Foreign Currency Exchange Practical Guide: How to Exchange Hong Kong Dollars and Japanese Yen to Save the Most Money?

In the current foreign currency investment boom, Hong Kong dollar and Japanese yen are two major mainstream choices. But do you know? Choosing the wrong exchange method can cost you hundreds of dollars in spread differences. Today, let’s break down the most cost-effective exchange options for these two currencies.

Hong Kong Dollar vs Japanese Yen: Why Exchange Both?

Many people think foreign currencies are only used for travel, but in fact, from daily life to asset allocation, HKD and JPY each have their own uses.

Three Major Values of JPY

First is travel demand. Japan’s cash culture is deeply rooted, especially in local cities, where many merchants only accept cash. Second is investment attribute—JPY is one of the world’s three safe-haven currencies (along with USD and Swiss Franc). When the stock market fluctuates or geopolitical risks rise, funds flood into JPY seeking refuge. Lastly, interest rate advantage—although Japan maintains a very low interest rate policy (around 0.5%), the interest rate differential with TWD remains attractive, especially suitable for fixed deposits or arbitrage trading in JPY.

Hidden Advantages of HKD

Although HKD is less discussed than JPY, it is equally practical. Tourism in Hong Kong and Macau, cross-border shopping often require HKD; from an asset allocation perspective, HKD, as a linked exchange rate currency, has relative stability; plus, Hong Kong as an international financial center makes opening HKD accounts more convenient and transfer costs lower.

For Taiwanese investors, HKD can serve as a stepping stone into the Asian market, while JPY is purely for hedging + yield allocation.

4 Ways to Exchange Foreign Currencies Compared

Many think exchanging foreign currency is just a trip to the counter, but in reality, the spread difference can cost you 1,000-2,000 yuan. We compare the costs of each method with actual data.

First: Bank Counter Cash Exchange

Bring TWD cash directly to the bank counter or airport to exchange for HKD or JPY cash. This is the most traditional and “expensive” way—banks price based on the “cash selling rate,” which is about 1-2% worse than the spot rate.

For example, in December 2025, exchanging 50,000 TWD to JPY:

• Cash selling rate approx. 0.206 (1 TWD = 4.85 JPY)
• You get about 48,500 JPY
• Using the spot rate of about 4.87, you could get 48,700 JPY
• Spread difference about 200 JPY (equivalent to 40 TWD)

Plus, if there are handling fees (some banks charge 100-200 TWD per transaction), costs increase further.

Pros: Safe, full denominations, staff assistance
Cons: Worst exchange rate, limited operating hours, possible fees
Suitable for: Small urgent exchanges (e.g., at the airport)

Second: Online Exchange + Counter or ATM Withdrawal

Use bank app or online banking to convert TWD directly into foreign currency and deposit into your account, using the “spot selling rate” (about 1% better than cash rate). Then withdraw cash at ATM or counter.

The advantage is you can observe exchange rate trends, buy in batches at low points (e.g., TWD to JPY drops below 4.80), averaging your costs.

Using the same 50,000 TWD to JPY example:

• Spot rate approx. 4.87
• You get about 48,700 JPY
• If you withdraw cash again, pay an additional 100-200 TWD handling fee
• Total cost is higher than counter exchange, but you save about 300-500 TWD in spread loss

Pros: 24/7 operation, low-cost averaging, better rates
Cons: Need to open foreign currency account first, withdrawal fees
Suitable for: Experienced investors, regular exchange plans

Third: Online Currency Exchange Reservation + Airport Pickup

This is the smartest way before traveling abroad. Fill in the amount, pickup date, and branch (usually airport branch) on the bank’s official website. After completion, just pick up cash at the counter—no need to queue.

Many banks offer this service, often fee-free. For example, a major bank charges only 10 TWD fee via its dedicated app (using designated payment methods), with about 0.5% exchange rate advantage.

Pros: Better rates, often no fee, airport pickup, planning advantage
Cons: Need to book 1-3 days in advance, pickup during bank hours
Suitable for: Travelers planning to go abroad and want to withdraw directly at the airport

Fourth: 24-Hour Foreign Currency ATM Withdrawal

Use a chip-enabled financial card to withdraw HKD or JPY at foreign currency ATMs, available 24 hours. Deducts directly from TWD account, with only a 5 TWD cross-bank fee, no additional exchange fee.

This method is the most flexible, especially for urgent needs. But the drawbacks are limited ATM locations (about 200 nationwide), only major currencies, fixed denominations (e.g., 1000/5000/10000 JPY). During peak times (like at airports), cash may be sold out.

Pros: Instant withdrawal, maximum flexibility, low cross-bank fee
Cons: Few ATM locations, limited denominations, may run out during peak hours
Suitable for: Last-minute needs, no time for counter exchange

Cost comparison table (based on exchanging 50,000 TWD)

Should You Exchange for HKD or JPY Now? Timing Analysis

JPY Market: Fluctuating, Mid-term Uptrend

As of December 2025, TWD to JPY is about 4.85, appreciating 8.7% since the start of the year. The Bank of Japan is expected to raise interest rates (to 0.75% by year-end, a 30-year high), pushing JGB yields to 17-year high of 1.93%. JPY/USD has fallen from 160 to around 154.58, likely fluctuating between 155-158 in the short term, with a long-term expectation to stabilize below 150.

Conclusion: Now is not the lowest point but not expensive either. It’s advisable to buy in batches, avoiding full conversion at once, to diversify risk.

HKD Market: Relatively Stable, Good for Hedging Taiwan Stock Volatility

HKD, pegged to USD via the linked exchange rate system, has less fluctuation than JPY. Under TWD depreciation pressure, HKD accounts can serve as a relatively stable hedge.

Conclusion: HKD and JPY are complementary—JPY for high yield + hedging, HKD for stability + cross-border payments.

After Exchanging Foreign Currency, Don’t Let Your Money Sit Idle

If you’ve successfully exchanged for HKD or JPY, don’t let it sit in your account without earning interest. Here are four small-scale value-added options suitable for beginners:

1. Foreign Currency Fixed Deposit
The safest choice. Both HKD and JPY have decent fixed deposit rates (JPY approx. 1.5-1.8%, HKD approx. 2-3%). Minimum 10,000 TWD investment, risk-free.

2. Foreign Currency Insurance
Savings insurance with guaranteed interest rates around 2-3%, combining protection and growth. Good if you have idle funds and plan mid-term holding.

3. Foreign Currency Index Products
Invest in related ETFs or index funds tracking HKD or JPY trends. Low cost, diversified risk, suitable for dollar-cost averaging.

4. Foreign Currency Trading
Trade on forex platforms for swing or intraday trading, e.g., USD/JPY, EUR/HKD. High risk and high reward, suitable for experienced investors. 24-hour market, small capital needed, but requires good understanding of exchange rate movements.

HKD to TWD vs JPY to TWD: Common Exchange Questions

Q. Where is the best place to exchange HKD to TWD?

The logic for HKD to TWD is the same as for JPY:

• Cheapest: Online exchange reservation (least spread)
• Fastest: Foreign currency ATM withdrawal (anytime, anywhere)
• Safest: Bank counter (but most expensive)

HKD/TWD is relatively stable; using online reservation or ATM can save 300-800 TWD.

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

Cash Rate: For physical banknotes/coins, banks add 1-2%, paid on the spot. Pros: immediate cash; Cons: highest cost.

Spot Rate: Electronic account exchange, settled T+2, close to international market price, lowest cost. Cons: takes a few working days.

Q. How much HKD/JPY can 10,000 TWD buy?

As of December 2025 rates:

• 10,000 TWD ≈ 10,000 ÷ 4.0 (HKD/TWD) ≈ 2,500 HKD
• 10,000 TWD ≈ 10,000 × 4.85 ≈ 48,500 JPY

(Note: actual rates fluctuate; check bank websites for real-time data)

Q. What should I watch out for in large foreign currency exchanges?

Exchanges over 100,000 TWD may require filling out source of funds declaration (anti-money laundering). Counter transactions need ID + passport; under 20 years old need parental accompaniment.

Latest rules show some banks’ daily ATM withdrawal limits for foreign currencies have dropped to 100,000-150,000 TWD. During peak times (like at airports), cash may run out quickly. Plan ahead or split withdrawals.

Final Advice

Whether HKD or JPY, the key is to choose the right method, buy in batches, and add value after exchange:

1. For beginners: Use bank online reservation + airport pickup, or foreign currency ATM—cost-effective and convenient
2. For investors: Buy gradually, observe low points, combine with fixed deposits or index products for growth
3. For hedging: JPY and HKD are complementary—JPY for high yield + hedging, HKD for stability + cross-border payments

This way, you can minimize exchange costs, gain extra protection during market turbulence, and keep your idle funds working for you.