What is the most cost-effective way to exchange Japanese yen? A comparison of 4 methods for exchanging yen.

6 minutes

Japanese Yen

Updated on 2025-06-06 07:17

Author Edward

Source: DepositPhotos

Summer vacation is approaching, and are you preparing to shop in Japan but unsure how to exchange currency to bring more money to spend? Let me share from my personal experience the pros and cons of four methods for exchanging yen. Every time I go to Japan, I encounter friends and family asking, “How's the yen lately? Should I exchange it now?” To be honest, I feel that the exchange rate at banks is really a rip-off!

Why exchange Japanese yen?

To be honest, the Japanese yen holds a special place in the hearts of Taiwanese people, not only because we love to go to Japan and spend money there. I have personally experienced several times when I clearly planned to wait for a better exchange rate, but ended up watching it become more and more expensive, and had no choice but to exchange it regardless…

Daily life uses: travel, shopping, studying abroad

Last year in Tokyo, I found that many food shops in the alleys still only accepted cash! The shrine selling amulets also only took cash, not to mention those rural areas. Even with the popularity of credit cards, many drugstores won't let you swipe your card unless you spend over 3000 yen, so having cash in yen really cannot be overlooked.

A while ago, my friend went to work and travel. He told me that for the first month, his living expenses relied entirely on the Japanese yen he exchanged from Taiwan. Luckily, he exchanged some in advance; otherwise, with the exchange rate skyrocketing at that time, the loss would have been terrible.

From a financial market perspective: the Japanese yen is a frustrating safe-haven currency.

1. Safe-Haven Currency Attributes

The market says that the Japanese yen is a safe-haven currency, and when war happens, the yen appreciates. However, during the Russia-Ukraine war, the yen depreciated significantly, which was not a safe haven at all! Although this is theoretically correct, reality is often not the same.

2. Low Interest Rates and Arbitrage Trading

Japan's ultra-low interest rates are simply a vampire in the financial market. How many speculators borrow yen to make money in high-interest markets, only to sell off other assets and rush back to yen at the slightest change in the wind, causing the yen exchange rate to spasm again and again. Trying to predict the yen's movement based on this, I think it's harder than betting on horses.

4 Ways to Exchange Currency for Japanese Yen in Taiwan

1. Go to the bank or airport to exchange New Taiwan Dollars for Japanese Yen at the counter.

This is the method that my grandmother's generation loved to use. It's convenient, but let me tell you, this is definitely a big fool in the currency exchange world.

What is that exchange rate at the airport? Ridiculous! Every time I see relatives lining up at the airport to exchange money, I want to rush up and stop them. Based on today's (2025 June 5, 2021 Taiwan Bank selling exchange rate of 0.2125, if you exchange 100,000 TWD, you can only get over 470,000 JPY, but in reality, the exchange rate should allow you to get over 480,000.

• Advantages: Even grandmas with gray hair can use it, and you can choose the denomination.

• Disadvantages: The exchange rate is so bad it makes you cry, you have to queue at the bank, and you can't exchange at night.

• Target Audience: People who are clueless about using mobile phones or computers, or those who only think about exchanging money when they suddenly arrive at the airport.

) 2. Online currency exchange, over-the-counter withdrawal of Japanese Yen

This is my common method: first, I use a mobile app to exchange New Taiwan Dollars into Japanese Yen and put it into a foreign currency account. When the Japanese Yen is at a low point, I exchange more, and when it's at a high point, I exchange less, entering in batches to average out the risk.

However, there are also traps when it comes to cash withdrawals! Every bank charges a “cash handling fee” for withdrawing cash from foreign currency accounts (it's clearly just computer operations, what cash are they handling?), so don't withdraw too often.

• Advantages: You can lie in bed at three o'clock in the morning and exchange immediately if the exchange rate is good.

• Disadvantages: The withdrawal fee is a pitfall, and you need a foreign currency account (many people are simply too lazy to open one).

• Target Audience: Smart individuals who frequently travel abroad, track exchange rates, and want to save some money.

3. Online currency exchange, over-the-counter withdrawal of Japanese Yen

I tried this method the last time I went to Osaka, and it was quite good! No need to open a foreign currency account, just make a reservation online, and the bank will lock in the exchange rate; you can just go and withdraw afterwards. The best part is that many banks offer discounts for online currency exchange, which can save you tens to hundreds of dollars.

I made a direct appointment at the airport branch that time, and went to pick it up right after landing, it was an amazing experience! Plus, there's no need for a foreign currency account, although I have one, but it's super convenient for many people who are too lazy to open an account.

• Advantages: The exchange rate is better than at the counter, and you don't have to deal with the hassle of foreign currency accounts.

• Disadvantages: You have to remember to make an appointment to withdraw money, and changing the schedule is very troublesome.

• Target Audience: Regular schedule, office workers who don't like trouble.

4. Foreign Currency ATM Withdrawal of Japanese Yen

There are more and more foreign currency ATMs in Taiwan, but to be honest, after using it once, I don't really want to use it again. Although the 24-hour service is very convenient, the feeling of “just giving you whatever denomination” is really frustrating. One time I wanted to withdraw small bills, but the machine gave me all 10,000 yen notes, which was super awkward when I went to buy something at a small shop.

Moreover, some bank cards still charge a fee for withdrawing cash from foreign currency ATMs, although it's not much, it's still annoying to think about.

• Advantages: A blessing for the lazy, can be withdrawn even at midnight.

• Disadvantages: Few ATMs, withdrawal amounts depend on the machine's mood, sometimes it's hard to find a machine or it has no cash.

• Target Audience: Severe procrastinators, or those who only think about exchanging money when they arrive at the airport.

Frequently Asked Questions about Japanese Yen Exchange

Q. What are cash exchange rates and spot exchange rates?

In simple terms, the cash exchange rate is the rate at which you exchange cash for foreign currency, which is usually poorer; the spot exchange rate is the rate used for interbank transactions, which is better. The difference between the two is the money that banks make, and I personally think this difference is nothing short of legal robbery!

Q. How much Japanese yen can I get for 10,000 New Taiwan dollars?

According to the current exchange rate of Taiwanese banks, it can be exchanged for about 47,080 Japanese yen. But to be honest, this exchange rate is really not very good; you can exchange a few hundred more Japanese yen online!

Q. What do I need to bring to exchange foreign currency?

ID card plus passport. However, I've seen that many banks only require the ID card, and anyway, if you forget to bring something, the bank staff will sternly inform you, haha!

Is it cost-effective to exchange for Japanese Yen now?

Recently, the Japanese yen has been on a roller coaster ride! At the beginning of the year, the exchange rate was around 1 TWD to 4.46 JPY, but in April, the yen suddenly surged, and TWD could only exchange for 4.28 JPY. As a result, the interest rate differential between the US and Japan widened, and now it has dropped back to 4.81.

In my personal judgment, the current exchange rate of 4.81 is a decent point for currency exchange. The Bank of Japan has started to raise interest rates, and the United States may lower interest rates as early as September, making it likely for the yen to bottom out and rebound. If you have travel plans, I suggest operating this way:

Conservative: Exchange 30% now, and add more when the exchange rate is a bit better.

Aggressive: First exchange 50%, then wait for the situation after the June Bank of Japan meeting to add more.

The most important thing is, don't put all your eggs in one basket! I exchange money in batches, so if the exchange rate continues to drop, at least it won't hurt too much.

Other Yen Investment Methods

Just exchanging Japanese yen is too boring. I have also tried directly trading currency pairs like USD/JPY. This is much more exciting than just exchanging money; you can go long or short, unlike currency exchange which only allows for one-way operations.

Of course, the risks are also much greater, so risk control must be done well. I personally use a platform like Mitrade, which supports deposits in TWD and is very convenient, as there is no need to go to the bank to exchange for USD, and the handling fees are not expensive.

The Japanese yen is quite interesting for short-term trading due to its volatility, especially during major data releases or central bank meetings. Of course, this is no longer just “currency exchange,” but real forex trading, which carries much greater risk. As the old saying goes, if you can afford to play, then enjoy it; if you can't, just stick to currency exchange!