Japanese Yen vs USD, how to exchange in 2025? 4 essential currency exchange strategies investors must know

Yen and USD Should You Buy Both? Check the Exchange Rate First

As of December 10, 2025, the NT$ to JPY is approximately 4.85, and to USD is about 32.5. Many Taiwanese investors face the same dilemma: is it more cost-effective to exchange for yen or dollars now? The answer depends on your investment goals, risk tolerance, and global economic outlook.

Since the beginning of the year, the yen has appreciated about 8.7% against the NT$, while the USD has appreciated about 6.2%. Both have performed well, but the underlying logic is entirely different.

The yen has long been regarded as one of the three major safe-haven currencies (along with the USD and Swiss Franc). During global market turbulence, funds tend to flow into the yen. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, while the stock market fell 10%, demonstrating the power of safe-haven assets. Currently, with increased volatility in Taiwan stocks, exchanging for yen has become an option for many investors to hedge risks.

The USD is a hard currency and the primary settlement currency worldwide. The Federal Reserve maintains relatively high interest rates (around 5.25-5.5%), with a US-Japan interest rate differential exceeding 4.0%. Many arbitrage traders borrow in low-interest yen to invest in higher-yield USD assets, which explains why there are still many who find it suitable to buy USD now.

In simple terms: hedge with yen, earn with dollars.

Why Has the Yen Become a Hot Currency for Exchange?

Besides its safe-haven attribute, the yen is far more practical in Taiwan than other foreign currencies.

Travel and Consumption Needs: Most merchants across Japan still primarily transact in cash (credit card penetration is only about 60%). Whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, carrying cash in yen remains essential. Additionally, when Taiwanese buy Japanese cosmetics, fashion, or anime merchandise, there is a large demand for direct payments in yen to agents or Japanese websites.

Investment Value: Recently, the Bank of Japan has shifted to a hawkish stance, with Governor Ueda Kazuo signaling an imminent rate hike. The market expects a 0.25 percentage point increase at the December 19 meeting (a 17-year high), with Japanese government bond yields reaching 1.93%, the highest in 17 years. This suggests that yen deposit interest rates will rise, and some banks are already offering annual rates of 1.5-1.8%, making yen deposits increasingly attractive.

Hedging Against NT$ Depreciation Pressure: Under the global rate hike environment, the NT$ faces risks of depreciation. Converting some funds into yen is akin to seeking a safe haven among international currencies, especially for long-term asset allocators.

4 Ways for Taiwanese to Exchange Yen: Cost and Efficiency Analysis

Many think exchanging yen only involves going to a bank, but choosing the wrong currency exchange channel can cost several cups of bubble tea more. Below, sorted from lowest to highest cost:

First Choice: Online Currency Exchange + Airport Pickup (Lowest Cost)

No need to open a foreign currency account. Simply fill in the currency, amount, pickup branch, and date on the bank’s official website. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay only NT$10 via Taiwan Pay), with an exchange rate about 0.5% better than counter rates. After completing the transfer, bring your ID and transaction notice to pick up at the counter, with appointment options at Taoyuan Airport branch.

Based on the December 10, 2025, rate, Taiwan Bank’s online exchange rate is about 4.87 (more favorable than the cash selling rate of 0.2060 NT$/JPY), with an estimated loss of only NT$300-800 for NT$50,000 exchanged. This method is ideal for planned travelers, especially those who prepare before departure.

Advantages: Better exchange rate, often no fee, supports airport pickup, 24/7 online operation
Disadvantages: Requires prior appointment (1-3 days), pickup limited to bank hours
Suitable for: Planned travelers who want to pick up at the airport

Second Choice: Online Exchange + Foreign Currency Account (Investment-Oriented)

Use online banking or app to convert NT$ into yen and deposit into a foreign currency account, using the “spot sell rate” (about 1% better than cash sell rate). After currency exchange via E.SUN Bank app, the rate is about 4.86. For cash, you can withdraw at counters or foreign currency ATMs, but there will be a spread and handling fee (minimum NT$100).

This method allows for installment purchases to average costs. When NT$ to JPY falls below 4.80, buy in; when above 4.90, reduce holdings, flexibly responding to exchange rate fluctuations. If not in a hurry to withdraw cash, you can also transfer yen into a yen deposit (annual interest 1.5-1.8%), letting idle funds earn interest. Estimated loss for NT$50,000 exchange is NT$500-1,000.

Advantages: 24-hour operation, dollar-cost averaging, favorable rates, potential for yen investment
Disadvantages: Need to open a foreign currency account first, withdrawal fees apply
Suitable for: Experienced forex traders planning long-term holding or investing in yen

Third Choice: Foreign Currency ATM Withdrawal (Urgent Need)

Use a chip-enabled bank card to withdraw yen cash at foreign currency ATMs, available 24 hours. E.SUN Bank’s foreign currency ATMs allow NT$ account holders to withdraw yen with a daily limit of NT$150,000, no exchange fee, and only NT$5 cross-bank fee. This is the most flexible option, especially for urgent needs.

Note that ATM locations are limited (about 200 nationwide), and denominations are fixed (1,000/5,000/10,000 yen). During peak times (like at airports), cash may run out. Estimated loss for NT$50,000 exchange is NT$800-1,200. Since the new regulations in 2025, most banks have lowered daily limits to NT$100,000-150,000; consider splitting withdrawals.

Advantages: 24/7 instant withdrawal, low cross-bank fees, high flexibility
Disadvantages: Limited locations and denominations, possible cash shortages during peak times
Suitable for: Those who cannot visit a bank or need immediate cash

Fourth Choice: Counter Cash Exchange (Backup Plan)

Bring NT$ cash directly to a bank branch or airport counter to exchange for yen cash. Although simple, it uses the “cash selling rate” (about 1-2% worse than spot rate), making it the most costly. Taiwan Bank’s December 10, 2025, cash selling rate is 0.2060 NT$/JPY, with some banks charging fixed fees (NT$50-200). Estimated loss for NT$50,000 exchange is NT$1,500-2,000.

Only recommended as a backup, such as for last-minute cash needs at the airport.

Advantages: Safe, full denominations, on-site assistance
Disadvantages: Worst exchange rate, limited operating hours (9:00-15:30 weekdays), possible higher fees
Suitable for: Those unfamiliar with online methods or needing small emergency cash

Cost comparison of 4 methods (based on NT$50,000 exchange, data as of December 2025)

Is It Worth Exchanging Yen Now? The Key Is in Staged Buying

In 2025, the yen appreciated 8.7%, slightly outperforming the USD’s 6.2% rise. But this doesn’t mean it’s the best time to buy all at once; a cautious staged approach is better.

Exchange Rate Trend Analysis: USD/JPY dropped from a high of 160 at the start of the year to around 154.58 now. Short-term fluctuations may bring it back to 155, but medium to long-term forecasts suggest below 150. This indicates a 2-5% short-term correction risk during yen appreciation, especially when closing arbitrage positions.

BOJ Rate Hike Expectations: The December 19 meeting is widely expected to raise rates to 0.75% (over 80% probability), supporting the yen’s strength. Meanwhile, Japanese bond yields hit a 17-year high of 1.93%, increasing the attractiveness of yen assets.

Suggested Strategy: Use staged buying to avoid lump-sum risk. For example, converting NT$50,000 into yen in 3-4 installments within the 4.80-4.90 range. This reduces entry risk and avoids losses from adverse exchange rate movements.

After Buying Yen, Don’t Let It Sit Idle

Once the yen is exchanged, the key is to keep the funds working rather than letting them sit idle. Here are four options ranked from low to high risk:

Yen Fixed Deposit (Most Stable): E.SUN Bank, Taiwan Bank, and others offer yen deposits starting from 10,000 yen, with annual interest rates of 1.5-1.8%. Suitable for risk-averse investors, with stable but limited returns.

Yen Savings Policy (Medium Term Hold): Cathay, Fubon Life’s yen savings insurance offers guaranteed 2-3% interest, with insurance coverage. Lock-in periods are typically 3-5 years; early withdrawal may incur losses.

Yen ETFs (Growth-Oriented): Yuanta 00675U and other yen index ETFs can be bought via brokerage apps, suitable for dollar-cost averaging. Management fee around 0.4%, ideal for long-term bullish outlook on yen.

Forex Trading (Swing Trading): Trade USD/JPY, EUR/JPY directly on forex platforms, allowing long and short positions 24/7. Low capital requirement but high risk; requires technical analysis skills.

FAQs

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

Cash rate applies to physical bills/coins, provided instantly by banks, but costs about 1-2%. Spot rate is the FX market’s T+2 settlement rate, mainly for electronic transfers, more favorable but requires waiting. Simply put, cash is convenient but costly; spot is cheaper but takes time.

Q: How much yen can I get for NT$10,000?

Using Taiwan Bank’s December 10, 2025, rate: at 4.87, NT$10,000 ≈ 48,700 yen; at cash sell rate 4.85, ≈ 48,500 yen. Difference about 200 yen (NT$40).

Q: What do I need to bring for counter exchange?

ID + passport (for locals) or passport + residence permit (for foreigners). If pre-booked online, also bring transaction notice. Under 20 needs parent’s consent; amounts over NT$100,000 may require source declaration.

Q: Are there limits on foreign currency ATM withdrawals?

Different banks have different limits. CTBC Bank’s limit is NT$120,000 equivalent per day; others like Taishin Bank and E.SUN Bank are NT$150,000. Since 2025, most banks have lowered limits to NT$100,000-150,000. Plan withdrawals accordingly.

Summary: The Golden Rules of Yen Investment

The yen has evolved from a “travel pocket money” currency to an asset with both hedging and investment functions. Whether for travel or asset allocation, the key is mastering “staged exchange + don’t leave it idle” principles.

Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then progress to yen deposits, ETFs, or small forex trades. This not only makes travel more cost-effective but also adds a layer of protection during market volatility. Especially under NT$ depreciation pressure, holding yen strategically offers significant value.