How to choose between New Taiwan Dollar and Japanese Yen? Complete analysis of the 2025 exchange rate trend and 4 major exchange channels

In December 2025, the New Taiwan Dollar (NTD) against the Japanese Yen (JPY) has reached 4.85, appreciating nearly 9% since the beginning of the year at 4.46. This wave of Yen appreciation not only attracts travelers to exchange currency in advance but also prompts many investors to consider: Is now a good time to exchange for Yen? This article provides a detailed analysis of the exchange dynamics between NTD and JPY to help you choose the most suitable method.

Investment Logic of NTD to JPY Exchange

Not everyone needs Yen solely for travel purposes. In the financial markets, Yen plays a more significant role.

Safe-Haven Attribute

Yen ranks among the world’s three major safe-haven currencies (alongside USD and Swiss Franc). When market risks rise, capital flows heavily into Yen. For example, during the Russia-Ukraine conflict in 2022, Yen appreciated by 8% in a single week, while the stock market fell 10%. For investors holding Taiwanese stocks, increasing Yen holdings provides an additional layer of risk hedging.

Interest Rate Spread Arbitrage Opportunities

The Bank of Japan has maintained ultra-low interest rates (currently 0.5%) for a long time, creating a “funding currency” characteristic. Many hedge funds borrow Yen at low interest and convert to USD (interest rates over 4.5%) for arbitrage. When global economic uncertainty increases, such arbitrage positions are often closed, which in turn drives Yen higher.

Four Main Channels and Cost Analysis for NTD to JPY Exchange

Many believe that exchanging Yen can only be done through banks, but in reality, different channels can have cost differences exceeding 2,000 TWD. Below is a detailed breakdown.

Option 1: Bank Counter Cash Exchange

Bring cash in NTD directly to a bank or airport counter to exchange for Yen cash on the spot. This is the most traditional and secure method, but it uses the “cash selling rate,” which is usually 1-2% worse than the market spot rate.

For example, Taiwan Bank’s December 10 rate is about 0.2060 TWD/JPY (1 TWD = 4.85 JPY). Some banks also charge an additional handling fee of 100-200 TWD. For 50,000 TWD, total loss can reach 1,500-2,000 TWD.

Advantages: Highest safety, multiple denominations (1000, 5000, 10000 JPY), assistance from staff on-site.
Disadvantages: Large rate spread, limited to bank operating hours (Weekdays 9:00-15:30), extra fees reduce profit.
Suitable for: Those unfamiliar with online operations, small amounts needed urgently at the airport.

Option 2: Online Banking Transfer + In-Person Pickup

Use bank app or online banking to convert TWD into Yen and deposit into a foreign currency account, using a favorable “spot sell rate” (better by about 1% than cash rate). When cash is needed, go to the counter or ATM to withdraw, but a conversion fee (~100 TWD) applies.

This method allows for phased entry, observing exchange rate trends, and buying at low points (e.g., when TWD/JPY drops below 4.80), averaging costs.

Advantages: 24/7 operation, better exchange rates, suitable for phased investment.
Disadvantages: Need to open a foreign currency account first, withdrawal incurs fees, interbank withdrawal fee of 5-100 TWD.
Suitable for: Those experienced in forex investment, planning long-term Yen holdings.

Option 3: Online Pre-Order Currency Exchange + Airport Pickup

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, present ID and transaction notice to pick up in person. Taiwan Bank’s “Easy Purchase” online exchange waives handling fees (pay only 10 TWD via TaiwanPay), offers a 0.5% rate advantage, and allows reservation for pickup at 14 locations at Taoyuan Airport (including 2 24-hour branches).

Ideal for planners, allowing online reservation days in advance and picking up cash directly at the airport.

Advantages: Competitive rates, often fee-free, designated airport pickup, highly planned.
Disadvantages: Requires 1-3 days in advance, pickup times limited by bank hours, branches cannot be changed on short notice.
Suitable for: Travelers with confirmed itineraries who want to complete exchange before departure.

Option 4: Foreign Currency ATM Instant Withdrawal

Use a chip-enabled bank card at designated foreign currency ATMs to withdraw Yen cash instantly. Operates 24/7, with a cross-bank withdrawal fee of only 5 TWD. E.SUN Bank’s foreign currency ATMs have a daily limit of 150,000 TWD, with no currency exchange fee.

However, there are about 200 such ATMs nationwide, with limited denominations (usually 1000, 5000, 10000 JPY). During peak times (holidays, airports), cash may run out.

Advantages: Instant withdrawal, flexible, available 24/7, lowest cross-bank fee.
Disadvantages: Limited locations, fixed denominations, cash shortages during busy periods.
Suitable for: Urgent, temporary cash needs.

Comparison of the Four Main Methods for Cost and Use Cases

Is Now a Good Time to Exchange Yen? Exchange Rate Trend Analysis

Short-term Fluctuation

Currently at 4.85, the TWD/JPY rate has appreciated about 8.7% from the start of the year. Bank of Japan Governor Ueda Kazuo recently signaled a hawkish stance, with expectations of a 0.25 bps rate hike at the December 19 meeting to 0.75% (a 30-year high). Japanese government bond yields hit a 17-year high of 1.93%.

USD/JPY has fallen from a high of 160 at the start of the year to 154.58, with a short-term test of around 155. Medium-term (6 months) forecast suggests below 150, indicating further Yen appreciation potential.

Investment Advice

For travelers: current exchange rate is reasonable; it’s recommended to complete exchange within 1-2 weeks.
For investors: Yen as a safe-haven asset may fluctuate 2-5% due to arbitrage unwinding in the short term. Avoid all-in exchange; instead, consider 3-4 phased entries to diversify risk.

Post-Exchange Use of Funds

After exchanging, don’t let Yen sit idle without interest. Here are four options suitable for small-scale beginners:

1. Yen Fixed Deposit
Open a foreign currency account at E.SUN or Taiwan Bank, with a minimum of 10,000 Yen. Current annual interest rate is 1.5-1.8%, with monthly interest accrual. Very low risk, suitable for risk-averse investors.

2. Yen Savings Insurance
Buy Yen-denominated savings insurance from Cathay or Fubon Life. Guaranteed interest rate of 2-3%. Holding for 3-5 years can provide stable growth. However, there is a surrender risk and binding period.

3. Yen ETF Investment
Purchase Yen-related ETFs like Yuanta 00675U via brokerage apps, with a management fee of 0.4%. Suitable for regular dollar-cost averaging. Offers more diversification than individual stocks.

4. Forex Swing Trading
Engage in short-term trading of USD/JPY or EUR/JPY on forex platforms to capture rate fluctuations. Benefits include two-way trading and 24-hour market, but requires technical analysis skills and risk management.

FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate is the buy/sell price banks offer for physical banknotes, usually 1-2% worse than the spot rate due to handling, transportation, and inventory costs. Spot rate is used for electronic transfers, close to international market prices, settled in 2 working days (T+2).

Q: How to calculate the amount of Yen for a given TWD?
Formula: Yen = TWD × current exchange rate. For example, at 4.85, 10,000 TWD = 48,500 Yen; at 4.87, it’s 48,700 Yen, difference about 200 Yen (~40 TWD).

Q: What should I bring for in-person exchange?
ID card + passport (for locals), or passport + residence permit (for foreigners). If pre-booked online, also bring transaction notice. Large exchanges (>100,000 TWD) may require declaration of source of funds.

Q: What’s the limit for foreign currency ATM withdrawals?
Varies by bank. CTBC: equivalent of 120,000 TWD/day; Taishin: 150,000 TWD; E.SUN: 50,000 TWD. Other banks follow their rules; some regulations limit RMB per transaction to 20,000 USD equivalent. Consider spreading withdrawals or using your bank’s card to save fees.

Summary: Winning Strategies for NTD to Yen Exchange

Yen is no longer just travel “pocket money”; it’s also a hedge against Taiwanese stock market volatility. Following the dual principles of “phased entry + full exchange without lying idle” can minimize costs and maximize returns.

Beginners are advised to start with Taiwan Bank’s online exchange or foreign currency ATMs, then transition into fixed deposits, ETFs, or swing trading based on needs. This approach makes travel more economical and adds a layer of asset protection amid global market fluctuations.