked online, also bring transaction notification. Under 20 years old: accompanied by parent and consent form; for large amounts (over 100,000 TWD), may need to declare source of funds.

Summary: Yen is now a multi-functional asset

Yen is no longer just pocket money for travel but also a safe-haven and small investment asset. Facing TWD depreciation and stock market volatility, appropriately allocating yen assets can enhance portfolio resilience.

Best practice strategy: Based on capital size and timing flexibility, prioritize “online exchange + airport pickup” or “foreign currency ATM” for lowest cost and highest flexibility. After exchanging yen, immediately move into fixed deposits or ETFs to avoid cash sitting idle. Use staggered entry instead of one-time exchange to average costs and respond to short-term fluctuations.

This way, you not only enjoy more cost-effective travel but also add an extra layer of asset protection amid global market turbulence.