NTD to JPY at 4.85: A Guide to the Most Cost-Effective Exchange Solution at Critical Moments

December 10, 2025, the TWD/JPY exchange rate broke through the 4.85 mark, marking an important milestone this year. Compared to the early-year level of 4.46, the appreciation is 8.7%—this not only means lower travel costs abroad but more importantly, as one of the world’s three major safe-haven currencies, the Japanese Yen’s allocation value is becoming more prominent. Meanwhile, the exchange rate movement between HKD and JPY is also worth noting, reminding us of potential FX arbitrage opportunities within the Asia-Pacific region.

Why is the Yen worth paying attention to? It’s not just a travel tool anymore

Many people equate the Yen with travel shopping, but this perception is outdated. The current attractiveness of the Yen stems from three dimensions:

Travel and daily consumption: Japan’s cash economy remains strong (credit card penetration is only 60%), meaning whether you’re shopping in Tokyo, skiing in Hokkaido, or purchasing Japanese cosmetics via proxy, cash Yen is essential. Those planning to study abroad or work holiday can exchange Yen in advance to hedge against sudden exchange rate fluctuations.

The core logic in financial markets is Yen’s safe-haven property: During global market volatility (e.g., Russia-Ukraine conflict in 2022), funds flow into Yen for protection—during that week, Yen appreciated by 8%, while stocks fell 10%. For Taiwanese investors, holding Yen is effectively buying insurance against Taiwan stock market fluctuations.

The arbitrage mechanism is more complex: The Bank of Japan has maintained ultra-low interest rates (currently 0.5%) for a long time, making Yen a global “funding currency”—investors borrow Yen at low interest, convert to higher-yield USD (USD/JPY interest rate differential of 4.0%), and unwind when risks increase. This cycle can reverse during market turbulence, bringing about 2-5% volatility.

Four ways to exchange Yen—Which one is the most cost-effective?

Taiwanese typically have four options to exchange Yen, with cost differences far greater than expected. Here’s a real-world analysis:

Option 1: Bank counter cash exchange—most traditional but most expensive

Go directly to a bank or airport counter, exchange cash for banknotes. Simple operation, but using the “cash selling rate” (1-2% worse than spot rate), plus possible handling fees, makes it the most costly.

For example, Taiwan Bank’s rate on December 10, 2025, is about 0.2060 TWD/JPY (equivalent to 1 TWD = 4.85 JPY). Different banks have slight variations; some charge NT$100 handling fee, others free. Exchanging NT$50,000 this way results in a loss of about NT$1,500–2,000.

Best for: Small emergency needs (like at the airport) or those unfamiliar with online methods.

Option 2: Online FX transfer to foreign currency account, then withdraw at counter or ATM—moderate cost and flexible

Use online banking app to convert TWD to Yen, deposit into a foreign currency account, enjoying the “spot sell rate” (about 1% better than cash rate). To get cash, you can go to the counter or withdraw via foreign currency ATM, but withdrawal incurs FX spread and handling fees (from NT$100).

Advantages include the ability to split purchases—monitor exchange rates, buy in installments when rates are low (e.g., TWD/JPY below 4.80), averaging costs. Major banks like E.SUN, CTBC support this service, also offering Yen fixed deposits (annual interest 1.5–1.8%). Cost for NT$50,000 is about NT$500–1,000.

Best for: Those experienced with FX accounts, planning long-term holding or fixed deposits.

Option 3: Online currency exchange with direct airport pickup—best pre-departure choice

Most convenient pre-order FX exchange. Fill in amount, currency, pickup branch, and date on bank’s website, then pick up with ID and notification at the counter. Taiwan Bank’s “Easy Purchase” online FX exchange has no handling fee (pay NT$10 via TaiwanPay), with about 0.5% better rate. The biggest advantage is reserving at one of 14 Taoyuan Airport locations (including 2 24-hour branches), allowing direct pickup before departure, saving the hassle of city bank visits.

Note: Must reserve 1–3 days in advance; pickup time limited by bank hours; cannot change branch after booking. Cost for NT$50,000 is about NT$300–800, making it the most cost-effective among the four options.

Best for: Well-planned travelers with confirmed travel dates.

Option 4: Foreign currency ATM withdrawal—24/7 access but limited locations

Use chip-enabled bank card at foreign currency ATMs to withdraw Yen, available 24/7, cross-bank fee NT$5 (deducted directly from TWD account). E.SUN Bank’s foreign currency ATM limit is NT$150,000 per day, with no FX fee.

However, only about 200 such ATMs nationwide, with limited cash supply—especially during peak times (airports, year-end)—risk running out of cash. Denominations are fixed at 1,000, 5,000, 10,000 Yen, limiting flexibility. Cost for NT$50,000 is about NT$800–1,200.

Best for: Those with no time to visit banks, urgent needs, but should allow enough time to ensure cash availability.

Cost comparison table of the four options

To exchange now or wait?

Short-term view: Yen is in an upward cycle. Recent hawkish comments from BOJ Governor Ueda have pushed market expectations for rate hikes to 80%, with a December 19 meeting expected to raise rates by 0.25 basis points to 0.75% (a 17-year high). The yield on 30-year Japanese bonds has hit 1.93%, the highest since 2008. This contrasts with the US easing cycle, further supporting Yen.

USD/JPY has fallen from a high of 160 early this year to around 154.58 now, with a short-term correction to about 155 possible, but medium to long-term forecasts suggest a retreat below 150. Meanwhile, the HKD/JPY exchange rate also reinforces Yen’s safe-haven status.

Investment advice: Enter gradually, avoid all-in exchange. While Yen’s safe-haven property is strong, risks of two-way volatility remain. Rate hikes benefit Yen, but global arbitrage unwinding or geopolitical conflicts (Taiwan Strait, Middle East) could reverse trends. It’s recommended to exchange in installments, balancing psychological comfort and market risk.

In the second half of 2025, Taiwan’s FX demand is projected to grow by 25%, driven mainly by tourism recovery and increased hedging needs, reflecting market recognition of Yen.

Path to wealth after getting Yen

Don’t let your Yen idle and earn interest. Based on holding period and risk appetite, four common paths:

Fixed deposits: The safest choice. Open FX accounts at E.SUN, Taiwan Bank, deposit Yen into fixed deposits. Minimum NT$10,000, annual interest 1.5–1.8%, suitable for conservative investors.

Insurance products: Cathay, Fubon offer Yen savings insurance, with guaranteed interest rates of 2–3%, combining protection and returns.

ETFs tracking long-term trends: Yuanta 00675U, 00703 Yen ETFs can be bought in fractional shares via brokerage apps, tracking Yen index, with 0.4% annual management fee, suitable for dollar-cost averaging.

Forex trading for volatility: Trade USD/JPY or EUR/JPY directly on platforms like Mitrade, supporting long/short, 24-hour trading, with small capital. Platforms offer zero commission, low spreads, and tools like stop-loss, take-profit, trailing stops.

Common questions answered

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

Cash rate is the bank’s quote for physical banknotes, used at counters for immediate exchange. It’s 1–2% worse than the spot rate because banks bear costs of handling cash.

Spot rate is the standard FX market price settled T+2, used for electronic transfers, no physical cash involved. It’s closer to international market prices but takes two business days to settle.

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

Based on Taiwan Bank’s rate on December 10, 2025, cash selling rate is about 0.2060 NT$/JPY (1 NT$ = 4.85 JPY). NT$10,000 exchanges for approximately 48,500 Yen. Using the spot selling rate (~4.87), it’s about 48,700 Yen, a difference of roughly 200 Yen (about NT$40).

Q: What ID do I need for counter exchange?

Taiwanese: ID card + passport; foreigners: passport + residence permit. If pre-booked online, bring transaction notification. Under 20 needs parent’s consent and ID. For large amounts (over NT$100,000), may need to declare source of funds.

Q: Are foreign currency ATMs limited?

Policies vary. CTBC’s in-bank foreign currency ATM limit is about NT$120,000/day; other banks’ cards typically NT$20,000 per transaction. Taishin Bank’s in-bank limit is NT$150,000/day. Post-2025 regulations, many banks have reduced digital account limits to NT$100,000/day for fraud prevention. It’s advisable to split withdrawals or use your own bank card to avoid cross-bank fees.

Final reminder

The Yen’s role has upgraded from “travel pocket money” to “asset allocation.” Whether planning a trip to Japan next year or hedging against TWD depreciation by entering Yen, the key is to follow the two principles: “split exchange” and “don’t just sit on the full amount.”

Beginners can start with “Taiwan Bank online FX + airport pickup” or “foreign currency ATM,” locking in the best rates easily. Later, transfer Yen into fixed deposits for interest, allocate ETFs for appreciation, or try FX trading for short-term gains. This not only makes travel more cost-effective but also adds a layer of asset protection during global market turbulence. At the current rate of 4.85 TWD/JPY, it’s a good time to act.