The Japanese Yen is not just for travel money: The complete guide to currency exchange and investment you need to know

Is the current TWD to JPY exchange rate at 4.85 really a good deal?

Today (December 10, 2025), the TWD to JPY rate has reached 4.85, up approximately 8.7% from 4.46 at the beginning of the year. But what does this number really represent? For those considering currency exchange, is it smart to enter now or just blindly follow the trend?

Instead of obsessing over timing, it’s better to understand why you want to exchange for JPY in the first place.

JPY: More than just a travel currency, also a safe-haven asset

Many think exchanging for JPY is only for trips to Tokyo shopping sprees, Osaka shopping, or cash for skiing in Hokkaido. But in reality, JPY plays a much more significant role in the financial markets.

From a safe-haven perspective, JPY ranks alongside USD and Swiss Franc as one of the world’s three major safe-haven currencies. During market turbulence, funds flow into JPY for safety—during the Russia-Ukraine conflict in 2022, JPY appreciated 8% in a week, while stock markets fell 10%. For Taiwanese investors, exchanging for JPY isn’t just for leisure; it can also hedge against Taiwan stock market volatility.

From an interest rate arbitrage perspective, Japan has maintained ultra-low interest rates (around 0.5%) for a long time, attracting investors to borrow low-interest JPY and invest in higher-yield USD (the USD/JPY interest rate differential can reach 4.0%). But when risks increase, these arbitrage trades unwind, putting downward pressure on JPY.

Recently, the Bank of Japan signaled a possible rate hike, with Governor Ueda making hawkish comments, leading to an 80% market expectation of a rate increase. If the December 19 meeting indeed raises rates by 0.25 basis points to 0.75% (a 30-year high), JGB yields have hit 1.93%, a 17-year high. This could shift the long-term arbitrage dynamics. USD/JPY has fallen from the high of 160 at the start of the year to 154.58; short-term, it may rebound slightly to 155, but medium to long-term forecasts suggest it could fall below 150.

Four channels for Taiwanese to exchange for JPY, with vastly different costs

Currency exchange seems simple, but the exchange rates and fees vary greatly across methods. For example, exchanging 50,000 TWD incorrectly could cost you an extra 1,500 to 2,000 TWD.

Method 1: In-person cash exchange at banks

This is the traditional way—bringing cash TWD to a bank or airport to buy JPY cash. It seems convenient, but banks use the “cash selling rate,” which is about 1-2% worse than the spot rate. For example, as of December 10, 2025, Taiwan Bank’s cash selling rate is about 0.2060 TWD/JPY (equivalent to 1 TWD = 4.85 JPY), and some banks add fixed handling fees.

Exchanging 50,000 TWD costs about 1,500 to 2,000 TWD in losses. Only worth it if you’re in a hurry at the airport or for very small amounts.

Method 2: Online currency exchange with in-branch cash withdrawal

Use bank apps or online banking to convert TWD to JPY at the “spot selling rate” (about 1% better than cash selling rate), then withdraw cash at the branch or ATM. The downside is you need to open a foreign currency account first, and withdrawing cash incurs a fee of over 100 TWD.

Suitable for experienced forex traders wanting to average costs over multiple entries. Cost for exchanging 50,000 TWD is about 500 to 1,000 TWD. E.SUN Bank and Taishin Bank offer this service. Current JPY fixed deposit rates are around 1.5-1.8%, providing an opportunity to invest.

Method 3: Online currency exchange with direct branch pickup

No need for a foreign currency account—just fill in amount, currency, branch, and date on the bank’s website. After completing the transfer online, bring ID and transaction notice to pick up the cash in person. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (using Taiwan Pay costs only 10 TWD), with about 0.5% better rates.

This is the smartest pre-departure booking method, especially with 14 Taiwan Bank branches at Taoyuan Airport, including 2 open 24 hours. Cost for exchanging 50,000 TWD is only about 300 to 800 TWD.

Method 4: 24-hour foreign currency ATM withdrawal

Use a chip-enabled debit card at foreign currency ATMs to withdraw JPY anytime. Only 5 TWD cross-bank fee per withdrawal from your TWD account. E.SUN Bank’s foreign currency ATMs have a daily limit of 150,000 TWD equivalent, with no exchange fee. Drawbacks include about 200 ATMs nationwide, fixed denominations (1,000/5,000/10,000 JPY), and possible cash shortages during peak times.

Exchanging 50,000 TWD costs about 800 to 1,200 TWD. Suitable for urgent needs.

Best options based on different scenarios

One week before travel: Use Taiwan Bank’s online exchange + airport pickup for convenience and savings.

For regular investment: Use online exchange + JPY fixed deposits to observe rates and accumulate assets.

Urgent need: Use foreign currency ATM withdrawal for flexibility, accepting slightly higher costs.

Small amount emergencies: Use in-branch cash exchange for amounts around 5,000–10,000 TWD, with minimal cost impact.

After exchanging JPY, don’t let it sit idle

If you already have JPY, don’t let it just sit without earning returns. Based on your risk appetite, here are four common options:

1. JPY Fixed Deposit (conservative)
Open a foreign currency account and deposit online, starting from 10,000 JPY, with annual interest rates of 1.5-1.8%. A passive way to earn.

2. JPY Insurance Policy (medium-term allocation)
Buy a savings insurance with guaranteed interest rates of 2-3%. Suitable for those who prefer not to manage frequently.

3. JPY ETFs (growth-oriented)
For example, Yuanta 00675U tracks the JPY index. You can buy fractional shares via broker apps, dollar-cost averaging to lower costs. Management fee is 0.4% annually, with lower risk than direct forex trading.

4. Forex swing trading (aggressive)
Trade USD/JPY or EUR/JPY to capture short-term fluctuations. Benefits include two-way trading, 24-hour market, and low capital requirements, but requires technical analysis skills.

USD vs HKD: Which safe-haven asset to choose?

Many investors hesitate between USD, HKD, and JPY. Simply put:

USD: The safest reserve currency, most widely accepted globally, but with low yields.

HKD: Pegged to USD (linked exchange rate system), very stable but limited appreciation potential. Mainly used for capital parking, not ideal for long-term safe-haven.

JPY: Has appreciation potential, with strong rate hike expectations, attractive fixed deposit rates, and arbitrage opportunities. For Taiwanese investors, JPY offers a more balanced mix of safety and yield.

Choosing between USD to HKD or JPY, JPY is more attractive—both for hedging and profiting from rate hikes.

Is it a good time to exchange for JPY now? The answer: stagger your exchanges

The rate has risen to 4.85, up 8.7% from the start of the year. A full lump-sum exchange now isn’t the smartest move.

Based on current market expectations, BOJ rate hikes will support JPY, but global arbitrage unwinding, USD trends, and geopolitical conflicts (Taiwan Strait, Middle East) could cause short-term fluctuations of 2-5%.

Recommended approach:

1. First batch (immediately): If you plan to travel, lock in the rate with online exchange + airport pickup for your travel funds.
2. Second batch (after one week): Watch BOJ meeting results; if rate hike is confirmed, invest another 30% of your funds.
3. Third batch (ongoing): Monthly small transfers to average costs and build hedging positions gradually.

This way, you avoid missing out and prevent being locked into a single rate point.

Quick FAQ

Q: What’s the difference between cash rate and spot rate?
Cash rate is the rate banks offer for physical cash, usually worse by 1-2%. Spot rate is the foreign exchange market price for delivery within two days, more favorable but requires waiting.

Q: How much JPY do I get for 10,000 TWD?
Using Taiwan Bank’s cash selling rate of 4.85, about 48,500 JPY. With spot rate 4.87, about 48,700 JPY.

Q: What’s the daily limit for foreign currency ATM withdrawals?
Post-2025 regulations, most banks limit to 100,000–150,000 TWD equivalent per day. Consider splitting withdrawals or using your own bank’s card to avoid cross-bank fees. Cash shortages during peak times are common, plan ahead.

Q: What ID do I need to exchange currency?
Bring ID and passport for in-branch cash exchange. For amounts over 100,000 TWD, you may need to declare source of funds. Minors under 20 need parental accompaniment.

Conclusion: Treat JPY as an asset, not just cash

JPY has evolved from a simple “travel pocket money” to an asset class with hedging and investment value.

The core strategy is twofold: staggered exchange to avoid missing opportunities, and don’t just sit on the money—make it work for you. Beginners can start with Taiwan Bank’s online exchange or ATM withdrawals, then move into fixed deposits, ETFs, or swing trading based on needs.

This way, you not only enjoy more cost-effective travel but also add a layer of protection during global market turbulence. Instead of debating whether to exchange now, start with a small, immediate transfer—time will prove how smart this decision is.