Japanese Yen Exchange Strategy Complete Guide: Which is the Most Favorable? Bank of Taiwan, E.SUN, or Mega International?

Now is the Time to Buy Japanese Yen

As we approach the end of 2025, the TWD/JPY exchange rate has risen to 4.85, an 8.7% increase from the beginning of the year at 4.46. For Taiwanese individuals planning to travel to Japan or allocate foreign currency assets, this upward trend is driven by two forces: first, the Bank of Japan’s rising interest rate hike expectations (recent hawkish stance by Governor Ueda Kazuo pushed the December rate hike expectation to 80%, with a projected 30-year high of 0.75%), and second, a reassessment by global investors of the yen’s safe-haven properties.

According to foreign exchange market observations, Taiwan’s demand for currency exchange has grown by 25% in the second half of the year, fueled by tourism recovery and increased asset hedging. Currently, USD/JPY has fallen from the year’s high of 160 to 154.58, with short-term fluctuations possibly reaching 155, but the medium to long-term outlook leans toward below 150. This suggests that staggered entry and buying on dips are more strategic than a one-time full exchange.

Practical Cost Comparison of Four Major Exchange Channels

Traditional Counter Exchange: Convenient but Costly

Walking into a bank or airport counter to exchange cash is the most straightforward option, but the “cash selling rate” is usually 1-2% worse than the spot rate. For example, Taiwan Bank’s rate on December 10, 2025, was 0.2060 TWD/JPY (equivalent to 4.85 JPY/TWD). Some banks like E.SUN also charge a handling fee of NT$100 per transaction.

For NT$50,000, exchanging cash at counters results in a loss of NT$1,500-2,000. The advantages are immediate cash in hand, full denominations, and no pre-preparation needed. The disadvantages include limited operating hours (weekday 9:00-15:30) and poorer rates. This channel is best suited for urgent airport needs or users unfamiliar with digital operations.

Major banks’ cash selling rates vary slightly: E.SUN 0.2058, Taiwan Bank 0.2060, Hua Nan 0.2061, First Bank 0.2062, Mega 0.2062, Cathay United 0.2063, China Trust 0.2065, E.SUN 0.2067, Taipei Fubon 0.2069. Including handling fees, costs can further widen.

Online Currency Exchange + Foreign Currency Account: Suitable for Long-term Investors

Using bank apps or online banking, convert TWD to JPY and deposit into a foreign currency account, utilizing the “spot sell rate” to save about 1% on the spread. If later cash withdrawal is needed, go to counters or foreign currency ATMs, where a handling fee starting from NT$100 applies.

This method is suitable for those monitoring exchange rates and gradually entering positions at lower levels. For example, when TWD/JPY drops below 4.80, buy some, and add more at 4.75, effectively lowering average exchange costs. After conversion, the JPY can be placed into fixed deposits (annual interest rate 1.5-1.8%) or JPY ETFs (such as Yuanta 00675U, management fee 0.4%), achieving continuous capital appreciation.

NT$50,000 invested this way is estimated to incur a loss of NT$500-1,000. The prerequisite is opening a foreign currency account, which most banks like E.SUN and Taiwan Bank can do online.

Online Currency Settlement + Airport Pickup: Best for Travelers Going Abroad

No need for a foreign currency account—simply fill in currency, amount, designated pickup branch, and date on the bank’s website. After completing online settlement, cash can be picked up the next day. Taiwan Bank’s “Easy Purchase” online settlement is fee-free (pay NT$10 via Taiwan Pay), with about 0.5% better rates.

The biggest advantage is the ability to reserve airport branches for pickup. Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours. For travelers with a planned schedule who prefer to pick up cash the day before departure, this is the most time-saving and convenient option. Estimated loss for NT$50,000 is NT$300-800. The only limitation is the need to book 1-3 days in advance, and pickup branches cannot be changed.

Foreign Currency ATMs: 24/7 Cash Withdrawal

Using a chip-enabled financial card at foreign currency ATMs to withdraw JPY cash, supporting 24-hour operation, with a cross-bank fee of NT$5. The Evergreen Bank foreign currency ATM allows NT$150,000 daily withdrawal from a TWD account with no exchange fee. Other banks (e.g., CTBC, Taishin, E.SUN) have daily limits around NT$100,000-150,000, with digital accounts limited to NT$100,000.

Highly convenient, with relatively low costs (NT$800-1,200 estimated loss for NT$50,000), but denominations are fixed (1,000/5,000/10,000 JPY), and locations are limited (about 200 nationwide). During peak hours at airports, cash may run out; plan accordingly.

Summary Table of Four Methods

Basic Concepts of Exchange Rates

Cash Rate vs. Spot Rate Difference

Cash rate is the rate offered by banks or exchange shops for physical cash transactions, suitable for immediate exchange, but usually 1-2% worse than the spot rate. The spot rate is the market quotation for settlement within two business days (T+2), mainly used for electronic transfers and account conversions, and aligns more closely with international market prices.

Calculating JPY for NT$10,000

Using Taiwan Bank’s cash sell rate of 4.85, NT$10,000 exchanges for about 48,500 JPY. Using the spot rate (~4.87), it yields about 48,700 JPY, a difference of 200 JPY (~NT$40). While small, the difference becomes significant with larger amounts: exchanging NT$50,000 could differ by over NT$1,000.

Preparing Documents for Counter Exchange

ID card plus passport are standard. Under 20 requires parental accompaniment and written consent. If pre-booked online, bring transaction confirmation. Large exchanges over NT$100,000 may trigger source of funds declaration.

Post-Exchange Investment Options for JPY

After converting to JPY, do not let the funds idle. Choose appropriate allocations based on risk appetite and time horizon.

JPY fixed deposits are a conservative choice, with most banks offering starting amounts of 10,000 JPY at an annual interest rate of 1.5-1.8%, suitable for mid-term holding of 1-3 years. JPY insurance policies (e.g., Cathay, Fubon) are medium-term holdings, with guaranteed interest rates of 2-3%, combining protection and returns.

For investors willing to accept exchange rate fluctuations, JPY ETFs (like 00675U, 00703) track the yen index for long-term appreciation, and can be bought as fractional shares via broker apps for dollar-cost averaging. The most advanced approach is direct forex trading, operating USD/JPY or EUR/JPY on trading platforms, capturing intraday or swing volatility, with 24-hour trading in both directions, requiring minimal capital.

While JPY offers hedging advantages, it faces two-way risks: rate benefits from BOJ rate hikes, but arbitrage unwinding or geopolitical conflicts (e.g., Taiwan Strait tensions) could cause rapid depreciation. Diversify risk via ETFs, set stop-loss and take-profit rules for swing trading.

Final Judgment: Is Exchanging Yen in 2025 Worth It?

In the short term, the TWD/JPY at 4.85 is relatively high; the 8.7% gain since the start of the year is notable. However, from a medium to long-term perspective, the BOJ’s rate hike cycle has just begun, with Japanese bond yields reaching a 17-year high of 1.93%. USD/JPY still has room for correction, expected to fluctuate between 150-155.

Staggered Entry Is Key: Making a one-time full exchange at high levels risks being trapped; better to enter in 3-4 installments, evenly distributing around 4.80-4.85, reducing timing risk.

Channel Selection Matters: Small amounts (NT$5,000-10,000) are best exchanged via foreign currency ATMs for speed; medium amounts (NT$10,000-50,000) are most cost-effective through online settlement; large, long-term investments (above NT$50,000) should be done via online currency exchange + foreign currency account for averaging costs.

Don’t Just Hold Cash: Storing JPY cash is the most costly; instead, move funds into fixed deposits, ETFs, or forex trading to create additional asset protection and passive income during market fluctuations.