Is the Japanese Yen more worth holding than the New Taiwan Dollar? A comparison of the actual costs across 4 major exchange channels

December 10, 2025, the TWD/JPY exchange rate reaches 4.85, attracting many Taiwanese to reassess the investment value of the yen. From 4.46 at the start of the year to now 4.85, the yen has appreciated over 8% against the TWD. But the question is: should I exchange now? Which channel offers the best deal?

Is it worth exchanging for yen? Three market reasons

Many think the yen is only for travel, but that’s not the case.

First, strong hedging attribute

The yen, along with USD and Swiss Franc, is one of the world’s three major safe-haven currencies. When global risk assets decline, funds flow into the yen for safety. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a week, while stocks fell 10%. Those converting to yen instead of TWD offset their stock losses. For Taiwanese investors, the yen essentially serves as a hedge against Taiwan stock market volatility.

Second, the low-interest financing function of the yen

The Bank of Japan maintains ultra-low interest rates (currently 0.5%), making the yen a “funding currency” for global arbitrage. Many funds borrow low-interest yen to invest in USD (the USD/JPY interest rate differential is about 4%), earning the interest spread. When risks rise, these arbitrage trades are closed, leading to large yen buybacks and pushing up the yen’s value—this is the core mechanism behind yen appreciation during risk-off periods.

Third, the Bank of Japan’s rate hike expectations

Ueda Kazuo recently made hawkish comments, and the market expects the BOJ to raise interest rates by 25 basis points to 0.75% at the December 19 meeting (a 30-year high). Japanese bond yields have hit a 17-year high of 1.93%. If the rate hike is confirmed, the yen will become more attractive in the long term.

So, is it worthwhile to exchange yen now? Yes, but operate in batches, not all at once.

Actual costs of four yen exchange channels in Taiwan

There are many ways to exchange yen, but the costs can differ by up to 50%. Here are actual figures as of December 2025.

First: Bank counter cash exchange — the most traditional but most expensive

Bring cash TWD to a bank or airport counter to exchange for yen. Banks use the “cash selling rate,” usually 1-2% worse than the spot market rate, plus possible service fees, making this the priciest method.

Based on Taiwan Bank’s rate at 09:18 on December 10, 2025, the cash selling rate is about 0.2060 TWD/JPY (i.e., 1 TWD = 4.85 JPY). For 50,000 TWD, the loss is roughly 1,500–2,000 TWD.

Comparison of bank rates and fees (2025/12/10):

Pros: Safe, reliable, full denominations, staff assistance.
Cons: Worse exchange rate, limited to banking hours (weekday 9:00–15:30).
Suitable for: Urgent needs, unfamiliar with online methods.

Second: Online exchange + in-person withdrawal — a balanced approach

Complete TWD to JPY transfer via bank app or online banking, using the “spot sell rate” (about 1% better than cash selling rate). If cash is needed, withdraw at the branch. Withdrawal incurs a currency exchange fee (~100–200 TWD).

For 50,000 TWD, total cost is about 500–1,000 TWD, saving roughly half.

Pros: Better rates, 24/7 operation, flexible batch entry.
Cons: Need to open a foreign currency account first; withdrawal fees apply.
Suitable for: Experienced forex investors, long-term holdings, can transfer to yen deposits (annual interest 1.5–1.8%).

Third: Online currency exchange reservation — the most cost-effective for travelers

Book currency exchange directly on bank websites, specify currency, amount, pickup branch, and date. After booking, bring ID and notification to pick up in person. Taiwan Bank and Mega Bank mainly offer this, with airport branch reservations available.

Taiwan Bank’s “Easy Purchase” online exchange fee is waived (pay via Taiwan Pay, only 10 TWD), with a 0.5% better rate. For 50,000 TWD, cost is about 300–800 TWD.

Taoyuan Airport has 14 Taiwan Bank counters (2 open 24 hours), ideal for pre-departure booking.

Pros: Often fee-free, better rates, specify airport pickup.
Cons: Need to book 1–3 days in advance, branches cannot modify bookings.
Suitable for: Planned travelers who want to pick up at the airport.

Fourth: Foreign currency ATM cash withdrawal — most flexible but limited

Use chip-enabled bank cards at foreign currency ATMs to withdraw yen cash, available 24/7, cross-bank fee only 5 TWD. E.SUN Bank’s foreign currency ATMs allow withdrawal from TWD accounts, with a daily limit of 150,000 TWD equivalent.

Note: Japan’s ATM withdrawal services will be adjusted by end of 2025, requiring international cards (Mastercard/Cirrus). Taiwan has about 200 foreign currency ATMs mainly in urban areas; rural areas have fewer.

For 50,000 TWD, cost roughly 800–1,200 TWD.

Pros: Instant withdrawal, high flexibility, low cross-bank fees.
Cons: Limited locations, fixed denominations (1,000/5,000/10,000 JPY), possible stockouts during peak times.
Suitable for: Last-minute needs, no time for counter exchange.

Cost comparison table of four methods

Yen and TWD exchange rate outlook

Currently, USD/JPY is around 154.58, down about 4% from 160 at the start of the year. Short-term may rebound to 155, but medium to long-term forecasts suggest below 150.

Factors supporting yen strength:

• BOJ rate hike expected (to 0.75% in December)
• US entering rate cut cycle, narrowing US-Japan interest gap
• Geopolitical risks (Taiwan Strait, Middle East) boosting safe-haven demand

Risks pushing yen lower:

• Arbitrage unwinding could cause 2–5% volatility
• Japan’s economic recovery may underperform

Investors are advised to dollar-cost average rather than exchange all at once. Especially in the 4.80–4.85 range, staggered entry can lower average costs.

What to do after exchanging yen? Four ways to increase value

Holding yen without earning interest is a missed opportunity. Here are four options suitable for small-scale beginners:

1. Yen fixed deposit
Open a foreign currency account at E.SUN or Taiwan Bank, transfer online into yen fixed deposit, starting from 10,000 yen, with annual interest of 1.5–1.8%. A conservative choice.

2. Yen insurance policy
Cathay or Fubon offer yen savings insurance with guaranteed interest rates of 2–3%. Suitable for mid-term holding (5–6 years).

3. Yen ETFs
Yuanta 00675U or other yen-related ETFs, buy fractional shares via broker apps, tracking yen index, with 0.4% annual management fee. Good for dollar-cost averaging.

4. Forex swing trading
Trade USD/JPY or EUR/JPY directly, using the yen’s two-way volatility to profit. Forex platforms offer 24-hour trading, long/short options, low fees, suitable for experienced traders.

FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate is the rate banks offer for physical bills and coins, paid immediately, but 1–2% worse than the spot rate. Spot rate is the FX market’s T+2 settlement rate, closer to international market prices.

Q: How much yen can I get with 10,000 TWD?
Using Taiwan Bank’s rate at 4.85, 10,000 TWD ≈ 48,500 JPY; at spot rate 4.87, ≈ 48,700 JPY. Difference about 200 JPY (~40 TWD).

Q: What ID do I need for counter exchange?
Taiwanese: ID card and passport; foreigners: passport and residence permit; companies: business registration. Pre-booked transactions require notification letter. Under 20 need parental consent and ID.

Q: What’s the daily withdrawal limit at foreign currency ATMs?
From October 2025, limits vary: CTBC about 120,000 TWD/day; Taishin about 150,000 TWD/day; E.SUN about 150,000 TWD/day. To avoid exceeding limits, consider multiple withdrawals or use your bank’s card.

Summary

The yen has evolved from a purely travel currency to an asset with hedging and investment value. Whether traveling or asset allocation, the key is “batch exchange, don’t sit idle after exchanging” to minimize costs and maximize gains. Beginners are advised to start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then move into deposits, ETFs, or swing trading based on needs. This approach makes travel more economical and provides extra protection amid global market fluctuations.